Innotrac Corporation Announces 2009 Fourth Quarter and Year End Results
ATLANTA, March 31 /PRNewswire-FirstCall/ -- Innotrac Corporation (Nasdaq: INOC) announced financial results today for the fourth quarter and year ended December 31, 2009. The Company reported revenues of $21.3 million for the quarter versus $37.2 million reported in the comparable period in 2008. For the year ended December 31, 2009, the Company reported revenues of $100.0 million compared to $131.4 million in 2008. The decrease in revenue for the year ended December 31, 2009 was primarily due to the loss of two large fulfillment service contracts, AT&T Fast Access DSL modem business at the end of June 2009 and the liquidation of the Smith & Hawken, LLC by its parent company in the third quarter of 2009 combined with lower than projected volumes in the 4th quarter from our existing customers due to general economic conditions.
The Company reported operating earnings of $2.7 million, before a fourth quarter 2009 one-time, non-cash goodwill impairment charge of $25.2 million, for the year ended December 31, 2009 compared to operating earnings of $4.5 million for the year ended December 31, 2008. After recording the one-time, non-cash goodwill impairment charge, the Company reported a net loss of $(22.7) million, or $(1.80) per share, for the year ended December 31, 2009 compared to a net profit of $3.3 million, or $0.26 per share for the year ended December 31, 2008. For the fourth quarter ended December 31, 2009 the Company reported a net loss of $(26.4) million, or $(2.09) per share, after the fourth quarter 2009 one-time, non-cash goodwill impairment charge, compared to a net profit for the fourth quarter of 2008 of $592,000, or $0.05 per share. The operating earnings of $2.7 million for the year ended December 31, 2009, before the fourth quarter 2009 one-time, non-cash goodwill impairment charge of $25.2 million, is calculated by adding the $25.2 million impairment charge back to our reported operating loss of $22.4 million presented in the condensed statement of operations for the year ended December 31, 2009 included in this press release.
Twelve Months Ended
December 31,
Audited
-------
2009 2008
---- ----
Operating (loss), income $(22,438) $4,509
One-time, non-cash goodwill impairment charge 25,169 -
------ ---
Operating income before one-time non-cash
goodwill impairment charge $2,731 $4,509
====== ======
The one-time, non-cash goodwill impairment charge of $25.2 million recorded in the 4th quarter of 2009 was determined in accordance with the requirements of Generally Accepted Accounting Principles during the Company's annual review for impairment performed in the fourth quarter. Since the goodwill impairment charge is a non-cash expense, it does not affect the company's liquidity. The Company completed 2009 with $1.1 million of cash on its balance sheet and no debt under its $15.0 million bank credit facility.
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 seven fulfillment centers and a call center in six 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 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2009 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
[email protected]
INNOTRAC CORPORATION
Condensed Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
(Unaudited) (Audited)
----------- ---------
2009 2008 2009 2008
---- ---- ---- ----
Service revenue $19,253 $30,461 $87,362 $104,487
Freight revenue 2,080 6,699 12,595 26,913
----- ----- ------ ------
Total revenue 21,333 37,160 99,957 131,400
Cost of service
revenues 9,855 16,607 39,467 50,797
Cost of freight
revenues 2,068 6,436 12,469 26,458
Selling, general and
administrative
expenses 9,849 12,212 40,991 45,293
Goodwill Impairment 25,169 - 25,169 -
Depreciation and
amortization 901 1,166 4,299 4,343
Total operating
expenses 47,842 36,421 122,395 126,891
------ ------ ------- -------
Operating (loss),
income (26,509) 739 (22,438) 4,509
Interest expense 44 147 251 1,231
--- --- --- -----
Total other
expense 44 147 251 1,231
--- --- --- -----
(Loss) income before
income taxes (26,553) 592 (22,689) 3,278
Income tax (benefit) (167) - - -
---- --- --- ---
Net (loss) income $(26,386) $592 $(22,689) $3,278
======== ==== ======== ======
Earnings per share:
Basic $(2.09) $0.05 $(1.80) $0.26
====== ===== ====== =====
Diluted $(2.09) $0.05 $(1.80) $0.26
====== ===== ====== =====
Weighted average shares
outstanding:
Basic 12,601 12,601 12,601 12,593
Diluted 12,601 12,601 12,601 12,594
INNOTRAC CORPORATION
Condensed Balance Sheets
(in thousands)
December 31, December 31,
2009 2008
---- ----
ASSETS (Audited) (Audited)
Current Assets:
Cash $1,118 $1,056
Accounts receivable (net of allowance
for doubtful accounts of $172 at December 31,
2009 and $271 at December 31, 2008) 14,521 25,793
Inventory 3,093 1,855
Prepaid expenses and other 1,693 1,262
Total current assets 20,425 29,966
Property and equipment, net 13,717 15,842
Goodwill - 25,169
Other assets, net 1,061 822
Total assets $35,203 $71,799
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $5,309 $9,259
Line of credit - 10,055
Accrued expenses and other 4,524 5,253
Total current liabilities 9,833 24,567
Noncurrent Liabilities:
Other non-current liabilities 1,491 753
Total noncurrent liabilities 1,491 753
Total shareholders' equity 23,879 46,479
Total liabilities and shareholders'
equity $35,203 $71,799
======= =======
INNOTRAC CORPORATION
Condensed Statements of Cash Flows
(in thousands)
Twelve Months Ended
December 31,
------------
(Audited) (Audited)
--------- ---------
2009 2008
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $(22,689) $3,278
Adjustments to net (loss) income:
Depreciation and amortization 4,299 4,343
Impairment of goodwill 25,169
Provision for bad debts 47 8
Loss on disposal of fixed assets 69 47
Stock compensation expense-stock options 14 72
Stock compensation expense-restricted stock 75 75
Changes in working capital:
Accounts receivable, gross 11,225 2,289
Inventory (1,238) (1,256)
Prepaid assets and other (384) (101)
Accounts payable, accrued expenses and
other (4,865) (5,246)
------ ------
Net cash provided by operating activities 11,722 3,509
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,691) (2,530)
Net change in noncurrent assets and liabilities 235 130
Cash used in investing activities (1,456) (2,400)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under line of
credit (10,055) 3,887
(Repayment) proceeds of term loan - (5,000)
Issuance of stock, net 42
Capital lease funding 3
Loan fees paid (152) (61)
Cash used in financing activities (10,204) (1,132)
------- ------
Net (decrease) increase in cash 62 (23)
Cash, beginning of period 1,056 1,079
Cash, end of period $1,118 $1,056
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SOURCE Innotrac Corporation
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