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Internet Capital Group (ICGE)

Q4 2012 Earnings Call

February 21, 2013 10:00 AM ET


Karen Greene - IR and Marketing Communications

Walter Buckley - Chairman and CEO

Kirk Morgan - CFO


Scott Berg - Feltl and Company

Jeff Van Rhee - Craig-Hallum

Richard Fetyko - Janney Capital



Good day ladies and gentlemen and welcome to the Fourth Quarter Annual 2012 ICG Earnings Conference Call. My name is Tahisha and I’ll be your operator for today. At this time, all participants are in a listen-only mode. (Operator Instructions)

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ms. Karen Greene, Managing Director of Investor Relations and Marketing Communications. Please proceed.

Karen Greene

Thank you and good morning. This is Karen Greene with Investor Relations and I want to welcome you to ICG’s fourth quarter and year end conference call. I’d like to remind everyone that we are going to use presentation slides to accompany our prepared remarks today. These slides can be found on our website at Go to the investor information tab and you will see an icon for our fourth quarter conference call. The slides can be accessed through that icon. For those of you without immediate access to our website, the conference call and presentation slides will remain on our website and be available for future reference.

On the call this morning, we will be discussing certain non-GAAP financial measures. For additional information on these non-GAAP financial measures, including a reconciliation of these measures to the most comparable GAAP measures, please refer to the press release we put out this morning, including the attachment to this press release. Please note that we issued a corrected press release at 9:50 a.m. this morning regarding our guidance, the change was very minor and with some core consolidated revenue to GAAP revenue, please be mindful of that change. The press release is available on our website which again is To access the press release on our website go to home page and select the February 21st 2013 press release. The attachments to the release can be accessed by clicking on the PDF file contained within the release itself.

Before we begin, I would like to briefly review our Safe Harbor language. 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 companies’ customers, our companies’ ability to compete successfully against their respective competitors, our partner companies’ ability to timely and effectively respond to technological developments, 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 divestures, our and our partner companies’ collective ability to retain key personnel and other risks and uncertainties detailed in ICG’s filing with the Securities and Exchange Commission. These and other factors may cause actual results to differ materially from those projected.

With that, let me turn the call over to Walter Buckley, ICG’s Chairman and CEO.

Walter Buckley

Thanks Karen and welcome and thank you for joining us this morning. Today I will provide an overview of ICG’s performance for 2012, and our outlook going to 2013, and Kirk Morgan, our Chief Financial Officer, will follow with ICG’s financial results for the fourth quarter and full year.

I am pleased to report to you today on ICG’s strong performance in 2012. Turning to slide 5, I will begin with the financial achievements. In terms of financial achievements we exceeded revenue guidance and achieved the high end of our EBITDA guidance for the year. We purchased approximately 930,000 shares of ICG common stock for $8.3 million during the year. On an operational perspective, we had a very cool year of initiatives and accomplishments.

Turning to Slide 6. We made several accretive platform acquisitions during the year. We acquired 96% ownership in MSDSonline, ICG’s recurring revenue compliance platform. We also completed two tuck-in transactions, Media IQ and UAI, strengthening Procurian’s marketing and energy practices. In addition, we increased our ownership in some of our businesses while streamlining and simplifying our model. We consolidated Channel Intelligence and under our leadership CI achieved a record booking and established a strong partnership with Google. It culminated in its recently announced sale to Google for $125 million, resulting in $60.5 million to ICG.

In addition we completed our tender offer for Procurian shares increasing our ownership on Procurian to 85%. And we recently announced that we increased our ownership in SeaPass to 53%, bringing SeaPass into ICG’s group of consolidated companies, as ICG’s digital insurance platform. We will talk more about SeaPass in a few minutes. Shortly after year end we sold Investor Force to MSCI for $23 million, resulting in approximately $21 million in proceeds to ICG.

For more on operational perspective, turning to slide 7. As a result of our R&D investments for approximately $14 million, we achieved important product development milestones across our procurement, government and compliance businesses. We released a new version of Savings Link, a customer portal and several business intelligent tools at Procurian. We also released a new version of network software GovDelivery, and at MSDSonline we added new chemical management and workload capabilities, a new mobile interface and new training forces all onto their SaaS platforms.

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