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 7,  2005

INNOTRAC CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Georgia

(State or Other Jurisdictionof Incorporation)

000-23741	58-1592285
(Commission File Number)	(IRS Employer Identification No.)
6655 Sugarloaf Parkway Duluth, Georgia	30097
(Address of Principal Executive Offices)	(Zip Code)

(678) 584-4000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(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 7, 2005, Innotrac Corporation (“Innotrac”) issued a press release to announce its financial results for the third quarter of 2005.  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

                    (c)              Exhibits

Exhibit No.	Description
99.1	Innotrac Corporation press release dated November 7, 2005, announcing Innotrac’s financial results for the third quarter ended September 30, 2005 (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.

	By:	/s/ Christine Herren
		Christine Herren
		Senior Director and Controller
Date:  November 7, 2005

EX-99.1

Exhibit 99.1

Innotrac Corporation Announces 2005 Third Quarter Results

ATLANTA, GA (November 7, 2005) – Innotrac Corporation (NASDAQ: INOC) announced financial results today for the third quarter and nine months ended September 30, 2005.  The Company reported revenues of $17.5 million for the quarter versus $17.6 million reported in the comparable period in 2004, a decrease of 0.5%. For the nine months ended September 30, 2005, the Company reported revenues of $55.7 million compared to $57.4 million for the same period in 2004, a decrease of 3.0%.  The decreases for both the three and nine month periods were primarily attributed to reduced volumes from our telecommunications business, which were partially offset by increased volumes from our DSL business.  In addition, we added several new clients, resulting in increased revenues from our direct marketing and retail/catalog businesses in excess of the decreased revenues caused by the termination of services for Tactica International, Inc. and Martha Stewart Living Omnimedia, as anticipated.

The Company reported a net loss of $796,000, or $0.06 per share, for the three months ended September 30, 2005, versus a net loss of $402,000, or $0.03 per share, in the comparable period of 2004.  For the nine months ended September 30, 2005, the Company reported a loss of $1.7 million, or $0.14 per share compared to net income of $50,000, or breakeven on a per share basis, for the same period in 2004.  The Company generated $5.1 million in cash flows from operations for the nine months ended September 30, 2005. 

The Company is pleased to announce that it has reached agreements with three new clients to provide services beginning in the second quarter of 2006.  The most significant of these agreements is a multiyear agreement with Target Corporation to provide North America’s second largest general merchandise retailer with product fulfillment services to support the expansion of their Target.com eCommerce initiative.  To handle the expected volumes, Innotrac will open another fulfillment center just outside of Cincinnati, Ohio, in Hebron, Kentucky.  Construction for the facility has begun and the new center is expected to be ready to ship Target.com’s orders in the summer of 2006.

The new fulfillment center will be Innotrac’s second facility in the Hebron, Kentucky, area and its ninth facility across six states bringing the total square footage of the Company’s facilities to over 2.4 million.

“Over the last year our focus has been on finding companies that would benefit from our integrated national footprint.  Although it took longer than anticipated to bring these to fruition, I feel that the new business we have signed for 2006 will be significant and will allow Innotrac to show stronger revenue and profit growth for several years to come,” stated Scott D. Dorfman, President and Chief Executive Officer.

Conference Call

Innotrac Corporation will hold a conference call to discuss this release this evening, November 7, 2005 at 5:00 PM Eastern Standard Time.  Investors can listen to the conference call live by dialing 1-877-569-0972 (Conference ID: 1788968) or by logging on to www.innotrac.com and clicking on “Webcasts and Presentations” in the “Company” section.  The Webcast will be archived and available at the same Web address.  Additionally, audio playback will be available at 1-800-642-1687 (Conference ID: 1788968).

About Innotrac

Innotrac Corporation, founded in 1984 and based in Atlanta, Georgia, is a full-service fulfillment and logistics provider serving enterprise clients and world-class brands.  The Company employs sophisticated order processing and warehouse management technology and operates eight fulfillment centers and two call centers in six cities spanning all time zones across the continental United States. For more information about Innotrac, visit the Innotrac Web site, www.innotrac.com.

Information contained in this press release, other than historical information, may be considered forward-looking in nature.  Forward-looking statements in this press release include our expectations for future progress in our business and future generation of cash flows.  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 and attract new clients, realization of expected revenues from new clients, the state of the telecommunications and direct response industries in general, changing technologies, Innotrac’s ability to maintain profit margins in the face of pricing pressures and numerous other factors discussed in Innotrac’s 2004 Annual Report on Form 10-K and other filings on file with the Securities and Exchange Commission.

Contact

Christine Herren
Senior Director and Controller
678-584-4115
cherren@innotrac.com

###

INNOTRAC CORPORATION
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
	(Unaudited)						(Unaudited)
Revenues	$	17,543		$	17,631		$	55,724		$	57,433
Cost of revenues		8,695			8,756			28,328			26,670
Gross profit		8,848			8,875			27,396			30,763
Operating expenses:
Selling, general and administrative expenses		8,535			7,931			25,421			26,574
Depreciation and amortization		1,091			1,283			3,551			3,905
Total operating expenses		9,626			9,214			28,972			30,479
Operating (loss) income		(778	)		(339	)		(1,576	)		284
Interest expense		18			63			127			234
Other		—			—			—			—
Total other expense		18			63			127			234
(Loss) income before income taxes		(796	)		(402	)		(1,703	)		50
Income tax (benefit)		—			—			—			—
Net (loss) income	$	(796	)	$	(402	)	$	(1,703	)	$	50
Earnings per share:
Basic	$	(0.06	)	$	(0.03	)	$	(0.14	)	$	0.00
Diluted	$	(0.06	)	$	(0.03	)	$	(0.14	)	$	0.00
Weighted average shares outstanding:
Basic		12,277			11,905			12,167			11,843
Diluted		12,277			11,905			12,167			12,540

Note: These statements should be read in conjunction with the Company’s Form 10-K filed with the Securities and Exchange Commission on March 31, 2005.

INNOTRAC CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)

	September 30, 2005		December 31, 2004
		(Unaudited)		(Audited)
ASSETS
Current Assets:
Cash	$	3,803	$	1,377
Accounts receivable (net of allowance for doubtful accounts of $1,049 at September 30, 2005 and $1,624 at December 31, 2004)		12,846		18,405
Inventory		4,131		2,662
Prepaid expenses and other		1,627		1,986
Total current assets		22,407		24,430
Property and equipment, net		9,906		12,499
Goodwill		25,169		25,169
Other assets, net		1,116		1,275
Total assets	$	58,598	$	63,373
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	4,292	$	6,023
Accrued expenses and other		3,127		2,630
Line of credit		—		3,063
Total current liabilities		7,419		11,716
Noncurrent Liabilities:
Other non-current liabilities		1,039		1,098
Total noncurrent liabilities		1,039		1,098
Total shareholders’ equity		50,140		50,559
Total liabilities and shareholders’ equity	$	58,598	$	63,373

Note: These statements should be read in conjunction with the Company’s Form 10-K filed with the Securities and Exchange Commission on March 31, 2005.

INNOTRAC CORPORATION
Condensed Consolidated Statements of Cash Flows
(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
	(Unaudited)						(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(796	)	$	(402	)	$	(1,703	)	$	50
Adjustments to net loss:
Depreciation and amortization		1,091			1,283			3,551			3,905
Loss on disposal of fixed assets		12			6			12			106
Amortization of deferred compensation		—			18			—			68
Changes in working capital:
Accounts receivable, net		5,031			(175	)		5,558			(1,373	)
Inventory		(1,377	)		385			(1,469	)		6,285
Prepaid assets and other		317			(763	)		348			(1,690	)
Accounts payable, accrued expenses and other		(1,584	)		195			(1,239	)		1,062
Cash provided by operating activities		2,694			547			5,058			8,413
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(217	)		(795	)		(800	)		(2,112	)
Cash used in investing activities		(217	)		(795	)		(800	)		(2,112	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under line of credit		—			262			(3,063	)		(7,455	)
Payment of capital lease obligation		(18	)		(25	)		(54	)		(65	)
Loan fees paid		—			—			—			(15	)
Exercise of employee stock options		21			105			1,285			748
Stock reacquired to settle employee stock bonus withholding tax obligation		—			—			—			(286	)
Cash (used in) provided by financing activities		3			342			(1,832	)		(7,073	)
Net increase (decrease) in cash		2,480			94			2,426			(772	)
Cash, beginning of period		1,323			1,362			1,377			2,228
Cash, end of period	$	3,803		$	1,456		$	3,803		$	1,456

Note: These statements should be read in conjunction with the Company’s Form 10-K filed with the Securities and Exchange on March 31, 2005.