Internet Commerce (NASDAQ:ICCA)
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ICC Announces Fourth Quarter and Fiscal 2003 Financial Results
NEW YORK, Oct. 29 /PRNewswire-FirstCall/ -- Internet Commerce Corporation
("ICC" or the "Company") , a leader in the e-commerce business-to-business
communication services market, today announced financial results for its fourth
quarter and fiscal year ended July 31, 2003.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030611/ICCALOGO )
G. Michael Cassidy, President and Chief Executive Officer of ICC, commented, "We
are pleased that during the fourth quarter, our core VAN services revenue grew
33.8% year-over-year, despite an ongoing economic slowdown. We also
substantially reduced our cash used in operations to $159,000 in the fourth
quarter of fiscal 2003 compared to $809,000 in the third quarter of fiscal
2003."
During fiscal 2002, the Company recognized $3.0 million in revenue from a
technology license with Triaton, a subsidiary of ThyssenKrupp Information
Services. No revenue from Triaton related to this license was recorded in
fiscal 2003. For comparative purposes, the fiscal 2002 full year and quarterly
pro forma results referred to throughout this press release exclude all revenue
related to this technology license.
Consolidated Three-Month Results
* Revenue for the fourth quarter increased 12.3% to $3.1 million from
pro forma revenue of $2.8 million in the year-ago period. Revenue
for the fourth quarter was essentially flat from the third quarter
of 2003.
* Gross margin improved to 38.5% versus pro forma gross margin of
17.4% and 33.6% in the year-ago period and the third quarter of
2003, respectively. Excluding impairment of software development
costs of $134,000 in the third quarter of 2003, gross margin
improved to 37.9%.
* The Company incurred a net loss of $2.1 million, or $0.16 per
diluted share, compared to a pro forma net loss of $3.7 million, or
$0.33 per diluted share, last year. This compares to a net loss of
$1.1 million, or $0.11 per diluted share, in the third quarter of
2003. Excluding impairment of software development costs of $15,000
and impairment of goodwill of $982,000 in the fourth quarter of
2003, the Company incurred a net loss of $1.1 million, or $0.08 per
diluted share.
Mr. Cassidy continued, "We completed a $2.1 million private placement in May
2003 and successfully executed an accounts receivable financing agreement under
which the Company can now borrow up to 80% of its outstanding receivables up to
$2 million. To date, we have not utilized this facility. We are confident that
these initiatives, coupled with our on-going cost containment programs, will
provide our company with a more solid platform for growth and improved financial
performance."
Consolidated Results for Fiscal 2003
* Revenue increased 7.7% to $12.1 million from pro forma revenue of
$11.2 million last year.
* Gross margin improved to 33.6% from pro forma gross margin of 21.8%
last year, primarily due to the Company's continued cost structure
optimization plan and increased revenue. Excluding $397,000 of
impairment charges in fiscal 2003, gross margin improved to 36.9%.
* The Company narrowed its net loss to $6.0 million, or $0.53 per
diluted share, from a pro forma net loss of $9.5 million, or $0.96
per diluted share last year.
* Fiscal 2003 results were adversely impacted by write-offs of
$1.7 million, or $0.14 per diluted share, reflecting impairments of
software development costs, software inventory, marketable
securities acquired by ICC as part of its August 2000 acquisition of
Intercoastal Data and goodwill for its Service Bureau.
Mr. Cassidy concluded, "Fiscal 2003 was a challenging year given world events
and challenging economic conditions. Nevertheless, our company made significant
strides and the ICC.NET service, which represents more than 73% of our business,
continues to reach new records, month over month, in the volume of data
transmitted. With the benefit of additional funding from our May 2003 private
placement, we look forward to increasing our marketing and sales efforts to
reach a larger customer base."
Consolidated Results for Fourth Quarter and Fiscal 2003 (Including Triaton
technology license)
Fourth Fiscal Quarter 2003
* Consolidated revenue for the three months ended July 31, 2003 was
$3.1 million compared to $5.7 million in the year-ago period.
* Gross margin declined to 38.5% from 60.4% in the year-ago period.
* The Company incurred a net loss for the three months ended
July 31, 2003 of $2.1 million, or $.16 per diluted share, compared
to a net loss of $682 thousand, or $.06 per diluted share, in the
year ago period.
Fiscal 2003
* Consolidated revenue for the fiscal year ended July 31, 2003 was
$12.1 million compared to $14.2 million in the year-ago period.
* Gross margin declined to 33.6% from 38.3% in the year-ago period.
* The Company incurred a net loss for the fiscal year ended
July 31, 2003 of $6.0 million, or $0.53 per diluted share, compared
to a net loss of $6.5 million, or $0.68 per diluted share, last
year.
Segment Results - Fourth Quarter & Full Year Results
ICC.NET:
For comparative purposes, the fiscal 2002 full year and quarterly results
referred to in the ICC.NET segment, exclude all revenue related to the Triaton
technology license. For the fourth quarter of fiscal 2003, ICC.NET revenue
represented 77.6% of consolidated revenue compared to 68.1% of pro forma revenue
in the year ago period and 74.3% in the third quarter of 2003.
Fourth Fourth Third
(000's) Quarter Quarter Quarter Fiscal Fiscal
2003 2002 2003 2003 2002
Pro forma Pro forma
Revenue $2,400 $1,900 $2,300 $8,900 $7,400
Gross Margin 46.1% 19.5% 43.5% 41.7% 22.7%
Core Van Services
Revenue $2,300 $1,700 $2,200 $8,300 $6,300
Gross Margin 59.2% 40.0% 56.5% 54.9% 8.4%
Mapping Revenue* $150 $189 $93 $571 $1,100
* Declines in mapping revenue reflect the continued challenging economic
environment and the resulting decline in demand for mapping services.
Service Bureau
Fourth Fourth Third
(000's) Quarter Quarter Quarter Fiscal Fiscal
2003 2002 2003 2003 2002
Revenue $291 $415 $341 $1,500 $1,600
Gross Margin 35.1%* 57.7% 9.3%** 40.6%*** 48.6%
* Excluding a $15,000 write-off of software development costs, gross
margin was 40.1% for the fourth quarter of fiscal 2003.
** Excluding a $134,000 write-off of software development costs, gross
margin was 48.6% for the third quarter of fiscal 2003.
*** Excluding the aforementioned write-offs of software development
costs, gross margin was 50.6% for Fiscal 2003.
Professional Services
(000's) Fourth Fourth Third
Quarter Quarter Quarter Fiscal Fiscal
2003 2002 2003 2003 2002
Revenue $404 $467 $456 $1,700 $2,200
Gross Margin (4.9%) (27.3%) 2.0% (13.8%)* (1.8%)
* Excluding a $248,000 write-off of software inventory, gross margin was
0.5% for fiscal 2003.
The Company will post its investor presentation and supplemental financial
information on its website, http://www.icc.net/ on the morning October 29, 2003,
the date of its quarterly webcast.
About Internet Commerce Corporation
Internet Commerce Corporation (NASDAQ:ICCA) is a leader in the e-commerce
business-to-business communication services market. ICC.NET, the company's
global Internet-based value added network, provides complete supply chain
connectivity solutions for EDI/EC while also offering users a sophisticated
vehicle to securely transact files of any format and size. ICC offers a broad
range of consulting services including, XML technologies, data transformation,
custom application development, an EDI service bureau, as well as comprehensive
e-commerce education. ICC uniquely bridges the legacy investments of yesterday
to today's Internet technologies. For further information, visit us at
http://www.icc.net/.
Except for the historical information contained herein, this press release
includes forward looking statements which are subject to a number of risks and
uncertainties, including the risks and uncertainties associated with rapidly
changing technologies such as the Internet, the risks of technology development
and the risks of competition. Actual results could differ materially. For more
information about these risks and uncertainties, see the SEC filings of Internet
Commerce Corporation.
INTERNET COMMERCE CORPORATION
Consolidated Statements of Operations and Comprehensive Loss (unaudited)
(in thousands, except for share and per share amounts)
Three Months Ended Twelve Months Ended
July 31, July 31,
2003 2002 2003 2002
Revenues:
Services $3,102 $2,762 $12,083 $11,222
Technology license 3,000 -- 3,000
Total revenues 3,102 5,762 12,083 14,222
Expenses:
Cost of services (excluding
non-cash compensation of
($15) and $119 for the three
months and twelve months
ended July 31, 2002,
respectively.) 1,894 2,283 7,622 8,776
Impairment of software
inventory -- -- 248 --
Impairment of capitalized
software 15 -- 148 --
Product development and
enhancement 282 247 1,111 977
Selling and marketing
(excluding non-cash
compensation of $7 and $30 for
the three and twelve months
ended July 31, 2002,
respectively.) 714 676 3,035 3,499
General and administrative
(excluding non-cash
compensation of $68 and $101
for the three and twelve
months ended July 31, 2002,
respectively and $57 and $139
for the three and twelve months
ended July 31, 2003
respectively.) 1,205 1,684 4,439 5,849
Non-cash charges for stock-based
compensation and services 57 60 139 250
Impairment of goodwill and
acquired intangibles 982 1,711 982 1,711
5,149 6,661 17,724 21,062
Operating loss (2,047) (899) (5,641) (6,840)
Other income and (expense):
Interest and investment income 3 3 13 27
Investment gain (loss) -- 15 (19) 121
Interest expense (18) (8) (39) (70)
Impairment of marketable
securities -- -- (318) --
Other income -- 207 -- 214
(15) 217 (363) 292
Net loss $(2,062) $(682) $(6,004) $( 6,548)
Dividends on preferred stock (101) (101) (400) (365)
Beneficial conversion feature for
repricing and issuance of warrants
in warrant exchange offer -- -- -- (461)
Beneficial conversion feature
related to series D
preferred stock -- -- (107) --
Loss attributable to common
stockholders $(2,163) $(783) $(6,511) $(7,374)
Basic and diluted loss per
common share $(0.16) $(0.06) $(0.53) $(0.68)
Weighted average number of
common shares outstanding-
basic and diluted 13,765,885 11,488,172 12,303,367 10,867,447
COMPREHENSIVE LOSS:
Net loss $(2,062) $(682) $(6,004) $(6,548)
Other comprehensive loss:
Unrealized gain (loss) -
marketable securities 15 (43) 35 (118)
Reclassification for impairment
of marketable securities -- -- 318 --
Comprehensive loss $(2,047) $(725) $(5,651) $(6,666)
INTERNET COMMERCE CORPORATION
Consolidated Balance Sheets
(in thousands)
July 31, July 31,
2002 2002
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $2,283 $2,088
Marketable securities 92 131
Accounts receivable, net of allowance for
doubtful accounts of $220 and $242, respectively 1,733 2,976
Prepaid expenses and other current assets 296 478
Total current assets 4,404 5,673
Restricted cash 128 157
Property and equipment, net 557 1,152
Software development costs, net 128 327
Goodwill 1,212 2,194
Other intangible assets, net 2,151 3,107
Other assets 18 15
Total assets $ 8,598 $12,625
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 918 $862
Accrued expenses 1,179 1,409
Accrued dividends - preferred stock 232 232
Deferred revenue 97 164
Capital lease obligation 148 182
Other liabilities 130 203
Total current liabilities 2,704 3,052
Capital lease obligation - less current portion 46 192
Other non-current liabilities 8 --
Total liabilities 2,758 3,244
Commitments and contingencies -- --
Stockholders' Equity:
Preferred stock * *
Common stock 138 117
Additional paid-in capital 87,489 85,401
Accumulated deficit (81,813) (75,809)
Accumulated other comprehensive income (loss) 26 (328)
Total stockholders' equity 5,840 9,381
Total liabilities and stockholders' equity $ 8,598 $12,625
* less than 1,000
http://www.newscom.com/cgi-bin/prnh/20030611/ICCALOGODATASOURCE: Internet
Commerce Corporation
CONTACT: Victor Bjorge of Internet Commerce Corporation,
+1-212-271-7681,
Web site: http://www.icc.net/