Exhibit 99.1
| For additional information contact: Richard S. DeRose (703) 293-7901 | ||
| For release: May 10, 2007 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, 2007. Revenues were $2,606,000, up 13% from the $2,315,000 reported in 2006’s first quarter. The Company reported net income of $95,000, or $0.01 per share, compared to net income of $86,000, or $0.01 per share, in the first quarter 2006.
“The Company increased revenue and gross margin in the first quarter in comparison to the first quarter of 2006,” 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 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, 2006 and in other filings with the Securities and Exchange Commission.
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Information Analysis Reports First Quarter Results
May 10, 2007
Page 2 of 3
Information Analysis Incorporated
Condensed Consolidated Income Statements
| Three months ended March 31, | ||||||
| (in thousands, except per share data; unaudited) | 2007 | 2006 | ||||
| Net revenue: |
||||||
| Professional fees |
$ | 1,901 | $ | 2,196 | ||
| Software sales |
705 | 119 | ||||
| Total revenue |
2,606 | 2,315 | ||||
| Cost of goods sold and services provided: |
||||||
| Cost of professional fees |
1,458 | 1,751 | ||||
| Cost of software sales |
542 | 70 | ||||
| Total cost of sales |
2,000 | 1,821 | ||||
| Gross margin |
606 | 494 | ||||
| Operating expenses: |
||||||
| Selling, general and administrative |
517 | 409 | ||||
| Operating income |
89 | 85 | ||||
| Other income |
6 | 1 | ||||
| Income before income taxes |
95 | 86 | ||||
| Provision for income taxes |
— | — | ||||
| Net income |
$ | 95 | $ | 86 | ||
| Net income per share: |
||||||
| Basic |
$ | 0.01 | $ | 0.01 | ||
| Diluted |
$ | 0.01 | $ | 0.01 | ||
| Shares used in calculating earnings per share: |
||||||
| Basic |
11,196,760 | 10,743,204 | ||||
| Diluted |
11,421,394 | 11,616,698 | ||||
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Information Analysis Reports First Quarter Results
May 10, 2007
Page 3 of 3
Information Analysis Incorporated and Subsidiaries
Consolidated Balance Sheets
| (in thousands) | As of: March 31, 2007 (unaudited) |
As of: December 31, (Audited) |
||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 537 | $ | 808 | ||||
| Accounts receivable, net |
2,394 | 1,758 | ||||||
| Prepaid expenses |
365 | 382 | ||||||
| Note receivable |
116 | 116 | ||||||
| Other assets |
4 | 4 | ||||||
| Other receivables |
2 | 6 | ||||||
| Total current assets |
3,418 | 3,074 | ||||||
| Fixed assets, net |
65 | 67 | ||||||
| Other assets |
9 | 9 | ||||||
| Total assets |
$ | 3,492 | $ | 3,150 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 895 | $ | 644 | ||||
| Deferred revenue |
373 | 513 | ||||||
| Accrued payroll and related liabilities |
276 | 265 | ||||||
| Other accrued liabilities |
175 | 53 | ||||||
| Total liabilities |
1,719 | 1,475 | ||||||
| Common stock, par value $0.01, 30,000,000 shares authorized; 12,839,376 shares issued, 11,196,760 outstanding |
128 | 128 | ||||||
| Additional paid in capital |
14,489 | 14,486 | ||||||
| Accumulated deficit |
(11,914 | ) | (12,009 | ) | ||||
| Less treasury stock; 1,642,616 shares at cost |
(930 | ) | (930 | ) | ||||
| Total stockholders’ equity |
1,773 | 1,675 | ||||||
| Total liabilities and stockholders’ equity |
$ | 3,492 | $ | 3,150 | ||||
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