Innotrac Corporation Announces 2011 Fourth Quarter and Year End Results

ATLANTA, March 30, 2012 /PRNewswire/ -- Innotrac Corporation (NASDAQ-GM: INOC) announced financial results today for the fourth quarter and year ended December 31, 2011.  The Company reported a 16.4% increase in service revenues to $23.4 million for the quarter versus $20.1 million reported in the comparable period in 2010.  For the year ended December 31, 2011, the Company reported an 11.3% increase in service revenues to $74.9 million from $67.4 million reported in the comparable period in 2010.  The increase in service revenue for both the quarter and year ended December 31, 2011 was primarily due to new client programs launched since October 2010 and a net increase in volume from existing clients.  

Total revenues, which include service and freight revenue, increased 10.1% and 6.4% for the three and twelve months ended December 31, 2011, respectively, when compared to the same periods in 2010.  Total revenues were $25.6 million for the three months ended December 31, 2011 compared to $23.2 million for the same period in 2010.  Total revenues were $84.7 million for the twelve months ended December 31, 2011 compared to $79.6 million for the same period in 2010.  Freight revenues, which are typically billed as a pass-through expense with minimal impact on the Company's operating income, declined for both the three and twelve month periods when compared to comparable periods in 2010 due to certain clients transitioning their freight usage from the Company's account to client owned accounts.

The Company reported net income of $294,000, or $0.02 per share, fully diluted, for the three months ended December 31, 2011, versus net income of $218,000, or $0.02 per share in the comparable period of 2010.  For the year ended December 31, 2011, the Company reported a net loss of $1.5 million, or ($0.12) per share, fully diluted, versus a net loss of $2.7 million, or ($0.21) per share in the comparable period of 2010.  

"During 2011 the online retail segment of the economy saw significant growth, with many of our clients seeing similar results," said Scott Dorfman, Innotrac's CEO.  "This growth, coupled with launching several new programs, further establishes Innotrac as a best-of-breed, direct-to-consumer fulfillment leader and led to over 11% year-over-year service revenue growth.  The boundaries between online and brick-and-mortar shopping continue to disappear, and the growth of mobile and tablet shopping has only increased exposure to many retailers' digital presence.  Our services support our clients' growth by allowing them to focus on sales expansion rather than the operational aspects of distribution."

"For the third consecutive year, we ended the year with no outstanding advances on our line of credit, and as of December 31, 2011 we had $3.3 million in cash on our balance sheet," said George Hare, CFO.

Innotrac

Innotrac Corporation, founded in 1984 and based near Atlanta, Georgia, is a best-of-breed commerce provider integrating digital technology, fulfillment and contact center solutions to support global brands.  The Company employs sophisticated order processing and warehouse management technology and operates eight fulfillment centers and one call center spanning all time zones across the continental United States.  Innotrac Europe GmbH has a network of fulfillment centers, call centers, and returns processing facilities with operations in the UK, Germany, France, Denmark, Sweden, Poland, Austria, Italy, Switzerland, Ireland, Spain and the Netherlands.  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 release include statements relating to future events and developments, as well as management's expectations, beliefs, plans, estimates and projections relating to the future.  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 and developing new business, Innotrac's ability to maintain or improve gross margins in the face of increasing revenues and pricing pressures, realization of expected revenues from new clients, the general state of the  industries that the Company serves, changing technologies, and numerous other factors discussed in Innotrac's 2011 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 Consolidated Statements of Operations

(in thousands, except per share amounts)





Three Months Ended




December 31,


Twelve Months Ended


(Unaudited)


December 31,


2011


2010


2011


2010

Service revenue

$         23,444


$   20,143


$ 74,943


$ 67,359

Freight revenue

2,140


3,098


9,741


12,260

    Total revenue

25,584


23,241


84,684


79,619









Cost of service revenues

12,703


9,770


36,211


30,983

Freight expense

2,085


3,052


9,642


12,069

Selling, general and








   administrative expenses

9,611


9,300


36,802


35,608

Depreciation and amortization

842


849


3,380


3,463

   Total operating expenses

25,241


22,971


86,035


82,123

Operating income (loss)

343


270


(1,351)


(2,504)

   Interest expense

48


52


186


183

   Other expense

1


-


3


-

       Total other expense

49


52


189


183

Net income (loss) before income taxes

294


218


(1,540)


(2,687)

  Income tax

-


-


-


-

Net income (loss)

294


218


(1,540)


(2,687)

  Net loss attributable to noncontrolling
  interest

-


-


2


-

Net income (loss) attributable to Innotrac

$              294


$       218


$  (1,538)


$ (2,687)









Earnings (loss)  per share:








   Basic

$             0.02


$      0.02


$   (0.12)


$    (0.21)

   Diluted

$             0.02


$      0.02


$   (0.12)


$    (0.21)









Weighted average shares








   outstanding:








   Basic

13,035


12,861


12,940


12,798

   Diluted

13,035


12,861


12,940


12,798





INNOTRAC CORPORATION

Condensed Consolidated Balance Sheets

(in thousands)







December 31, 2011


December 31, 2010

ASSETS




Current Assets:





Cash

$            3,283


$               238


Accounts receivable (net of allowance for doubtful
accounts of  $97 at December 31, 2011 and $242 at
December 31, 2010)

16,977


15,279


Inventory

743


3,626


Prepaid expenses and other

1,066


1,149


      Total current assets

22,069


20,292





Property and equipment, net

11,173


11,380

Other assets, net

1,100


1,122


       Total assets

$          34,342


$          32,794





LIABILITIES AND SHAREHOLDERS' EQUITY




Current Liabilities:





Accounts payable

$            7,914


$            5,920


Line of credit

-


-


Accrued expenses and other

4,484


4,076


      Total current liabilities

12,398


9,996





Noncurrent Liabilities:





Other non-current liabilities

2,128


1,499


      Total noncurrent liabilities

2,128


1,499







      Total shareholders' equity

19,816


21,299


      Total liabilities and shareholders' equity

$          34,342


$         32,794










INNOTRAC CORPORATION

Condensed Consolidated Statements of Cash Flows

(in thousands)




Twelve Months Ended



December 31,


2011


2010

CASH FLOWS FROM OPERATING ACTIVITIES:




Net loss

$      (1,540)


$     (2,687)

Adjustments to net loss:





Depreciation and amortization

3,380


3,463


Provision for bad debts

43


145


(Gain) loss on disposal of fixed assets

(15)


(9)


Stock compensation expense (income)-stock options

2


(1)


Stock compensation expense-restricted stock

39


108


Changes in operating assets and liabilities:





Accounts receivable, gross

(1,741)


(902)


Inventory

2,883


(533)


Prepaid assets and other

116


573


Other long-term assets

10


65


Accounts payable, accrued expenses and other

2,040


142


    Other long-term liabilities

532


162


Net cash provided by operating activities

5,749


526





CASH FLOWS FROM INVESTING ACTIVITIES:




Capital expenditures

(2,389)


(1,119)

Proceeds from disposition of assets

26


23


Net change in noncurrent assets and liabilities

(10)


(9)


Cash used in investing activities

(2,373)


(1,105)





CASH FLOWS FROM FINANCING ACTIVITIES:




Net borrowings under line of credit

-


-

Capital lease payments

(314)


(239)

Contribution from noncontrolling interest

17


-

Loan fees paid

(34)


(62)


Cash used in financing activities

(331)


(301)





Net increase (decrease)  in cash

3,045


(880)

Cash, beginning of period

238


1,118

Cash, end of period

$        3,283


$          238







SOURCE Innotrac Corporation



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