RADNOR, Pa., May 1, 2014 (GLOBE NEWSWIRE) -- ICG Group, Inc. (Nasdaq:ICGE) ("ICG") today reported its results for the first quarter ended March 31, 2014.
Revenue was $18.4 million for the first quarter of 2014, compared to $12.0 million for the first quarter of 2013. Net loss for the first quarter of 2014 was $(10.2) million, or $(0.27) per diluted share, compared to net income of $19.1 million, or $0.52 per diluted share, for the corresponding 2013 period. The first quarter of 2013 reflects the gains that ICG realized on the Channel Intelligence and Investor Force sales. Non-GAAP net income (loss) for the first quarter of 2014 was $(3.6) million, or $(0.10) per share, compared to a Non-GAAP net income (loss) of $(5.2) million, or $(0.14) per diluted share, for the prior year quarter.
"We were pleased to start 2014 with a strong first quarter," said Walter Buckley, chief executive officer of ICG. "We experienced excellent revenue growth across all of our businesses, demonstrating the success of our aggressive sales and marketing efforts, and we look forward to building on our positive momentum throughout the remainder of the year."
"We continue to drive growth at our existing businesses and we are also poised to capitalize on the power of the cloud to transform other industry-specific vertical markets," added Buckley. "As a reflection of ICG's evolution in our pursuit of this significant opportunity, we are engaged in a renaming and rebranding process and adopting a new ticker symbol. We are seeking stockholder approval for our new name, Actua Corporation, and look forward to unveiling our new brand in the coming months."
A reconciliation of the non-GAAP financial measures used above with the most comparable GAAP financial measure is included with the financial tables at the end of this release.
Please see ICG's website at www.icg.com for more information on ICG, its businesses and its first quarter 2014 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 Investors tab. Then click the link for the first quarter 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 by dialing 866.318.8620 or 617.399.5139. The passcode for either is 49083277.
For those unable to participate in the conference call, a replay will be available from May 1, 2014 at 12:00 p.m. ET until May 8, 2014 at 11:59 p.m. ET. To access the replay, dial 888.286.8010 or 617.801.6888. The passcode is 23723846. 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) brings the power of the cloud to industry-specific vertical markets, including public sector, compliance and insurance markets. ICG is headquartered in Radnor, Pennsylvania. For more information, please go to www.icg.com.
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 within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain risks and uncertainties, including, but not limited to, risks associated with the effect of economic conditions generally, capital spending by our customers, our ability to retain existing customer relationships and secure new ones, our ability to compete successfully against alternative solutions, our ability to timely and effectively respond to technological developments, our 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 U.S. Securities and Exchange Commission. Those and other factors may cause actual results to differ materially from those projected.
| ICG Group, Inc. | ||
| Consolidated Statements of Operations | ||
| (In thousands, except per share data) | ||
| (Unaudited) | ||
| Three Months Ended March 31, | ||
| 2014 | 2013 | |
| Revenue | $ 18,422 | $ 11,974 |
| Operating Expenses | ||
| Cost of revenue | 4,899 | 4,198 |
| Sales and marketing | 8,531 | 5,682 |
| General and administrative | 10,009 | 8,803 |
| Research and development | 3,253 | 2,246 |
| Amortization of intangibles | 2,301 | 2,491 |
| Impairment related and other | -- | 170 |
| Total operating expenses | 28,993 | 23,590 |
| Operating income (loss) | (10,571) | (11,616) |
| Other income (expense): | ||
| Other income (loss), net | 300 | (64) |
| Interest income | 86 | 31 |
| Interest expense | (511) | (321) |
| Income (loss) before income taxes, equity loss and discontinued operations | (10,696) | (11,970) |
| Income tax benefit (expense) | (94) | (73) |
| Equity loss | (312) | (701) |
| Income (loss) from continuing operations | (11,102) | (12,744) |
| Income (loss) from discontinued operations | 48 | 28,226 |
| Net income (loss) | (11,054) | 15,482 |
| Less: Net income (loss) attributable to the noncontrolling interest | (904) | (3,586) |
| Net income (loss) attributable to ICG | $ (10,150) | $ 19,068 |
| Amounts attributable to ICG common shareholders: | ||
| Net income (loss) from continuing operations | $ (10,198) | $ (11,426) |
| Net income (loss) from discontinued operations | 48 | 30,494 |
| Net income (loss) attributable to ICG common shareholders | $ (10,150) | $ 19,068 |
| Basic and diluted net income (loss) per share: | ||
| Income (loss) from continuing operations attributable to ICG common shareholders | $ (0.27) | $ (0.31) |
| Income (loss) from discontinued operations attributable to ICG common shareholders | (0.00) | 0.83 |
| Income (loss) attributable to ICG common shareholders | $ (0.27) | $ 0.52 |
|
Shares used in computation of basic and diluted net income (loss) per common share attributable to ICG common shareholders |
37,096 | 36,713 |
| Condensed Consolidated Balance Sheets | ||
| (In thousands) | ||
| (Unaudited) | ||
| March 31, | December 31, | |
| 2014 | 2013 | |
| ASSETS | ||
| Cash and cash equivalents | $ 319,815 | $ 334,656 |
| Restricted cash | 1,406 | 1,242 |
| Accounts receivable, net | 15,102 | 11,300 |
| Prepaid expenses and other current assets | 5,900 | 5,907 |
| Total current assets | 342,223 | 353,105 |
| Fixed assets, net | 5,629 | 5,840 |
| Goodwill | 90,466 | 90,466 |
| Intangibles, net | 56,452 | 58,755 |
| Cost and equity method investments | 20,062 | 20,373 |
| Other assets, net | 1,164 | 1,179 |
| Total Assets | $ 515,996 | $ 529,718 |
| LIABILITIES AND EQUITY | ||
| Current maturities of other long-term debt | $ 3,500 | $ 5,902 |
| Accounts payable | 3,012 | 2,970 |
| Accrued expenses | 4,991 | 5,176 |
| Accrued compensation and benefits | 5,137 | 8,732 |
| Deferred revenue | 24,865 | 21,830 |
| Total current liabilities | 41,505 | 44,610 |
| Long-term debt | 5,242 | 6,008 |
| Deferred revenue | 249 | 254 |
| Other liabilities | 1,474 | 1,726 |
| Total Liabilities | 48,470 | 52,598 |
| Redeemable noncontrolling interest | 4,054 | 3,442 |
| Equity: | ||
| Controlling (ICG) equity | 441,161 | 450,161 |
| Noncontrolling interest | 22,311 | 23,517 |
| Total Equity | 463,472 | 473,678 |
| Total Liabilities, Redeemable noncontrolling interest and Equity | $ 515,996 | $ 529,718 |
| ICG Group, Inc. | ||
| Consolidated Statements of Cash Flows | ||
| (In thousands) | ||
| (Unaudited) | ||
| Three Months Ended March 31, | ||
| 2014 | 2013 | |
| Operating Activities - continuing operations | ||
| Net income (loss) | $ (11,054) | $ 15,482 |
| (Income) loss from discontinued operations, including gain on sale, net of tax | (48) | (28,226) |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
| Depreciation and amortization | 3,123 | 3,418 |
| Equity-based compensation | 3,876 | 2,063 |
| Impairment related and other | -- | 170 |
| Other (income) loss | (300) | 64 |
| Equity loss | 312 | 701 |
| Changes in assets and liabilities, net of effect of acquisitions: | ||
| Accounts receivable, net | (3,802) | (305) |
| Prepaid expenses and other assets | 22 | (132) |
| Accounts payable | 42 | (3,054) |
| Accrued expenses | (1,193) | 212 |
| Accrued compensation and benefits | (3,595) | (795) |
| Deferred revenue | 3,030 | 482 |
| Other liabilities | (64) | (700) |
| Cash flows provided by (used in) operating activities | (9,651) | (10,620) |
| Investing Activities - continuing operations | ||
| Capital expenditures, net | (608) | (318) |
| Change in restricted cash | (164) | 203 |
| Proceeds from sales/distributions of ownership interests | 293 | 73,369 |
| Ownership acquisitions, net of cash acquired | -- | (1,870) |
| Cash flows provided by (used in) investing activities | (479) | 71,384 |
| Financing Activities - continuing operations | ||
| Acquisition of noncontrolling interest in subsidiary equity | -- | 3,400 |
| Repayments of long-term debt and capital lease obligations | (3,488) | -- |
| Purchase of treasury stock | -- | (2,114) |
| Tax withholdings related to equity-based awards | (1,271) | (231) |
| Cash flows provided by (used in) financing activities | (4,759) | 1,055 |
| Discontinued Operations | ||
| Cash flows provided by (used in) operating activities | 48 | 620 |
| Cash flows provided by (used in) investing activities | -- | (948) |
| Cash flows provided by (used in) financing activities | -- | (97) |
| Net increase(decrease) in cash and cash equivalents from discontinued operations | 48 | (425) |
| Net decrease in cash and cash equivalents | (14,841) | 61,394 |
| Cash and cash equivalents at beginning of period | 334,656 | 20,872 |
| Cash and cash equivalents at end of period | $ 319,815 | $ 82,266 |
| ICG Group, Inc. | |||||
| Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures | |||||
| (In thousands, except per share data) | |||||
| (Unaudited) | |||||
| 2013 | 2014 | ||||
| Q1 | Q2 | Q3 | Q4 | Q1 | |
| GAAP Net income (loss) attributable to ICG: | $19,068 | ($6,858) | ($3,332) | $200,181 | ($10,150) |
| Add back: | |||||
| Share-based compensation | 2,063 | 2,096 | 1,880 | 844 | 3,876 |
| Amortization of intangibles | 2,491 | 1,544 | 2,176 | 2,259 | 2,301 |
| Impairment related and other | 170 | 127 | 470 | 3,607 | 337 |
| Other (income) loss, net | 64 | 46 | 68 | 4,032 | (300) |
| Acquired businesses' deferred revenue | 753 | 605 | 90 | 76 | 76 |
| Equity loss | 701 | 923 | 295 | 1,044 | 312 |
| Current non-cash income tax benefit on discrete item | -- | -- | -- | (18,017) | -- |
| Loss (Income) from discontinued operations | (28,226) | (2,448) | (5,010) | (196,453) | (48) |
| Impact of non-controlling interest (NCI) for discontinued operations | (2,267) | 283 | 290 | (693) | -- |
| Non-GAAP net income (loss) | ($5,183) | ($3,682) | ($3,073) | ($3,120) | ($3,596) |
| GAAP Net income (loss) per diluted share: | $0.52 | ($0.19) | ($0.09) | $5.18 | ($0.27) |
| Add back: | |||||
| Share-based compensation | $0.06 | $0.06 | $0.05 | $0.02 | $0.10 |
| Amortization of intangibles | $0.07 | $0.04 | $0.06 | $0.06 | $0.06 |
| Impairment related and other | $0.00 | $0.00 | $0.01 | $0.09 | $0.01 |
| Other (income) loss, net | $0.00 | $0.00 | $0.00 | $0.10 | ($0.01) |
| Acquired businesses' deferred revenue | $0.02 | $0.02 | $0.00 | $0.00 | $0.00 |
| Equity loss | $0.02 | $0.03 | $0.01 | $0.03 | $0.01 |
| Current non-cash income tax benefit on discrete item | $0.00 | $0.00 | $0.00 | ($0.47) | $0.00 |
| Income from discontinued operations | ($0.77) | ($0.07) | ($0.13) | ($5.08) | $0.00 |
| Impact of non-controlling interest (NCI) for discontinued operations | ($0.06) | $0.01 | $0.01 | ($0.02) | $0.00 |
| Non-GAAP net income (loss) per diluted share | ($0.14) | ($0.10) | ($0.08) | ($0.09) | ($0.10) |
| Shares used in calculation of GAAP net income (loss) per share attributable to ICG: | |||||
| Basic | 36,713 | 36,468 | 36,303 | 36,664 | 37,096 |
| Diluted | 36,713 | 36,468 | 36,303 | 38,680 | 37,096 |
| Shares used in calculation of non-GAAP net income (loss) per share attributable to ICG: | |||||
| Basic | 36,713 | 36,468 | 36,303 | 36,664 | 37,096 |
| Diluted | 36,713 | 36,468 | 36,303 | 36,664 | 37,096 |
About ICG's Non-GAAP Financial Measures
This release contains non-GAAP financial measures. The tables above reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.
Non-GAAP financial measures should not be considered as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. ICG strongly urges investors and potential investors in our securities to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures that are included in this release.
ICG's management believes that its non-GAAP financial measures provide useful information to investors because they allow investors to view the business through the eyes of management and provide meaningful supplemental information regarding ICG's operating results, as they exclude amounts that ICG excludes as part of its monitoring of operating results and assessment of the performance of the business.
ICG presents the following non-GAAP financial measures in this release: (1) non-GAAP net income (loss) (also referred to as adjusted net income (loss)) and (2) non-GAAP net income (loss) per diluted share (also referred to as adjusted net income (loss) per diluted share). ICG excludes items from these non-GAAP financial measures as described below.
Non-GAAP net income (loss), excludes the additional following items:
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Share-based compensation. ICG excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that ICG does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of ICG's results with results of other companies.
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Amortization of intangibles. ICG excludes amortization of acquired intangibles, primarily customer relationships and technology, because they are expenses that ICG does not consider part of ongoing operating results when assessing the performance of its business, and ICG believes that doing so facilitates comparisons to its historical operating results and to the results of other companies.
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Impairment-related and other costs. ICG excludes the effect of impairment-related and other costs, which primarily include impairment charges, revaluation of contingent consideration, restructuring and severance fees, acquisition related costs, legal and settlement costs and other one-time costs, because ICG does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on ICG's operations.
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Other income (loss), net. ICG excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses, as well as certain foreign currency impacts, because ICG does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on ICG's operations.
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Acquired businesses' deferred revenue. ICG includes acquired businesses' previously deferred revenues that are not recognized under GAAP because ICG considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations.
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Equity loss. In accordance with GAAP, ICG recognizes its share of the earnings or losses of each company accounted for under the equity method and adjusts the carrying amount for each such company for its share of the earnings or losses of the company. ICG excludes GAAP equity income (loss) because it is significantly impacted by factors outside its direct control.
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Current non-cash income tax benefit on discrete items. ICG excludes the impact of any current non-cash income tax benefit associated with discrete items as ICG believes it is useful for investors to understand the effect of this item and ICG does not consider them a part of ongoing operating results when assessing the performance of its business.
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Income (loss) from discontinued operations. ICG excludes the income (loss) from discontinued operations as ICG believes it is useful for investors to understand the effect of this item for all periods presented as ICG does not consider them a part of ongoing operating results when assessing the performance of its business.
- Impact of non-controlling interest (NCI) on discontinued operations. ICG does not own 100% of the discontinued operations presented. Therefore ICG excludes the impact of the NCI on discontinued operations as ICG believes it is useful for investors to understand the effect of this item for all periods presented as compared to what has historically been provided as ICG does not consider them a part of ongoing operating results when assessing the performance of its business.
Non-GAAP net income (loss) per diluted share is calculated as follows:
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Non-GAAP net income (loss) (as defined above) is the numerator.
- Shares used in calculation of non-GAAP net income (loss) per diluted share. For periods where GAAP and non-GAAP net income (loss) are both losses, ICG uses the same number of shares used to calculate GAAP and non-GAAP net loss per share. For periods where GAAP and non-GAAP net income (loss) are both income, ICG uses the same number of shares used to calculate GAAP and non-GAAP net income per diluted share. For periods where GAAP net income (loss) is a loss but non-GAAP net income (loss) is income, ICG includes the impact of incremental dilutive securities for the period to determine non-GAAP net income per diluted share. For periods where GAAP net income (loss) is income but non-GAAP net income (loss) is a loss, ICG excludes the impact of incremental dilutive securities for the period to determine non-GAAP net loss per diluted share.
ICG believes that the following considerations apply to the non-GAAP financial measures that it presents:
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ICG's management uses non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share in internal reports used by management in monitoring and making decisions regarding ICG's business, including in monthly financial reports prepared for management and in periodic reports to ICG's Board of Directors.
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An important limitation of ICG's non-GAAP financial measures is that they exclude expenses, some of which may be significant, that are required by GAAP to be recorded. In addition, non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which charges to exclude from the non-GAAP financial measures.
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To mitigate the limitations associated with non-GAAP financial measures, ICG reconciles its non-GAAP financial measures to the nearest comparable GAAP financial measures and recommends that investors and potential investors do not give undue weight to its non-GAAP financial measures.