EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm  

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

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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