NEW YORK – December 14, 2004 – Internet Commerce Corporation (ICC) (NasdaqSC: ICCA), a pioneer in the use of the Internet for business-to-business (B2B) e-commerce solutions, today announced financial results for its fiscal first quarter ended October 31, 2004.
Thomas J. Stallings, Chief Executive Officer of ICC, commented, “ICC continues to dramatically improve its financial position. Our first quarter was highlighted with unprecedented levels of network traffic, a 200% increase in service bureau revenue as a result of the efficiently managed integration of our Electronic Commerce System acquisition, and quarterly adjusted gross margins of over 70%. As previously indicated, ICC clearly exceeded our original guidance for the first quarter. Instead of a projected 9% improvement in revenues over the same quarter in the prior fiscal year, we experienced 21% growth.”
“Additionally, ICC has continued to cut costs, although there will be some one-time costs for the second quarter relating to the company’s relocation to our more operationally cost-effective offices in Atlanta, Sarbanes-Oxley compliance and system conversion costs. Still, with the broader base of product offerings ICC now provides to its customers, including our retail software solutions, we anticipate to be cash flow positive on an adjusted EBITDA basis for the second quarter and 2005 fiscal year as a whole.”
Consolidated Three-Month Results
• The net loss decreased by 50.9% to $402,000, or $0.03 per diluted share, in the first quarter of fiscal 2005 from a net loss of $818,000, or $0.07 per diluted share, in the first quarter of fiscal 2004.
• Consolidated revenue for the first quarter of fiscal 2005 increased 20.7% to $3.7 million from $3.1 million in the year ago period.
• Gross margin percentage for the first quarter of fiscal 2005 improved to 62.2% from 40.1% in the first quarter of last year.
Consolidated Three-Month Results – Adjusted EBITDA is earnings before net interest and investment income, income taxes, depreciation, amortization and non-cash charges for stock-based compensation. Adjusted gross margin represents gross margin less depreciation and amortization. Refer to the Supplemental Financial Data set forth below for a reconciliation of net income to EBITDA and gross margin to adjusted gross margin.
• Adjusted EBITDA for the first quarter of fiscal 2005 was $187,000 compared to a loss of $367,000 in the year ago period.
• Adjusted gross margin percentage for the first quarter of fiscal 2005 improved to 70.6% from 49.6% in the first quarter last year.
Segment Three-Month Results
• ICC.NET revenue, which represented 75.4% of consolidated revenue in the quarter ended October 31, 2004, compared to 90.0% of consolidated revenue in the year ago period, increased 1.1% to $2.83 million in the first quarter ended October 31, 2004 from $2.80 million in the first quarter ended October 31, 2003. VAN Services revenue increased 11.3% to $2.6 million from $2.4 million and gross margin percentage improved to 62.2% from 40.1% from the year ago period. Adjusted gross margin percentage for VAN Services improved to 70.6% from 49.6% in the year ago period.
• Service Bureau revenue, representing 24.6% of consolidated revenue in the first quarter of fiscal 2005 compared to 10% of consolidated revenue in the year ago period, increased 199.5% to $921,000 from $308,000 in the year ago period.
ICC will post its supplemental financial information on its website, www.icc.net, in the afternoon of December 16, 2004.
About Internet Commerce Corporation
Internet Commerce Corporation (ICC), headquartered in New York, is a pioneer in the use of the Internet for business-to-business (B2B) e-commerce solutions. Thousand 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 B2B solutions for businesses, regardless of size and level of technical sophistication, to connect with their trading communities. For more information, visit 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.