IBSG International Announces Fourth Quarter and 2005 Year-End Financial Results; Full Year Revenue Tops $7.6 Million; Sixth Straight Quarter of Profitability; Earnings Per Share Increases $0.13 From 2004 to 2005.CELEBRATION, Fla. -- IBSG IBSG Internet Business Solutions Group IBSG Internetwork Broadcast Sub-Group (ATM Forum, MPOA SWG) International Will Host a Conference Call Today at 11:00Am EST EST electroshock therapy. EST abbr. electroshock therapy IBSG International, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :IGII IGII Islamic Government Investment Issue (Malaysian securities) ) a holding company for three software subsidiaries, announced today its financial results for fourth quarter and year-end 2005. Revenue for the three months ended December 31, 2005 reached $3.8 million, more than triple the $1.0 million for the last quarter of 2004. Similarly, gross profit climbed to $3.7 million up more than 370% from $1.0 million in the three months ended December 31, 2004. This was the Company's sixth consecutive profitable quarter. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the fourth quarter of 2005 rose more than nine-fold to $2.2 million from $202,329 in the same period prior year. Net income grew by a similar multiple, surpassing $1.9 million, $0.04 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, in the last three months of 2005 compared with $198,424, or $0.01 per basic share, in the same period of 2004. Dr. Michael Rivers, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of IGII stated: "Fourth quarter 2005 represented a break-through for IBSG International and its subsidiaries. The going concern statement has been removed from our financials. The period accounted for roughly half our revenues and gross profit, and about three-quarters of our net income for the year. Also during that time, we set the stage for our achievements of first quarter 2006. We created and announced our partnership with South Africa-based Global Eagle Strategic Empowerment em·pow·er tr.v. em·pow·ered, em·pow·er·ing, em·pow·ers 1. To invest with power, especially legal power or official authority. See Synonyms at authorize. 2. Alliance Systems and Galaxy Five (PTY Pty Austral & S African Proprietary ) LTD LTD 1 Laron-type dwarfism 2 Leukotriene D 3 Long-term depression, see there 4. Long-term disability . of Johannesburg that led directly to our projected $37 million (license and subscription fees) agreement with South Africa's Department of Industrial Development Corporation (IDC) to secure, implement, and promote the economic development trading platform, BizWorldPro(TM), in the Johannesburg region - which was expanded shortly thereafter at the South African government's request to cover the entire nation." Rivers continued: "The fourth quarter of 2005 was also the period in which we were preparing for the opening of our technical center in Ahmedabad, India. This will not only save us $30,000 annually but also will allow us to service our client base around the Indian Ocean Indian Ocean, third largest ocean, c.28,350,000 sq mi (73,427,000 sq km), extending from S Asia to Antarctica and from E Africa to SE Australia; it is c.4,000 mi (6,400 km) wide at the equator. It constitutes about 20% of the world's total ocean area. much more readily than would be the case from North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . It is a valuable selling point selling point n. An aspect of a product or service that is stressed in advertising or marketing. Noun 1. selling point - a characteristic of something that is up for sale that makes it attractive to potential customers as we continue discussions with the Malaysian government and the UAE (Uninterruptible Application Error) The name given to a crash in Windows 3.0. In subsequent versions of Windows, a crash was called a "General Protection Fault," "Application Error" or "Illegal Operation." See crash in Windows and abend. for a project very similar to our South African initiative." He also said: "Since the quarter ended, we have continued progressing in the implementation of our business strategy. We have arranged to buy A Division IT, a move that will effectively make us a subcontractor One who takes a portion of a contract from the principal contractor or from another subcontractor. When an individual or a company is involved in a large-scale project, a contractor is often hired to see that the work is done. on BAE System's numerous offset credit projects, such as the Malaysian initiative, throughout the developing world and provide a broad network of contracts in Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. , China and Europe. We are working with the State of Connecticut Small Business Development Center (CSBDC CSBDC Commonwealth Small Business Development Corporation (Frankfort, KY) ) and have launched the implementation of our digital management solution for use within the state's SBDC SBDC Small Business Development Center SBDC South Bucks District Council (UK) SBDC Small Business Development Company (Trinidad and Tobago) SBDC Simulation Based Design Center network. We also have simplified our receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed situation with regard to our business in Nigeria by selling the CAC See Consumer Advisory Council. contract to South Africa-based Galaxy Five (pty), Ltd." Rivers concluded, "We have put in place many of the internal structures and made the necessary alliances to pursue our global business plan, and we have every reason to believe that the fourth quarter of 2005 marks the beginning of a significant growth period at IBSG International and its subsidiaries." For the full year 2005 sales reached $7.65 million compared with $3.3 million for all of 2004. Gross profit was $7.2 million in 2005 against $3.1 million in 2004. Operating income in 2005 was $3.0 million while the Company had a loss of $2.2 million in 2004. Net income for 2005 was $2.5 million, or $0.06 per basic share; in 2004, there was a $2.4 million loss, or $0.07 per basic share loss. Management of IBSG International will host a conference call today at 11 A.M. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss the company's financial results and achievements. Those who wish to participate in the conference call may telephone (888) 335-6674, PIN # 7257828 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 US, or (973) 341-3080, for international callers, and entering PIN # 7257828. About IBSG International, Inc. IBSG International, Inc. is a holding company for three software subsidiaries: Intelligent Business Systems Group, Inc. (IBSG), a provider of turnkey See turnkey system. digital service center software; Secure Blue, Inc., a Sarbanes-Oxley and security software solution provider and Intelligent Business Systems Development (IBSD IBSD ion beam sputter deposition IBSD Integrated Business Systems Division (Cannon) IBSD Ion Backscatter Diffraction ), a software development, maintenance and data storage company. 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 (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business , 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 (1) (Schema for Object-oriented XML) An XML schema developed by Veo Systems and Muzino Communications, which was submitted to the W3C. SOX is based on DTD, but adds data typing and reuse mechanisms. ) 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 See systems integrator. 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 in·var·i·a·ble adj. Not changing or subject to change; constant. in·var  i·a·bil renewed upon expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute.2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created ; to date the company has had only one licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. 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 IBS Irritable bowel syndrome, see there Group and Secure Blue. The company provides development, system support and secure data storage, and will maintain offices in the US and India, where its current offshore development and support team is located. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Statements of Operations
Audited
Year Ended December 31
2005 2004(Restated)
----------- --------------
Sales $ 7,651,064 $ 3,295,014
Cost of Sales 410,726 223,293
----------- --------------
Gross Profit 7,240,338 3,071,721
Operating Expenses
Amortization and Depreciation 39,685 30,757
Stock-base compensation 1,802,581 1,450,338
Bonus share expense 19,200 2,445,843
Bad debt expense - -
Bad debt expense - related party 9,007 171,072
Professional Fees 717,052 -
Salary / Wages 538,549 -
General and Administration 1,092,368 1,139,555
----------- --------------
Total Operating Expenses 4,218,442 5,460,858
----------- --------------
Income (Loss) from Operations 3,021,896 (2,165,844)
----------- --------------
Other Income (Expense)
Gain on debt settlement 52,317 -
Loss on extinguishment of debt -
related party - (156,765)
Loss on extinguishment of asset (8,266) -
Interest expense (456,251) (38,876)
Tax Provision (104,500)
----------- --------------
Total Other Income (Expense), net (516,700) (195,641)
----------- --------------
Net Income (Loss) $ 2,505,196 $(2,361,485)
Net Income (Loss) Per Share
Basic $ .06 $ (0.07)
Diluted $ .05 $ --
Weighted average number of shares
outstanding during the period
Basic 44,841,613 32,399,692
Diluted 48,370,611 --
IBSG International, Inc. and Subsidiaries
Consolidated Balance Sheet
December 31, 2005
Audited
ASSETS
Current Assets
Cash $ 1,297,449
Accounts receivable $10,638,379
Related Party receivable 0
Prepaids 616,440
-----------
Total Current Assets $12,552,268
-----------
Equipment, net $ 922,371
Other Assets
Prepaids $ 9,091
Deposits 1,400
Deferred Consulting Services 4,731,697
-----------
Total Other Assets $ 4,742,188
-----------
Total Assets $18,216,827
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 873,687
Accrued interest payable 55,425
Deferred revenue 1,256,422
Capital leases payable 14,086
Convertible promissory note payable, net 395,890
-----------
Total Current Liabilities $ 2,595,510
Commitments and Contingencies
Stockholders' Equity
Common stock, $0.001 par value,
100,000,000 shares authorized
64,843,302 shares issued and
outstanding $ 60,399
Additional paid-in capital 15,794,055
Accumulated deficit (233,137)
-----------
Total Stockholders' Equity $15,621,317
-----------
Total Liabilities and Stockholders' Equity $18,216,827
===========
IBSG International, Inc. and Subsidiaries
Consolidated Statements of Operations
Additional Financial Records
Three Months ended December 31
2005 2004
----------- -----------
Sales $ 3,812,377 $ 1,017,147
Cost of Sales 88,885 4,388
----------- -----------
Gross Profit 3,723,492 1,012,759
Operating Expenses
Amortization and Depreciation 29,616 123,956
Stock-base compensation 652,652 511,101
Bonus share expense - -
Bad debt expense - -
Bad debt expense - related party - -
Professional Fees 208,902 27,103
Salary / Wages 6,435 138,769
General and Administration 635,157 9,501
----------- -----------
Total Operating Expenses 1,532,762 810,430
----------- -----------
Income (Loss) from Operations 2,190,730 202,329
----------- -----------
Other Income (Expense)
Gain on debt settlement - -
Loss on extinguishment of debt -
related party - -
Loss on extinguishment of asset (8,266) -
Interest expense (162,154) (3,905)
Tax Provision (104,500)
----------- -----------
Total Other Income (Expense), net (274,920) (3,905)
----------- -----------
Net Income (Loss) $ 1,915,810 $ 198,424
Net Income (Loss) Per Share
Basic $ 0.04 $ 0.01
Diluted $ 0.04 $ ---
Weighted average number of shares
outstanding during the period
Basic 44,841,613 36,098,130
Diluted 48,370,611 --
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