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) June 30, 2010

 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.)

6465 East Johns Crossing Johns Creek, GA	30097
(Address of Principal Executive Offices)	(Zip Code)

(678) 584-4000

(Registrant’s Telephone Number, Including Area Code)

 6655 Sugarloaf Parkway

Duluth, GA  30097-4916

(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 August 16, 2010, Innotrac Corporation ("Innotrac") issued a press release to announce its financial results for the second quarter ended June 30, 2010. 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 August 16, 2010, announcing Innotrac’s financial results for the second quarter ended June 30, 2010 (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:  August 16, 2010	Scott D. Dorfman  President, Chairman and Chief Executive Officer

EX-99.1

EXHIBIT 99.1

Innotrac Corporation Announces 2010 Second Quarter Results

ATLANTA, GA (August 16, 2010) – Innotrac Corporation (NASDAQ-GM: INOC) announced financial results today for the second quarter and six months ended June 30, 2010.  The Company reported revenues of $18.5 million for the quarter versus $27.6 million reported in the comparable period in 2009.  For the six months ended June 30, 2010, the Company reported revenues of $37.8 million versus $56.4 million in the comparable period in 2009.  The decrease in revenue for both the three and six months ended June 30, 2010 was primarily due to the loss of two large fulfillment service contracts, combined with lower volumes from our existing customers due to general economic conditions.

The Company reported a net loss of $1.1 million, or ($0.09) per share, fully diluted, for the three months ended June 30, 2010, versus net income of $1.8 million or $0.15 per share in the comparable period of 2009.  For the six months ended June 30, 2010, the Company reported a net loss of $2.1 million, or ($0.16) per share, fully diluted, versus net income of $3.8 million or $0.30 per share in the comparable period of 2009.

Innotrac

Innotrac Corporation, founded in 1984 and based near Atlanta, Georgia, is a technology-based integrated fulfillment and Customer Care solutions provider serving enterprise clients and world-class brands.  The Company employs sophisticated order processing and warehouse management technology and operates seven fulfillment centers and one call center 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 2009 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					Six Months Ended
	June 30,					June 30,
	(Unaudited)					(Unaudited)
	2010			2009		2010			2009
Service revenue	$	15,339		$	24,052	$	31,367		$	48,708
Freight revenue		3,116			3,540		6,441			7,659
Total revenue		18,455			27,592		37,808			56,367
Cost of service revenues		6,827			10,327		14,173			20,987
Freight expense		3,069			3,488		6,360			7,545
Selling, general and
administrative expenses		8,745			10,768		17,547			21,578
Depreciation and amortization		884			1,108		1,732			2,317
Total operating expenses		19,525			25,691		39,812			52,427
Operating (loss) income		(1,070	)		1,901		(2,004	)		3,940
Interest expense		41			59		80			165
Total other expense		41			59		80			165
(Loss) income before income taxes		(1,111	)		1,842		(2,084	)		3,775
Income tax		-			-		-			-
Net (loss) income	$	(1,111	)	$	1,842	$	(2,084	)	$	3,775
(Loss) income per share:
Basic	$	(0.09	)	$	0.15	$	(0.16	)	$	0.30
Diluted	$	(0.09	)	$	0.15	$	(0.16	)	$	0.30
Weighted average shares
outstanding:
Basic		12,861			12,601		12,734			12,601
Diluted		12,861			12,601		12,734			12,601

INNOTRAC CORPORATION

Condensed Balance Sheets

(in thousands)

	June 30, 2010		December 31, 2009
ASSETS	(Unaudited)		(Audited)
Current Assets:
Cash	$	976	$	1,118
Accounts receivable (net of allowance for doubtful accounts of  $146 at June 30, 2010 and $172 at December 31, 2009)		12,312		14,521
Inventory		3,835		3,093
Prepaid expenses and other		1,245		1,693
Total current assets		18,368		20,425
Property and equipment, net		12,477		13,717
Other assets, net		1,041		1,061
Total assets	$	31,886	$	35,203
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	3,726	$	5,309
Line of credit		895		-
Accrued expenses and other		3,973		4,524
Total current liabilities		8,594		9,833
Noncurrent Liabilities:
Other non-current liabilities		1,452		1,491
Total noncurrent liabilities		1,452		1,491
Total shareholders' equity		21,840		23,879
Total liabilities and shareholders' equity	$	31,886	$	35,203

INNOTRAC CORPORATION

Condensed Statements of Cash Flows

(in thousands)

	Six Months Ended June 30,
	(Unaudited)
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(2,084	)	$	3,775
Adjustments to net (loss) income:
Depreciation and amortization		1,732			2,317
Provision for bad debts		(24	)		39
Loss on disposal of fixed assets		9			-
Stock compensation expense-stock options		(3	)		6
Stock compensation expense-restricted stock		48			37
Decrease in other long-term assets		27			12
Increase in other long-term liabilities		114			21
Changes in working capital:
Accounts receivable, gross		2,233			8,930
Inventory		(742	)		741
Prepaid assets and other		477			(59	)
Accounts payable, accrued expenses and other		(2,129	)		(4,404	)
Net cash (used in) provided by operating activities		(342	)		11,415
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(506	)		(674	)
Net change in noncurrent assets and liabilities		(8	)		(31	)
Cash used in investing activities		(514	)		(705	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under line of credit		895			(10,055	)
Capital lease (payments) funding		(119	)		130
Loan fees paid		(62	)		(151	)
Cash provided by (used in) financing activities		714			(10,076	)
Net (decrease) increase in cash		(142	)		634
Cash, beginning of period		1,118			1,056
Cash, end of period	$	976		$	1,690