Exhibit 99.1
For additional information contact:
Richard S. DeRose (703) 293-7901
For release:
November 10, 2004 at 9:00 a.m.
Information Analysis Inc. Reports Increased Profit in Third Quarter
FAIRFAX, VIRGINIA – Information Analysis Inc. (IAIC:OTCBB) today reported results for its third fiscal quarter ended September 30, 2004. Revenues were $2,438,000, up from the $1,483,000 reported in 2003’s third quarter. The information technology services company reported a net income of $354,000, or $0.03 per share basic and diluted, compared to a net income of $11,000, or $0.00 per share basic and diluted, in 2003’s third quarter.
For the nine months ended September 30, 2004, IAI’s revenues were $6,712,000, compared to revenues of $3,585,000 for the same period in 2003. The Company reported a net income of $466,000, or $0.05 per share basic and $0.04 per share diluted, in contrast to a net loss of $254,000, or ($0.02) per share basic and diluted, reported for the comparable 2003 period.
“We experienced an increase in the third quarter revenue compared to the first two quarters of the year, and have been profitable for the past five quarters. After taking into consideration other operating income of $290,000, which was recovery of past due receivables, and officers’ bonuses totaling $30,000 paid in connection with this recovery, we are pleased to report that the effective net operating income was still $99,000, which shows that the company trend continues upward,” said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI. “Our contract wins have contributed to our increased revenue stream. Our participation in the Mainframe Migration Alliance (MMA), a consortium of organizations committed to helping customers migrate application workload from the mainframe to the Windows platform, is expected to significantly build our pipeline over the next 12 months.
“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. 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.
-- more --
Information Analysis Reports Increased Profit in Third Quarter
November 10, 2004
Page 2 of 4
Information Analysis Incorporated
Condensed Consolidated Income Statements
| Three months ended September 30, |
||||||||
| (in thousands, except per share data; unaudited) | 2004 |
2003 |
||||||
| Revenue: |
||||||||
| Professional fees |
$ | 2,255 | $ | 1,426 | ||||
| Software sales |
183 | 57 | ||||||
| Total revenue |
2,438 | 1,483 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
1,776 | 1,140 | ||||||
| Cost of software sales |
176 | 59 | ||||||
| Total cost of sales |
1,952 | 1,199 | ||||||
| Gross margin |
486 | 284 | ||||||
| Selling, general and administrative expense |
(417 | ) | (264 | ) | ||||
| Other operating income |
290 | |||||||
| Operating income |
359 | 20 | ||||||
| Other expense |
(5 | ) | (9 | ) | ||||
| Income before income taxes |
354 | 11 | ||||||
| Provision for income taxes |
— | — | ||||||
| Net income |
$ | 354 | $ | 11 | ||||
| Earnings per common share: |
||||||||
| Basic: Net income |
$ | 0.03 | $ | 0.00 | ||||
| Diluted: Net income |
$ | 0.03 | $ | 0.00 | ||||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,283,515 | 10,283,515 | ||||||
| Diluted |
11,019,408 | 10,329,468 | ||||||
-- more --
Information Analysis Reports Increased Profit in Third Quarter
November 10, 2004
Page 3 of 4
Information Analysis Incorporated
Condensed Consolidated Income Statements
| Nine months ended September 30, |
||||||||
| (in thousands, except per share data; unaudited) | 2004 |
2003 |
||||||
| Revenue: |
||||||||
| Professional fees |
$ | 6,314 | $ | 3,338 | ||||
| Software sales |
398 | 247 | ||||||
| Total revenue |
6,712 | 3,585 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
5,098 | 2,610 | ||||||
| Cost of software sales |
314 | 242 | ||||||
| Total cost of sales |
5,412 | 2,852 | ||||||
| Gross margin |
1,300 | 733 | ||||||
| Selling, general and administrative expense |
(1,098 | ) | (967 | ) | ||||
| Other operating income |
290 | — | ||||||
| Operating income (loss) |
492 | (234 | ) | |||||
| Other expense |
(26 | ) | (20 | ) | ||||
| Income (loss) before income taxes |
466 | (254 | ) | |||||
| Provision for income taxes |
— | — | ||||||
| Net income (loss) |
$ | 466 | $ | (254 | ) | |||
| Earnings per common share: |
||||||||
| Basic: Net income |
$ | 0.05 | $ | (0.02 | ) | |||
| Diluted: Net income |
$ | 0.04 | $ | (0.02 | ) | |||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,283,515 | 10,283,515 | ||||||
| Diluted |
11,009,825 | 10,283,515 | ||||||
-- more --
Information Analysis Reports Increased Profit in Third Quarter
November 10, 2004
Page 4 of 4
Information Analysis Incorporated and Subsidiaries
Consolidated Balance Sheets
| As of: |
||||||||
| September 30, 2004 |
December 31, 2003 |
|||||||
| (in thousands) | (unaudited) | (audited) | ||||||
| ASSETS |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 90 | $ | 318 | ||||
| Accounts receivable, net |
1,835 | 1,521 | ||||||
| Prepaid expenses |
117 | 116 | ||||||
| Note receivable |
85 | 85 | ||||||
| Other receivables |
6 | 16 | ||||||
| Capitalized Software, net |
— | 63 | ||||||
| Total current assets |
2,133 | 2,119 | ||||||
| Fixed assets, net |
31 | 31 | ||||||
| investments |
6 | 6 | ||||||
| Other assets |
17 | 37 | ||||||
| Total assets |
2,187 | 2,193 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 1,603 | $ | 1,151 | ||||
| Accrued payroll and related payroll items |
265 | 215 | ||||||
| Notes payable |
125 | 125 | ||||||
| Other accrued liabilities |
99 | 313 | ||||||
| Deferred revenue |
64 | 136 | ||||||
| Revolving line of credit |
— | 689 | ||||||
| Total current liabilities |
2,156 | 2,629 | ||||||
| Total liabilities |
2,156 | 2,629 | ||||||
| Common stock, par value $0.01, 30,000,000 shares authorized; 11.788,126 shares issued, 10.283,515 outstanding at September 30, 2004 and December 31, 2003, respectively |
118 | 118 | ||||||
| Additional paid in capital |
14,122 | 14,122 | ||||||
| Accumulated deficit |
(13,349 | ) | (13,816 | ) | ||||
| accumulated other comprehensive income |
(6 | ) | (6 | ) | ||||
| Less treasury stock; 1,504,611 shares at cost |
(854 | ) | (854 | ) | ||||
| Total stockholders’ equity |
31 | (436 | ) | |||||
| Total liabilities and stockholders’ equity |
2,187 | 2,193 | ||||||
-- end --