SOURCE: Internet Commerce Corporation

March 15, 2007 16:30 ET

Internet Commerce Corporation Announces Financial Results for Second Quarter Fiscal 2007

NORCROSS, GA -- (MARKET WIRE) -- March 15, 2007 -- Internet Commerce Corporation (ICC) (NASDAQ: ICCA), a leader in business-to-business e-commerce solutions, today announced financial results for its fiscal second quarter 2007.

Second Quarter Fiscal Year 2007 Results

Second quarter revenue from continuing operations in fiscal 2007 was approximately $5.3 million, up 6.0% compared with our second quarter of fiscal 2006 revenues of approximately $5.0 million. Net income was approximately $703,000 compared to a net income of approximately $372,000 for the same period in fiscal 2006, an increase of approximately 89%. Basic and diluted income per common share from continuing operations were $0.04 and $0.03, respectively, as compared with $0.01 per basic and diluted common share for the fiscal 2006 period.

In the EC Solutions segment, comprised of the ICC.NET™ Value Added Network, browser-based and hosted applications and desktop software, second quarter revenues from continuing operations were approximately $3.9 million, up 23% from approximately $3.2 million in the fiscal second quarter 2006 period. Revenues from the EC Services segment, comprised of the EC service center, managed services and professional services, were approximately $1.4 million, down 23% from approximately $1.9 million in the second quarter of fiscal 2006.

Total expenses from continuing operations remained flat in second quarter fiscal 2007 as compared to the second quarter 2006 at approximately $4.6 million.

"ICC is pleased to report a basic earnings per share increase of $0.03 and growth year-over-year with approximately $5.3 million in revenue and approximately $700 thousand in net income," said Thomas J. Stallings, ICC's chief executive officer. "Those results are a testament to the strength of our offerings in the EC Solutions segment. Customers continue to select and grow their business by relying on us for unmatched customer support and reliability. While the decline in services revenue was disappointing, it was not unexpected. We have planned for and continue to execute cost control measures to ensure solid financial results."

Mr. Stallings added that the decline in the EC Services segment revenue resulted from anticipated attrition of customers obtained in acquisitions and that the declining revenue in this segment is expected to stabilize for the second half of fiscal year 2007. Mr. Stallings also noted that as a result of the cost control efforts, the gross margin for the EC Services segment increased 10% in the second quarter of fiscal 2007 as compared to second quarter of fiscal 2006.

Six Month Fiscal 2007 Results

For the six months ended January 31, 2007, revenues from continuing operations totaled approximately $11.1 million, up 11% compared with first half fiscal 2006 revenues of approximately $10.0 million. Net income was approximately $1.3 million compared to a net income of approximately $1.1 million for the same period in fiscal 2006, an increase of 17%. Basic and diluted income per common share from continuing operations were $0.06 and $0.05, respectively, as compared to $0.05 per basic and diluted common share for the six month period of fiscal 2006 period.

The Company ended the first six months of fiscal 2007 with approximately $6.1 million of cash on hand. The balance sheet remains strong with current assets ending at approximately $10.6 million and current liabilities at approximately $2.0 million. The Company believes it is well positioned to take advantage of acquisition and other 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 (NASDAQ: ICCA), headquartered in Norcross, Georgia, is a leader in providing 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 e-commerce solutions for businesses, regardless of size and level of technical sophistication, to connect them with their trading communities. For more information, visit www.icc.net.

INTERNET COMMERCE CORPORATION

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


                              Three Months Ended       Six Months Ended
                                  January 31,             January 31,
                            ----------------------  ----------------------
                               2007        2006        2007        2006
                            ----------  ----------  ----------  ----------

Service revenues            $    5,302  $    5,012  $   11,110  $   10,030
                            ----------  ----------  ----------  ----------

Expenses:
   Cost of services              1,970       1,750       3,829       3,655
   Product development and
    enhancement                    586         207       1,303         310
   Selling and marketing           369         577         889         993

   General and
    administrative               1,720       2,081       3,829       3,935
                            ----------  ----------  ----------  ----------
                                 4,645       4,615       9,850       8,893
                            ----------  ----------  ----------  ----------

   Operating income                657         397       1,260       1,137
                            ----------  ----------  ----------  ----------

Other income (expense):
   Interest and investment
    income                          81          35         164          60
   Interest expense                (19)        (77)        (40)       (113)
   Other income (expense)            1          10         (22)         27
                            ----------  ----------  ----------  ----------
                                    63         (32)        102         (26)
                            ----------  ----------  ----------  ----------
Income before provision for
 income taxes                      720         365       1,362       1,111

Provision (benefit) for
 income taxes, current              17          (7)         84          17
                            ----------  ----------  ----------  ----------

Net income                         703         372       1,278       1,094
                            ----------  ----------  ----------  ----------

Dividends on preferred stock       (83)       (102)       (185)       (201)
Extinguishment of dividends
 on retired preferred stock        200          --         200          --
                            ----------  ----------  ----------  ----------

Net income attributable to
 common stockholders        $      820  $      270  $    1,293  $      893
                            ==========  ==========  ==========  ==========

Basic income per common
 share                      $     0.04  $     0.01  $     0.06  $     0.05
                            ==========  ==========  ==========  ==========
Diluted income per common
 share                      $     0.03  $     0.01  $     0.05  $     0.05
                            ==========  ==========  ==========  ==========

Anti-dilutive stock options
 and warrants outstanding    1,710,399   1,652,695   1,710,399   2,527,457
Weighted average number of
 common shares outstanding
 - basic                    22,740,594  19,462,025  22,728,530  19,560,428
                            ==========  ==========  ==========  ==========
Weighted average number of
 common shares outstanding
 - diluted                  24,963,417  22,124,182  25,066,145  21,865,940
                            ==========  ==========  ==========  ==========




INTERNET COMMERCE CORPORATION

Consolidated Balance Sheets
(in thousands)


                                                  January 31,    July 31,
                                                     2007          2006
                                                  -----------  -----------
                                                  (unaudited)
ASSETS
Current assets:
   Cash and cash equivalents                      $     6,095  $     6,989
   Accounts receivable, net of allowance for
    doubtful accounts and allowance for sales
    returns and allowances of $518 and $458,
    respectively                                        3,878        3,631
   Prepaid expenses and other current assets              631          462
                                                  -----------  -----------
      Total current assets                             10,604       11,082

Restricted cash                                           433          433
Property and equipment, net                             1,142        1,113
Goodwill                                                6,169        6,148
Other intangible assets, net                            4,376        4,830
Other assets                                               41           38
                                                  -----------  -----------
      Total assets                                $    22,765  $    23,644
                                                  ===========  ===========

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
   Accounts payable                               $       500  $       662
   Accrued expenses                                       757          575
   Accrued dividends - preferred stock                     17          232
   Deferred revenue                                       239          262
   Lease liability from acquisition                       305          250
   Other current liabilities                              139          116
                                                  -----------  -----------
      Total current liabilities                         1,957        2,097


Long-term lease liability from acquisition                842          967
                                                  -----------  -----------
      Total liabilities                                 2,799        3,064
                                                  -----------  -----------


Stockholders’ Equity:
Preferred stock                                             *            *
Common stock                                              227          227
Additional paid-in capital                            101,151      103,043
Accumulated deficit                                   (81,412)     (82,690)
                                                  -----------  -----------
      Total stockholders’ equity                       19,966       20,580
                                                  -----------  -----------

      Total liabilities and stockholders’ equity  $    22,765  $    23,644
                                                  ===========  ===========

 * less than 1,000

Contact Information

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