Internet Commerce Corporation Announces Financial Results for Third Quarter Fiscal 2007

  
    
  
  
    
      Internet Commerce Corporation (ICC) (Nasdaq: ICCA), a leader in 
      business-to-business e-commerce solutions, today announced financial 
      results for its fiscal third quarter 2007.
    
    
      "Overall, this quarter was productive for ICC in regards to our ‘Growth 
      with Profitability’ strategy,” 
      said Thomas Stallings, chief executive officer of ICC. “With 
      our continued focus on revenue growth, streamlined operations and 
      shareholder value, we met our internal financial forecasts with a 19% 
      increase in revenue and a 32% increase in operating income, implemented 
      organizational changes to save approximately $1.3 million annually 
      beginning in the fourth quarter fiscal 2007 and announced a definitive 
      agreement to acquire EasyLink Services Corporation.”
    
    
      Mr. Stallings continued, “We made great 
      progress toward achieving our long-term marketplace and financial goals, 
      and I am confident that our core strength in operational excellence will 
      result in a solid performance for fiscal year 2007.”
    
    
      Third Quarter Fiscal Year 2007 Results
    
    
      Third quarter revenue from continuing operations in fiscal 2007 was 
      approximately $5.4 million, up 19% compared with our third quarter of 
      fiscal 2006 revenues of approximately $4.5 million. In the EC Solutions 
      segment, comprised of the ICC.NETTM Value Added 
      Network, browser-based and hosted applications and desktop software, 
      third quarter revenues from continuing operations were approximately 
      $4.1 million, up 28% from approximately $3.2 million in the fiscal third 
      quarter 2006 period. Revenues from the EC Services segment, comprised of 
      the EC service center, managed services and professional services, were 
      approximately $1.29 million, down 3% from approximately $1.33 million in 
      the third quarter of fiscal 2006.
    
    
      Total expenses from continuing operations increased 17% in third quarter 
      fiscal 2007 from the prior-year period to $4.8 million from $4.1 
      million. The increase in expenses during the quarter was primarily 
      driven by the acquisition of Enable Corp and restructuring charges to 
      eliminate redundancy from acquisitions and streamlined operations.
    
    
      Operating income increased 32% to approximately $635,000 in third 
      quarter fiscal 2007 from approximately $482,000 for the same period in 
      fiscal 2006. With a $124,000 increase in provision for income taxes, 
      consisting primarily of state income taxes not covered by our existing 
      state net loss carryforwards and a true up of past years’ 
      state income tax timing differences as a result of changing the tax 
      year-end from December 31 to July 31, net income was approximately 
      $551,000 compared to a net income of approximately $550,000 for third 
      quarter fiscal 2006. Basic and diluted income per common share from 
      continuing operations were $0.02 as compared with $0.02 per basic and 
      diluted common share for the fiscal 2006 period.
    
    
      Nine Month Fiscal 2007 Results
    
    
      For the nine months ended April 30, 2007, revenues from continuing 
      operations totaled approximately $16.5 million, up 13% compared with the 
      first nine months fiscal 2006 revenues of approximately $14.6 million. 
      Net income was approximately $1.8 million compared to a net income of 
      approximately $1.6 million for the same period in fiscal 2006, an 
      increase of 11%. Basic and diluted income per common share from 
      continuing operations were $0.08 and $0.07, respectively, as compared to 
      $0.07 per basic and diluted common share for the nine month period of 
      fiscal 2006 period.
    
    
      The Company ended the first nine months of fiscal 2007 with 
      approximately $7.0 million of cash on hand. The balance sheet remains 
      strong with current assets ending at approximately $11.8 million and 
      current liabilities at approximately $2.0 million.
    
    
      Forward-Looking and Cautionary Statements
    
    
      Except for the historical information and discussion contained herein, 
      statements contained in this release may constitute forward-looking 
      statements within the meaning of the Private Securities Litigation 
      Reform Act of 1995. These statements involve a number of risks, 
      uncertainties and other factors that could cause actual results to 
      differ materially, as discussed in the company’s 
      filing with the U.S. Securities and Exchange Commission (SEC).
    
    
      About Internet Commerce Corporation (ICC)
    
    
      Internet Commerce Corporation (Nasdaq: ICCA), headquartered in Norcross, 
      Georgia, is a leader in providing business-to-business e-commerce 
      solutions. Thousands of customers rely on ICC's comprehensive line of 
      solutions, in-depth expertise, and unmatched customer service to help 
      balance cost, fit, and function required to meet unique requirements for 
      trading partner compliance, coordination, and collaboration. With its 
      software solutions, network services, hosted web applications, managed 
      services, and consulting services, ICC is the trusted provider of 
      e-commerce solutions for businesses, regardless of size and level of 
      technical sophistication, to connect them with their trading 
      communities. For more information, visit www.icc.net.
    
    
      
        
          
            INTERNET COMMERCE CORPORATION
          
        
      
      
        
          
            Consolidated Statements of Operations (unaudited)
          
        
      
      
        
          
            (in thousands, except for share and per share amounts)
          
        
      
      
        
           
        
      
      
        
        
        
        
        
        
        
          Three Months Ended
        
        
        
        
        
        
          Nine Months Ended
        
      
      
        
        
        
        
        
        
        
          April 30,
        
        
        
        
        
        
          April 30,
        
      
      
        
        
        
        
        
        
        
          2007 
        
        
        
        
        
        
          2006 
        
        
        
        
        
        
          2007 
        
        
        
        
        
        
          2006 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Service revenues
        
        
        
        
          $
        
        
          5,390 
        
        
        
        
          $
        
        
          4,535 
        
        
        
        
          $
        
        
          16,500 
        
        
        
        
          $
        
        
          14,565 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Expenses:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cost of services
        
        
        
        
        
        
          1,999 
        
        
        
        
        
        
          1,579 
        
        
        
        
        
        
          5,828 
        
        
        
        
        
        
          5,234 
        
      
      
        
          Product development and enhancement
        
        
        
        
        
        
          595 
        
        
        
        
        
        
          192 
        
        
        
        
        
        
          1,898 
        
        
        
        
        
        
          502 
        
      
      
        
          Selling and marketing
        
        
        
        
        
        
          380 
        
        
        
        
        
        
          567 
        
        
        
        
        
        
          1,269 
        
        
        
        
        
        
          1,560 
        
      
      
        
          General and administrative
        
        
        
        
        
        
          1,781 
        
        
        
        
        
        
          1,715 
        
        
        
        
        
        
          5,610 
        
        
        
        
        
        
          5,650 
        
      
      
        
        
        
        
        
        
        
          4,755 
        
        
        
        
        
        
          4,053 
        
        
        
        
        
        
          14,605 
        
        
        
        
        
        
          12,946 
        
      
      
        
          
            Operating income
          
        
        
        
        
        
        
          635 
        
        
        
        
        
        
          482 
        
        
        
        
        
        
          1,895 
        
        
        
        
        
        
          1,619 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other income (expense):
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest and investment income
        
        
        
        
        
        
          70 
        
        
        
        
        
        
          75 
        
        
        
        
        
        
          233 
        
        
        
        
        
        
          134 
        
      
      
        
          Interest expense
        
        
        
        
        
        
          (19)
        
        
        
        
        
        
          (23)
        
        
        
        
        
        
          (59)
        
        
        
        
        
        
          (136)
        
      
      
        
          Other income (expense)
        
        
        
        
        
        
          -- 
        
        
        
        
        
        
          27 
        
        
        
        
        
        
          (21)
        
        
        
        
        
        
          55 
        
      
      
        
        
        
        
        
        
        
          51 
        
        
        
        
        
        
          79 
        
        
        
        
        
        
          153 
        
        
        
        
        
        
          53 
        
      
      
        
          Income before provision for income taxes
        
        
        
        
        
        
          686 
        
        
        
        
        
        
          561 
        
        
        
        
        
        
          2,048 
        
        
        
        
        
        
          1,672 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Provision (benefit) for income taxes, current
        
        
        
        
        
        
          135 
        
        
        
        
        
        
          11 
        
        
        
        
        
        
          219 
        
        
        
        
        
        
          28 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income
        
        
        
        
        
        
          551 
        
        
        
        
        
        
          550 
        
        
        
        
        
        
          1,829 
        
        
        
        
        
        
          1,644 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Dividends on preferred stock
        
        
        
        
        
        
          (49)
        
        
        
        
        
        
          (97)
        
        
        
        
        
        
          (233)
        
        
        
        
        
        
          (299)
        
      
      
        
          Extinguishment of dividends on retired preferred stock
        
        
        
        
        
        
          -- 
        
        
        
        
        
        
          -- 
        
        
        
        
           
        
        
          200 
        
        
        
        
        
        
          -- 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income attributable to common stockholders
        
        
        
        
          $
        
        
          502 
        
        
        
        
          $
        
        
          453 
        
        
        
        
          $
        
        
          1,796 
        
        
        
        
          $
        
        
          1,345 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic income per common share
        
        
        
        
          $
        
        
          0.02 
        
        
        
        
          $
        
        
          0.02 
        
        
        
        
          $
        
        
          0.08 
        
        
        
        
          $
        
        
          0.07 
        
      
      
        
          Diluted income per common share
        
        
        
        
          $
        
        
          0.02 
        
        
        
        
          $
        
        
          0.02 
        
        
        
        
          $
        
        
          0.07 
        
        
        
        
          $
        
        
          0.07 
        
      
      
        
          
            Anti-dilutive stock options and warrants outstanding
          
        
        
        
        
        
        
          
            2,371,473 
          
        
        
        
        
        
        
          
            1,075,057 
          
        
        
        
        
        
        
          1,482,592 
        
        
        
        
        
        
          1,600,841 
        
      
      
        
          Weighted average number of common shares outstanding –
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          basic
        
        
        
        
        
        
          22,823,776 
        
        
        
        
        
        
          20,370,591 
        
        
        
        
        
        
          22,759,581 
        
        
        
        
        
        
          19,982,232 
        
      
      
        
          Weighted average number of common shares outstanding –

          
            diluted
          
        
        
        
        
        
        
          
            24,234,565 
          
        
        
        
        
        
        
          
            22,943,061 
          
        
        
        
        
        
        
          24,674,040 
        
        
        
        
        
        
          21,900,688 
        
      
    
    
    
    
      
        
          
            INTERNET COMMERCE CORPORATION
          
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          
            Consolidated Balance Sheets
          
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          
            (in thousands)
          
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
          April 30,
        
        
        
        
        
        
          July 31,
        
      
      
        
        
        
        
        
        
        
          2007 
        
        
        
        
        
        
          2006 
        
      
      
        
        
        
        
        
        
        
          (unaudited)
        
        
        
        
        
        
        
      
      
        
          ASSETS
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Current assets:
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
        
        
          $
        
        
          7,047 
        
        
        
        
          $
        
        
          6,989 
        
      
      
        
          Accounts receivable, net of allowance for doubtful accounts and 
          allowance for sales returns and allowances of $448 and $458, 
          respectively
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          4,106 
        
        
        
        
        
        
          3,631 
        
      
      
        
          Prepaid expenses and other current assets
        
        
        
        
        
        
          684 
        
        
        
        
        
        
          462 
        
      
      
        
          Total current assets
        
        
        
        
        
        
          11,837 
        
        
        
        
        
        
          11,082 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Restricted cash
        
        
        
        
        
        
          433 
        
        
        
        
        
        
          433 
        
      
      
        
          Property and equipment, net
        
        
        
        
        
        
          1,058 
        
        
        
        
        
        
          1,113 
        
      
      
        
          Goodwill
        
        
        
        
        
        
          6,169 
        
        
        
        
        
        
          6,148 
        
      
      
        
          Other intangible assets, net
        
        
        
        
        
        
          4,001 
        
        
        
        
        
        
          4,830 
        
      
      
        
          Other assets
        
        
        
        
        
        
          41 
        
        
        
        
        
        
          38 
        
      
      
        
          Total assets
        
        
        
        
          $
        
        
          23,539 
        
        
        
        
          $
        
        
          23,644 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES AND STOCKHOLDERS’ EQUITY
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts payable
        
        
        
        
          $
        
        
          398 
        
        
        
        
          $
        
        
          662 
        
      
      
        
          Accrued expenses
        
        
        
        
        
        
          889 
        
        
        
        
        
        
          575 
        
      
      
        
          Accrued dividends – preferred stock
        
        
        
        
        
        
          66 
        
        
        
        
        
        
          232 
        
      
      
        
          Deferred revenue
        
        
        
        
        
        
          237 
        
        
        
        
        
        
          262 
        
      
      
        
          Lease liability from acquisition
        
        
        
        
        
        
          266 
        
        
        
        
        
        
          250 
        
      
      
        
          Other current liabilities
        
        
        
        
        
        
          135 
        
        
        
        
        
        
          116 
        
      
      
        
          Total current liabilities
        
        
        
        
        
        
          1,991 
        
        
        
        
        
        
          2,097 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Long-term lease liability from acquisition
        
        
        
        
        
        
          776 
        
        
        
        
        
        
          967 
        
      
      
        
          Total liabilities
        
        
        
        
        
        
          2,767 
        
        
        
        
        
        
          3,064 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Stockholders’ Equity:
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Preferred stock
        
        
        
        
        
        
          
            (a)
          
        
        
        
        
        
        
          
            (a)
          
        
      
      
        
          Common stock
        
        
        
        
        
        
          230 
        
        
        
        
        
        
          227 
        
      
      
        
          Additional paid-in capital
        
        
        
        
        
        
          101,403 
        
        
        
        
        
        
          103,043 
        
      
      
        
          Accumulated deficit
        
        
        
        
        
        
          (80,861)
        
        
        
        
        
        
          (82,690)
        
      
      
        
          Total stockholders’ equity
        
        
        
        
        
        
          20,772 
        
        
        
        
        
        
          20,580 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total liabilities and stockholders’ equity
        
        
        
        
          $
        
        
          23,539 
        
        
        
        
          $
        
        
          23,644 
        
      
    
    
      (a) less than 1,000