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Innotrac Corporation Announces 2009 Second Quarter Results
ATLANTA, Aug. 14 /PRNewswire-FirstCall/ -- Innotrac Corporation (Nasdaq: INOC) announced financial results today for the second quarter and six months ended June 30, 2009. The Company reported revenues of $27.6 million for the quarter versus $29.5 million reported in the comparable period in 2008, a decrease of 6.6%. The decrease in revenue for the three months ended June 30, 2009 was primarily due to a $2.6 million decrease in freight revenue, which has no material impact on our operating profitability due to pricing practices for direct freight costs, offset by a $634,000 increase in service revenue for the quarter as compared to the same period in 2008. The increase in service revenue for the quarter resulted from a $1.4 million increase in service revenue from existing clients in our eCommerce and Telecom verticals offset by a $559,000 decrease in service revenue from our direct marketing vertical due to decreased volumes and a $177,000 decrease in service revenue from our DSL vertical resulting from the completed transition of a portion of the AT&T fulfillment business to AT&T's in-house fulfillment in mid June 2009.
For the six months ended June 30, 2009, the Company reported revenues of $56.4 million compared to $62.2 million for the same period in 2008, a decrease of 9.4%. The decrease in revenue for the six months ended June 30, 2009 was primarily due to a $5.7 million decrease in freight revenue resulting from the transition of Company owned freight accounts to client owned freight accounts and an $180,000 decrease in service revenue. The slight decrease in service revenue resulted from a $1.4 million decrease in direct marketing and B2B service revenue due to reduced volumes partially offset by a $1.2 million increase in service revenue resulting from increases in volumes from existing clients in our eCommerce, DSL and Telecom verticals.
The Company reported net income of $1.8 million, or $0.15 per share, fully diluted, for the three months ended June 30, 2009, versus net income of $995,000 or $0.08 per share in the comparable period of 2008. For the six months ended June 30, 2009, the Company reported net income of $3.8 million, or $0.30 per share, fully diluted, compared to net income of $1.9 million, or $0.15 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 seven 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 and attract new clients, 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
INNOTRAC CORPORATION
Condensed Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
(Unaudited) (Unaudited)
---------- ----------
2009 2008 2009 2008
---- ---- ---- ----
Service revenue $24,052 $23,418 $48,708 $48,888
Freight revenue 3,540 6,109 7,659 13,351
----- ----- ----- ------
Total revenue 27,592 29,527 56,367 62,239
Cost of service revenues 10,327 10,559 20,987 22,657
Freight expense 3,488 6,016 7,545 13,265
Selling, general and
administrative expenses 10,768 10,583 21,578 21,662
Depreciation and amortization 1,108 1,021 2,317 2,072
----- ----- ----- -----
Total operating expenses 25,691 28,179 52,427 59,656
------ ------ ------ ------
Operating income 1,901 1,348 3,940 2,583
Interest expense 59 353 165 726
--- --- --- ---
Total other expense 59 353 165 726
--- --- --- ---
Income before income taxes 1,842 995 3,775 1,857
Income tax - - - -
--- --- --- ---
Net income $1,842 $995 $3,775 $1,857
====== ==== ====== ======
Earnings per share:
Basic $0.15 $0.08 $0.30 $0.15
===== ===== ===== =====
Diluted $0.15 $0.08 $0.30 $0.15
===== ===== ===== =====
Weighted average shares
outstanding:
Basic 12,601 12,586 12,601 12,586
Diluted 12,601 12,602 12,601 12,594
INNOTRAC CORPORATION
Condensed Balance Sheets
(in thousands)
June 30, December 31,
2009 2008
---- ----
ASSETS (Unaudited)
Current Assets:
Cash $1,690 $1,056
Accounts receivable (net of allowance for
doubtful accounts of $248 at June 30,
2009 and $271 at December 31, 2008) 16,824 25,793
Inventory 1,114 1,855
Prepaid expenses and other 1,356 1,262
----- -----
Total current assets 20,984 29,966
Property and equipment, net 14,810 15,842
Goodwill 25,169 25,169
Other assets, net 981 822
--- ---
Total assets $61,944 $71,799
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $5,203 $9,259
Line of credit - 10,055
Accrued expenses and other 5,143 5,253
----- -----
Total current liabilities 10,346 24,567
Noncurrent Liabilities:
Equipment lease payable 503 -
Other noncurrent liabilities 798 753
--- ---
Total noncurrent liabilities 1,301 753
Total shareholders' equity 50,297 46,479
------ ------
Total liabilities and shareholders'
equity $61,944 $71,799
======= =======
INNOTRAC CORPORATION
Condensed Statements of Cash Flows
(in thousands)
Six Months Ended
June 30,
(Unaudited)
----------
2009 2008
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,775 $1,857
Adjustments to net income:
Depreciation and amortization 2,317 2,072
Provision for bad debts 39 (50)
Stock compensation expense-stock options 6 46
Stock compensation expense-restricted stock 37 37
Changes in working capital:
Accounts receivable, gross 8,930 6,798
Inventory 741 (223)
Prepaid assets and other (59) (504)
Accounts payable, accrued expenses and other (4,404) (8,466)
------ ------
Net cash provided by operating activities 11,382 1,567
------ -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (674) (1,412)
Net change in noncurrent assets and liabilities 2 57
- --
Cash used in investing activities (672) (1,355)
---- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments under line of credit (10,055) (948)
Proceeds from financing lease 130 -
Loan commitment fees (151) -
---- -
Cash used in financing activities (10,076) (948)
------- ----
Net increase (decrease) in cash 634 (736)
Cash, beginning of period 1,056 1,079
----- -----
Cash, end of period $1,690 $343
====== ====
SOURCE Innotrac Corporation