EX-99.1 2 ex99-1.htm EXHIBIT 99.1

Exhibit 99.1
 
Innotrac Corporation Announces 2013 Third Quarter Results
 
ATLANTA, GA (November 14, 2013) – Innotrac Corporation (NASDAQ: INOC) announced financial results today for the third quarter ended September 30, 2013. Total revenues for the quarter increased $4.1 million (15.8%) to $29.8 million from $25.7 million for the three months ended September 30, 2012.  Total revenue for the nine month period ended September 30, 2013, increased $15.5 million (21.3%) to $88.3 million from $72.8 million for the nine months ended September 30, 2012.  Revenue from new clients and growth of existing clients were the key drivers of this revenue growth.
 
The Company reported net income of $18.5 million, or $1.39 per share, fully diluted, for the third quarter ended September 30, 2013, as compared to $1.1 million, or $0.08 per share for the quarter ended September 30, 2012.   Net income for the nine months ended September 30, 2013 was $20.4 million, or $1.55 per share, as compared to $2.0 million, or $0.15 per share, for the nine months ended September 30, 2012.
 
In the third quarter ended September 30, 2013, Innotrac released a valuation allowance of $17.2 million that was previously recorded against deferred tax assets primarily related to net operating loss carryforwards.  The Company did not generate any cash flow from the income tax benefit recorded in the consolidated statements of operations for the period ended September 30, 2013.  This income tax benefit did not have any impact on business operations during the quarter.  This $17.2 million income tax benefit recorded in the quarter ended September 30, 2013 accounted for $1.30 of the total $1.39 fully diluted earnings per share for the quarter ended September 30, 2013 and $1.30 of the total $1.55 earnings per share for the nine months ended September 30, 2013.
 
About Innotrac
Innotrac Corporation, founded in 1984 and based near Atlanta, Georgia, is a best-in-class commerce provider integrating digital technology, fulfillment, contact center and business intelligence solutions to support global brands.  Innotrac’s fulfillment, order management and contact center solutions are integrated with all major web platforms, and seamlessly integrate with any required partner technologies.  The Company employs sophisticated order processing and warehouse management technology and operates eight fulfillment centers and one call center spanning all time zones across the continental United States.  Innotrac Europe GmbH has a network of fulfillment centers, call centers, and returns processing facilities with operations in the UK, Germany, France, Denmark, Sweden, Poland, Austria, Italy, Switzerland, Ireland, Spain and the Netherlands. Connect with Innotrac at www.innotrac.com or http://www.linkedin.com/company/innotrac.
 
 
 

 

 
Information contained in this press release, other than historical information, may be considered forward-looking in nature.  Forward-looking statements in this release include statements relating to future events and developments, as well as management’s expectations, beliefs, plans, estimates and projections relating to the future. Forward-looking statements are subject to various risks, uncertainties and assumptions.  Please refer to the Risk Factors discussed in Innotrac’s 2012 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
Steve Keaveney
Chief Financial Officer
678-584-4020
skeaveney@innotrac.com
 
 
 

 

 
INNOTRAC CORPORATION and SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
             
   
September 30, 2013
    
December 31, 2012
  
   
(unaudited)
        
             
ASSETS
            
             
Current assets:
            
             
Cash and cash equivalents
   $ 3,450     $ 4,005  
Accounts receivable (net of allowance for doubtful accounts of $134 at September 30, 2013 and $136 at December 31, 2012)
     20,084       23,216  
Inventories, net
     704       740  
Deferred income taxes
     639       -  
Prepaid expenses and other
     1,277       1,107  
Total current assets
     26,154       29,068  
                 
Property and equipment:
                
                 
Computers, machinery and equipment
     48,495       42,877  
Furniture, fixtures and leasehold improvements
     10,405       10,055  
      58,900       52,932  
Less accumulated depreciation and amortization
     (41,990 )     (39,089 )
      16,910       13,843  
                 
Deferred income taxes
     16,569       -  
Other assets, net
     1,459       1,281  
                 
Total assets
   $ 61,092     $ 44,192  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
                 
Current liabilities:
                
Accounts payable
   $ 7,957     $ 10,409  
Line of credit
     -       -  
Accrued salaries
     1,828       2,854  
Equipment lease payable
     652       421  
Accrued expenses and other
     3,742       3,088  
Equipment loan
     -       1,620  
Total current liabilities
     14,179       18,392  
                 
Noncurrent liabilities:
                
                 
Deferred compensation
     969       837  
Equipment lease payable
     1,188       544  
Other noncurrent liabilities
     697       963  
Total noncurrent liabilities
     2,854       2,344  
                 
Shareholders’ equity:
                
                 
Preferred stock: 10,000,000 shares authorized, $0.10 par value, no shares issued or outstanding
     -       -  
Common stock: 50,000,000 shares authorized, $0.10 par value, 13,245,440 shares issued and outstanding at September 30, 2013 13,155,440 shares issued and outstanding at December 31, 2012
     1,325       1,316  
Additional paid-in capital
     66,930       66,784  
Accumulated other comprehensive loss
     (2 )     (2 )
Accumulated deficit
     (24,207 )     (44,656 )
Total Innotrac shareholders’ equity
     44,046       23,442  
Noncontrolling interest
     13       14  
                 
Total shareholders’ equity
     44,059       23,456  
                 
Total liabilities and shareholders’ equity
   $ 61,092     $ 44,192  
 
 
 

 

 
INNOTRAC CORPORATION and SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2013 and 2012
(in thousands, except per share amounts)
             
   
Three Months Ended September 30,
  
   
2013
    
2012
  
   
(unaudited)
    
(unaudited)
  
             
Service revenues
   $ 26,410     $ 22,088  
Freight revenues
     3,345       3,606  
Total revenues
     29,755       25,694  
                 
                 
Cost of service revenues
     13,391       10,368  
Freight expense
     3,240       3,463  
Selling, general and administrative expenses
     10,816       9,674  
Depreciation and amortization
     996       995  
Total operating expenses
     28,443       24,500  
Operating income
     1,312       1,194  
                 
Other expense (income):
                
Interest expense
     41       90  
Other (income) expense
     (1 )     (2 )
Total other expense
     40       88  
                 
Income before income taxes
     1,272       1,106  
Income tax benefit
     (17,184 )     -  
Net income
     18,456       1,106  
Net loss attributable to noncontrolling interest
     1       (1 )
Net income attributable to Innotrac
   $ 18,457     $ 1,105  
                 
Earnings per share:
                
                 
Basic
   $ 1.39     $ 0.08  
                 
Diluted
   $ 1.39     $ 0.08  
                 
Weighted average shares outstanding:
                
                 
Basic
     13,245       13,058  
                 
Diluted
     13,267       13,058  
 
 
 

 

 
INNOTRAC CORPORATION and SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2013 and 2012
(in thousands, except per share amounts)
             
   
Nine Months Ended September 30,
  
   
2013
    
2012
  
   
(unaudited)
    
(unaudited)
  
             
Service revenues
   $ 77,875     $ 63,857  
Freight revenues
     10,471       8,953  
Total revenues
     88,346       72,810  
                 
                 
Cost of service revenues
     38,839       30,326  
Freight expense
     10,129       8,639  
Selling, general and administrative expenses
     32,988       28,931  
Depreciation and amortization
     2,901       2,711  
Total operating expenses
     84,857       70,607  
Operating income
     3,489       2,203  
                 
Other expense:
                
Interest expense
     196       212  
Other expense
     (1 )     -  
Total other expense
     195       212  
                 
Income before income taxes
     3,294       1,991  
Income tax benefit
     (17,154 )     -  
Net income
     20,448       1,991  
Net loss attributable to noncontrolling interest
     1       -  
Net income attributable to Innotrac
   $ 20,449     $ 1,991  
                 
Earnings per share:
                
                 
Basic
   $ 1.55     $ 0.15  
                 
Diluted
   $ 1.55     $ 0.15  
                 
Weighted average shares outstanding:
                
                 
Basic
     13,199       13,033  
                 
Diluted
     13,215       13,033  
 
 
 

 

 
INNOTRAC CORPORATION and SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2013 and 2012
(in thousands)
       
   
Nine Months Ended September 30,
  
   
2013
    
2012
  
   
(unaudited)
    
(unaudited)
  
Cash flows from operating activities:
            
             
Net Income
   $ 20,448     $ 1,991  
Adjustments to reconcile net income to net cash provided by operating activities:
                
                 
Depreciation and amortization
     2,901       2,711  
Provision for bad debts
     3       18  
Deferred income taxes
     (17,208 )     -  
Stock compensation expense-restricted stock
     155       124  
Changes in operating assets and liabilities:
                
Accounts receivable, gross
     3,129       (1,611 )
Inventory
     36       160  
Prepaid expenses and other
     (126 )     (230 )
Long-term assets
     52       (69 )
Accounts payable
     (3,929 )     (1,661 )
Accrued expenses, accrued salaries and other
     (372 )     396  
Long-term liabilities
     (266 )     (91 )
Net cash provided by operating activities
     4,823       1,738  
                 
Cash flows from investing activities:
                
                 
Capital expenditures
     (3,291 )     (4,703 )
Proceeds from disposition of assets
     -       1  
Net change in noncurrent assets and liabilities
     (10 )     (9 )
                 
Net cash used in investing activities
     (3,301 )     (4,711 )
                 
Cash flows from financing activities:
                
                 
Borrowings on equipment loan
     -       1,800  
Payments on equipment loan
     (1,620 )     (90 )
Capital lease payments
     (326 )     (321 )
Loan commitment fees
     (131 )     (37 )
Net cash (used in) provided by financing activities
     (2,077 )     1,352  
                 
Net increase (decrease) in cash and cash equivalents
     (555 )     (1,621 )
                 
Cash and cash equivalents, beginning of period
     4,005       3,283  
Cash and cash equivalents, end of period
   $ 3,450     $ 1,662  
                 
Supplemental cash flow disclosures:
                
                 
Cash paid for interest
   $ 151     $ 148  
Non-cash investing and financing activities:
                
Capital lease for warehouse and computer equipment
   $ 1,201     $ 862  
Capital expenditures in accounts payable
   $ 1,477     $ 287