Exhibit 99.1
INNOTRAC CORPORATION ANNOUNCES 2005 FOURTH QUARTER AND YEAR END RESULTS
ATLANTA, April 3 /PRNewswire-FirstCall/ -- Innotrac Corporation (Nasdaq:
INOC) announced financial results today for the fourth quarter and fiscal year
ended December 31, 2005. The Company reported revenues of $18.2 million for the
quarter versus $20.9 million reported in the comparable period in 2004, a
decrease of 13.0%. The decrease in revenue was primarily attributed to reduced
volumes from our telecommunications and direct marketing clients, which was
partially offset by an increase in volumes from our DSL business. In addition,
we had a decrease in revenue from our retail/catalog clients as a result of the
anticipated termination of services for Martha Stewart Living Omnimedia.
For the year ended December 31, 2005, the Company reported revenues of
$73.9 million compared to $78.3 million for the same period in 2004, a decrease
of 5.7%. This decrease was primarily the result of reduced volumes from our
telecommunications business, which was partially offset by increased volumes
from our DSL business and an increase in revenues from our direct marketing and
retail/catalog businesses. The increase in revenues from our direct marketing
and retail/catalog businesses was the result of increased volumes and the
addition of several new clients, reduced by the termination of services for
Tactica International, Inc. and Martha Stewart Living Omnimedia.
The Company reported a net loss of $3.0 million, or $0.24 per share, for
the three months ended December 31, 2005, versus net income of $60,000, or
breakeven on a per share basis, in the comparable period of 2004. For the year
ended December 31, 2005, the Company reported a net loss of $4.7 million, or
$0.38 per share compared to net income of $110,000, or $0.01 per share, for the
same period in 2004. Contributing to the net loss for both the fourth quarter
and the year was an additional accounts receivable provision of approximately
$1.7 million recorded for Tactica in the fourth quarter. The Company is in the
process of liquidating Tactica's inventory in order to pay down Tactica's
receivable balance. The additional reserve was based on management's estimate of
the net realizable value of the remaining Tactica inventory, which was reduced
considerably in the fourth quarter as a result of buyers not materializing as
initially indicated by a the third party independent appraiser and a continuing
reduction in value of the merchandise. The Company produced $5.1 million in cash
flows from operations for 2005.
Conference Call
Innotrac Corporation will hold a conference call to discuss this release
this evening, April 3, 2006 at 5:00 PM Eastern Daylight Time. Investors can
listen to the conference call live by dialing 1-877-569-0972 (Conference ID:
5561452) 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: 5561452).
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 2005
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)
------------------------ ------------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues $ 18,168 $ 20,889 $ 73,892 $ 78,322
Cost of revenues 9,329 11,254 37,656 37,925
Selling, general and
administrative expenses 9,047 8,472 34,978 34,579
Bad Debt Expense 1,756 (245) 1,248 221
Depreciation and amortization 973 1,297 4,524 5,202
Total operating expenses 21,105 20,778 78,406 77,927
Operating (loss) income (2,937) 111 (4,514) 395
Interest expense 27 51 154 285
Total other expense 27 51 154 285
(Loss) income before income taxes (2,964) 60 (4,668) 110
Income tax (benefit) - - - -
Net (loss) income $ (2,964) $ 60 $ (4,668) $ 110
Earnings per share:
Basic $ (0.24) $ 0.01 $ (0.38) $ 0.01
Diluted $ (0.24) $ 0.00 $ (0.38) $ 0.01
Weighted average shares outstanding:
Basic 12,280 11,930 12,196 11,865
Diluted 12,280 12,473 12,196 12,522
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, 2006.
INNOTRAC CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2005 2004
(Audited) (Audited)
------------ ------------
ASSETS
Current Assets:
Cash $ 2,068 $ 1,377
Accounts receivable (net of
allowance for doubtful accounts
of $2,791 at December 31, 2005
and $1,624 at December 31, 2004) 12,745 18,405
Inventory 4,676 2,662
Prepaid expenses and other 1,383 1,986
Total current assets 20,872 24,430
Property and equipment, net 10,754 12,499
Goodwill 25,169 25,169
Other assets, net 1,177 1,275
Total assets $ 57,972 $ 63,373
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 6,707 $ 6,023
Accrued expenses and other 3,036 2,630
Line of credit - 3,063
Total current liabilities 9,743 11,716
Noncurrent Liabilities:
Other non-current liabilities 1,038 1,098
Total noncurrent liabilities 1,038 1,098
Total shareholders' equity 47,191 50,559
Total liabilities and
shareholders' equity $ 57,972 $ 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, 2006.
INNOTRAC CORPORATION
Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
(Unaudited) (Audited)
------------------------ ------------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (2,964) $ 60 $ (4,668) $ 110
Adjustments to net loss:
Depreciation and amortization 973 1,297 4,524 5,202
Provision for bad debts 1,755 (245) 1,247 (72)
Loss on disposal of fixed assets 28 - 40 106
Amortization of deferred compensation - 16 - 84
Changes in working capital:
Accounts receivable, gross (1,654) (1,104) 4,412 (2,651)
Inventory (545) 1,949 (2,014) 8,234
Prepaid assets and other 151 386 499 (1,304)
Accounts payable, accrued
expenses and other 2,327 (625) 1,089 192
Cash provided by operating activities 71 1,734 5,129 9,901
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,815) (650) (2,615) (2,762)
Cash used in investing activities (1,815) (650) (2,615) (2,762)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under
line of credit - (1,285) (3,063) (8,740)
Payment of capital lease obligation (5) (18) (58) (82)
Loan fees paid (2) - (2) (15)
Exercise of employee stock options 16 140 1,300 1,133
Stock reacquired to settle employee
stock bonus withholding tax obligation - - - (286)
Cash (used in) provided by
financing activities 9 (1,163) (1,823) (7,990)
Net increase (decrease) in cash (1,735) (79) 691 (851)
Cash, beginning of period 3,803 1,456 1,377 2,228
Cash, end of period $ 2,068 $ 1,377 $ 2,068 $ 1,377
Note: These statements should be read in conjunction with the Company's Form
10-K filed with the Securities and Exchange on March 31, 2006.
SOURCE Innotrac Corporation
-0- 04/03/2006
/CONTACT: Christine Herren, Senior Director and Controller of Innotrac
Corporation, +1-678-584-4115, or cherren@innotrac.com/
/Web site: http://www.innotrac.com/
(INOC)