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| iMergent Announces Third Quarter Fiscal 2007 Financial Results |
Don Danks, chairman and chief executive officer, stated, "We have accomplished and exceeded our goals this past quarter by continuously focusing on our growth strategy. To demonstrate our commitment to shareholder value, we initiated a quarterly cash dividend during March 2007, which is another way for our shareholders to participate in our continued success. We are very excited about the 68 percent increase in net income to $4.7 million during the quarter, compared to $2.8 million during the third quarter of fiscal 2006. Net income per diluted common share was $0.36 this quarter, compared to $0.22 in the prior year. We are also very excited about the 129 percent increase in non-GAAP net income to $7.9 million during the quarter, compared to $3.5 million during the third quarter of fiscal 2006. Non-GAAP net income per diluted common share was $0.61 this quarter, compared to $0.28 in the prior year." Danks continued, "The key driver for our strong revenue growth during the quarter was an increase in the number of workshops in combination with the improvement in the percentage of attendees purchasing our software at our workshops. This improvement was attributable to refinements made in our workshop and preview presentations, which resulted in increased revenue and Net Dollar Volume of Contracts Written per workshop and strengthened our margins. In addition, the rising demand for our StoresOnline Pro(TM) software was complemented by the traction we are seeing from new sales teams. The number of workshops we held during the quarter grew significantly to 320 workshops, including 91 internationally, compared to 189 workshops, including seven internationally, during the same quarter last year." Danks added, "We remain focused on consistently offering our customers ancillary products and services that help our customers run their businesses effectively, and drive recurring revenue for iMergent. For example, we offer ancillary products such as Money Resource Network, TaxVantage and AVAIL. Our goal is to continue to develop and market products that assist small businesses and entrepreneurs, which we expect will contribute to our growth." "This quarter we set another record for Net Dollar Volume of Contracts Written, which reached $49.1 million, representing an 86 percent increase over the third quarter of fiscal 2006," stated Robert Lewis, chief financial officer. "Also during the quarter, we generated $6.0 million in net cash from operating activities, some of which was used to facilitate our stock purchase plan. We purchased 180,100 shares of our common stock for $3.4 million, bringing the total to 293,900 shares purchased for $5.0 million during fiscal 2007." 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. These non-GAAP measures assume 1) the Net Dollar Volume of Contracts Written is recognized as revenue at the time of sale; 2) certain corresponding costs 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 Third Quarter 2007 Compared to 2006
Nine Months Ended March 31, 2007 Compared to 2006
Outlook Danks reiterated, "We delivered a robust third quarter in fiscal 2007 and anticipate this growth to continue for the remainder of fiscal 2007. As such, we are increasing our expectations for fiscal 2007 annual growth of Net Dollar Volume of Contracts Written to approximately 60 percent to 65 percent over fiscal 2006 Net Dollar Volume of Contracts Written of $99.8 million." On March 27, 2007, iMergent had increased guidance for fiscal 2007 to grow Net Dollar Volume of Contracts Written approximately 45 percent to 50 percent over fiscal 2006 to reflect continued strong demand for StoresOnline Pro software and benefits of the company's ninth sales team. 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 May 9, 2007; dial 706-645-9291, and enter access code 5021133. Safe Harbor Statement The statements made in this press release regarding (i) iMergent continuously focusing on its growth strategy, (ii) iMergent providing and continuing to provide uninterruptible commitment to shareholder value, (iii) iMergent continuing to provide a cash dividend, (iv) iMergent continuing to improve the sales close rates of its workshops, (v) iMergent continuing to make refinements to its workshop and preview presentations, (vi) iMergent continuing to see rising demand for its StoresOnline Pro(TM) software, (vii) iMergent continuing to see traction from its new sales teams, (viii) iMergent continuing to increase the number of workshops held both domestically and internationally, (ix) iMergent continuing to offer its customers ancillary products and services which may help to run their businesses effectively, (x) iMergent being able to drive recurring revenue, (xi) iMergent being able to monetize its database and build ancillary and residual products, (xii) iMergent's ability to develop and market products that assist small businesses and entrepreneurs, (xiii) iMergent's ability to continue to grow its business throughout the remainder of fiscal 2007 and beyond, (xiv) iMergent's commitment to providing its customers with the highest level of products and services, (xv) 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, (xvi) iMergent's expectation that fiscal 2007 Net Dollar Volume of Contracts Written will grow approximately 60 to 65 percent over fiscal 2006, 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 Forms 10-Q for the periods ended September 30, 2006 and December 31, 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.
- Financial Statements and Reconciling Tables to Follow -
iMERGENT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in thousands, except per share data)
(unaudited)
March 31, 2007 June 30, 2006
-------------- -------------
Assets
Current Assets:
Cash and cash equivalents $ 38,981 $ 30,023
Certificate of deposit - 500
Trade receivables, net of allowance for
doubtful accounts of $15,940 as of
March 31, 2007 and $6,894 as of June
30, 2006 24,282 13,419
Inventories 207 151
Prepaid expenses and other 7,250 2,739
-------------- -------------
Total Current Assets 70,720 46,832
Certificate of deposit 500 -
Long-term trade receivables, net of
allowance for doubtful accounts of $7,783
as of March 31, 2007 and $4,117 as of
June 30, 2006 11,239 7,508
Property and equipment, net 1,778 696
Deferred income tax assets 11,091 9,976
Merchant account deposits and other 580 1,000
-------------- -------------
Total Assets $ 95,908 $ 66,012
============== =============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 2,792 $ 2,752
Accrued expenses and other 4,722 4,085
Dividends payable 1,230 -
Income taxes payable 843 348
Deferred revenue, current portion 29,313 20,064
Capital lease obligations 42 91
-------------- -------------
Total Current Liabilities 38,942 27,340
Deferred revenue, net of current portion 11,239 8,693
-------------- -------------
Total Liabilities 50,181 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;
12,302,067 shares outstanding as of
March 31, 2007 and 12,375,313 shares
outstanding as of June 30, 2006 12 12
Additional paid-in capital 76,012 77,762
Accumulated deficit (30,297) (47,795)
-------------- -------------
Total Stockholders' Equity 45,727 29,979
-------------- -------------
Total Liabilities and Stockholders'
Equity $ 95,908 $ 66,012
============== =============
iMERGENT, INC. AND SUBSIDIARIES
Condensed Consolidated Income Statements
(Dollars in thousands, except per share data)
(unaudited)
Three Months Ended March Nine Months Ended March
31, 31,
------------------------- -------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Revenues:
Product and other $ 35,593 $ 21,508 $ 90,728 $ 147,970
Commission and
other 7,043 3,497 16,592 8,923
------------ ------------ ------------ ------------
Total revenues 42,636 25,005 107,320 156,893
------------ ------------ ------------ ------------
Operating expenses:
Cost of product
and other
revenues 12,850 7,567 33,534 21,847
Selling and
marketing 19,408 10,215 47,658 27,760
General and
administrative 4,102 3,473 11,976 9,931
Research and
development 371 208 858 677
------------ ------------ ------------ ------------
Total operating
expenses 36,731 21,463 94,026 60,215
------------ ------------ ------------ ------------
Income from
operations 5,905 3,542 13,294 96,678
------------ ------------ ------------ ------------
Other income
(expense):
Interest income 1,836 819 4,831 2,099
Interest expense - (3) (3) (17)
Other income
(expense), net (91) 158 (70) (117)
------------ ------------ ------------ ------------
Total other
income, net 1,745 974 4,758 1,965
------------ ------------ ------------ ------------
Income before
income tax
(provision)
benefit 7,650 4,516 18,052 98,643
Income tax
(provision)
benefit (2,953) (1,716) 676 9,829
------------ ------------ ------------ ------------
Net income $ 4,697 $ 2,800 $ 18,728 $ 108,472
============ ============ ============ ============
Net income per
common share:
Basic $ 0.38 $ 0.23 $ 1.51 $ 8.94
Diluted $ 0.36 $ 0.22 $ 1.45 $ 8.56
Weighted average
common shares
outstanding:
Basic 12,389,854 12,135,889 12,373,728 12,133,971
Diluted 12,952,954 12,691,997 12,911,557 12,674,550
iMERGENT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)
Nine Months Ended March 31,
-----------------------------
Increase (decrease) in cash and cash
equivalents 2007 2006
--------------------------------------- ------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 18,728 $ 108,472
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 440 212
Expense for stock options issued
to employees 1,710 898
Expense for stock options issued
to consultants 34 44
Changes in assets and liabilities:
Trade receivables and trade
receivables held for sale (14,594) 7,546
Inventories (56) (18)
Prepaid expenses and other (4,511) (830)
Restricted cash - (50)
Merchant account deposits and
other 420 (739)
Deferred income tax assets (1,115) (10,639)
Accounts payable, accrued
expenses and other liabilities 677 1,026
Deferred revenue 11,795 (88,469)
Income taxes payable 495 242
------------- --------------
Net cash provided by operating
activities 14,023 17,695
------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and
equipment (1,522) (286)
------------- --------------
Net cash used in investing
activities (1,522) (286)
------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of common stock (4,965) -
Proceeds from exercise of stock
options and related income tax
benefit 1,471 42
Principal payments on capital
lease obligations (49) (59)
------------- --------------
Net cash used in financing
activities (3,543) (17)
------------- --------------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 8,958 17,392
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE PERIOD 30,023 10,691
------------- --------------
CASH AND CASH EQUIVALENTS AT THE END OF
THE PERIOD $ 38,981 $ 28,083
============= ==============
NON-GAAP MEASURES The following non-GAAP measures assume:
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 costs 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 U.S. 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 23 workshops during the last three business days of March 2007. Consequently, $2,258,000 of cash sales were deferred and recognized in April 2007. Additionally, the related costs of revenue totaling $395,000 and the related selling and marketing expenses totaling $547,000 were recognized in April 2007. The Company conducted 3 workshops during the last three business days of March 2006. Consequently, $147,000 of cash sales were deferred and recognized in April 2006. Additionally, the related costs of revenue totaling $25,000 and the related selling and marketing expenses totaling $74,000 were recognized in April 2006. No workshops were conducted during the last three business days of December 2006 or December 2007. 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 $2,048,000, resulting in a net income tax benefit of $9,829,000 for the nine months ended March 31, 2006. Due to management's increased taxable earnings projections and discrete event developments in the resolution of certain contingencies during the three months ended December 31, 2006, 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 $7,070,000, resulting in a net income tax benefit of $676,000 for the nine months ended March 31, 2007. The Company has recognized and expects to continue 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 table summarizes the activity within deferred revenue and the Net Dollar Volume of Contracts Written for the three and nine months ended March 31, 2007 and 2006, 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 Nine Months Ended
March 31, March 31,
------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ----------
(in thousands)
Deferred revenue, beginning
of period $ 34,125 $ 24,256 $ 28,757 $ 114,050
Plus: Cash product sales
during the last three
business days of March 2007 $ 2,258 $ 147 $ 2,258 $ 147
Remaining net change in
deferred revenue 4,169 1,178 9,537 (88,616)
--------- --------- --------- ----------
Deferred revenue, end of
period $ 40,552 $ 25,581 $ 40,552 $ 25,581
========= ========= ========= ==========
2007 2006 2007 2006
--------- --------- --------- ----------
(in thousands)
Total revenue recognized in
financial statements in
accordance with US GAAP $ 42,636 25,005 107,320 156,893
Plus: Cash product sales
during the last three
business days of March 2007 2,258 147 2,258 147
Remaining net change in
deferred revenue 4,169 1,178 9,537 (88,616)
--------- --------- --------- ----------
Net Dollar Volume of
Contracts Written, non-GAAP $ 49,063 $ 26,330 $119,115 $ 68,424
========= ========= ========= ==========
iMERGENT, INC. AND SUBSIDIARIES
GAAP to Non-GAAP Reconciliation Tables
(Dollars in thousands, except per share data)
(unaudited)
Three Months Ended March 31, 2007
-------------------------------------------------
Expense assuming
NDVCW is recognized
as revenue and
related expenses
are recognized at
time of sale (Non-
GAAP Adj. GAAP).
-------------- ----------- --------------------
Cost of product and
other revenue $ 12,850 $ 395 (1) $ 13,245
Selling and marketing 19,408 547 (1) 19,955
Three Months Ended March 31, 2007
-------------------------------------------------
Assumes NDVCW is
recognized as
revenue and related
expenses are
recognized at time
of sale, including
income tax
provision at 40
GAAP Adj. percent (Non-GAAP).
-------------- ----------- --------------------
Income before income
tax provision $ 7,650 $ 5,485 (2) $ 13,135
Income tax provision (2,953) (2,301)(3) (5,254)
-------------- ----------- --------------------
Net income $ 4,697 $ 3,184 $ 7,881
============== =========== ====================
Net income per common
share:
Basic $ 0.38 $ 0.64
============== ====================
Diluted $ 0.36 $ 0.61
============== ====================
Weighted average
common shares
outstanding:
Basic 12,389,854 12,389,854
Diluted 12,952,954 12,952,954
Three Months Ended March 31, 2006
-------------------------------------------------
Expense assuming
NDVCW is recognized
as revenue and
related expenses
are recognized at
time of sale (Non-
GAAP Adj. GAAP).
-------------- ----------- --------------------
Cost of product and
other revenue $ 7,567 $ 25 (4) $ 7,592
Selling and marketing 10,215 74 (4) 10,289
Three Months Ended March 31, 2006
-------------------------------------------------
Assumes NDVCW is
recognized as
revenue and related
expenses are
recognized at time
of sale, including
income tax
provision at 40
GAAP Adj. percent (Non-GAAP).
-------------- ----------- --------------------
Income before income
tax provision $ 4,516 $ 1,226 (5) $ 5,742
Income tax provision (1,716) (581)(3) (2,297)
-------------- ----------- --------------------
Net income $ 2,800 $ 645 $ 3,445
============== =========== ====================
Net income per common
share:
Basic $ 0.23 $ 0.28
============== ====================
Diluted $ 0.22 $ 0.27
============== ====================
Weighted average
common shares
outstanding:
Basic 12,135,889 12,135,889
Diluted 12,691,997 12,691,997
Note explanations follow the tables.
iMERGENT, INC. AND SUBSIDIARIES
GAAP to Non-GAAP Reconciliation Tables
(Dollars in thousands, except per share data)
(unaudited)
Nine Months Ended March 31, 2007
------------------------------------------------
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 $ 33,534 $ 395 (1) $ 33,929
Selling and marketing 47,658 547 (1) 48,205
Nine Months Ended March 31, 2007
------------------------------------------------
Assumes NDVCW is
recognized as
revenue and
related expenses
are recognized at
time of sale,
including income
tax provision at
40 percent (Non-
GAAP Adj. GAAP).
-------------- ------------ ------------------
Income before income
tax benefit
(provision) $ 18,052 $ 10,853 (6) $ 28,905
Income tax benefit
(provision) 676 (12,238)(3) (11,562)
-------------- ------------ ------------------
Net income $ 18,728 $ (1,385) $ 17,343
============== ============ ==================
Net income per common
share:
Basic $ 1.51 $ 1.40
============== ==================
Diluted $ 1.45 $ 1.34
============== ==================
Weighted average
common shares
outstanding:
Basic 12,373,728 12,373,728
Diluted 12,911,557 12,911,557
Nine Months Ended March 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 $ 21,847 $ 25 (4) $ 21,872
Selling and marketing 27,760 74 (4) 27,834
Nine Months Ended March 31, 2006
------------------------------------------------
Assumes NDVCW is
recognized as
revenue and
related expenses
are recognized at
time of sale,
including income
tax provision at
40 percent (Non-
GAAP Adj. GAAP).
-------------- ------------ ------------------
Income before income
tax benefit
(provision) $ 98,643 $ (88,370)(7) $ 10,273
Income tax benefit
(provision) 9,829 (13,938)(3) (4,109)
-------------- ------------ ------------------
Net income $ 108,472 $(102,308) $ 6,164
============== ============ ==================
Net income per common
share:
Basic $ 8.94 $ 0.51
============== ==================
Diluted $ 8.56 $ 0.49
============== ==================
Weighted average
common shares
outstanding:
Basic 12,133,971 12,133,971
Diluted 12,674,550 12,674,550
Note explanations follow the tables.
----------------------------------------------------------------------
(1) Represents certain expenses, described above, related to revenues
that were deferred to April 2007 as a result of workshops
conducted during the last three business days of March 2007.
(2) Represents the net adjustment to revenues of $6,427,000 to derive
the Net Dollar Volume of Contracts Written during the period
(including $2,258,000 of cash sales that were deferred to April
2007 as a result of workshops conducted during the last three
business days of March 2007), and the adjustments to expenses
noted above in cost of product and other revenues of $395,000 and
selling and marketing expenses of $547,000.
(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 certain expenses, described above, related to revenues
that were deferred to April 2006 as a result of workshops
conducted during the last three business days of March 2006.
(5) Represents the net adjustment to revenues of $1,325,000 to derive
the Net Dollar Volume of Contracts Written during the period
(including $147,000 of cash sales that were deferred to April
2006 as a result of workshops conducted during the last three
business days of March 2006), and the adjustments to expenses
noted above in cost of product and other revenues of $25,000 and
selling and marketing expenses of $74,000.
(6) Represents the net adjustment to revenues of $11,795,000 to derive
the Net Dollar Volume of Contracts Written during the period
(including $2,258,000 of cash sales that were deferred to April
2007 as a result of workshops conducted during the last three
business days of March 2007), and the adjustments to expenses
noted above in cost of product and other revenues of $395,000
and selling and marketing expenses of $547,000.
(7) Represents the net adjustment to revenues of ($88,469,000) to
derive the Net Dollar Volume of Contracts Written during the
period (including $147,000 of cash sales that were deferred to
April 2006 as a result of workshops conducted during the last
three business days of March 2006), and the adjustments to
expenses noted above in cost of product and other revenues of
$25,000 and selling and marketing expenses of $74,000.
----------------------------------------------------------------------
SOURCE: iMergent, Inc. iMergent, Inc. |