ATLANTA, Nov. 10 /PRNewswire-FirstCall/ -- Innotrac Corporation
(NASDAQ: INOC) announced financial results today for the third
quarter and nine months ended September 30, 2008. The Company
reported revenues of $32.0 million for the quarter versus $29.1
million reported in the comparable period in 2007, an increase of
10.0%. For the nine months ended September 30, 2008, the Company
reported revenues of $94.2 million compared to $84.9 million for
the same period in 2007, an increase of 11.0%. The increase in
revenue for the three and nine months ended September 30, 2008 was
primarily due to the addition of several new direct marketing
clients and increased revenue from existing clients in our
eCommerce, DSL and direct marketing verticals. These increases were
offset by a decrease in revenues from our B2B and telecom
verticals. The Company reported net income of $829,000, or $0.07
per share, fully diluted, for the three months ended September 30,
2008, versus net income of $1.0 million or $0.08 per share in the
comparable period of 2007. For the nine months ended September 30,
2008, the Company reported net income of $2.7 million, or $0.22 per
share, compared to net income of $287,000, or $0.02 per share in
the same period in 2007. Approximately $292,000 of expenses
directly related to the merger transaction described below were
included in the financial results for the three months ended
September 30, 2008. The GSI Commerce Merger On October 5, 2008, the
Company entered into an Agreement and Plan of Merger (the "Merger
Agreement") with GSI Commerce, Inc., a Delaware corporation
("GSI"), and Bulldog Acquisition Corp., a Georgia corporation and
wholly-owned subsidiary of GSI ("Acquisition Sub"). On October 6,
2008, the Company filed a Form 8-K which presented a summary of the
Merger Agreement and included the Merger Agreement and related
agreements as exhibits. Subject to satisfaction of the terms and
conditions of the Merger Agreement, Acquisition Sub will merge with
and into the Company, with the Company continuing as the surviving
corporation and a wholly-owned subsidiary of GSI. It is expected
that the merger will be consummated during the first half of 2009.
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 eight fulfillment centers and
two call centers in seven cities spanning all time zones across the
continental United States. For more information about Innotrac,
visit the Innotrac Website, http://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 press release include our expectations for
future progress in our business and future generation of cash
flows. 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 and
attract new clients, realization of expected revenues from new
clients, the state of the telecommunications and direct response
industries in general, changing technologies, Innotrac's ability to
maintain profit margins in the face of pricing pressures, the
occurrence of any event, change or other circumstance that could
give rise to the termination of the Merger Agreement, the inability
to complete the merger due to the failure to receive approvals or
to satisfy other conditions, the risk that the proposed merger
disrupts current plans and operations, the risk that anticipated
synergies and opportunities as a result of the transaction will not
be realized, difficulty or unanticipated expenses in connection
with integrating Innotrac into GSI, the risk that the combined
company does not perform as planned, potential difficulties in
employee retention following the closing of the merger and numerous
other factors discussed in Innotrac's 2007 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. INNOTRAC
CORPORATION Condensed Statements of Operations (in thousands,
except per share amounts) Three Months Ended Nine Months Ended
September 30, September 30, (Unaudited) (Unaudited) 2008 2007 2008
2007 Service revenue $ 25,138 $23,536 $ 74,028 $ 68,185 Freight
revenue 6,863 5,551 20,213 16,731 Total revenue 32,001 29,087
94,241 84,916 Cost of service revenues 11,532 10,657 34,190 31,372
Freight expense 6,757 5,558 20,022 16,588 Selling, general and
administrative expenses 11,419 10,490 33,081 32,392 Depreciation
and amortization 1,106 1,185 3,178 3,787 Total operating expenses
30,814 27,890 90,471 84,139 Operating income 1,187 1,197 3,770 777
Interest expense 358 161 1,084 490 Total other expense 358 161
1,084 490 Income before income taxes 829 1,036 2,686 287 Income tax
- - - - Net income $829 $1,036 $2,686 $287 Earnings per share:
Basic $0.07 $0.08 $0.22 $0.02 Diluted $0.07 $0.08 $0.22 $0.02
Weighted average shares outstanding: Basic 12,332 12,320 12,324
12,296 Diluted 12,442 12,320 12,429 12,296 INNOTRAC CORPORATION
Condensed Balance Sheets (in thousands) September 30, December 31,
2008 2007 ASSETS (Unaudited) (Audited) Current Assets: Cash $620
$1,079 Accounts receivable (net of allowance for doubtful accounts
of $286 at September 30, 2008 and $288 at December 31, 2007) 24,844
28,090 Inventory 1,209 599 Prepaid expenses and other 1,193 1,100
Total current assets 27,866 30,868 Property and equipment, net
16,906 17,702 Goodwill 25,169 25,169 Other assets, net 1,012 1,192
Total assets $70,953 $74,931 LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities: Accounts payable $7,551 $14,050 Line of credit
9,114 6,168 Term loan - 5,000 Accrued expenses and other 7,576
5,708 Total current liabilities 24,241 30,926 Noncurrent
Liabilities: Other non-current liabilities 857 993 Total noncurrent
liabilities 857 993 Total shareholders' equity 45,855 43,012 Total
liabilities and shareholders' equity $70,953 $74,931 INNOTRAC
CORPORATION Condensed Statements of Cash Flows (in thousands) Nine
Months Ended September 30, (Unaudited) 2008 2007 CASH FLOWS FROM
OPERATING ACTIVITIES: Net income $2,686 $287 Adjustments to net
income: Depreciation and amortization 3,178 3,787 Provision for bad
debts - (16) Stock compensation expense-stock options 59 88 Stock
compensation expense-restricted stock 56 - Stock issued to settle
employee stock bonus - 111 Changes in working capital: Accounts
receivable, gross 3,245 2,189 Inventory (609) 810 Prepaid assets
and other 87 (7) Accounts payable, accrued expenses and other
(4,767) (3,024) Net cash provided by operating activities 3,935
4,225 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures
(2,382) (3,836) Installment payment on previous acquisition of
business - (800) Cash used in investing activities (2,382) (4,636)
CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings (repayments)
under line of credit 2,946 (4,581) (Repayment) proceeds of term
loan (5,000) 5,000 Issuance of stock, net 42 - Loan commitment fees
- (425) Cash used in financing activities (2,012) (6) Net decrease
in cash (459) (417) Cash, beginning of period 1,079 1,014 Cash, end
of period $620 $597 DATASOURCE: Innotrac Corporation CONTACT:
George Hare, Chief Financial Officer of Innotrac Corporation,
+1-678-584-4020, Web site: http://www.innotrac.com/
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