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For release: August 8, 2006 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, 2006. Revenues were $2,569,000 compared to $3,006,000 reported in 2005 s second quarter. The Company reported net income of $154,000, or $0.01 per share,
compared to net income of $148,000, or $0.01 per share in 2005 s second quarter. IAI had revenue of $4,883,000, compared to $5,193,000 reported for six months ending June 30, 2005. Net income for the first six months of fiscal 2006 was
$239,000, or $0.02 per share, versus net income of $220,000, or $0.02 per share, in the comparable 2005 period.
profit continued to improve over last year s results, said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI. 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 during the later part
As our financial strength continues to grow, we expect more opportunities to expand our business through M&A
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, 2005 and in other filings with the Securities and Exchange Commission.
Information Analysis Reports Second Quarter Results
Information Analysis Incorporated
Condensed Income Statements
| Three months ended June 30, | |||||||
| 2006 | 2005 | ||||||
| (in thousands, except per share data; unaudited) | |||||||
| Sales: | |||||||
| Professional fees | $ | 2,299 | $ | 2,372 | |||
| Software sales | 270 | 634 | |||||
| Total sales | 2,569 | 3,006 | |||||
| Cost of goods sold and services provided: | |||||||
| Cost of professional fees | 1,703 | 1,837 | |||||
| Cost of software sales | 225 | 564 | |||||
| Total cost of sales | 1,928 | 2,401 | |||||
| Gross margin | 641 | 605 | |||||
| Operating expenses: | |||||||
| Selling, general and administrative | 489 | 452 | |||||
| Operating income | 152 | 153 | |||||
| Other income (expense) | 2 | (5 | ) | ||||
| Income before income taxes | 154 | 148 | |||||
| Provision for income taxes | |||||||
| Net income | $ | 154 | $ | 148 | |||
| Comprehensive Income | $ | 154 | $ | 148 | |||
| Net income per share: | |||||||
| Basic and diluted | $ | 0.01 | $ | 0.01 | |||
| Shares used in calculating earnings per share: | |||||||
| Basic | 11,035,507 | 10,296,527 | |||||
| Diluted | 11,504,714 | 11,292,107 |
Information Analysis Reports Second Quarter Results
Information Analysis Incorporated
Condensed Income Statements
| Six months ended June 30, | |||||||
| 2006 | 2005 | ||||||
| (in thousands, except per share data; unaudited) | |||||||
| Sales: | |||||||
| Professional fees | $ | 4,495 | $ | 4,486 | |||
| Software sales | 388 | 707 | |||||
| Total sales | 4,883 | 5,193 | |||||
| Cost of goods sold and services provided: | |||||||
| Cost of professional fees | 3,454 | 3,519 | |||||
| Cost of software sales | 295 | 605 | |||||
| Total cost of sales | 3,749 | 4,124 | |||||
| Gross margin | 1,134 | 1,069 | |||||
| Operating expenses: | |||||||
| Selling, general and administrative | 898 | 840 | |||||
| Operating income | 236 | 229 | |||||
| Other income (expense) | 3 | (9 | ) | ||||
| Income before income taxes | 239 | 220 | |||||
| Provision for income taxes | |||||||
| Net income | $ | 239 | $ | 220 | |||
| Comprehensive Income | $ | 239 | $ | 220 | |||
| Net income per share: | |||||||
| Basic and diluted | $ | 0.02 | $ | 0.02 | |||
| Shares used in calculating earnings per share: | |||||||
| Basic | 10,890,164 | 10,290,057 | |||||
| Diluted | 11,399,119 | 11,151,036 |
Information Analysis Reports Second Quarter Results
Information Analysis Incorporated
Condensed Balance Sheets
| As of June 30, 2006 | As of December 31, 2005 | |||||||
| (unaudited) | (audited) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 668 | $ | 452 | ||||
| Accounts receivable, net | 2,233 | 1,994 | ||||||
| Prepaid expenses | 324 | 183 | ||||||
| Note receivable | 105 | 85 | ||||||
| Other assets | 12 | |||||||
| Other receivables | 4 | 15 | ||||||
| Total current assets | 3,346 | 2,729 | ||||||
| Fixed assets, net | 58 | 57 | ||||||
| Other assets | 2 | 9 | ||||||
| Total assets | $ | 3,406 | $ | 2,795 | ||||
| LIABILITIES & STOCKHOLDERS EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,137 | $ | 1,175 | ||||
| Deferred revenues | 440 | 214 | ||||||
| Accrued payroll and related liabilities | 328 | 321 | ||||||
| Other accrued liabilities | 129 | 125 | ||||||
| Income taxes payable | 4 | |||||||
| Total liabilities | 2,034 | 1,839 | ||||||
| Common stock, par value $0.01, 30,000,000 shares authorized; 12,779,987 shares issued, 11,137,371 outstanding at June 30, 2006, and 12,127,626 shares issued, 10,623,015 outstanding at December 31, 2005 | 128 | 121 | ||||||
| Additional paid in capital | 14,458 | 14,212 | ||||||
| Accumulated deficit | (12,272 | ) | (12,511 | ) | ||||
| Accumulated other comprehensive loss | (12 | ) | (12 | ) | ||||
| Less treasury stock; 1,642,616 shares at cost at June 30, 2006, and 1,504,611 shares at cost At December 31, 2005 | (930 | ) | (854 | ) | ||||
| Total stockholders equity | 1,372 | 956 | ||||||
| Total liabilities and stockholders equity | $ | 3,406 | $ | 2,795 |