ICCA Internet Commerce (MM)

Internet Commerce Corporation (ICC) (Nasdaq: ICCA), a leader in business-to-business e-commerce solutions, today announced financial results for its fiscal third quarter 2007. "Overall, this quarter was productive for ICC in regards to our �Growth with Profitability� strategy,� said Thomas Stallings, chief executive officer of ICC. �With our continued focus on revenue growth, streamlined operations and shareholder value, we met our internal financial forecasts with a 19% increase in revenue and a 32% increase in operating income, implemented organizational changes to save approximately $1.3 million annually beginning in the fourth quarter fiscal 2007 and announced a definitive agreement to acquire EasyLink Services Corporation.� Mr. Stallings continued, �We made great progress toward achieving our long-term marketplace and financial goals, and I am confident that our core strength in operational excellence will result in a solid performance for fiscal year 2007.� Third Quarter Fiscal Year 2007 Results Third quarter revenue from continuing operations in fiscal 2007 was approximately $5.4 million, up 19% compared with our third quarter of fiscal 2006 revenues of approximately $4.5 million. In the EC Solutions segment, comprised of the ICC.NETTM Value Added Network, browser-based and hosted applications and desktop software, third quarter revenues from continuing operations were approximately $4.1 million, up 28% from approximately $3.2 million in the fiscal third quarter 2006 period. Revenues from the EC Services segment, comprised of the EC service center, managed services and professional services, were approximately $1.29 million, down 3% from approximately $1.33 million in the third quarter of fiscal 2006. Total expenses from continuing operations increased 17% in third quarter fiscal 2007 from the prior-year period to $4.8 million from $4.1 million. The increase in expenses during the quarter was primarily driven by the acquisition of Enable Corp and restructuring charges to eliminate redundancy from acquisitions and streamlined operations. Operating income increased 32% to approximately $635,000 in third quarter fiscal 2007 from approximately $482,000 for the same period in fiscal 2006. With a $124,000 increase in provision for income taxes, consisting primarily of state income taxes not covered by our existing state net loss carryforwards and a true up of past years� state income tax timing differences as a result of changing the tax year-end from December 31 to July 31, net income was approximately $551,000 compared to a net income of approximately $550,000 for third quarter fiscal 2006. Basic and diluted income per common share from continuing operations were $0.02 as compared with $0.02 per basic and diluted common share for the fiscal 2006 period. Nine Month Fiscal 2007 Results For the nine months ended April 30, 2007, revenues from continuing operations totaled approximately $16.5 million, up 13% compared with the first nine months fiscal 2006 revenues of approximately $14.6 million. Net income was approximately $1.8 million compared to a net income of approximately $1.6 million for the same period in fiscal 2006, an increase of 11%. Basic and diluted income per common share from continuing operations were $0.08 and $0.07, respectively, as compared to $0.07 per basic and diluted common share for the nine month period of fiscal 2006 period. The Company ended the first nine months of fiscal 2007 with approximately $7.0 million of cash on hand. The balance sheet remains strong with current assets ending at approximately $11.8 million and current liabilities at approximately $2.0 million. Forward-Looking and Cautionary Statements Except for the historical information and discussion contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, as discussed in the company�s filing with the U.S. Securities and Exchange Commission (SEC). About Internet Commerce Corporation (ICC) Internet Commerce Corporation (Nasdaq: ICCA), headquartered in Norcross, Georgia, is a leader in providing business-to-business e-commerce solutions. Thousands 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 e-commerce solutions for businesses, regardless of size and level of technical sophistication, to connect them with their trading communities. For more information, visit www.icc.net. INTERNET COMMERCE CORPORATION Consolidated Statements of Operations (unaudited) (in thousands, except for share and per share amounts) � Three Months Ended Nine Months Ended April 30, April 30, 2007� 2006� 2007� 2006� � Service revenues $ 5,390� $ 4,535� $ 16,500� $ 14,565� � Expenses: Cost of services 1,999� 1,579� 5,828� 5,234� Product development and enhancement 595� 192� 1,898� 502� Selling and marketing 380� 567� 1,269� 1,560� General and administrative 1,781� 1,715� 5,610� 5,650� 4,755� 4,053� 14,605� 12,946� Operating income 635� 482� 1,895� 1,619� � Other income (expense): Interest and investment income 70� 75� 233� 134� Interest expense (19) (23) (59) (136) Other income (expense) --� 27� (21) 55� 51� 79� 153� 53� Income before provision for income taxes 686� 561� 2,048� 1,672� � Provision (benefit) for income taxes, current 135� 11� 219� 28� � Net income 551� 550� 1,829� 1,644� � Dividends on preferred stock (49) (97) (233) (299) Extinguishment of dividends on retired preferred stock --� --� � 200� --� � Net income attributable to common stockholders $ 502� $ 453� $ 1,796� $ 1,345� � Basic income per common share $ 0.02� $ 0.02� $ 0.08� $ 0.07� Diluted income per common share $ 0.02� $ 0.02� $ 0.07� $ 0.07� Anti-dilutive stock options and warrants outstanding 2,371,473� 1,075,057� 1,482,592� 1,600,841� Weighted average number of common shares outstanding � basic 22,823,776� 20,370,591� 22,759,581� 19,982,232� Weighted average number of common shares outstanding � diluted 24,234,565� 22,943,061� 24,674,040� 21,900,688� INTERNET COMMERCE CORPORATION Consolidated Balance Sheets (in thousands) � April 30, July 31, 2007� 2006� (unaudited) ASSETS Current assets: Cash and cash equivalents $ 7,047� $ 6,989� Accounts receivable, net of allowance for doubtful accounts and allowance for sales returns and allowances of $448 and $458, respectively 4,106� 3,631� Prepaid expenses and other current assets 684� 462� Total current assets 11,837� 11,082� � Restricted cash 433� 433� Property and equipment, net 1,058� 1,113� Goodwill 6,169� 6,148� Other intangible assets, net 4,001� 4,830� Other assets 41� 38� Total assets $ 23,539� $ 23,644� � LIABILITIES AND STOCKHOLDERS� EQUITY Current liabilities: Accounts payable $ 398� $ 662� Accrued expenses 889� 575� Accrued dividends � preferred stock 66� 232� Deferred revenue 237� 262� Lease liability from acquisition 266� 250� Other current liabilities 135� 116� Total current liabilities 1,991� 2,097� � � Long-term lease liability from acquisition 776� 967� Total liabilities 2,767� 3,064� � � Stockholders� Equity: Preferred stock (a) (a) Common stock 230� 227� Additional paid-in capital 101,403� 103,043� Accumulated deficit (80,861) (82,690) Total stockholders� equity 20,772� 20,580� � Total liabilities and stockholders� equity $ 23,539� $ 23,644� (a) less than 1,000