Exhibit 99.1
| For additional information contact: |
| Sandor Rosenberg (703) 293-7900 |
| For release: August 10, 2005 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, 2005. Revenues were $3,006,000 up 39% from the $2,158,000 reported in 2004’s second quarter. The Company reported net income of $148,000, or $0.01 per share, compared to net income of $59,000, or $0.01 per share in 2004’s second quarter. For the six months ended June 30, 2005, IAI had revenue of $5,193,000, up from the $4,274,000 reported for six months ending June 30, 2004. Net income for the first six months of fiscal 2005 was $220,000, or $0.02 per share, versus net income of $112,000, or $0.01 per share, in the comparable 2004 period.
“The Company attributes the improvement in the second quarter in comparison to the second quarter of 2004 to increased sales success. We also experienced an increase in revenue and profit in the second quarter compared to the first quarter of this year,” said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI.
“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. Our alliances with a number of software product companies are beginning to pay off as evidenced by recent revenue increases. We now are able to work on a greater number of opportunities in the area of legacy modernization which should continue to build our pipeline for the second half of the year and forward. Significantly, several of our new accounts are in the commercial sector.
“We continue to pursue merger and acquisition discussions with a number of firms.”
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, 2004 and in other filings with the Securities and Exchange Commission.
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Information Analysis Reports Second Quarter Results
August 10, 2005
Page 2 of 4
Information Analysis Incorporated
Condensed Income Statements
| Three months ended June 30, |
||||||||
| (in thousands, except per share data; unaudited) | 2005 |
2004 |
||||||
| Sales: |
||||||||
| Professional fees |
$ | 2,371 | $ | 2,069 | ||||
| Software sales |
635 | 89 | ||||||
| Total sales |
3,006 | 2,158 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
1,837 | 1,661 | ||||||
| Cost of software sales |
564 | 72 | ||||||
| Total cost of sales |
2,401 | 1,733 | ||||||
| Gross margin |
605 | 425 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
452 | 353 | ||||||
| Operating income |
153 | 72 | ||||||
| Other expense |
(5 | ) | (13 | ) | ||||
| Income before income taxes |
148 | 59 | ||||||
| Provision for income taxes |
— | — | ||||||
| Net income |
$ | 148 | $ | 59 | ||||
| Comprehensive Income |
$ | 148 | $ | 59 | ||||
| Net income per share: |
||||||||
| Basic: |
||||||||
| Net income |
$ | 0.01 | $ | 0.01 | ||||
| Diluted: |
||||||||
| Net income |
$ | 0.01 | $ | 0.01 | ||||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,296,527 | 10,283,515 | ||||||
| Diluted |
11,279,095 | 11,073,148 | ||||||
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Information Analysis Reports Second Quarter Results
August 10, 2005
Page 3 of 4
Information Analysis Incorporated
Condensed Income Statements
| Six months ended June 30, |
||||||||
| (in thousands, except per share data; unaudited) | 2005 |
2004 |
||||||
| Sales: |
||||||||
| Professional fees |
$ | 4,486 | $ | 4,060 | ||||
| Software sales |
707 | 214 | ||||||
| Total sales |
5,193 | 4,274 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
3,519 | 3,322 | ||||||
| Cost of software sales |
605 | 138 | ||||||
| Total cost of sales |
4,124 | 3,460 | ||||||
| Gross margin |
1,069 | 814 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
841 | 681 | ||||||
| Operating income |
229 | 133 | ||||||
| Other expense |
(9 | ) | (21 | ) | ||||
| Income before income taxes |
220 | 112 | ||||||
| Provision for income taxes |
— | — | ||||||
| Net income |
$ | 220 | $ | 112 | ||||
| Comprehensive Income |
$ | 220 | $ | 112 | ||||
| Net income per share: |
||||||||
| Basic: |
||||||||
| Net income |
$ | 0.02 | $ | 0.01 | ||||
| Diluted: |
||||||||
| Net income |
$ | 0.02 | $ | 0.01 | ||||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,290,057 | 10,283,515 | ||||||
| Diluted |
11,144,494 | 11,021,141 | ||||||
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Information Analysis Reports Second Quarter Results
August 10, 2005
Page 4 of 4
Information Analysis Incorporated
Condensed Balance Sheets
| As of June 30, 2005 |
As of December 31, 2004 (audited) |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 81 | $ | 116 | ||||
| Accounts receivable, net |
2,507 | 2,170 | ||||||
| Prepaid expenses |
168 | 47 | ||||||
| Note receivable |
85 | 85 | ||||||
| Other receivables |
4 | 7 | ||||||
| Total current assets |
2,845 | 2,425 | ||||||
| Fixed assets, net |
46 | 35 | ||||||
| Other assets |
7 | 7 | ||||||
| Investments |
3 | 3 | ||||||
| Total assets |
$ | 2,901 | $ | 2,470 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 1,671 | $ | 1,567 | ||||
| Accrued payroll and related liabilities |
342 | 277 | ||||||
| Other accrued liabilities |
197 | 65 | ||||||
| Deferred revenues |
169 | 84 | ||||||
| Notes Payable |
125 | 125 | ||||||
| Revolving line of credit |
34 | 219 | ||||||
| Total liabilities |
2,538 | 2,337 | ||||||
| Common stock, par value $0.01, 30,000,000 shares authorized; 11,788,126 shares issued, 10,283,515 outstanding at June 30, 2005 and December 31, 2004 |
118 | 118 | ||||||
| Additional paid in capital |
14,131 | 14,122 | ||||||
| Accumulated deficit |
(13,023 | ) | (13,244 | ) | ||||
| Accumulated other comprehensive income |
(9 | ) | (9 | ) | ||||
| Less treasury stock; 1,504,611 shares at cost |
(854 | ) | (854 | ) | ||||
| Total stockholders’ equity |
363 | 133 | ||||||
| Total liabilities and stockholders’ equity |
$ | 2,901 | $ | 2,470 | ||||