Exhibit 99.1
| For additional information contact: |
| Richard S. DeRose (703) 293-7901 |
| For release: August 16, 2004 at 9:00 a.m. |
Information Analysis Inc. Reports Second Quarter Results
FAIRFAX, VIRGINIA – Information Analysis Inc. (OTCBB: IAIC) reported results for the second quarter ended June 30, 2004. Revenues were $2,157,000 up 82% from the $1,182,000 reported in 2003’s second quarter. The Company reported net income of $59,000, or $0.01 per share, compared to a net loss of $74,000, or ($0.01) per share in 2003’s second quarter. For the six months ended June 30, 2004, IAI had revenue of $4,274,000, up from the $2,103,000 reported for six months ending June 30, 2003. Net income for the first six months of fiscal 2004 was $112,000, or $0.01 per share, versus a net loss of $264,000, or ($0.03) per share, in the comparable 2003 period.
The Company attributes the improvement in the second quarter in comparison to the second quarter of 2003 to increased sales success. “We now have four consecutive quarters of profitability,” said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI. “The return to profitability has improved our balance sheet and cash flow.
“The Company is continuing the active pursuit of the conversion and system modernization business in addition to developing business opportunities in the area of Web applications. We have also formed alliances with a number of software product companies where IAI will be the general systems integrator. This will allow the company to work on a greater number of opportunities which should significantly build our pipeline for the second half of the year and forward.
“We still are in merger and acquisition discussions with a number of firms and hope to complete a transaction in the future.”
About Information Analysis Incorporated
Information Analysis Incorporated (www.infoa.com), headquartered in Fairfax, Virginia, is an information technology services company. The Company is a web solution provider and software conversion specialist, modernizing legacy systems and extending their reach to the Internet world.
Additional information for investors
This release may contain forward-looking statements regarding the Company’s business, customer prospects, or other factors that may affect future earnings or financial results. Such statements involve risks and uncertainties which could cause actual results to vary materially from those expressed in the forward-looking statements. These include the failure to obtain sufficient contracts, and to profitably complete those contracts. Investors should read and understand the risk factors detailed in the Company’s 10-KSB for the fiscal year ended December 31, 2003 and in other filings with the Securities and Exchange Commission.
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Information Analysis Reports Second Quarter Results
August 16, 2004
Page 2 of 4
Information Analysis Incorporated
Condensed Income Statements
| Three months ended June 30, |
||||||||
| (in thousands, except per share data; unaudited) | 2004 |
2003 |
||||||
| Sales: |
||||||||
| Professional fees |
$ | 2,069 | $ | 1,086 | ||||
| Software sales |
88 | 96 | ||||||
| Total sales |
2,157 | 1,182 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
1,661 | 848 | ||||||
| Cost of software sales |
72 | 99 | ||||||
| Total cost of sales |
1,733 | 947 | ||||||
| Gross margin |
424 | 235 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
352 | 302 | ||||||
| Operating income (loss) |
72 | (67 | ) | |||||
| Other expense |
(13 | ) | (7 | ) | ||||
| Income (loss) before income taxes |
59 | (74 | ) | |||||
| Provision for income taxes |
— | — | ||||||
| Net income (loss) |
$ | 59 | $ | (74 | ) | |||
| Net income per share: |
||||||||
| Basic: |
||||||||
| Net income (loss) |
$ | 0.01 | $ | (0.01 | ) | |||
| Diluted: |
||||||||
| Net income (loss) |
$ | 0.01 | $ | (0.01 | ) | |||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,283,515 | 10,283,515 | ||||||
| Diluted |
11,073,148 | 10,283,515 | ||||||
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Information Analysis Reports Second Quarter Results
August 16, 2004
Page 3 of 4
Information Analysis Incorporated
Condensed Income Statements
| Six months ended June 30, |
||||||||
| (in thousands, except per share data; unaudited) | 2004 |
2003 |
||||||
| Sales: |
||||||||
| Professional fees |
$ | 4,060 | $ | 1,913 | ||||
| Software sales |
214 | 190 | ||||||
| Total sales |
4,274 | 2,103 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
3,322 | 1,470 | ||||||
| Cost of software sales |
138 | 183 | ||||||
| Total cost of sales |
3,460 | 1,653 | ||||||
| Gross margin |
814 | 450 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
681 | 703 | ||||||
| Operating income (loss) |
133 | (253 | ) | |||||
| Other expense |
(21 | ) | (11 | ) | ||||
| Income (loss) before income taxes |
112 | (264 | ) | |||||
| Provision for income taxes |
— | — | ||||||
| Net income (loss) |
$ | 112 | $ | (264 | ) | |||
| Net income per share: |
||||||||
| Basic: |
||||||||
| Net income (loss) |
$ | 0.01 | $ | (0.03 | ) | |||
| Diluted: |
||||||||
| Net income (loss) |
$ | 0.01 | $ | (0.03 | ) | |||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,283,515 | 10,283,515 | ||||||
| Diluted |
11,021,141 | 10,283,515 | ||||||
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Information Analysis Reports Second Quarter Results
August 16, 2004
Page 4 of 4
Information Analysis Incorporated
Condensed Income Statements
| As of June 30, 2004 |
As of 2003 (audited) |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 24 | $ | 318 | ||||
| Accounts receivable, net |
1,510 | 1,521 | ||||||
| Note receivable |
85 | 85 | ||||||
| Prepaid expenses |
81 | 116 | ||||||
| Capitalized software, net |
21 | 63 | ||||||
| Other receivables |
12 | 16 | ||||||
| Total current assets |
1,733 | 2,119 | ||||||
| Fixed assets, net |
28 | 31 | ||||||
| Investments |
6 | 6 | ||||||
| Other assets |
26 | 37 | ||||||
| Total assets |
$ | 1,793 | $ | 2,193 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Revolving line of credit |
$ | 86 | $ | 689 | ||||
| Accounts payable |
1,532 | 1,151 | ||||||
| Accrued payroll and related liabilities |
269 | 215 | ||||||
| Deferred revenues |
73 | 136 | ||||||
| Other accrued liabilities |
31 | 313 | ||||||
| Total current liabilities |
1,991 | 2,504 | ||||||
| Long-term debt |
125 | 125 | ||||||
| Total liabilities |
2,116 | 2,629 | ||||||
| Common stock, par value $0.01, 30,000,000 shares authorized; 11,788,126 shares issued, 10,283,515 outstanding at June 30, 2004 and December 31, 2003 |
118 | 118 | ||||||
| Additional paid in capital |
14,122 | 14,122 | ||||||
| Accumulated deficit |
(13,703 | ) | (13,816 | ) | ||||
| Accumulated other comprehensive income |
(6 | ) | (6 | ) | ||||
| Less treasury stock; 1,504,611 shares at cost |
(854 | ) | (854 | ) | ||||
| Total stockholders’ equity |
(323 | ) | (436 | ) | ||||
| Total liabilities and stockholders’ equity |
$ | 1,793 | $ | 2,193 | ||||