Exhibit 99.1
| For additional information contact: | ||||
| Richard S. DeRose (703) 293-7901 | ||||
| For release: | ||||
| May 11, 2006 at 9:00 a.m. |
Information Analysis, Inc. Reports First Quarter Profit
FAIRFAX, VIRGINIA – Information Analysis, Inc. (IAIC:OTCBB) today reported results for the first fiscal quarter ended March 31, 2006. Revenues were $2,315,000, up 5.8% from the $2,187,000 reported in 2005’s first quarter. The Company reported a net profit of $86,000, or $0.01 per share, compared to a profit of $72,000, or $0.01per share, in the first quarter 2005.
“The Company attributes the improvement in the first quarter in comparison to the first quarter of 2005 to continued sales success and increased margins,” Sandor Rosenberg, Chairman and Chief Executive Officer of IAI said. “First quarter performance is in line with previous year’s first quarter results. Some orders that we expected to work on in the first quarter were recently awarded and will be performed during subsequent quarters of this year. We expect our quarterly profitability to improve during the year as a result of this.
“We are actively pursuing the conversion and system modernization business through our business partners and sales prospects. Business opportunities in the area of Adobe and Web applications remain strong. We continue to build our pipeline opportunities which should increase revenue for subsequent quarters and 2007.
“We continue to pursue merger and acquisition opportunities.”
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.
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Information Analysis, Inc. Reports First Quarter Profit
May 11, 2006
Page 2 of 3
Information Analysis Incorporated
Condensed Consolidated Income Statements
| Three months ended March 31, | |||||||
| (in thousands, except per share data; unaudited) | 2006 | 2005 | |||||
| Net revenue: |
|||||||
| Professional fees |
$ | 2,196 | $ | 2,115 | |||
| Software sales |
119 | 72 | |||||
| Total revenue |
2,315 | 2,187 | |||||
| Cost of goods sold and services provided: |
|||||||
| Cost of professional fees |
1,751 | 1,682 | |||||
| Cost of software sales |
70 | 41 | |||||
| Total cost of sales |
1,821 | 1,723 | |||||
| Gross margin |
494 | 464 | |||||
| Operating expenses: |
|||||||
| Sales, general and administrative |
409 | 388 | |||||
| Total operating expenses |
409 | 388 | |||||
| Operating income |
85 | 76 | |||||
| Other income (expense) |
1 | (4 | ) | ||||
| Income before income taxes |
86 | 72 | |||||
| Provision for income taxes |
— | — | |||||
| Net income |
$ | 86 | $ | 72 | |||
| Earnings per share: |
|||||||
| Basic |
$ | 0.01 | $ | 0.01 | |||
| Diluted |
$ | 0.01 | $ | 0.01 | |||
| Shares used in calculating earnings per share: |
|||||||
| Basic |
10,743,204 | 10,283,515 | |||||
| Diluted |
11,616,698 | 11,078,563 | |||||
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Information Analysis, Inc. Reports First Quarter Profit
May 11, 2006
Page 3 of 3
Information Analysis Incorporated and Subsidiaries
Consolidated Balance Sheets
| As of: March 31, 2006 |
As of: December 31, 2005 |
|||||||
| (in thousands) | (unaudited) | (audited) | ||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 388 | $ | 452 | ||||
| Accounts receivable, net |
2,167 | 1,994 | ||||||
| Prepaid expenses |
185 | 183 | ||||||
| Note receivable |
85 | 85 | ||||||
| Other receivables |
16 | 15 | ||||||
| Total current assets |
2,841 | 2,729 | ||||||
| Fixed assets, net |
60 | 57 | ||||||
| Other assets |
9 | 9 | ||||||
| Total assets |
$ | 2,910 | $ | 2,795 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 989 | $ | 1,175 | ||||
| Accrued payroll and related payroll items |
414 | 321 | ||||||
| Deferred revenue |
290 | 214 | ||||||
| Other accrued liabilities |
72 | 125 | ||||||
| Income taxes payable |
— | 4 | ||||||
| Total liabilities |
1,765 | 1,839 | ||||||
| Common stock, par value $0.01, 30,000,000 shares authorized; 12,358,626 shares issued, 10,854,015 outstanding at March 31, 2006 and 12,127,626 issued, 10,623,015 outstanding at December 31, 2005 |
124 | 121 | ||||||
| Additional paid in capital |
14,313 | 14,212 | ||||||
| Accumulated deficit |
(12,426 | ) | (12,511 | ) | ||||
| Accumulated other comprehensive loss |
(12 | ) | (12 | ) | ||||
| Less treasury stock; 1,504,611 shares at cost |
(854 | ) | (854 | ) | ||||
| Total stockholders’ equity |
1,145 | 956 | ||||||
| Total liabilities and stockholders’ equity |
$ | 2,910 | $ | 2,795 | ||||
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