News Column

ICG Announces First Quarter 2014 Financial Results

May 1, 2014

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)    
           
 20132014
 Q1Q2Q3Q4Q1
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:

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.

 •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.

 •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.

 •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.

 •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.

 •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.

 •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.

 •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:

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:

• 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.

 • 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.

 • 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.

 

CONTACT: Investor inquiries: Karen Greene ICG Investor Relations 610.727.6900 IR@icg.com



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Source: ICG Group, Inc.


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