EX-99.1 2 e17858ex99-1.txt PRESS RELEASE Exhibit 99.1 Innotrac Corporation Announces 2004 First Quarter Results ATLANTA, May 10 /PRNewswire-FirstCall/ -- Innotrac Corporation (Nasdaq: INOC) announced today financial results for the first quarter ended March 31, 2004. For the three months ended March 31, 2004, the Company earned $0.02 per share on revenue of $20.0 million and generated $5.0 million in positive cash flow from operations. Revenues were up 9.1% on a year-over-year basis and the Company improved earnings per share by $0.10 versus the first quarter of 2003. Gross margins were 55.3%, up from 52.8% in the same period in 2003. "In the first quarter, we exhibited solid revenue, earnings and cash flow growth. Our business is strengthening along with the economy, and our prospects for further top line and earnings growth remain excellent. Additionally, we capitalized on strong cash flows from operations and further reductions in inventory to reduce outstanding borrowings on our line of credit from $11.8 million at December 31, 2003 to $6.1 million at quarter end," stated David L. Gamsey, Chief Financial Officer. "We are pleased that our focus on operational improvement returned the Company to profitability. With an active new sales pipeline, and our existing clients introducing new products and programs to the market, we believe our potential for growth is strong," stated Scott D. Dorfman, President and Chief Executive Officer. Conference Call Innotrac Corporation will hold a conference call to discuss this release this evening, May 10th, at 5:00 p.m. Eastern Daylight Time. Investors can listen to the conference call live by dialing 1-877-569-0972 (Conference ID: 6956042) or by logging on to www.innotrac.com and clicking on "Webcasts and Presentations" in the "Company" section. The Webcast will be archived and available at the same Web address. Additionally, audio playback will be available at 1-800-642-1687 (Conference ID: 6956042). About Innotrac Innotrac Corporation, founded in 1984 and based in Atlanta, Georgia, is a full-service fulfillment and logistics provider serving enterprise clients and world-class brands. The Company employs sophisticated order processing and warehouse management technology and operates seven fulfillment centers and two call centers in five cities spanning all time zones across the continental United States. For more information about Innotrac, visit the Innotrac Web site, www.innotrac.com . Information contained in this press release, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Innotrac's operating results, performance or financial condition are competition, the demand for Innotrac's services, Innotrac's ability to retain its clients, the state of the telecommunications industry in general, Innotrac's ability to maintain profit margins in the face of pricing pressures and numerous other factors discussed in Innotrac's 2003 Annual Report on Form 10-K and other filings on file with the Securities and Exchange Commission. INNOTRAC CORPORATION Condensed Consolidated Statements of Operations (in thousands, except per share amounts) Three Months Ended March 31, (Unaudited) 2004 2003 Revenues $19,994 $18,334 Total cost of revenues 8,938 8,659 Gross margin 11,056 9,675 Operating expenses: Selling, general and administrative expenses 9,484 9,371 Depreciation and amortization 1,252 1,469 Total operating expenses 10,736 10,840 Operating income (loss) 320 (1,165) Interest expense 93 246 Other - (6) Total other expense 93 240 Income (loss) before income taxes 227 (1,405) Income tax (benefit) - (513) Net income (loss) $227 $(892) Earnings per share: Basic $0.02 $(0.08) Diluted $0.02 $(0.08) Weighted average shares outstanding: Basic 11,626 11,422 Diluted 12,526 11,422 Note: These statements should be read in conjunction with the Company's Form 10-K filed with the Securities and Exchange Commission on March 30, 2004. INNOTRAC CORPORATION Condensed Consolidated Balance Sheets (in thousands) March 31, December 31, 2004 2003 ASSETS (Unaudited) (Audited) Current Assets: Cash $1,368 $2,228 Accounts receivable, net 16,357 15,682 Inventory 6,292 10,896 Prepaid expenses and other 1,304 915 Total current assets 25,321 29,721 Property and equipment, net 14,162 14,750 Goodwill 25,169 25,169 Other assets, net 1,290 1,322 Total Assets $65,942 $70,962 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $5,630 $5,738 Accrued expenses and other 2,982 2,577 Line of credit 6,116 11,802 Total current liabilities 14,728 20,117 Noncurrent Liabilities: Other non-current liabilities 1,071 1,083 Total noncurrent liabilities 1,071 1,083 Total shareholders' equity 50,143 49,762 Total Liabilities and Shareholders' Equity $65,942 $70,962 Note: These statements should be read in conjunction with the Company's Form 10-K filed with the Securities and Exchange Commission on March 30, 2004. INNOTRAC CORPORATION Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) Three Months Ended March 31, 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $227 $(892) Adjustments to net loss: Depreciation and amortization 1,252 1,469 Deferred income taxes - (513) Amortization of deferred compensation 33 18 Withholding tax paid for common shares issued to employees (286) - Changes in working capital: Accounts receivable, net (674) (2,035) Inventory 4,603 3,229 Prepaid assets and other (433) (10) Accounts payable, accrued expenses and other 304 (7,182) Cash provided by operating activities 5,026 (5,916) CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (588) (397) Cash (used in) investing activities (588) (397) CASH FLOWS FROM FINANCING ACTIVITIES: Net (repayments) borrowings under line of credit (5,687) 5,688 Repayment of long term debt (19) (36) Exercise of employee stock options 408 - Issuance of treasury stock - 47 Cash (used in) by financing activities (5,298) 5,699 Net (decrease) increase in cash (860) (614) Cash, beginning of period 2,228 961 Cash, end of period $1,368 $347 Note: These statements should be read in conjunction with the Company's Form 10-K filed with the Securities and Exchange Commission on March 30, 2004. SOURCE Innotrac Corporation -0- 05/10/2004 /CONTACT: David L. Gamsey, Chief Financial Officer of Innotrac Corporation, +1-678-584-4020, or dgamsey@innotrac.com/ /Web site: http://www.innotrac.com / (INOC) CO: Innotrac Corporation ST: Georgia IN: CPR SU: CCA MAV ERN