Exhibit 99.1
| For additional information contact: | ||||
| Richard S. DeRose (703) 293-7901 | ||||
| For release: | ||||
| March 29, 2006 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 and full year ended December 31, 2005. Revenues were $2,950,000, an increase of 14% from the $2,597,000 reported in the fourth quarter 2004. The Information Technology services company reported net income of $261,000 or $0.02 per share basic and diluted, compared to net income of $105,000 or $0.01 per share basic and diluted in the comparable period in 2004.
For the year ended December 31, 2005, IAI posted revenue of $10,772,000 and net income of $732,000, or $0.07 per share basic and diluted. The Company reported revenue of $9,309,000 and net income of $572,000 or $0.06 per share basic and $0.05 per share diluted for the year ended December 31, 2004.
“This is the third year in a row that the company has grown year over year. In the last two years combined our growth has been nearly 50%. Just as important, our profitability has reached nearly 7%.,” said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI. “We accomplished our initial goals, set in 2002, which were to reach financial stability and gain momentum in increasing profitable revenue. Both accomplishments are critical to our future success. Our return to positive stockholder equity has enabled us to secure a new credit facility of $1,000,000 to finance current and future operations. Our second goal was accomplished through new business relationships. By participating in the Mainframe Migration Alliance (MMA), a consortium of organizations, including Microsoft and Micro Focus, 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 revenue during 2006 and future years. As a partner with Adobe, we have obtained contracts with 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.”
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Information Analysis Announces Fourth Quarter Results
March 29, 2006
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, 2005 and in other filings with the Securities and Exchange Commission.
Information Analysis Announces Fourth Quarter Results
March 29, 2006
Page 3 of 4
Information Analysis Incorporated
Condensed Consolidated Statements of Operations
| Three months ended December 31, |
||||||||
| (in thousands, except per share data) | 2005 | 2004 | ||||||
| Sales: |
||||||||
| Professional fees |
$ | 2,187 | $ | 2,321 | ||||
| Software sales |
763 | 276 | ||||||
| Total sales |
2,950 | 2,597 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
1,689 | 1,819 | ||||||
| Cost of software sales |
534 | 106 | ||||||
| Total cost of sales |
2,223 | 1,925 | ||||||
| Gross profit |
727 | 672 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
(462 | ) | (558 | ) | ||||
| Income from operations |
265 | 114 | ||||||
| Other expenses, net |
1 | (9 | ) | |||||
| Income before provision for income taxes |
266 | 105 | ||||||
| Provision for income taxes |
5 | — | ||||||
| Net income |
$ | 261 | $ | 105 | ||||
| Earnings per Common Share: Basic and Diluted |
||||||||
| Basic net income |
$ | 0.02 | $ | 0.01 | ||||
| Diluted net income |
$ | 0.02 | $ | 0.01 | ||||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,620,570 | 10,283,515 | ||||||
| Diluted |
11,388,849 | 10,979,100 | ||||||
| Twelve months ended December 31, | ||||||||
| (in thousands, except per share data) | 2005 | 2004 | ||||||
| Sales: |
||||||||
| Professional fees |
$ | 9,045 | $ | 8,635 | ||||
| Software sales |
1,727 | 674 | ||||||
| Total revenue |
10,772 | 9,309 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
6,960 | 6,917 | ||||||
| Cost of software sales |
1,348 | 420 | ||||||
| Total cost of sales |
8,308 | 7,337 | ||||||
| Gross profit |
2,464 | 1,972 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
(1,715 | ) | (1,656 | ) | ||||
| Other operating income |
— | 290 | ||||||
| Income (loss) from operations |
749 | 606 | ||||||
| Other expenses, net |
(12 | ) | (34 | ) | ||||
| Income (loss) before provision for income taxes |
737 | 572 | ||||||
| Provision for income taxes |
5 | — | ||||||
| Net income (loss) |
$ | 732 | $ | 572 | ||||
| Earnings per Common Share: Basic and Diluted |
||||||||
| Basic net income (loss) |
$ | 0.07 | $ | 0.06 | ||||
| Diluted net income (loss) |
$ | 0.07 | $ | 0.05 | ||||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
10,376,247 | 10,283,515 | ||||||
| Diluted |
10,968,026 | 11,015,724 | ||||||
Information Analysis Announces Fourth Quarter Results
March 29, 2006
Page 4 of 4
Information Analysis Incorporated
Consolidated Balance Sheets
| (in thousands) |
As of December 31, |
As of December 31, |
||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 452 | $ | 116 | ||||
| Accounts receivable, net |
1,994 | 2,170 | ||||||
| Prepaid expenses |
183 | 47 | ||||||
| Note receivable |
85 | 85 | ||||||
| Other receivables |
15 | 7 | ||||||
| Capitalized Software, net |
— | — | ||||||
| Total current assets |
2,729 | 2,425 | ||||||
| Fixed assets, net |
57 | 35 | ||||||
| Other assets |
9 | 7 | ||||||
| Investments |
— | 3 | ||||||
| Total assets |
$ | 2,795 | $ | 2,470 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 1,175 | $ | 1,567 | ||||
| Accrued payroll and related liabilities |
321 | 277 | ||||||
| Deferred revenue |
214 | 83 | ||||||
| Other accrued liabilities |
125 | 65 | ||||||
| Income taxes payable |
4 | — | ||||||
| Notes payable |
— | 125 | ||||||
| Revolving line of credit |
— | 220 | ||||||
| Total current liabilities |
1,839 | 2,337 | ||||||
| Total liabilities |
1,839 | 2,337 | ||||||
| Common stock, par value $0.01, 30,000,000 shares authorized; |
121 | 118 | ||||||
| Additional paid in capital |
14,212 | 14,122 | ||||||
| Accumulated deficit |
(12,511 | ) | (13,244 | ) | ||||
| Other comprehensive income |
(12 | ) | (9 | ) | ||||
| Less treasury stock; 1,504,611 shares at cost |
(854 | ) | (854 | ) | ||||
| Total stockholders’ equity |
956 | 133 | ||||||
| Total liabilities and stockholders’ equity |
$ | 2,795 | $ | 2,470 | ||||
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