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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 4 th 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 4 th 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
    ghare@innotrac.com
    
    
    
    
    
                                   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
                                                     ======          ======

SOURCE Innotrac Corporation

Copyright 2009 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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