Internet Commerce Corp. Announces Financial Results for Fourth Quarter and Year End Fiscal 2006

Norcross, Georgia – October 16, 2006 - Internet Commerce Corporation (ICC) (NasdaqCM: ICCA), a leader in business-to-business e-commerce solutions, today announced financial results for its fiscal fourth quarter and year ended July 31, 2006.

In announcing the results, Thomas J. Stallings, chief executive officer, said, "ICC’s performance for fiscal year 2006 demonstrates continued progress with our ‘Growth with Profitability’ strategy. I am pleased to report another historic year with revenue of $19.8 million, net income of $2.98 million and earnings per share of $0.12. Those results validate the strategic execution in recent years and show strength in our approach to managing the business. We remain committed to growing the business through investments in acquisitions and organic growth initiatives and driving performance that produces solid returns for our investors.”

Fourth Quarter Fiscal Year 2006 Results

Fourth quarter revenue from continuing operations in fiscal 2006 was approximately $5.2 million compared with our fourth quarter of fiscal 2005 revenues of approximately $5.1 million. Net income was $1.3 million, up 112% compared with net income of $628,000 a year ago. Basic and diluted earnings per common share from continuing operations increased to $0.06 compared with basic and diluted earnings of $0.03 per common share in the same period of fiscal 2005.

The Company’s total gross profit margin from continuing operations improved to 70.3% in fourth quarter fiscal 2006 from 61.7% in the fourth quarter of last fiscal year, and total expenses from continuing operations increased 5% in fourth quarter fiscal 2006 from the prior-year period to $4.7 million from $4.4 million. The increase in expenses during the quarter was driven by the acquisition of ENABLE Corporation.

Fiscal Year 2006 Results

For the fiscal year ended July 31, 2006, revenues from continuing operations totaled approximately $19.8 million, up 18% compared with fiscal year 2005 revenues of $16.7 million. Net income was approximately $2.98 million compared to a net income of $234,000 for fiscal year 2005, an increase of 1,172%. Basic and diluted income per common share from continuing operations was $0.12 compared with a loss of $0.01 per basic and diluted common share for fiscal year 2005. 

Fiscal year 2006 revenue growth of 18% was driven by both business segments. In the ICC.NET™ segment, fiscal year revenues from continuing operations were approximately $12.8 million, up 13% from approximately $11.3 million for the same fiscal 2005 period. This revenue represented 65% of consolidated revenue in the fiscal year 2006 compared to 67% of consolidated revenue in the fiscal year 2005. Revenues from the Service Bureau segment were approximately $7.0 million, an increase of 30% compared with $5.4 million in fiscal year 2005. This revenue represented 35% of consolidated revenue compared to 33% of consolidated revenue in fiscal year 2005.

The Company’s total gross profit margin from continuing operations improved to 65.7% in fiscal 2006 from 63.8% in fiscal year 2005, and total expenses from continuing operations increased 7% in fiscal year 2006 from the prior-year period to approximately $17.6 million from approximately $16.5 million. 

The company ended fiscal 2006 with approximately $7 million of cash on hand, up from approximately $4 million at the end of fiscal 2005. The balance sheet remains strong with current assets ending at approximately $11 million and current liabilities at approximately $2.1 million. The company believes it is well positioned to take advantage of investment opportunities.

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.