Exhibit 99.1
| For additional information contact: |
| Richard S. DeRose (703) 293-7901 |
| For release: |
| November 10, 2005 |
Information Analysis Inc. Reports Third Quarter Results
Company reports earnings of 2 cents per share for quarter and 5 cents per share for 9 months
FAIRFAX, VIRGINIA – Information Analysis Inc. (IAIC:OTCBB) today reported results for its third fiscal quarter ended September 30, 2005. Revenues were $2,629,062, up from the $2,438,440 reported in 2004’s third quarter. The information technology services company reported a net income of $250,576, or $0.02 per share basic and diluted, compared to a net income of $354,092, or $0.03 per share basic and diluted, in 2004’s third quarter.
For the nine months ended September 30, 2005, IAI’s revenues were $7,822,086, compared to revenues of $6,712,282 for the same period in 2004. The Company reported a net income of $471,073, or $0.05 per share basic and $0.04 per share diluted, compared to net income of $466,440, or $0.05 per share basic and $0.04 per share diluted, reported for the comparable 2004 period.
“I am encouraged by what we have accomplished during this quarter. Our third quarter profit was more than first and second quarter combined. The increase in net operating income in this quarter compared to the effective net operating income for third quarter 2004 also shows that the company is progressing according to our business plan. Third quarter profit in 2004 included a $290,000 recovery of previously owed money from prior years. Accordingly, our operating profit has substantially increased,” said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI. “We expect fourth quarter results to be comparable to or better than third quarter.
“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, 2004 and in other filings with the Securities and Exchange Commission.
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Information Analysis Reports Third Quarter Results
November 10, 2005
Page 2 of 4
Information Analysis Incorporated
Condensed Consolidated Statements of Operations
| Three months ended September 30, |
||||||||
| (in thousands, except per share data; unaudited)
|
2005 |
2004 |
||||||
| Revenue: |
||||||||
| Professional fees |
$ | 2,371 | $ | 2,255 | ||||
| Software sales |
258 | 183 | ||||||
| Total revenue |
2,629 | 2,483 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
1,753 | 1,776 | ||||||
| Cost of software sales |
208 | 176 | ||||||
| Total cost of sales |
1,961 | 1,952 | ||||||
| Gross margin |
668 | 486 | ||||||
| Selling, general and administrative expense |
(413 | ) | (417 | ) | ||||
| Other operating income |
— | 290 | ||||||
| Operating income |
255 | 359 | ||||||
| Other expense |
(4 | ) | (5 | ) | ||||
| Income before income taxes |
251 | 354 | ||||||
| Provision for income taxes |
— | — | ||||||
| Net income |
$ | 251 | $ | 354 | ||||
| Earnings per common share: |
||||||||
| Basic: Net income |
$ | 0.02 | $ | 0.03 | ||||
| Diluted: Net income |
$ | 0.02 | $ | 0.03 | ||||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,301,494 | 10,283,515 | ||||||
| Diluted |
10,655,071 | 11,019,408 | ||||||
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Information Analysis Reports Third Quarter Results
November 10, 2005
Page 3 of 4
Information Analysis Incorporated
Condensed Consolidated Statements of Operations
| Nine months ended September 30, |
||||||||
| (in thousands, except per share data; unaudited)
|
2005 |
2004 |
||||||
| Revenue: |
||||||||
| Professional fees |
$ | 6,858 | $ | 6,314 | ||||
| Software sales |
964 | 398 | ||||||
| Total revenue |
7,822 | 6,712 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
5,272 | 5,098 | ||||||
| Cost of software sales |
813 | 314 | ||||||
| Total cost of sales |
6,085 | 5,412 | ||||||
| Gross margin |
1,737 | 1,300 | ||||||
| Selling, general and administrative expense |
(1,253 | ) | (1,098 | ) | ||||
| Other operating income |
— | 290 | ||||||
| Operating income |
484 | 492 | ||||||
| Other expense |
(13 | ) | (26 | ) | ||||
| Income before income taxes |
471 | 466 | ||||||
| Provision for income taxes |
— | — | ||||||
| Net income |
$ | 471 | $ | 466 | ||||
| Net loss per share: |
||||||||
| Basic: Net income (loss) |
$ | 0.05 | $ | 0.05 | ||||
| Diluted: Net income (loss) |
$ | 0.04 | $ | 0.04 | ||||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,293,910 | 10,283,515 | ||||||
| Diluted |
10,687,084 | 11,009,825 | ||||||
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Information Analysis Reports Third Quarter Results
November 10, 2005
Page 4 of 4
Information Analysis Incorporated and Subsidiaries
Consolidated Balance Sheets
| As of September 30, 2005 |
As of December 31, 2004 |
|||||||
| (in thousands) | (unaudited) | (audited) | ||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 145 | $ | 116 | ||||
| Accounts receivable, net |
2,426 | 2,170 | ||||||
| Prepaid expenses |
157 | 47 | ||||||
| Note receivable |
85 | 85 | ||||||
| Other receivables |
13 | 7 | ||||||
| Total current assets |
2,826 | 2,425 | ||||||
| Fixed assets, net |
61 | 35 | ||||||
| Other assets |
9 | 7 | ||||||
| Investments |
— | 3 | ||||||
| Total assets |
$ | 2,896 | $ | 2,470 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 1,297 | $ | 1,567 | ||||
| Accrued payroll and related payroll items |
349 | 277 | ||||||
| Other accrued liabilities |
293 | 65 | ||||||
| Deferred revenue |
149 | 84 | ||||||
| Revolving line of credit |
114 | 219 | ||||||
| Notes payable |
— | 125 | ||||||
| Total current liabilities |
2,202 | 2,337 | ||||||
| Total liabilities |
2,202 | 2,337 | ||||||
| Common stock, par value $0.01, 30,000,000 shares authorized; 12,122,626 shares issued, 10,618,015 outstanding at September 30, 2005, and 11,788,126 shares issued, 10,283,515 outstanding at December 31, 2004 |
121 | 118 | ||||||
| Additional paid in capital |
14,211 | 14,122 | ||||||
| Accumulated deficit |
(12,772 | ) | (13,244 | ) | ||||
| Accumulated other comprehensive income |
(12 | ) | (9 | ) | ||||
| Less treasury stock; 1,504,611 shares at cost |
(854 | ) | (854 | ) | ||||
| Total stockholders’ equity |
694 | 133 | ||||||
| Total liabilities and stockholders’ equity |
$ | 2,896 | $ | 2,470 | ||||
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