SAN FRANCISCO, March 29 /PRNewswire-FirstCall/ -- Summary of Operating Results from Continuing Operations IA Global Inc. (AMEX:IAO) announced the following results for the three months ended December 31, 2006, as compared to the three months ended September 30, 2006: * Revenues -- increased 73% to $7,742,000 from $4,483,000.
* Gross profit -- increased 100% to $7,778,000 from $3,879,000.
* Net profit from continuing operations -- $548,000 as compared to a net
loss of $1,179,000.
* Net profit per share from continuing operations -- increased to $.01 per
share from a net loss per share of $.01.
Key Accomplishments in Fourth Quarter * Successfully negotiated a settlement with a Tier 1 Telecommunication
company whereby Global Hotline recognized $2,870,000 in revenues and
repaid $1,019,000 related to a contract that expired March 31, 2006.
* Successfully executed a new contract with a major international
insurance company and recognized $728,000 in revenue during the three
months ended December 31, 2006 and deferred $728,000 into fiscal year
2007.
* Successfully executed a new contract with a Tier 1 telecommunication
company for the period January 1, 2007 to March 31, 2007. We expect this
contract to be renewed.
* Stockholder's equity reached $9,259,000.
* Successfully closed the 36% equity investment in Australian Secured
Financial Limited and received a dividend of $422,000.
The Company's CEO, Derek Schneideman, said, "We are pleased to announce that our 100% subsidiary, Global Hotline, reported profitable results for the three months ended December 31, 2006. Global Hotline is on an escalated revenue trajectory and has begun to demonstrate the operational efficiencies promised by the investments made in infrastructure and training during the first three quarters of 2006. With the new contract signed on January 1, 2007, and the strong fourth quarter results accruing from the contracts signed in 2006, we are confident that Global Hotline has achieved the point of sustainable and growing profitability." The Company's CFO, Mark Scott, said, "I am pleased with the development of the Global Hotline business and the equity investment in Australian Secured Financial Limited. Both entities made substantial contributions to this profitable quarter and we look forward to even greater contribution in 2007." At December 31, 2006, the Company had cash and cash equivalents of $4,173,000, net working capital of $2,957,000 and stockholder's equity of $9,259,000.
Net Profit The net profit increased to $216,000 for the three months ended December 31, 2006 from a net loss of $1,179,000 for the three months ended September 30, 2006 due to the expansion of the Global Hotline business. The net profit for the three months ended December 31, 2006 was net of a loss from discontinued operations of $332,000.
March 31, 2007 Results The Company expects to report its results for the three months ended March 31, 2007 by May 15, 2007.
About IA Global, Inc.
IA Global, Inc. ("IA Global") operates as a holding company, executing to a narrow focused Mergers and Acquisitions strategy in the Pacific Rim region. Over time, IA Global expects to establish a broadly based network of subsidiary and majority-owned synergistic and complementary investments in the Japan, Australia, Singapore, the Philippines, India, and China markets. IA Global expects to enhance performance across all business metrics and deliver accelerating shareholder value.
IA Global owns 100% of Global Hotline. Operating exclusively in Japan, Global Hotline Inc.'s multiple call centers undertake telemarketing of telecommunications products and services, and a range of insurance products and services for several major corporations. IA Global owns 36% of Australian Secured Financial Limited which raises funds through the issuance of debentures in Australia and provides short term, secured, real property loans to businesses or investors in Australia.
For further information, contact:
Investor Relations
IA Global, Inc. 101 California Street, Suite 2450
San Francisco, CA 94111
415-946-8828(t)
415-946-8801(f)
http://www.iaglobalinc.com/ "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements (within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934) regarding us and our business, financial condition, results of operations and prospects. Forward-looking statements in this report reflect the good faith judgment of our management and the statements are based on facts and factors as we currently know them. Forward- looking statements are subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Specifically, the comments concerning the Global Hotline contract renewal, 2007 revenue growth and 2007 deferred revenue are forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements, as a result of either the matters set forth or incorporated in this report generally or certain economic and business factors, some of which may be beyond the control of IA Global. These factors include adverse economic conditions, entry of new and stronger competitors, inadequate capital to support our operations, projections of revenues and profitability for the significant contracts and the inability to negotiate a favorable settlement on the penalties. Readers are urged not to place undue reliance on these forward-looking statements which speak only as of the date of this press release. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of the press release.
IA GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS December 31, December 31,
2006 2005
ASSETS CURRENT ASSETS:
Cash and cash equivalents $4,172,889 $4,460,986
Marketable Securities 250,638 -
Accounts receivable, net of
reserves of $310,741 and $0,
respectively 5,016,328 610,220
Prepaid expenses 523,733 430,334
Notes receivable 409,565 4,129,408
Other current assets 202,716 189,783
Deferred tax asset - -
Assets from discontinued operations - 12,606,044
Total current assets 10,575,869 22,426,775 EQUIPMENT, NET 408,544 521,964 OTHER ASSETS
Intangible assets, net 2,317,889 4,449,558
Equity investment in Australia
Secured Financial Limited 7,146,386 -
Other assets 1,190,820 735,859 $21,639,508 $28,134,156 LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES:
Accounts payable - trade $104,573 $496,448
Accrued liabilities 2,477,509 2,274,646
Consumption taxes received 264,514 294,947
Income taxes payable- foreign 416,724 825,000
Note payable - current portion of
long term debt 3,058,229 -
Deferred revenue 1,297,046 3,589,532
Liabilities of discontinued
operations - 11,929,115
Total current liabilities 7,618,595 19,409,688 LONG TERM LIABILITIES:
Long term debt 1,637,076 -
Convertible debentures 3,125,000 2,708,333
4,762,076 2,708,333
STOCKHOLDER'S EQUITY:
Series A-1 Convertible Preferred
Stock, $10,000 par value, 4,375
issued and outstanding (liquidation
value $7,000) 7,000,000 -
Series B Preferred stock, $.01 par
value, 5,000 shares authorized - 0 -
and 1,158 issued and outstanding,
respectively (liquidation value
$1,158,000) - 12
Common stock, $.01 par value,
200,000,000 shares authorized,
109,165,157 and 97,425,181 issued
and outstanding, respectively 1,091,651 974,251
Additional paid in capital 32,835,714 32,992,589
Accumulated deficit (31,431,914) (27,662,170)
Treasury stock (50,000) (50,000)
Accumulated other comprehensive loss (186,614) (238,547)
Total stockholder's equity 9,258,837 6,016,135 $21,639,508 $28,134,156 IA GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31,
2006 2005 2004 REVENUE $19,139,004 $15,744,686 $- COST OF SALES 2,894,727 5,571,090 - GROSS PROFIT 16,244,277 10,173,596 - Selling, general and administrative
expenses 19,066,699 9,693,106 1,096,503 OPERATING (LOSS) PROFIT (2,822,422) 480,490 (1,096,503) OTHER INCOME (EXPENSE):
Interest income 92,307 52,460 9,364
Interest expense and
amortization of beneficial
conversion feature (850,873) (389,850) (19,511)
Other income 178,640 120,750 90
Gain on equity investment in
Australia Secured Financial
Limited 69,540 - -
Foreign currency transaction
adjustment (129,448) (124,554) 24,680
Gain on sale of equity
investment in QuikCAT Australia
Pty Ltd - - 40,240
Loss on equity investment in
QuikCAT Australia Pty Ltd - - (43,229)
Total other income (expense) (639,834) (341,194) 11,634 (LOSS) PROFIT FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES (3,462,256) 139,296 (1,084,869) Income taxes - current provision 515,000 825,000 - NET LOSS FROM CONTINUING OPERATIONS (3,977,256) (685,704) (1,084,869) DISCONTINUED OPERATIONS
Gain from disposal of
discontinued operations 463,375 307,885 -
Gain (loss) from discontinued
operations 76,054 (1,393,531) (358,166)
Loss on impairment of note
receivable from sale of
discontinued operations (331,917) (300,000) -
Total gain (loss) from
discontinued operations 207,512 (1,385,646) (358,166) NET LOSS $(3,769,744) $(2,071,350) $(1,443,035) Basic and Diluted Loss Per share of
Common-
Basic and diluted loss per share
from continuing operations $(0.04) $(0.01) $(0.01)
Basic and diluted loss per share
from discontinued operations - (0.02) -
Total basic and diluted loss per
share $(0.03) $(0.02) $(0.02) Weighted average shares of
common stock outstanding -
Basic and diluted 107,718,970 90,496,230 75,914,127 IA GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31,
2006 2005 2004 CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $(3,769,744) $(2,071,350) $(1,443,035)
Adjustments to reconcile net loss
to net cash (used in)
provided by operating activities:
Depreciation and amortization 1,979,875 1,191,225 1,623
Amortization of beneficial
conversion feature 416,667 208,332 -
Amortization of financing cost - 44,444 -
Stock based compensation 122,007 - -
Common stock issued for services - 6,000 -
Impairment of note receivable for
sale of discontinued operation 331,917 - -
(Gain) on disposal of
discontinued operation - - (40,240)
Stock issued for services - - 13,500
Equity loss from investment in
QuikCAT Australia Pty Ltd - - 43,229
Gain on equity investment in
Australia Secured Financial
Limited (69,540) - -
Changes in operating assets and
liabilities:
Accounts receivable (4,406,108) 1,215,499 -
Notes receivable (247,568) 76,699 -
Prepaid expenses (93,399) 20,665 (76,524)
Other current assets (12,933) 33,584 366,705
Deferred tax asset - - -
Other assets (454,961) (243,093) -
Accounts payable - trade (391,875) 360,269 11,489
Accrued liabilities (49,649) 71,055 (59,927)
Net consumption tax payable (115,443) 257,923 -
Income taxes payable - foreign 163,604 825,000 -
Deferred revenue (2,292,486) (606,961) -
Net cash (used in) provided by
continuing operations (8,889,636) 1,389,291 (1,183,180)
Loss from discontinued operations (539,429) 1,246,583 335,741
Net cash used in discontinued
operations (854,895) (1,620,497) (1,124,587)
Net cash used in discontinued
operations from debt - (6,169,717) -
Net decrease (increase) in assets
of discontinued operations 12,606,044 1,164,035 (7,440,457)
Net (decrease) increase in
liabilities of discontinued
operations (11,939,787) 1,017,092 5,067,880
NET CASH USED IN OPERATIONS (9,617,703) (2,973,213) (4,344,603) CASH FLOWS PROVIDED BY INVESTING
ACTIVITIES:
Capital expenditures (221,656) (367,476) (5,220)
Capital expenditures from
discontinued operations - (51,912) -
Repayment of loan receivable from
QUIKCAT Australia Pty Ltd - 150,000 -
Proceeds from sale of QUIKCAT
business unit and note receivable - 200,000 -
Proceeds from sale of Fan Club
Entertainment Co Ltd - 185,000 -
Repayment of loan receivable from
sale of Fan Club Entertainment
Co Ltd - 445,680 -
Repayment of loan receivable from
affiliate of controlling
shareholder group 3,394,000 2,242,475 -
Proceeds from sale of Rex Tokyo
Co, Ltd. 1,300,000 - -
Cash portion used in acquisition
of Investment - Australian
Secured Financial Limited (250,000) - -
Purchase of marketable securities (250,638) - -
Loan to affiliate of controlling
shareholder group - (5,672,994) -
Cash of Rex Tokyo Co Ltd
(discontinued operation)
immediately following
acquisition - - 1,934,839
Purchase of discontinued
operation- Rex Tokyo Co Ltd - - (941,000)
Purchase of discontinued
operation- IA Global Acquisition Co - - (700,000)
Note receivable from sale of
discontinued operation - QuikCAT
Australia Pty Ld - - (150,000)
Cash from Global Hotline, Inc. on
date of acquisition - 1,240,037 -
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 3,971,706 (1,629,190) 138,619 CASH PROVIDED BY FINANCING
ACTIVITIES:
Proceeds from long term debt 9,276,671 - -
Repayments of long term debt (4,581,366) (593,662) -
Proceeds from cash dividend from
investment in Australia Secured
Financial Limited 425,666 - -
Proceeds from issuance of
convertible debentures - 3,483,000 -
Proceeds from long term debt-
discontinued operations - 7,572,100 -
Repayment of long term debt-
discontinued operations - (674,954) -
Repayment of long term debt-
discontinued operations - related
party - (727,429) -
Proceeds from issuance of common
stock - 59,500 -
Proceeds from loan payable -
related party - - 1,500,000
Discontinued operations - Rex
Tokyo Co Ltd - - 788,846
Proceeds from subscription
receivable - - 400,000
Proceeds from issuance of common
stock - - 1,130,000
Proceeds from exercise of stock
options 80,000 - 40,000
NET CASH PROVIDED BY FINANCING
ACTIVITIES 5,200,971 9,118,555 3,858,846 NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (445,026) 4,516,152 (347,138) EFFECT OF EXCHANGE RATE CHANGES
ON CASH 156,929 (414,340) 50,773 CASH AND CASH EQUIVALENTS,
beginning of year 4,460,986 359,174 655,539 CASH AND CASH EQUIVALENTS, end of
year $4,172,889 $4,460,986 $359,174 Supplemental disclosures of cash
flow information:
Interest paid $67,563 $17,447 $-
Taxes paid $233,528 $2,504 $- Non-cash investing and financing
activities:
Common stock surrendered to
company in payment of note
receivable $241,494 $- $-
Conversion of Series B Preferred
stock into common stock $115,800 $- $-
Adjustment of intangible asset
due to recognition of tax asset
related to NOL carryforward from
acquisition of Global Hotline,
Inc. $486,870 $- $-
Issuance of Preferred Stock for
acquisition of Investment -
Australian Secured Financial
Limited $7,000,000 $- $-
Common stock issued for Global
Hotline, Inc. $- $3,097,500 $-
Beneficial conversion feature
recognized with issuance of
convertible debentures $- $1,250,000 $-
Issuance of loan receivable for
sale of Fan Club Entertainment
Co Ltd $- $755,000 $-
Issuance of loan receivable for
sale of QUIKCAT business unit $- $200,000 $-
Common stock issued for Rex Tokyo
Co Ltd $- $- $138,600
Conversion of debt to equity $- $- $1,533,001
Contribution of debt to equity $- $- $101,629
Conversion of liability to equity $- $- $13,500
DATASOURCE: IA Global Inc.
CONTACT: Investor Relations: IA Global, Inc., +1-415-946-8828, +1-415-946-8801 - fax, Web site: http://www.iaglobalinc.com/
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