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iMergent Reports Fiscal Year and Fiscal Fourth Quarter 2009
Financial Results and IRS settlement
Phoenix, September 1, 2009 -iMergent, Inc. (AMEX: IIG), a leading provider of eCommerce software, site development, web hosting and search engine optimization for businesses and entrepreneurs, today reported financial results for its fiscal year and fiscal fourth quarter ended June 30, 2009. The Company also announced a settlement with the IRS related to the IRS audits of its income tax returns for the fiscal years ended June 30, 2005, 2006 and 2007.
Fiscal Fourth Quarter 2009 Compared to 2008
Income from operations for the fourth quarter of fiscal 2009 increased to $1,100,000 from a loss of $438,000 in the same quarter last year due in large part to the continued success of cost saving initiatives which significantly reduced our selling and marketing expenses to approximately 44% of revenue in the current quarter down from approximately 55% of revenue in the same quarter last year. Income before income tax provision for the fourth quarter of fiscal 2009 increased 53% to $2,660,000 from $1,730,000 in the same quarter last year. The income tax benefit for the fourth quarter of fiscal 2009 was $5,880,000, primarily due to our settlement with the IRS, compared to an income tax provision of $1,180,000 in the same quarter last year. Net income for the fourth quarter of fiscal 2009 was $8,540,000, or $0.74 per diluted common share, compared to net income of $554,000, or $0.05 per common share in the same quarter last year.
Product and other revenues for the fourth quarter of fiscal 2009 were $14,100,000, compared to $22,500,000 for the same quarter last year. The lower product and other revenues were a result of a 20% reduction in the number of workshops conducted during the current quarter as compared to the prior year quarter as well as a decrease in the percentage of attendees purchasing to 24% in the current quarter, compared to 31% in the prior year quarter. Commission and other revenues for the fourth quarter of fiscal 2009 decreased 20% to $5,300,000, compared to $6,600,000 for same quarter last year. Commission and other revenues are derived from commissions on sales of ancillary products by independent third-party partners as well as hosting and other revenues. The lower commission and other revenues were a result of a smaller number of leads sent to the independent third-party partners as a result of the reduction in number of previews and full workshops.
Total operating expenses decreased 38% to $18,300,000 for the fourth quarter of fiscal 2009, compared to $29,600,000 for the fourth quarter last year, primarily as a result of cost saving initiatives in the current quarter as well as conducting fewer workshops. Selling and marketing expenses as a percentage of revenue decreased to 44% for the fourth quarter of fiscal 2009 compared to 55% for the fourth quarter of fiscal 2008. The decrease is attributable to the continuation of cost savings initiatives in the current quarter which reduced our cost per direct response advertising piece which in turn decreased our advertising cost per buyer.
Cash used in operating activities was $826,000 for the fourth quarter of fiscal 2009, compared to cash provided by operating activities of $3,400,000 for the same period in fiscal 2008. As of June 30, 2009, cash and cash equivalents were $20,500,000, working capital was $16,300,000, and working capital excluding deferred revenue was $40,000,000. Total current and long-term net trade receivables were $30,800,000 as of June 30, 2009.
The following information was filed by Crexendo, Inc. (CXDO) on Tuesday, September 1, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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