Innodata Isogen Inc. : Innodata Reports Fourth Quarter and Fiscal Year 2012 Results

 Innodata Isogen Inc. : Innodata Reports Fourth Quarter and Fiscal Year 2012
                                   Results

        



NEW YORK -  February 7,  2013 - INNODATA  INC. (NASDAQ:  INOD) today  reported 
results for the fourth quarter and the 12 months ended December 31, 2012.

  *Total revenue  was $19.0  million in  the  fourth quarter  of 2012,  a  4% 
    sequential decline from $19.7 million in  the third quarter of 2012 and  a 
    20% decline from $23.7 million in the fourth quarter of 2011. 

  *Net earnings for the  fourth quarter of 2012  were $0.7 million, or  $0.03 
    per diluted share, compared  with net earnings of  $1.3 million, or  $0.05 
    per diluted  share, in  the third  quarter of  2012. Net  earnings in  the 
    fourth quarter of 2011 were $2.3 million, or $0.09 per diluted share. 

  *Total revenue for the 12 months ended December 31, 2012 was $86.6 million,
    a  17%  increase  from  $73.9  million  in  2011.  Net  earnings  improved 
    significantly to $7.5 million, or $0.28  per diluted share, in 2012,  from 
    $4.5 million, or $0.18 per diluted share, in 2011.

  *Cash, cash  equivalents  and investments  increased  to $28.5  million  at 
    December 31, 2012 from $25 million  at September 30, 2012. As of  December 
    31, 2012, the  Company had  no debt,  and stockholders'  equity was  $50.5 
    million. 

  *Capital expenditures  in  the  fourth  quarter and  the  full  year  ended 
    December 31,  2012  were  approximately $1.2  million  and  $6.8  million, 
    respectively.  These  expenditures  were  made  primarily  to  expand  the 
    Company's delivery centers in Asia and to fund continued investment in the
    Company's Innodata Advanced Data Solutions (IADS) business.

"Looking back on  2012, we're pleased  with the operating  performance of  our 
Content Services segment which generated $13.0 million in operating income and
reflected solid execution  of our clients'  requirements," said Jack  Abuhoff, 
the  Company's  Chairman  and  CEO.  "We  also  made  significant  long   term 
investments to build our IADS business. Our total 2012 investment in IADS  was 
$9.5 million,  consisting  of $7.5  million  in operating  expenses  and  $2.0 
million in capital expenses. The mission of our IADS segment is to develop and
launch new,  innovative data-related  products and  services that  will  drive 
increases in recurring revenue.

"We are making further progress in marketing the Synodex component of our IADS
business. In the fourth quarter we  completed pilot work for four  prospective 
clients, and in the first  quarter of 2013 we  arranged to perform pilot  work 
for eight additional prospective  clients. Although we  have not yet  achieved 
significant Synodex revenues, the positive  feedback we received on the  pilot 
programs we completed  in the  fourth quarter makes  us cautiously  optimistic 
about closing deals and earning revenues in the near term.
"We believe  that  total  revenue  in  the  first  quarter  of  2013  will  be 
sequentially lower,  in the  range of  $16.0 million  to $17.5  million, as  a 
result of the current relatively lower volume of e-book production."

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:

1-888-417-8465 (Domestic)
1-719-325-2362 (International)

1-888-203-1112 (Domestic Replay) 
1-719-457-0820 (International Replay)

Pass code on both: 1604473

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 (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 
ofLeading 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.

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

or

Media Contact
Stanley or Andrew Berger
SM Berger & Company
(216) 464-6400
INNODATA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
(Dollars in thousands, except per-share amounts)

                                Three Months Ended      Twelve Months Ended
                                   December 31,             December 31,
                                2012        2011         2012         2011
Revenues                       $ 18,978     $ 23,739    $ 86,591      $ 73,942
Operating costs and expenses:
  Direct operating expenses    13,115       15,302      57,382        50,176
  Selling and                   5,375        6,319      22,194        19,082
administrative expenses
  Impairment charge               500            -         500             -
  Interest income, net          (112)        (133)       (324)         (587)
    Total                                               68,671
                                 18,877       21,488      79,752
Income before provision for                               5,271
income taxes                        100       2,251      6,839
Provision for (benefit from)                            1,361
income taxes                      (260)          298      1,150
Net income                                                3,910
                                    360       1,953      5,689
Loss attributable to                                        
non-controlling interests           304          320      1,784           561
Net income attributable to
Innodata Inc. and              $  664   $  2,273   $  7,473      $ 4,471
Subsidiaries
Income per share attributable
to Innodata Inc. and
Subsidiaries:
Basic                          $  0.03     $  0.09    $  0.30      $  0.18
Diluted                        $  0.03     $  0.09    $  0.28      $  0.18
Weighted average shares
outstanding:
Basic                            24,883       24,691      24,895        24,916
Diluted                          25,701       25,193      26,232        25,103
Net income attributable to
Innodata Inc. and               $ 664     $ 2,273    $ 7,473      $ 4,471
Subsidiaries
Pension liability adjustment,     (164)        (302)       (138)         (284)
net of taxes
Change in fair value of                                       
derivatives                       (85)       (313)       1,202       (1,945)
Comprehensive income
attributable to
 Innodata Inc. and             $  415    $  1,658   $  8,537     $  2,242
Subsidiaries

                        INNODATAINC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)
                           (Dollars in thousands)

                                                      December 31,
                                                   2012             2011
ASSETS
Current assets:
     Cash and cash equivalents              $      25,425  $     
                                                                11,389
     Short term investments - other                      3,091          5,828
     Accounts receivable, net                           14,317         21,706
     Prepaid expenses and other current                  2,561          2,984
     assets
     Deferred income taxes                               1,104          1,934
           Total current assets                         46,498         43,841
Property and equipment, net                             10,656          7,430
Other assets                                             3,504          3,565
Deferred income taxes                                    4,848          3,886
Goodwill                                                   675            675
           Total assets                     $      66,181    $     
                                                                       59,397
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable and accrued expenses  $             $      
                                            4,100               5,873
     Accrued salaries, wages and related                 6,584          6,596
     benefits
     Income and other taxes                              2,155          2,576
     Current portion of long term                          818            639
     obligations
     Deferred income taxes                                  57              9
           Total current liabilities                    13,714         15,693
Deferred income taxes                                      182            153
Long term obligations                                    3,374          2,944
Non-controlling interests                              (1,598)          (561)
STOCKHOLDERS' EQUITY                                    50,509         41,168
           Total liabilities and            $      66,181  $     
           stockholders' equity                                 59,397

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Source: Innodata Isogen Inc. via Thomson Reuters ONE
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