INNOTRAC CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 13, 2013

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Exhibit 99.1
 
Innotrac Corporation Announces 2013 Second Quarter Results
 
ATLANTA, GA (August 13, 2013) – Innotrac Corporation (NASDAQ: INOC) announced financial results today for the second quarter ended June 30, 2013.  The Company reported a 27% increase in net service revenues to $26.0 million for the three months ended June 30, 2013, up from $20.4 million for the same period last year.  This increase was fueled by the continued growth of strong blue chip clients as well as an expanded client base; driven by growth of eCommerce purchasing.
 
Total revenues for the quarter increased $6.4 million (28%) to $29.3 million, up from $22.9 million last year.  Total revenue for the six-month period ended June 30, 2013, increased $11.5 million (24%) to $58.6 million, from last year.
 
The Company reported net income of $1.0 million, or $0.07 per share, fully diluted, for the quarter, as compared to $0.4 million, or $0.03 per share for the same quarter of last year.   Net income for the six-month period ended June 30, 2013 was $2.0 million, or $0.15 per share, as compared to $0.9 million, or $0.07 per share, for the six months ended June 30, 2012.
 
“We have grown revenue by 27% over last year, doubled net income and earnings per share” said Scott Dorfman, Innotrac’s CEO.  “The business is continuing to grow thanks to our flexible integration methodology and unique partnership approach with our clients.  We take great pride in providing exceptional service and unparalleled metrics to manage their business, as consumers enjoy the convenience of eCommerce, and our clients continue to develop their omnichannel strategies to optimize inventory management.  We continue to demonstrate our strong operating leverage and an ability to scale volumes throughout the year.  We are committed to invest in technology and the expansion of our distribution network to offer exceptional solutions for our clients.”
 
“We ended the quarter with no outstanding advances on our line of credit, and over $4 million in cash,” said Steve Keaveney, CFO.  “We repaid a $1.6 million term loan from operating cash flow, further strengthening our balance sheet.  In addition to this, we secured a $25 million revolver with SunTrust Bank, our new banking Partner.”
 
About Innotrac
Innotrac Corporation, founded in 1984 and based near Atlanta, Georgia, is a best-in-class commerce provider integrating digital technology, fulfillment, contact center and business intelligence solutions to support global brands.  Innotrac’s fulfillment, order management and contact center solutions are integrated with all major web platforms, and seamlessly integrate with any required partner technologies.  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. Connect with Innotrac at www.innotrac.com or http://www.linkedin.com/company/innotrac.
 
 
 

 

 
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.  Please refer to the Risk Factors discussed in Innotrac’s 2012 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
 
Steve Keaveney
Chief Financial Officer
678-584-4020
skeaveney@innotrac.com
 
 
 

 

 
INNOTRAC CORPORATION and SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
             
   
June 30, 2013
    
December 31, 2012
  
   
(unaudited)
        
ASSETS
            
             
Current assets:
            
             
Cash and cash equivalents
   $ 4,382     $ 4,005  
Accounts receivable (net of allowance for doubtful accounts of $134 at June 30, 2013 and $136 at December 31, 2012)
     21,084       23,216  
Inventories, net
     820       740  
Prepaid expenses and other
     1,493       1,107  
Total current assets
     27,779       29,068  
                 
Property and equipment:
                
                 
Computers, machinery and equipment
     45,953       42,877  
Furniture, fixtures and leasehold improvements
     10,319       10,055  
      56,272       52,932  
Less accumulated depreciation and amortization
     (40,994 )     (39,089 )
      15,278       13,843  
                 
Other assets, net
     1,408       1,281  
                 
Total assets
   $ 44,465     $ 44,192  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
                 
Current liabilities:
                
Accounts payable
   $ 10,261     $ 10,409  
Line of credit
     -       -  
Accrued salaries
     2,532       2,854  
Equipment lease payable
     446       421  
Accrued expenses and other
     3,594       3,088  
Equipment loan
     -       1,620  
Total current liabilities
     16,833       18,392  
                 
Noncurrent liabilities:
                
                 
Deferred compensation
     908       837  
Equipment lease payable
     389       544  
                 
Other noncurrent liabilities
     786       963  
Total noncurrent liabilities
     2,083       2,344  
                 
Shareholders’ equity:
                
                 
Preferred stock: 10,000,000 shares authorized, $0.10 par value, no shares issued or outstanding
     -       -  
Common stock: 50,000,000 shares authorized, $0.10 par value, 13,245,440 shares issued and outstanding at June 30, 2013 13,155,440 shares issued and outstanding at December 31, 2012
     1,325       1,316  
Additional paid-in capital
     66,876       66,784  
Accumulated other comprehensive loss
     (2 )     (2 )
Accumulated deficit
     (42,664 )     (44,656 )
Total Innotrac shareholders’ equity
     25,535       23,442  
Noncontrolling interest
     14       14  
                 
Total shareholders’ equity
     25,549       23,456  
                 
Total liabilities and shareholders’ equity
   $ 44,465     $ 44,192  
 
 
 

 

 
INNOTRAC CORPORATION and SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2013 and 2012
(in thousands, except per share amounts)
             
      Three Months Ended June 30,  
   
2013
    
2012
  
   
(unaudited)
    
(unaudited)
  
             
Service revenues
   $ 25,997     $ 20,449  
Freight revenues
     3,275       2,497  
Total revenues
     29,272       22,946  
                 
Cost of service revenues
     12,831       9,624  
Freight expense
     3,193       2,411  
Selling, general and administrative expenses
     11,209       9,508  
Depreciation and amortization
     955       891  
Total operating expenses
     28,188       22,434  
Operating income
     1,084       512  
                 
Other expense (income):
                
Interest expense
     77       69  
Other (income) expense
     (1 )     3  
Total other expense
     76       72  
                 
Income before income taxes
     1,008       440  
Income taxes
     30       -  
Net income
     978       440  
Net loss attributable to noncontrolling interest
     -       1  
Net income attributable to Innotrac
   $ 978     $ 441  
                 
Earnings per share:
                
                 
Basic
   $ 0.07     $ 0.03  
                 
Diluted
   $ 0.07     $ 0.03  
                 
Weighted average shares outstanding:
                
                 
Basic
     13,245       13,010  
                 
Diluted
     13,263       13,010  
 
 
 

 

 
INNOTRAC CORPORATION and SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2013 and 2012
(in thousands, except per share amounts)
             
   
Six Months Ended June 30,
  
   
2013
    
2012
  
   
(unaudited)
    
(unaudited)
  
             
Service revenues
   $ 51,465     $ 41,769  
Freight revenues
     7,126       5,347  
Total revenues
     58,591       47,116  
                 
Cost of service revenues
     25,448       19,958  
Freight expense
     6,889       5,176  
Selling, general and administrative expenses
     22,172       19,257  
Depreciation and amortization
     1,905       1,716  
Total operating expenses
     56,414       46,107  
Operating income
     2,177       1,009  
                 
Other expense:
                
Interest expense
     155       122  
Other expense
     -       2  
Total other expense
     155       124  
                 
Income before income taxes
     2,022       885  
Income taxes
     30       -  
Net income
     1,992       885  
Net loss attributable to noncontrolling interest
     -       1  
Net income attributable to Innotrac
   $ 1,992     $ 886  
                 
Earnings per share:
                
                 
Basic
   $ 0.15     $ 0.07  
                 
Diluted
   $ 0.15     $ 0.07  
                 
Weighted average shares outstanding:
                
                 
Basic
     13,175       13,020  
                 
Diluted
     13,188       13,020  
 
 
 

 

 
INNOTRAC CORPORATION and SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2013 and 2012
(in thousands)
 
   
Six Months Ended June 30,
  
   
2013
    
2012
  
   
(unaudited)
    
(unaudited)
  
Cash flows from operating activities:
            
             
Net income
  $ 1,992     $ 885  
Adjustments to reconcile net income to net cash provided by operating activities:
                
                 
Depreciation and amortization
     1,905       1,716  
Provision for bad debts
     (1 )     5  
Stock compensation expense-restricted stock
     102       68  
Changes in operating assets and liabilities:
                
Accounts receivable, gross
     2,133       1,243  
Inventory
     (80 )     138  
                 
Prepaid expenses and other
     (342 )     (294 )
                 
Long-term assets
     41       (68 )
Accounts payable
    (1,503 )     (2,499 )
Accrued expenses, accrued salaries and other
     183       157  
Long-term liabilities
     (178 )     (105 )
Net cash provided by operating activities
     4,252       1,246  
                 
Cash flows from investing activities:
                
                 
Capital expenditures
     (1,896 )     (3,753 )
                 
Net change in noncurrent assets and liabilities
     (9 )     -  
                 
Net cash used in investing activities
     (1,905 )     (3,753 )
                 
Cash flows from financing activities:
                
                 
Borrowings on equipment loan
     -       1,800  
Payments on equipment loan
     (1,620 )     -  
Capital lease payments
     (219 )     (216 )
Loan commitment fees
     (131 )     (37 )
Net cash (used in) provided by financing activities
     (1,970 )     1,547  
                 
Net increase (decrease) in cash and cash equivalents
     377       (960 )
                 
Cash and cash equivalents, beginning of period
     4,005       3,283  
Cash and cash equivalents, end of period
   $ 4,382     $ 2,323  
                 
Supplemental cash flow disclosures:
                
                 
Cash paid for interest
   $ 123     $ 83  
Non-cash investing and financing activities:
                
Capital lease for warehouse and computer equipment
   $ 89     $ 862  
Capital expenditures in accounts payable
   $ 1,355     $ 216  
 
 

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