IMergent Inc. (IIG)
Q1 2010 Earnings Call
May 4, 2010 4:30 pm ET
Steve Mihaylo - CEO and Director
Jeff Korn - CLO
Jon Erickson - CFO
Clint Sanderson - Senior VP
David Krietzberg - CAO
Robin Lochner - Deutsche Bank
Previous Statements by IIG
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Welcome to the iMergent, Incorporated first quarter calendar 2010 financial results conference call. Today’s conference is being recorded. At this time I’d like to turn the conference over to Steve Mihaylo. Please go ahead sir.
Thank you Nancy and good afternoon everyone. Before we get started I’d like to introduce you to who is on the conference call with us here and also our General Counsel Jeff Korn will be reading a forward statement. To start with we have Clint Sanderson, our President in both Crexendo division and the StoresOnline division. We have David Krietzberg, our Chief Administrative Officer and Executive VP. We have Jon Erickson, our Chief Financial Officer. And we have Jeff Jarvie, our Controller, as well as Jeff Korn, our General Counsel. And Jeff would you read the forward looking statement please before I give a brief overview?
Certainly, thank you, Steve. I want to take this opportunity to remind listeners that this call will contain forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for such forward-looking statements. All statements made in this conference call other than statements of historical fact are forward-looking statements. Forward-looking statements include but are not limited to words likes believe, expect, anticipate, estimate, will and other similar expectation identifying forward-looking statements. Investors should be aware that any forward-looking statements are based upon assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed here today.
These risk factors are explained in detail in the company’s filings with the Securities and Exchange Commission including the Form 10-K for the fiscal year ended December 31, 2009 and the Form 10-Q for the period ended March 30, 2010. iMergent does not undertake any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future events or otherwise. Steve?
Thank you, Jeff. Before I get started here, I want to remind everyone that first of all I’m going to be giving an overview of the highlights then I’ll have Jon Erickson give a more granular overview. Then we are going to open it up to Q&A after that but I’d also like to remind everyone that we filed our 10-Q at the same time we filed our press release and I encourage all of you to go the 10-Q for any additional granularity that you may be looking for. I’m going to start with our revenue first and then I’ll talk about net income and then I’m going to turn it over to Jon Erickson.
Revenue for the first quarter of 2010 decreased 18% to $17,094,000 compared to $20,931,000 for the comparable period in 2009. The lower revenue was a result of a 5% reduction in the number of workshops conducted during the first quarter of 2010 as compared to the comparable quarter in 2009. A decrease in the percentage of attendees purchasing products to 26% in the first quarter of 2010 compared to 28% in the comparable quarter of 2009, a 21% decrease in the number preview buyers attending our workshops compared to the prior year quarter.
I might just give you a little bit of color here. We actually have more people in the previous but fewer people in the workshops. As well as a 39% reduction in principal cash collected on receivables portfolio and that’s the result of having lower sales. The remaining decrease in revenue primarily related to commissions derived from third parties which decreased 22% $2,581,000 for the three months ended March 31 2010 compared to $3,330,000 for the three months ended March 31 2009.
The decrease was primarily attributable to the decrease in commissions from third parties as a result of fewer leads sent to the third parties due to a decrease in the company’s product and service sales. The decrease in revenue from workshops was offset by an increase of $1 million as a result of the change in the Avail 24/7 contract and here again Jon Erickson will go into that.
Revenue from our Crexendo Business Solutions division was $2,42,000 compared to zero in the comparable period last year. Total operating expenses decrease 9% to $17,975,000 for the first quarter of 2010 compared to $19,704,000 for the comparable quarter in 2009 primarily as a result of conducting fewer workshop events. This netted the company for the first quarter of 2010 a $123,000 or $0.01 per diluted common share compared to $1,552,000 or $0.14 per common share on the comparable quarter last year. Income before tax provisions for the first quarter of 2010 was $248,000 compared to $2,778,000 in the comparable quarter last year.
The income tax provision for the first quarter of 2010 was $125,000 compared to an income tax provision of $1,226,000 in the prior quarter. The higher the normal income tax provision in the current quarter is primarily due to the expiration of the Federal Research and Development Tax Credit. At this time I’m going to turn this over to Jon Erickson who will go through the granularity at which time we’ll open it up for questions after he is finished.