Exhibit 99.1
iMergent Announces Second Quarter Fiscal 2007 Financial Results
- Reports Total Revenue of $35.7 Million -
- Delivers Record $37.6 Million in Net Dollar Volume of Contracts
Written -
- Delivers $5.1 Million of Net Cash Provided by Operating
Activities Increasing Cash and Cash Equivalents to $37.1 Million -
- Increases Trade Receivables, Net of Allowance for Doubtful
Accounts, by $4.3 Million to $29.5 Million -
- Posts GAAP Net Income of $11.7 Million, Inclusive of $5.2
Million Income Tax Benefit -
- Posts GAAP Diluted EPS of $0.90 -
- Posts Record Non-GAAP Diluted EPS of $0.42 -
- Increases Guidance for Fiscal 2007 Net Dollar Volume of
Contracts Written to Grow Approximately 40% over Fiscal 2006 -
OREM, Utah--(BUSINESS WIRE)--Feb. 6, 2007--iMergent, Inc. (AMEX:IIG), a
leading provider of eCommerce and software for small businesses and
entrepreneurs, today announced its financial results for the three and six
months ended December 31, 2006.
Don Danks, chairman and chief executive officer, stated, "We have executed
on our plan and delivered another quarter of tremendous growth. The first half
of the fiscal year has exceeded our expectations on all fronts. For our second
fiscal quarter, revenue reached $35.7 million with strong domestic sales and a
reinvigorated international program. During the three months ended December 31,
2006, we held 297 workshops, including 82 internationally, compared to 200
workshops, including 65 internationally, during the comparable period last
year."
Danks added, "Response to our marketing campaigns has been strong, and our
sales teams are gaining traction. In January 2007, we announced AVAIL, a new
telephone/voicemail/email/fax product that complements iMergent's web site
development software. This demonstrates iMergent's ongoing commitment to
providing our customers with the highest level of products and services. In
addition, AVAIL is expected to drive recurring revenue."
"This quarter we posted another record for Net Dollar Volume of Contracts
Written, which reached $37.6 million, representing a 50 percent increase over
the comparable quarter last year," stated Robert Lewis, chief financial officer.
"Also during the quarter, we generated $5.1 million in net cash from operating
activities."
As of December 31, 2006, cash and cash equivalents were $37.1 million; net
trade receivables were $29.5 million; working capital was $28.9 million; and
working capital excluding deferred revenue was $52.4 million.
Generally Accepted Accounting Principles (GAAP) and Non-GAAP Metrics
In December 2005, the company changed its business model to: (1) limit
certain "free" services to a period of one year for all customers who purchased
the StoresOnline software prior to December 20, 2005, and (2) begin charging
customers for those services as part of customer support. This change in
business model resulted in the recognition of previously deferred product and
other revenue of $108.0 million in December 2005, which would have been
recognized in future periods had the change in business model not occurred.
Because of the change in business model described above, the company
believes the Net Dollar Volume of Contracts Written during each period is a
consistent and relevant measure to understand the operations of the company. Net
Dollar Volume of Contracts Written represents the gross dollar amount of
contracts executed during the period less estimates for bad debts, discounts
incurred on sales of trade receivables, and estimates for customer returns. The
company also believes non-GAAP net income and non-GAAP net income per diluted
common share are useful measures. The non-GAAP measures, including non-GAAP net
income and non-GAAP net income per diluted common share, assume 1) the Net
Dollar Volume of Contracts Written is recognized as revenue at the time of sale;
2) certain corresponding cost of product and other revenue and selling and
marketing expenses are also recognized at the time of sale; and 3) the income
tax provision is based upon an estimated federal, state, and foreign statutory
blended rate of 40 percent. Non-GAAP net income per diluted common share is
defined as non-GAAP net income divided by the weighted average of diluted common
shares outstanding. Tables reconciling GAAP and non-GAAP measures follow in this
press release.
Fiscal Second Quarter 2007 Compared to 2006
-- Revenues for the second quarter of fiscal 2007 were $35.7 million.
This compares to $120.5 million for the second quarter of fiscal 2006,
which included the recognition of previously deferred product and
other revenue of $108.0 million due to the change in our business
model in December 2005.
-- Net Dollar Volume of Contracts Written was $37.6 million for the
current quarter compared to $25.1 million for the comparable period
last year.
-- Total operating expenses were $30.8 million for the current quarter,
compared to $21.6 million for the comparable quarter last year. The
increase in cost of product and other revenues and selling and
marketing expenses was primarily attributable to the increase in Net
Dollar Volume of Contracts Written.
-- Net cash provided by operating activities for the current quarter was
$5.1 million.
-- For the three months ended December 31, 2006, net income was $11.7
million, or $0.90 per diluted common share, which included the impact
of a $5.2 million income tax benefit resulting primarily from the
reversal of a valuation allowance against the company's deferred
income tax assets. This compares to net income of $111.2 million, or
$8.92 per diluted common share in the comparable quarter last year,
which included the aforementioned recognition of product and other
revenues of $108.0 million and an income tax benefit of $11.7 million.
-- Non-GAAP net income was $5.5 million, or $0.42 per diluted common
share, for the three months ended December 31, 2006, compared to
non-GAAP net income of $2.5 million, or $0.20 per diluted common
share, for the comparable quarter last year.
Six Months Ended December 31, 2006 Compared to 2005
-- Revenues for the six months ended December 31, 2006 were $64.7 million
compared to $131.9 million for the comparable period last year, which
included the aforementioned recognition of previously deferred product
and other revenues of $108.0 million.
-- Net Dollar Volume of Contracts Written was $70.1 million for the
current period, compared to $42.1 million for the same period last
year.
-- Total operating expenses were $57.3 million, compared to $38.8 million
for the comparable period last year.
-- Net cash provided by operating activities for the current period was
$8.1 million.
-- For the six months ended December 31, 2006, net income was $14.0
million, or $1.07 per diluted common share, which includes a $3.6
million income tax benefit resulting from the reversal of a valuation
allowance against the company's deferred income tax assets. This
compares to net income of $105.7 million, or $8.46 per diluted common
share, in the comparable period last year, which included the
aforementioned recognition of previously deferred product and other
revenues of $108.0 million and an income tax benefit of $11.5 million.
-- Non-GAAP net income was $9.5 million, or $0.72 per diluted common
share, for the six months ended December 31, 2006, compared to
non-GAAP net income of $2.6 million, or $0.21 per diluted common
share, for the comparable period last year.
Outlook
Danks concluded, "We closed a very strong quarter and are quite positive
about 2007. Therefore, we increased our expectations for fiscal 2007 annual
growth of Net Dollar Volume of Contracts Written to approximately 40 percent
over fiscal 2006. Additionally, we continue to anticipate non-GAAP net income,
which assumes Net Dollar Volume of Contracts Written is recognized as revenue
and related expenses are recognized at the time of sale, including income taxes
at a blended rate of 40 percent, will grow at a faster percentage rate than Net
Dollar Volume of Contracts Written."
Conference Call
The company is hosting a conference call today at 1:30 p.m. PT (4:30 p.m.
ET). The call will be broadcast live over the Internet at www.imergentinc.com.
If you do not have Internet access, the telephone dial-in number is 800-639-0297
for domestic participants and 706-634-7417 for international participants.
Please dial in five to ten minutes prior to the beginning of the call. A
telephone replay will be available through February 8, 2007; dial 706-645-9291,
and enter access code 6071161.
Safe Harbor Statement
The statements made in this press release regarding (i) iMergent continuing
its progress of strong domestic and international programs, (ii) iMergent's
marketing campaigns continuing to be strong, (iii) iMergent's sales teams
continuing to gain traction, (iv) the success of the AVAIL product and its
ability to drive recurring revenues, (v) iMergent's commitment to providing its
customers with the highest level of products and services, (vi) iMergent's
ability to continue to grow its business throughout the remainder of fiscal 2007
and beyond, (vii) iMergent's expectation that Net Dollar Volume of Contracts
Written is a consistent and relevant metric to understand the operations of the
Company as a result of the change in business model in December 2005, (viii)
iMergent's expectation that fiscal 2007 Net Dollar Volume of Contracts Written
will grow 40 percent over fiscal 2006, (ix) iMergent's expectation that non-GAAP
net income will grow at a faster percentage rate than Net Dollar Volume of
Contracts Written in fiscal 2007, (x) iMergent's ability to generate new
products and initiatives, and other statements that are not historical in nature
constitute forward-looking statements within the meaning of the Safe Harbor
Provisions 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 risks 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 ability to increase the Net Dollar Volume of Contracts
Written; the Company properly estimating customer returns and cash collections
on financed contracts; the Company's ability to continue to evaluate and find
ancillary products; the Company's ability to offer best solutions to its
customers; the Company's ability to maintain a very solid customer base; the
Company's ability to have lucrative long-term relationships with its customers;
that the market for the Company's products will continue to grow; whether
regulatory authorities will bring future actions against the Company; the
success of StoresOnline(TM) Pro; the continued ability to increase the number of
workshops; the ability to expand operating margins; fluctuations in the
Company's operating results because of negative publicity, seasonality, weather,
competition and other factors; adverse international or domestic regulatory
developments affecting the internet or the Company's business; the effect of
competitive and economic factors and the Company's reaction to them; possible
disruption in commercial activities caused by terrorist activity and armed
conflicts; changes in logistics and security arrangements; reduced purchases
relative to security expectations; possible disruption in commercial activity as
a result of natural disasters or major health concerns including epidemics;
continued competitive pressures in the marketplace; the ability of the Company
to successfully evolve its products; costs of and developments in the Company's
pending litigation and SEC investigation; the Company's ability to generate
revenue and profits from current strategic partnerships; the Company continuing
to experience traction from marketing partnerships; the Company's ability to
generate positive cash flows from operating activities; the Company's ability to
sell receivables; the continued ability of the Company to repurchase its common
shares and what effect those transactions may have on cash and liquidity; the
Company's ability to expand current markets and develop new markets and
establish profitable strategic partnerships; the Company's ability to continue
to finance extended payment term arrangement customer contracts; whether there
is continual demand for the Company's products and services in its target market
of small businesses and entrepreneurs for assistance in establishing websites;
that the Company can successfully adjust its product financing policy and that
such adjustments to the policy will not negatively impact business or revenues;
that the Company is able to leverage its business; that the Company does improve
margins and can continue to improve margins; that new products and initiatives
in the pipeline will be implemented; that new products and initiatives, if
implemented, will improve the customer base and margins of the Company; that the
Company's customer service will be adequate to meet the needs of its customers;
that the Company's customer service will continue to improve; that the Company
can broaden its training and education programs as well as offer new products
and solutions; that if the Company is able to broaden its training and education
programs as well as offer new products and solutions that such actions will have
a positive impact on the Company, its customers, its customer relationships, and
its margins or revenues; and that the growth strategy undertaken by the Company
will be successful. For a more detailed discussion of risk factors that may
affect iMergent's operations, please refer to the Company's Form 10-K for the
year ended June 30, 2006 and the Form 10-Q for the period ended September 30,
2006. These forward-looking statements speak only as of the date on which such
statements are made and the Company undertakes no obligation and expressly
disclaims any obligation to update such forward-looking statements, except as
required by law.
About iMergent
iMergent provides eCommerce solutions to entrepreneurs and small businesses
enabling them to market and sell their business products or ideas via the
Internet. Headquartered in Orem, Utah, the Company sells its proprietary
StoresOnline software and training services which help 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 and marketing 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.
iMERGENT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in thousands, except per share data)
(unaudited)
December 31, 2006 June 30, 2006
----------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 37,141 $ 30,023
Certificate of deposit - 500
Trade receivables, net of allowance
for doubtful accounts of $11,165 as
of December 31, 2006 and $6,894 as
of June 30, 2006 18,905 13,419
Inventories 185 151
Prepaid expenses and other 2,727 2,739
----------------- -------------
Total current assets 58,958 46,832
Certificate of deposit 500 -
Long-term trade receivables, net of
allowance for doubtful accounts of
$6,220 as of December 31, 2006 and
$4,117 as of June 30, 2006 10,558 7,508
Property and equipment, net 949 696
Deferred income tax assets 13,886 9,976
Merchant account deposits and other 856 1,000
----------------- -------------
Total Assets $ 85,707 $ 66,012
================= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,251 $ 2,752
Accrued expenses and other 2,537 4,085
Income taxes payable 692 348
Deferred revenue, current portion 23,567 20,064
Capital lease obligations, current
portion 49 91
----------------- -------------
Total current liabilities 30,096 27,340
Deferred revenue, net of current
portion 10,558 8,693
----------------- -------------
Total liabilities 40,654 36,033
----------------- -------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.001
per share - authorized 5,000,000
shares; none issued - -
Common stock, par value $0.001 per
share - authorized 100,000,000
shares; 12,431,879 shares
outstanding as of December 31, 2006
and 12,375,313 shares outstanding
as of June 30, 2006 12 12
Additional paid-in capital 78,805 77,762
Accumulated deficit (33,764) (47,795)
----------------- -------------
Total stockholders' equity 45,053 29,979
----------------- -------------
Total Liabilities and
Stockholders' Equity $ 85,707 $ 66,012
================= =============
iMERGENT, INC. AND SUBSIDIARIES
Condensed Consolidated Income Statements
(Dollars in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenues:
Product and
other $ 29,821 $ 117,493 $ 55,134 $ 126,462
Commission and
other 5,854 3,002 9,550 5,426
------------ ------------ ------------ ------------
Total revenues 35,675 120,495 64,684 131,888
------------ ------------ ------------ ------------
Operating
expenses:
Cost of product
and other
revenues 11,375 8,442 20,684 14,281
Selling and
marketing 15,331 9,837 28,249 17,544
General and
administrative 3,833 3,090 7,874 6,458
Research and
development 253 196 488 469
------------ ------------ ------------ ------------
Total
operating
expenses 30,792 21,565 57,295 38,752
------------ ------------ ------------ ------------
Income from
operations 4,883 98,930 7,389 93,136
------------ ------------ ------------ ------------
Other income
(expense):
Interest income 1,628 605 2,995 1,280
Interest expense (1) (4) (3) (14)
Other income
(expense), net 5 (44) 21 (275)
------------ ------------ ------------ ------------
Total other
income, net 1,632 557 3,013 991
------------ ------------ ------------ ------------
Income before
income tax
benefit 6,515 99,487 10,402 94,127
Income tax benefit 5,188 11,703 3,629 11,545
------------ ------------ ------------ ------------
Net income $ 11,703 $ 111,190 $ 14,031 $ 105,672
============ ============ ============ ============
Net income per
common share:
Basic $ 0.95 $ 9.16 $ 1.13 $ 8.71
Diluted $ 0.90 $ 8.92 $ 1.07 $ 8.46
Weighted average
common shares
outstanding:
Basic 12,365,203 12,133,930 12,365,841 12,133,032
Diluted 13,061,113 12,459,597 13,060,096 12,489,110
iMERGENT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)
Six Months Ended
December 31,
---------------------
Increase (decrease) in cash and cash equivalents 2006 2005
- ------------------------------------------------ ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 14,031 $ 105,672
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 260 130
Expense for stock options issued to employees 1,387 588
Expense for stock options issued to
consultants 34 33
Changes in assets and liabilities:
Trade receivables and trade receivables held
for sale (8,536) 11,713
Inventories (34) (74)
Prepaid expenses and other 12 190
Restricted cash - (57)
Merchant account deposits and other 144 (455)
Deferred income tax asset (3,910) (11,877)
Accounts payable, accrued expenses and other
liabilities (1,049) (798)
Deferred revenue 5,368 (89,794)
Income taxes payable 344 -
---------- ----------
Net cash provided by operating activities 8,051 15,271
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (513) (213)
---------- ----------
Net cash used in investing activities (513) (213)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of common stock (1,566) -
Proceeds from exercise of stock options and
related tax benefit 1,188 10
Principal payments on capital lease
obligations (42) (38)
---------- ----------
Net cash used in financing activities (420) (28)
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 7,118 15,030
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF
THE PERIOD 30,023 10,691
---------- ----------
CASH AND CASH EQUIVALENTS AT THE END OF THE
PERIOD $ 37,141 $ 25,721
========== ==========
NON-GAAP MEASURES
The following non-GAAP measures assume:
-- The Net Dollar Volume of Contracts Written is recognized as revenue at
the time of sale;
-- Certain corresponding cost of revenue and selling and marketing
expenses are also recognized at the time of sale; and
-- The income tax provision is based upon an estimated federal, state,
and foreign statutory blended rate of 40%.
Net Dollar Volume of Contracts Written
Until the change in our business model in late December 2005, the Company
recognized product and other revenue ratably over a period of five years and not
at the time contracts were written. Effective December 2005, the Company began
recognizing product and other revenue after the expiration of the three-day
cancellation period for contracts written for which cash payments were received.
For products purchased by customers under extended payment term arrangements,
the Company continues to defer and recognize revenue as cash payments are
received from customers, typically over two years.
Because of the changes in the Company's revenue recognition policies
resulting from the change in business model noted above and due to the Company's
growth, management believes that the Net Dollar Volume of Contracts Written is a
consistent and relevant measure to understand the operations of the Company. Net
Dollar Volume of Contracts Written represents the gross dollar amount of
contracts executed during the period less estimates for bad debts, discounts
incurred on sales of trade receivables (financial discounts), and estimates for
customer returns. Net Dollar Volume of Contracts Written is not equivalent to
revenue recognized in accordance with US GAAP. In contrast, revenue recognized
in accordance with US GAAP consists of cash contracts written net of estimated
customer returns plus actual cash collections on financed contracts. Actual
collections on financed contracts and customer returns may differ materially
from original estimates. However, the Company has several years of experience
with the financing arrangements and products and services offered to its
customers. Consequently, management believes it has a reasonable basis for its
estimates.
Management uses the following non-GAAP measures to evaluate the results of
the Company's operations because Net Dollar Volume of Contracts Written is the
primary factor that influences cost of revenue and selling and marketing
expenses, which are typically recognized at the time the contract is written but
no later than the expiration of the customer's three-day cancellation period.
Consequently, management measures the Company's operating performance and sets
its future operating budgets based upon the Net Dollar Volume of Contracts
Written during the period.
The following non-GAAP measures assume that the Net Dollar Volume of
Contracts Written is recognized as revenue at the time of sale, regardless of
the three-day cancellation period.
Certain Costs of Revenue and Selling and Marketing Expenses
The Company recognizes sales commissions and software royalties as costs of
revenue at the time the related sales are deemed final, i.e. upon expiration of
the customers' three-day cancellation period in accordance with US GAAP.
Additionally, the Company recognizes direct-response advertising costs as
selling and marketing expenses in accordance with SOP 93-7 as the related cash
sales are recognized as revenues.
Because the following non-GAAP measures assume that Net Dollar Volume of
Contracts Written is recognized as revenue at the time of sale, the non-GAAP
measures also assume that the related costs described above are recognized as
expenses at the time of sale, regardless of the three-day cancellation period.
The Company conducted multiple workshops during the last three business
days of September 2006. Consequently, $1,540,000 of cash sales were deferred and
recognized in October 2006. Additionally, the related costs of revenue totaling
$237,000 and the related selling and marketing expenses totaling $450,000 were
recognized in October 2006. No workshops were conducted during the last three
business days of September 2005, December 2005, or December 2006.
Income Tax Provision
Due to the change in business model in December 2005, the Company
determined that it was more likely than not that $11,877,000 of its net deferred
income tax assets, which had a valuation allowance against them, would be
realized. The benefit recorded upon the removal of the corresponding valuation
allowance was partially offset by an income tax provision of $174,000, resulting
in a net income tax benefit of $11,703,000 during the quarter ended December 31,
2005.
Due to management's increased taxable earnings projections and discrete
event developments in the resolution of certain contingencies during the current
quarter, the Company determined that it was more likely than not that its
remaining deferred income tax assets of $7,746,000 would be realized. The
benefit resulting from the removal of the corresponding valuation allowance was
partially offset by an income tax provision of $2,558,000, resulting in a net
income tax benefit of $5,188,000 during the quarter ended December 31, 2006.
The Company expects to recognize income tax expense commensurate with
federal, state, and foreign statutory rates in periods subsequent to December
2006. Consequently, the following non-GAAP measures assume an income tax
provision based upon an estimated federal, state, and foreign statutory blended
rate of 40%. Because of the change in business model in December 2005 and the
resulting impacts on income tax provision/benefit mentioned above, management
believes that this non-GAAP measure provides a consistent and relevant metric to
understand the operations of the Company.
Reconciliation of Net Dollar Volume of Contracts Written
The following tables summarize the activity within deferred revenue and the
Net Dollar Volume of Contracts Written during the three and six months ended
December 31, 2006 and 2005, and reconciles the Net Dollar Volume of Contracts
Written (NDVCW) with US GAAP revenue as reported in the Company's financial
statements.
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ------------------
2006 2005 2006 2005
-------- --------- -------- ---------
(in thousands)
Deferred revenue, beginning of
period $32,189 $119,644 $28,757 $114,050
Less: Cash product sales during
the last three business days of
September 2006 (1,540) - - -
Remaining net change in deferred
revenue 3,476 (95,388) 5,368 (89,794)
-------- --------- -------- ---------
Deferred revenue, end of period $34,125 $ 24,256 $34,125 $ 24,256
======== ========= ======== =========
2006 2005 2006 2005
-------- --------- -------- ---------
(in thousands)
Total revenue recognized in
financial statements in
accordance with US GAAP $35,675 $120,495 $64,684 $131,888
Less: Cash product sales during
the last three business days of
September 2006 (1,540) - - -
Remaining net change in deferred
revenue 3,476 (95,388) 5,368 (89,794)
-------- --------- -------- ---------
Net Dollar Volume of Contracts
Written, non-GAAP $37,611 $ 25,107 $70,052 $ 42,094
======== ========= ======== =========
iMERGENT, INC. AND SUBSIDIARIES
GAAP to Non-GAAP Reconciliation Tables
(Dollars in thousands, except per share data)
(unaudited)
Three Months Ended December 31, 2006
----------------------------------------------
Expense assuming
NDVCW is recognized
as revenue and
related expenses
are recognized at
time of sale
GAAP Adj. (Non-GAAP).
------------ ---------- -------------------
Cost of product and
other revenue $ 11,375 $ (237)(1) $ 11,138
Selling and marketing 15,331 (450)(1) 14,881
Three Months Ended December 31, 2006
----------------------------------------------
Assumes NDVCW is
recognized as
revenue and
related expenses
are recognized
at time of sale,
including income
taxes at 40
percent
GAAP Adj. (Non-GAAP).
------------ ---------- -------------------
Income before income
tax benefit
(provision) $ 6,515 $ 2,623 (2) $ 9,138
Income tax benefit
(provision) 5,188 (8,843)(3) (3,655)
------------ ---------- -------------------
Net income $ 11,703 $ (6,220) $ 5,483
============ ========== ===================
Net income per common
share:
Basic $ 0.95 $ 0.44
============ ===================
Diluted $ 0.90 $ 0.42
============ ===================
Weighted average common
shares outstanding:
Basic 12,365,203 12,365,203
Diluted 13,061,113 13,061,113
Three Months Ended December 31, 2005
----------------------------------------------
Assumes NDVCW is
recognized as
revenue and
related expenses
are recognized
at time of sale,
including income
taxes at 40
percent
GAAP Adj. (Non-GAAP).
------------ ---------- -------------------
Income before income
tax benefit
(provision) $ 99,487 $ (95,388)(4) $ 4,099
Income tax benefit
(provision) 11,703 (13,343)(3) (1,640)
------------ ---------- -------------------
Net income $ 111,190 $(108,731) $ 2,459
============ ========== ===================
Net income per common
share:
Basic $ 9.16 $ 0.20
============ ===================
Diluted $ 8.92 $ 0.20
============ ===================
Weighted average common
shares outstanding:
Basic 12,133,930 12,133,930
Diluted 12,459,597 12,459,597
iMERGENT, INC. AND SUBSIDIARIES
GAAP to Non-GAAP Reconciliation Tables
(Dollars in thousands, except per share data)
(unaudited)
Six Months Ended December 31, 2006
----------------------------------------------
Assumes NDVCW is
recognized as
revenue and
related expenses
are recognized
at time of sale,
including income
taxes at 40
percent
GAAP Adj. (Non-GAAP).
------------ ---------- -------------------
Income before income
tax benefit
(provision) $ 10,402 $ 5,368 (4) $ 15,770
Income tax benefit
(provision) 3,629 (9,937)(3) (6,308)
------------ ---------- -------------------
Net income $ 14,031 $ (4,569) $ 9,462
============ ========== ===================
Net income per common
share:
Basic $ 1.13 $ 0.77
============ ===================
Diluted $ 1.07 $ 0.72
============ ===================
Weighted average common
shares outstanding:
Basic 12,365,841 12,365,841
Diluted 13,060,096 13,060,096
Six Months Ended December 31, 2005
----------------------------------------------
Assumes NDVCW is
recognized as
revenue and
related expenses
are recognized
at time of sale,
including income
taxes at 40
percent
GAAP Adj. (Non-GAAP).
------------ ---------- -------------------
Income before income
tax benefit
(provision) $ 94,127 $ (89,794)(4) $ 4,333
Income tax benefit
(provision) 11,545 (13,278)(3) (1,733)
------------ ---------- -------------------
Net income $ 105,672 $(103,072) $ 2,600
============ ========== ===================
Net income per common
share:
Basic $ 8.71 $ 0.21
============ ===================
Diluted $ 8.46 $ 0.21
============ ===================
Weighted average common
shares outstanding:
Basic 12,133,032 12,133,032
Diluted 12,489,110 12,489,110
(1) Represents certain expenses, described above, related to revenues that
were deferred to October 2006 as a result of workshops conducted during the last
three business days of September 2006.
(2) Represents the net adjustment to revenues of $1,936,000 to derive the
Net Dollar Volume of Contracts Written during the period (including $1,540,000
of cash sales that were deferred to October 2006 as a result of workshops
conducted during the last three business days of September 2006), and the
adjustments to expenses noted above in cost of product and other revenues of
$237,000 and selling and marketing expenses of $450,000.
(3) Represents the adjustment necessary to recognize the income tax
provision based upon an estimated federal, state, and foreign statutory blended
rate of 40%.
(4) Represents the adjustment to revenues to derive the Net Dollar Volume
of Contracts Written during the period.
CONTACT: iMergent, Inc.
Robert Lewis, CFO, 801-431-4695
investor_relations@imergentinc.com
or
Lippert/Heilshorn & Associates
Kirsten Chapman, 415-433-3777 (Investor Relations)
kchapman@lhai.com
Mary Magnani, 415-433-3777 (Investor Relations)