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

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 portion 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