PHOENIX, Feb 8, 2010 (GlobeNewswire) -- iMergent, Inc. (AMEX:IIG), a leading provider of eCommerce software, site development, web hosting and search engine optimization for businesses and entrepreneurs, today reported financial results for its six month transition period and calendar fourth quarter ended December 31, 2009.

In November 2009, and as previously announced, iMergent changed its fiscal year to December 31 to align with the calendar year.

Calendar Fourth Quarter 2009 Compared to 2008

Net income for the fourth calendar quarter of 2009 was $613,000 or $0.06 per diluted common share, compared to a net loss of $10,130,000, or $0.89 per common share in the comparable quarter last year. Income before income tax provision for the fourth calendar quarter of 2009 was $868,000 compared to a loss of $5,680,000 in the comparable quarter last year. The income tax provision for the fourth calendar quarter of 2009 was $255,000, compared to an income tax provision of $4,450,000 in the prior year quarter. The higher than normal income tax provision in the prior year quarter was primarily due to an increase in our valuation allowance and the application of Financial Accounting Standards Board Interpretation No. 48 as a result of our settlement discussions with the IRS in the prior year.

Product and other revenues for the fourth calendar quarter of 2009 decreased 34% to $13,202,000, compared to $20,080,000 for the comparable quarter last year. The lower product and other revenues were a result of a 23% reduction in the number of workshops conducted during the fourth calendar quarter of 2009 as compared to the comparable quarter in 2008, a decrease in the percentage of attendees purchasing products to 23% in the fourth calendar quarter of 2009, compared to 27% in the comparable quarter of 2008, as well as a 34% reduction in principal cash collected on our receivables portfolio. Commission and other revenues for the fourth calendar quarter of 2009 decreased 24% to $5,136,000, compared to $6,774,000 for comparable quarter in 2008. Commission and other revenues are derived primarily from commissions on sales of ancillary products by independent third-party partners as well as hosting and other revenues. The lower commission and other revenues were largely a result of a smaller number of leads sent to the independent third-party partners as a result of the reduction in the number of previews and workshops, as well as a decrease in the percentage of customers utilizing these offerings.

Total operating expenses decreased 45% to $18,648,000 for the fourth calendar quarter of 2009, compared to $33,780,000 for the comparable quarter in 2008, primarily as a result of the continuing impact of cost savings initiated in the March 2009 quarter as well as reduced costs due to conducting fewer workshop events. Selling and marketing expenses as a percentage of revenue decreased to 46% for the fourth calendar quarter of 2009 compared to 65% for the comparable quarter in 2008. The decrease is principally attributable to the continuation of cost saving initiatives in the fourth calendar quarter of 2009, which reduced our cost per direct response advertising piece, which in turn decreased our advertising cost per buyer.

Cash provided by operating activities was $1,615,000 for the fourth calendar quarter of 2009, compared to cash used for operating activities of $5,570,000 for the comparable period in 2008. As of December 31, 2009, cash and cash equivalents were $21,549,000, working capital was $17,604,000, and working capital excluding deferred revenue was $33,431,000. Total current and long-term net trade receivables decreased 46% to $20,426,000 as of December 31, 2009, compared to $37,716,000 for the comparable quarter in 2008.

Six Month Transition Period Ended December 31, 2009 Compared to 2008

Revenues for the six month transition period ended December 31, 2009 were $35,716,000 compared to $54,120,000 for the comparable period last year. Revenue from our Crexendo Business Solutions Division was $127,000 for the six month transition period ended December 31, 2009 compared to zero revenue in the comparable period last year. Total operating expenses were $36,239,000, compared to $64,309,000 for the comparable period last year.

Net income for the six month transition period ended December 31, 2009 was $1,331,000, or $.12 per diluted common share, compared to net loss of $17,628,000, or $1.55 per diluted common share in the comparable period last year. Cash provided by operating activities was $2,578,000 for the six month transition period ended December 31, 2009, compared to cash used for operating activities of $6,083,000 for the comparable period last year.

Steven G. Mihaylo, Chief Executive Officer of iMergent, stated, "Calendar year 2009 was very challenging, which had a negative impact on our sales and operations. However, we continue to improve our operating efficiencies through our cost saving initiatives. We believe the results are promising, particularly considering the effect of the economic downturn on our StoresOnline customers. I am also pleased with the progress of our Crexendo Business Solutions division (Crexendo). We have invested considerable time, money and effort on the initial sales and processes in Crexendo. Initial sales have been slow, which is not surprising considering that Crexendo is a start-up business. We are now proactively working to economically increase our Crexendo sales, customer base and offerings.

iMergent is currently working with a company in India to provide programming and design services for our customers. We are considering expanding this relationship to a joint venture which, if completed, could enable iMergent to market its award winning products and services to businesses in India.

We are also in final negotiations to acquire a small boutique SEO Company in a major U.S city. If completed, we believe this acquisition would provide iMergent with a customer base and additional sales and fulfillment capabilities. As currently proposed, the acquisition purchase price would be primarily based on an "earn out" on future business from the current customer base. We expect this acquisition to be accretive if consummated. We also believe that this acquisition could be the foundation to duplicate these capabilities in other large population centers in the future.

Finally, our first telecom offering is now in the initial Beta test stage and, although the early results are preliminary, we are encouraged by those results. We intend to make our telecom offering available to end-user customers in the second half of calendar 2010. We also intend to offer our telecom services through our StoresOnline previews and workshops. Finally, we believe this telecom offering will allow iMergent to realize a source of new hosting revenue in 2011 and beyond."

Mihaylo went on to say, "iMergent's board of directors recently reconfirmed the Company's previously authorized common stock repurchase program first announced in 2006. It is our intention to repurchase our common stock, through strategic open market transactions, particularly when the price per share is at or below $7.25.

Conference Call

The Company is hosting a conference call today, February 8, 2010, at 6:00 a.m. PT (9:00 a.m. ET). The conference call will be broadcast live over the Internet at www.imergentinc.com. If you do not have Internet access, the telephone dial-in number is 800-967-7141 for domestic participants and 719-457-2625 for international participants. The conference ID to join the call is 9196487. Please dial in five to ten minutes prior to the beginning of the call at 9:00 AM EST. A telephone replay will be available two hours after the call for 90 days by dialing 888-203-1112 for domestic callers or 719-457-0820 for international callers and entering access code 9196487. Online webcast replay will be available for 90 days from the date of the call.

About iMergent

iMergent provides eCommerce solutions to entrepreneurs and businesses enabling them to market and sell their business products or ideas via the Internet. The company sells its proprietary software and training services which help users build Internet strategies to allow entrepreneurs and businesses to market and sell their products, accept online orders, analyze marketing performance and manage pricing and customers over the Internet. In addition to software and training, iMergent offers site development, web hosting and search engine optimization (SEO). iMergent, StoresOnline and Crexendo Business Solutions, Inc. are trademarks of iMergent, Inc.

Safe Harbor Statement

This press release contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. The words "believe," "expect," "anticipate," "estimate," "will" and other similar statements of expectation identify forward-looking statements. Specific forward-looking statements in this press release include information about iMergent, (i) being effected in our sales and operations by the economic downturn, (ii) results being promising particularly considering the effect of the economic downturn on StoresOnline customers, (iii) being pleased with the progress of the Crexendo Business Solutions division, (iv) having spent considerable time, money and effort on the initial sales and processes in Crexendo, (v) initial sales being slow due to the operations being essentially a start-up, (vi) proactively but economically working to increase our Crexendo sales, customer base and offerings, (vii) working with a Company in India to provide programming and design services for its customers (viii) considering expanding this relationship to a joint venture which would enable iMergent to market its award winning products and services to businesses in India (ix) being in final negotiations to acquire a small SEO company with access to a major U.S population center. This acquisition will provide iMergent with a customer base and additional sales and fulfillment capabilities. The acquisition purchase price is primarily based on being paid for with an "earn out" on future business from the current customer base, (x) expecting this acquisition to be accretive, (xi) belief that this acquisition can be the foundation to duplicate these capabilities in other large population centers in the future, (xii) our telecom offering being in the initial Beta test stage and being tested with positive results (xiii) intending to make our telecom offering available to end-user customers in the second half of calendar 2010, (xiv ) intending to offer our telecom services thru our StoresOnline previews and workshops, (xv) belief that this telecom offering will allow it to realize a source of new hosting revenue in 2011 and beyond and (xvi) the intention to repurchase common stock, through strategic open market transactions, particularly when the price per share is at or below $7.25.

For a more detailed discussion of risk factors that may affect iMergent's operations and results, please refer to the company's Form 10-Q for the quarter ended September 30, 2009 and Form 10-K for the year ended June 30, 2009. 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.

                 iMERGENT, INC. AND SUBSIDIARIES
                   Consolidated Balance Sheets
          (Dollars in thousands, except per share data)

                                   December  June 30,  June 30,
                                   31, 2009    2009      2008
                                   --------  --------  --------
  Assets

  Current assets:
  Cash and cash equivalents         $21,549   $20,474   $26,184
  Restricted cash                     1,088     1,802        --
  Trade receivables, net of
   allowance for doubtful
   accounts of $11,827, $9,670,
  and $13,797, respectively          14,162    20,771    28,723
  Inventories                           243       256       627
  Income tax receivable                 387     1,826       793
  Deferred income tax assets,
   current portion                    1,009     2,171     3,891

  Prepaid expenses and other          2,988     1,524     3,849
                                   --------  --------  --------
  Total current assets               41,426    48,824    64,067

  Certificate of deposit                500       500       500
  Available-for-sale securities          --        --     3,800
  Long-term trade receivables,
   net of allowance for doubtful
   accounts of $5,882, $4,437,
   and $4,786, respectively           6,264     9,985     9,845
  Property and equipment, net         1,446     1,322     1,672
  Deferred income tax assets, net
   of current portion                 5,298     4,975     4,385
  Intangible assets                   1,206     1,400     1,831
  Merchant account deposits and
   other                                302       348       514
                                   --------  --------  --------

  Total Assets                      $56,442   $67,354   $86,614
                                   ========  ========  ========

  Liabilities and Stockholders'
   Equity

  Current liabilities:
  Accounts payable                   $3,154    $2,265    $4,760
  Accrued expenses and other          4,588     6,257     5,614
  Dividend payable                      229       229        --
  Income taxes payable                   24        41       212
  Deferred revenue, current
   portion                           15,827    23,627    32,859

  Note payable, current portion          --        68        64
                                   --------  --------  --------
  Total current liabilities          23,822    32,487    43,509

  Deferred revenue, net of
   current portion                    6,447    10,236    10,332
  Note payable, net of current
   portion                               --        47       115

  Other long-term liabilities           191       184       183
                                   --------  --------  --------

  Total liabilities                  30,460    42,954    54,139
                                   --------  --------  --------

  Commitments and contingencies

  Stockholders' equity:
  Preferred stock, par value
   $0.001 per share - authorized
   5,000,000 shares; none issued
  Common stock, par value $0.001
   per share - authorized
   100,000,000 shares;
  11,446,320, 11,425,320 and
   11,304,410 shares outstanding,
   respectively                          11        11        11
  Additional paid-in capital         53,033    52,782    53,315

  Accumulated deficit              (27,062)  (28,393)  (20,851)
                                   --------  --------  --------

  Total stockholders' equity         25,982    24,400    32,475
                                   --------  --------  --------

  Total Liabilities and
   Stockholders' Equity             $56,442   $67,354   $86,614
                                   ========  ========  ========

                       iMERGENT, INC. AND SUBSIDIARIES
                     Consolidated Statements of Operations
                 (Dollars in thousands, except per share data)


                                 Six Months Ended       Three Months Ended
                                   December 31,            December 31,
                              ----------------------  ----------------------

                                 2009        2008        2009        2008
                              ----------  ----------  ----------  ----------
  Revenues:
  Product and other              $25,886     $39,481     $13,202     $20,080

  Commission and other             9,830      14,639       5,136       6,774
                              ----------  ----------  ----------  ----------

  Total revenues                  35,716      54,120      18,338      26,854
                              ----------  ----------  ----------  ----------

  Operating expenses:
  Cost of product and other
   revenues                       11,608      17,804       6,025       9,436
  Selling and marketing           16,391      34,646       8,487      17,580
  General and administrative       7,196      10,779       3,595       6,267

  Research and development         1,044       1,080         541         497
                              ----------  ----------  ----------  ----------

  Total operating expenses        36,239      64,309      18,648      33,780
                              ----------  ----------  ----------  ----------


  Loss from operations             (523)    (10,189)       (310)     (6,926)
                              ----------  ----------  ----------  ----------

  Other income (expense):
  Interest income                  2,596       3,681       1,253       1,820
  Interest expense                   (7)         (7)         (4)         (4)

  Other expense, net                (98)       (783)        (71)       (570)
                              ----------  ----------  ----------  ----------

  Total other income, net          2,491       2,891       1,178       1,246
                              ----------  ----------  ----------  ----------

  Income (loss) before
   income tax provision            1,968     (7,298)         868     (5,680)


  Income tax provision             (637)    (10,330)       (255)     (4,450)
                              ----------  ----------  ----------  ----------


  Net income (loss)               $1,331   $(17,628)        $613   $(10,130)
                              ==========  ==========  ==========  ==========

  Net income (loss) per
   common share:
  Basic                            $0.12     $(1.55)       $0.06     $(0.89)
  Diluted                          $0.12     $(1.55)       $0.06     $(0.89)

  Dividends per common share       $0.04       $0.13       $0.02       $0.02

  Weighted-average common shares
   outstanding:
  Basic                       11,402,442  11,351,094  11,399,328  11,362,190
  Diluted                     11,484,684  11,351,094  11,481,570  11,362,190

                 iMERGENT, INC. AND SUBSIDIARIES
               Consolidated Statements of Cash Flows
                      (Dollars in thousands)

                                              Six Months Ended
                                                December 31,
                                             -------------------

  Increase (decrease) in cash and cash
   equivalents                                 2009       2008
  -----------------------------------------  --------  ---------
  CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                            $1,331  ($17,628)
  Adjustments to reconcile net income
   (loss) to net
  cash provided by (used for) operating
   activities:
  Depreciation and amortization                   704        722
  Impairment of held-for-sale property             90         --
  Expense for stock options issued to
   employees                                      709        810
  Deferred income tax provision                   839        752
  Changes in assets and liabilities:
   Trade receivables                           10,330        852
   Inventories                                     13       (93)
   Prepaid expenses and other                 (1,258)      1,834
   Restricted cash                                714    (1,197)
   Merchant account deposits and other             46        118
   Income tax receivable                        1,439          7
   Other long-term liabilities                      7      9,108
   Accounts payable, accrued expenses and
    other                                       (780)      1,073
   Deferred revenue                          (11,589)    (2,229)

   Income taxes payable                          (17)      (212)
                                             --------  ---------
  Net cash provided by (used for) operating
   activities                                   2,578    (6,083)
                                             --------  ---------

  CASH FLOWS FROM INVESTING ACTIVITIES
  Acquisition of property and equipment         (634)      (475)
  Acquisition of property held-for-sale         (296)         --

  Sale of available-for-sale securities            --        900
                                             --------  ---------
  Net cash provided by (used for) investing
   activities                                   (930)        425
                                             --------  ---------
  CASH FLOWS FROM FINANCING ACTIVITIES
  Repurchase of common stock                       --      (734)
  Proceeds from exercise of options and
   related income tax benefit                      --        229
  Principal payments on note payable            (115)         --

  Dividend payments                             (458)    (1,259)
                                             --------  ---------

  Net cash used for financing activities        (573)    (1,764)
                                             --------  ---------

  NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                  1,075    (7,422)

  CASH AND CASH EQUIVALENTS AT THE
   BEGINNING OF THE YEAR                       20,474     26,184
                                             --------  ---------

  CASH AND CASH EQUIVALENTS AT THE END OF
   THE YEAR                                   $21,549    $18,762
                                             ========  =========

  Increase (decrease) in cash and cash
   equivalents
   Supplemental disclosures of non-cash
    transactions:
   Dividends declared                            $229       $227
  Cash paid (received) during the year for:
   Interest                                         7          7
   Income taxes                               (1,641)        456

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SOURCE: iMergent, Inc.

CONTACT:  iMergent, Inc.
Steven G. Mihaylo, CEO
775-530-3955
Stevemihaylo@imergentinc.com