SOURCE: Internet Commerce Corporation

October 16, 2006 09:25 ET

Internet Commerce Corporation Announces Financial Results for Fourth Quarter and Year End Fiscal 2006

NORCROSS, GA -- (MARKET WIRE) -- October 16, 2006 -- Internet Commerce Corporation (ICC) (NASDAQ: ICCA), a leader in business-to-business e-commerce solutions, today announced financial results for its fiscal fourth quarter and year ended July 31, 2006.

In announcing the results, Thomas J. Stallings, chief executive officer, said, "ICC's performance for fiscal year 2006 demonstrates continued progress with our 'Growth with Profitability' strategy. I am pleased to report another historic year with revenue of $19.8 million, net income of $2.98 million and earnings per share of $0.12. Those results validate the strategic execution in recent years and show strength in our approach to managing the business. We remain committed to growing the business through investments in acquisitions and organic growth initiatives and driving performance that produces solid returns for our investors."

Fourth Quarter Fiscal Year 2006 Results

Fourth quarter revenue from continuing operations in fiscal 2006 was approximately $5.2 million compared with our fourth quarter of fiscal 2005 revenues of approximately $5.1 million. Net income was $1.3 million, up 112% compared with net income of $628,000 a year ago. Basic and diluted earnings per common share from continuing operations increased to $0.06 compared with basic and diluted earnings of $0.03 per common share in the same period of fiscal 2005.

The Company's total gross profit margin from continuing operations improved to 70.3% in fourth quarter fiscal 2006 from 61.7% in the fourth quarter of last fiscal year, and total expenses from continuing operations increased 5% in fourth quarter fiscal 2006 from the prior-year period to $4.7 million from $4.4 million. The increase in expenses during the quarter was driven by the acquisition of ENABLE Corporation.

Fiscal Year 2006 Results

For the fiscal year ended July 31, 2006, revenues from continuing operations totaled approximately $19.8 million, up 18% compared with fiscal year 2005 revenues of $16.7 million. Net income was approximately $2.98 million compared to a net income of $234,000 for fiscal year 2005, an increase of 1,172%. Basic and diluted income per common share from continuing operations was $0.12 compared with a loss of $0.01 per basic and diluted common share for fiscal year 2005.

Fiscal year 2006 revenue growth of 18% was driven by both business segments. In the ICC.NETTM segment, fiscal year revenues from continuing operations were approximately $12.8 million, up 13% from approximately $11.3 million for the same fiscal 2005 period. This revenue represented 65% of consolidated revenue in the fiscal year 2006 compared to 67% of consolidated revenue in the fiscal year 2005. Revenues from the Service Bureau segment were approximately $7.0 million, an increase of 30% compared with $5.4 million in fiscal year 2005. This revenue represented 35% of consolidated revenue compared to 33% of consolidated revenue in fiscal year 2005.

The Company's total gross profit margin from continuing operations improved to 65.7% in fiscal 2006 from 63.8% in fiscal year 2005, and total expenses from continuing operations increased 7% in fiscal year 2006 from the prior-year period to approximately $17.6 million from approximately $16.5 million.

The company ended fiscal 2006 with approximately $7 million of cash on hand, up from approximately $4 million at the end of fiscal 2005. The balance sheet remains strong with current assets ending at approximately $11 million and current liabilities at approximately $2.1 million. The company believes it is well positioned to take advantage of investment opportunities.

Forward-Looking and Cautionary Statements

Except for the historical information and discussion contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, as discussed in the company's filing with the U.S. Securities and Exchange Commission (SEC).

About Internet Commerce Corporation (ICC)

Internet Commerce Corporation (ICC), headquartered in Norcross, GA, is a leader in business-to-business e-commerce solutions. Thousands of customers rely on ICC's comprehensive line of solutions, in-depth expertise, and unmatched customer service to help balance cost, fit, and function required to meet unique requirements for trading partner compliance, coordination, and collaboration. With its software solutions, network services, hosted web applications, managed services, and consulting services, ICC is the trusted provider of solutions for businesses, regardless of size and level of technical sophistication, to connect with their trading communities. For more information, visit www.icc.net.

INTERNET COMMERCE CORPORATION

Consolidated Statements of Operations in thousands, except for share and
 per share amounts)


                           Three Months Ended       Twelve Months Ended
                                July 31,                  July, 31
                       ------------------------   ------------------------
                            2006         2005         2006         2005
                        -----------  -----------  -----------  -----------
                         Unaudited    Unaudited    Unaudited     Audited

  Service revenues      $     5,206  $     5,078  $    19,771  $    16,705
                        -----------  -----------  -----------  -----------

  Expenses:

  Cost of services            1,546        1,945        6,780        6,047
  Product development
   and enhancement              131          172          632          855
  Selling and marketing         548          525        2,108        2,673
      General and
       administrative         2,446        1,792        8,097        6,903
                        -----------  -----------  -----------  -----------
                              4,671        4,434       17,617       16,478
                        -----------  -----------  -----------  -----------

        Operating
         income                 535          644        2,154          227
                        -----------  -----------  -----------  -----------

  Other income
   (expense):
    Interest and
     investment income           65           11          200           39
    Interest expense            (22)           -         (158)          (5)
    Other income
     (expense)                  786            3          841            3
                        -----------  -----------  -----------  -----------
                                829           14          883           37
                        -----------  -----------  -----------  -----------
  Income before
   provision for income
   taxes                      1,364          658        3,037          264

  Provision for income
   taxes, current                33           30           61           30
                        -----------  -----------  -----------  -----------

  Net Income                  1,331          628        2,976          234
                        -----------  -----------  -----------  -----------

  Dividends on
   preferred stock             (101)        (101)        (400)        (400)
                        -----------  -----------  -----------  -----------

  Net income (loss)
   attributable to
   common stockholders  $     1,230  $       527  $     2,576  $      (166)
                        ===========  ===========  ===========  ===========

  Basic income (loss)
   per common share     $      0.06  $      0.03  $      0.12  $     (0.01)
                        ===========  ===========  ===========  ===========
  Diluted income (loss)
   per common share     $      0.06  $      0.03  $      0.12  $     (0.01)
                        ===========  ===========  ===========  ===========

 Anti-dilutive stock
   options and warrants
   outstanding            1,235,989    4,685,383    1,584,704    4,698,717
  Weighted average
   number of common
   shares outstanding -
   basic                 20,092,440   19,230,869   20,643,139   19,230,869
                        ===========  ===========  ===========  ===========
  Weighted average
   number of common
   shares outstanding –
   diluted               22,397,935   20,402,935   22,640,496   19,603,540
                        ===========  ===========  ===========  ===========


INTERNET COMMERCE CORPORATION

Consolidated Balance Sheets
(in thousands)

                                                   July 31,     July 31,
                                                     2006         2005
                                                 -----------  -----------
                                                 (unaudited)
ASSETS
Current assets:
  Cash and cash equivalents                      $     6,989  $     3,983
  Accounts receivable, net of allowance for
   doubtful accounts and allowance for sales
   returns and allowances of $458 and $582,
   respectively                                        3,631        3,476
  Prepaid expenses and other current assets              462          404
                                                 -----------  -----------
    Total current assets                              11,082        7,863

Restricted cash                                          433          417
Property and equipment, net                            1,113          630
Goodwill                                               6,148        3,843
Other intangible assets, net                           4,830        1,773
Other assets                                              38           32
                                                 -----------  -----------
    Total assets                                 $    23,644  $    14,558
                                                 ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                               $       662  $       226
  Accrued expenses                                       575        1,491
  Accrued dividends - preferred stock                    232          232
  Deferred revenue                                       262          152
  Capital lease obligation                                 -            4
  Lease liability from acquisition                       250          749
  Other current liabilities                              116          145
                                                 -----------  -----------
    Total current liabilities                          2,097        2,999


Long-term lease liability from acquisition               967        1,217
                                                 -----------  -----------
    Total liabilities                                  3,064        4,216
                                                 -----------  -----------


Stockholders' Equity:
Preferred stock                                            *            *
Common stock                                             227          194
Additional paid-in capital                           103,043       95,814
Accumulated deficit                                  (82,690)     (85,666)
                                                 -----------  -----------
    Total stockholders' equity                        20,580       10,342
                                                 -----------  -----------

    Total liabilities and stockholders' equity   $    23,644  $    14,558
                                                 ===========  ===========

* less than 1,000

Contact Information

  • Media Contact:
    Terri Deuel
    Internet Commerce Corporation
    678-533-8003