NEW YORK - August
3, 2017 - INNODATA INC. (NASDAQ: INOD) today reported results
for the second quarter and the six months ended June 30, 2017.
-
Total revenue was $15.3 million in the second
quarter of 2017, a 2% sequential increase from $15.0 million in the
first quarter of 2017. Total revenue was $15.6 million in the
second quarter of 2016.
-
Net loss was $0.2 million in the second quarter
of 2017 or $(0.01) per diluted share, compared to a net loss of
$1.7 million in the first quarter of 2017 or ($0.07) per diluted
share. Net loss in the second quarter of 2016 was $1.8 million, or
$(0.07) per diluted share.
-
For the first six months of 2017, total revenue
was $30.3 million, a decline of 3% from $31.3 million in the first
six months of 2016. Net loss was $1.9 million, or $(0.07) per
diluted share, in the first six months of 2017, compared to a net
loss of $1.8 million, or $(0.07) per diluted share, for the same
period in 2016.
- Adjusted EBITDA (as defined
below) was $1.0 million in the second quarter of 2017, compared to
a loss of $0.2 million in the first quarter of 2017. Adjusted
EBITDA was a loss of $0.7 million in the second quarter of
2016.
- Cash, cash equivalents and
investments were $15.3 million at June 30, 2017 compared to $14.2
million at December 31, 2016.
Jack Abuhoff, Chairman and CEO,
said, "At the consolidated level both our revenue and Adjusted
EBITDA performance were higher this quarter. In our Digital Data
Solutions (DDS) segment, our second quarter revenue was $11.8
million compared to $11.4 million in the first quarter. This
includes $1.1 million of previously deferred revenue that was
recognized in the second quarter when we received payment.
"The opportunity landscape in our
DDS business continues to evolve rapidly as a result of changes
taking place within our core publishing and information market
segment and new ways businesses are consuming digital data. To grow
revenue and increase earnings, we are repositioning our service
capabilities to expand our addressable market, and we are driving
efficiencies by lowering our cost structure and driving increased
automation."
Abuhoff continued, "In our Innodata Advanced Data Solutions (IADS)
segment, revenue was $1.2 million compared to $1.0 million last
quarter. Higher revenue was driven by new work from existing
clients. We continued to increase productivity in our Synodex
business and we reduced production costs by $100,000 this
quarter.
"Revenue in our Media Intelligence
Solutions (MIS) segment was $2.3 million compared to $2.6 million
last quarter. We experienced a lower renewal rate
for US customers
acquired in our Agility acquisition than
for UK customers in the acquisition. We are putting
into place enhanced account management and support
processes that we think will improve
the US renewal rate. MIS results for the
quarter were also affected by seasonality in the Bulldog
Reporter awards business."
Abuhoff concluded, "We anticipate third quarter revenue to be in
the range of $14.5 - $15.5 million, consisting of DDS revenue in
the range of $11.3 - $12.0 million, IADS revenue in the range of
$1.0 - $1.2 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 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:
1-888-632-3381 (Domestic)
1-785-424-1678 (International)
1-866-375-1919 (Domestic Replay)
1-719-457-0820 (International Replay)
Pass code on both: 3318282
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 4,500 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@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 |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Revenues |
$ 15,300 |
|
$ 15,642 |
|
$ 30,253 |
|
$ 31,340 |
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
Direct
operating costs |
11,399 |
|
11,685 |
|
23,122 |
|
23,150 |
|
Selling and administrative expenses |
4,043 |
|
5,553 |
|
8,668 |
|
9,364 |
|
Interest expense (income), net |
1 |
|
16 |
|
(11) |
|
29 |
|
Totals |
15,443 |
|
17,254 |
|
31,779 |
|
32,543 |
|
|
|
|
|
|
|
|
|
Loss before income taxes |
(143) |
|
(1,612) |
|
(1,526) |
|
(1,203) |
Provision for income taxes |
94 |
|
258 |
|
539 |
|
776 |
Net loss |
(237) |
|
(1,870) |
|
(2,065) |
|
(1,979) |
Loss attributable to non-controlling
interests |
71 |
|
92 |
|
169 |
|
204 |
Net loss attributable to Innodata Inc.
and Subsidiaries |
$ (166) |
|
$ (1,778) |
|
$ (1,896) |
|
$ (1,775) |
|
|
|
|
|
|
|
|
|
Loss per share attributable to Innodata
Inc.
and Subsidiaries: |
|
|
|
|
|
|
|
Basic and Diluted |
$ (0.01) |
|
$ (0.07) |
|
$ (0.07) |
|
$ (0.07) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic and Diluted |
25,877 |
|
25,445 |
|
25,753 |
|
25,445 |
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ (237) |
|
$ (1,870) |
|
$ (2,065) |
|
$ (1,979) |
Pension liability adjustment, net of taxes |
(61) |
|
(82) |
|
(123) |
|
(164) |
Change in fair values of derivatives, net of taxes |
(175) |
|
(193) |
|
136 |
|
246 |
Foreign currency translation adjustment, net of taxes |
274 |
|
8 |
|
298 |
|
364 |
Other Comprehensive income (loss) |
38 |
|
(267) |
|
311 |
|
446 |
Total Comprehensive loss |
(199) |
|
(2,137) |
|
(1,754) |
|
(1,533) |
Comprehensive loss attributed to non-controlling
interest |
71 |
|
92 |
|
169 |
|
204 |
Comprehensive loss attributable to
Innodata Inc. and Subsidiaries |
$ (128) |
|
$ (2,045) |
|
$ (1,585) |
|
$ (1,329) |
Supplemental Financial Data: |
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ 956 |
|
$ (681) |
|
$ 792 |
|
$ 672 |
INNODATA INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
|
|
June 30, |
|
December 31, |
|
|
2017 |
|
2016 |
ASSETS |
|
|
|
Current assets: |
|
|
|
|
Cash
and cash equivalents |
$ 15,275 |
|
$ 14,172 |
|
Accounts receivable, net |
9,230 |
|
9,952 |
|
Prepaid expenses and other current assets |
3,771 |
|
3,124 |
|
Total current assets |
28,276 |
|
27,248 |
Property and equipment, net |
7,262 |
|
5,397 |
Other assets |
3,240 |
|
2,377 |
Deferred income taxes |
1,910 |
|
1,641 |
Intangibles, net |
7,897 |
|
8,191 |
Goodwill |
2,776 |
|
2,734 |
Total assets |
$ 51,361 |
|
$
47,588 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued expenses |
$ 7,237 |
|
$ 5,351 |
|
Accrued salaries, wages and related benefits |
5,601 |
|
5,040 |
|
Income
and other taxes |
1,879 |
|
1,330 |
|
Current portion of long term obligations |
1,997 |
|
1,120 |
|
Total current liabilities |
16,714 |
|
12,841 |
Deferred income taxes |
682 |
|
680 |
Long term obligations |
4,567 |
|
3,917 |
Non-controlling interests |
(3,803) |
|
(3,634) |
STOCKHOLDERS' EQUITY |
33,201 |
|
33,784 |
Total liabilities and
stockholders' equity |
$ 51,361 |
|
$ 47,588 |
INNODATA INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(Dollars in thousands)
|
|
|
|
|
|
|
|
Adjusted EBITDA - IADS Segment |
Three Months
Ended |
|
Six Months
Ended |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
Net
loss attributable to Innodata Inc. and Subsidiaries |
$ (79) |
|
$ (454) |
|
$ (493) |
|
$ (1,125) |
Stock-based compensation |
|
|
2 |
|
2 |
|
(14) |
Adjusted EBITDA - IADS Segment |
$ (79) |
|
$ (452) |
|
$ (491) |
|
$ (1,139) |
Adjusted EBITDA - MIS Segment |
Three Months
Ended |
|
Six Months
Ended |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
Net
loss attributable to Innodata Inc. and Subsidiaries |
$ (531) |
|
$ (598) |
|
$ (681) |
|
$ (1,047) |
Depreciation and amortization |
337 |
|
152 |
|
666 |
|
291 |
Benefit from income taxes |
(10) |
|
(14) |
|
(12) |
|
(27) |
Interest expense, net |
3 |
|
|
|
3 |
|
|
Adjusted EBITDA - MIS Segment |
$ (201) |
|
$ (460) |
|
$ (24) |
|
$ (783) |
Adjusted EBITDA - DDS Segment |
Three Months
Ended |
|
Six Months
Ended |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
Net
income (loss) attributable to Innodata Inc. and Subsidiaries |
$ 444 |
|
$ (726) |
|
$ (722) |
|
$ 397 |
Depreciation and amortization |
572 |
|
520 |
|
1,186 |
|
1,033 |
Stock-based compensation |
189 |
|
241 |
|
475 |
|
536 |
Provision for income taxes |
104 |
|
272 |
|
551 |
|
803 |
Interest expense (income), net |
(2) |
|
16 |
|
(14) |
|
29 |
Non-controlling interests |
(71) |
|
(92) |
|
(169) |
|
(204) |
Adjusted EBITDA - DDS Segment |
$ 1,236 |
|
$ 231 |
|
$ 1,307 |
|
$ 2,594 |
Adjusted EBITDA |
Three Months
Ended |
|
Six Months
Ended |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
Net
loss attributable to Innodata Inc. and Subsidiaries |
$ (166) |
|
$ (1,778) |
|
$ (1,896) |
|
$ (1,775) |
Depreciation and amortization |
909 |
|
672 |
|
1,852 |
|
1,324 |
Stock-based compensation |
189 |
|
243 |
|
477 |
|
522 |
Provision for income taxes |
94 |
|
258 |
|
539 |
|
776 |
Interest expense (income), net |
1 |
|
16 |
|
(11) |
|
29 |
Non-controlling interests |
(71) |
|
(92) |
|
(169) |
|
(204) |
Adjusted EBITDA |
$ 956 |
|
$ (681) |
|
$ 792 |
|
$ 672 |
INNODATA INC. AND
SUBSIDIARIES
REVENUE
(Unaudited)
(Dollars in thousands)
|
Three Months
Ended |
|
Six Months
Ended |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
Digital Data Solutions |
$ 11,800 |
|
$ 13,232 |
|
$ 23,155 |
|
$ 26,876 |
IADS |
1,211 |
|
1,165 |
|
2,213 |
|
2,062 |
MIS |
2,289 |
|
1,245 |
|
4,885 |
|
2,402 |
Adjusted EBITDA |
$ 15,300 |
|
$ 15,642 |
|
$ 30,253 |
|
$ 31,340 |
|
|
|
|
|
|
|
|
Revenue (by segment)
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
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