NEW YORK - July 26, 2012 - INNODATA INC. (NASDAQ: INOD) today reported results
for the second quarter and the six months ended June 30, 2012.
* Total revenue was $22.8 million for the second quarter of 2012, a 9%
sequential decline from $25.1 million in the first quarter of 2012 and a
40% increase from $16.3 million in the second quarter of 2011. Net earnings
for the second quarter of 2012 were $2.1 million, or $0.08 per diluted
share, compared to net earnings of $3.4 million, or $0.13 per diluted share,
in the first quarter of 2012. Net earnings for the second quarter of 2011
were $0.8 million, or $0.03 per diluted share.
* For the first six months of 2012, revenues were $48 million, up 55% from $31
million in the first six months of 2011. Net earnings were $5.5 million, or
$0.21 per diluted share, during the first six months of 2012, compared with
net earnings of $0.8 million, or $0.03 per diluted share, for the same
period in 2011.
* Cash, cash equivalents and investments were $23.0 million at both June
30, 2012 and March 31, 2012. As of June 30, 2012, the Company had no debt,
and stockholders' equity was $48.5 million.
* Capital expenditures in the second quarter were approximately $2.3 million,
incurred primarily to complete the expansion of new delivery centers in Asia
and to fund continued investment in the Innodata Advanced Data Solution
(IADS) businesses.
Jack Abuhoff, the Company's Chairman and CEO, stated, "The $2.4 million decline
in revenues from Q1 to Q2 primarily reflects a reduction in revenue from a large
e-book client that shifted its budgetary priority from standard English language
content to international and enhanced content. We expect that this shift will
continue in the second half of 2012 and that revenues from this client will
continue to decline during this period. At the same time, and in close
collaboration with our major clients, we continue to develop valuable
technological capabilities to continue in the forefront of our industry as
market demands move.
"Revenues in our new IADS division have not been significant to date.
Nevertheless, the reception we are receiving in active discussions with more
than 50 major firms in life insurance, healthcare and pharma, as well as a
contract that we signed at the end of the second quarter with a prominent
company in the health-care sector, reinforces our expectation that there is
considerable market potential ahead of us."
Abuhoff added, "We are forecasting third quarter revenue to be in the range of
$18 to $20 million, and we are targeting sequential growth in Q4. We also
anticipate overall growth in revenues for 2012 as a whole."
Timing of Conference Call with Q&A
Innodata will conduct an earnings conference call, including a question-and-
answer period, at 11:00 AM eastern time today. Â You can participate in this call
by dialing the following call-in numbers:
The call-in numbers for the conference call are:
1-800-967-7184 (Domestic)
1-719-325-2370 (International)
1-888-203-1112 (Domestic Replay)
1-719-457-0820 (International Replay)
Pass code on both: 4736219
Investors are also invited to access a live Webcast of the conference call at
the Investor Relations section of www.innodata.com. Â Please note that the
Webcast feature will be in listen-only mode.
Call-in or Webcast replay will be available for 30 days following the conference
call.
Innodata Inc. (NASDAQ: INOD) is a leading provider of business process,
technology and consulting services, as well as products and solutions, that help
our valued clients create, manage, use and distribute digital information.
 Propelled by a culture of quality, service and innovation, we have developed a
client base that includes many of the world's preeminent media, publishing and
information services companies, as well as leading enterprises in information-
intensive industries such as aerospace, defense, financial services, government,
healthcare, high technology, insurance, intelligence, manufacturing and law.
Recent honors include EContent Magazine's EContent 100, KMWorld Magazine's 100
Companies That Matter in Knowledge Management, the International Association of
Outsourcing Professionals' (IAOP) Global Outsourcing Top 100, D&B India's
Leading ITeS and BPO Companies and the Black Book of Outsourcing's Top List of
Leading Outsourcing Providers to the Printing and Publishing Business.
Headquartered in the New York metro area, Innodata has offices and operations in
the United States, the United Kingdom, Israel, India, Sri Lanka, and the
Philippines.
Safe Harbor Statement
This release contains forward-looking statements that are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
The words "project," "head start," "believe," "expect," "should," "anticipate,"
"indicate," "point to," "forecast," "likely", "optimistic" and other similar
expressions generally identify forward-looking statements, which speak only as
of their dates.
These forward-looking statements are based largely on our current expectations,
and are subject to a number of risks and uncertainties, including without
limitation, that our Innodata Advanced Data Solutions segment is subject to the
risks and uncertainties of early-stage companies; the primarily at-will nature
of the Company's contracts with its Content Services segment customers and the
ability of the customers to reduce, delay or cancel projects; continuing Content
Services segment revenue concentration in a limited number of customers;
continuing Content Services segment reliance on project-based work; inability to
replace projects that are completed, cancelled or reduced; depressed market
conditions; changes in external market factors; the ability and willingness of
our customers and prospective customers to execute business plans which give
rise to requirements for digital content and professional services in knowledge
processing; difficulty in integrating and deriving synergies from acquisitions,
joint ventures and strategic investments; potential undiscovered liabilities of
companies that we acquire; changes in our business or growth strategy; the
emergence of new or growing competitors; various other competitive and
technological factors; and other risks and uncertainties indicated from time to
time in our filings with the Securities and Exchange Commission. Actual results
may differ significantly.
Actual results could differ materially from the results referred to in the
forward-looking statements. Â In light of these risks and uncertainties, there
can be no assurance that the results referred to in the forward-looking
statements contained in this release will occur.
Company Contact
Raj Jain
Vice President
Innodata Inc.
rjain@innodata.com
(201) 371-8024
                    INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per-share amounts)
   Three Months Ended  Six Months Ended
----------------------------- ---------------------------
   June 30,  June 30,
----------------------------- ---------------------------
   2012  2011  2012  2011
-------------- -------------- -------------- ------------
 $    $    $    $
Revenues  22,768   16,257   47,904   30,958
-------------- -------------- -------------- ------------
Operating costs and
expenses:
Direct operating
 expenses 14,654  11,370  30,759  22,043
Selling and
administrative
 expenses 6,186  4,071  11,586  8,124
Interest income,
 net (90)  (170)  (181)  (279)
-------------- -------------- -------------- ------------
  Total 20,750  15,271  42,164  29,888
-------------- -------------- -------------- ------------
Income before
provision for income
taxes 2,018 Â 986 Â 5,740 Â 1,070
Provision for income
taxes 365 Â 228 Â Â 1,273 Â 297
-------------- -------------- -------------- ------------
Net income 1,653 Â 758 Â 4,467 Â 773
-------------- -------------- -------------- ------------
Loss attributable to
non-controlling
interests 435 Â 49 Â 1053 Â 49
-------------- -------------- -------------- ------------
Net income
attributable to
Innodata Inc. and
 $     $       $     $
 Subsidiaries  2,088  807   5,520   822
-------------- -------------- -------------- ------------
Income per share
attributable to
 Innodata Inc. and
Subsidiaries:
 $      $      $      $
 Basic  0.08   0.03   0.22   0.03
-------------- -------------- -------------- ------------
 $      $      $      $
 Diluted  0.08   0.03   0.21   0.03
-------------- -------------- -------------- ------------
Weighted average
shares outstanding:
 Basic 25,085  25,059  24,771  25,107
-------------- -------------- -------------- ------------
 Diluted 26,862  25,308  26,459  25,262
-------------- -------------- -------------- ------------
Net income
attributable to
 Innodata Inc. and  $     $       $     $
Subsidiaries  2,088  807   5,520   822
Pension liability
adjustment, net of
 taxes    9     5    17    14
Change in fair
value of
 derivatives   68   (311)   761   (397)
-------------- -------------- -------------- ------------
Comprehensive income
attributable to
 Innodata Inc. and  $     $       $     $
Subsidiaries  2,165  501   6,298   439
-------------- -------------- -------------- ------------
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 (Dollars in thousands)
   June 30,  December 31,
------------------------------------------
   2012  2011
---------------------- -------------------
ASSETS
Current assets:
 Cash and cash equivalents  $      20,732   $      11,389
 Short term investments - other 2,604  5,828
 Accounts receivable, net 18,920  21,706
Prepaid expenses and other current
 assets 2,361  2,984
 Deferred income taxes 1,483  1,934
---------------------- -------------------
  Total current assets 46,100  43,841
Property and equipment, net 10,410 Â 7,430
Other assets 3,588 Â 3,565
Deferred income taxes 3,607 Â 3,886
Goodwill  675  675
---------------------- -------------------
  Total assets  $      64,380   $      59,397
---------------------- -------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
 expenses  $       4,748   $      5,873
Accrued salaries, wages and
 related benefits 6,590  6,596
 Income and other taxes 2,184  2,576
Current portion of long-term
 obligations          586  639
 Deferred income taxes 9  9
---------------------- -------------------
  Total current liabilities 14,117  15,693
Deferred income taxes 153 Â 153
Long-term obligations 3,206 Â 2,944
Non-controlling interests (1,614) Â (561)
---------------------- -------------------
STOCKHOLDERS' EQUITY 48,518 Â 41,168
---------------------- -------------------
 Total liabilities and
 stockholders' equity  $      64,380   $      59,397
---------------------- -------------------
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Innodata Isogen Inc. via Thomson Reuters ONE
[HUG#1629557]
