iMergent Announces First Quarter Fiscal 2008 Financial Results

-Reports Total Revenue of $32.5 Million-

-Delivers $35.6 Million in Net Dollar Volume of Contracts Written-

-Reports Net Loss of $0.07 per Share-

-Launches StoresOnline Express-

-Receives SSPA Service Award-

OREM, Utah--Nov. 6, 2007--iMergent, Inc., (AMEX:IIG) a leading provider of eCommerce software for small businesses and entrepreneurs, today announced its financial results for the three months ended September 30, 2007.

Don Danks, chief executive officer of iMergent, stated, "Although there were some challenges in our business this quarter, we had some positive accomplishments. We are pleased with our recent legal resolutions, particularly our long standing dispute in Utah. In addition, in August, we were awarded the 2007 Service Excellence in Consumer Support Award by the Service & Support Professionals Association. This accolade is one of the most prestigious in our industry. We are proud of this recognition, as providing superior customer support is a top priority at iMergent."

During the three months ended September 30, 2007, the company held 291 workshops, including 13 internationally, compared to 243 workshops, including 21 internationally, during the same period last year.

"During the quarter, we launched our newest product offering, StoresOnline(TM) Express," said Brandon Lewis, president and COO of iMergent. "We believe StoresOnline Express will enable us to expand the number of customers we serve and our scope and, by leveraging our technology and scalable eCommerce infrastructure, we expect to be able to deliver our solution to a larger segment of the market we have not addressed in the past. In addition, StoresOnline Express enables us to consider new distribution channels including online direct sales and other possibilities."

Lewis added, "We expect StoresOnline Express to be competitive, as we believe our feature set delivers a superior product to other eCommerce alternatives. We have structured StoresOnline Express for sale at our preview conferences, which will expand our potential customer base. Our strategy is to get our software into the hands of at least 1,000 potential customers weekly, some of whom we believe may choose to upgrade at the workshop and, therefore, augment sales of our StoresOnline Pro product."

During the quarter, the company purchased 165,607 of its common shares for approximately $2.9 million. As of September 30, 2007, cash and cash equivalents were $32.9 million; net trade receivables were $40.9 million; working capital was $31.1 million; and working capital excluding deferred revenue was $64.5 million.

Comparison of Three Months Ended September 30, 2007 to September 30, 2006

• Revenues for the first quarter of fiscal 2008 increased to $32.5 million from $29.0 million for the first quarter of fiscal 2007.
• Net dollar volume of contracts written was $35.6 million for the current quarter, compared to $32.4 million during the comparable quarter last year. The company believes the net dollar volume of contracts written during each period is a relevant metric 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.
• Total operating expenses were $35.9 million for the quarter, compared to $26.5 million for the first quarter of last year, reflecting increases in selling and marketing expenses incurred with the goal of driving greater revenue, which did not occur due to the lower response rates at the preview conferences.
• Net loss was $800,000, or $0.07 per common share, for the three months ended September 30, 2007, compared to net income of $2.3 million, or $0.18 per diluted common share, for the first quarter of last year.
• Cash flow from operations was $426,000 compared to $3.0 million in the prior year`s quarter.

Robert Lewis, chief financial officer, said, "This quarter, we delivered respectable growth with revenue increasing 12 percent and net dollar volume of contracts written rising 10 percent, although growth was shy of our target. During the quarter, we experienced lower response rates to our selling and marketing activities at our preview conferences, which reduced the number of buying units attending our internet training workshops where we sell our software. Additionally, we believe the current credit crisis in the U.S. negatively impacted revenue as buyers were reluctant to purchase with cash and, consequently, sales under financing arrangements increased to 50 percent compared to the recent trend of 40 percent of sales."

The company has taken action to improve response rates at its preview conferences by restructuring preview sales management, modifying the preview conference presentation and enhancing preview speaker training.

Outlook

Contingent upon marketing in California and North Carolina, the company expects fiscal 2008 revenue and net dollar volume of contracts written to grow 10 percent to 15 percent over fiscal 2007 revenue of $151.6 million and net dollar volume of contracts written of $165.3 million.

Danks concluded, "In light of recent events, we reduced our guidance. Originally, we had thought we had an opportunity to re-enter California in December; however, the landscape changed because of an injunction. Instead, we had to refocus our strategy, we went back to some markets sooner than anticipated, and we went back to markets that were not necessarily as profitable. Nonetheless, we do not see this having a long-term effect on the business. We are energized, we will continue to enhance our technology, refine our business, focus on growth, and return value to our shareholders."

Conference Call

The conference call will be broadcast live over the Internet at www.imergentinc.com. If you do not have Internet access, the telephone dial-in number is 800-639-0297 for domestic participants and 706-634-7417 for international participants. Please dial in five to ten minutes prior to the beginning of the call at 1:30 p.m. PT (4:30 p.m. ET). A telephone replay will be available three hours after the call through November 8, 2007 by dialing 800-642-1687 for domestic callers or 706-645-9291 for international callers and entering access code 19978945.

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