Innodata Reports First Quarter 2017 Results
(Thomson Reuters ONE) -
NEW YORK - May 8, 2017 - INNODATA INC. (NASDAQ: INOD) today reported results for
the first quarter ended March 31, 2017.
* Total revenue was $15.0 million in the first quarter of 2017, a 5% decline
from $15.7 million in both the first and fourth quarters of 2016.
* Net loss was $1.7 million in the first quarter of 2017, or $(0.07) per
diluted share, compared to a net loss of $1.0 million in the fourth quarter
of 2016, or $(0.04) per diluted share. Net earnings in the first quarter of
2016 was $3,000, or $0.00 per diluted share.
* Adjusted EBITDA (as defined below) was a loss of $0.2 million in the first
quarter of 2017 compared to income of $0.4 million in the fourth quarter of
2016 and $1.4 million in the first quarter of 2016.
* Cash, cash equivalents and investments were $14.2 million at both March
31, 2017 and December 31, 2016.
The tables that accompany this release set out results by segment.
Jack Abuhoff, Chairman and CEO, said, "First quarter revenue - while in line
with the mid-point of our guidance - declined by $0.7 million from the fourth
quarter. This resulted in an Adjusted EBITDA loss of $160,000 due to high
operating leverage. Revenue in our Digital Data Solutions (DDS) segment was
$11.4 million compared to $11.7 million in the fourth quarter, as volumes from
new customer engagements were not sufficient to offset the lower volumes from
several existing customer engagements. In our Innodata Advanced Data Solutions
(IADS) segment, a combination of seasonality and the expiration of a contract in
the Synodex business translated into lower segmental revenue of $1.0 million
compared to $1.25 million in the fourth quarter.
Abuhoff continued, "In our DDS segment we're focused on new service offerings
that will help us win new recurring revenue business and expand our addressable
market. In Synodex, we remain actively engaged with several late-stage prospects
and continue to work on cost efficiencies to lower our break-even point.
"Our Media Intelligence Solutions (MIS) segment performed in accordance with our
expectations. Revenue in the first quarter was $2.6 million, with 55% gross
margins before acquisition related amortization charges and 7% Adjusted EBITDA.
In the first quarter we launched an API for our Agility global media database,
and we continue to sign up channel partners to access new markets."
Abuhoff concluded, "We anticipate second quarter revenue to be in the range of
$13.4 - 15.3 million, consisting of DDS revenue in the range of $10.0 - 11.5
million, IADS revenue in the range of $1.0 - 1.2 million, and MIS revenue in the
range of $2.4 - 2.6 million."
Non-GAAP Financial Measures
This press release and the accompanying tables include references to Adjusted
EBITDA, which is a non-GAAP financial measure. We define Adjusted EBITDA as net
income (loss) attributable to Innodata Inc. and subsidiaries in accordance with
GAAP before income taxes, depreciation, amortization of intangible assets,
changes in fair value of contingent consideration, stock-based compensation,
loss attributable to non-controlling interests and interest income (expense). We
believe Adjusted EBITDA is useful to our management and investors in evaluating
our operating performance and for financial and operational decision-making
purposes. In particular, it facilitates comparisons of the core operating
performance of our company from period to period on a consistent basis and helps
us identify underlying trends in our business. We believe it provides useful
information about our operating results, enhances the overall understanding of
our past performance and future prospects, and allows for greater transparency
with respect to key metrics used by management in our financial and operational
decision making. We use this measure to establish operational goals for managing
our business and evaluating our performance.
Adjusted EBITDA has limitations as an analytical tool and should not be
considered in isolation or as a substitute for results reported under GAAP. Some
of these limitations are:
* Adjusted EBITDA does not reflect tax payments, and such payments reflect a
reduction in cash available to us;
* Adjusted EBITDA does not reflect changes in, or cash requirements for, our
working capital needs or for our cash expenditures or future requirements
for capital expenditures or contractual commitments;
* Adjusted EBITDA excludes the potential dilutive impact of stock-based
compensation expense related to our workforce, interest income (expense) and
net loss attributable to non-controlling interests, and these items may
represent a reduction or increase in cash available to us;
* Although depreciation and amortization are non-cash charges, the assets
being depreciated and amortized may have to be replaced in the future, and
Adjusted EBITDA does not reflect cash capital expenditure requirements for
such replacements or for new capital expenditure requirements; and
* Other companies, including companies in our own industry, may calculate
Adjusted EBITDA differently than we do, limiting its usefulness as a
comparative measure.
Because of these limitations, Adjusted EBITDA should be considered alongside
other financial performance measures, including various cash flow metrics, net
income (loss) and our other GAAP results.
A reconciliation from net income (loss) to Adjusted EBITDA is attached to this
release.
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:
1-800-475-6881 (Domestic)
1-913-312-1466 (International)
1-866-375-1919 (Domestic Replay)
1-719-457-0820 (International Replay)
Pass code on both: 1333553
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.
About Innodata
Innodata (NASDAQ: INOD) is a global digital services and solutions company.
Innodata's technology and services power leading information products and
online retail destinations around the world. Innodata's solutions help
prestigious enterprises harness the power of digital data to re-imagine how they
operate and drive performance. Innodata serves publishers, media and information
companies, digital retailers, banks, insurance companies, government agencies
and many other industries.
Founded in 1988, Innodata comprises a team of 4,400 diverse people in 8
countries who are dedicated to delivering services and solutions that help the
world's businesses make better decisions.
Innodata 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.
Forward Looking 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," "goals," "optimistic," "foster,"
"estimate" 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 contracts may be terminated by clients; projected or committed
volumes of work may not materialize; our Innodata Advanced Data Solutions
("IADS") segment is a venture formed in 2011 that has incurred losses since
inception and has recorded impairment charges for all of its fixed assets; we
currently intend to continue to invest in IADS; the primarily at-will nature of
contracts with our Digital Data Solutions clients and the ability of these
clients to reduce, delay or cancel projects; continuing Digital Data Solutions
segment revenue concentration in a limited number of clients; continuing Digital
Data Solutions segment reliance on project-based work; inability to replace
projects that are completed, canceled or reduced; our dependency on content
providers in our Media Intelligence Solutions segment; difficulty in integrating
and deriving synergies from acquisitions, joint venture and strategic
investments; potential undiscovered liabilities of companies and businesses that
we may acquire; depressed market conditions; changes in external market factors;
the ability and willingness of our clients and prospective clients to execute
business plans which give rise to requirements for our services; 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.
Our 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
will occur.
We undertake no obligation to update or review any guidance or other forward-
looking information, whether as a result of new information, future developments
or otherwise.
Company Contact
Raj Jain
Vice President
Innodata Inc.
rjain(at)innodata.com
(201) 371-8024
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(Dollars in thousands, except per-share amounts)
Three Months Ended
March 31,
----------------------------
2017 2016
-------------- -------------
Revenues $ 14,953 $ 15,698
-------------- -------------
Operating costs and expenses:
Direct operating costs 11,723 11,465
Selling and administrative expenses 4,625 3,811
Interest expense (income), net (12) 13
-------------- -------------
Totals 16,336 15,289
-------------- -------------
Income (loss) before income taxes (1,383) 409
Provision for income taxes 445 518
-------------- -------------
Net loss (1,828) (109)
Loss attributable to non-controlling
interests 98 112
-------------- -------------
Net income (loss) attributable to Innodata
Inc.
and Subsidiaries $ (1,730) $ 3
-------------- -------------
Income (loss) per share attributable to
Innodata Inc. and Subsidiaries:
Basic and diluted $ (0.07) $ 0.00
-------------- -------------
Weighted average shares outstanding:
Basic 25,627 25,445
-------------- -------------
Diluted 25,627 25,574
-------------- -------------
Comprehensive income (loss)
Net loss $ (1,828) $ (109)
-------------- -------------
Pension liability adjustment, net of
taxes (62) (82)
Change in fair value of derivatives, net
of taxes 311 439
Foreign currency translation adjustment,
net of taxes 24 356
-------------- -------------
Other Comprehensive income 273 713
-------------- -------------
Total Comprehensive income (loss) (1,555) 604
Comprehensive loss attributed to non-
controlling interest 98 112
-------------- -------------
Comprehensive income (loss) attributable
to
Innodata Inc. and Subsidiaries $ (1,457) $ 716
-------------- -------------
Supplemental Financial Data:
Adjusted EBITDA $ (164) $ 1,353
-------------- -------------
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
March 31, December 31,
2017 2016
------------ -------------
ASSETS
Current assets:
Cash and cash equivalents $ 14,199 $ 14,172
Accounts receivable, net 9,523 9,952
Prepaid expenses and other current assets 3,280 3,124
------------ -------------
Total current assets 27,002 27,248
Property and equipment, net 5,898 5,397
Other assets 3,204 2,377
Deferred income taxes 1,744 1,641
Intangibles, net 7,990 8,191
Goodwill 2,747 2,734
------------ -------------
Total assets $ 48,585 $ 47,588
------------ -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 6,376 $ 5,351
Accrued salaries, wages and related benefits 4,950 5,040
Income and other taxes 1,239 1,330
Current portion of long-term obligations 1,859 1,120
------------ -------------
Total current liabilities 14,424 12,841
Deferred income taxes 682 680
Long-term obligations 4,072 3,917
Non-controlling interests (3,733) (3,634)
STOCKHOLDERS' EQUITY 33,140 33,784
------------ -------------
Total liabilities and stockholders' equity $ 48,585 $ 47,588
------------ -------------
INNODATA INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(Dollars in thousands)
Adjusted EBITDA Three Months Ended
March 31,
------------------------
2017 2016
------------- ----------
Net income (loss) attributable to Innodata Inc. and
Subsidiaries $ (1,730) $ 3
Depreciation and amortization 943 652
Stock-based compensation 288 279
Provision for income taxes 445 518
Interest expense (income), net (12) 13
Non-controlling interests (98) (112)
------------- ----------
Adjusted EBITDA $ (164) $ 1,353
------------- ----------
Adjusted EBITDA - DDS Segment Three Months Ended
March 31,
------------------------------
2017 2016
--------------- ------------
Net income (loss) attributable to DDS Segment $ (1,166) $ 1,123
Depreciation and amortization 614 513
Stock-based compensation 286 295
Provision for income taxes 447 531
Interest expense (income), net (12) 13
Non-controlling interests (98) (112)
--------------- ------------
Adjusted EBITDA - DDS Segment 71 $ 2,363
--------------- ------------
Adjusted EBITDA - IADS Segment Three Months Ended
March 31,
------------------------------
2017 2016
--------------- ------------
Net loss attributable to IADS Segment $ (414) $ (671)
Stock-based compensation 2 (16)
--------------- ------------
Adjusted EBITDA - IADS Segment $ (412) $ (687)
--------------- ------------
Adjusted EBITDA - MIS Segment Three Months Ended
March 31,
------------------------------
2017 2016
--------------- ------------
Net loss attributable to MIS Segment $ (150) $ (449)
Depreciation and amortization 329 139
Benefit from income taxes (2) (13)
--------------- ------------
Adjusted EBITDA - MIS Segment $ 177 $ (323)
--------------- ------------
INNODATA INC. AND SUBSIDIARIES
REVENUE
(Unaudited)
(Dollars in thousands)
Revenue (by segment)
Three Months Ended
March 31,
-------------------------------
2017 2016
--------------- -------------
DDS $ 11,355 $ 13,644
IADS 1,002 897
MIS 2,596 1,157
--------------- -------------
Revenue $ 14,953 $ 15,698
--------------- -------------
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq 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 Inc. via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 08.05.2017 - 14:30 Uhr
Sprache: Deutsch
News-ID 540894
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