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Internet Capital Group Announces Second Quarter Results
Wayne, PA – August 3, 2006 – Internet Capital Group, Inc. (Nasdaq: ICGE) today reported its results for the second quarter ended June 30, 2006.
Second Quarter Highlights:
- Achieved solid quarterly Core company revenue growth.
- Revenue growth and operating results at ICG Commerce, StarCite and Metastorm were particularly strong.
- Repurchased $10.4 million of debt, resulting in a balance of $26.6 million of outstanding convertible debt.
Subsequent Event:
- The Core group saw significant M&A activity including Investor Force selling its database division to Morningstar for $10.0 million in cash and a licensing deal, and CreditTrade announcing its pending merger with Creditex.
“We are excited about the underlying revenue growth we are seeing at a number of our Core companies, including ICG Commerce, StarCite and Metastorm,” said Walter Buckley, ICG’s Chairman and Chief Executive Officer. “We are also very enthusiastic about the level of M&A activity we are seeing at our partner companies, such as CreditTrade and Investor Force. The pending merger between CreditTrade and Creditex is a great example of combining forces with a competitor - increasing functionality, scalability and market share - and emerging as a stronger, more valuable entity. Ultimately, we believe this type of M&A activity results in value creation for ICG and its stockholders.”
ICG Financial Results
ICG reported consolidated revenue of $16.0 million for the second quarter of 2006 versus $9.8 million for the 2005 period. ICG reported consolidated revenue of $31.2 million for the six months ended June 30, 2006 versus $20.9 million for the comparable 2005 period. Investor Force’s database division was sold in August 2006 and has been reflected as a discontinued operation for all periods presented.
ICG reported a net loss of $(7.8) million, or $(0.21) per share, for the second quarter of 2006 versus net income of $1.1 million, or $0.03 per diluted share, for the 2005 period. Results for the 2006 quarter include $1.9 million of stock based compensation versus $0.4 million in the prior year’s period. Additionally, results for the 2006 quarter include $0.3 million in net charges primarily related to a loss on debt repurchases offset by other gains and an income tax benefit versus $10.0 million in net gains in 2005 primarily from sales of Blackboard shares. ICG reported a net loss of $(12.7) million, or $(0.34) per share, for the six months ended June 30, 2006 versus a net loss of $(2.0) million, or $(0.05) per share, for the prior year period.
ICG’s corporate cash and short-term investment balance at June 30, 2006 was $107.4 million and the value of its public securities was $92.5 million.
Online versions of Q2 Release Earnings (PDF):
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ICG
Core Partner Company Information
Set forth below is pro forma information relating to ICG’s current nine private Core companies: CreditTrade, Freeborders, ICG Commerce, Investor Force, Marketron, Metastorm, StarCite, Vcommerce and WhiteFence. Our ownership positions in these nine companies averages 48%.
Aggregate pro forma revenue of ICG’s nine private Core companies grew 12% year over year, to $55.0 million in the second quarter of 2006 from $48.9 million in the first quarter of 2005. Aggregate pro forma EBITDA (loss) for the Core companies increased to $(3.6) million in the second quarter of 2006 from $(3.1) million in the second quarter of 2005. CreditTrade had a down quarter from a very strong 2005 quarter. Excluding CreditTrade, aggregate pro forma revenue of ICG’s eight other private Core companies grew 38% year over year, and aggregate pro forma EBITDA (loss) improved 58%. Please refer to the supplemental financial data at the end of this release for a reconciliation of such amounts to the nearest comparable GAAP measures.
“ICG executed against a number of its strategic objectives, both at the ICG Corporate and Core company levels,” said Kirk Morgan, Chief Financial Officer at ICG. “In the past year, we repurchased more than $33 million of debt, effectively repurchasing 3.7 million shares of common stock potentially issuable upon conversion. Additionally, we’ve seen good momentum at a number of our partner companies this quarter and our Core companies are projected to achieve at least 20% revenue growth for the year.”
ICG will host a webcast at 10:00 am ET today to discuss 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 http://www.internetcapital.com/investorinfo-preswebcast.htm and click on the link for the second 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 at 877-407-8035. The international dial in number is 201-689-8035.
For those unable to participate in the conference call, a replay will be available beginning August 3, 2006 at 11:00 am until August 10, 2006 at 11:59p.m. To access the replay, dial 877-660-6853 (domestic) or 201-612-7415 (international) and enter the account code, 286, followed by the conference ID number 208352. The replay and slide presentation can also be accessed on the Internet Capital Group web site at http://www.internetcapital.com/investorinfo-preswebcast.htm. |
About
Internet Capital Group
Internet Capital Group (www.internetcapital.com) builds and owns Internet software and services companies that drive business productivity and reduce transaction costs between firms. Founded in 1996, ICG devotes its expertise and capital to maximizing the success of these platform companies that are delivering software and service applications to customers worldwide. |
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 uncertainty of future performance of our partner companies, acquisitions or dispositions of interests in additional partner companies, the effect of economic conditions generally, capital spending by customers and development of the e-commerce and information technology markets, and uncertainties detailed in the Company’s filings with the Securities and Exchange Commission. These and other factors may cause actual results to differ materially from those projected.
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