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| 8-K - FORM 8-K - INNOTRAC CORP | t70156_8k.htm |
Exhibit 99.1
Innotrac Corporation Announces 2010 Fourth Quarter and Year End Results
ATLANTA, GA (March 31, 2011) – Innotrac Corporation (NASDAQ-GM: INOC) announced financial results today for the fourth quarter and year ended December 31, 2010. The Company reported revenues of $23.2 million for the quarter versus $21.3 million reported in the comparable period in 2009. For the year ended December 31, 2010, the Company reported revenues of $79.6 million versus $100.0 million in the comparable period in 2009. The increase in revenue for the three months ended December 31, 2010, was due to the addition of new clients and a net increase in revenue from existing clients, primarily from our eCommerce vertical. The decrease in revenue for the year ended December 31, 2010, was primarily due to one of our larger retail and eCommerce clients closing their operations in 2009, the merger of one of our telecommunications clients resulting in the merged company utilizing in-house services for a portion of their fulfillment starting in third quarter of 2009 and overall softness in our Direct Marketing vertical during 2010 due to general economic conditions.
The Company reported net income of $218,000, or $0.02 per share, fully diluted, for the three months ended December 31, 2010, versus a net loss of $26.4 million, after recording a one-time, non-cash goodwill impairment charge of $25.2 million, or ($2.09) per share in the comparable period of 2009. For the year ended December 31, 2010, the Company reported a net loss of $2.7 million, or ($0.21) per share, fully diluted, versus a net loss of $22.7 million or ($1.80) per share in the comparable period of 2009.
“During 2010 we controlled our operating expenses while maintaining our administrative and IT infrastructure to allow for a quick response to the economy when it improves. For the second consecutive year, we ended the year with no outstanding advances on our line of credit,” said George Hare, CFO.
“We continued our focus on our sales and marketing initiatives during the fourth quarter and are developing new service capabilities to support our clients’ growth strategies. Our joint venture with PVS Fulfillment Service GmbH in Germany allows us to expand our operations into Europe, an attractive market for North American brands. Innotrac now provides the infrastructure and end-to-end services necessary for multi-channel merchants to successfully launch and operate an eCommerce business in this market. There is additional opportunity to support European marketers who want to expand into the North American market through Innotrac’s network,” said Scott Dorfman, CEO.
Innotrac
Innotrac Corporation, founded in 1984 and based near 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 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 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 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, developing new business, reducing operating costs in response to reduced service revenues, 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 2010 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
###
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INNOTRAC CORPORATION
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Condensed Statements of Operations
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(in thousands, except per share amounts)
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Three Months Ended
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December 31,
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Twelve Months Ended
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(Unaudited)
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December 31,
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2010
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2009
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2010
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2009
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Service revenue
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$ | 20,143 | $ | 19,253 | $ | 67,359 | $ | 87,362 | ||||||||
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Freight revenue
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3,098 | 2,080 | 12,260 | 12,595 | ||||||||||||
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Total revenue
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23,241 | 21,333 | 79,619 | 99,957 | ||||||||||||
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Cost of service revenues
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9,770 | 9,855 | 30,983 | 39,467 | ||||||||||||
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Freight expense
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3,052 | 2,068 | 12,069 | 12,469 | ||||||||||||
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Selling, general and
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administrative expenses
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9,300 | 9,849 | 35,608 | 40,991 | ||||||||||||
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Goodwill impairment
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- | 25,169 | - | 25,169 | ||||||||||||
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Depreciation and amortization
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849 | 901 | 3,463 | 4,299 | ||||||||||||
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Total operating expenses
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22,971 | 47,842 | 82,123 | 122,395 | ||||||||||||
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Operating income (loss)
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270 | (26,509 | ) | (2,504 | ) | (22,438 | ) | |||||||||
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Interest expense
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52 | 44 | 183 | 251 | ||||||||||||
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Total other expense
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52 | 44 | 183 | 251 | ||||||||||||
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Income (loss) before income taxes
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218 | (26,553 | ) | (2,687 | ) | (22,689 | ) | |||||||||
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Income tax
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- | (167 | ) | - | - | |||||||||||
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Net income (loss)
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$ | 218 | $ | (26,386 | ) | $ | (2,687 | ) | $ | (22,689 | ) | |||||
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Income (loss) per share:
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Basic
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$ | 0.02 | $ | (2.09 | ) | $ | (0.21 | ) | $ | (1.80 | ) | |||||
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Diluted
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$ | 0.02 | $ | (2.09 | ) | $ | (0.21 | ) | $ | (1.80 | ) | |||||
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Weighted average shares
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outstanding:
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Basic
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12,861 | 12,601 | 12,798 | 12,601 | ||||||||||||
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Diluted
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12,861 | 12,601 | 12,798 | 12,601 | ||||||||||||
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INNOTRAC CORPORATION
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Condensed Balance Sheets
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(in thousands)
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December 31, 2010
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December 31, 2009
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ASSETS
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Current Assets:
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Cash
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$ | 238 | $ | 1,118 | ||||
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Accounts receivable (net of allowance for doubtful accounts of $242 at December 31, 2010 and $172 at December 31, 2009)
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15,279 | 14,521 | ||||||
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Inventory
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3,626 | 3,093 | ||||||
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Prepaid expenses and other
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1,149 | 1,693 | ||||||
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Total current assets
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20,292 | 20,425 | ||||||
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Property and equipment, net
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11,380 | 13,717 | ||||||
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Other assets, net
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1,122 | 1,061 | ||||||
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Total assets
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$ | 32,794 | $ | 35,203 | ||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current Liabilities:
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Accounts payable
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$ | 5,920 | $ | 5,309 | ||||
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Line of credit
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- | - | ||||||
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Accrued expenses and other
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4,076 | 4,524 | ||||||
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Total current liabilities
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9,996 | 9,833 | ||||||
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Noncurrent Liabilities:
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Other non-current liabilities
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1,499 | 1,491 | ||||||
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Total noncurrent liabilities
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1,499 | 1,491 | ||||||
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Total shareholders' equity
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21,299 | 23,879 | ||||||
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Total liabilities and shareholders' equity
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$ | 32,794 | $ | 35,203 | ||||
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INNOTRAC CORPORATION
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Condensed Statements of Cash Flows
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(in thousands)
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Twelve Months Ended
December 31,
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2010
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2009
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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$ | (2,687 | ) | $ | (22,689 | ) | ||
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Adjustments to net loss:
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Depreciation and amortization
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3,463 | 4,299 | ||||||
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Impairment of goodwill
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- | 25,169 | ||||||
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Provision for bad debts
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145 | 47 | ||||||
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(Gain) loss on disposal of fixed assets
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(9 | ) | 69 | |||||
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Stock compensation expense-stock options
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(1 | ) | 14 | |||||
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Stock compensation expense-restricted stock
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108 | 75 | ||||||
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Decrease in other long-term assets
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65 | 46 | ||||||
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Increase in other long-term liabilities
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162 | 241 | ||||||
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Changes in working capital:
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Accounts receivable, gross
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(902 | ) | 11,225 | |||||
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Inventory
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(533 | ) | (1,238 | ) | ||||
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Prepaid assets and other
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573 | (384 | ) | |||||
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Accounts payable, accrued expenses and other
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142 | (4,865 | ) | |||||
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Net cash provided by operating activities
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526 | 12,009 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Capital expenditures
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(1,119 | ) | (1,691 | ) | ||||
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Proceeds from disposition of assets
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23 | - | ||||||
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Net change in noncurrent assets and liabilities
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(9 | ) | (52 | ) | ||||
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Cash used in investing activities
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(1,105 | ) | (1,743 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Net repayments under line of credit
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- | (10,055 | ) | |||||
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Capital lease (payments) funding
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(239 | ) | 3 | |||||
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Loan fees paid
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(62 | ) | (152 | ) | ||||
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Cash used in financing activities
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(301 | ) | (10,204 | ) | ||||
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Net (decrease) increase in cash
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(880 | ) | 62 | |||||
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Cash, beginning of period
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1,118 | 1,056 | ||||||
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Cash, end of period
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$ | 238 | $ | 1,118 | ||||