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Innodata Reports Fourth Quarter and Fiscal Year 2013 Results



NEW YORK - February 19, 2014 - INNODATA INC. (INOD) today reported results for the fourth quarter and the 12 months ended December 31, 2013.

  • Total revenue was $15.4 million in the fourth quarter of 2013, a 2% sequential decline from $15.7 million in the third quarter of 2013 and a 19% decline from $19.0 million in the fourth quarter of 2012.   

  • Net earnings for the fourth quarter of 2013 were $0.9 million, or $0.03 per diluted share, compared to a net loss of $11.7 million, or $(0.47) per diluted share, in the third quarter of 2013. Included in the results for the third quarter of 2013 are an impairment charge of $5.5 million in respect of the Company`s IADS segment and a $7.1 million valuation allowance on the Company`s U.S. deferred tax assets. Net earnings in the fourth quarter of 2012 were $0.7 million, or $0.03 per diluted share.  

  • Total revenue for the 12 months ended December 31, 2013 was $64.2 million, a 26% decline from $86.6 million in 2012. Net loss for the 12 months ended December 31, 2013 was $10.6 million, or $(0.43) per diluted share, compared to $7.5 million of net earnings, or $0.28 per diluted share, in 2012. Included in the results for 2013 are an impairment charge of $5.5 million in respect of the Company`s IADS segment and a $7.1 million valuation allowance on the Company`s U.S. deferred tax assets. Excluding these one-time, non-cash charges, the Company would have had 2013 net earnings of $1.0 million, or $0.04 per diluted share. 

  • Cash, cash equivalents and investments decreased to $24.8 million at December 31, 2013 from $26.2 million at September 30, 2013. As of December 31, 2013, the Company had no debt, and stockholders` equity was $40.0 million. 

"Jack Abuhoff, Chairman and CEO, said, "Our revenues in 2013 declined as a result of decreasing Content Services volumes on projects of a large customer. Content Services revenue for the year was $63.1 million and operating earnings were $4.4 million. These earnings contributed to our continuing investment in our gestational Synodex subsidiary which has not yet achieved significant revenue. Synodex development, marketing and sales efforts continue apace and were most recently bolstered by a major reinsurer that publicly announced its interest in a strategic relationship with us. We anticipate that our Synodex efforts will enable us to derive revenue that is durable and recurring."
"We are forecasting that revenue in the first quarter of 2014 will be in the range of $13.5 to $15.5 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:

1-888-359-3627 (Domestic)
1-719-325-2428 (International)

1-888-203-1112 (Domestic Replay)  
1-719-457-0820 (International Replay)

Pass code on both: 7015159

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 listen-only mode.

Call-in or Webcast replay will be available for 30 days following the conference call.

Innodata (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.

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.
(201) 371-8024


Media Contact
Stanley or Andrew Berger
SM Berger & Company
(216) 464-6400
(Dollars in thousands, except per-share amounts)

Three Months Ended  Twelve Months Ended
December 31, December 31,
2013 2012 2013 2012
Revenues $ 15,440 $ 18,978 $  64,249 $ 86,591
Operating costs and expenses:
    Direct operating expenses 10,944 13,115 49,127 57,382
    Selling and administrative expenses 4,323 5,370 17,295 22,189
    Impairment charge -   505 5,524 505
    Interest income, net 1 (112) (313) (324)
        Total       15,268       18,878       71,633       79,752
Income (loss) before provision for income taxes           172           100        (7,384)        6,839
Provision for (benefit from) income taxes           (358)           (259) 5,451        (1,150)
Net income (loss)           530           359        (12,835)        5,689
Loss attributable to non-controlling interests           334           305        2,203        1,784
Net income (loss) attributable to Innodata Inc. and Subsidiaries $    864 $    664 $ (10,632) $   7,473
Income (loss) per share attributable to Innodata Inc. and Subsidiaries:
Basic $   0.03 $   0.03 $    (0.43) $   0.30
Diluted $   0.03 $   0.03 $    (0.43) $   0.28
Weighted average shares outstanding:
Basic 25,053 24,883 24,997 24,895
Diluted 25,053 25,701 24,997 26,232
Net income (loss) attributable to  Innodata Inc. and Subsidiaries $       864 $    664 $ (10,632) $  7,473
Pension liability adjustment, net of taxes (127) (164) (73) (138)
Change in fair value of derivatives            1,149            (85)        
Comprehensive income (loss) attributable to
  Innodata Inc. and Subsidiaries $   1,886 $    415 $(11,361) $  8,537

 (Dollars in thousands)

December 31,
2013         2012
Current assets:
Cash and cash equivalents $           24,752 $           25,425
Short term investments - other -   3,091
Accounts receivable, net 11,876 14,317
Prepaid expenses and other current assets 1,907 2,561
Deferred income taxes 45 1,104
Total current assets 38,580 46,498
Property and equipment, net 6,083 10,656
Other assets 3,323 3,504
Deferred income taxes 1,336 4,848
Goodwill 675 675
Total assets $           49,997 $           66,181
Current liabilities:
Accounts payable and accrued expenses $             3,678 $             4,100
Accrued salaries, wages and related benefits 4,647 6,584
Income and other taxes 1,003 2,155
Current portion of long term obligations 351 818
Deferred income taxes 57 57
Total current liabilities 9,736 13,714
Deferred income taxes 190 182
Long term obligations 3,747 3,374
Non-controlling interests (3,649) (1,598)
Total liabilities and stockholders` equity $           49,997 $           66,181

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Innodata Isogen Inc. via GlobeNewswire