EX-99.1 2 a4950907ex991.txt EXHIBIT 99.1 Exhibit 99.1 Innodata Isogen Reports Second Quarter 2005 Results NEW YORK--(BUSINESS WIRE)--Aug. 11, 2005--INNODATA ISOGEN, INC. (NASDAQ: INOD), a leading provider of content supply chain solutions, today reported a net loss of $517,000, or $.02 per diluted share, for the second quarter of 2005, versus net income of $1,577,000, or $0.06 per diluted share, for the second quarter of 2004. In the first six months of 2005, the company lost $218,000, or $0.01 per diluted share. Over the same period in 2004, the company earned $3,657,000, or $0.15 per diluted share. Revenues were $10,110,000 in the second quarter of 2005, down from revenues of $12,354,000 in the second quarter of 2004; and revenues were $21,300,000 for the six months ending June 30, 2005, down from $24,511,000 for the same period last year. Innodata Isogen's cash and equivalents were approximately $23 million at June 30, 2005 and the company carries virtually no debt other than routine payables. Innodata Isogen attributed the results primarily to the unscheduled termination of a large project in the first six months of 2005 without sufficient replacement by other revenues. "These results are disappointing, especially in light of several quarters of strong, sustained profitability," said Jack Abuhoff, chairman and CEO of Innodata Isogen. "As we gear up to turn our results around, our position as a leading provider in an attractive, growing market is an important asset. "We will continue to invest wisely to grow our business - especially in the areas of sales, business and product development and solutions engineering - and we're confident that these investments will bear fruit in the coming year." The company recently hired a new vice president of sales and solutions, Tim Christin (formerly director of enterprise sales at Bowne Global Solutions), and is planning to introduce a significant new content services offering in the second half of 2005. Abuhoff said he anticipates the company's financial results will be down slightly next quarter as well, but remains optimistic the company will see an improvement in the fourth quarter. Timing of Conference Call with Q&A Innodata Isogen will conduct an investor conference call, including a question & answer period, at 11:00 AM ET today. Interested parties can participate in this call by dialing the following call-in numbers: 1-800-289-0743 (Domestic) 1-913-981-5546 (International) Replays will also be made available at: 1-888-203-1112 (Domestic Replay) 1-719-457-0820 (International Replay) (Pass code on Replay only: 3975445) Investors are also invited to access a live Webcast of the conference call at the Investor Relations section of www.innodata-isogen.com. Please note that the Webcast feature will be in a listen-only mode. Call-in or Webcast replay will be available for 30 days following the conference call. About Innodata Isogen Innodata Isogen (www.innodata-isogen.com) provides business and technology services that help organizations create, manage and distribute information more effectively and economically. We are headquartered in Hackensack, New Jersey, just outside of New York City. We have two additional solution centers in North America, seven production facilities in Asia (the Philippines, India and Sri Lanka) and a technology and tools development center in India. This release contains certain forward-looking statements, including without limitation, statements concerning the company's operations, economic performance, and financial condition. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "indicate," "point to" and other similar expressions generally identify forward-looking statements, which speak only as of their dates. These forward-looking statements are based largely on the company's current expectations, and are subject to a number of risks and uncertainties, including without limitation, continuing revenue concentration in a limited number of clients, continuing reliance on project-based work, worsening of 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 digital content and professional services in knowledge processing, difficulty in integrating and deriving synergies from acquisitions, 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 the company's filings with the Securities and Exchange Commission. 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. INNODATA ISOGEN, INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended ----------------- ----------------- June 30 June 30 ----------------- ----------------- 2005 2004 2005 2004 -------- -------- -------- -------- REVENUES $10,110 $12,354 $21,300 $24,511 -------- -------- -------- -------- OPERATING COSTS AND EXPENSES: Direct operating expenses 7,497 7,859 15,700 15,634 Selling and administrative expenses 3,406 2,413 6,090 4,667 Bad debt recovery - net - - - (963) Interest (income) expense - net (114) - (195) 1 -------- -------- -------- -------- Total 10,789 10,272 21,595 19,339 -------- -------- -------- -------- (LOSS) INCOME BEFORE (BENEFIT FROM) PROVISION FOR INCOME TAXES (679) 2,082 (295) 5,172 (BENEFIT FROM) PROVISION FOR INCOME TAXES (162) 505 (77) 1,515 -------- -------- -------- -------- NET (LOSS) INCOME $(517) $1,577 $(218) $3,657 ======== ======== ======== ======== BASIC (LOSS) INCOME PER SHARE $(.02) $.07 $(.01) $.17 ======== ======== ======== ======== WEIGHTED AVERAGE SHARES OUTSTANDING 22,903 22,145 22,798 22,049 ======== ======== ======== ======== DILUTED (LOSS) INCOME PER SHARE $(.02) $.06 $(.01) $.15 ======== ======== ======== ======== DILUTIVE SHARES OUTSTANDING 22,903 24,433 22,798 24,480 ======== ======== ======== ======== INNODATA ISOGEN, INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December June 30, 31, 2005 2004 -------------------- Unaudited From audited financial statements ASSETS: CURRENT ASSETS Cash and equivalents $22,945 $20,663 Accounts receivable-net 5,979 8,019 Prepaid expenses and other current assets 2,009 1,757 Deferred income taxes 385 645 -------------------- Total current assets 31,318 31,084 PROPERTY AND EQUIPMENT - NET 4,511 4,559 OTHER ASSETS 1,609 893 GOODWILL 675 675 -------------------- TOTAL $38,113 $37,211 ==================== LIABILITIES AND STOCKHOLDERS' EQUITY: CURRENT LIABILITIES Accounts payable and accrued expenses $3,248 $3,412 Accrued salaries, wages and related benefits 3,363 3,979 Income and other taxes 810 1,304 Current portion of long-term obligations 980 180 -------------------- Total current liabilities 8,401 8,875 DEFERRED INCOME TAXES 1,432 1,449 LONG-TERM OBLIGATIONS 848 150 STOCKHOLDERS' EQUITY 27,432 26,737 -------------------- TOTAL $38,113 $37,211 ==================== CONTACT: Innodata Isogen Al Girardi, 201-488-1200, ext. 5392 agirardi@innodata-isogen.com