iMergent Increases Guidance for Fiscal 2007
March 27 2007 - 4:00PM
Business Wire
iMergent, Inc. (AMEX:IIG), a leading provider of eCommerce software
and services for small businesses and entrepreneurs, announced it
has increased guidance with respect to Net Dollar Volume of
Contracts Written (NDVCW) for its fiscal year ending June 30, 2007.
The company defines NDVCW as 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. Although NDVCW is not a U.S. generally accepted accounting
principle (GAAP) metric, the company believes NDVCW is a consistent
and relevant metric to understand the operations of the company.
Management now expects NDVCW to grow approximately 45 percent to 50
percent over fiscal 2006 NDVCW of $99.8 million. Management
previously expected NDVCW growth to be 40 percent over the prior
year�s NDVCW. Don Danks, chairman and chief executive officer,
stated, �Since reporting our fiscal second quarter results in early
February, we have experienced better than expected demand for our
StoresOnlineTM Pro software. Finally, the launch of our ninth sales
team is helping us to capture more of the rising demand in the
eCommerce marketplace and is driving further growth in our NDVCW.�
Safe Harbor Statement The statements made in this press release
regarding (i) iMergent�s ability to continue to grow its business
throughout the remainder of fiscal 2007 and beyond, (ii) iMergent�s
expectation that net dollar volume of contracts written (NDVCW)
will grow 45 to 50 percent in fiscal 2007 over fiscal 2006 NDVCW,
(iii) iMergent�s ability to fully leverage its infrastructure and
capture rising demand in the eCommerce marketplace, (iv) continued
traction of the new as well as other sales teams, and other
statements that are not historical in nature constitute
forward-looking statements within the meaning of the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995.
Such statements are based on the current expectations and beliefs
of the management of iMergent and are subject to a number of risks
and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements.
Such risks and uncertainties include, without limitation, the
Company�s ability to increase the NDVCW; the Company properly
estimating customer returns and cash collections on financed
contracts; the Company�s ability to continue to evaluate and find
ancillary products; that the market for the Company�s products will
continue to grow; fluctuations in the Company�s operating results
because of negative publicity, seasonality, competition and other
factors; adverse international or domestic regulatory developments
affecting the internet or the Company�s business; the effect of
competitive and economic factors and the Company�s reaction to
them; costs of and developments in the Company�s pending litigation
and SEC investigation; the Company�s ability to generate revenue
and profits from current strategic partnerships; the Company�s
ability to generate positive cash flows from operating activities;
and whether there is continual demand for the Company�s products
and services in its target market of small businesses and
entrepreneurs for assistance in establishing websites. For a more
detailed discussion of risk factors that may affect iMergent's
operations, please refer to the Company�s Form 10-K for the year
ended June 30, 2006 and the Company�s Forms 10-Q for the periods
ended September 30, 2006 and December 31, 2006. These
forward-looking statements speak only as of the date on which such
statements are made, and the Company undertakes no obligation to
update such forward-looking statements, except as required by law.
About iMergent iMergent provides eCommerce solutions to
entrepreneurs and small businesses enabling them to market and sell
their business products or ideas via the Internet. Headquartered in
Orem, Utah, the Company sells its proprietary StoresOnline Pro
software and training services, helping users build a successful
Internet strategy to market products, accept online orders, analyze
marketing performance, and manage pricing and customers. In
addition to software, iMergent offers site development, web
hosting, marketing and mentoring products. iMergent typically
reaches its target audience through a concentrated direct marketing
effort to fill Preview Sessions, in which a StoresOnline expert
reviews the product opportunities and costs. These sessions lead to
a follow-up Workshop Conference, where product and technology
experts train potential users on the software and encourage them to
make purchases. iMergent, Inc. and StoresOnline are trademarks of
iMergent, Inc. Net Dollar Volume of Contracts Written Until the
change in our business model in late December 2005, the Company
recognized product and other revenues ratably over a period of five
years and not at the time contracts were written in accordance with
US GAAP. Effective December 2005, the Company began recognizing
product and other revenues after the expiration of the three-day
cancellation period for contracts written for which cash payments
were received. For products purchased by customers under extended
payment term arrangements, the Company continues to defer and
recognize revenue as cash payments are received from customers,
typically over two years. Because of the changes in the Company�s
revenue recognition policies resulting from the change in business
model noted above and due to the Company�s growth, management
believes that the net dollar volume of contracts written (NDVCW) is
a consistent and relevant metric to understand the operations of
the Company. NDVCW represents the gross dollar amount of contracts
executed during the period less estimates for bad debts, discounts
incurred on sales of trade receivables (financial discounts), and
estimates for customer returns. Management uses this non-GAAP
metric to evaluate the Company�s operations because NDVCW is the
primary factor that influences cost of revenue and selling and
marketing expenses, which are typically recognized at the time the
contract is written but no later than the expiration of the
customer�s three-day cancellation period. Consequently, management
measures the Company�s operating performance and sets its future
operating budgets based upon the NDVCW during the period. NDVCW is
not equivalent to revenue recognized in accordance with US GAAP.
This non-GAAP metric represents cash contracts written plus
estimates of future cash collections on financed contracts, net of
estimated customer returns. In contrast, revenue recognized in
accordance with US GAAP represents cash contracts written net of
estimated customer returns plus actual cash collections on financed
contracts. Actual collections on financed contracts and customer
returns may differ materially from original estimates. However, the
Company has several years of experience with the financing
arrangements and products and services offered to its customers.
Consequently, management believes it has a reasonable basis for its
estimates.
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