-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PoTaNdYdhqTAkLTtpdGsYetYXzrbQz+QSMmGydgkaYfBOISx8at97J5XvHN9RYwm vcO8LlugkW/HK+T+iwWbbw== 0000891092-04-005350.txt : 20041104 0000891092-04-005350.hdr.sgml : 20041104 20041103180746 ACCESSION NUMBER: 0000891092-04-005350 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041103 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041104 DATE AS OF CHANGE: 20041103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INNOTRAC CORP CENTRAL INDEX KEY: 0001051114 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 581592285 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23741 FILM NUMBER: 041117490 BUSINESS ADDRESS: STREET 1: 6655 SUGARLOAF PARKWAY CITY: DULUTH STATE: GA ZIP: 30097 BUSINESS PHONE: 678-584-4000 MAIL ADDRESS: STREET 1: 1828 MECA WAY CITY: NORCROSS STATE: GA ZIP: 30093 8-K 1 e19600_8k.txt FORM 8K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported) November 3, 2004 INNOTRAC CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Georgia - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 000-23741 58-1592285 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 6655 Sugarloaf Parkway Duluth, Georgia 30097 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (678) 584-4000 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Not Applicable - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On November 3, 2004, Innotrac Corporation ("Innotrac") issued a press release to announce its financial results for the third quarter of 2004. A copy of the press release is attached as Exhibit 99.1. The information in this Report, including the Exhibit attached hereto, is furnished solely pursuant to Item 2.02 of this Form 8-K. Consequently, it is not deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits Exhibit No. Description ----------- ----------- 99.1 Innotrac Corporation press release dated November 3, 2004, announcing Innotrac's financial results for the third quarter of 2004 (furnished pursuant to Item 2.02 of this Form 8-K). SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. INNOTRAC CORPORATION By: /s/ David L. Gamsey --------------------------- David L. Gamsey Senior Vice President, Chief Financial Officer and Date: November 3, 2004 Secretary EX-99.1 2 e19600ex99_1.txt PRESS RELEASE Exhibit 99.1 Innotrac Corporation Announces 2004 Third Quarter and Nine Month Results ATLANTA, Nov. 3 /PRNewswire-FirstCall/ -- Innotrac Corporation (Nasdaq: INOC) announced financial results today for the third quarter ended September 30, 2004. For the three months ended September 30, 2004, the Company generated revenues of $17.6 million versus $18.5 million for the comparable period in 2003, a decline of 4.9%. This decline was primarily attributable to higher than expected softness in the direct response business line and the conclusion of two programs for one of our major clients. During the past two quarters, Innotrac has signed contracts with several new clients, which we anticipate will offset this decline. Innotrac went live and began shipping for the majority of these clients in October. Seasonal slowness and the start-up costs associated with the new client implementations resulted in a loss per share of $0.03 for the third quarter ended September 30, 2004 versus a loss per share of $0.02 in the comparable period of 2003. For the nine months ended September 30, 2004, the Company generated revenues of $57.4 million versus $54.5 million for the comparable period in 2003, an increase of 5.4%. Innotrac produced $8.4 million in cash flows from operations for the nine months ended September 30, 2004 compared to a $2.1 million usage of cash in the first nine months of 2003. Earnings per share for the nine months ended September 30, 2004 was breakeven versus a loss of $0.13 in the comparable period of 2003. On October 21, 2004, Tactica International, Inc. ("Tactica"), one of the Company's direct response clients, filed for Chapter 11 bankruptcy protection. As part of this filing, Innotrac and Tactica have entered into a court approved Stipulation Agreement whereby Tactica has acknowledged the validity of Innotrac's receivable and Innotrac's associated first security interest in Tactica's inventory. This agreement will allow Innotrac to continue providing services to Tactica on a prepaid basis while pursuing recovery of its full $2.7 million receivable, against which there is an existing $1.5 million reserve. We hope to recover a substantial portion of the receivable but it is too early in Tactica's Chapter 11 proceeding to predict the ultimate recovery. "The third quarter of 2004 was an exciting but challenging period for Innotrac. Despite higher than expected seasonal slowness and the start-up costs associated with implementing several new enterprise clients and opening a new facility in Delaware, we generated solid operational cash flows. Most of these expenses are now behind us and we are now gearing up for the holiday shipping season," stated Scott D. Dorfman, President and Chief Executive Officer. Conference Call Innotrac Corporation will hold a conference call to discuss this release this evening, November 3rd, at 5:00 p.m. Eastern Standard Time. Investors can listen to the conference call live by dialing 1-877-569-0972 (Conference ID: 1461796) or by logging on to http://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: 1461796). 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 eight fulfillment centers and two call centers in six cities spanning all time zones across the continental United States. For more information about Innotrac, visit the Innotrac Web site, http://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. Without limitation, statements in this press release concerning future revenues from new clients, future results of operations, future general economic conditions and our ability to collect amounts owed to us by Tactica are forward-looking statements. 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 (unaudited) (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 Revenues $17,631 $18,545 $57,433 $54,510 Cost of revenues 8,756 8,548 26,670 25,706 Gross profit 8,875 9,997 30,763 28,804 Operating expenses: Selling, general and administrative expenses 7,931 8,819 26,574 26,332 Depreciation and amortization 1,283 1,358 3,905 4,289 Total operating expenses 9,214 10,177 30,479 30,621 Operating income (loss) (339) (180) 284 (1,817) Interest expense 63 180 234 581 Other - 1 - (5) Total other expense 63 181 234 576 Income (loss) before income taxes (402) (361) 50 (2,393) Income tax (benefit) - (112) - (859) Net income (loss) $(402) $(249) $50 $(1,534) Earnings per share: Basic $(0.03) $(0.02) $0.00 $(0.13) Diluted $(0.03) $(0.02) $0.00 $(0.13) Weighted average shares outstanding: Basic 11,905 11,584 11,843 11,498 Diluted 11,905 11,584 12,540 11,498 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) September 30, December 31, 2004 2003 ASSETS (Unaudited) (Audited) Current Assets: Cash $1,456 $2,228 Accounts receivable (net of allowance for doubtful accounts of $1,897 at September 30, 2004 and $1,696 at December 31, 2003) 17,055 15,682 Inventory 4,611 10,896 Prepaid expenses and other 2,500 915 Total current assets 25,622 29,721 Property and equipment, net 13,087 14,750 Goodwill 25,169 25,169 Other assets, net 1,207 1,322 Total assets $65,085 $70,962 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $5,875 $5,738 Accrued expenses and other 3,491 2,577 Line of credit 4,348 11,802 Total current liabilities 13,714 20,117 Noncurrent Liabilities: Other non-current liabilities 1,028 1,083 Total noncurrent liabilities 1,028 1,083 Total shareholders' equity 50,343 49,762 Total liabilities and shareholders' equity $65,085 $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 Nine Months Ended September 30, September 30, 2004 2003 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $(402) $(249) $50 $(1,534) Adjustments to net loss: Depreciation and amortization 1,283 1,358 3,905 4,289 Loss on impairment or disposal of fixed assets 6 1 106 1 Deferred income taxes - (302) - (1,049) Amortization of deferred compensation 18 18 68 54 Changes in working capital: Accounts receivable, net (175) 1,679 (1,373) (796) Inventory 385 1,418 6,285 8,460 Prepaid assets and other (763) (794) (1,690) 58 Accounts payable, accrued expenses and other 195 (684) 1,062 (11,557) Cash provided by (used in) operating activities 547 2,445 8,413 (2,074) CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (795) (363) (2,112) (1,018) Acquisition of business, net of cash acquired - (5) - (181) Cash (used in) investing activities (795) (368) (2,112) (1,199) CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings (repayments) under line of credit 262 (2,016) (7,455) 2,619 (Payment) of capital lease obligation (25) (28) (65) (100) Loan commitment fees - - (15) (31) Exercise of employee stock options 105 537 748 1,009 Stock reacquired to settle employee stock bonus withholding tax obligation - - (286) - Issuance of treasury stock - - - - Cash (used in) provided by financing activities 342 (1,507) (7,073) 3,497 Net (decrease) increase in cash 94 570 (772) 224 Cash, beginning of period 1,362 615 2,228 961 Cash, end of period $1,456 $1,185 $1,456 $1,185 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- 11/03/2004 /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; Tactica International, Inc. ST: Georgia IN: CPR MLM SU: ERN CCA MAV -----END PRIVACY-ENHANCED MESSAGE-----