Exhibit 99.1
Innotrac Corporation Announces 2009 Third Quarter Results
ATLANTA, GA (November 16, 2009) – Innotrac Corporation (NASDAQ-GM: INOC) announced financial results today for the third quarter and nine months ended September 30, 2009. The Company reported revenues of $22.3 million for the quarter versus $32.0 million reported in the comparable period in 2008, a decrease of 30.4%. The decrease in revenue for the three months ended September 30, 2009 as compared to the same period in 2008 was due to a $5.7 million decrease in service revenue and a $4.0 million decrease in freight revenue, which has no material impact on our operating profitability due to pricing practices for direct freight costs. The decrease in service revenue for the quarter resulted from a $3.7 million decrease in service revenue from our DSL vertical mainly due to the completed transition of a portion of the AT&T fulfillment business to AT&T’s in-house fulfillment in mid June 2009 and a $2.0 million net decrease in service revenues for our other customer verticals.
For the nine months ended September 30, 2009, the Company reported revenues of $78.6 million compared to $94.2 million for the same period in 2008, a decrease of 16.6%. The decrease in revenue for the nine months ended September 30, 2009 as compared to the same period in 2008 was due to a $5.9 million decrease in service revenue and a $9.7 million decrease in freight revenue, which has no material impact on our operating profitability due to pricing practices for direct freight costs. The decrease in service revenue for the nine months resulted from a $3.5 million decrease in revenue from our DSL vertical mainly due to the completed transition of a portion of the AT&T fulfillment business to AT&T’s in-house fulfillment in mid June 2009 and a $2.4 million net decrease in service revenues for our other customer verticals.
The Company reported a loss of $78,000, or ($0.01) per share, fully diluted, for the three months ended September 30, 2009, compared to net income of $829,000 or $0.07 per share in the comparable period of 2008. For the nine months ended September 30, 2009, the Company reported net income of $3.7 million, or $0.29 per share, fully diluted, compared to net income of $2.7 million, or $0.21 per share, in the same period in 2008.
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 one call center in six cities 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 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, 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 2008 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
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INNOTRAC CORPORATION | ||||||||||||||||||
Condensed Statements of Operations | ||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||||
Service revenue | $ | 19,402 | $ | 25,138 | $ | 68,109 | $ | 74,028 | ||||||||||
Freight revenue | 2,856 | 6,863 | 10,515 | 20,213 | ||||||||||||||
Total revenue | 22,258 | 32,001 | 78,624 | 94,241 | ||||||||||||||
Cost of service revenues | 8,625 | 11,532 | 29,612 | 34,190 | ||||||||||||||
Freight expense | 2,856 | 6,757 | 10,401 | 20,022 | ||||||||||||||
Selling, general and | ||||||||||||||||||
administrative expenses | 9,564 | 11,419 | 31,142 | 33,081 | ||||||||||||||
Depreciation and amortization | 1,082 | 1,106 | 3,398 | 3,178 | ||||||||||||||
Total operating expenses | 22,127 | 30,814 | 74,553 | 90,471 | ||||||||||||||
Operating income | 131 | 1,187 | 4,071 | 3,770 | ||||||||||||||
Interest expense | 42 | 358 | 207 | 1,084 | ||||||||||||||
Total other expense | 42 | 358 | 207 | 1,084 | ||||||||||||||
Income before income taxes | 89 | 829 | 3,864 | 2,686 | ||||||||||||||
Income tax | 167 | - | 167 | - | ||||||||||||||
Net (Loss) income | $ | (78 | ) | $ | 829 | $ | 3,697 | $ | 2,686 | |||||||||
(Loss) earnings per share: | ||||||||||||||||||
Basic | $ | (0.01 | ) | $ | 0.07 | $ | 0.29 | $ | 0.21 | |||||||||
Diluted | $ | (0.01 | ) | $ | 0.07 | $ | 0.29 | $ | 0.21 | |||||||||
Weighted average shares | ||||||||||||||||||
outstanding: | ||||||||||||||||||
Basic | 12,601 | 12,598 | 12,601 | 12,590 | ||||||||||||||
Diluted | 12,601 | 12,620 | 12,601 | 12,612 |
INNOTRAC CORPORATION
Condensed Balance Sheets
(in thousands)
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
ASSETS | (Unaudited) | |||||||
Current Assets: | ||||||||
Cash | $ | 965 | $ | 1,056 | ||||
Accounts receivable (net of allowance for doubtful accounts of $234 at September 30, 2009 and $271 at December 31, 2008) | 15,038 | 25,793 | ||||||
Inventory | 2,545 | 1,855 | ||||||
Prepaid expenses and other | 1,228 | 1,262 | ||||||
Total current assets | 19,776 | 29,966 | ||||||
Property and equipment, net | 13,891 | 15,842 | ||||||
Goodwill | 25,169 | 25,169 | ||||||
Other assets, net | 1,053 | 822 | ||||||
Total assets | $ | 59,889 | $ | 71,799 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 4,564 | $ | 9,259 | ||||
Line of credit | - | 10,055 | ||||||
Accrued expenses and other | 3,602 | 5,253 | ||||||
Total current liabilities | 8,166 | 24,567 | ||||||
Noncurrent Liabilities: | ||||||||
Equipment lease payable | 434 | - | ||||||
Other noncurrent liabilities | 880 | 753 | ||||||
Deferred income taxes-non current | 167 | - | ||||||
Total noncurrent liabilities | 1,481 | 753 | ||||||
Total shareholders' equity | 50,242 | 46,479 | ||||||
Total liabilities and shareholders' equity | $ | 59,889 | $ | 71,799 | ||||
INNOTRAC CORPORATION
Condensed Statements of Cash Flows
(in thousands)
Nine Months Ended | ||||||||
September 30, (Unaudited) | ||||||||
2009 | 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 3,697 | $ | 2,686 | ||||
Adjustments to net income: | ||||||||
Depreciation and amortization | 3,398 | 3,178 | ||||||
Loss on disposal of fixed assets | 9 | - | ||||||
Provision for bad debts | 41 | - | ||||||
Stock compensation expense-stock options | 10 | 59 | ||||||
Stock compensation expense-restricted stock | 56 | 56 | ||||||
Deferred income taxes | 167 | - | ||||||
Changes in working capital: | ||||||||
Accounts receivable, gross | 10,714 | 3,246 | ||||||
Inventory | (690 | ) | (610 | ) | ||||
Prepaid assets and other | 69 | (101 | ) | |||||
Accounts payable, accrued expenses and other | (6,585 | ) | (4,631 | ) | ||||
Net cash provided by operating activities | 10,886 | 3,883 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (845 | ) | (2,381 | ) | ||||
Net change in noncurrent assets and liabilities | 12 | 51 | ||||||
Cash used in investing activities | (833 | ) | (2,330 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Net (repayments) borrowings under line of credit | (10,055 | ) | 2,946 | |||||
Repayment of term loan | - | (5,000 | ) | |||||
Issuance of stock, net | - | 42 | ||||||
Proceeds from financing lease | 62 | - | ||||||
Loan commitment fees | (151 | ) | - | |||||
Cash used in financing activities | (10,144 | ) | (2,012 | ) | ||||
Net decrease in cash | (91 | ) | (459 | ) | ||||
Cash, beginning of period | 1,056 | 1,079 | ||||||
Cash, end of period | $ | 965 | $ | 620 |