Exhibit 99.1
INNOTRAC CORPORATION ANNOUNCES 2005 SECOND QUARTER RESULTS
ATLANTA, Aug. 8 /PRNewswire-FirstCall/ -- Innotrac Corporation (Nasdaq:
INOC) announced financial results today for the second quarter and six months
ended June 30, 2005. The Company reported revenues of $18.9 million for the
quarter versus $19.8 million reported in the comparable period in 2004, a
decrease of 4.4%. For the six months ended June 30, 2005, the Company reported
revenues of $38.2 million compared to $39.8 million for the same period in 2004,
a decrease of 4.1%. The decrease for both the three and six month periods was
primarily attributable to reduced revenue from our telecommunications vertical
as a result of the conclusion of two programs for a major client. This was
offset by increased revenues from our direct marketing and retail/catalog
verticals resulting from the addition of several new clients generating revenues
in excess of those lost from the termination of services for Tactica
International, Inc. and Martha Stewart Living Omnimedia.
The Company reported a net loss of $619,000, or $0.05 per share, for the
three months ended June 30, 2005, versus net income of $225,000, or $0.02 per
share, in the comparable period of 2004. For the six months ended June 30, 2005,
the Company reported a loss of $907,000, or $0.07, per share compared to net
income of $452,000, or $0.04 per share, for the same period in 2004. The Company
generated $2.4 million in cash flows from operations for the first six months of
2005.
"We are working hard on replacing the lost revenues with profitable new
business. As we continue to do this, we should see marked improvements in our
bottom line. In addition, we continue to generate cash from operations and keep
our balance sheet strong," stated Scott D. Dorfman, President and Chief
Executive Officer.
Conference Call
Innotrac Corporation will hold a conference call to discuss this release
this evening, August 8, 2005 at 5:00 PM Eastern Daylight Time. Investors can
listen to the conference call live by dialing 1-877-569-0972 (Conference ID:
7829146) or by logging on to http://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: 7829146).
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,
http://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 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.
INNOTRAC CORPORATION
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
(Unaudited) (Audited)
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues $ 18,943 $ 19,807 $ 38,181 $ 39,802
Cost of revenues 9,680 8,977 19,633 17,915
Gross profit 9,263 10,830 18,548 21,887
Operating expenses:
Selling, general and
administrative expenses 8,632 9,158 16,886 18,642
Depreciation and amortization 1,208 1,370 2,460 2,622
Total operating expenses 9,840 10,528 19,346 21,264
Operating (loss) income (577) 302 (798) 623
Interest expense 42 77 109 171
Other - - - -
Total other expense 42 77 109 171
(Loss) income before income taxes (619) 225 (907) 452
Income tax (benefit) - - - -
Net (loss) income $ (619) $ 225 $ (907) $ 452
Earnings per share:
Basic $ (0.05) $ 0.02 $ (0.07) $ 0.04
Diluted $ (0.05) $ 0.02 $ (0.07) $ 0.04
Weighted average shares
outstanding:
Basic 12,222 11,731 12,111 11,748
Diluted 12,222 12,316 12,111 12,501
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)
June 30, December 31,
2005 2004
(Audited) (Audited)
------------ ------------
ASSETS
Current Assets:
Cash $ 1,323 $ 1,377
Accounts receivable (net of
allowance for doubtful accounts of
$1,196 at June 30, 2005 and $1,624
at December 31, 2004) 17,877 18,405
Inventory 2,753 2,662
Prepaid expenses and other 1,961 1,986
Total current assets 23,914 24,430
Property and equipment, net 10,742 12,499
Goodwill 25,169 25,169
Other assets, net 1,150 1,275
Total assets $ 60,975 $ 63,373
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 6,317 $ 6,023
Accrued expenses and other 2,706 2,630
Line of credit - 3,063
Total current liabilities 9,023 11,716
Noncurrent Liabilities:
Other non-current liabilities 1,037 1,098
Total noncurrent liabilities 1,037 1,098
Total shareholders' equity 50,915 50,559
Total liabilities and
shareholders' equity $ 60,975 $ 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 Six Months Ended
June 30, June 30,
(Unaudited) (Unaudited)
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (619) $ 225 $ (907) $ 452
Adjustments to net loss:
Depreciation and amortization 1,208 1,370 2,460 2,622
Loss on disposal of fixed assets - 100 - 100
Amortization of deferred
compensation - 18 - 51
Changes in working capital:
Accounts receivable, net (294) (524) 527 (1,198)
Inventory 674 1,296 (91) 5,899
Prepaid assets and other (284) (494) 31 (927)
Accounts payable, accrued
expenses and other (72) 563 344 866
Cash provided by operating
activities 613 2,554 2,364 7,865
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (294) (729) (583) (1,317)
Cash (used in) investing
activities (294) (729) (583) (1,317)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) under line of credit (2,194) (2,031) (3,063) (7,717)
(Payment) of capital lease obligation (18) (20) (36) (39)
Loan fees paid - (15) - (15)
Exercise of employee stock options 1,006 235 1,264 643
Stock reacquired to settle employee
stock bonus withholding
tax obligation - - - (286)
Cash (used in) provided by
financing activities (1,206) (1,831) (1,835) (7,414)
Net increase (decrease) in cash (887) (6) (54) (866)
Cash, beginning of period 2,210 1,368 1,377 2,228
Cash, end of period $ 1,323 $ 1,362 $ 1,323 $ 1,362
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.
SOURCE Innotrac Corporation
-0- 08/08/2005
/CONTACT: Christine Herren, Senior Director and Controller of Innotrac
Corporation, +1-678-584-4115, or cherren@innotrac.com /
/Web site: http://www.innotrac.com /
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