Exhibit 99.1
iMergent Announces Record Fourth Quarter and
Full-year 2004 Revenues and Profits
OREM, Utah--(BUSINESS WIRE)--Sept. 8, 2004--iMergent, Inc.,
(AMEX:IIG)
-- Fourth Quarter Revenue Increases 82% and Year-end Revenue
Increases 74%
-- EBT per Diluted Share Triples to $0.30 for Quarter and Up 80%
to $0.79 for Fiscal 2004
iMergent, Inc., (AMEX:IIG) a leading provider of eCommerce and
software for small businesses and entrepreneurs, announced today its
results for the fiscal fourth quarter and year-ended June 30, 2004.
Total revenue for the fiscal fourth quarter ended June 30, 2004
rose to $25.0 million from $13.7 million in the same quarter of 2003.
The 82 percent revenue growth is attributable to the increasing number
of training workshops conducted by the company and other marketing
initiatives, including the significant rise in international business.
In the fourth quarter of 2004, the company hosted 37 international
workshops, which generated approximately $4.9 million in revenue. In
the fourth quarter of 2003, the company did not conduct any
international workshops.
Operating expenses for the quarter were $16.0 million compared to
$9.8 million in 2003. The increase is directly attributable to the
significantly higher sales. As a percent of sales operating expenses
decreased 6.9 percent to 64.1 percent of sales compared with 71.0
percent in the fourth quarter of 2003, reflecting improving operating
leverage and tight expense controls.
Earnings before income taxes (EBT) for the fiscal fourth quarter
ended June 30, 2004 more than tripled to $3.7 million from $1.2
million in the same quarter of 2003. EBT per diluted share also
tripled to $0.30 for the fourth quarter 2004 from $0.10 for the fourth
quarter of 2003. Net income for the fiscal fourth quarter increased to
$2.5 million, or $0.20 per diluted share, compared to net income of
$1.6 million, or $0.14 per diluted share, for the comparable quarter
of the prior fiscal year.
Revenue for the year-ended June 30, 2004 grew to $81.0 million
compared to $46.5 million for the same period last year, representing
a 74 percent increase. EBT for the year-ended June 30, 2004 rose to
$9.6 million from $5.0 million in the prior year, an increase of 91
percent. EBT per diluted share was $0.79 for the year, an 80 percent
increase over $0.44 for the prior year. As a result of its strong
earnings history, during the year iMergent recognized a $12.3 million
non-cash income tax benefit based on the reversal of the valuation
allowance against its deferred tax asset, which consists mainly of net
operating losses carried forward (NOL) from prior periods and largely
reduces future tax burdens on cash. At June 30, 2004, the total
deferred tax asset was $13.1 million. As a result, net income for the
year-ended June 30, 2004 including the income tax benefit increased to
$21.9 million, or $1.80 per diluted share, compared to $5.0 million,
or $0.44 per diluted share, in the prior year.
Highlights
-- Began trading on the American Stock Exchange (AMEX) on August
16th under the ticker "IIG," which will be celebrated when
iMergent's management team opens the stock exchange on
September 14th.
-- Increased the number of StoresOnline(TM) workshops held to 164
during the quarter and 544 during the year. The company
conducted 37 international workshops during the quarter and 58
during the year.
-- Expanded customer support services to include chat and email
24-hours a day, 7-days a week.
-- Added UPS OnLine(R) Tools to the StoresOnline(TM) platform
enabling merchants to reduce operating costs, increase
shipping efficiencies and improve customer service - for no
additional charge to the merchants. To use UPS OnLine Tools
merchants simply need to open a standard UPS shipping account
and activate their websites.
-- Extended international sales by visiting the United Kingdom
for the first time and returning to Australia, Canada, and New
Zealand.
-- In August, announced a new two-year, $5 million line of credit
with Bank One. The new line of credit replaces its previous
credit facility and will provide accessible working capital to
support the company's growth initiatives. The agreement allows
iMergent to borrow up to $5 million at LIBOR plus 2 percent.
Don Danks, chairman and chief executive officer, stated,
"iMergent's management team is extremely pleased with our record
financial growth, as well as our recent listing on the AMEX. We
believe listing gives us another avenue to reach out globally to
institutional investors who wish to participate in our growth. We look
forward to utilizing AMEX's tremendous resources to help maximize
shareholder value and increase the visibility of iMergent's future
achievements, as we strive to be the pre-eminent supplier of
e-commerce solutions to entrepreneurs and small business."
Brandon Lewis, president and chief operating officer, said,
"During fiscal 2004, our record revenue and earnings prove we have
successfully executed our strategic plan to grow the business and
increase operating leverage. We have increased our sales team and its
reach, while maintaining the same corporate infrastructure.
Consequently, we were able to launch and then expand our international
marketing while raising our overall seminar profitability. In
addition, we adopted UPS Online Tools and began a marketing
partnership with MIT Financial. Following on the success of these
mutually beneficial relationships, we are working to develop
additional distribution channels and significant marketing
partnerships. In addition, we have established a number of new
programs to capture even more opportunities in our large and growing
market."
Robert Lewis, chief financial officer, added, "We are implementing
programs to further raise sales productivity, leverage existing
infrastructure, reduce our bad debt expense and increase recurring
revenue. In addition to expanding our marketing resources, we continue
to augment our customer service and add affiliate programs. We expect
these initiatives to increase the number of activated merchant
websites, to further raise the value that every merchant brings to our
company and to further improve our financial performance."
Conference Call
Management will hold a conference call to discuss these results on
Wednesday, September 8, 2004 at 4:30 p.m. ET; 1:30 p.m. PT. The
conference call will be broadcast live over the Internet and available
for replay for 90 days following the call at the company's website,
www.imergentinc.com. If you do not have Internet access, the telephone
dial-in number is 800-639-0297 for domestic and 706-634-7417 for
international participants. Please dial in five to ten minutes prior
to the call. A telephone replay will be available through September
10, 2004; dial 706-645-9291, and enter code 9167823.
About iMergent
iMergent provides eCommerce solutions to entrepreneurs and small
businesses enabling them to market and sell their business product or
idea via the Internet. Headquartered in Orem, Utah the company sells
its proprietary StoresOnline software and training services, helping
users build a successful Internet strategy to market products, accept
online orders, analyze marketing performance, and manage pricing and
customers. In addition to software, iMergent offers site development,
web hosting, marketing and mentoring products. iMergent typically
reaches its target audience through a concentrated direct marketing
effort to fill Preview Sessions, in which a StoresOnline expert
reviews the product opportunities and costs. These sessions lead to a
follow-up Workshop Conference, where product and technology experts
train potential users on the software and encourage them to make
purchases.
iMergent, Inc. and StoresOnline are trademarks of iMergent, Inc.
Statements made in this press release that are not historical in
nature constitute forward-looking statements within the meaning of the
Safe Harbor Provision of the Private Securities Litigation Reform Act
of 1995. Such statements are based on the current expectations and
beliefs of the management of iMergent and are subject to a number of
factors and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements.
Such risks and uncertainties include, without limitation, the
Company's continued ability to increase revenue; continue to increase
earnings; continue to expand and the continued success of business
internationally; the ability to increase sales teams; continue to
increase the number of workshops; continue to decrease bad debt
expense; continue to maintain/increase training events; the effect of
trading on the American Stock Exchange; the effect of the increased
customer service support and the ability to provide necessary customer
service; benefits being realized from the UPS relationship, MIT, as
well as other strategic partnerships; the ability to expand the scope
of business and capture additional opportunities; the ability to raise
sales productivity; the ability to increase activate merchant web
sites; the continued ability to use loans to increase liquidity and
capital resources; benefits being realized from the Bank One line of
credit; the Company's ability to attract and retain key management and
other personnel. For a more detailed discussion of factors that affect
iMergent's operating results, please refer to its SEC reports
including its most recent Form 10-K and Form 10-Q. The Company
undertakes no obligation to update this forward-looking information.
IMERGENT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings for the
Three Months Ended Twelve Month Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
------------ ------------ ------------ ------------
(unaudited) (unaudited)
Revenue $24,966,966 $13,737,480 $81,027,517 $46,470,678
Cost of revenue 5,779,498 2,801,015 18,746,270 9,784,368
Cost of revenue -
related party - 277,737 - 1,118,002
------------ ------------ ------------ ------------
Total cost of
revenue 5,779,498 3,078,752 18,746,270 10,902,370
------------ ------------ ------------ ------------
Gross profit 19,187,468 10,658,728 62,281,247 35,568,308
Operating expenses
Research and
development 102,177 - 358,391 -
Selling and
marketing 6,409,675 3,530,039 20,964,701 11,632,209
Selling and
marketing -
related party - 172,126 - 349,680
General and
administrative 2,741,248 1,615,480 8,855,459 5,081,353
Bad debt expense 6,761,365 4,439,677 24,144,800 14,255,877
------------ ------------ ------------ ------------
Total operating
expenses 16,014,465 9,757,322 54,323,351 31,319,119
------------ ------------ ------------ ------------
Earnings from
operations 3,173,003 901,406 7,957,896 4,249,189
Other income
(expense)
Other income
(expense), net (89,969) 9,366 (40,035) 12,358
Interest income 615,358 263,723 1,725,776 813,136
Interest expense (23,073) (11,128) (43,359) (40,611)
------------ ------------ ------------ ------------
Total other
income 502,316 261,961 1,642,382 784,883
------------ ------------ ------------ ------------
Earnings before
income taxes 3,675,319 1,163,367 9,600,278 5,034,072
Income tax benefit
(provision) (1,222,210) 450,275 12,292,871 -
------------ ------------ ------------ ------------
Net earnings $2,453,109 $1,613,642 $21,893,149 $5,034,072
============ ============ ============ ============
Basic earnings per
share:
Basic $0.21 $0.15 $1.93 $0.46
Diluted $0.20 $0.14 $1.80 $0.44
Weighted average
shares
outstanding:
Basic 11,493,258 11,043,340 11,329,699 11,019,094
Diluted 12,398,913 11,943,142 12,180,714 11,552,621
Earnings Before Income Taxes Per Share Calculation
Three Months Ended Twelve Months Ended
----------------------- -----------------------
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
----------- ----------- ----------- -----------
(unaudited) (unaudited)
Earnings before income
taxes (EBT) $3,675,319 $1,163,367 $9,600,278 $5,034,072
Basic EBT per share:
Basic $0.32 $0.11 $0.85 $0.46
Diluted $0.30 $0.10 $0.79 $0.44
Weighted average shares
outstanding:
Basic 11,493,258 11,043,340 11,329,699 11,019,094
Diluted 12,398,913 11,943,142 12,180,714 11,552,621
IMERGENT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, June 30,
2004 2003
------------ ------------
Assets
Current assets
- --------------
Cash $4,956,512 $2,319,618
Trade receivables, net of allowance
for doubtful accounts of $5,784,113 at
June 30, 2004 and $4,471,667 at June 30,
2003 12,427,366 5,161,010
Inventories 71,416 34,194
Prepaid expenses 1,145,632 737,983
Deferred tax asset - current 3,714,732 -
Credit card reserves 596,556 770,011
------------ ------------
Total current assets 22,912,214 9,022,816
Property and equipment, net 524,427 200,174
Goodwill, net 455,177 455,177
Trade receivables, net of allowance for
doubtful accounts of $3,167,216 at
June 30, 2004 and $2,131,593 at June 30,
2003 6,515,102 2,254,969
Deferred tax asset 9,406,523 -
Other assets, net of allowance for doubtful
accounts of $0 at June 30, 2004 and $100,783
at June 30, 2003 612,632 103,460
------------ ------------
Total Assets $40,426,075 $12,036,596
============ ============
Liabilities and Stockholders' Equity
Current liabilities
- -------------------
Accounts payable $2,849,632 $1,413,112
Accounts payable - related party - 114,925
Accrued expenses and other current
liabilities 3,367,799 1,166,648
Income taxes payable 873,235 -
Deferred revenue 562,076 653,463
Line of credit 1,377,715 -
Current portion of capital lease obligations 56,682 26,536
Current portion of notes payable - 121,206
------------ ------------
Total current liabilities 9,087,139 3,495,890
Capital lease obligations, net of current
portion 201,053 1,802
Notes payable, net of current portion 400,000 435,857
------------ ------------
Total liabilities 9,688,192 3,933,549
------------ ------------
Commitments and contingencies - -
Stockholders' equity
- --------------------
Capital stock, par value $.001 per share
Preferred stock - authorized 5,000,000
shares; none issued
Common stock - authorized 100,000,000
shares; issued and outstanding 11,536,258
and 11,062,290 shares, at June 30, 2004
and June 30, 2003, respectively 11,537 11,063
Additional paid-in capital 73,330,600 72,605,749
Deferred compensation (6,112) (22,474)
Accumulated other comprehensive loss (4,902) (4,902)
Accumulated deficit (42,593,240) (64,486,389)
------------ ------------
Total stockholders' equity 30,737,883 8,103,047
------------ ------------
Total liabilities and stockholders' equity $40,426,075 $12,036,596
============ ============
CONTACT: iMergent, Inc.
Don Danks, 801-431-4695 (Chairman and CEO)
investor_relations@imergentinc.com
or
Lippert/Heilshorn & Associates
Chris Bunn & Kirsten Chapman, 415-433-3777
(Investor Relations)
Chris@lhai-sf.com