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Orem, Utah - (Cheap Web Hosting Directory) - May 10, 2007 - E-commerce web host, software and services provider for small businesses and entrepreneurs, iMergent, Inc., has released its third quarter fiscal 2007 financial results, including total revenue of $42.6 million.

In addition, iMergent reported a record $49.1 million in net dollars with $6.0 million of net cash from operating activities and increasing cash and cash equivalents to $39.0 million. The post GAAP net income reached $4.7 million, with guidance raised to approximately 60% to 65% growth over fiscal 2006, Repurchases totalled 180,100 shares for $3.4 million.

Don Danks, Chairman and Chief Executive Officer remarked, ”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.”

Robert Lewis, Chief Financial Officer commented, ”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. 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.”

Mr. 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 ProTM 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.”

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

• Revenues for the third quarter of fiscal 2007 were $42.6 million, representing a 71 percent increase from revenues of $25.0 million for the third quarter of fiscal 2006. Net Dollar Volume of Contracts Written was $49.1 million for the quarter, an increase of 86 percent from $26.3 million for the comparable quarter last year. The increase in both revenues and Net Dollar Volume of Contracts Written is attributable to increased demand for our StoresOnline Pro software, contribution from our new sales teams, and an increase in percentage of attendees purchasing our software at our workshops.
• Total operating expenses were $36.7 million for the quarter, compared to $21.5 million for the same quarter of fiscal 2006. The increase in costs of product and other revenues and selling and marketing expenses was primarily attributable to the increase in revenue and Net Dollar Volume of Contracts Written.
• Net cash provided by operating activities for the quarter was $6.0 million, compared to $5.1 million for the second quarter of fiscal 2007 and $2.4 million for the third quarter of fiscal 2006.
• For the three months ended March 31, 2007, net income was $4.7 million, an increase of 68 percent compared to net income of $2.8 million for the same quarter of fiscal 2006. Net income per diluted common share was $0.36 for the quarter, compared to $0.22 for the same quarter of fiscal 2006.
• For the three months ended March 31, 2007, non-GAAP net income was $7.9 million, up 129 percent compared to non-GAAP net income of $3.5 million for the same quarter of fiscal 2006. Non-GAAP net income per diluted share was $0.61 for the quarter, compared to $0.28 for the same quarter of fiscal 2006.

Nine Months Ended March 31, 2007 Compared to 2006

• Revenues for the nine months ended March 31, 2007 were $107.3 million, compared to $156.9 million for the same period last year, which prior year period 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 $119.1 million for the nine months ended March 31, 2007, compared to $68.4 million for the same period last year. The increase in Net Dollar Volume of Contracts written is attributable to increased demand for our StoresOnline Pro software, contribution from our new sales teams, and an increase in percentage of attendees purchasing our software at our workshops.
• Total operating expenses were $94.0 million, for the nine months ended March 31, 2007 compared to $60.2 million for the same period last year.
• Net cash provided by operating activities for the nine months ended March 31, 2007 was $14.0 million, compared to $17.7 million for the same period last year, which prior year period included the sale of our domestic trade receivables in August 2005 for $14.0 million.
• For the nine months ended March 31, 2007, GAAP net income was $18.7 million, or $1.45 per diluted common share, which included an income tax benefit of $676,000. This compares to GAAP net income of $108.5 million, or $8.56 per diluted share, in the same period last year, which prior year period included the aforementioned recognition of previously deferred product and other revenues of $108.0 million and an income tax benefit of $9.8 million.
• Non-GAAP net income for the nine months ended March 31, 2007 was $17.3 million, or $1.34 per diluted common share, compared to non-GAAP net income of $6.1 million, or $0.48 per diluted common share, for the same period last year.

Mr. 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.

Danks concluded, ”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.”

iMergent provides eCommerce solutions to entrepreneurs and small businesses, designed to enable marketing and selling business products or ideas via the Internet. Headquartered in Orem, Utah, the company sells its proprietary StoresOnline software and training services, developed to help users build a successful Internet strategy to market products, accept online orders, analyze marketing performance, and manage pricing and customers. In connection with Internet software, iMergent also offers website development, website hosting, marketing and mentoring products and services. iMergent typically reaches its target audience through concentrated direct marketing efforts to fill Preview Sessions, in which a StoresOnline expert reviews the product opportunities and costs. The sessions lead to a follow-up Workshop Conference, where experts train potential users on the software and services and encourage them to make purchases.

To learn more about iMergent, please visit: www.imergentinc.com.

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