Exhibit 99.1
| For additional information contact: | ||||||||
| Richard S. DeRose (703) 293-7901 |
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| For release: | ||||||||
| March 29, 2007 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, 2006. Revenues were $2,002,000, compared to $2,950,000 reported in the fourth quarter 2005. The Information Technology services company reported net income of $106,000 or $0.01 per share basic and diluted, compared to net income of $261,000 or $0.02 per share basic and diluted in the comparable period in 2005.
For the year ended December 31, 2006, IAI posted revenue of $9,459,000 and net income of $502,000, or $0.05 per share basic and $0.04 diluted. The Company reported revenue of $10,772,000 and net income of $732,000 or $0.07 per share basic and diluted for the year ended December 31, 2005.
“We experienced a downturn of revenues in 2006 as a result of delays in the government ordering process,” said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI. “During the past few years we were able to reach financial stability, which has allowed us to plan for future growth. We have been working diligently on building a larger pipeline. This is expected to add additional revenue during 2007 and future years. We continue to see more opportunities through our Adobe relationship that should enhance our future business.
“We are continuing too pursue merger/acquisition opportunities with other organizations.”
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, 2006, and in other filings with the Securities and Exchange Commission.
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Information Analysis Reports Fourth Quarter Results
March 29, 2007
Page 2 of 3
Information Analysis Incorporated
Condensed Statements of Operations
| Three months ended December 31, | ||||||||
| (in thousands, except per share data) |
2006 | 2005 | ||||||
| Sales: |
||||||||
| Professional fees |
$ | 1,809 | $ | 2,187 | ||||
| Software sales |
193 | 763 | ||||||
| Total sales |
2,002 | 2,950 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
1,322 | 1,689 | ||||||
| Cost of software sales |
143 | 534 | ||||||
| Total cost of sales |
1,465 | 2,223 | ||||||
| Gross profit |
537 | 727 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
(421 | ) | (462 | ) | ||||
| Income from operations |
116 | 265 | ||||||
| Other expenses, net |
(9 | ) | 1 | |||||
| Income before provision for income taxes |
107 | 266 | ||||||
| Provision for income taxes |
1 | 5 | ||||||
| Net income |
$ | 106 | $ | 261 | ||||
| Earnings per Common Share: Basic and Diluted |
||||||||
| Basic net income |
$ | 0.01 | $ | 0.02 | ||||
| Diluted net income |
$ | 0.01 | $ | 0.02 | ||||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
11,151,394 | 10,620,570 | ||||||
| Diluted |
11,366,653 | 11,388,849 | ||||||
| Twelve months ended December 31, | ||||||||
| (in thousands, except per share data) |
2006 | 2005 | ||||||
| Sales: |
||||||||
| Professional fees |
$ | 8,484 | $ | 9,045 | ||||
| Software sales |
975 | 1,727 | ||||||
| Total revenue |
9,459 | 10,772 | ||||||
| Cost of goods sold and services provided: |
||||||||
| Cost of professional fees |
6,402 | 6,960 | ||||||
| Cost of software sales |
621 | 1,348 | ||||||
| Total cost of sales |
7,023 | 8,308 | ||||||
| Gross profit |
2,436 | 2,464 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
(1,929 | ) | (1,715 | ) | ||||
| Income from operations |
507 | 749 | ||||||
| Other expenses, net |
(4 | ) | (12 | ) | ||||
| Income before provision for income taxes |
503 | 737 | ||||||
| Provision for income taxes |
1 | 5 | ||||||
| Net income |
$ | 502 | $ | 732 | ||||
| Earnings per Common Share: Basic and Diluted |
||||||||
| Basic net income |
$ | 0.05 | $ | 0.07 | ||||
| Diluted net income |
$ | 0.04 | $ | 0.07 | ||||
| Shares used in calculating earnings per share: |
||||||||
| Basic |
11,018,317 | 10,376,247 | ||||||
| Diluted |
11,342,072 | 10,968,026 | ||||||
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Information Analysis Reports Fourth Quarter Results
March 29, 2007
Page 3 of 3
Information Analysis Incorporated
Balance Sheets
| (in thousands) |
As of December 31, 2006 |
As of December 31, 2005 |
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| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 808 | $ | 452 | ||||
| Accounts receivable, net |
1,758 | 1,994 | ||||||
| Prepaid expenses |
382 | 183 | ||||||
| Note receivable |
116 | 85 | ||||||
| Other receivables |
6 | 15 | ||||||
| Other assets |
4 | — | ||||||
| Total current assets |
3,074 | 2,729 | ||||||
| Fixed assets, net |
67 | 57 | ||||||
| Other assets |
9 | 9 | ||||||
| Total assets |
$ | 3,150 | $ | 2,795 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY |
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| Current liabilities: |
||||||||
| Accounts payable |
$ | 644 | $ | 1,175 | ||||
| Deferred revenue |
513 | 214 | ||||||
| Accrued payroll and related liabilities |
265 | 321 | ||||||
| Other accrued liabilities |
53 | 125 | ||||||
| Income taxes payable |
— | 4 | ||||||
| Revolving line of credit |
— | — | ||||||
| Total current liabilities |
1,475 | 1,839 | ||||||
| Total liabilities |
1,475 | 1,839 | ||||||
| Common stock, par value $0.01, 30,000,000 shares authorized; 12,839,376 shares issued, 11,196,760 outstanding at December 31, 2006, and 12,127,626 shares issued, 10,623,015 outstanding at December 31, 2005, |
128 | 121 | ||||||
| Additional paid in capital |
14,486 | 14,212 | ||||||
| Accumulated deficit |
(12,009 | ) | (12,511 | ) | ||||
| Other comprehensive income |
— | (12 | ) | |||||
| Less treasury stock; 1,642,616 and 1,504,611 shares at cost at December 31, 2006 and 2005, respectively |
(930 | ) | (854 | ) | ||||
| Total stockholders’ equity |
1,675 | 956 | ||||||
| Total liabilities and stockholders’ equity |
$ | 3,150 | $ | 2,795 | ||||
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