Exhibit 99.1
ICC Announces Fourth Quarter and Fiscal 2004 Financial Results
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PRESS RELEASE
ICC Announces Fourth Quarter and Fiscal 2004 Financial Results
NEW YORK - October 29, 2004 - Internet Commerce Corporation (ICC) (NasdaqSC:
ICCA), a pioneer in the use of the Internet for business-to-business (B2B)
e-commerce solutions, today announced financial results for its fourth quarter
and fiscal year ended July 31, 2004.
Thomas J. Stallings, Chief Executive Officer of ICC, commented, "Our fiscal 2004
fourth quarter performance was below expectations; however, significant one-time
expenses of approximately $300,000 adversely affected our financial results.
EBITDA for the fourth quarter of fiscal 2004 was a loss of $291,000, after
adjusting for those one-time charges. As a result of this adjustment, the EBITDA
loss for the fiscal fourth quarter decreased 50% from the year ago period. With
the additional revenue contribution from the acquisition of Electronic Commerce
Systems, Inc., which closed in June 2004, we have significantly increased
revenue in July, August and September of 2004 and continue to show improvement
in our gross margin percentage. These improvements will help us achieve our goal
of generating positive cash flow from operations."
Consolidated Three-Month Results
o The net loss decreased by 46.5% to $1.1 million, or $0.06 per
diluted share, in the fourth quarter of fiscal 2004 from a net loss
of $2.1 million, or $0.16 per diluted share, in the fourth quarter
of fiscal 2003.
o Consolidated revenue for the fourth quarter of fiscal 2004 decreased
4.8% to $3.0 million from $3.1 million in the year ago period.
o Gross margin percentage for the fourth quarter of fiscal 2004
improved to 46.7% from 38.5% in the fourth quarter of last year.
Consolidated Three-Month Results - Adjusted - EBITDA is earnings before net
interest and investment income, income taxes, depreciation, amortization,
impairment charges and non-cash charges for stock-based compensation. Adjusted
gross margin represents gross margin less depreciation, amortization and
impairment charges. Refer to the Supplemental Financial Data set forth below for
a reconciliation of net income to EBITDA and gross margin to adjusted gross
margin.
o EBITDA for the fourth quarter of fiscal 2004 was a loss of $591,000,
an increase of 2.2% from a loss of $578,000 in the year ago period.
o Adjusted gross margin percentage for the fourth quarter of fiscal
2004 improved to 56.4% from 47.7% in the fourth quarter last year.
Segment Three-Month Results
o ICC.NET revenue, which represented 82% of consolidated revenue
compared to 91% in the year ago period, decreased 13.5% to $2.43
million in the fourth quarter ended July 31, 2004 from $2.8 in the
fourth quarter ended July 31, 2003. VAN Services revenue increased
1.6% to $2.3 million from $2.3 million and gross margin percentage
improved to 61.5% from 59.2% from the year ago period. Adjusted
gross margin percentage for VAN Services improved to 62.3% from
60.7% in the year ago period. EDI educational services and seminars
were discontinued in February 2004.
o Service Bureau revenue, representing 18% of consolidated revenue in
the fourth quarter of fiscal 2004 compared to 9% of consolidated
revenue in the year ago period, increased 79% to $521,000 from
$291,000 in the year ago period. The acquisition of Electronic
Commerce Systems, Inc. was completed in June 2004.
ICC Announces Fourth Quarter and Fiscal 2004 Financial Results
Consolidated Fiscal Year Results
o The net loss decreased by 31.9% to $4.1 million, or $0.30 per
diluted share, in the fiscal year ended July 31, 2004, from a net
loss of $6.0 million, or $0.53 per diluted share, in the prior year.
o Consolidated revenue for the fiscal year ended July 31, 2004
decreased 3.2% to $11.7 million from $12.1 million in the prior
year.
o Gross margin percentage for the fiscal year ended July 31, 2004
improved to 42.1% from 33.6% in the prior year.
Consolidated Fiscal Year - Adjusted
o EBITDA for the fiscal year ended July 31, 2004 improved 25.8% to a
loss of $1.8 million from a loss of $2.4 million in the prior year.
o Adjusted gross margin percentage for the fiscal year ended July 31,
2004 improved to 52.2% from 46.2% in the prior year.
Segment Fiscal Year Results
o ICC.NET revenue, representing 88% of consolidated revenue, decreased
3% to $10.3 million from $10.6 million in fiscal year ended July 31,
2004 from the fiscal year prior. VAN Services revenue increased 9.3%
to $9.07 million from $8.3 million and gross margin percentage
improved to 60.6% from 54.9% in fiscal year ended July 31, 2004 from
the prior fiscal year. Adjusted gross margin percentage for VAN
Services for the fiscal year ended July 31, 2004 improved to 61.7%
from 56.6% in the prior year. EDI educational services and seminars
were discontinued in February 2004.
o Service Bureau revenue, representing 12% of consolidated revenue,
decreased 3.7% to $1.4 million from $1.5 million in fiscal year
ended July 31, 2004 from the fiscal year prior. The acquisition of
Electronic Commerce Systems, Inc. was completed in June 2004.
ICC will post its supplemental financial information on its website,
www.icc.net, in the afternoon of November 1, 2004.
About Internet Commerce Corporation
Internet Commerce Corporation (ICC), headquartered in New York, is a pioneer in
the use of the Internet for business-to-business (B2B) e-commerce solutions.
Thousand 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 B2B solutions for businesses, regardless of size and level
of technical sophistication, to connect with their trading communities. For more
information, visit www.icc.net.
Except for the historical information contained herein, this press release
includes forward looking statements which are subject to a number of risks and
uncertainties, including the risks and uncertainties associated with rapidly
changing technologies such as the Internet, the risks of technology development
and the risks of competition. Actual results could differ materially. For more
information about these risks and uncertainties, see the SEC filings of Internet
Commerce Corporation. CONTACT: Victor Bjorge, 212.271.7618, victor@icc.net
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ICC Announces Fourth Quarter and Fiscal 2004 Financial Results
INTERNET COMMERCE CORPORATION
Consolidated Statements of Operations and Comprehensive Loss (unaudited)
(in thousands, except for share and per share amounts)
Three Months Ended Twelve Months Ended
July 31, July 31,
---------------------------- ----------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Revenues:
Services $ 2,953 $ 3,102 $ 11,705 $ 12,083
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Total revenues 2,953 3,102 11,705 12,083
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Expenses:
Cost of services (excluding non-cash compensation
of $4 and $39 for the three months and twelve
months ended July 31, 2004, respectively) 1,564 1,894 6,736 7,622
Impairment of software inventory -- -- -- 248
Impairment of capitalized software development
costs -- 15 45 148
Product development and enhancement (excluding
non-cash compensation of $8 and $126 for the
three months and twelve months ended July 31, 2004,
respectively) 267 282 954 1,111
Selling and marketing (excluding non-cash compensation
of $2 and $94 for the three months and twelve
months ended July 31, 2004, respectively) 699 714 3,070 3,035
General and administrative (excluding non-cash compensation
of $149 and $542 for the three and twelve months ended
July 31, 2004, respectively and of $57 and $139 for the
three and twelve months ended July 31, 2003 respectively.) 1,362 1,205 4,206 4,439
Non-cash charges for stock-based compensation and services 163 57 801 139
Impairment of goodwill -- 982 -- 982
------------ ------------ ------------ ------------
4,055 5,149 15,812 17,724
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Operating loss (1,102) (2,047) (4,107) (5,641)
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Other income and (expense):
Interest and investment income -- 3 3 13
Investment gain (loss) -- -- 68 (19)
Interest expense (2) (18) (51) (39)
Impairment of marketable securities -- -- -- (318)
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(2) (15) 20 (363)
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Net loss $ (1,104) $ (2,062) $ (4,087) $ (6,004)
Dividends on preferred stock (101) (101) (401) (400)
Beneficial conversion feature related to series D
preferred stock -- -- -- (107)
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Loss attributable to common stockholders $ (1,205) $ (2,163) $ (4,488) $ (6,511)
============ ============ ============ ============
Basic and diluted loss per common share $ (0.06) $ (0.16) $ (0.30) $ (0.53)
============ ============ ============ ============
Weighted average number of common shares outstanding -
basic and diluted 17,928,601 13,765,885 15,025,524 12,303,367
============ ============ ============ ============
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ICC Announces Fourth Quarter and Fiscal 2004 Financial Results
INTERNET COMMERCE CORPORATION
Consolidated Balance Sheets (unaudited)
(in thousands)
July 31, July 31,
2004 2003
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(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 3,790 $ 2,283
Marketable securities -- 92
Accounts receivable, net of allowance for
doubtful accounts of $309 and $220, respectively 2,154 1,733
Prepaid expenses and other current assets 245 296
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Total current assets 6,189 4,404
Restricted cash 108 128
Property and equipment, net 296 557
Software development costs, net 18 128
Goodwill 2,539 1,212
Other intangible assets, net 2,265 2,151
Other assets 14 18
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Total assets $ 11,429 $ 8,598
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 524 $ 918
Accrued expenses 1,004 1,179
Accrued dividends - preferred stock 233 232
Deferred revenue 133 97
Capital lease obligation 52 148
Other current liabilities 45 130
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Total current liabilities 1,991 2,704
Capital lease obligation - less current portion 4 46
Other non-current liabilities -- 8
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Total liabilities 1,995 2,758
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Commitments and contingencies - -
Stockholders' Equity:
Preferred stock * *
Common stock 191 138
Additional paid-in capital 95,143 87,489
Accumulated deficit (85,900) (81,813)
Accumulated other comprehensive income (loss) -- 26
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Total stockholders' equity 9,434 5,840
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Total liabilities and stockholders' equity $ 11,429 $ 8,598
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* less than 1,000
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ICC Announces Fourth Quarter and Fiscal 2004 Financial Results
INTERNET COMMERCE CORPORATION
Supplemental Financial Data
Reconciliation of Net Income to EBITDA - Consolidated
Three Three Twelve Twelve
Months Ended Months Ended Months Ended Months Ended
(in thousands) July 31, 2004 July 31, 2003J July 31, 2004 July 31, 2003
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Net loss $(1,104) $(2,062) $(4,087) $(6,004)
Less: Net interest and investment
(income) expense 2 15 (20) 45
Impairment of marketable securities -- -- -- 318
Depreciation and amortization 348 415 1,445 1,678
Impairment of software inventory -- -- -- 248
Impairment of capitalized software -- 15 45 148
Non-cash chargesfor stock-based
compensation 163 57 801 139
Impairment of goodwill -- 982 -- 982
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EBITDA loss $ (591) $ (578) $(1,816) $(2,446)
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Reconciliation of Net Income to EBITDA -
ICC.NET, VAN Services Only
Three Three Twelve Twelve
Months Ended Months Ended Months Ended Months Ended
(in thousands) July 31, 2004 July 31, 2003 July 31, 2004 July 31, 2003
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Net loss $ (681) $ (493) $(2,264) $(2,783)
Less: Net interest and investment
(income) expense 1 4 (28) 21
Impairment of marketable securities -- -- -- 318
Depreciation and amortization 59 84 317 387
Non-cash charges for stock-based
compensation 163 57 801 139
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EBITDA loss $ (458) $ (348) $(1,174) $(1,918)
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ICC Announces Fourth Quarter and Fiscal 2004 Financial Results
INTERNET COMMERCE CORPORATION
Supplemental Financial Data
Reconciliation of Gross Margin to
Adjusted Gross Margin - Consolidated Three Three Twelve Twelve
Months Ended Months Ended Months Ended Months Ended
(in thousands) July 31, 2004 July 31, 2003 July 31, 2004 July 31, 2003
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Revenue $ 2,953 $ 3,102 $11,705 $12,083
Cost of services 1,575 1,909 6,781 8,018
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Gross margin $ 1,378 $ 1,193 $ 4,924 $ 4,065
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Gross margin % 46.7% 38.5% 42.1% 33.6%
Cost of services $ 1,575 $ 1,909 $ 6,781 $ 8,018
Less: Depreciation and amortization 288 273 1,144 1,124
Impairment of software inventory -- -- -- 248
Impairment of capitalized software -- 15 45 148
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Adjusted cost of services $ 1,287 $ 1,621 5,592 6,498
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Adjusted gross margin $ 1,666 $ 1,481 $ 6,113 $ 5,585
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Adjusted gross margin % 56.4% 47.7% 52.2% 46.2%
Reconciliation of Gross Margin to
Adjusted Gross Margin - ICC.NET, VAN Three Three Twelve Twelve
Services Only Months Ended Months Ended Months Ended Months Ended
(in thousands) July 31, 2004 July 31, 2003 July 31, 2004 July 31, 2003
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Revenue $ 2,293 $ 2,257 $ 9,065 $ 8,296
Cost of services 882 920 3,568 3,744
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Gross margin $ 1,411 $ 1,337 $ 5,497 $ 4,552
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Gross margin % 61.5% 59.2% 60.6% 54.9%
Cost of services $ 882 $ 920 $ 3,568 $ 3,744
Less: Depreciation 18 33 99 141
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Adjusted cost of services 864 887 3,469 3,603
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Adjusted gross margin $ 1,429 $ 1,370 $ 5,596 $ 4,693
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Adjusted gross margin % 62.3% 60.7% 61.7% 56.6%
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