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 15, 2010

 INNOTRAC CORPORATION

 (Exact Name of Registrant as Specified in 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)

(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 15, 2010, Innotrac Corporation ("Innotrac") issued a press release to announce its financial results for the third quarter ended September 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 November 15, 2010, announcing Innotrac’s financial results for the third quarter ended September 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:  November 15, 2010	Scott D. Dorfman President, Chairman and Chief Executive Officer

EX-99.1

EXHIBIT 99.1

Innotrac Corporation Announces 2010 Third Quarter Results

ATLANTA, GA (November 15, 2010) – Innotrac Corporation (NASDAQ-GM: INOC) announced financial results today for the third quarter and nine months ended September 30, 2010.  The Company reported revenues of $18.6 million for the quarter versus $22.3 million reported in the comparable period in 2009.  For the nine months ended September 30, 2010, the Company reported revenues of $56.4 million versus $78.6 million in the comparable period in 2009.  The decrease in revenue for both the three and nine months ended September 30, 2010 was primarily due to the reduction in reported revenue resulting from one of our larger retail and eCommerce clients closing their operations in 2009, the merger of one of our telecommunications clients resulting in the merged company utilizing in-house services, for a porti on of their fulfillment, starting in third quarter of 2009 and overall softness in our Direct Marketing vertical during 2010.

The Company reported a net loss of $821,000, or ($0.06) per share, fully diluted, for the three months ended September 30, 2010, versus net loss of $78,000 or ($0.01) per share in the comparable period of 2009.  For the nine months ended September 30, 2010, the Company reported a net loss of $2.9 million, or ($0.23) per share, fully diluted, versus net income of $3.7 million or $0.29 per share in the comparable period of 2009.

“We have been diligent in controlling our operating expenses while preserving our installed capacity which has helped to provide moderate improvement in our net loss this quarter when compared to the second quarter of this year.  We ended the quarter with no outstanding debt on our line of credit,” said George Hare, CFO.

“We have been very focused on our sales and marketing initiatives.  As a result we have seen strong activity and have been able to convert several new clients that we will begin to service during 2011,” said Scott Dorfman, CEO.

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						Nine Months Ended
	September 30,						September 30,
	(Unaudited)						(Unaudited)
	2010			2009			2010			2009
Service revenue	$	15,849		$	19,402		$	47,216		$	68,109
Freight revenue		2,721			2,856			9,162			10,515
Total revenue		18,570			22,258			56,378			78,624
Cost of service revenues		7,040			8,625			21,213			29,612
Freight expense		2,657			2,856			9,017			10,401
Selling, general and
administrative expenses		8,761			9,564			26,308			31,142
Depreciation and amortization		882			1,082			2,614			3,398
Total operating expenses		19,340			22,127			59,152			74,553
Operating (loss) income		(770	)		131			(2,774	)		4,071
Interest expense		51			42			131			207
Total other expense		51			42			131			207
(Loss) income before income taxes		(821	)		89			(2,905	)		3,864
Income tax		-			167			-			167
Net (loss)  income	$	(821	)	$	(78	)	$	(2,905	)	$	3,697
(Loss) income per share:
Basic	$	(0.06	)	$	(0.01	)	$	(0.23	)	$	0.29
Diluted	$	(0.06	)	$	(0.01	)	$	(0.23	)	$	0.29
Weighted average shares
outstanding:
Basic		12,861			12,601			12,777			12,601
Diluted		12,861			12,601			12,777			12,601

INNOTRAC CORPORATION
Condensed Balance Sheets
(in thousands)
	September 30, 2010		December 31, 2009
ASSETS	(Unaudited)		(Audited)
Current Assets:
Cash	$	551	$	1,118
Accounts receivable (net of allowance for doubtful       accounts of  $238 at September 30, 2010 and $172       at December 31, 2009)		11,584		14,521
Inventory		3,663		3,093
Prepaid expenses and other		1,271		1,693
Total current assets		17,069		20,425
Property and equipment, net		11,896		13,717
Other assets, net		1,090		1,061
Total assets	$	30,055	$	35,203
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	4,194	$	5,309
Line of credit		-		-
Accrued expenses and other		3,269		4,524
Total current liabilities		7,463		9,833
Noncurrent Liabilities:
Other non-current liabilities		1,542		1,491
Total noncurrent liabilities		1,542		1,491
Total shareholders' equity		21,050		23,879
Total liabilities and shareholders' equity	$	30,055	$	35,203

INNOTRAC CORPORATION
Condensed Statements of Cash Flows
(in thousands)
	Nine Months Ended September 30,
	(Unaudited)
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(2,905	)	$	3,697
Adjustments to net (loss) income:
Depreciation and amortization		2,614			3,398
Provision for bad debts		87			41
Loss on disposal of fixed assets		9			9
Stock compensation expense-stock options		(2	)		10
Stock compensation expense-restricted stock		78			56
Deferred income taxes		-			167
Decrease in other long-term assets		46			23
Increase in other long-term liabilities		196			23
Changes in working capital:
Accounts receivable, gross		2,850			10,714
Inventory		(570	)		(690	)
Prepaid assets and other		451			69
Accounts payable, accrued expenses and other		(2,356	)		(6,585	)
Net cash provided by operating activities		498			10,932
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(815	)		(845	)
Net change in noncurrent assets and liabilities		(9	)		(34	)
Cash used in investing activities		(824	)		(879	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) under line of credit		-			(10,055	)
Capital lease (payments) funding		(179	)		62
Loan fees paid		(62	)		(151	)
Cash (used in) financing activities		(241	)		(10,144	)
Net (decrease) in cash		(567	)		(91	)
Cash, beginning of period		1,118			1,056
Cash, end of period	$	551		$	965