Internet Commerce Corporation Announces Financial Results for Third Quarter Fiscal Year 2006

Norcross, Georgia – June 9, 2006 - Internet Commerce Corporation (ICC) (NasdaqCM: ICCA), a leader in business-to-business e-commerce solutions, today announced financial results for its fiscal third quarter ended April 30, 2006.

"Over the last year, we have achieved both revenue growth and increased profitability,” said Thomas J. Stallings, chief executive officer of ICC. “By doing so, we demonstrate our myopic focus on enhancing value to customers, partners and shareholders with our ‘Growth with Profitability’ strategy. Our most recent acquisition reaffirms our commitment to leveraging our expertise in supplier enablement, building services leadership with an unmatched portfolio and maintaining a leadership position in the industry.”

Stallings continued, “ICC is investing in sales and marketing, deploying development to optimize underlying technologies, streamlining customer and technical support and continuing to look for synergistic acquisitions. All of these actions will capitalize on the potential we have to increase our market share and offer unique value with our products, services and support. We are positioning ICC for staying power in a competitive environment.”

Third Quarter Fiscal 2006 Results
Third quarter revenue from continuing operations in fiscal 2006 were $4.54 million, up 3% compared with the third quarter of fiscal 2005 revenues of $4.39 million. Net income was $550 thousand compared with net income of $296 thousand a year ago, an increase of 86%. Basic and diluted income per common share of $0.02 from continuing operations compared with basic and diluted income of $0.01 per common share in the same period of fiscal 2005.

In the ICC.NET™ segment, third quarter revenues from continuing operations were $2.96 million, up 8% from $2.74 million in the fiscal 2005 period.  This revenue represented 65% of consolidated revenue in the third quarter compared to 62% of consolidated revenue in the year ago period. Revenues from the Service Bureau segment were $1.58 million, a decrease of 4% compared to $1.65 million in the third quarter of fiscal 2005. This revenue represented 35% of consolidated revenue in the third quarter compared to 38% of consolidated revenue in the year ago period. Total expenses from continuing operations decreased 1% in third quarter fiscal 2006 from the prior-year period to $4.05 million from $4.11 million. 

Nine Month Fiscal 2006 Results
For the nine months ended April 30, 2006, revenues from continuing operations totaled $14.57 million, up 25% compared with the first nine months of fiscal 2005 revenues of $11.63 million. Net income was $1.64 million compared to a net loss of $394 thousand for the same period in fiscal 2005. Basic and diluted income per common share from continuing operations was $0.07 compared with a loss of $0.04 per common share for both basic and diluted shares for the nine month fiscal 2005 period. 

In the ICC.NET segment, nine month revenues from continuing operations were $9.11 million, up 10% from $8.31 million the same fiscal 2005 period. This revenue represented 63% of consolidated revenue in the first nine months of fiscal 2006 compared to 71% of consolidated revenue in the year ago period. Revenues from the Service Bureau segment were $5.45 million, an increase of 64% compared with $3.32 million in the first nine months of fiscal 2005. This revenue represented 37% of consolidated revenue compared to 29% of consolidated revenue in the year ago period. Total expenses increased 7% in first nine months of fiscal 2006 from the prior-year period to $12.95 million from $12.05 million principally as a result of the additional costs from the Kodiak Group Inc.’s operations. 

The Company ended the first nine months of fiscal 2006 with over $8.3 million of cash on hand.

Business Outlook
Historically, the second and third quarters generate the lowest revenue in the fiscal year while the first and fourth quarters generate the highest. This fiscal year is expected to follow the historical track with a strong fourth quarter. Future revenue performance will include contribution from the acquisition of Enable Corp.

Based on the current business outlook, ICC anticipates fiscal year 2006 revenues to be approximately $19.75 million, an increase of 18% over fiscal year 2005, with a gross margin of approximately $12.7 million, an increase of 19% over the prior fiscal year period. Operating expenses for fiscal year 2006 are anticipated to increase slightly to approximately $10.98 million from $10.44 million in fiscal year 2005. The resulting net income for fiscal year 2006 is anticipated to be in the range of approximately $2.5 million to $2.65 million. Basic and diluted income per common share from continuing operations is anticipated to be approximately $0.10 to $0.08 compared with a loss of $0.01 per basic and diluted common share for the fiscal 2005 period.

About Internet Commerce Corporation (ICC)
Internet Commerce Corporation (NasdaqCM: ICCA), headquartered in Norcross, Georgia, is a leader in providing business-to-business e-commerce solutions. Thousands of customers rely on ICC's comprehensive line of solutions, in-depth expertise, and unmatched customer service to help balance cost, fit, and function required to meet unique requirements for trading partner compliance, coordination, and collaboration.  With its software solutions, network services, hosted web applications, managed services, and consulting services, ICC is the trusted provider of e-commerce solutions for businesses, regardless of size and level of technical sophistication, to connect them with their trading communities.  For more information, visit www.icc.net.

Except for the historical information contained herein, this press release includes forward looking statements which are subject to a number of risks and uncertainties, including the risks and uncertainties associated with rapidly changing technologies such as the Internet, the risks of technology development and the risks of competition. Actual results could differ materially. For more information about these risks and uncertainties, see the SEC filings of Internet Commerce Corporation.