Innotrac Corporation Announces 2004 Third Quarter And Nine Month Results
ATLANTA, GA (November 3, 2004) – Innotrac Corporation (NASDAQ: INOC) announced financial results today for the third quarter ended September 30, 2004. For the three months ended September 30, 2004, the Company generated revenues of $17.6 million versus $18.5 million for the comparable period in 2003, a decline of 4.9%. This decline was primarily attributable to higher than expected softness in the direct response business line and the conclusion of two programs for one of our major clients. During the past two quarters, Innotrac has signed contracts with several new clients, which we anticipate will offset this decline. Innotrac went live and began shipping for the majority of these clients in October. Seasonal slowness and the start-up costs associated with the new client implementations resulted in a loss per share of $0.03 for the third quarter ended September 30, 2004 versus a loss per share of $0.02 in the comparable period of 2003.
For the nine months ended September 30, 2004, the Company generated revenues of $57.4 million versus $54.5 million for the comparable period in 2003, an increase of 5.4%. Innotrac produced $8.4 million in cash flows from operations for the nine months ended September 30, 2004 compared to a $2.1 million usage of cash in the first nine months of 2003. Earnings per share for the nine months ended September 30, 2004 was breakeven versus a loss of $0.13 in the comparable period of 2003.
On October 21, 2004, Tactica International, Inc. (“Tactica”), one of the Company’s direct response clients, filed for Chapter 11 bankruptcy protection. As part of this filing, Innotrac and Tactica have entered into a court approved Stipulation Agreement whereby Tactica has acknowledged the validity of Innotrac’s receivable and Innotrac’s associated first security interest in Tactica’s inventory. This agreement will allow Innotrac to continue providing services to Tactica on a prepaid basis while pursuing recovery of its full $2.7 million receivable, against which there is an existing $1.5 million reserve. We hope to recover a substantial portion of the receivable but it is too early in Tactica’s Chapter 11 proceeding to predict the ultimate recovery.
“The third quarter of 2004 was an exciting but challenging period for Innotrac. Despite higher than expected seasonal slowness and the start-up costs associated with implementing several new enterprise clients and opening a new facility in Delaware, we generated solid operational cash flows. Most of these expenses are now behind us and we are now gearing up for the holiday shipping season,” stated Scott D. Dorfman, President and Chief Executive Officer.
Conference Call
Innotrac Corporation will hold a conference call to discuss this release this evening, November 3rd, at 5:00 p.m. Eastern Standard Time. Investors can listen to the conference call live by dialing 1-877-569-0972 (Conference ID: 1461796) or by logging on to www.innotrac.com and clicking on “Webcasts and Presentations” in the “Company” section. The Webcast will be archived and available at the same Web address. Additionally, audio playback will be available at 1-800-642-1687 (Conference ID: 1461796).
About 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 six cities spanning all time zones across the continental United States. For more information about Innotrac, visit the Innotrac Web site, www.innotrac.com.
Information contained in this press release, other than historical information, may be considered forward-looking in nature and is 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. Without limitation, statements in this press release concerning future revenues from new clients, future results of operations, future general economic conditions and our ability to collect amounts owed to us by Tactica are forward-looking statements. 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 clients, the state of the telecommunications industry in general, Innotrac’s ability to maintain profit margins in the face of pricing pressures and numerous other factors discussed in Innotrac`s 2003 Annual Report on Form 10-K and other filings on file with the Securities and Exchange Commission.
Contact:
David L. Gamsey
Chief Financial Officer
Phone: 678-584-4020
Email: dgamsey@innotrac.com
Back...
