Innotrac Corporation Announces 2008 Fourth Quarter and Year End Results

ATLANTA, March 30 /PRNewswire-FirstCall/ -- Innotrac Corporation (Nasdaq:
INOC) announced financial results today for the fourth quarter and year ended
December 31, 2008. The Company reported revenues of $37.2 million for the
quarter versus $36.9 million reported in the comparable period in 2007, a
slight increase of 0.7%. For the year ended December 31, 2008, the Company
reported revenues of $131.4 million compared to $121.8 million for the same
period in 2007, an increase of 7.9%. The increase in revenue for the twelve
months ended December 31, 2008 was primarily due to 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 $592,000, or $0.05 per share, fully
diluted, for the three months ended December 31, 2008, versus net income of
$425,000 or $0.03 per share in the comparable period of 2007. For the year
ended December 31, 2008, the Company reported net income of $3.3 million, or
$0.26 per share, fully diluted, compared to net income of $712,000, or $0.06
per share in the same period in 2007. Included in net income for the year
ended December 31, 2008 was approximately $959,000 of expenses directly
related to the terminated merger transaction with GSI Commerce, which
termination was announced on January 29, 2009.

On March 27, 2009, the Company extended its existing loan agreement with
Wachovia Bank, National Association through June 30, 2012. The amended and
restated agreement has a maximum borrowing limit of $15.0 million. The
amended and restated loan agreement is filed as an exhibit to the Company's
2008 Annual Report on Form 10-K filed with the Securities and Exchange
Commission today.

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, 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 and
numerous other factors discussed in Innotrac's 2008 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 Statements of Operations
(in thousands, except per share amounts)

Three Months Ended Twelve Months Ended
December 31, December 31,
(Unaudited)
2008 2007 2008 2007
Service revenue $30,461 $29,030 $104,487 $97,215
Freight revenue 6,699 7,870 26,913 24,601
Total revenue 37,160 36,900 131,400 121,816

Cost of service revenues 16,607 16,351 50,797 47,723
Cost of freight revenues 6,436 7,711 26,458 24,299
Selling, general and
administrative expenses 12,212 10,950 45,293 43,342
Depreciation and
amortization 1,166 1,066 4,343 4,846
Total operating expenses 36,421 36,078 126,891 120,210
Operating income 739 822 4,509 1,606
Interest expense 147 397 1,231 894
Total other expense 147 397 1,231 894
Income before income taxes 592 425 3,278 712
Income tax - - - -
Net income $592 $425 $3,278 $712

Earnings per share:
Basic $0.05 $0.03 $0.27 $0.06
Diluted $0.05 $0.03 $0.26 $0.06

Weighted average shares
outstanding:
Basic 12,335 12,586 12,327 12,301
Diluted 12,340 12,586 12,401 12,301

INNOTRAC CORPORATION
Condensed Balance Sheets
(in thousands)

December 31, December 31,
2008 2007
ASSETS
Current Assets:
Cash $1,056 $1,079
Accounts receivable (net of
allowance for doubtful accounts
of $271 at December 31, 2008
and $288 at December 31, 2007) 25,793 28,090
Inventory 1,855 599
Prepaid expenses and other 1,262 1,100
Total current assets 29,966 30,868

Property and equipment, net 15,842 17,702
Goodwill 25,169 25,169
Other assets, net 822 1,192

Total assets $71,799 $74,931

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $9,259 $14,050
Line of credit 10,055 6,168
Term loan - 5,000
Accrued expenses and other 5,253 5,708
Total current liabilities 24,567 30,926

Noncurrent Liabilities:
Other noncurrent liabilities 753 993
Total noncurrent liabilities 753 993

Total shareholders' equity 46,479 43,012

Total liabilities and
shareholders' equity $71,799 $74,931

INNOTRAC CORPORATION
Condensed Statements of Cash Flows
(in thousands)

Twelve Months Ended
December 31,

2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,278 $712
Adjustments to net income:
Depreciation and amortization 4,343 4,846
Provision for bad debts 8 43
Loss on disposal of fixed assets 47 16
Stock compensation expense-stock options 72 102
Stock compensation expense-restricted stock 75 53
Stock issued to settle employee stock bonus - 111
Changes in working capital:
Accounts receivable, gross 2,289 (5,194)
Inventory (1,256) 1,130
Prepaid assets and other (101) 294
Accounts payable, accrued expenses and
other (5,246) 1,797
Net cash provided by operating activities 3,509 3,910

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,530) (4,827)
Installment payment on previous acquisition
of business - (800)
Net change in noncurrent assets and
liabilities 130 (476)
Cash used in investing activities (2,400) (6,103)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under line of
credit 3,887 (2,418)
(Repayment) proceeds of term loan (5,000) 5,000
Issuance of stock, net 42 -
Loan commitment fees (61) (324)
Cash (used in) provided by financing
activities (1,132) 2,258

Net (decrease) increase in cash (23) 65
Cash, beginning of period 1,079 1,014
Cash, end of period $1,056 $1,079

SOURCE Innotrac Corporation

George Hare, Chief Financial Officer, +1-678-584-4020, ghare@innotrac.com