Exhibit 99.1
Innotrac Corporation Announces 2003 Fourth Quarter and Yearend Results
ATLANTA, March 30 /PRNewswire-FirstCall/ -- Innotrac Corporation
(Nasdaq: INOC) announced financial results today for the fourth quarter and
year ended December 31, 2003. For the three months ended December 31, 2003,
the Company generated $5.9 million in positive cash flow from operations on
revenues of $20.2 million. Revenues were up approximately 9.1% on a quarter-
over-quarter basis. Gross margins were 53.3%. For the year ended
December 31, 2003, the Company generated $3.8 million in positive cash flow
from operations on revenues of $74.7 million.
In the fourth quarter, the Company recorded valuation allowances totaling
approximately $10.6 million on an after-tax basis against the Company's
deferred tax asset and a certain aged account receivable. The receivable
allowance relates to past due amounts owed by a long-term client with whom the
Company has an ongoing relationship. In February 2004, the Company entered
into an arrangement with this client to reduce the aged balance over the next
several months and has received significant payments from this client in
February and March. In regards to the second valuation allowance, the Company
determined the need to record the deferred tax asset allowance once the
recording of the receivable allowance generated an operating loss for the
quarter and the full year. Accordingly, the Company reported net losses of
$10.4 million or $.89 per share, and $12.0 million or $1.04 per share, for the
fourth quarter and year ended December 31, 2003, respectively.
"In the fourth quarter, we continued our pace of revenue and cash flow
growth. The valuation allowances we recorded had no effect on the Company's
cash flow, as they were both non-cash charges. Additionally, income taxes
associated with future earnings will be offset by a reduction in the valuation
allowance which will benefit our earnings per share for the foreseeable
future," stated David L. Gamsey, Chief Financial Officer.
Conference Call
Innotrac Corporation will hold a conference call to discuss this release
this evening, March 30th, at 5:00 p.m. Eastern Standard Time. Investors can
listen to the conference call live by dialing 1-877-569-0972
(Conference ID: 5964942) 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: 5964942).
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 seven fulfillment centers and two
call centers in five 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 and is 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 clients, the state of the telecommunications industry in general,
Innotrac's ability to maintain profit margins in the face of pricing pressures
and numerous other factors discussed in Innotrac's 2003 Annual Report on Form
10-K and other filings on file with the Securities and Exchange Commission.
INNOTRAC CORPORATION
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
(Unaudited) (Audited)
2003 2002 2003 2002
Revenues $20,230 $21,956 $74,740 $82,420
Cost of revenues:
Cost of revenues 9,451 12,800 35,157 46,444
Special credit - - - (293)
Total cost of
revenues 9,451 12,800 35,157 46,151
Gross margin 10,779 9,156 39,583 36,269
Operating expenses:
Selling, general and
administrative
expenses 10,082 9,573 36,444 37,332
Special charges, net - (1,398) (30) 404
Depreciation and
amortization 1,333 1,494 5,622 5,336
Total operating
expenses 11,415 9,669 42,036 43,072
Operating income (loss) (636) (513) (2,453) (6,803)
Interest expense 160 86 741 318
Other 19 (2) 15 (124)
Total other expense 179 84 756 194
(Loss) before income taxes (815) (597) (3,209) (6,997)
Income tax provision
(benefit) 9,632 (207) 8,772 (2,578)
Net (loss) $(10,447) $(390) $(11,981) $(4,419)
Earnings per share:
Basic $(0.89) $(0.03) $(1.04) $(0.38)
Diluted $(0.89) $(0.03) $(1.04) $(0.38)
Weighted average shares
outstanding:
Basic 11,678 11,418 11,542 11,516
Diluted 11,678 11,418 11,542 11,516
Note: these statements should be read in conjunction with the Company's
Form 10-K filed with the Securities and Exchange Commission on March 30,
2004.
INNOTRAC CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2003 2002
ASSETS (Audited) (Audited)
Current Assets:
Cash $2,228 $961
Accounts receivable, net 15,682 14,203
Inventories, net 10,896 24,098
Deferred income taxes, net - 552
Prepaid expenses and other 915 2,357
Total current assets 29,721 42,171
Property and equipment, net 14,750 18,915
Goodwill 25,169 24,988
Deferred income taxes, net - 7,940
Other assets, net 1,322 1,485
Total Assets $70,962 $95,499
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $5,738 $13,517
Accrued expenses and other 2,577 6,626
Line of credit 11,802 -
Total current liabilities 20,117 20,143
Noncurrent Liabilities:
Line of credit - 14,372
Other non-current liabilities 1,083 1,125
Total noncurrent liabilities 1,083 15,497
Total shareholders' equity 49,762 59,859
Total Liabilities and
Shareholders' Equity $70,962 $95,499
Note: these statements should be read in conjunction with the Company's
Form 10-K filed with the Securities and Exchange Commission
on March 30, 2004.
INNOTRAC CORPORATION
Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
(Unaudited) (Unaudited) (Audited) (Audited)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net (loss) $(10,447) $(390) $(11,981) $(4,419)
Adjustments to net loss:
Depreciation and amortization 1,333 1,494 5,622 5,336
Loss on impairment or disposal
of fixed assets 21 - 22 3,638
Deferred income taxes 9,541 (207) 8,492 (5,317)
Amortization of deferred
compensation 18 18 72 72
Changes in working capital:
Accounts receivable, net (683) 2,474 (1,479) (541)
Inventory 4,743 (4,108) 13,202 3,165
Prepaid assets and other 1,280 (564) 1,338 1,248
Accounts payable, accrued
expenses and other 60 2,204 (11,494) 688
Cash provided by (used in)
operating activities 5,866 921 3,794 3,870
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures (163) (1,162) (1,182) (12,830)
Payments for business acquired - 130 (181) (13,502)
Sale of marketable securities - - - 436
Cash (used in) investing
activities (163) (1,032) (1,363) (25,896)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net (repayments) borrowings under
line of credit (5,188) 965 (2,570) 14,372
Repayment of long term debt (19) (41) (119) (250)
Loan fees paid - (50) (31) (100)
Exercise of employee stock options 547 - 1,556 -
Sale (purchase) of treasury stock
shares - - - (448)
Cash (used in) provided by
financing activities (4,660) 874 (1,164) 13,574
Net increase (decrease) in cash 1,043 763 1,267 (8,452)
Cash, beginning of period 1,185 198 961 9,413
Cash, end of period $2,228 $961 $2,228 $961
Note: these statements should be read in conjunction with the Company's
Form 10-K filed with the Securities and Exchange Commission on March 30,
2004.
SOURCE Innotrac Corporation
-0- 03/30/2004
/CONTACT: David L. Gamsey, Chief Financial Officer of Innotrac
Corporation, +1-678-584-4020, or dgamsey@innotrac.com/
/Web site: http://www.innotrac.com /
(INOC)
CO: Innotrac Corporation
ST: Georgia
IN: CPR TLS
SU: ERN CCA MAV