Total revenue was a record $25.1 million in the first quarter of 2012, a 6% sequential increase from $23.7 million in the fourth quarter of 2011, and a 71% increase from $14.7 million in the first quarter of 2011. The increase is primarily attributable to higher revenue from eBook-related services for one of the Company's significant clients and revenues from a new client in the Company's recently launched Advanced Data Solutions (IADS) business.
Net earnings for the first quarter of 2012 were $3.4 million, or $0.13 per diluted share, compared to net earnings of $2.3 million, or $0.09 per diluted share, in the fourth quarter of 2011, and net earnings of $15,000, or less than $0.01 per diluted share in the first quarter of 2011. The growth in net earnings is primarily attributable to higher revenue, as well as an increase in gross margins from 27% in the first quarter of 2011 to 36% both in the first quarter of 2012 and the fourth quarter of 2011.
Cash, cash equivalents and investments increased to $23.0 million at March 31, 2012 from $17.2 million at December 31, 2011. As of March 31, 2012, the Company had no debt and stockholders' equity was $45.8 million.
Capital expenditures in the first quarter were approximately $2.1 million, and were incurred primarily for new delivery centers in Asia, continued product development in the Company's IADS business, and hardware, software and infrastructure upgrades. The Company anticipates that its new delivery centers in Asia will be sufficient to support approximately $25 million of additional annual revenue.
"We experienced higher than expected demand for our eBook services in the first quarter as platform owners continued to make significant investments in their digital inventories," said Jack Abuhoff, the Company's Chairman and CEO. "We will continue working to extend our eBook services capabilities to stay at the forefront of this market. We will also continue to invest in IADS where we see significant opportunities for more predictable and even growth. We are pleased that IADS has begun to contribute to revenues from pilot projects this quarter, and are enthusiastic about its progress."
Abuhoff concluded,"Our $25.1 million in revenues during the first quarter exceeded our $21 million forecast because of stronger than expected demand. We anticipate that revenues in the second quarter of 2012 will also exceed $21 million but not to the same extent as in the first quarter."
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:
1-800-533-7954 (Domestic) / 1-785-830-1924 (International)
1-888-203-1112 (Domestic Replay) / 1-719-457-0820 (International Replay)
Pass code on both: 3164574
Investors are also invited to access a live Webcast of the conference call at the Investor Relations section of 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 (innodata.com) 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.
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.