8-K

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 16, 2009

 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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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 16, 2009, Innotrac Corporation ("Innotrac") issued a press release to announce its financial results for the third quarter ended September 30, 2009. 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

(d)	Exhibits
Exhibit No.	Description
99.1	Innotrac Corporation press release dated November 16, 2009, announcing Innotrac’s financial results for the third quarter ended September 30, 2009 (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
	/s/ Scott D. Dorfman
Date:  November 16, 2009	Scott D. Dorfman President, Chairman and Chief Executive Officer

EX-99.1

Exhibit 99.1

Innotrac Corporation Announces 2009 Third Quarter Results

ATLANTA, GA (November 16, 2009) – Innotrac Corporation (NASDAQ-GM: INOC) announced financial results today for the third quarter and nine months ended September 30, 2009.  The Company reported revenues of $22.3 million for the quarter versus $32.0 million reported in the comparable period in 2008, a decrease of 30.4%.  The decrease in revenue for the three months ended September 30, 2009 as compared to the same period in 2008 was due to a $5.7 million decrease in service revenue and a $4.0 million decrease in freight revenue, which has no material impact on our operating profitability due to pricing practices for direct freight costs.  The decrease in service revenue for the quarter resulted from a $3.7 million decrease in service revenue from our DSL vertical mainly due to the completed transition of a portion of the AT&T fulfillment business to AT&T’s in-house fulfillment in mid June 2009 and a $2.0 million net decrease in service revenues for our other customer verticals.

For the nine months ended September 30, 2009, the Company reported revenues of $78.6 million compared to $94.2 million for the same period in 2008, a decrease of 16.6%.  The decrease in revenue for the nine months ended September 30, 2009 as compared to the same period in 2008 was due to a $5.9 million decrease in service revenue and a $9.7 million decrease in freight revenue, which has no material impact on our operating profitability due to pricing practices for direct freight costs. The decrease in service revenue for the nine months resulted from a $3.5 million decrease in revenue from our DSL vertical mainly due to the completed transition of a portion of the AT&T fulfillment business to AT&T’s in-house fulfillment in mid June 2009 and a $2.4 million net decrease in service revenues for our other customer verticals.

The Company reported a loss of $78,000, or ($0.01) per share, fully diluted, for the three months ended September 30, 2009, compared to net income of $829,000 or $0.07 per share in the comparable period of 2008.  For the nine months ended September 30, 2009, the Company reported net income of $3.7 million, or $0.29 per share, fully diluted, compared to net income of $2.7 million, or $0.21 per share, in the same period in 2008.

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 one call center in six cities spanning all time zones across the continental United States.  For more information about Innotrac, visit the Innotrac Website, www.innotrac.com.

Information contained in this press release, other than historical information, may be considered forward-looking in nature.  Forward-looking statements in this press release include our expectations for future progress in our business and future generation of cash flows.  Forward-looking statements are 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 current clients, Innotrac’s success in growing its existing client base, developing new business, reducing operating costs in response to reduced service revenues, realization of expected revenues from new clients, the general state of the  industries that the Company serves, changing technologies, Innotrac’s ability to maintain profit margins in the face of pricing pressures and numerous other factors discussed in Innotrac’s 2008 Annual Report on Form 10-K and other filings on file with the Securities and Exchange Commission.  Innotrac disclaims any intention or obligation to update or revise any forward-looking statement whether as a result of new information, future events or otherwise.

Contact

George Hare

Chief Financial Officer

678-584-4020

ghare@innotrac.com

###

INNOTRAC CORPORATION
Condensed Statements of Operations
(in thousands, except per share amounts)
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	(Unaudited)					(Unaudited)
	2009			2008		2009		2008
Service revenue	$	19,402		$	25,138	$	68,109	$	74,028
Freight revenue		2,856			6,863		10,515		20,213
Total revenue		22,258			32,001		78,624		94,241
Cost of service revenues		8,625			11,532		29,612		34,190
Freight expense		2,856			6,757		10,401		20,022
Selling, general and
administrative expenses		9,564			11,419		31,142		33,081
Depreciation and amortization		1,082			1,106		3,398		3,178
Total operating expenses		22,127			30,814		74,553		90,471
Operating income		131			1,187		4,071		3,770
Interest expense		42			358		207		1,084
Total other expense		42			358		207		1,084
Income before income taxes		89			829		3,864		2,686
Income tax		167			-		167		-
Net (Loss) income	$	(78	)	$	829	$	3,697	$	2,686
(Loss) earnings per share:
Basic	$	(0.01	)	$	0.07	$	0.29	$	0.21
Diluted	$	(0.01	)	$	0.07	$	0.29	$	0.21
Weighted average shares
outstanding:
Basic		12,601			12,598		12,601		12,590
Diluted		12,601			12,620		12,601		12,612

INNOTRAC CORPORATION

Condensed Balance Sheets

(in thousands)

	September 30,		December 31,
	2009		2008
ASSETS	(Unaudited)
Current Assets:
Cash	$	965	$	1,056
Accounts receivable (net of allowance for doubtful accounts of  $234 at September 30, 2009 and $271 at December 31, 2008)		15,038		25,793
Inventory		2,545		1,855
Prepaid expenses and other		1,228		1,262
Total current assets		19,776		29,966
Property and equipment, net		13,891		15,842
Goodwill		25,169		25,169
Other assets, net		1,053		822
Total assets	$	59,889	$	71,799
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	4,564	$	9,259
Line of credit		-		10,055
Accrued expenses and other		3,602		5,253
Total current liabilities		8,166		24,567
Noncurrent Liabilities:
Equipment lease payable		434		-
Other noncurrent liabilities		880		753
Deferred income taxes-non current		167		-
Total noncurrent liabilities		1,481		753
Total shareholders' equity		50,242		46,479
Total liabilities and shareholders' equity	$	59,889	$	71,799

INNOTRAC CORPORATION

Condensed Statements of Cash Flows

(in thousands)

	Nine Months Ended
	September 30, (Unaudited)
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,697		$	2,686
Adjustments to net income:
Depreciation and amortization		3,398			3,178
Loss on disposal of fixed assets		9			-
Provision for bad debts		41			-
Stock compensation expense-stock options		10			59
Stock compensation expense-restricted stock		56			56
Deferred income taxes		167			-
Changes in working capital:
Accounts receivable, gross		10,714			3,246
Inventory		(690	)		(610	)
Prepaid assets and other		69			(101	)
Accounts payable, accrued expenses and other		(6,585	)		(4,631	)
Net cash provided by operating activities		10,886			3,883
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(845	)		(2,381	)
Net change in noncurrent assets and liabilities		12			51
Cash used in investing activities		(833	)		(2,330	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under line of credit		(10,055	)		2,946
Repayment of term loan		-			(5,000	)
Issuance of stock, net		-			42
Proceeds from financing lease		62			-
Loan commitment fees		(151	)		-
Cash used in financing activities		(10,144	)		(2,012	)
Net decrease in cash		(91	)		(459	)
Cash, beginning of period		1,056			1,079
Cash, end of period	$	965		$	620