IBIN IBSG International Inc (CE)

IBSG International, Inc., (the �Company�), (OTC BB: IBIN) announced today its financial results for the fourth quarter and year ended December 31, 2006. For the full year 2006, revenues were slightly above $10.3 million compared to the result for 2005 of $7.2 million. Gross profit for the year ended December 31, 2006 was $10.1 million compared to $6.8 million in the previous year, an increase of roughly 48%. Cash collections rose approximately 150% year over year. The Company showed a $4.3 million net income from Operations in 2006. Operating expenses rose to $6.0 million for 2006 from $4.6 million in 2005. General and administrative expenses show an increase in 2006 primarily due to the addition of the ISBD India, the South Africa office and the A-1 Division office as well as an increase in travel expenses. Other expenses rose to $2.5 million in 2006 from $464,008 in 2005. The increase of other expenses for 2006 was due to the settlement of certain debt and warrants outstanding and $1,949,540 of income tax expense recorded in 2006. Taxes in 2006 amounted to almost 78% of other expenses as compared to 23% of other expenses in 2005. The single largest impact coming from the tax provision for 2006 and the fully discharged net operating loss that was carried into 2005 from 2004 was no longer available to offset profitability. Net income reported for the year ending December 31, 2006 was $1.8 million, or a gain of $0.25 per fully diluted share. Deferred revenue increased by $1.5 million to total $3.2 million at the end of 2006 compared to $1.7 million at the end of 2005. The $3.2 million in deferred revenue represents a backlog of future revenue. Dr. Michael Rivers, CEO of IBSG stated said, �We have come a long way in 2006, and in 2007, we will build on these successes. The Company�s performance between 2005 and 2006 primarily differed in two major ways. First, performance quarter to quarter in 2006 was relatively even with substantial growth coming from within existing business. Second, with the net operating loss carried forward from 2004 to 2005 extinguished, we must make a substantially higher tax provision for our success. However, with the continued opportunities coming to the company, both internationally and domestically, we fully expect to continue to show strong profitability. Based on forecasts for existing projects and expected expansion within existing projects, we project, but cannot guarantee, revenues for 2007 should range from $18 million to $24 million. For the coming year, we have targeted Europe as a major theater of business development.� Kevin Gollop, COO of A-Division IT and responsible for the international markets said, �We have several countries engaged in negotiations. The European Union has strongly urged the implementation of e-commerce platforms such as BizWorld Pro. The EU has set aside �26 billion (roughly US$37 billion) for SME development for the 28 EU states. The funds are there, and we have made an impression on a key EU official and her staff responsible for SME development. Anne Troye-Walker, Deputy Head of the EU Unit responsible for Lisbon Strategy and i2010 (the EU SME Development strategy), stated that, �with the exception of a concept, they have never seen a fully developed and integrated platform such as BizWorld Pro.� In other words, we have the real thing, and the EU has seen nothing like it. We anticipate announcements this year of contracts within the EU, possibly in the private as well as the public sector.� Alan Shafer, COO of IBSG, and responsible for domestic market development, stated, �Looking back over 2006, we have progressed in the US and US territories. In the US, we have deployed our system in 11 US states and most recently with the Dallas Government Contracting SBDC, one of four SBDCs in Texas. We expect to announce further contracts with other American SBDCs in the coming months, and it is our ambition to provide our system and support it in each and every state in the Union.� James Queen, COO of IBSD said, �We are particularly excited by our work on the Health Business World (HBW) Gateway as part of our growing relationship with the World Bank, which we established in 2006. As we have said previously, BizWorldPro will function as the transactional platform for the support SMEs in the HBW and create an investment management platform for investors worldwide. We continue populating the platform with health care providers from several African nations, and the HBW gateway can now locate health care providers in Africa for investment opportunities. This represents a major step forward in attracting capital to these providers, and we expect it to expand to other nations in Africa in the coming year.� Fourth Quarter 2006 Revenues for the three months ended December 31, 2006 were $2.8 million compared to revenues for the three months ended December 31, 2005 of $3.4 million. Gross profit in the final quarter of 2006 was $2.7 million, as compared to $3.3 million for the last quarter of 2005. Fourth quarter 2006 operating expenses totaled $1.9 million compared to $1.6 million in fourth quarter 2005. Other expenses for the last three months of 2006 were $515,000 against $118,000 in 2005. The increase largely stems from $653,000 in income tax expense. Management of IBSG International will host a conference call on Monday, April 9, 2007 at 11:00 A.M. EDT to discuss the company�s financial results and achievements. Those who wish to participate in the conference call may telephone 888-335-6674, from the US or, 973-935-2100 for international callers, PIN #8645001 approximately 15 minutes before the call. A digital replay will be available by telephone for two weeks and may be accessed by dialing 877-519-4471 from the US or 973-341-3080 for international callers and entering PIN #8645001. About IBSG International, Inc. IBSG International, Inc. is a holding company for four technology and software subsidiaries: Intelligent Business Systems Group, Inc. (IBSG), a provider of turnkey digital service center software; Secure Blue, Inc., a Sarbanes-Oxley and security software solution provider; Intelligent Business Systems Development (IBSD), a software development, maintenance and data storage company; and A-Division IT, a consultant company focused on development of IT projects for multinational corporations. IBS Group offers enterprise solutions designed to enhance the operating efficiency and create revenue for State Small Business Development Centers, business associations (e.g., business associations) and Fortune 1000 corporations by licensing its unique turnkey digital service center software, which provides a broad range of digital budgetary, administrative and commercial services (B2B, e-commerce, government to business and enterprise business services) on a single platform known as the BizWorld Pro�. Secure Blue, Inc. provides a robust economical Sarbanes-Oxley (SOX) compliance and security software suite, Secure Blue SOX Pro. It is targeted at small- and mid-cap public companies as well as private companies requiring SOX compliance to enable them to continue working with public companies. As software providers, system integrators and Application Service Providers, IBS Group, Inc. and Secure Blue, Inc. generate revenue from license sales, system modifications, systems support and a percentage of monthly customer fees. The typical IBS Group/Secure Blue license agreement has a five-year term which is updated on an annual basis. IBS Development, Inc. will provide ongoing support of International�s other subsidiaries, IBS Group and Secure Blue. The company provides development, system support and secure data storage, and will maintain offices in the US and India, where its current offshore development and support team is located. A-Division IT establishes IT projects for various countries around the world and for multinational corporations around the world. A-Division has already introduced and continues to provide demonstrations of the system on a national scale. For multinational corporations, the projects are recognized off-set program qualified and provide a required contractual obligation of these corporations. A-Division IT through its associations is an offset provider to BAE Systems and maintains relationships with various other multinational corporations. A-Division maintains offices in the United Kingdom. Safe Harbor Forward-Looking Statements Except for historical information contained herein, the statements in this release are forward-looking statements that are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. The above information does not guarantee any successful closing of new business. No assurances can be given that any projections related to gross revenues or profit margins will be realized. Forward-looking statements involve known and unknown risks and uncertainties that may cause the companies� actual results in future periods to differ materially from forecasted results. Such risks and uncertainties include, but are not limited to, market conditions, competitive factors, the ability to successfully complete additional financings and other risks. IBSG INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements of Operations � For the years ended December 31, 2006� 2005� REVENUES $ 10,301,970� $ 7,226,064� � EXPENSES Cost of Sales 272,171� 410,726� Services paid for with common stock 1,474,661� 1,802,581� Amortization and depreciation 35,153� 39,685� Salary 914,064� 538,549� Professional Fees 827,929� 717,052� General and administrative expenses � 2,489,885� � 1,120,575� � Total Expenses � 6,013,863� � 4,629,168� � Income from operations � 4,288,107� � 2,596,896� � OTHER EXPENSES Loss on asset sale --� (8,266) Interest expense (58,877) (456,251) Interest income 98,837� --� Liquidated damages option liability --� (160,000) Change in fair value of embedded conversion (18,683) 388,870� Change in far value of warrant liability (61,181) (176,178) Loss on debt settlement (470,897) --� Gain on debt --� 52,317� Income tax expense � (1,949,540) � (104,500) Total Other Expenses � (2,460,341) � (464,008) � Net Income $ 1,827,766� $ 2,132,888� Income PER SHARE - Basic $ .25� $ 0.48� Income PER SHARE - Diluted $ . 25� $ 0.44� WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - Basic 7,023,831� 4,484,161� WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - Diluted 7,023,831� 4,837,061� IBSG INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Balance Sheet � ASSETS � December 31, 2006 CURRENT ASSETS Cash $ 963,646� Accounts receivable 15,339,550� Prepaid expenses � 454,753� � Total Current Assets � 16,757,949� � FURNITURE, FIXTURES AND SOFTWARE, NET (Note 3) � 641,167� � OTHER ASSETS Deposits 4,164� Account receivable - long term, net of discount of $428,296 2,571,704� Other assets 170,805� Goodwill Deferred consulting services � 38,000 3,541,036� Total Other Assets � 6,325,709� � TOTAL ASSETS $ 23,724,825� � CURRENT LIABILITIES Accounts payable and accrued expenses $ 964,463� Accrued tax provision 2,121,640� Deferred revenue (Note 2) 3,199,461� Capital leases payable � 4,031� � Total Current Liabilities � 6,289,595� � TOTAL LIABILITIES � 6,289,595� � COMMITMENTS AND CONTINGENCIES (Note 6) STOCKHOLDERS' EQUITY Common stock authorized 100,000,000 shares at $0.001 par value; 7,017,519 shares issued and outstanding 7,071� Additional paid-in capital 16,205,838� Retained Earnings � 1,222,321� � Total Stockholders' Equity � 17,435,230� � TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 23,724,825�