Innodata Reports Second Quarter 2013 Results
NEW YORK – July 25, 2013 – INNODATA INC. (NASDAQ: INOD) today reported results for the second quarter and the six months ended June 30, 2013.
| · | Total revenue was $16.2 million for the second quarter of 2013, a 4% sequential decline from $16.9 million in the first quarter of 2013. Total revenue was $22.8 million during the second quarter of 2012. |
| · | In the second quarter of 2013 we incurred a net loss of $0.1 million, or less than $0.01 per diluted share, compared to net earnings of $0.3 million, or $0.01 per diluted share, in the first quarter of 2013. Net earnings in the second quarter of 2012 were $2.1 million, or $0.08 per diluted share. |
| · | For the first six months in 2013, revenues were $33 million, down 31% from $48 million in the first six months of 2012. Net earnings were $0.2 million, or $0.01 per diluted share during the first six months of 2013, compared with net earnings of $5.5 million, or $0.21 per diluted share for the similar period in 2012. |
| · | Cash, cash equivalents and investments were $27.2 million at June 30, 2013 compared to $28.5 million at December 31, 2012. As of June 30, 2013, the Company had no debt and stockholders’ equity was $49.7 million. |
Jack Abuhoff, the Company's Chairman and CEO, said, "Revenues in our IADS segment declined from the first quarter by $500,000 to $0.2 million primarily because of the completion of two one-time projects in the first quarter. Project volume fluctuations resulted in a $200,000 decline to $16 million from the first quarter in revenues of our Content Services segment. Pre-operating costs in our Synodex subsidiary were $2 million in the second quarter.
“We believe that our collective patience and perseverance in building the new Synodex business line will pay off in the end. At the same time, we are mindful of the investment we are making and the need to manage our cost structure carefully. For that reason, we have reduced our cost structure by approximately $6 million in annualized costs over the past 12 months, including approximately $2 million of annualized costs that we reduced in the second quarter of 2013.”
Abuhoff added, “We anticipate revenues in the third quarter of 2013 to be in the range of $14 million to $16 million.”
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. You can participate in this call by dialing the following call-in numbers:
The call-in numbers for the conference call are:
1-800-533-7619 (Domestic)
1-785-830-1923 (International)
1-888-203-1112 (Domestic Replay)
1-719-457-0820 (International Replay)
Pass code on both: 6507252
Investors are also invited to access a live Webcast of the conference call at the Investor Relations section ofwww.innodata.com.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(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’sEContent 100, KMWorld Magazine’s100 Companies That Matter in Knowledge Management, the International Association of Outsourcing Professionals’ (IAOP)Global Outsourcing Top 100, D&B India’sLeading ITeS and BPO Companiesand the Black Book of Outsourcing’sTop List ofLeading 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.
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. 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
or
Media Contact
Stanley or Andrew Berger
SM Berger & Company
(216) 464-6400
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands, except per-share amounts)
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30 | | | June 30 | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| | | | | | | | | | | | | |
| Revenues | | $ | 16,160 | | | $ | 22,768 | | | $ | 33,063 | | | $ | 47,904 | |
| | | | | | | | | | | | | | | | | |
| Operating costs and expenses: | | | | | | | | | | | | | | | | |
| Direct operating expenses | | | 13,419 | | | | 14,654 | | | | 26,210 | | | | 30,759 | |
| Selling and administrative expenses | | | 4,357 | | | | 6,186 | | | | 8,980 | | | | 11,586 | |
| Interest income, net | | | (117 | ) | | | (90 | ) | | | (257 | ) | | | (181 | ) |
| Total | | | 17,659 | | | | 20,750 | | | | 34,933 | | | | 42,164 | |
| | | | | | | | | | | | | | | | | |
| Income (Loss) before provision for income taxes | | | (1,499 | ) | | | 2,018 | | | | (1,870 | ) | | | 5,740 | |
| Provision for (benefit from) income taxes | | | (1,013 | ) | | | 365 | | | | (1,488 | ) | | | 1,273 | |
| Net income (loss) | | | (486 | ) | | | 1,653 | | | | (382 | ) | | | 4,467 | |
| Loss attributable to non-controlling interests | | | 365 | | | | 435 | | | | 578 | | | | 1,053 | |
| Net income (loss) attributable to Innodata Inc. and Subsidiaries | | $ | (121 | ) | | $ | 2,088 | | | $ | 196 | | | $ | 5,520 | |
| | | | | | | | | | | | | | | | | |
| Income (Loss) per share attributable to Innodata Inc. and Subsidiaries: | | | | | | | | | | | | | | | | |
| Basic | | $ | (0.00 | ) | | $ | 0.08 | | | $ | 0.01 | | | $ | 0.22 | |
| Diluted | | $ | (0.00 | ) | | $ | 0.08 | | | $ | 0.01 | | | $ | 0.21 | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 24,940 | | | | 25,085 | | | | 24,938 | | | | 24,771 | |
| Diluted | | | 24,940 | | | | 26,862 | | | | 24,938 | | | | 26,459 | |
| | | | | | | | | | | | | | | | | |
| Other Comprehensive income (loss) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) attributable to Innodata Inc. and Subsidiaries | | $ | (121 | ) | | $ | 2,088 | | | $ | 196 | | | $ | 5,520 | |
| Pension liability (loss) adjustment, net of taxes | | | 18 | | | | 9 | | | | 36 | | | | 17 | |
| Unrealized gain from derivatives, net of taxes | | | (1,221 | ) | | | 68 | | | | (1,230 | ) | | | 761 | |
| Comprehensive income (loss) attributable to Innodata Inc. and Subsidiaries | | $ | (1,324 | ) | | $ | 2,165 | | | $ | (998 | ) | | $ | 6,298 | |
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
| | | June 30, | | | December 31, | |
| | | 2013 | | | 2012 | |
| ASSETS | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 24,379 | | | $ | 25,425 | |
| Short term investments – other | | | 2,773 | | | | 3,091 | |
| Accounts receivable, net | | | 10,898 | | | | 14,317 | |
| Prepaid expenses and other current assets | | | 2,094 | | | | 2,561 | |
| Deferred income taxes | | | 1,514 | | | | 1,104 | |
| Total current assets | | | 41,658 | | | | 46,498 | |
| | | | | | | | | |
| Property and equipment, net | | | 12,069 | | | | 10,656 | |
| Other assets | | | 3,292 | | | | 3,504 | |
| Deferred income taxes | | | 7,156 | | | | 4,848 | |
| Goodwill | | | 675 | | | | 675 | |
| Total assets | | $ | 64,850 | | | $ | 66,181 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 5,538 | | | $ | 4,100 | |
| Accrued salaries, wages and related benefits | | | 5,263 | | | | 6,584 | |
| Income and other taxes | | | 1,720 | | | | 2,155 | |
| Current portion of long term obligations | | | 538 | | | | 818 | |
| Deferred income taxes | | | - | | | | 57 | |
| Total current liabilities | | | 13,059 | | | | 13,714 | |
| | | | | | | | | |
| Deferred income taxes | | | 190 | | | | 182 | |
| Long term obligations | | | 3,677 | | | | 3,374 | |
| Non-controlling interests | | | (1,791 | ) | | | (1,598 | ) |
| STOCKHOLDERS’ EQUITY: | | | 49,715 | | | | 50,509 | |
| Total liabilities and stockholders’ equity | | $ | 64,850 | | | $ | 66,181 | |
