EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
EXHIBIT 99.1
 
Innotrac Corporation Announces 2009 Fourth Quarter and Year End Results

ATLANTA, GA (March 31, 2010) – Innotrac Corporation (NASDAQ-GM: INOC) announced financial results today for the fourth quarter and year ended December 31, 2009.  The Company reported revenues of $21.3 million for the quarter versus $37.2 million reported in the comparable period in 2008.  For the year ended December 31, 2009, the Company reported revenues of $100.0 million compared to $131.4 million in 2008.  The decrease in revenue for the year ended December 31, 2009 was primarily due to the loss of two large fulfillment service contracts, AT&T Fast Access DSL modem business at the end of June 2009 and the liquidation of the Smith & Hawken, LLC by its parent company in the third quarter of 2009 combined with lower than projected volumes in the 4th quarter from our existing customers due to general economic conditions.

The Company reported operating earnings of $2.7 million, before a fourth quarter 2009 one-time, non-cash goodwill impairment charge of $25.2 million, for the year ended December 31, 2009 compared to operating earnings of $4.5 million for the year ended December 31, 2008.  After recording the one-time, non-cash goodwill impairment charge, the Company reported a net loss of $(22.7) million, or $(1.80) per share, for the year ended December 31, 2009 compared to a net profit of $3.3 million, or $0.26 per share for the year ended December 31, 2008.  For the fourth quarter ended December 31, 2009 the Company reported a net loss of $(26.4) million, or $(2.09) per share, after the fourth quarter 2009 one-time, non-cash goodwill impairment charge, compared to a net profit for the fourth quarter of 2008 of $592,000, or $0.05 per share.  The operating earnings of $2.7 million for the year ended December 31, 2009, before the fourth quarter 2009 one-time, non-cash goodwill impairment charge of $25.2 million, is calculated by adding the $25.2 million impairment charge back to our reported operating loss of $22.4 million presented in the condensed statement of operations for the year ended December 31, 2009 included in this press release.

   
Twelve Months Ended
  
   
December 31,
  
   
Audited
  
   
2009
    
2008
  
Operating (loss), income
   $ (22,438 )   $ 4,509  
                 
One-time, non-cash goodwill impairment charge
     25,169       -  
                 
Operating income before one-time non-cash goodwill impairment charge
   $ 2,731     $ 4,509  
 
The one-time, non-cash goodwill impairment charge of $25.2 million recorded in the 4th quarter of 2009 was determined in accordance with the requirements of Generally Accepted Accounting Principles during the Company’s annual review for impairment performed in the fourth quarter.  Since the goodwill impairment charge is a non-cash expense, it does not affect the company’s liquidity.  The Company completed 2009 with $1.1 million of cash on its balance sheet and no debt under its $15.0 million bank credit facility.

 
 
 

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 a 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 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 Annual Report on Form 10-K for the fiscal year ending December 31, 2009 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
    
Twelve Months Ended
  
   
December 31,
    
December 31,
  
   
(Unaudited)
    
(Audited)
  
   
2009
    
2008
    
2009
    
2008
  
Service revenue
   $ 19,253     $ 30,461     $ 87,362     $ 104,487  
Freight revenue
     2,080       6,699       12,595       26,913  
Total revenue
     21,333       37,160       99,957       131,400  
                                 
Cost of service revenues
     9,855       16,607       39,467       50,797  
Cost of freight revenues
     2,068       6,436       12,469       26,458  
Selling, general and
                                
administrative expenses
     9,849       12,212       40,991       45,293  
Goodwill Impairment
     25,169       -       25,169       -  
Depreciation and amortization
     901       1,166       4,299       4,343  
Total operating expenses
     47,842       36,421       122,395       126,891  
                                 
Operating (loss), income
     (26,509 )     739       (22,438 )     4,509  
Interest expense
     44       147       251       1,231  
Total other expense
     44       147       251       1,231  
                                 
(Loss) income before income taxes
     (26,553 )     592       (22,689 )     3,278  
                                 
Income tax (benefit)
     (167 )     -       -       -  
Net (loss) income
   $ (26,386 )   $ 592     $ (22,689 )   $ 3,278  
                                 
Earnings per share:
                                
Basic
   $ (2.09 )   $ 0.05     $ (1.80 )   $ 0.26  
Diluted
   $ (2.09 )   $ 0.05     $ (1.80 )   $ 0.26  
                                 
Weighted average shares
                                
outstanding:
                                
Basic
     12,601       12,601       12,601       12,593  
Diluted
     12,601       12,601       12,601       12,594  

 
 
 

INNOTRAC CORPORATION
  
Condensed Balance Sheets
  
(in thousands)
  
   
             
   
December 31,
    
December 31,
  
   
2009
    
2008
  
ASSETS
  
(Audited)
    
(Audited)
  
Current Assets:
            
Cash
   $ 1,118     $ 1,056  
Accounts receivable (net of allowance for doubtful accounts of  $172 at December 31, 2009 and $271 at December 31, 2008)
     14,521       25,793  
Inventory
     3,093       1,855  
Prepaid expenses and other
     1,693       1,262  
Total current assets
     20,425       29,966  
                 
Property and equipment, net
     13,717       15,842  
Goodwill
     -       25,169  
Other assets, net
     1,061       822  
                 
Total assets
   $ 35,203     $ 71,799  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
Current Liabilities:
                
Accounts payable
   $ 5,309     $ 9,259  
Line of credit
     -       10,055  
Accrued expenses and other
     4,524       5,253  
Total current liabilities
     9,833       24,567  
                 
Noncurrent Liabilities:
                
Other non-current liabilities
     1,491       753  
Total noncurrent liabilities
     1,491       753  
                 
Total shareholders' equity
     23,879       46,479  
                 
Total liabilities and shareholders' equity
   $ 35,203     $ 71,799  
 
 
 
 
 
INNOTRAC CORPORATION
  
Condensed Statements of Cash Flows
  
(in thousands)
  
             
   
Twelve Months Ended
  
   
December 31,
  
   
(Audited)
    
(Audited)
  
   
2009
    
2008
  
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net (loss) income
   $ (22,689 )   $ 3,278  
Adjustments to net (loss) income:
                
Depreciation and amortization
     4,299       4,343  
Impairment of goodwill
     25,169       -  
Provision for bad debts
     47       8  
Loss on disposal of fixed assets
     69       47  
Stock compensation expense-stock options
     14       72  
Stock compensation expense-restricted stock
     75       75  
Changes in working capital:
                
Accounts receivable, gross
     11,225       2,289  
Inventory
     (1,238 )     (1,256 )
Prepaid assets and other
     (384 )     (101 )
Accounts payable, accrued expenses and other
     (4,865 )     (5,246 )
Net cash provided by operating activities
     11,722       3,509  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
                
Capital expenditures
     (1,691 )     (2,530 )
Net change in noncurrent assets and liabilities
     235       130  
Cash used in investing activities
     (1,456 )     (2,400 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Net (repayments) borrowings under line of credit
     (10,055 )     3,887  
(Repayment) proceeds of term loan
     -       (5,000 )
Issuance of stock, net
     -       42  
Capital lease funding
     3       -  
Loan fees paid
     (152 )     (61 )
Cash used in financing activities
     (10,204 )     (1,132 )
                 
Net (decrease) increase in cash
     62       (23 )
Cash, beginning of period
     1,056       1,079  
Cash, end of period
   $ 1,118     $ 1,056