ATLANTA, Aug. 16 /PRNewswire-FirstCall/ -- Innotrac Corporation (Nasdaq-GM: INOC) announced financial results today for the second quarter and six months ended June 30, 2010. The Company reported revenues of $18.5 million for the quarter versus $27.6 million reported in the comparable period in 2009. For the six months ended June 30, 2010, the Company reported revenues of $37.8 million versus $56.4 million in the comparable period in 2009. The decrease in revenue for both the three and six months ended June 30, 2010 was primarily due to the loss of two large fulfillment service contracts, combined with lower volumes from our existing customers due to general economic conditions.

The Company reported a net loss of $1.1 million, or ($0.09) per share, fully diluted, for the three months ended June 30, 2010, versus net income of $1.8 million or $0.15 per share in the comparable period of 2009. For the six months ended June 30, 2010, the Company reported a net loss of $2.1 million, or ($0.16) per share, fully diluted, versus net income of $3.8 million or $0.30 per share in the comparable period of 2009.

Innotrac

Innotrac Corporation, founded in 1984 and based near Atlanta, Georgia, is a technology-based integrated fulfillment and Customer Care solutions provider serving enterprise clients and world-class brands. The Company employs sophisticated order processing and warehouse management technology and operates seven fulfillment centers and one call center 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 2009 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        Six Months Ended
                                      June 30,                 June 30,
                                     (Unaudited)             (Unaudited)
                                     -----------             -----------
                                   2010          2009    2010         2009
                                   ----          ----    ----         ----
    Service revenue             $15,339       $24,052 $31,367      $48,708
    Freight revenue               3,116         3,540   6,441        7,659
                                  -----         -----   -----        -----
         Total revenue           18,455        27,592  37,808       56,367

    Cost of service
     revenues                     6,827        10,327  14,173       20,987
    Freight expense               3,069         3,488   6,360        7,545
    Selling, general and
        administrative expenses   8,745        10,768  17,547       21,578
    Depreciation and
     amortization                   884         1,108   1,732        2,317
        Total operating
         expenses                19,525        25,691  39,812       52,427
                                 ------        ------  ------       ------
    Operating (loss) income      (1,070)        1,901  (2,004)       3,940
        Interest expense             41            59      80          165
                                    ---           ---     ---          ---
            Total other expense      41            59      80          165
                                    ---           ---     ---          ---
    (Loss) income before
     income taxes                (1,111)        1,842  (2,084)       3,775
        Income tax                    -             -       -            -
                                    ---           ---     ---          ---
    Net (loss) income           $(1,111)       $1,842 $(2,084)      $3,775
                                =======        ====== =======       ======

    (Loss) income per
     share:
        Basic                    $(0.09)        $0.15  $(0.16)       $0.30
                                 ======         =====  ======        =====
        Diluted                  $(0.09)        $0.15  $(0.16)       $0.30
                                 ======         =====  ======        =====

    Weighted average shares
        outstanding:
        Basic                    12,861        12,601  12,734       12,601
        Diluted                  12,861        12,601  12,734       12,601

                               INNOTRAC CORPORATION
                             Condensed Balance Sheets
                                  (in thousands)

                                                   June 30,   December 31,
                                                     2010          2009
                                                  ---------  -------------
      ASSETS                                     (Unaudited)    (Audited)
    Current Assets:
       Cash                                             $976         $1,118
       Accounts receivable (net of
        allowance for doubtful                        12,312         14,521
      accounts of $146 at June 30, 2010
       and $172 at
      December 31, 2009)
       Inventory                                       3,835          3,093
       Prepaid expenses and other                      1,245          1,693
                                                       -----          -----
             Total current assets                     18,368         20,425

     Property and equipment, net                      12,477         13,717
     Other assets, net                                 1,041          1,061
                                                       -----          -----
              Total assets                           $31,886        $35,203
                                                     =======        =======

      LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities:
       Accounts payable                               $3,726         $5,309
       Line of credit                                    895              -
       Accrued expenses and other                      3,973          4,524
                                                       -----          -----
             Total current liabilities                 8,594          9,833

    Noncurrent Liabilities:
       Other non-current liabilities                   1,452          1,491
                                                       -----          -----
             Total noncurrent liabilities              1,452          1,491

             Total shareholders' equity               21,840         23,879
                                                      ------         ------
             Total liabilities and shareholders'
              equity                                 $31,886        $35,203
                                                     =======        =======

                         INNOTRAC CORPORATION
                  Condensed Statements of Cash Flows
                            (in thousands)

                                                       Six Months Ended
                                                           June 30,
                                                         (Unaudited)
                                                         -----------
                                                       2010          2009
                                                       ----          ----
      CASH FLOWS FROM OPERATING ACTIVITIES:
      Net (loss) income                             $(2,084)       $3,775
      Adjustments to net (loss) income:
        Depreciation and amortization                 1,732         2,317
        Provision for bad debts                         (24)           39
        Loss on disposal of fixed assets                  9             -
        Stock compensation expense-stock
         options                                         (3)            6
        Stock compensation expense-restricted
         stock                                           48            37
        Decrease in other long-term assets               27            12
        Increase in other long-term
         liabilities                                    114            21
        Changes in working capital:
          Accounts receivable, gross                  2,233         8,930
          Inventory                                    (742)          741
          Prepaid assets and other                      477           (59)
          Accounts payable, accrued expenses and
           other                                     (2,129)       (4,404)
                                                     ------        ------
        Net cash (used in) provided by
         operating activities                          (342)       11,415
                                                       ----        ------

      CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures                             (506)         (674)
      Net change in noncurrent assets and
       liabilities                                       (8)          (31)
        Cash used in investing activities              (514)         (705)
                                                       ----          ----

      CASH FLOWS FROM FINANCING ACTIVITIES:
      Net borrowings (repayments) under line
       of credit                                        895       (10,055)
      Capital lease (payments) funding                 (119)          130
      Loan fees paid                                    (62)         (151)
        Cash provided by (used in) financing
         activities                                     714       (10,076)
                                                        ---       -------

      Net (decrease) increase in cash                  (142)          634
      Cash, beginning of period                       1,118         1,056
      Cash, end of period                              $976        $1,690
                                                       ====        ======

SOURCE Innotrac Corporation