Exhibit 99.1
For additional information contact:
Richard S. DeRose (703) 293-7901
For release: August 13, 2007 at 9:00 a.m.
Information Analysis Inc. Reports Second Quarter Results
FAIRFAX, VIRGINIA – Information Analysis Inc. (OTCBB: IAIC) reported results for the second quarter ended June 30, 2007. Revenues were $2,557,000 compared to $2,569,000 reported in 2006’s second quarter. The Company reported net income of $17,000, or $0.00 per share, compared to net income of $154,000, or $0.01 per share in 2006’s second quarter. IAI reported revenue of $5,162,000 for six months ending June 30, 2007, compared to $4,883,000 reported for the same period in 2006. Net income for the first six months of 2007 was $112,000, or $0.01 per share, versus net income of $239,000, or $0.02 per share, in the comparable 2006 period.
“Although revenues have increased year-to-date, profitability this quarter was lower than expected,” said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI. “The Company experienced lower profitability than last year because of an increase of operating expenses, some of which were additional infrastructure support to meet public reporting requirements, increased recruiting costs for cleared people, and additional stock incentives for key employees. However, I don’t believe that second quarter profitability is indicative of the rest of the year. Based on business already signed, there should be significant improvement in third and fourth quarters. The Company is continuing the active pursuit of the conversion and system modernization business in addition to developing business opportunities in the area of Web applications. We now are working on a number of bid opportunities for new business and additional add-on business to existing contracts, which are expected to be awarded and started during the later part of the year.
“We continue to pursue merger and acquisition opportunities to expand our business base.”
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. These include the failure to obtain sufficient contracts, and to profitably complete those contracts. 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.
— more —
Information Analysis Reports Second Quarter Results
August 13, 2007
Page 2 of 4
Information Analysis Incorporated
Condensed Income Statements
| Three months ended June 30, | ||||||
| (in thousands, except per share data; unaudited) | 2007 | 2006 | ||||
| Sales: |
||||||
| Professional fees |
$ | 1,777 | $ | 2,299 | ||
| Software sales |
780 | 270 | ||||
| Total sales |
2,557 | 2,569 | ||||
| Cost of goods sold and services provided: |
||||||
| Cost of professional fees |
1,363 | 1,703 | ||||
| Cost of software sales |
641 | 225 | ||||
| Total cost of sales |
2,004 | 1,928 | ||||
| Gross margin |
553 | 641 | ||||
| Operating expenses: |
||||||
| Selling, general and administrative |
542 | 489 | ||||
| Operating income |
11 | 152 | ||||
| Other income |
6 | 2 | ||||
| Income before income taxes |
17 | 154 | ||||
| Provision for income taxes |
— | — | ||||
| Net income |
$ | 17 | $ | 154 | ||
| Comprehensive Income |
$ | 17 | $ | 154 | ||
| Net income per share: |
||||||
| Basic and diluted |
$ | 0.00 | $ | 0.01 | ||
| Shares used in calculating earnings per share: |
||||||
| Basic |
11,196,760 | 11,035,507 | ||||
| Diluted |
11,398,487 | 11,504,714 | ||||
— more —
Information Analysis Reports Second Quarter Results
August 13, 2007
Page 3 of 4
Information Analysis Incorporated
Condensed Income Statements
| Six months ended June 30, | ||||||
| (in thousands, except per share data; unaudited) | 2007 | 2006 | ||||
| Sales: |
||||||
| Professional fees |
$ | 3,677 | $ | 4,495 | ||
| Software sales |
1,485 | 388 | ||||
| Total sales |
5,162 | 4,883 | ||||
| Cost of goods sold and services provided: |
||||||
| Cost of professional fees |
2,821 | 3,454 | ||||
| Cost of software sales |
1,182 | 295 | ||||
| Total cost of sales |
4,003 | 3,749 | ||||
| Gross margin |
1,159 | 1,134 | ||||
| Operating expenses: |
||||||
| Selling, general and administrative |
1,059 | 898 | ||||
| Operating income |
100 | 236 | ||||
| Other income |
12 | 3 | ||||
| Income before income taxes |
112 | 239 | ||||
| Provision for income taxes |
— | — | ||||
| Net income |
$ | 112 | $ | 239 | ||
| Comprehensive Income |
$ | 112 | $ | 239 | ||
| Net income per share: |
||||||
| Basic and diluted |
$ | 0.01 | $ | 0.02 | ||
| Shares used in calculating earnings per share: |
||||||
| Basic |
11,196,760 | 10,890,164 | ||||
| Diluted |
11,401,905 | 11,399,119 | ||||
— more —
Information Analysis Reports Second Quarter Results
August 13, 2007
Page 4 of 4
Information Analysis Incorporated
Condensed Balance Sheets
| As of June 30, 2007 |
As of December 31, |
|||||||
| (unaudited) | (audited) | |||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 921 | $ | 808 | ||||
| Accounts receivable, net |
1,843 | 1,758 | ||||||
| Prepaid expenses |
319 | 382 | ||||||
| Note receivable |
116 | 116 | ||||||
| Other assets |
4 | 4 | ||||||
| Other receivables |
4 | 6 | ||||||
| Total current assets |
3,207 | 3,074 | ||||||
| Fixed assets, net |
69 | 67 | ||||||
| Other assets |
9 | 9 | ||||||
| Total assets |
$ | 3,285 | $ | 3,150 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 668 | $ | 644 | ||||
| Deferred revenues |
356 | 513 | ||||||
| Accrued payroll and related liabilities |
293 | 265 | ||||||
| Other accrued liabilities |
151 | 53 | ||||||
| Total liabilities |
1,468 | 1,475 | ||||||
| Common stock, par value $0.01, 30,000,000 shares authorized; 12,839,376 shares issued, 11,196,760 outstanding at June 30, 2007, and at December 31, 2006 |
128 | 128 | ||||||
| Additional paid in capital |
14,516 | 14,486 | ||||||
| Accumulated deficit |
(11,897 | ) | (12,009 | ) | ||||
| Less treasury stock; 1,642,616 shares at cost at June 30, 2007, and at December 31, 2006 |
(930 | ) | (930 | ) | ||||
| Total stockholders’ equity |
1,817 | 1,675 | ||||||
| Total liabilities and stockholders’ equity |
$ | 3,285 | $ | 3,150 | ||||