iMergent Reports Record First Quarter Revenue

First Quarter Revenue Grew 26%; Earnings before Taxes Rose 30%; EBT per Diluted Share Increased to $0.23; EPS of $0.14 per Diluted Share for First Quarter iMergent, Inc., (AMEX:IIG) a leading provider of eCommerce and software for small businesses and entrepreneurs, announced its results for the fiscal first quarter ended September 30, 2004.

Total revenue for the fiscal first quarter 2005 ended September 30, 2004 rose 25.8 percent to $23.7 million from $18.8 million in the same quarter of 2004. In the first quarter of 2005, the company hosted 169 workshops, of which 29 were international, compared to the first quarter of 2004, when the company conducted 118 workshops, none of which were international.

Brandon Lewis, president and chief operating officer, said, “iMergent continued to deliver strong growth this quarter both internationally and domestically. In order to support our rapid growth we accelerated expansion of our sales resources and product capabilities for all markets. Our fifth sales team has completed its extensive training and will be on the road next week. We have also built a flexible infrastructure to deploy additional sales teams when necessary to support our continued growth. We are particularly pleased that our growth in earnings exceeded our growth in sales even as we accelerated our investment in sales.”

Compared to first quarter 2004, gross profit for the quarter rose 18.3 percent to $17.1 million, although gross profit as a percent of sales decreased to 72.3 percent as the cost of revenue increased with costs associated with training our fifth sales team prior to its launch on November 1st. Operating expenses for the quarter were $15.1 million compared to $12.6 million in 2004, due primarily to our sales and market expansions. As a percent of sales, operating expenses decreased 3.1 percent to 63.8 percent of sales compared with 66.9 percent in the first quarter of 2004, reflecting continuing increasing efficiency associated with cost management as well as the company’s leverageable business model.

Don Danks, chairman and chief executive officer, stated, “We are excited that we have made substantial progress during the first quarter on the programs we announced previously for fiscal 2005. We initiated testing of our model in both additional European markets and in Asia, which provides the basis for our continued significant international expansion. We are thrilled about our eBay expansion, both the software functionality for uploading to eBay, and the exceptionally well received one day training product. This eBay training offering is an example of how we provide value to our merchants, while increasing our revenue and earnings, and at the same time creating additional opportunities for ancillary product sales and ongoing recurring revenues. With our expanded global sales reach and our existing and future partnerships, we are making progress on our goal of becoming the leading supplier of ecommerce solutions to small business worldwide.”