International Card Establishment, Inc. (I.C.E.) announced its first quarter results. For the quarter ended March 31, 2007, the company generated net revenues of $2,513,997 as compared to net revenues of $2,311,273 for the quarter ended March 31, 2006. For the quarter ended March 31, 2007 and March 31, 2006, the company reported net losses of $(204,454) and $(729,082) $(0.01 per share) and $(0.02 per share), respectively.
Gross profit for the first quarter 2007 rose 37% to $850,947 versus $622,765 for the previous year-ago period and EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) was $157,241. The loss for the quarter included a one-time capital lease write off of $71,000, a $102,000 bad debt expense and costs associated with the company’s internal sales training and recruiting effort.
The 9% increase in net revenues as of March 31, 2007 compared to March 31, 2006 is mainly attributable to an increase of $519,000 in Merchant account residuals, offset by approximately $480,000 decrease in equipment and gift card sales.
General and administrative costs decreased by approximately $179,000 largely due to approximately $301,000 decrease in payroll expenses and $15,000 decrease in rents and other office expenses. These reductions in expenses were largely due to cost cutting measures by management and were offset by an increase in bad debts and merchant losses.
“After incurring a large, approximately $200,000 charge back expense from a single merchant — which we recognized in the last quarter of 2006 and the first quarter of this year — we conducted a thorough underwriting criteria review of our entire merchant portfolio in an effort to upgrade its quality and minimize risks going forward,” said William Lopshire, CEO, I.C.E. “As a result, we closed several accounts that we felt did not conform to our tightened underwriting criteria. While these measures cost the company some short term revenues and profits, we expect that these actions will minimize future charge backs and bad debt expense.” Mr. Lopshire added, “On a more positive note, we have been working with a number of large independent sales organizations and companies toward potential strategic alliances that could significantly enhance revenues. In addition, we continue to recruit new agents and expect to see incremental revenue growth from this sector.”
About I.C.E.
http://www.cardnetone.com
I.C.E. is a rapidly growing provider of diversified products and services to the electronic transaction processing industry. I.C.E. establishes merchant accounts for businesses that enable them to accept credit cards, debit cards and other forms of electronic payments; supplies point-of-sale systems; facilitates processing; and markets a proprietary “Smart Card”-based system that enables merchants to offer store-branded gift and loyalty cards.
