Exhibit 99.1
| For additional information contact: |
| Richard S. DeRose (703) 293-7901 |
| For release: |
| March 21, 2005 at 9:00 a.m. |
Information Analysis Inc. Announces Fourth Quarter Results
FAIRFAX, VIRGINIA – Information Analysis Inc. (IAIC:OTCBB) today reported results for the fourth quarter of its fiscal 2004 ended December 31, 2004. Revenues were $2,597,000, an increase of 46% from the $1,783,000 reported in 2003’s fourth quarter. The Information Technology services company reported a net income of $105,000, compared to a net profit of $20,000 in the comparable period in fiscal year 2003.
For the twelve months ended December 31, 2004, IAI had revenue of $9,309,000 and a net income of $572,000, or $0.06 per share basic and $0.05 per share diluted. The Company had revenue of $5,369,000 and a loss of $234,000 or $(0.02) per share for twelve months ended December 31, 2003.
“IAI had a solid year in 2004 and is well positioned to continue that trend.,” said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI. “Specifically, we accomplished several goals for the year that are critical to our future success. Primarily, we needed to strengthen our financial base and increase our pipeline for future sales. Attaining our first goal, we increased annual revenue by 73% and generated an $806,000 positive swing in profit from 2003. This result allowed the company to return to a position of positive stockholders’ equity. Our second goal was accomplished through new business relationships. By participating in the Mainframe Migration Alliance (MMA), a consortium of organizations, including Microsoft and MicroFocus, that help customers migrate application workload from the mainframe to the Windows platform, we have been able to build our pipeline of potential customers. We expect to convert that pipeline into additional customers during 2005 and future years. As a partner with Adobe, we have sold several enterprise deals to the Department of Veterans Affairs and the Internal Revenue Service. As a result, Adobe has brought IAI into more opportunities that should enhance our future business.
“We expect to continue our strong performance and to grow organically, while we also pursue merger/acquisition opportunities with other organizations.”
—more—
Information Analysis Reports Fourth Quarter Results
March 21, 2005
Page 2 of 4
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, 2004 and in other filings with the Securities and Exchange Commission.
Information Analysis Reports Fourth Quarter Results
March 21, 2005
Page 3 of 4
Information Analysis Incorporated
Condensed Consolidated Statements of Operations
| Three months ended December 31, |
||||||||
| (in thousands, except per share data) | 2004 |
2003 |
||||||
| Sales |
||||||||
| Professional fees |
$ | 2,321 | $ | 1,650 | ||||
| Software sales |
276 | 133 | ||||||
| Total sales |
2,597 | 1,783 | ||||||
| Cost of goods sold and services provided |
||||||||
| Cost of professional fees |
1,819 | 1,353 | ||||||
| Cost of software sales |
106 | 107 | ||||||
| Total cost of sales |
1,925 | 1,460 | ||||||
| Gross profit |
672 | 323 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
(558 | ) | (296 | ) | ||||
| Income from operations |
114 | 27 | ||||||
| Other expenses, net |
(9 | ) | (7 | ) | ||||
| Income before provision for income taxes |
105 | 20 | ||||||
| Provision for income taxes |
— | — | ||||||
| Net income |
105 | 20 | ||||||
| Earnings per Common Share – Basic and Diluted |
||||||||
| Basic net income |
$ | 0.01 | $ | 0.00 | ||||
| Diluted net income |
$ | 0.01 | $ | 0.00 | ||||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,283,515 | 10,283,515 | ||||||
| Diluted |
10,979,100 | 10,283,515 | ||||||
| Twelve months ended December 31, |
||||||||
| (in thousands, except per share data) | 2004 |
2003 |
||||||
| Sales |
||||||||
| Professional fees |
$ | 8,635 | $ | 4,989 | ||||
| Software sales |
674 | 380 | ||||||
| Total sales |
9,309 | 5,369 | ||||||
| Cost of goods sold and services provided |
||||||||
| Cost of professional fees |
6,917 | 3,963 | ||||||
| Cost of software sales |
420 | 350 | ||||||
| Total cost of sales |
7,337 | 4,313 | ||||||
| Gross profit |
1,972 | 1,056 | ||||||
| Selling, general and administrative expenses |
(1,656 | ) | (1,262 | ) | ||||
| Other operating income |
290 | — | ||||||
| Income (loss) from operations |
606 | (206 | ) | |||||
| Other expenses |
(34 | ) | (28 | ) | ||||
| Income (loss) before provision for income taxes |
572 | (234 | ) | |||||
| Provision for income taxes |
— | — | ||||||
| Net income (loss) |
572 | (234 | ) | |||||
| Earnings per Common Share – Basic and Diluted |
||||||||
| Basic net income (loss) |
$ | 0.06 | $ | (0.02 | ) | |||
| Diluted net income (loss) |
$ | 0.05 | $ | (0.02 | ) | |||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,283,515 | 10,283,515 | ||||||
| Diluted |
11,015,724 | 10,283,515 | ||||||
Information Analysis Reports Fourth Quarter Results
March 21, 2005
Page 4 of 4
Information Analysis Incorporated
Consolidated Balance Sheets
| As of December 31, 2004 |
As of December 31, 2003 |
|||||||
| ASSETS |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 116 | $ | 318 | ||||
| Accounts receivable, net |
2,170 | 1,521 | ||||||
| Note receivable |
85 | 85 | ||||||
| Prepaid expenses |
47 | 116 | ||||||
| Other receivables |
7 | 16 | ||||||
| Capitalized software, net |
— | 63 | ||||||
| Total current assets |
2,425 | 2,119 | ||||||
| Fixed assets, net |
35 | 31 | ||||||
| Investments |
3 | 6 | ||||||
| Other assets |
7 | 37 | ||||||
| Total assets |
$ | 2,470 | $ | 2,193 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 1,567 | $ | 1,151 | ||||
| Accrued payroll and related liabilities |
277 | 215 | ||||||
| Revolving line of credit |
220 | 689 | ||||||
| Notes payable |
125 | 125 | ||||||
| Deferred revenue |
83 | 136 | ||||||
| Other accrued liabilities |
65 | 312 | ||||||
| Total current liabilities |
2,337 | 2,628 | ||||||
| Total liabilities |
2,337 | 2,628 | ||||||
| Common stock, $0.01 par value, 30,000,000 shares authorized, 11,788,126 shares issued, 10,283,515 shares outstanding at December 31, 2004 and December 31, 2003 respectively |
118 | 118 | ||||||
| Additional paid-in capital |
14,122 | 14,122 | ||||||
| Accumulated deficit |
(13,244 | ) | (13,815 | ) | ||||
| Accumulated other comprehensive income (loss) |
(9 | ) | (6 | ) | ||||
| Treasury stock, 1,504,611 shares, at cost |
(854 | ) | (854 | ) | ||||
| Total stockholders’ equity |
133 | (435 | ) | |||||
| Total liabilities and stockholders’ equity |
$ | 2,470 | $ | 2,193 | ||||