UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: July 26, 2012
(Date of earliest event reported):
INNODATA INC.
(Exact name of registrant as specified in its charter)
Delaware | 0-22196 | 13-3475943 |
(State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer |
incorporation) | Identification No.) |
Three University Plaza | 07601 | |
Hackensack, NJ 07601 | (Zip Code) | |
(Address of principal executive offices) |
(201) 371-8000 |
(Registrant's telephone number, including area code) |
Innodata Isogen, Inc. |
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
p Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
p Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
p Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
p Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On July 26, 2012, Innodata Inc. issued a press release announcing its second quarter 2012 financial results. A copy of the press release is attached hereto as Exhibit 99.1.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
99.1 Press release dated July 26, 2012.
2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
INNODATA INC.
Date: July 26, 2012 | By: /s/ O’Neil Nalavadi |
O’Neil Nalavadi | |
Senior Vice President | |
and Chief Financial Officer |
3 |
INDEX TO EXHIBITS
Exhibit No. | Description | ||||||
99.1 | Press Release of Innodata Inc., dated July 26, 2012, reporting second quarter 2012 financial results. | ||||||
4 |
Innodata Reports Second Quarter 2012 Results
NEW YORK – July 26, 2012 – INNODATA INC. (NASDAQ: INOD) today reported results for the second quarter and the six months ended June 30, 2012.
· | Total revenue was $22.8 million for the second quarter of 2012, a 9% sequential decline from $25.1 million in the first quarter of 2012 and a 40% increase from $16.3 million in the second quarter of 2011. Net earnings for the second quarter of 2012 were $2.1 million, or $0.08 per diluted share, compared to net earnings of $3.4 million, or $0.13 per diluted share, in the first quarter of 2012. Net earnings for the second quarter of 2011 were $0.8 million, or $0.03 per diluted share. |
· | For the first six months of 2012, revenues were $48 million, up 55% from $31 million in the first six months of 2011. Net earnings were $5.5 million, or $0.21 per diluted share, during the first six months of 2012, compared with net earnings of $0.8 million, or $0.03 per diluted share, for the same period in 2011. |
· | Cash, cash equivalents and investments were $23.0 million at both June 30, 2012 and March 31, 2012. As of June 30, 2012, the Company had no debt, and stockholders’ equity was $48.5 million. |
· | Capital expenditures in the second quarter were approximately $2.3 million, incurred primarily to complete the expansion of new delivery centers in Asia and to fund continued investment in the Innodata Advanced Data Solution (IADS) businesses. |
Jack Abuhoff, the Company’s Chairman and CEO, stated, “The $2.4 million decline in revenues from Q1 to Q2 primarily reflects a reduction in revenue from a large e-book client that shifted its budgetary priority from standard English language content to international and enhanced content. We expect that this shift will continue in the second half of 2012 and that revenues from this client will continue to decline during this period. At the same time, and in close collaboration with our major clients, we continue to develop valuable technological capabilities to continue in the forefront of our industry as market demands move.
“Revenues in our new IADS division have not been significant to date. Nevertheless, the reception we are receiving in active discussions with more than 50 major firms in life insurance, healthcare and pharma, as well as a contract that we signed at the end of the second quarter with a prominent company in the health-care sector, reinforces our expectation that there is considerable market potential ahead of us.”
Abuhoff added, “We are forecasting third quarter revenue to be in the range of $18 to $20 million, and we are targeting sequential growth in Q4. We also anticipate overall growth in revenues for 2012 as a whole.”
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:
1-800-967-7184 (Domestic)
1-719-325-2370 (International)
1-888-203-1112 (Domestic Replay)
1-719-457-0820 (International Replay)
Pass code on both: 4736219
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 Inc. (NASDAQ: 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.
Safe Harbor 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”, “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.
rjain@innodata.com
(201) 371-8024
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per-share amounts)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenues | $ | 22,768 | $ | 16,257 | $ | 47,904 | $ | 30,958 | ||||||||
Operating costs and expenses: | ||||||||||||||||
Direct operating expenses | 14,654 | 11,370 | 30,759 | 22,043 | ||||||||||||
Selling and administrative expenses | 6,186 | 4,071 | 11,586 | 8,124 | ||||||||||||
Interest income, net | (90 | ) | (170 | ) | (181 | ) | (279 | ) | ||||||||
Total | 20,750 | 15,271 | 42,164 | 29,888 | ||||||||||||
Income before provision for income taxes | 2,018 | 986 | 5,740 | 1,070 | ||||||||||||
Provision for income taxes | 365 | 228 | 1,273 | 297 | ||||||||||||
Net income | 1,653 | 758 | 4,467 | 773 | ||||||||||||
Loss attributable to non-controlling interests | 435 | 49 | 1053 | 49 | ||||||||||||
Net income attributable to Innodata Inc. and | ||||||||||||||||
Subsidiaries | $ | 2,088 | $ | 807 | $ | 5,520 | $ | 822 | ||||||||
Income per share attributable to | ||||||||||||||||
Innodata Inc. and Subsidiaries: | ||||||||||||||||
Basic | $ | 0.08 | $ | 0.03 | $ | 0.22 | $ | 0.03 | ||||||||
Diluted | $ | 0.08 | $ | 0.03 | $ | 0.21 | $ | 0.03 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 25,085 | 25,059 | 24,771 | 25,107 | ||||||||||||
Diluted | 26,862 | 25,308 | 26,459 | 25,262 | ||||||||||||
Net income attributable to | ||||||||||||||||
Innodata Inc. and Subsidiaries | $ | 2,088 | $ | 807 | $ | 5,520 | $ | 822 | ||||||||
Pension liability adjustment, net of taxes | 9 | 5 | 17 | 14 | ||||||||||||
Change in fair value of derivatives | 68 | (311 | ) | 761 | (397 | ) | ||||||||||
Comprehensive income attributable to | ||||||||||||||||
Innodata Inc. and Subsidiaries | $ | 2,165 | $ | 501 | $ | 6,298 | $ | 439 |
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
June 30, | December 31, | |||||||
2012 | 2011 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 20,732 | $ | 11,389 | ||||
Short term investments - other | 2,604 | 5,828 | ||||||
Accounts receivable, net | 18,920 | 21,706 | ||||||
Prepaid expenses and other current assets | 2,361 | 2,984 | ||||||
Deferred income taxes | 1,483 | 1,934 | ||||||
Total current assets | 46,100 | 43,841 | ||||||
Property and equipment, net | 10,410 | 7,430 | ||||||
Other assets | 3,588 | 3,565 | ||||||
Deferred income taxes | 3,607 | 3,886 | ||||||
Goodwill | 675 | 675 | ||||||
Total assets | $ | 64,380 | $ | 59,397 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 4,748 | $ | 5,873 | ||||
Accrued salaries, wages and related benefits | 6,590 | 6,596 | ||||||
Income and other taxes | 2,184 | 2,576 | ||||||
Current portion of long-term obligations | 586 | 639 | ||||||
Deferred income taxes | 9 | 9 | ||||||
Total current liabilities | 14,117 | 15,693 | ||||||
Deferred income taxes | 153 | 153 | ||||||
Long-term obligations | 3,206 | 2,944 | ||||||
Non-controlling interests | (1,614 | ) | (561 | ) | ||||
STOCKHOLDERS' EQUITY | 48,518 | 41,168 | ||||||
Total liabilities and stockholders’ equity | $ | 64,380 | $ | 59,397 |