OREM, Utah, september 7, 2006 -iMergent, Inc.(AMEX: IIG),a leading provider of eCommerce and software for small businesses and entrepreneurs, today announced the results for the three months and year ended June 30, 2006. 

Robert Lewis, chief financial officer, stated, “2006 performance was strong financially and operationally, with the company overcoming a variety of challenges. Our fourth quarter revenue grew 13 percent compared to the third quarter 2006. Fourth quarter 2006 revenue increased more than 159 percent compared to the fourth quarter 2005, primarily due to the change in our business model in December 2005. Annually, revenue grew to $185.1 million, compared to $39.1 million in 2005, again primarily reflecting the change in the business model. We achieved the highest net dollar volume of contracts written in our company’s history this quarter at $31.4 million, compared to the prior high of $26.3 million last quarter. Annually, net dollar volume of contracts written rose 19 percent to $99.8 million, compared to $84.1 million in 2005.”

Don Danks, chairman and chief executive officer, stated, “We drove growth in net dollar volume of contracts written by expanding our sales force to six teams in September 2005; enhancing our technology and introducing StoresOnline™ Pro in January 2006; and increasing the number of workshops conducted in fiscal 2006 to 812, up from 740 in the prior fiscal year. In fact, during the past quarter, we began testing our first Spanish-speaking team, and this month we intend to add our eighth sales team. In fiscal 2007, we plan to return to Australia to conduct workshops. We are excited about the prospects for fiscal 2007 as we propel these and other initiatives further. Additionally, this week, we announced we are instituting a share buyback program intended to maximize shareholder value.”

Three-months Ended June 30, 2006 Compared to June 30, 2005

• Revenues for the fiscal fourth quarter of 2006 increased to $28.2 million from $10.9 million for the fiscal fourth quarter of 2005. The increase is primarily due to the change in business model regarding the customer service practice implemented in December 2005.
• Net dollar volume of contracts written was $31.4 million for the quarter compared to $18.3 million for the same period last year. The company believes the net dollar volume of contracts written during each period is a relevant and meaningful statistic in understanding the operations of the company as net dollar volume of contracts written represents gross dollar sales contracts executed during the period less estimates for bad debts and discounts incurred on sales of trade receivables. A table reconciling United States Generally Accepted Accounting Principles (US GAAP) revenue to net dollar volume of contracts written follows in this press release.
• Total operating expenses were $25.6 million for the quarter compared to $19.9 million for the comparable period of the previous fiscal year. The increase was primarily attributable to the increase in net dollar volume of contracts written, an increase in stock option compensation expense of $253,000 resulting from the application of SFAS No.123(R) in fiscal 2006 and an increase in legal expenses of $644,000 associated with the Australian Competition and Consumer Commission matter, the Securities and Exchange Commission (SEC) investigation and the class action lawsuit.
• Net income was $2.2 million, or $0.17 per diluted common share, for the three months ended June 30, 2006 compared to a net loss of $(8.3) million, or $(0.69) per diluted common share, for the comparable period of the previous year.
• Non-GAAP net income was $4.1 million, or $0.32 per diluted common share, for the three months ended June 30, 2006 compared to a non-GAAP net loss of $(408,000), or $(0.03) per diluted common share, for the comparable period of the previous year. A table reconciling US GAAP revenue to non-GAAP is included in this press release. Historical non-GAAP reconciliations can be found on the company’s web site at www.imergentinc.com.

• Revenues for the year ended June 30, 2006 increased to $185.1 million from $39.1 million for the year ended June 30, 2005. The increase reflects the recognition of $108.0 million of previously deferred revenue that would have been recognized in future periods had the change in business model regarding the customer service practice not occurred in December 2005.
• Net dollar volume of contracts written was $99.8 million for the year ended June 30, 2006 compared to $84.1 million for the prior year.
• Total operating expenses were $85.8 million for the year ended June 30, 2006 compared to $71.7 million for the prior year. The increase was primarily attributable to the increase in net dollar volume of contracts written, an increase in sales and marketing expense due to marketing tests and increased postage and paper costs, an increase in stock option compensation expense of $1.1 million resulting from the application of SFAS No.123(R) in fiscal 2006, an increase in legal expenses of $1.0 million associated with the Australian Competition and Consumer Commission matter, the SEC investigation and the class action lawsuit, and an increase in auditing fees associated with the change in independent registered public accounting firm and restatement of previously issued financial statements.
• Net income was $110.6 million, or $8.76 per diluted common share, for the year ended June 30, 2006 compared to a net loss of $(29.5) million, or $(2.49) per diluted common share, for the prior year.
• Non-GAAP net income was $10.2 million, or $0.81 per diluted common share, for the year ended June 30, 2006 compared to non-GAAP net income of $9.7 million, or $0.79 per diluted common share, for the comparable period in the prior fiscal year.
• Net cash provided by operating activities for the year ended June 30, 2006 was $18.9 million compared to $6.9 million for the prior year.

Outlook
As previously announced, in fiscal 2007, the company expects product and other revenues to decrease as a result of the significant revenue recognition that took place in fiscal 2006 as a result of the change in business model in December 2005.

Danks added, “We have laid the groundwork for fiscal 2007 and, consequently, we are targeting net dollar volume of contracts written to grow between 15 percent and 20 percent for the year. Additionally, we anticipate pre-tax income will grow at a faster rate than net dollar volume of contracts written.”

Conference Call
The company is hosting a conference call today at 1:30 p.m. PT (4:30 p.m. ET). The 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. A telephone replay will be available through September 8, 2006; dial 706-645-9291, and enter access code 5034735.

Safe Harbor Statement

The statements made in this press release regarding (i) iMergent’s prospects for fiscal 2007, (ii) iMergent’s intention to add an eighth sales team, (iii) iMergent’s intention to return to Australia, (iv) iMergent’s expectation that product and other GAAP revenue will decrease as a result of the change in business model in December 2005, (v) iMergent’s goal that net dollar volume of contracts will grow between 15 percent and 20 percent in fiscal 2007, (vi) iMergent’s expectation that pre-tax income will grow at a faster rate than net dollar volume of contracts written (vii) iMergent’s ability to generate new products and initiatives, and other statements that are not historical in nature constitute forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on the current expectations and beliefs of the management of iMergent and 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. Such risks and uncertainties include, without limitation, the Company’s ability to increase the net dollar volume of contracts written; the Company’s ability to continue to evaluate and find ancillary products; the Company’s ability to offer best solutions to its customers, or otherwise provide solutions to customers; the Company’s ability to maintain a very solid customer base; the Company’s ability to have lucrative long term relationships with its customers; that the market for the Company’s products will continue to grow; whether regulatory authorities will bring future actions against the Company; the success of StoresOnline ™ Pro; the continued ability to increase the number of workshops; the ability to maintain and grow net dollar volume of contracts written; the ability of the training center to offer revenue generating opportunities and lower certain training expenses; the ability to expand operating margins; fluctuations in the Company’s operating results because of negative publicity, seasonality, competition and other factors; adverse international or domestic regulatory developments affecting the internet or the Company’s business; the effect of competitive and economic factors and the Company’s reaction to them; possible disruption in commercial activities caused by terrorist activity and armed conflicts; changes in logistics and security arrangements; reduced purchases relative to security expectations; possible disruption in commercial activity as a result of natural disasters or major health concerns including epidemics; continued competitive pressures in the marketplace; the ability of the Company to successfully evolve its products; costs of and developments in the Company’s pending litigation and SEC investigation; the Company’s ability to generate revenue and profits from current strategic partnerships; the Company’s ability to generate cash flow from operating activities and sales of receivables; the Company’s ability to expand current markets and develop new markets and establish profitable strategic partnerships; the Company’s ability to continue to finance extended payment term arrangement customer contracts; whether there is continual demand for the Company’s products and services in its target market of small business and entrepreneurs for assistance in establishing websites; that the Company can successfully adjust its product financing policy, and that such adjustments to the policy will not negatively impact business or revenues; that the Company is able to leverage its business; that the Company does improve margins and can continue to improve margins; that new products and initiatives in the pipeline will be implemented; that new products and initiatives, if implemented, will improve the customer base and margins of the Company; that the Company can broaden its training and education programs as well as offer new products and solutions; that if the Company is able to broaden its training and education programs as well as offer new products and solutions that such actions will have a positive impact on the Company, its customers, its customer relationships, its margins or revenues; and, that the growth strategy undertaken by the Company will be successful. For a more detailed discussion of risk factors that may affect iMergent's operations, please refer to the Company’s Form 10-K for the year ended d June 30, 2005, and its Forms 10-Q for the quarterly periods ended September 30, 2005, December 31, 2005, and March 31, 2006. 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.

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, helping users build a successful Internet strategy to market products, accept online orders, analyze marketing performance, and manage pricing and customers. In addition to software, iMergent offers site development, web hosting, marketing and mentoring 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.