Imergent Common Stock (IIG) 銘柄情報

This thing tanked in 2006. I picked it up at $4 and rode it to $28. It's up %50 since Jan. 9

Up %50 since Jan. 9

This last one was much better.

Florida State Attorney General Files Notice of Dismissal of Initial Action
8:04a ET January 22, 2008 (PrimeNewswire)
iMergent, Inc., (AMEX:IIG) a leading provider of eCommerce software for small businesses and entrepreneurs, announced the Attorney General of the State of Florida, on Jan. 17, 2008, filed a notice of dismissal without prejudice of a complaint filed on June 26, 2007 against the company. The complaint had specific counts seeking to require the company to register as a seller of business opportunities and of alleged violations of the deceptive and unfair trade practices act.

Jeff Korn, iMergent general counsel, said, "Since the filing of the initial complaint, we have been in discussions with the office of the attorney general in an effort to clarify iMergent's business and sales practices. We have made attempts to show the company does not sell business opportunities and that the practices of the company are open, honest and transparent."

On Jan. 18, 2007, the attorney general of the state of Florida posted on its website a press release indicating a new complaint filed in the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida, which alleges, in two counts, violations of the State's deceptive and unfair trade practices act. The complaint does not have a specific count alleging sale of a business opportunity.

Korn added, "While the Attorney General filed a new action, this is not a new complaint. The attorney general's office could have simply filed an amended complaint to the initial action without the company's or the court's permission and could have done so without the issuance of a press release."

"The company vehemently disputes it has, in any manner, defrauded purchasers of its product. We will continue to attempt to work with the attorney general's office to reach an acceptable settlement, however, we are prepared to actively and aggressively litigate these allegations," Korn concluded.

Safe Harbor Statement

Statements made in this press release regarding (1) the initial complaint and the actions of the Florida Attorney General; (2) iMergent's discussions with the office of the attorney general in an effort to clarify the company's business and sales practices, (3) that the Company has made attempts to show the company does not sell business opportunities and that the practices of the company are open, honest and transparent, (4) that the Company has not, in any manner, defrauded purchasers of its products and (5) that the Company will continue to attempt to work with the attorney general's office to reach an acceptable settlement, as well as being prepared to actively and aggressively litigate these allegations 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. For a more detailed discussion of risk factors that affect iMergent's operations, please refer to the company's Form 10-K for the year ended June 30, 2007, and Form 10-Q for the period ended September 30, 2007.

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 software and training services, which help users build successful Internet strategies to market products, accept online orders, analyze marketing performance, and manage pricing and customers. In addition to software, iMergent offers site development, web hosting and marketing 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.

This news release was distributed by PrimeNewswire, www.primenewswire.com

StoresOnline Receives Certification of Excellence in Service Operations From the SSPA
OREM, Utah, Jan. 17, 2008 (PRIME NEWSWIRE) -- StoresOnline, Inc., a subsidiary of iMergent Inc., (AMEX:IIG), a leading provider of eCommerce software for small businesses and entrepreneurs, was awarded the Excellence in Service Operations certification by the Service & Support Professionals Association (SSPA). By awarding this certification, the SSPA recognizes the company has met the highest industry standards for support operations.

"To achieve this certification, StoresOnline(tm) met or exceeded 290 best practices criteria developed by the SSPA and validated by 50 leading technology companies," said Stephen Smith, executive director of SSPA. "In addition, it passed a rigorous onsite audit conducted by service executives with more than 20 years experience. When customers see the SSPA Excellence in Service Operations logo, they can be confident that StoresOnline has the people, processes and technology in place necessary to provide quality support."

Founded in 1989, SSPA has grown to become the largest and most influential industry trade group for technology service and support professionals. Its nearly 200 member companies represent tech support, field service and customer relations organizations around the globe.

"StoresOnline's top priority is exceptional customer support as we provide eCommerce solutions for small businesses and entrepreneurs," said Robert Schow, vice president customer operations, StoresOnline. "In September 2007, we were awarded the SSPA's 2007 Star Award for Service Excellence in Consumer Support. In November, 2007 Stores Online's technical support organization engaged in the SSPA Organizational Development Program undergoing thorough audits and testing of our technical support operations, which we are proud to announce resulted in SSPA's prestigious Excellence in Service Operations certification."

"We understand the impact that high quality service and support can have on our customers and our competitive position in the marketplace," added Brandon Lewis, iMergent's president and COO. "Over the past several years our goal has been to become the leading provider of eCommerce software solutions while maintaining our commitment to our customers. Most recently, we expanded our product line by launching our StoresOnline Express platform. We are excited about how the market is receiving both our StoresOnline Express and StoresOnline Pro products as we continue to rollout StoresOnline Express and train our sales and support teams."

Don Danks, CEO of iMergent, said, "We continue our focus on providing best of breed products, services and support to the entrepreneur and small business markets. Everyone at iMergent is enthusiastic and energized about the prospects for the future of our company."

iMergent to Hold Second Quarter Fiscal 2008 Financial Results Conference Call on February 5, 2008
8:05a ET January 15, 2008 (Business Wire)
iMergent, Inc. (AMEX:IIG) announced it will hold its second quarter fiscal 2008 financial results conference call on Tuesday, February 5, 2008 at 1:30 p.m. Pacific Time or 4:30 p.m. Eastern Time. Donald Danks, chief executive officer, Brandon Lewis, president and chief operating officer, Robert Lewis, chief financial officer and Jeff Korn, general counsel, will deliver prepared remarks and conduct a question and answer session.

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 800-639-0297 for domestic participants and 706-634-7417 for international participants. Please dial in five to ten minutes prior to the beginning of the call at 1:30 p.m. PT (4:30 p.m. ET). A telephone replay will be available three hours after the call through February 7, 2008 by dialing 800-642-1687 for domestic callers or 706-645-9291 for international callers and entering access code 30398872.

Single digits it is...

I guess this news was not taken well.

iMergent Streamlines Sales Force and Operations
8:01a ET December 20, 2007 (Business Wire)
iMergent Inc., (AMEX:IIG), a leading provider of eCommerce software for small businesses and entrepreneurs, announced the streamlining of its sales team and administrative functions to optimize the resources dedicated to launch StoresOnline(TM) Express and to drive StoresOnline Pro sales. As a result, the company expects to reduce operating expenses by approximately 15-20 percent and to incur an associated charge in the second fiscal quarter of less than $50,000.

StoresOnline Express' Initial Successes

Management also reported the initial statistics for the StoresOnline Express October and November preview sessions. Express workshops have experienced a higher percentage of buying units upgrading to the StoresOnline Pro software compared to close rates of 26 percent in the quarter ended September 30, 2007 and 25 percent for the quarter ended December 31, 2006. The company plans to offer StoresOnline Express at about 30 percent of all preview sessions by the end of January 2008 and at all preview sessions by the end of March 2008.

The Vision

"Over the past several years, iMergent's primary goal has been to aggressively grow sales of our flagship product StoresOnline Pro and become the leading provider of superior eCommerce software solutions," said Don Danks, CEO of iMergent. "With StoresOnline Express, we are expanding our core business to reach a greater audience, which requires new marketing tactics as well as new curriculum at the preview sessions. We are excited about our enhanced business model as StoresOnline Express buyers are now able to 'test drive' our software before attending workshops. The initial results of Express sales and higher Pro close rates have inspired us to expedite the roll out of the Express sales model."

The Plan

"The streamlining of our sales force is driven by the launch of StoresOnline Express. While reviewing our implementation plan, we determined we needed specific expert speakers and a smaller number of sales teams to roll out Express. Also, we intend to visit targeted markets less frequently than in the recent past to cultivate greater pent-up demand. Hence, we will need fewer speakers and have reduced the number of preview teams from 32 to approximately 18-20 and workshop teams from nine to six. Additionally, we have decreased the event and travel support staff and general administrative staff accordingly. The overall staff reduction is approximately 20 percent of our employee base, which is expected to deliver savings of approximately $1.0 million annually in addition to commissions associated with reduction of our sales force," continued Danks.

"Our employees are extremely valuable to the company; therefore, this was a very difficult yet necessary action," said Brandon Lewis, iMergent's president and COO. "We have reaffirmed our commitment to StoresOnline merchants and preserved our customer service and engineering teams that support our customers today and build our future. Additionally, we will maintain our scalable infrastructure to support future hires, when appropriate. While a smaller sales base will lower our top-line expectations, we are confident this retrenchment will improve operating margins and the company's long-term potential to grow profitability."

The Outlook, the Stock Repurchase Program and the Dividend

Commenting on the company's outlook, CEO Don Danks continued, "We expect our actions will have a positive impact on iMergent's future bottom line. However, due to our streamlined sales force, lower than expected sales and our continued absence from California and North Carolina markets, we are revising our previously reported guidance of 10-15 percent increase over 2007. Fiscal 2008 expectations of revenues and net dollar volume of contracts written will decrease 15-20 percent over fiscal 2007 revenue of $151.6 million and net dollar volume of contracts written of $165.3 million. We remain committed to our continued growth and believe these changes will increase the volume of people activating websites and thereby increase recurring revenue as well as open potential new sales channel opportunities."

"The market continues to grow, according to AMI-Partners, home-based businesses are expected to spend around $35 billion in 2008, up approximately 7 percent from 2007. We believe with a leaner infrastructure, iMergent is better positioned to build upon our core strengths, to advance our strategic vision and to deliver value to shareholders. At this point in time, the board has elected to continue to pay the quarterly cash dividend of $0.11 per share on the company's common stock. Additionally, from September 30, 2007 through December 19, 2007, the company has repurchased 220,800 shares for approximately $3.4 million, bringing the total shares purchased since the program commencement in August 2006 to over 1,400,805 shares for approximately $20.1 million. The company intends to maintain its policy of opportunistically repurchasing shares," Danks concluded.

Please visit the Frequently Asked Questions section of iMergent's website, http://media.corporate-ir.net/media_files/irol/82/82078/streamliningfa q.pdf, for additional information on the company's streamlining efforts. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

Soon to be single digits?

I was impressed with their buy back of common shares and their working capital. Not many companies these days have cash on hand.

earnings report on 11/06/07 wasn't very good

What entry are you looking for? Any idea why it is down? In 2005 it dropped from 25 to 4 on bashing by analysts. This was unwarranted as business was good. It went back up to 25.

Dont' own the stock but watching for good entry Just got web sites to build on

Is anyone still following this stock? I has been off my radar for a while. I got in at 11 when it was getting bashed in 2005, doubled down at 4 and rode it up to 28. Haven't followed it since but it looks like it has been swinging. Looking to get in to hold then flip. Any reason why it is down now?

i love stocklemon thanks to them
i was able to pick up a couple thousand shares befor it
starts the run to $100 in 2008 if they keep the buissness up.

stocklemon bashes this stock but institutional been buying like crazy they know this is the most undervaluaded stock at under $30. institutional up to 75%
short interest is around 70% (how is this working anyway)
company raises guidence every 3 months
company buys back shares
company pays divident
company has like 40million dollar in cash
it does not get any better then this folks.

AND STOCKLEMON BASHES THEM ...


LMFAO

Good post. I'm doing some DD on this one. Looks very shady. You have a short position in the stock? I'd be interested in hearing about any more of your DD.

Cheers.

Stocklemon updates iMergent

IMergent Has Their Hands Caught In the Cookie Jar

In our last comments on iMergent, we promised further discussion of the company’s accounting vulnerabilities. When a short seller calls “accounting irregularities” on a company, they might just be accused of pounding the table on their own position. Yet, when the company in question is currently the subject of numerous Attorney General Investigations, a Formal SEC Investigation, and a business that Forbes Magazine singled out this month as a paradigm for dirty companies on the AMEX, a warning of accounting irregularities begs to be given additional weight.

http://72.14.253.104/search?q=cache:Nmp2C6YqLR0J:www.forbes.com
/free_forbes/2006/1002/090.html%3Fpartner%3Drss+%22imergent%22
+forbes+clean&hl=en&gl=us&ct=clnk&cd=2



Stocklemon believes that iMergent is guilty of using cookie jar accounting to pad current earnings. This “voodoo” accounting employed by iMergent could be the reason why the company has lost all coverage from major brokerage houses and is now reports numbers to the public without independent scrutiny.



Cookie Jar Accounting defined:

http://www.investopedia.com/terms/c/cookiejaraccounting.asp

http://www.investorwords.com/1121/cookie_jar_accounting.html





First Hand Caught in the Cookie Jar



In 2005, iMergent confessed a huge restatement of prior earnings, and rolled up a mass of prior years’ unreported losses. The losses were due to overestimating collectability of receivables from its installment contract sales to its typically poor quality credit risk customers.



Hidden by these massive adjustments were their repeated acts of “cookie jar” accounting, where they shuttled dollars in and out of receivables, reserves, and net profit, as necessary to massage their earnings for the benefit of shareholders.

As the stock tanked from 25 to 4 last year, iMergent issued these multi-year restatements under the cover of late filing and the absence of a conference call to discuss them.



For a “normal” company, a massive confession/restatement like this one would be an opportunity to “clean house”, to sweep out the closets, dump out all the bad news and take a fresh start.



Not iMergent. They simply used the revision of their entire accounting policy and all the confusion created by a set of massive one-time adjustments (which obstruct investors’ ability to draw meaningful comps to prior periods) to start a whole new cookie jar.



Most cookie jar accounting serves to “smooth earnings” and, although subtle, is banned corporate behavior. But cookie jars also have a more sinister use – misleading investors to believe there is a pattern of increasing earnings when actually the business is stagnant or declining. With the amount of complaints online and government regulation along with dissatisfied customers, it does not take Warren Buffet to figure out this is a terminal business model.





And now, the other hand….

This strategy only works until the cookie jar runs out…and the jar at iMergent is running low.



In a call with First Albany (before they dropped coverage), management of iMergent was astoundingly candid about the company’s reserve policy. They implied that the company was at times over-reserving against bad debt, which could, in future periods improve earnings. SEC files show the agency was curious enough about this to inquire further as to its validity.

http://www.sec.gov/Archives/edgar/data/1075736/000110465905034488/filename1.htm



In the company's reply to SEC questions, they clarified how exactly the reserves are figured out and also supplied statistics for defaults. This Rosetta Stone, posted on the SEC website not more than 2 weeks ago. The company explained the issue to the SEC with facts it had never previously disclosed to investors.



Their better credits (the "A"s) defaulted at a 26% rate and the lower quality credits (the "B"s) defaulted at a 53% rate. The company also stated that they didn't make a determination of reserves when finance receivables were perfected (created), rather they would look at the pool of receivables at quarter-end and then determine what reserve level was appropriate. The result was that when the prior reserve was deemed higher than necessary, the recently added reserves would get a lower reserve allocated -- which has the direct result of improving non-GAAP earnings!



Hidden under the massive restatements of June 2005, an anomaly appears which raises serious questions about IIG's use of reserves to benefit future earnings. Buried in the restatement, and not explicitly disclosed, IIG reserved an astounding 79% of revenues for bad debt reserves, dropping their new contracts written (from which the reserve has been deducted) to a historic low $14.6 million. This made their loss for the quarter even worse (because of the restatement it was already gigantic, so nobody noticed).



It also created a brand new cookie jar to pad future quarters. Strangely, at the same time, the company, explaining why their sales conversion rate had dropped, stated that new policy changes were resulting in increased credit quality. This is contradictory to a reserve rate nearly double its historical levels. Stocklemon believes iMergent’s current results have been benefiting from the new cookie jar.



As recently as March 2005 the company stated that the eventual default rate for finance receivables was 47%, which begs the question as to why higher reserves were ever materially above that. The company refuses to update the overall default rate, as they say it won't impact GAAP earnings. True enough, but it directly impacts non-GAAP earnings. Since the September 2005 quarter with a 57.5% reserve ratio, the company has grown gross receivables by $14.8 million, yet reserves have only grown by $1.2 million for an 8% suggested reserve ratio. While the company will suggest that that is mainly due to losing the lower quality credits (which we showed may have been artificially created last year) it suggests very strongly that the company was using those higher reserves to benefit current earnings.



In fact, were the ending June 2006 reserve materially higher, it would have had a dramatic impact on non-GAAP earnings as demonstrated by this table: Most companies would report non-GAAP so as to give a clear picture of profitability without options expenses or goodwill. iMergent wants you to focus on non- GAAP so you do not factor in their customer with a 550 FICO Score who may or may not pay 18% interest on his “software loan”.



Ending reserve rate
non-GAAP EPS
GAAP EPS
Delta from GAAP

34.5%
$.32
$.17
89%

37.5%
$.28
$.17
62%

40%
$.24
$.17
40%

42.5%
$.20
$.17
17%

45%
$.16
$.17
-6%

47%
$.13
$.17
-24%








Therefore, it is the opinion of Stocklemon that if this company reserved properly, their NON-GAAP would be 24% lower than their GAAP earnings.



Receivables still not visible



Imergent’s receivables and reserves accounting can only be relied upon if the company’s cash is indeed “unrestricted” and the receivables are real. Considering the company they sold their receivables to was:

1 set up with a Storesonline Website

2 doesn’t seem to have any factoring business beyond iMergent

3 run out of a 2000 sq ft house in Incline Village NV

4 bought the receivables on a “non-recourse” basis, but still periodically puts bad contracts back to iMergent for “replacement”



… this transaction fails to dispel the questions looming over the quality of iMergent’s receivables.



http://www.adpfund.com/news.htm



History repeats?

Imergent bears very strong resemblance to former Stocklemon subject Housevalues.com (SOLD). At the heart of both is an accounting model that systematically leaves out certain key metrics needed by the investing public to determine the true health of the company. Add to that an unending litany of consumer complaints, and you have the reason for the reporting omissions – an unsustainable business model – the last thing management wants to admit.



When Stocklemon reported on Housevalues.com, the stock was $15 a share and Avondale and Piper both had lofty price targets on the stock. Today it is $5.65, trading not far above its cash.



In contrast to Housevalues.com, iMergent has no analyst coverage. There’s no independent scrutiny holding management to a standard of reporting sufficient to shed light on their real business operations.



At the Edge of Unprofitability

Besides the consumer complaint red flags, and the ongoing stream of state AG investigations, the company is sliding towards unprofitability. Their sales conversion rates are flat to declining (the company blames this on sticking to better credit risks, a story unsupported by the reserves analysis). In fact, were it not for interest on its cash, and the commissions from third-party upsales, the company would not now be profitable.



With the current trend in Imergent’s business, Stocklemon believes that IIG is worth no more than a number slightly higher than their cash position (which also is a hazy topic).



Audit committee revolving door

If anyone needs any more clarity on this issue, just email Stocklemon and we will present even more compelling evidence. Maybe this voodoo accounting is also the reason that 2 of the 3 audit committee members just left iMergent. To replace them we have been introduced to Craig Rauchle, president of Inter-Tel and Todd Goergen, manager of Ropart Asset Management. Maybe the shareholders of Intertel should note that while the President and COO should be busy building shareholder value, he is going to dedicate his time to “creating internet tycoons” and giving away free lunches so lower income consumers can sign up for 18% financing.



It is the belief of Stocklemon that neither Rauchle of Goergen are representing the best interests of their investors and shareholders as they join an enterprise that has this much scrutiny from the US and foreign governments.



We have to give iMergent credit on one front. They have found a novel way to save money on customer service…they just outsourced it to the Utah Division of Consumer Protection.

http://www.commerce.utah.gov/releases/06-08-28_imergent-cease.pdf



Stocklemon welcomes iMergent to refute any of the above statements and we will give them fair space on Stocklemon to issue any statement related to this issues discussed above.



Cautious investing to all.

starting the board