Innodata Reports Third Quarter 2017 Results
(Thomson Reuters ONE) -
NEW YORK - November 7, 2017 - INNODATA INC. (NASDAQ: INOD) today reported
results for the third quarter and the nine months ended September 30, 2017.
* Total revenue was $15.0 million in the third quarter of 2017, a decline of
2% from $15.3 million in the second quarter of 2017. Total revenue was $16.1
million in the third quarter of 2016.
* Net loss was $1.1 million in the third quarter of 2017 or $(0.04) per
diluted share, compared to a net loss of $0.2 million in the second quarter
of 2017 or $(0.01) per diluted share. Net loss in the third quarter of 2016
was $2.8 million (which included $1.6 million of one-time costs and charges)
or $(0.11) per diluted share.
* For the first nine months of 2017, total revenue was $45.3 million, a
decline of 4% from $47.4 million in the first nine months of 2016. Net loss
was $3.0 million, or $(0.11) per diluted share, in the first nine months of
2017, compared to a net loss of $4.5 million (which included $3.0 million of
one-time costs and charges), or $(0.18) per diluted share, for the same
period in 2016.
* Adjusted EBITDA (as defined below) was $0.2 million in the third quarter of
2017, compared to $1.0 million in the second quarter of 2017. Adjusted
EBITDA was $(0.4) million in the third quarter of 2016.
* Cash, cash equivalents and investments were $12.5 million at September
30, 2017 compared to $14.2 million at December 31, 2016.
The tables that accompany this release set out results by segment.
Jack Abuhoff, Chairman and CEO, said, "Consolidated revenue this quarter was at
the mid-point of our previously provided guidance. Revenue in our Digital Data
Solutions (DDS) segment was $11.6 million in the third quarter of this year,
compared to revenue of $10.7 million in the second quarter of the year after
excluding $1.1 million of previously deferred revenue that was recognized in the
second quarter. This increase primarily reflects higher volumes from an existing
customer. We continue to reposition our service capabilities and to reduce our
fixed costs. We expect that our 2018 fixed costs will be approximately $2.0
million lower than our annualized fixed costs as of January 2017.
"Revenue in our Innodata Advanced Data Solutions (IADS) segment was flat on a
sequential basis in the second and third quarters of this year, although revenue
in our Synodex business increased by $100,000. We improved our Synodex
production efficiency significantly during the first three quarters of 2017 and
anticipate further efficiency improvements and cost alignments."
Abuhoff continued, "Revenue in our Media Intelligence Solutions (MIS) segment
declined 4% sequentially from the second quarter this year to the third
quarter. Revenue of the portion of the business we acquired from PR Newswire in
the third quarter of 2016 declined 22% from approximately $1.6 million (net of a
one-time acquisition-related adjustment) to $1.2 million in the third quarter of
2017. MIS used approximately $900,000 of cash in the third quarter of 2017.
Transition issues should be largely behind us in 2018 and we will target
customer renewals in excess of 75%."
Abuhoff concluded, "We anticipate fourth quarter revenue to be in the range of
$14.4 - $15.3 million, consisting of DDS revenue in the range of $11.0 - $11.6
million, IADS revenue in the range of $1.2 - $1.4 million and MIS revenue in the
range of $2.2 - $2.3 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 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:
1-877-888-4312 (Domestic)
1-785-424-1876 (International)
1-866-375-1919 (Domestic Replay)
1-719-457-0820 (International Replay)
Pass code on both: 4780939
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 4,000 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; potential impairment of the carrying value of goodwill and other
acquired intangible assets of companies and businesses that we 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 LOSS
(Unaudited)
(In thousands, except per-share amounts)
Three Months Ended Nine Months Ended
---------------------------- -----------------------------
September 30, September 30,
---------------------------- -----------------------------
2017 2016 2017 2016
-------------- ------------- --------------- -------------
Revenues $ 15,018 $ 16,060 $ 45,271 $ 47,400
-------------- ------------- --------------- -------------
Operating costs and
expenses:
Direct operating
costs 11,463 12,422 34,585 35,572
Selling and
administrative
expenses 4,438 5,105 13,106 14,469
Interest expense
(income), net 2 15 (9) 44
Change in fair
value of
contingent
consideration * 1,038 * 1,038
-------------- ------------- --------------- -------------
Totals 15,903 18,580 47,682 51,123
-------------- ------------- --------------- -------------
Loss before income
taxes (885) (2,520) (2,411) (3,723)
Provision for income
taxes 268 352 807 1,128
-------------- ------------- --------------- -------------
Net loss (1,153) (2,872) (3,218) (4,851)
Loss attributable to
non-controlling
interests 85 106 254 310
-------------- ------------- --------------- -------------
Net loss
attributable to
Innodata Inc. and
Subsidiaries $ (1,068) $ (2,766) $ (2,964) $ (4,541)
-------------- ------------- --------------- -------------
Loss per share
attributable to
Innodata Inc. and
Subsidiaries:
Basic and Diluted $ (0.04) $ (0.11) $ (0.11) $ (0.18)
-------------- ------------- --------------- -------------
Weighted average
shares outstanding:
Basic and Diluted 25,877 25,651 25,795 25,514
-------------- ------------- --------------- -------------
Comprehensive loss:
$ (1,153)
Net loss $ (2,872) $ (3,218) $ (4,851)
-------------- ------------- --------------- -------------
Pension liability
adjustment, net of
taxes (60) (83) (183) (247)
Change in fair
values of
derivatives, net of
taxes (37) (39) 99 207
Foreign currency
translation
adjustment, net of
taxes 482 (118) 780 246
-------------- ------------- --------------- -------------
Other Comprehensive
income (loss) 385 (240) 696 206
-------------- ------------- --------------- -------------
Total Comprehensive
loss (768) (3,112) (2,522) (4,645)
Comprehensive loss
attributed to non-
controlling interest 85 106 254 310
-------------- ------------- --------------- -------------
Comprehensive loss
attributable to
Innodata Inc. and
Subsidiaries $ (683) $ (3,006) $ (2,268) $ (4,335)
-------------- ------------- --------------- -------------
Supplemental Financial Data:
Adjusted EBITDA $ 221 $ (384) $ 1,013 $ 288
---------- ------------ ---------- ------
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
September 30, December 31,
2017 2016
--------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 12,468 $ 14,172
Accounts receivable, net 9,577 9,952
Prepaid expenses and other current assets 3,761 3,124
--------------- -------------
Total current assets 25,806 27,248
Property and equipment, net 7,322 5,397
Other assets 3,136 2,377
Deferred income taxes 1,909 1,641
Intangibles, net 7,884 8,191
Goodwill 2,839 2,734
--------------- -------------
Total assets $ 48,896 $ 47,588
--------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 5,348 $ 5,351
Accrued salaries, wages and related benefits 5,418 5,040
Income and other taxes 1,764 1,330
Current portion of long term obligations 2,124 1,120
--------------- -------------
Total current liabilities 14,654 12,841
Deferred income taxes 694 680
Long term obligations 4,733 3,917
Non-controlling interests (3,888) (3,634)
--------------- -------------
STOCKHOLDERS' EQUITY: 32,703 33,784
--------------- -------------
Total liabilities and stockholders' equity $ 48,896 $ 47,588
--------------- -------------
INNODATA INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(Dollars in thousands)
Adjusted EBITDA
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- --------------------------
2017 2016 2017 2016
-------------- ------------- ------------ -------------
Net loss attributable
to Innodata Inc. and $ $ (4,541)
Subsidiaries $ (1,068) $ (2,766) (2,964)
Depreciation and
amortization 919 876 2,771 2,200
Stock-based
compensation 185 207 662 729
Provision for income
taxes 268 352 807 1,128
Change in fair value of
contingent
consideration * 1,038 * 1,038
Interest expense
(income), net 2 15 (9) 44
Non-controlling
interests (85) (106) (254) (310)
-------------- ------------- ------------ -------------
Adjusted EBITDA $ 221 $ (384) $ 1,013 $ 288
-------------- ------------- ------------ -------------
Adjusted EBITDA -
DDS Segment
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ --------------------------
2017 2016 2017 2016
------------ ----------- ---------- -------------
Net income (loss)
attributable to $ $ (1,842)
DDS Segment $ 107 $ (2,147) (615)
Depreciation and
amortization 546 585 1,732 1,618
Stock-based
compensation 183 205 658 741
Provision for
income taxes 278 370 829 1,173
Change in fair
value of
contingent
consideration * 1,038 * 1,038
Interest expense
(income), net (2) 15 (16) 44
Non-controlling
interests (85) (106) (254) (310)
------------ ----------- ---------- -------------
Adjusted EBITDA - $
DDS Segment $ 1,027 $ (40) 2,334 $ 2,462
------------ ----------- ---------- -------------
Adjusted EBITDA -
IADS Segment
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ --------------------------
2017 2016 2017 2016
------------ ----------- ---------- -------------
Net loss
attributable to $
IADS Segment $ (256) $ (553) (749) $ (1,598)
Stock-based
compensation * 2 2 (12)
------------ ----------- ---------- -------------
Adjusted EBITDA - $
IADS Segment $ (256) $ (551) (747) $ (1,610)
------------ ----------- ---------- -------------
Adjusted EBITDA - MIS Segment
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- --------------------------
2017 2016 2017 2016
----------- ---------- ------------- ------------
Net loss attributable to MIS
Segment $ (919) $ (66) $ (1,600) $ (1,101)
Depreciation and amortization 373 291 1,039 582
Stock-based compensation 2 * 2 *
Benefit from income taxes (10) (18) (22) (45)
Interest expense, net 4 * 7 *
----------- ---------- ------------- ------------
Adjusted EBITDA - MIS Segment $ (550) $ 207 $ (574) $ (564)
----------- ---------- ------------- ------------
INNODATA INC. AND SUBSIDIARIES
REVENUE
(Unaudited)
(Dollars in thousands)
Revenue (by segment)
Three Months Ended Nine Months Ended
--------------------------- --------------------------
September 30, September 30,
--------------------------- --------------------------
2017 2016 2017 2016
------------ -------------- ------------- ------------
Digital Data Solutions $ 11,617 $ 12,052 $ 34,772 $ 38,928
IADS 1,193 1,028 3,406 3,090
MIS 2,208 2,980 7,093 5,382
------------ -------------- ------------- ------------
Total Revenue $ 15,018 $ 16,060 $ 45,271 $ 47,400
------------ -------------- ------------- ------------
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: 07.11.2017 - 14:30 Uhr
Sprache: Deutsch
News-ID 566988
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