updated 2/24/2011 8:45:40 AM ET 2011-02-24T13:45:40

Core Consolidated Revenue Increases 27% in 2010

Metastorm Sale Completed

WAYNE, Pa., Feb. 24, 2011 (GLOBE NEWSWIRE) -- Internet Capital Group, Inc. (Nasdaq:ICGE) ("ICG") today reported its results for the fourth quarter and full year ended December 31, 2010.

"We are pleased with our financial results, which were driven by strong performance at each of our consolidated core partner companies," said Walter Buckley, ICG's Chief Executive Officer. "2010 was a pivotal year for ICG, as we set out on a path to refine our business model by focusing on core consolidated companies while monetizing certain equity companies. We successfully executed against these goals by increasing our stake in ICG Commerce to over 80% and, more recently, by monetizing our stake in Metastorm, one of our core equity companies. As we look ahead, we are well positioned to continue to report strong operating results within a simpler, more transparent structure."

Financial Results

ICG's GAAP revenue increased to $33.1 million for the quarter ended December 31, 2010, up from $24.0 million for the fourth quarter of 2009. GAAP net income for the quarter ended December 31, 2010 was $0.3 million, or $0.01 per diluted share, compared to $32.0 million, or $0.87 per diluted share, in the comparable 2009 period. Core consolidated revenue totaled $33.1 million in the fourth quarter of 2010, an increase of 27% from the corresponding 2009 period. Core consolidated EBITDA totaled $5.6 million for the fourth quarter of 2010, compared to $4.0 million in the corresponding 2009 period.  

ICG's GAAP revenue increased to $115.7 million for 2010, up from $90.3 million for 2009. GAAP net income for 2010 was $46.6 million, or $1.26 per diluted share, compared to $15.5 million, or $0.42 per diluted share, for 2009. Core consolidated revenue totaled $117.7 million for 2010, an increase of 27% from 2009.  Core consolidated EBITDA totaled $13.7 million for 2010, compared to $9.3 million for 2009.

ICG's corporate cash and cash equivalents were $72.9 million at December 31, 2010, and the value of ICG's holdings in GoIndustry-DoveBid (LSE.AIM: GOI) was $3.5 million. Additionally, as of December 31, 2010, ICG had an income tax receivable of $6.3 million.

ICG Commerce

ICG Commerce reported $28.5 million of revenue for the fourth quarter of 2010, representing an increase of 25% over the comparable 2009 period. ICG Commerce reported $101.1 million of revenue for 2010, representing an increase of 24% over 2009. ICG Commerce's EBITDA, excluding stock-based compensation and unusual items, for the quarter ended December 31, 2010 increased to $6.4 million, up from $4.9 million in the comparable 2009 period. ICG Commerce's EBITDA, excluding stock-based compensation and unusual items, for 2010 increased to $17.1 million, up from $13.4 million in 2009.

Metastorm

On February 17, 2011, the sale of Metastorm to Open Text Corporation was consummated. ICG's portion of the sale proceeds consisted of approximately $53 million, approximately $1.6 million of which has been placed in escrow in connection with a customary indemnification holdback. Subject to any indemnification claims that Open Text may assert, the escrowed sale proceeds will be released to ICG nine months following the closing of the transaction.

2011 Guidance

"As we look forward in 2011, we expect core consolidated revenue for the year to be in the range of $142 million to $148 million, representing 21% to 26% growth over 2010 revenue, and core consolidated EBITDA to be in the range of $16 million to $18 million as we continue to support key growth and expansion efforts at our consolidated partner companies," said Kirk Morgan, Chief Financial Officer at ICG. "Additionally, the proceeds from our recent sale of Metastorm will further strengthen our balance sheet, providing us greater financial flexibility to achieve our goals of owning majority stakes in companies and driving growth."

For information related to ICG's core equity companies, Channel Intelligence, Freeborders, StarCite and WhiteFence, please refer to the supplemental schedule on our website, as well as the slide presentation that will accompany today's earnings results webcast. See below for further details regarding the webcast.

Please see ICG's website at www.icg.com for more information on ICG, its partner companies and its fourth quarter and full year 2010 results.

ICG will host a webcast at 10:00 a.m. ET today to discuss its financial results. As part of the live webcast for this call, ICG will post a slide presentation to accompany the prepared remarks. To access the webcast, go to www.icg.com and click on the investor relations tab. Then click the link for the fourth quarter and full year conference call webcast. Please log on to the website approximately ten minutes prior to the call to register and download and install any necessary audio software. The conference call is also accessible through listen-only mode at 866-831-6247. The international dial-in number is 617-213-8856. The pass code is 42656308.

For those unable to participate in the conference call, a replay will be available from February 24, 2011 at 1:00 p.m. ET until March 3, 2011 at 11:59 p.m. ET. To access the replay, dial 888-286-8010 (domestic) or 617-801-6888 (international). The pass code is83619482. The replay and slide presentation also can be accessed in the investor relations section of the ICG website at www.icg.com/investors/events-and-presentations/ .

About ICG

ICG (Nasdaq:ICGE) identifies, capitalizes and grows companies in the SaaS, tech-enabled BPO and Internet marketing sectors.  These partner companies transform the way business is done by enabling enterprises to increase efficiencies and improve critical processes. ICG leverages its unique expertise to carefully identify companies based on their potential to become market changers and market leaders. ICG focuses on building successful businesses in the SaaS, tech-enabled BPO and Internet marketing sectors by providing them with access to management expertise and strategic and operational guidance, as well as growth capital.

The Internet Capital Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7794

Safe Harbor Statement under Private Securities Litigation Reform Act of 1995

The statements contained in this press release that are not historical facts are forward-looking statements that involve certain risks and uncertainties, including, but not limited to, risks associated with the effect of economic conditions generally, capital spending by our partner companies' customers, our partner companies' ability to compete successfully against their respective competitors, our partner companies' ability to timely and effectively respond to technological developments, our and our partner companies' collective ability to retain key personnel, our ability to have continued access to capital and to deploy capital effectively and on acceptable terms, our ability to maximize value in connection with divestitures, and other risks and uncertainties detailed in ICG's filings with the Securities and Exchange Commission. These and other factors may cause actual results to differ materially from those projected. 

 
 Internet Capital Group, Inc. 
 Consolidated Statements of Operations 
(In thousands, except per share data)
         
         
   Three Months Ended   Twelve Months Ended 
   December 31,   December 31, 
  2010 2009 2010 2009
         
         
 Revenue   $ 33,076  $ 23,951  $ 115,710  $ 90,252
         
 Operating Expenses         
 Cost of revenue   18,669  14,715  71,050  56,920
 Selling, general and administrative   10,995  7,857  42,206  34,578
 Research and development   2,846  1,597  10,644  9,015
 Amortization of intangibles   337  --   1,357  205
 Impairment related and other   10  128  1,182  5,192
 Total operating expenses   32,857  24,297  126,439  105,910
         
 Operating income (loss)   219  (346)  (10,729)  (15,658)
         
 Other income (loss), net   28  5,353  74,147  16,578
 Interest income   75  108  330  446
 Interest expense   (174)  (10)  (366)  (216)
 Income (loss) before income taxes and equity loss   148  5,105  63,382  1,150
         
 Income tax benefit (expense)   2,811  40,394  (254)  39,510
 Equity loss   (2,155)  (1,493)  (16,022)  (12,131)
 Income (loss) from continuing operations   804  44,006  47,106  28,529
 Income (loss) on discontinued operations   --   --   802  -- 
 Net income (loss)   804  44,006  47,908  28,529
 Less: Net income (loss) attributable to the noncontrolling interest   538  11,989  1,319  12,995
 Net income (loss) attributable to ICG   $ 266  $ 32,017  $ 46,589  $ 15,534
         
 Amounts attributable to ICG common shareholders:         
 Net income (loss) from continuing operations   $ 266  $ 32,017  $ 45,977  $ 15,534
 Net income (loss) on discontinued operations   --   --   612  -- 
 Net income (loss) attributable to ICG common shareholders   $ 266  $ 32,017  $ 46,589  $ 15,534
         
 Basic net income (loss) per share:         
 Income (loss) from continuing operations attributable to ICG common shareholders   $ 0.01  $ 0.87  $ 1.26  $ 0.42
 Income (loss) on discontinued operations attributable to ICG common shareholders   --   --   0.02  -- 
   $ 0.01  $ 0.87  $ 1.28  $ 0.42
         
Shares used in computation of basic net income (loss) per

 common share attributable to ICG common shareholders 
 36,684  36,623  36,427  36,660
         
 Diluted net income (loss) per share:         
 Income (loss) from continuing operations attributable to ICG common shareholders   $ 0.01  $ 0.87  $ 1.24  $ 0.42
 Income (loss) on discontinued operations attributable to ICG common shareholders   --   --   0.02  -- 
 Income (loss) attributable to ICG common shareholders   $ 0.01  $ 0.87  $ 1.26  $ 0.42
         
Shares used in computation of diluted net income (loss) per

 common share attributable to ICG common shareholders 
 37,875  36,692  37,064  36,705
 
 
 Internet Capital Group, Inc. 
 Condensed Consolidated Balance Sheets 
(In thousands)
     
     
     
   December 31,   December 31, 
   2010   2009 
     
 ASSETS     
 Cash and cash equivalents   $ 92,639  $ 55,528
 Accounts receivable, net   25,705  19,120
 Deferred tax asset   6,792  8,147
 Income tax receivable   6,314  11,071
 Prepaid expenses and other current assets   2,507  2,146
 Assets of discontinued operations   --   1,750
 Total current assets   133,957  97,762
 Marketable securities   --   73,512
 Fixed assets, net   5,991  4,179
 Ownership interests in partner companies   83,829  97,777
 Goodwill   20,317  20,317
 Intangibles, net   13,832  14,789
 Deferred tax asset   21,288  20,724
 Other assets, net   1,904  1,027
 Total assets   $ 281,118  $ 330,087
     
     
     
 LIABILITIES AND STOCKHOLDERS' EQUITY     
 Current maturities of other long-term debt   $ 4,546  $ 381
 Accounts payable   1,973  1,590
 Accrued expenses   3,033  4,463
 Accrued compensation and benefits   15,327  12,218
 Deferred revenue   10,226  5,668
 Liabilities of discontinued operations   --   320
 Total current liabilities   35,105  24,640
 Long-term debt   15,535  645
 Other non-current liabilities   867  1,640
 Total liabilities   51,507  26,925
 Redeemable noncontrolling interest   1,182  1,420
 Equity:     
 Controlling (ICG) equity   223,780  280,665
 Noncontrolling interest   4,649  21,077
 Total stockholders' equity   228,429  301,742
 Total liabilities and stockholders' equity   $ 281,118  $ 330,087
         
         
ICG        
Non-GAAP Reconciliation        
(In thousands)        
         
The following table is a reconciliation of non-GAAP financial measures to GAAP results.        
         
   Quarter Ended December 31,   Year Ended December 31, 
  2010 2009 2010 2009
         
Reconciliation of GAAP revenue to core consolidated revenue (A)        
         
GAAP revenue  $ 33,076  $ 23,951  $ 115,710  $ 90,252
         
GovDelivery revenue for periods prior to acquisition  --   2,074  --   7,031
Deferred revenue not recorded in purchase accounting  38  --   1,955  -- 
Vcommerce revenue to exclude periods while consolidated  --   --   --   (4,610)
         
Core consolidated revenue  $ 33,114  $ 26,025  $ 117,665  $ 92,673
         
         
Reconciliation of GAAP Net income attributable to ICG to adjusted operating income (loss) and core consolidated EBITDA (A)
         
GAAP Net income (loss) attributable to ICG:  $ 266  $ 32,017  $ 46,589  $ 15,534
         
Net income attributable to non-controlling interests  538  11,989  1,319  12,995
Discontinued operations  --   --   (802)  -- 
Equity loss (income)  2,155  1,493  16,022  12,131
Income tax expense (benefit)  (2,811)  (40,394)  254  (39,510)
Interest (income) expense, net  99  (98)  36  (230)
Other (income) loss, net  (28)  (5,353)  (74,147)  (16,578)
         
Consolidated operating income (loss)  219  (346)  (10,729)  (15,658)
         
Depreciation - corporate  13  15  58  90
Intangibles amortization resulting from acquisitions - corporate  337  --   1,357  205
Depreciation and amortization - core consolidated  721  379  2,490  1,281
Stock-based compensation - corporate  582  257  2,345  2,888
Stock-based compensation - core consolidated  147  228  682  791
Impairment related and other - corporate  --   --   796  4,876
Impairment related and other - core consolidated  10  --   386  -- 
         
Adjusted operating income (loss)  2,029  533  (2,615)  (5,527)
         
Corporate:        
Operating expenses  3,631  3,628  14,766  13,279
         
Core Consolidated Companies:        
Deferred revenue not recorded in purchase accounting  38  --   1,955  -- 
Other income (loss), net  (100)  (185)  (360)  602
         
Proforma:        
GovDelivery results of operations for periods prior to acquisition  --   38  --   (342)
Vcommerce results of operations to exclude periods while consolidated  --   --   --   1,301
         
Core consolidated EBITDA  $ 5,598  $ 4,014  $ 13,746  $ 9,313
         
(A) Core consolidated revenue, core consolidated EBITDA and adjusted operating income (loss) are non-GAAP financial measures and have no standardized measurement prescribed by GAAP. Core consolidated revenue is the sum of the revenue of ICG's three core consolidated companies. Core consolidated EBITDA is the sum of the earnings (losses) before interest, taxes, depreciation and amortization, stock-based compensation and unusual items of ICG's three core consolidated companies. ICG's management considers charges unusual when they are transactional-driven or non-recurring. Adjusted operating income (loss) is operating income (loss), adjusted for depreciation and amortization, stock-based compensation, and impairment related and other amounts of ICG's three core consolidated companies. ICG's management believes these non-GAAP financial measures provide useful information to investors, potential investors, securities analysts and others that enables each such group to evaluate core consolidated companies' current and future prospects in a similar manner as ICG's management and review results on a comparable basis for all periods presented.
CONTACT:  Investor inquiries:
          Karen Greene
          ICG
          Investor Relations
          610-727-6900
          IR@icg.com

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