EX-99.1 2 t68695_ex99-1.htm EXHBIT 99.1 t68695_ex99-1.htm
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