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IBSG International Announces First Quarter 2006 Financial Results; First Quarter Revenue Tops $2.1 Million; Seventh Straight Quarter of Profitability; IBSG International Will Host a Conference Call Today at 4:00 P.M. Eastern May 16, 2006 10:18:00 AM Copyright Business Wire 2006
IBSG International, Inc. (OTCBB:IGII), a holding company for four technology and software subsidiaries, announced today its financial results for the first quarter 2006.
Revenue for the three months ended March 31, 2006 reached $2.1 million, almost double the $1.1 million for the first quarter of 2005. Most of this additional revenue came from the Company's international business. IBSG International also had deferred revenues for the latest quarter of over $900,000.
In first quarter 2006, the Company had operating expenses of $900,000, almost exactly what they were in the same period of 2005; there was a $6,000 increase, which was primarily the result of establishing the technical center in Ahmedabad, India in February 2006. As a result, IBSG International reported an operating profit of $1.2 million for the quarter ended March 31, 2006 compared to $182,000 for the quarter months ended March 31, 2005.
The Company had other expenses of $1.1 million for the three months ended March 31, 2006 compared to other expenses restated of $32,000 for the three months ended March 31, 2005. The increase of other expenses for 2006 was due to the settlement of the debt and warrants outstanding, the sale of an asset and a provision for taxes. The loss associated with the settlement of the debt and warrants was $471,000. The Company also recorded a loss of $532,000 as a result of the sale of the CAC asset, on which the Company had recognized a total of $3.5 million at the time of the sale. The sale was for $4 million, of which $1 million is due in 2006 and the balance is due for each subsequent year over the next 3 years. This figure is reflected in the long-term receivable category on the balance sheet under assets.
Net income for the quarter ended March 31, 2006 was $112,000 compared to $150,000 for the same quarter of 2005 primarily due to the extinguishment of debt and warrants as described above.
Dr. Michael Rivers, CEO of IGII stated, "We are very pleased with our progress in the first quarter of 2006. Our revenue is growing year-over-year in a fashion that is both healthy and sustainable. The expansion of our Johannesburg project to cover the entire Union of South Africa may have seemed challenging, but it is up and running across that country, and it will contribute to revenues for the second quarter and beyond."
He added, "We are continuing our discussions with the Malaysian government to launch a similar project there, and our relationship with BAE through our purchase of A-Division in the first quarter will help ensure that we are in the running for other such projects globally. We expect the success that we are seeing in South Africa can and will be replicated elsewhere."
Rivers observed, "In the U.S., IBS Group has launched the implementation of our digital management solution for use within the state of Connecticut's Small Business Development Center network. This network is also capable of being replicated in other jurisdictions in the U.S., and we are exploring opportunities to do just that." He concluded, "IBSG International is on a trajectory toward significant growth this year as measured both at the top and bottom lines."
Management of IBSG International will host a conference call today at 4:00 P.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 U.S., or for international callers (973) 935-2100, passcode # 7399598 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 U.S., or (973) 341-3080, for international callers, and entering PIN # 7399598.
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 multi-national corporations.
IBSG offers enterprise solutions designed to enhance the operating efficiency and create revenue for State Small Business Development Centers, business associations (e.g., Chambers of Commerce) 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 BizWorldPro(C).
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, IBSG, Inc. and Secure Blue, Inc. generate revenue from license sales, system modifications, systems support and a percentage of monthly customer fees. The typical IBSG/Secure Blue license agreement has a five-year term which is updated on an annual basis and almost invariably renewed upon expiration; to date the company has had only one licensee not renew, due to the expiration of the licensee's contract with another party.
IBSD, 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 U.S. and India, where its current offshore development and support team is located.
A-Division IT establishes it projects for multi-national corporations around the world. The projects are recognized off set program qualified and provide a required contractual obligation of theses corporations.
A-Division IT is the sole IT off set provider to BAE Systems and maintains relationships with various other multi national corporations. A-Division maintains office 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 Balance Sheet (Unaudited)
ASSETS
March 31, 2006 CURRENT ASSETS
Cash $ 1,158,026 Accounts receivable 8,652,500 Prepaid expenses 574,209 ------------- Total Current Assets 10,384,735
FURNITURE, FIXTURES AND SOFTWARE, NET 859,841 ------------- OTHER ASSETS
Account receivable - Long term 3,000,000 Deposits 5,564 Deferred Consulting Services 4,438,029 ------------- Total Other Assets 7,443,593 ------------- TOTAL ASSETS $ 18,688,169 =============
IBSG INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Balance Sheet (Continued) (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, 2006
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 793,370 Accrued tax provision 116,688 Deferred revenue 918,176 Capital leases payable 10,571 ------------- Total Current Liabilities 1,838,805 ------------- TOTAL LIABILITIES 1,838,805 -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock authorized 100,000,000 shares at $0.001 par value; 69,056,194 shares issued and outstanding 65,223 Additional paid-in capital 16,498,933 Stock Subscription Payable 353,270 Accumulated deficit (68,062) ------------- Total Stockholders' Equity 16,849,364 ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,688,169 =============
IBSG INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited)
For the Three Months Ended March 31 2006 2005 --------- --------- (Restated)
OTHER EXPENSES Services paid for with common stock 346,589 481,947 Amortization and depreciation 10,394 1,022 Bonus shares expense - 19,200 Bonus expense 25,000 - Bad debt expense - related party - 5,009 General and administrative expenses 468,659 330,779 --------- --------- Total Expenses 850,642 837,957 --------- ---------
Income from operations 1,207,061 181,703 --------- ---------
OTHER EXPENSES
Loss on release of debt and warrants (470,897) 52,317 Change in Fair Value of embedded conv. options (18,683) (358,291) Change in Fair Value of warrants (61,181) 294,524 Loss on asset sale (531,729) - Interest expense - (20,537) Tax Provision (12,188) - --------- --------- Total Other Expenses (1,094,678) (31,987) --------- ---------
NET INCOME $ 112,383 $ 149,716 ========= =========
NET INCOME PER SHARE - Basic $ 0.00 $ 0.00 ========= ========= NET INCOME PER SHARE - Diluted $ 0.00 $ 0.00 ========= =========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 62,255,769 38,112,717 ========== ==========
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 62,255,769 39,262,717 ========== ==========
Source: IBSG International, Inc.
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Porter LeVay and Rose Inc. New York Michael Porter 212-564-4700 or IBSG International 321-939-6321
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holding steady for now. Should definetly rise after lunch. This news is really great. The stock price doesn't make sense with the profits they are earning. Should be trading at 2-2.5 times what it is at now IMO
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Well... Im holding this one today. Hopefully we see a gap and some good gains. Still surprised that the news has not affected the price yet. i was in at .21 and its at .225, so at least theres SOME gain so far lol
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I'm holding this one also. This was great news released yesterday. Unfortunatly in was in the middle of a pps correction in the stock after gaining nice ground a few days prior. I think that this will rise steadily in the next couple of weeks. Probably a middle term hold for me.
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