UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 14, 2006
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INTEGRATED MANAGEMENT INFORMATION, INC.
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(Exact name of registrant as specified in its charter)
Colorado 333-133634 43-1802805
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) file number) Identification Number)
221 Wilcox, Suite A, Castle Rock, Colorado 80104
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(Address of principal executive offices)(Zip Code)
303-895-3002
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(Registrant's telephone number, including area code)
N/A
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(Former name and former address, if changed since last report)
Item 7.01 Regulation FD Disclosure
On Tuesday, November 14, 2006, the Company held a Webcast reporting on the
Company's third quarter results and to announce that the Company's shares would
begin trading on Wednesday, November 15, 2006 under the symbol "IMNG". A text of
the webcast is attached as an Exhibit.
Item 9.01 Financial Statements and Exhibits
(c) 99.1 Transcript of Webcast dated November 14, 2006
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Integrated Management Information, Inc. (IMI Global)
2006 3rd Quarter Conference Call Script
Call date: Tuesday, November 14, 2006
Call time: 2:15 p.m. Mountain
Jay Pfeiffer
Good afternoon and welcome to IMI Global's third quarter earnings call. I'm Jay
Pfeiffer of Pfeiffer High Investor Relations. I have been retained by IMI Global
to assist the Company with its investor relations requirements. My role is to
help the Company build professional investor communications processes and to
help raise awareness for the Company in the investment community. Today, John
Saunders, CEO, and Mark McGregor, CFO, will deliver prepared remarks and then
open the call to questions. Immediately prior to the Q&A portion of the call,
the operator will provide you with instructions on how to ask questions, so
please listen carefully.
As part of each conference call, IMI, like other public companies, is required
to read Forward Looking Statements language. This is a fair amount of legalese,
so bear with me while I move through this.
Certain statements during this conference call will constitute forward-looking
statements or statements which may be deemed or construed to be forward-looking
statements within the meaning of the private securities litigation reform act of
1995. The words "forecast," "estimate," "plan," "anticipate" "project,"
"intend," "expect," "should," "would," "believe," "bodes well," and similar
expressions and all statements that are not historical facts, are intended to
identify forward-looking statements. These forward-looking statements involve
and are subject to known and unknown risks, uncertainties and other factors
which could cause the Company's actual results, performance (financial or
operating), or achievements to differ from future results, performance
(financial or operating), or achievements expressed or implied by
forward-looking statements. For more details, please refer to our third quarter
news release issued today and to the Risk Factors in our SEC filings.
I will now turn the call over to Mark McGregor, chief financial officer of IMI
Global. Mark...
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Mark McGregor
Thank you, Jay. Good afternoon everyone. As this is our first investor
conference call and I know John Saunders has a lot of extra topics to cover
today, I'm going to step through our third quarter financial results as quickly
as possible. Keep in mind that I will be rounding up our numbers. As Jay
mentioned, I will be available to answer any specific questions you may have
later on in the Q&A portion of this call.
In the unlikely event that you have not seen our third quarter news release
issued this morning, I can tell you that IMI Global reported strong third
quarter and year to date results. Third quarter revenue increased 85% to
$419,000 from $226,000 in the same quarter last year. All three of our primary
revenue streams contributed to that growth. Those revenue streams are USVerified
verification and identification services, advertising from our CattleNetwork.com
web site, and product sales from our direct sales team and from our
CattleStore.com ecommerce site. Again, demand was up in all three areas.
Gross profit in the third quarter increased 58% to $173,000 from $109,000. The
main drivers were USVerified and CattleNetwork.com. We had a 51% increase in
selling, general and administrative expense in the third quarter - to $570,000
from $378,000. Our S,G&A expense included $31,000 in non-cash charges related to
FAS 123R share-based compensation expense. The overall higher expense base was
expected as the Company continued to invest aggressively, primarily in
personnel, as we gear up to support current and future growth. In addition, our
"going public" activities resulted in a significant increase in legal and
accounting costs - which grew from $10,000 to $70,000 for the comparative third
quarters. Our net loss for the third quarter was $401,000, or $0.02 per share,
versus a net loss of $272,000, or $0.01 per share, in the third quarter last
year.
Revenue for the nine months year to date period increased 94% to nearly $1.1
million from $557,000 in the same period last year. Once again we had growth in
all three revenue streams. In addition, we enjoyed a full nine months of
contribution from our Internet operations versus 4 1/2 months in the same period
last year. By Internet operations I'm referring to CattleNetwork.com and
CattleStore.com, both of which were acquired in May of 2005.
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Gross profit through nine months increased 107% to $531,000 from $256,000 in the
same period last year. Again, USVerified and CattleNetwork.com were responsible
for driving margins. S,G&A expense increased 58% to $1.6 million from $1.0
million, again reflecting accelerated investments to enhance and expand our
solutions offerings and to position the Company for current and anticipated
growth. Legal and accounting costs related primarily to "going public"
activities grew from $63,000 to $213,000 for the comparative nine-month periods.
Non-cash, share-based compensation costs grew to $183,000 from $30,000 a year
ago. We reported a net loss through nine months of $1.l million, or $0.06 per
share, versus a net loss of $814,000, or $0.04 per share, in the same period a
year ago.
With that I'll turn the call over to John Saunders. John...
John Saunders
Good afternoon. I'm John Saunders, founder and chief executive officer of IMI
Global. I, too, want to welcome all of you to the call today. I am personally
acquainted with many of you. I know that many of you participated in one of our
private placements and I hope are as excited as we are about where IMI Global
finds itself today - a leading provider of verification and Internet solutions
for the livestock/agricultural community; a Company that has only just begun to
grow toward its full potential.
Tomorrow, November 15, shares of IMI Global will begin trading on the OTC
Bulletin Board. Our trading symbol will be INMG. If you haven't already done so,
please take a moment to jot down that symbol - INMG.
Our process of "going public" was somewhat unorthodox in that we didn't do a
traditional initial public offering, or IPO. In our case we raised funding from
a group of private investors and then registered those shares on Form SB-2. The
biggest difference between an IPO and the approach we took is that we don't have
the built-in following in the investment community that companies who do IPOs
have. Otherwise, for all intents and purposes, we will function as any other
public company.
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Today I'm going to give you a brief overview of the Company and talk about our
strategy for building IMI Global from a successful small company to a successful
large company. Before I get to that, however, I want to address a couple of
housekeeping issues.
First, our name. We do business as IMI Global. That's the name that our
investors, customers, suppliers and industry business partners know us by. Our
formal name, however, is Integrated Management Information, Inc. When you look
up our company on the Internet, you will likely have to search under Integrated
Management Information. For example, if you do a stock symbol search on a
financial web site or look for our SEC filings on www.sec.gov, you will have to
search under Integrated Management Information. Of course, your best bet is
going to our web site at www.imiglobal.com, which has all kinds of resources to
keep you informed about our company. We may look at changing our formal name to
IMI Global down the road to simplify things, but right now we're Integrated
Management Information doing business as IMI Global.
Another topic that's probably on everyone's mind is your stock certificates. If
you are currently a stockholder then you received a certificate that has a
restrictive legend on it. A few days ago we sent all of you a letter explaining
the steps you have to take to exchange your current certificate for a
free-trading certificate. If you didn't get that letter, then you can go to our
web site at www.imiglobal.com, click the "Investors" tab on the home page, then
click the "Shareholder Info" tab, where you'll find a copy of the letter.
Of course we hope you'll continue to be shareholders for a long time as we work
to achieve our objectives for revenue growth and profitability. We expect to
commence trading tomorrow at a valuation that we believe leaves plenty of room
for upside as we grow the business. Our pledge to you is that we will run a
tight ship, continuously building value for our customers and thereby building
shareholder value for our investors. IMI is a small company right now, but we
are well regarded in the industry, we are growing rapidly, and we have a great
head start on our ultimate objective of dominating our space.
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Finally, we want to reiterate that we have retained the services of Pfeiffer
High Investor Relations, Inc. of Denver, Colorado. Pfeiffer High has been
providing investor relations services to public companies for nearly 25 years.
Jay Pfeiffer has extensive experience helping emerging growth companies like IMI
Global to communicate their message to investors, brokers, analysts, portfolio
managers and the financial press. One of his primary assignments with IMI Global
will be to help us build a following among these audiences so that as our
results improve there will be enough people familiar with our story to take an
interest. Because we went public without going the traditional IPO route, which
brings with it a lot of participation from brokerage firms, his services will be
particularly valuable moving forward.
Now let me tell you a little bit about IMI Global...
As I said earlier, we're a small company but we've come a long way over the past
couple of years and believe we have a terrific growth opportunity in a high
growth industry.
Our flagship solution offering, and currently our leading revenue driver, falls
under the umbrella of USVerified. Boiled down to its simplest terms, USVerified
provides cattle ranchers, feed yards and meatpackers with valuable verification
and identification services that help do three things: One, reassure consumers
that the meat products they are purchasing are wholesome; two, help support
claims of meat producers; and, three, give cattle producers access to
potentially lucrative markets driven by verification demand. Verification of
claims was recently key to re-opening important export markets such as Japan and
South Korea after the discovery of Mad Cow Disease in the United States in
December of 2003. Today, our patent-pending USVerified solutions are used by
nearly 1,500 cattle ranchers out of a total addressable market of more than
800,000, 100 of the 300 largest feed yards, and three of the top meat packers.
We are very well established in the marketplace with a growing list of loyal
customers, and at the same time we have tremendous potential to grow in what is
a largely untapped space.
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Our second solution offering is CattleNetwork.com, which we believe to be THE
leading news and information source for the cattle industry that generates
advertising revenue from a growing number of companies such as Merial, Elanco,
and RaboBank. CattleNetwork.com is experiencing strong growth in visitors, page
views, hits, and visit duration. The site has reported 206,000 hits per day
through the first nine months of 2006 as compared with 96,000 hits per day in
2005. We have now had more than 1 million unique visitors to the site.
Our third revenue stream is product sales. We have two sales channels - direct
and CattleStore.com. Our direct sales focus primarily on livestock
identification ear tags that are sold in connection with our USVerified
offerings. Tag sales in Q3 increased to $90,000 from $22,000 in the same quarter
a year ago. For the record, fall is a heavy calf tagging season, so sales in Q3
are usually strong. Our other sales channel is CattleStore.com, our ecommerce
site that offers livestock products, including animal identification, medical
equipment and veterinarian supplies. We are steadily adding products to the site
and believe that it will eventually be a strong revenue contributor due to
growing consumer preferences for online shopping. CattleStore.com is based on a
drop ship model, which means we carry NO inventory. Instead, orders we receive
online are routed directly to distributors, who in turn ship the product to our
customer.
So, where do we go from here?
As I said earlier, I believe we are just beginning to scratch the surface of our
potential. We have a solid growth strategy for all three of our revenue
components. So without giving away too much competitive information, I'd like to
share with you some highlights of that strategy.
USVerified addresses a critical aspect of the beef industry. You just cannot
overemphasize the importance of reassuring consumers that the products they are
purchasing meet their expectations and live up to the claims of the companies
marketing them. In addition to the mad cow situation, in recent years we've seen
consumers put on edge by Bird Flu and more recent news regarding E-coli. My
point is that the production practices used and the safety of food products is a
front-of-mind issue for consumers. USVerified has benefited from consumer
uncertainty and expects to continue to do so for years to come as it provides
third party authenticity management. To date, the vast majority of our
USVerified business is focused domestically.
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Internationally, the market is even larger. On July 21 of this year, Japan
re-lifted its import ban on US beef. This was an important event for IMI Global
as it once again began driving large and progressive beef producers to
USVerified. Similarly, South Korea, the second largest importer of US beef, also
has re-opened its borders but, like Japan, is proceeding very cautiously with a
sharp focus on claims verification. And finally, this summer IMI Global was
certified by the USDA as the first approved umbrella program for the European
Union. The EU is an expanding, high growth market for US beef producers and IMI
stands to benefit from this program.
As good as our growth opportunity is for USVerified, the opportunities may be
even better for our Internet solutions. The growth and popularity of
CattleNetwork.com has been a very pleasant surprise. We knew there was potential
there when we acquired the site last year, but it has really performed beyond
our expectations. With the heavy traffic that we're experiencing on the site,
we've been able to grow our advertising revenue and attract larger and more
influential advertisers. Of course, there are the obvious cross marketing
opportunites with CattleStore.com, which shares roughly the same demographic as
CattleNetwork.com. Moving forward, we believe we can leverage the
CattleNetwork.com model to build similar sites in other areas of livestock and
agriculture. Two such new initiatives planned for 2007 launch are AgNetwork.com,
which will provide news and market information covering all livestock industries
and commodities throughout the world; and AgTraderIndex, the newest and most
comprehensive fundamental trading tool for producers, feedyards, packers and
commodities brokers. Anyone who followed the dot-com phenomenon knows that the
surviving companies - the web sites with heavy traffic flow that provide
valuable products and/or services to consumers -- can be very valuable assets,
so we think we have something pretty special in CattleNetwork.com and our plans
for additional sites.
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The product sales component of our revenue mix - primarily CattleStore.com - is
sort of the wild card for us. We know we'll continue to sell ear tags, but
that's generally low margin business and more of a required complement to our
verification services. If we're going to grow product sales and drive meaningful
margins, it's really CattleStore.com that's going to do it for us. Right now we
have hundreds of products available for purchase on the site. The challenge is
driving traffic to the site and building sales, and we think we can do that
through a variety of means. One obvious approach is leveraging and diverting the
traffic flow from CattleNetwork.com to CattleStore.com. We think that many of
the people who are browsing CattleNetwork are likely the same people making
purchasing decisions for their operations, whether its ranching or feeding.
The rationale for our acquisitions of CattleNetwork and CattleStore was to add
complementary products and services to our portfolio and build a position as THE
one-stop-shop for all things cattle. We are well on our way to doing that. We
think our growth opportunities are substantial.
The commencement of trading tomorrow is a major milestone for IMI Global and the
many private investors who have supported the Company's growth over the past few
years. Our transition to publicly held status should enhance our ability to
execute our growth strategy and continue building value for all shareholders.
For one thing, as a public company we think we'll have better access to growth
capital. In addition, we'll have currency to pursue a contemplated M&A strategy.
On the subject of growth capital, we are currently in the process of raising
additional capital, which will strengthen our balance sheet and give us cash to
grow into 2007. Moving forward, we intend to be very careful and dilution
sensitive in issuing additional shares.
In closing, we are very excited about our growth prospects and look forward to
expanding on the successes we have achieved in building a diversified portfolio
of products and services. Thank you again for your participation in IMI Global.
Before I open the call for questions, I want to make a final point on the issue
of guidance or projections. For the time being we do not plan on providing
specific financial guidance and timetables on revenue growth or profitability.
What I will tell you is that we understand the importance of improving our
bottom line and transitioning to profitability.
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Operator, you may now open the call to questions...
John, when the questions are finished, the operator will turn the call back over
to you. Following is what you might say:
John
Well, I want to thank you all again for your attendance on the call today. Your
management team is working diligently to pursue tremendous growth opportunities,
so conference calls are really going to be our best means of communicating with
investors from this point on. We'll be doing a conference call at least four
times a year in connection with our quarterly and year-end financial results. In
the meantime, please keep an eye on our web site for breaking news and
developments. Goodbye.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
INTEGRATED MANAGEMENT INFORMATION,INC.
Dated: November 17, 2006
By: /s/ John Saunders
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John Saunders
President