IceWEB: Fiscal 3Q11 Financial Results

IceWEB, Inc. announced results for the fiscal 2011 third quarter period ended June 30, 2011.

Quarterly Highlights and Recent Developments

• IceWEB’s NAS systems received official VMware Ready certification – IceWEB NAS Solutions Certified as compatible with VMware environments and applications
• IceWEB expanded its Model 3000 and 5000 storage platforms with new Hybrid (HB) models – Both models are turnkey, ready-to-deploy and include IceWEB’s all inclusive Storage Operating system which supports both SAN/block and NAS/file requirements in both data center and cloud environments starting under $30,000
• IceWEB expanded its storage line with its new, top-of-the-line, highly-redundant 6000-HR series of Unified Storage Systems – New Feature-Rich 6000-HR (High Reliability) series gives IceWEB significant competitive advantages in the fastest growing, mid- to high-end enterprise storage market
• IceWEB’s line of storage products is available to Federal, State and Local Governments: through Promark Technology’s two-tier GSA Services Agreement

Financial Highlights
In the quarter ending June 30, 2011, the Company reported revenue of $719,727, as compared to quarterly revenue of $1,203,878 for the year-ago period. The year over year revenue was directly impacted by delayed and reduced Federal Government spending. While there continues to be growing interest and demand for IceWEB’s data storage products many of our channel partners’ customers in the public and private sectors have delayed purchasing during the fiscal third quarter that ended June 30, 2011. Historically, the fiscal fourth quarter for the government sector is the strongest for our channel partners and we are hopeful this trend continues.

Gross margin was 47% for the three months ending December 31, 2010, down slightly from 49% in the year earlier period.

For the three month period ending June 30, 2011 the Company reported a non-GAAP loss of $404,935 and a GAAP loss of $698,269, versus a non-GAAP and GAAP loss of $695,512 and $1,423,743, respectively, for the year-ago period. The improved net loss was attributable to significant cost-cutting measures undertaken by the company, in anticipation of the merger with Promark. Operating expenses for the quarter was $932,559, as compared to $1,867,094 in the year ago period, a decrease of 50%. On a non-GAAP basis operating expenses for the quarter was $639,225 versus $1,034,051 for the same period in the prior year.

For the nine months fiscal year to date our total operating expenses decreased approximately 40% to $3,482,289 as compared to $5,822,391 for the nine months ended June 30, 2010.

Acquisition of USI/Promark Technology
As previously announced, IceWEB and Promark Technology continue to work in tandem with its team of consultants, bankers and legal teams to complete the merger initially announced in March 2011.The Company anticipates that the merger with Promark will be completed by the end of this fiscal year and will host a conference call to provide shareholders details of the merger and allow shareholders the opportunity to speak directly to the combined management team. The combined company’s revenue would have exceeded $23m for the quarter ended June 30th. Typically, the September quarter tends to be the largest quarter for both companies due to year-end Government spending.

John R. Signorello, Chairman and CEO, stated: "IceWEB continued its significant product development and R&D efforts during the quarter as we prepare to close the transaction with Promark. We are especially encouraged by our progress in product development, as we expect to see revenue growth from the recent VMware certifications, as well as the launch of the 6000 series family of products. These developments demonstrate the effectiveness of our continued product line expansion, technology developments, and our calculated decision to invest in R&D and engineering support to spur present and future growth."