Exhibit 99.1
Innodata Announces First Quarter 2003 Results
NEW YORK--(BUSINESS WIRE)--May 14, 2003--Innodata Corporation
(NASDAQ:INOD)
-- Revenues climb 8% from Q4 2002
-- At the same time, direct operating costs decline by 8%
-- Early signs point to positive revenue trend in 2003
INNODATA CORPORATION (NASDAQ:INOD), a leading provider of digital
content services and solutions, today announced a net loss of
$1,113,000 or $0.05 per diluted share, for the first quarter of 2003,
versus net income of $243,000, or $0.01 per diluted share, for the
first quarter of 2002. Of the first quarter 2003 loss, $1,049,000 represented
non-cash depreciation and amortization.
Revenues were $6,653,000 for the three months ended March 31,
2003, as compared to revenues of $12,556,000 for the same period in
2002, but were up about 8% from revenues of $6,162,000 in the fourth
quarter of 2002. Of first quarter 2003 revenues, approximately 57%
represented revenue from business process outsourcing engagements.
Innodata's cash position continued to be strong at $5.7 million in
the first quarter 2003, but was down from $7.3 million in the fourth
quarter 2002. Approximately $300,000 of the decline resulted from
scheduled capital expenditures, and the balance of the decline
resulted in large part from March revenues (which were not collected
at March 31, 2003) being disproportionately higher than January 2003
or February 2003 revenues. Principally as a result, accounts
receivable increased to approximately $4.5 million in the first
quarter 2003 from approximately $3.3 million in the fourth quarter
2002.
In addition, working capital remained in excess of $8 million and
the company had no debt other than routine trade payables.
While first quarter 2003 revenues rose from the fourth quarter
2002, the company's direct operating costs declined by 8%, dropping
from $6.3 million in the fourth quarter of 2002 to $5.8 million in the
first quarter 2003. The reduction in costs resulted in part from a
$250,000 fixed cost savings attributable to the closure of a facility
in the fourth quarter 2002, as well as continued aggressive cost
management. Since the company began its cost cutting efforts at the
beginning of July 2002, it has reduced the level of fixed direct
operating costs by more than $1.5 million per quarter.
Innodata attributed the overall financial results chiefly to the
recessionary business environment that has severely limited capital
spending in the commercial and enterprise publishing sectors through
early 2003. However, the company said it is seeing increasing
indications of strengthening demand for its services.
"We're seeing early indications that 2003 should be a better year
than 2002," said Jack Abuhoff, chairman and CEO of Innodata. "As
demand conditions continue to improve modestly, cost savings we've
engineered from operations should help stabilize, then reverse, the
cash flow trend of the past few quarters. I'm optimistic about the
second half of 2003.
"At this point, it looks to me that we're getting back on the
right track," Abuhoff noted.
Under the terms of Innodata's stock buyback program, there remains
approximately $1.1 million in outstanding authorization should the
company decide to buy back shares.
Timing of Conference Call with Q&A
Innodata will conduct an investor conference call, including a
question & answer period, at 11:00 a.m. EDT today. Interested parties
can participate in this call by dialing the following call-in numbers:
1-800-915-4836 (Domestic)
1-973-317-5319 (International)
Replays will also be made available at:
1-800-428-6051 (Domestic Replay)
1-973-709-2089 (International Replay)
(Passcode on Replay only: 291811)
Investors are also invited to access a live Webcast of the
conference call at the Investor Relations section of www.innodata.com.
Please note that the Webcast feature will be in a listen-only mode.
Call-in or Webcast replay will be available for 30 days following the
conference call.
About Innodata
Innodata (www.innodata.com / www.isogen.com) is a leading provider
of digital content services and solutions. Innodata, based in the New
York metro area, delivers content manufacturing, content conversion,
XML transformation, systems engineering, and education in XML and
related standards to leading companies in fields as diverse as
publishing, telecommunications, healthcare and defense. Innodata's six
content manufacturing centers based in Asia provide peerless
outsourced support to companies worldwide, and its ISOGEN unit offers
advanced systems engineering and education at four U.S.-based
solutions centers. In 2001, Fortune and Business Week each rated
Innodata as one of the 100 top-performing public companies in the U.S.
This release contains certain forward-looking statements,
including without limitation, statements concerning the Company's
operations, economic performance, and financial condition. These
forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
The words "believe," "expect," "anticipate," "indicate," "point to"
and other similar expressions generally identify forward-looking
statements, which speak only as of their dates.
These forward-looking statements are based largely on the
Company's current expectations, and are subject to a number of risks
and uncertainties, including without limitation, continuation or
worsening of present depressed market conditions, changes in external
market factors, the ability and willingness of the Company's clients
and prospective clients 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, potential undiscovered liabilities of companies
that Innodata acquires, changes in the Company's 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 the Company's filings
with the Securities and Exchange Commission.
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.
INNODATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31, 2003 December 31, 2002
-------------- -----------------
Unaudited Derived from
audited
financial
statements
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 5,765 $ 7,255
Accounts receivable-net 4,530 3,253
Prepaid expenses and other current
assets 728 706
Refundable income taxes 1,412 1,491
Deferred income taxes 1,500 1,501
------- -------
Total current assets 13,935 14,206
PROPERTY AND EQUIPMENT - NET 6,104 6,707
OTHER ASSETS 859 1,109
GOODWILL 675 675
------- -------
TOTAL $21,573 $22,697
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 2,532 $ 2,655
Accrued salaries and wages 2,706 2,526
Income and other taxes 401 455
------- -------
Total current liabilities 5,639 5,636
------- -------
DEFERRED INCOME TAXES PAYABLE 1,478 1,492
------- -------
STOCKHOLDERS' EQUITY 14,456 15,569
------- -------
TOTAL $21,573 $22,697
======= =======
INNODATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2003 2002
------- -------
REVENUES $ 6,653 $12,556
------- -------
OPERATING COSTS AND EXPENSES:
Direct operating expenses 5,825 9,739
Selling and administrative expenses 2,046 2,483
Interest income - net (9) (4)
------- -------
Total 7,862 12,218
------- -------
(LOSS) INCOME BEFORE (BENEFIT FROM) PROVISION
FOR INCOME TAXES (1,209) 338
(BENEFIT FROM) PROVISION FOR INCOME TAXES (96) 95
------- -------
NET (LOSS) INCOME $(1,113) $ 243
======= =======
BASIC (LOSS) INCOME PER SHARE $ (.05) $ .01
======= =======
WEIGHTED AVERAGE SHARES OUTSTANDING 21,436 21,450
======= =======
DILUTED (LOSS) INCOME PER SHARE $ (.05) $ .01
======= =======
ADJUSTED DILUTIVE SHARES OUTSTANDING 21,436 23,901
======= =======
CONTACT: Innodata Corporation
Al Girardi, 201/488-1200, ext. 5392
al_girardi@innodata.com