INNOTRAC CORPORATION 
By ATLANTA, Aug. 11, 2011 /PRNewswire/ -- Innotrac Corporation (NASDAQ-GM: INOC) announced financial results today for the second quarter and six months ended June 30, 2011. The Company reported an 8.1% increase in service revenues to $16.6 million for the quarter versus $15.3 million reported in the comparable period in 2010. For the six months ended June 30, 2011, the Company reported an 8.0% increase in service revenues to $33.9 million from $31.4 million reported in the comparable period in 2010. The increase in service revenue for both the quarter and six months ended June 30, 2011 was primarily due to the launch of new clients that were added during the fourth quarter of 2010.
Revenues recorded from freight billings, which are typically billed as a pass-through expense and do not materially impact the Company's operating income, declined to $2.0 million in the second quarter of 2011 compared to $3.1 million in the same quarter of 2010 due to certain clients transitioning their freight usage from the Company's account to client owned accounts. As a result of the reduction in freight revenues during the second quarter, total revenues for the three and six months ended June 30, 2011 were only 0.9% and 4.7% greater, respectively, than the same periods in 2010.
The Company reported a net loss of $816,000, or ($0.06) per share, fully diluted, for the three months ended June 30, 2011, versus a net loss of $1.1 million, or ($0.09) per share in the comparable period of 2010. For the six months ended June 30, 2011, the Company reported a net loss of $1.3 million, or ($0.10) per share, fully diluted, versus a net loss of $2.1 million, or ($0.16) per share in the comparable period of 2010.
"Consistent growth of approximately 8% in both the first and second quarters of 2011 compared to the same period in 2010 produced an improvement of $742,000 or a 36% reduction in our net loss to $1.3 million in the first six months of 2011 from $2.1 million in the same period in 2010. With several new clients scheduled to launch in the second half of the year, along with significant organic growth expected from one of our major clients, we anticipate growth in revenue for the remainder of the year. While we continue to invest in our business development efforts, we are controlling our total SG&A spending such that our SG&A costs as a percentage of total revenue has fallen to 45.5% for the six month period ended June 30, 2011 compared to 46.4% for the same period last year. With continued growth in revenue, we anticipate continued improvement in our operating results throughout the rest of 2011 compared to the same period last year." said George Hare, CFO.
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 in this release include statements relating to expected new clients, future operating results and performance future financial condition, 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, developing new business, Innotrac's ability to maintain or improve gross margins in the face of increasing revenues, 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
INNOTRAC CORPORATION
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended
June 30,
(Unaudited)
-----------
2011 2010
---- ----
Service revenue $16,589 $15,339
Freight revenue 2,025 3,116
----- -----
Total revenue 18,614 18,455
Cost of service revenues 7,684 6,827
Freight expense 2,064 3,069
Selling, general and
administrative expenses 8,794 8,745
Depreciation and amortization 840 884
Total operating expenses 19,382 19,525
------ ------
Operating loss (768) (1,070)
Interest expense 48 41
--- ---
Total other expense 48 41
--- ---
Loss before income taxes and (816) (1,111)
noncontrolling interest in net
loss
Income tax - -
Noncontrolling interest in net
loss - -
--- ---
Net loss $(816) $(1,111)
===== =======
Loss per share:
Basic $(0.06) $(0.09)
====== ======
Diluted $(0.06) $(0.09)
====== ======
Weighted average shares
outstanding:
Basic 12,815 12,861
Diluted 12,815 12,861
Six Months Ended
June 30,
(Unaudited)
-----------
2011 2010
---- ----
Service revenue $33,876 $31,367
Freight revenue 5,707 6,441
----- -----
Total revenue 39,583 37,808
Cost of service revenues 15,436 14,173
Freight expense 5,702 6,360
Selling, general and
administrative expenses 18,002 17,547
Depreciation and amortization 1,691 1,732
Total operating expenses 40,831 39,812
------ ------
Operating loss (1,248) (2,004)
Interest expense 94 80
--- ---
Total other expense 94 80
--- ---
Loss before income taxes and (1,342) (2,084)
noncontrolling interest in net
loss
Income tax - -
Noncontrolling interest in net
loss - -
--- ---
Net loss $(1,342) $(2,084)
======= =======
Loss per share:
Basic $(0.10) $(0.16)
====== ======
Diluted $(0.10) $(0.16)
====== ======
Weighted average shares
outstanding:
Basic 12,838 12,734
Diluted 12,838 12,734
INNOTRAC CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
June 30, December 31,
2011 2010
--------- -------------
ASSETS (Unaudited)
Current Assets:
Cash $3,567 $238
Accounts receivable (net of
allowance for 10,724 15,279
doubtful accounts of $94 at
June 30,
2011 and $242 at December 31,
2010)
Inventory 788 3,626
Prepaid expenses and other 1,338 1,149
----- -----
Total current assets 16,417 20,292
Property and equipment, net 10,738 11,380
Other assets, net 1,125 1,122
----- -----
Total assets $28,280 $32,794
======= =======
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts payable $2,931 $5,920
Line of credit - -
Accrued expenses and other 3,931 4,076
----- -----
Total current liabilities 6,862 9,996
Noncurrent Liabilities:
Other non-current liabilities 1,467 1,499
----- -----
Total noncurrent liabilities 1,467 1,499
Total shareholders' equity 19,951 21,299
------ ------
Total liabilities and
shareholders' equity $28,280 $32,794
======= =======
INNOTRAC CORPORATION
Condensed Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended
June 30,
(Unaudited)
-----------
2011 2010
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,342) $(2,084)
Adjustments to net loss:
Depreciation and amortization 1,691 1,732
Provision for bad debts 35 (24)
(Gain) loss on disposal of fixed assets (16) 9
Stock compensation expense-stock options 2 (3)
Stock compensation (income) expense-
restricted stock (25) 48
Decrease in other long-term assets 38 27
Increase in other long-term liabilities 19 114
Changes in working capital:
Accounts receivable, gross 4,520 2,233
Inventory 2,838 (742)
Prepaid assets and other (155) 477
Accounts payable, accrued expenses and other (3,379) (2,129)
------ ------
Net cash provided by (used in) operating
activities 4,226 (342)
----- ----
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (748) (506)
Proceeds from disposition of assets 17 -
Net change in noncurrent assets and
liabilities (7) (8)
Cash used in investing activities (738) (514)
---- ----
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit - 895
Capital lease payments (142) (119)
Contribution from noncontrolling interest 17 -
Loan fees paid (34) (62)
Cash (used in) provided by financing
activities (159) 714
---- ---
Net increase (decrease) in cash 3,329 (142)
Cash, beginning of period 238 1,118
Cash, end of period $3,567 $976
====== ====
SOURCE Innotrac Corporation
