Exhibit 99.1
IceWEB™ Announces First Quarter Financial Results
HERNDON, Va. - (BUSINESS WIRE) - February 17, 2009, - IceWEB, Inc. (OTCBB:IWEB), www.IceWEB.com, today announced financial results for its fiscal first quarter which ended December 31, 2008. Revenue for the first quarter totaled $1,741,000 compared to $4,213,000 for the same period in 2007. Gross profit margin rose during the same period almost 100% from 14% to 27.2%. Total gross margin for the first quarter was $472,913. First quarter total operating expenses were $936,000, $501,000 of which were non-cash items. After adjusting for non-cash items and interest expense, the Company’s pro-forma EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the quarter resulted in a $38,000 compared to ($154,700) in Q1 of fiscal 2008.
John R. Signorello, Chairman and Chief Executive Officer of IceWEB, Inc., stated, “Our first quarter results are the direct result of strategic initiatives we’ve taken to drastically reduce the corporation’s fixed operational costs. Concurrently, we continue to expand our sales, R&D, and marketing efforts on our high-margin INLINE storage products and our IceWEB Online business units.
Signorello continued, “Our vision is clear and concise – continue to gain market share and profits in the fast-growing GIS (Geographical Information Systems) market place with our high-performance GIS storage solutions. Our GIS business growth is also being fueled by the strong business alliances we’ve formed with some of the GIS market leaders.
Q1 2009 Highlights
| • | Compared to Q1 2008, in Q1 2009... |
| o | Gross Profits increased to 27.2% from 14%. |
| o | Operating Expenses were reduced by 16% |
| o | R&D investments went to $81,000 from $0. |
| o | EBITDA went to a profitable $38,000 from ($154,700) |
| • | Interest rates on current loan reduced by 25% |
| • | Company receive Sarbanes Oxley corporate compliance certificate |
Going forward, the Company projects growing revenues with commensurate gross profits for the remainder of 2009 and beyond.
Non-Cash Items
In Q1 there was approximately $501,000 in non-cash expenses; $176,248 in depreciation and amortization, $292,488 from FAS123(R) and stock based compensation, and $32,264 in deferred financing costs. The Company uses the Black-Scholes model for calculating FAS123(R) expense, which relates to stock options and other equity awards given to our employees. The non-cash expense calculated at the time of an option grant is recognized over the vesting period of the option and has no impact on cash flows. FAS123(R) expenses are estimated to be approximately $160,000 per quarter, through the end of this fiscal year.
ICEWEB, Inc.
Consolidated Balance Sheets
CURRENT ASSETS: |
| December 31, 2008 |
|
| September 30, 2008 (1) |
|
Cash | $ | 3,498 |
| $ | 4,780 |
|
Accounts receivable, net of allowance for doubtful accounts of $9,000 |
| 3,794,162 |
|
| 3,094,110 |
|
Inventory, net |
| 461,055 |
|
| 400,312 |
|
Other current assets |
| 16,807 |
|
| 21,572 |
|
Prepaid expenses |
| 55,308 |
|
| 55,155 |
|
|
| 4,330,830 |
|
| 3,575,929 |
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|
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|
OTHER ASSETS: |
|
|
|
|
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Property and equipment, net of accumulated depreciaton of $1,542,871 |
| 1,091,968 |
|
| 1,169,369 |
|
Deposits |
| 61,418 |
|
| 61,418 |
|
Intangible assets, net of accumulated amortization of $542,047 |
| 1,048,882 |
|
| 1,132,612 |
|
Total Assets | $ | 6,533,098 |
| $ | 5,939,328 |
|
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CURRENT LIABILITIES: |
|
|
|
|
|
|
Accounts payable and accrued liabilities | $ | 7,865,191 |
| $ | 7,762,872 |
|
Notes payable |
| 1,842,055 |
|
| 1,372,565 |
|
Deferred revenue |
| 14,396 |
|
| 13,164 |
|
|
| 9,721,642 |
|
| 9,148,601 |
|
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Long-Term Liabilities |
|
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Notes Payable |
| 1,145,921 |
|
| 956,520 |
|
Total Liabilities |
| 10,867,563 |
|
| 10,105,121 |
|
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Stockholders’ Deficit |
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Preferred stock ($.001 par value; 10,000,000 shares authorized) Series A convertible preferred stock ($.001 par value; 0 shares issued and outstanding) |
| — |
|
| — |
|
Series B convertible preferred stock ($.001 par value; 1,253,334 shares issued and outstanding) |
| 1,253 |
|
| 1,253 |
|
Common stock ($.001 par value; 1,000,000,000 shares authorized; 30,979,369 shares issued and 30,816,669 shares outstanding) |
| 30,981 |
|
| 24,690 |
|
Additional paid in capital |
| 16,437,291 |
|
| 15,953,221 |
|
Accumulated deficit |
| (20,790,990 | ) |
| (20,131,957 | ) |
Treasury stock, at cost, (162,500 shares) |
| (13,000 | ) |
| (13,000 | ) |
Total stockholders’ deficit |
| (4,334,465 | ) |
| (4,165,793 | ) |
|
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Total Liabilities and stockholders’ deficit | $ | 6,533,098 |
| $ | 5,939,328 |
|
| (1) | Derived from audited financial statements |
See notes to unaudited consolidated financial statements
ICEWEB, Inc.
Consolidated Statements of Operations
| Three Months Ended |
| ||||
| 2008 |
| 2007 |
| ||
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Sales | $ | 1,740,588 |
| $ | 4,212,732 |
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Cost of sales |
| 1,267,675 |
|
| 3,613,816 |
|
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Gross profit |
| 472,913 |
|
| 598,916 |
|
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Operating expenses: |
|
|
|
|
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|
Marketing and selling |
| 11,244 |
|
| 29,405 |
|
Depreciation and amortization |
| 176,248 |
|
| 75,831 |
|
Research and development |
| 81,665 |
|
| — |
|
General and administrative |
| 667,059 |
|
| 1,006,948 |
|
|
|
|
|
|
|
|
Total Operating Expenses |
| 936,216 |
|
| 1,112,184 |
|
|
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|
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|
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Loss From Operations |
| (463,303 | ) |
| (513,268 | ) |
|
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Other income (expenses): |
|
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Interest income |
| 483 |
|
| 924 |
|
Interest expense |
| (196,214 | ) |
| (97,636 | ) |
|
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Total other income (expenses): |
| (195,731 | ) |
| (96,712 | ) |
|
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Net loss | $ | (659,034 | ) | $ | (609,980 | ) |
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Basic and diluted loss per common share | $ | (0.02 | ) | $ | (0.05 | ) |
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Weighted average common shares outstanding – basic and diluted |
| 28,855,635 |
|
| 13,305,466 |
|
See notes to unaudited consolidated financial statements
ICEWEB, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
|
| Three Months Ended |
|
| |||||
|
| 2008 |
| 2007 |
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NET CASH PROVIDED/(USED) IN OPERATING ACTIVITIES |
| $ | (842,930 | ) | $ | 724,231 |
| ||
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CASH FLOWS FROM INVESTING ACTIVITIES: |
|
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|
| ||
Purchase of property and equipment |
|
| (15,119 | ) |
| (9,892 | ) | ||
Cash used in acquisitions, net |
|
| — |
|
| (1,538,407 | ) | ||
NET CASH USED IN INVESTING ACTIVITIES |
|
| (15,119 | ) |
| (1,548,299 | ) | ||
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CASH FLOWS FROM FINANCING ACTIVITIES: |
|
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| ||
Repayment of equipment financing |
|
| (26,586 | ) |
| (21,480 | ) | ||
Proceeds from notes payable - related party |
|
| — |
|
| 1,482 |
| ||
Repayment of notes payable - related party |
|
| — |
|
| (8,540 | ) | ||
Proceeds from notes payable |
|
| 1,972,131 |
|
| 2,812,247 |
| ||
Proceeds from exercise of common stock options |
|
| 600 |
|
| — |
| ||
Payments on notes payable |
|
| (1,089,378 | ) |
| (2,393,414 | ) | ||
|
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NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
| 856,767 |
|
| 390,295 |
| ||
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NET DECREASE IN CASH |
|
| (1,282 | ) |
| (433,773 | ) | ||
|
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| ||
CASH - beginning of period |
|
| 4,780 |
|
| 1,092,470 |
| ||
|
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CASH - end of period |
| $ | 3,498 |
| $ | 658,697 |
| ||
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Supplemental disclosure of cash flow information: |
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Cash paid for : |
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Interest |
| $ | 148,647 |
| $ | 97,636 |
| ||
Income taxes |
|
| — |
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| — |
| ||
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Non-cash transactions affecting investing and financing activities: |
|
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Conversion of shares of preferred stock to shares of common stock |
|
| — |
|
| 456,667 |
| ||
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Acquisition details: |
|
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Fair value of assets acquired |
| $ | — |
| $ | 2,688,795 |
| ||
Intangible assets |
| $ | — |
| $ | 1,215,450 |
| ||
Liabilities assumed |
| $ | — |
| $ | (614,668 | ) | ||
Common stock issued in connection with acquisition |
| $ | — |
| $ | 876,846 |
| ||
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See notes to unaudited consolidated financial statements
Investors and shareholders who wish to be included in the corporate database for company press releases and industry updates, please send an e-mail to LCGroup@mindspring.com
About IceWEB, Inc.
Headquartered just outside of Washington, D.C., IceWEB manufactures and markets storage solutions and on-line application services. Additionally it is a leading source for best-of-class security products, services and solutions offered in partnership with a wide range of global technology leaders. Its customer base includes U.S. government agencies, enterprise companies, and small to medium sized businesses (SMB). For more information, please visit www.IceWEB.com.
“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are forward looking statements that involve a number of risks and uncertainties. It is possible that the assumptions made by management are not necessarily the most likely and may not materialize. In addition, other important factors that could cause actual results to differ materially include the following: business conditions and the amount of growth in the computer industry and general economy; competitive factors; ability to attract and retain personnel, including key sales and management personnel; the price of the Company’s stock; and the risk factors set forth from time to time in the Company’s SEC reports, including but not limited to its annual report on Form 10-K and its quarterly reports on Forms 10-Q; and any reports on Form 8K. IceWEB takes no obligation to update or correct forward-looking statements.
FOR MORE INFORMATION, PLEASE CONTACT:
703-344-0951 or email at investor@iceweb.com