SAN FRANCISCO, May 16 /PRNewswire-FirstCall/ -- Summary of Operating Results from Continuing Operations IA Global, Inc. (AMEX:IAO) announced the following results for the three months ended March 31, 2007, as compared to the three months ended March 31, 2006: * Revenues -- increased 77% to $6,493,000 from $3,671,000. * Gross profit -- increased 155% to $5,497,000 from $2,152,000. * Net loss from continuing operations was reduced 42% -- $844,000 as
compared to a net loss of $1,464,000. * Net loss per share from continuing operations -- was $.01 per share as
compared to a net loss per share of $.01.
Key Accomplishments in First Quarter * Successfully executed a contract with a major international insurance
company during the three months ended December 31, 2006 and recognized
$646,000 in revenues in the three months ended March 31, 2007. * Successfully executed a new contract with a Tier 1 telecommunication
company for the period January 1, 2007 to March 31, 2007 and renewed
this contract for the period April 1, 2007 to June 30, 2007. * Regained full compliance with the continued listing standards of the
American Stock Exchange.
The company's CEO, Derek Schneideman, said, "We are pleased to announce that our 100% subsidiary, Global Hotline, reported strong revenues for the three months ended March 31, 2007. The March 31, 2007 quarter is traditionally slow due to the large number of public holidays in Japan. Global Hotline is on an escalated revenue trajectory and is demonstrating 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 contracts renewed in April 2007, and the strong results from the contracts signed in 2006, we are confident that Global Hotline has achieved the point of sustainable and growing profitability." At March 31, 2006, the Company had cash and marketable securities of $4,162,000, net working capital of $2,693,000 and stockholder's equity of $8,499,000.
Net Loss There was a dramatic decline in net loss to $844,000 for the three months ended March 31, 2007, from a net loss of $1,387,000 for the three months ended March 31, 2006. The net loss for the three months ended March 31, 2006 was net of income from discontinued operations of $76,000.
About IA Global, Inc.
IA Global, Inc. ("IA Global") is a strategic holding company with a dedicated focus on growth through mergers and acquisitions in the Pacific Rim region. Our mission is to identify and invest in business opportunities, apply our skills and resources to grow and enhance the performance of those businesses across all business metrics, and to deliver accelerating shareholder value.
To realize this plan, in fiscal 2007 the company is actively expanding investments in businesses in the consumer, technology, services, and health sectors, sectors with long-term growth prospects in which applying our skills and resources can add significant value to our investments. At the same time, the company is expanding its reach to encompass the Philippines/Singapore, India, and China, and the outstanding growth opportunities and synergies these markets present.
In Japan, IA Global is 100% owner of Global Hotline, Inc., an operator of major call centers for telemarketing of telecommunications and insurance products. Since our acquisition of the Global Hotline, Inc. in June 2005, its business has expanded rapidly with the agreement of significant multi-year contracts with major corporations. With these revenues streams in place, revenues in 2007 are expected to double year on year.
In Australia, the Company has a 36% stake in Australian Secured Financial Limited and its affiliates, Australian Secured Investments Ltd, ADJ Services Pty Ltd. and Auslink Ltd (collectively, "ASFL") which raise funds through the issuance of debentures within Australia and provide short term, secured, real property loans to businesses and 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 profitability and revenue growth of Global Hotline and target sectors and markets 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 March 31, December 31,
2007 2006
ASSETS (unaudited) (audited) CURRENT ASSETS:
Cash and cash equivalents $3,908,186 $4,172,889
Marketable Securities 253,767 250,638
Accounts receivable, net of
reserves of $373,889 and
$310,741, respectively 5,546,807 5,016,328
Prepaid expenses 658,315 523,733
Notes receivable - 409,565
Other current assets 377,488 202,716
Total current assets 10,744,563 10,575,869 EQUIPMENT, NET 392,496 408,544 OTHER ASSETS
Intangible assets, net 1,920,537 2,317,889
Equity investment in Australia
Secured Financial Limited 7,159,975 7,146,386
Other assets 1,207,292 1,190,820 $21,424,863 $21,639,508 LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES:
Accounts payable - trade $433,550 $104,573
Accrued liabilities 3,042,703 2,477,509
Consumption taxes received 287,271 264,514
Income taxes payable- foreign 761,984 416,724
Note payable - current portion of
long term debt 3,005,591 3,058,229
Deferred revenue 520,036 1,297,046
Total current liabilities 8,051,135 7,618,595 LONG TERM LIABILITIES:
Long term debt 1,645,225 1,637,076
Convertible debentures 3,229,167 3,125,000
4,874,392 4,762,076
STOCKHOLDER'S EQUITY:
Series A-1 Convertible Preferred
Stock, $10,000 par value, - 0 - and
4,375 authorized, issued and
outstanding, (liquidation value
$7,000) - 7,000,000
Preferred stock, $.01 par value,
5,000 authorized, none outstanding - -
Common stock, $.01 par value,
250,000,000 shares authorized,
152,915,157 and 109,165,157
issued and outstanding,
respectively 1,529,151 1,091,651
Additional paid in capital 39,442,243 32,835,714
Accumulated deficit (32,276,064) (31,431,914)
Treasury stock (50,000) (50,000)
Accumulated other comprehensive loss (145,994) (186,614)
Total stockholder's equity 8,499,336 9,258,837 $21,424,863 $21,639,508 IA GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31,
2007 2006
(unaudited) (unaudited)
REVENUE $6,492,723 $3,671,305 COST OF SALES 996,120 1,518,937 GROSS PROFIT 5,496,603 2,152,368 Selling, general and administrative
expenses 5,909,818 3,861,006 OPERATING LOSS (413,215) (1,708,638) OTHER INCOME (EXPENSE):
Interest income 20,583 30,005
Interest expense and amortization
of beneficial conversion feature (195,738) (194,915)
Other income (1,326) 53,593
Gain on equity investment in
Australia Secured Financial
Limited 13,589 -
Foreign currency transaction
adjustment - 132
Total other income (expense) (162,892) (111,185) LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (576,107) (1,819,823) Income taxes - current provision 268,043 (356,320) NET LOSS FROM CONTINUING OPERATIONS (844,150) (1,463,503) DISCONTINUED OPERATIONS
Income from discontinued operations - 76,054 NET LOSS $(844,150) $(1,387,449) Basic and Diluted Loss Per share of
Common-
Basic and diluted loss per share
from continuing operations $(0.01) $(0.01)
Basic and diluted loss per share
from discontinued operations - -
Total basic and diluted loss per
share $(0.01) $(0.01) Weighted average shares of common
stock outstanding - Basic and
diluted 133,470,713 105,077,842
IA GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended March 31,
2007 2006
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(844,150) $(1,387,449)
Adjustments to reconcile net loss to
net cash (used in) provided by operating
activities:
Depreciation and amortization 450,733 603,412
Amortization of beneficial conversion
feature 104,167 104,167
Stock based compensation 44,029 26,257
Gain on equity investment in
Australia Secured Financial Limited (13,589) -
Unrealized gain on marketable
securities (3,129) -
Changes in operating assets and liabilities:
Accounts receivable (530,479) (664,698)
Notes receivable 409,565 1,636,793
Prepaid expenses (134,582) (26,346)
Other current assets (174,772) 17,437
Other assets (16,472) (118,320)
Accounts payable - trade 328,977 (108,510)
Accrued liabilities 690,194 2,930,797
Net consumption tax payable 22,757 82,986
Income taxes payable - foreign 345,260 (356,320)
Deferred revenue (777,010) (3,589,532)
Net cash used in continuing operations (98,501) (849,326)
Cash used in discontinued operations - (157,233)
NET CASH USED IN OPERATING ACTIVITIES (98,501) (1,006,559) CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital expenditures (37,333) (66,431)
Acquisition of investment in
Australian Secured Financial Limited (125,000) -
NET CASH USED IN INVESTING ACTIVITIES: (162,333) (66,431) CASH USED IN FINANCING ACTIVITIES:
Repayments of long term debt (44,489) - NET DECREASE IN CASH AND CASH EQUIVALENTS (305,323) (1,072,990) EFFECT OF EXCHANGE RATE CHANGES ON CASH 40,620 (5,991) CASH AND CASH EQUIVALENTS, beginning
of period 4,172,889 4,460,986 CASH AND CASH EQUIVALENTS, end of period $3,908,186 $3,382,005 Supplemental disclosures of cash flow
information:
Interest paid $18,340 $-
Taxes paid $- $- Non-cash investing and financing activities:
Common stock surrendered to company
in payment of note receivable $- $241,494
Conversion of Series A-1 Preferred
stock into common stock $7,000,000 $-
DATASOURCE: IA Global, Inc.
CONTACT: Investor Relations, IA Global, Inc., +1-415-946-8828, or fax, +1-415-946-8801, Web site: http://www.iaglobalinc.com/
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