Good morning and welcome to the Innodata Fourth Quarter and Fiscal Year 2014 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Amy Agress. Please go ahead.

Thank you, Paula. Good morning, everyone. Thank you for joining us today. Our speakers today are Jack Abuhoff, Chairman and CEO of Innodata; and O’Neil Nalavadi, our CFO. We’ll hear from O’Neil first, who will provide a detailed review our results for both the fourth quarter and the 12 months ended December 31, 2014, and then Jack will follow with additional perspective about the business. We’ll then take your questions. First, let me qualify the forward-looking statements that are made during the call. These 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; project or committed volumes of work may not materialize; our Innodata Advanced Data Solutions segment, IADS, it’s a venture with minimal revenues 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 primary at-will nature of contracts with our Content Services clients and the ability of these clients to reduce, delay or cancel projects; continuing Content Services segment revenue concentration in a limited number of clients; continuing Content Services segment reliance on project-based work; inability to replace projects that are completed, canceled or reduced; 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; difficulty in integrating and deriving synergies from acquisition, joint venture and strategic investments; potential undiscovered liabilities of companies that we may 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. We undertake no obligation to update forward-looking information, and actual results could differ materially. Thank you. I will now turn the call over to O’Neil.

Thank you, Amy. Good morning, everyone. Thank you once again for joining us today to review our financial results for the fourth quarter and financial year 2014. I will start with our full year 2014 performance. Our revenues in fiscal 2014 were $59 million, compared to $64 million in 2013. The decline was primarily attributable to a $1 million decline in eBook revenues from a key eBook customer and the completion in 2013 of a $5.3 million project for another client in our Content Services business. These declines were partially offset by $1.7 million revenues in our Media Intelligence business. Let me now review the segment wise analysis. Content Services was the main contributor to our top line in 2014, with $57 million in revenues, compared to $63 million in 2013. Gross margins in this segment were 32% and operating margins were 8%, compared to 30% and 7% respectively in 2013. Despite the decline in revenues, we maintained our gross and operating margins by managing cost efficiencies and as a result of favorable exchange rates. In our IADS segment, in which we continue to invest new products with the goal of achieving long-term recurring revenues, revenues were $600,000 and we incurred losses of $5.6 million in 2014, compared to revenues of $1.1 million and pre-impairment losses of $6.2 million in 2013. We are pleased to report that we commenced providing Synodex services for a large insurance carrier in November. Our Media Intelligence Segment consisting of MediaMiser and Bulldog products, contributed $1.7 million in revenues or five months during FY2014. We acquired MediaMiser in July and Bulldog Reporter in December 2014. At the end of Q4, MediaMiser products empowered 120 customers including Fortune 1000 companies, small and medium businesses, government institutions and not for profits, by providing real time Media Intelligence…

Thank you, O’Neil. Good morning, everyone. Thank you for joining us today. O’Neil has provided a detailed financial review of the fourth quarter and 2014. I’ll now segway into sharing with you my perspectives on 2015 as we kick off the year and I’ll do this by running through each of our reporting segments, providing my thoughts on where we are now and what we are looking to accomplish in the course of 2015. I’ll start with the Synodex division of IADS. In the fourth quarter, our revenue increased from $70,000 to $200,000 as we successfully launched our Synodex 3.0 solution with the new insurance carrier client we’d announced earlier in the year. We have approximated the value of this contract at $1.6 million per year. We are in the final stages of putting in place new contracts with the large reinsurance clients under which we believe we will achieve in annual revenue run rate of approximately $2 million, taking into account of both, current work with this client, as well as new scope with possible expansion opportunities beyond that. We’re continuing to get a very positive reception to our new Synodex 3.0 product and we’re forecasting a number of additional opportunities closing near term. For example, we’re now in contract negotiations with a leading life insurance company which wants to incorporate our technology into their underwriting environment. We expect this contract will be worth approximately $700,000 per year in combined licensing and services fees. This quite a bit of momentum on the client side to get this closed and the client has assembled an internal task force consisting of IT professionals, product managers, attorneys and underwriters to get it done. Another example, senior management of a leading domestic and international insurer and financial advisor, has decided after extensive testing…

Thank you. [Operator Instructions] We will take our first question from Tim Clarkson with Van Clemens Capital.

Hey, couple of questions guys. Jack I was just wondering, have you in your attempt to get new business, do you have the new features that you developed the last year as part of your package in trying to get the new business?

We do Tim. And clearly, the work that we did last year in completely incorporating feedback regard from over 16 companies in life insurance has been instrumental in the success that we’re now seeing. The other thing that’s working for us is where it is getting out. We stared with our first large company under the new platform in November and life insurance is a very closely-knit community where it is getting out and people are getting the fact that we can be very helpful to them in their underwriting operations. As evidenced by the fact that we’ve got deals that are accelerating, number one. And number two, we’ve got many big companies that are actually calling into us asking us for meetings. So I’m feeling very good about it right now. I think we did the right things last year and we’ve got a strong product.

And in terms of the actual execution is that for your first customer has it turned into pretty basic standard deal or you’re just having the information as it comes and it’s relatively routine or are there problems?

No, we are finding that initially back in November, there were some problems getting the integration right, getting some necessary IT work done in their side, but once we’ve got that out of the way it’s been very, very smooth. And you never know it will be, you know when you start something, when you turn the key on something for the first time, there’s always some lingering doubt, no matter how confident you’re that, whether things will go smoothly. But I’m happy to say that they went very smoothly and the client has been very happy with the results that they’re getting using our data.

Is the energy – are they getting a decent gross margin on this business, or is that just two small volume to know yet.

No, our margins are intact, again the reason for confidence, we’re targeting with the margins that we get on this newer to be comparable with the margins we get off the best of the kinds of work that we do. And that appears to be intact and we see further opportunities for innovating and increasing on efficiency from beyond where we are today.

Okay, just one more question, this is for ONeil. On the financial end, you’re projecting your revenues essentially to drop from $16 million to $14 million, fourth quarter to first quarter. I would think that, if your gross margins are 35%, 40% that you have a loss of gross margin of $700,000, $800,000 that you have about $1 million loss, how come you’re projecting almost $2 million loss?

The gross margins in Q4 were 27%.

Okay.

That’s – one of the second thing is at this scale of operation stand the operating leverage plays a pretty important – significant impact on the bottom line. We are maintaining our production capabilities and not adjusting that. So as a result of that the impact of lower revenues goes straight to the bottom line.

Okay, okay. You’ve mentioned something about CapEx and expensing it off, how does that play into the losses. CapEx…

The guidance that we’d given excludes any CapEx in IADS.

Okay, okay. Do you expect significant at CapEx sir?

It has not been significant so far, but we are – we may incur something in the month of March, it all depends on what the client requirements are and how much we can optimize it. So right now, I don’t have a number to provide on that.

Okay, I’m good – I’m done, thank you.

Thank you, Tim.

And next we’ll go to Vincent Colicchio with Noble Financial.

Hi Jack, you’re doing a nice job, continuing to show improvement on your recurring revenue businesses, which is nice to see. On the Content Services side, I’m curious if you can help us model out what we expect for the year, should we expect to see it continue to turn lower and in the below that was in 2014 or could we expect them be a flat or a better year?

Sure, Vince, thank you for the question. I think as you know, one of the reasons that we’ve been investing heavily in some of these other businesses is because of the choppy, inherent nature of the Content Services business. It’s essentially dominated by a few very big players on the customer side and it has the large project based component and timing is tough there. So it’s inherently difficult to forecast. We’re going to – we’re continuing to build that business, we’ve got some new strategies, new ideas, we’ve got new things going on with customers, we’ve got some completely new opportunities that we’re in discussions with our largest customer about. So we’re enthusiastic about the business, but we hate the fact that it’s choppy and we hate the fact that it’s our forecast.

On Synodex has anything changed in the competitive front, sort of how unique do your customers think your capabilities are? It’d be nice to, interesting to hear color on that.

We’re hearing lot of great things. The customers generally speaking are very interested in big data, they are very interested in being able to understand that portfolios better and mind their data better, which they cannot due today, but they will be able to do and can do with our solution. They are very interested in efficiencies and they are very interested in being able to underwrite more quickly and even improve underwriting. Improve what they refer to as mortality and their ability to accurately underwrite the risk that’s inherent in the medical file. And our solution goes to all of that. From a competitive perspective, they are telling us that there is no other solution on the market that does what we do, the way that we do it and they find that compelling.

Thanks, guys.

Thank you.

And next we’ll go to Benj Gallander with Contra The Heard.

Hi, I’ve been a shareholder for a while and I have to congratulate you guys on how you manage to just about breakeven on receding revenues but, this is my, one of my big concerns is you taking over companies, but revenues keep on going down overall. So this obviously is not a good trend. And I’m just wondering if you really see revenues going up quite a bit in the next couple of years?

Yes, thank you for the question. I think that clearly, we’ve known for longtime, we’ve talked about for a longtime that there is an inherent mismatch between what public investors want to see in the companies they are investing in and the nature of our Content Services business, that the Content Services business by it’s very nature lumpy and tends to be dominated in good times by very large one of projects. We’ve got a few more of those in sight, but they are what they are. So we’ve been investing very heavily in things that we think are differentiating, highly differentiating and that bring with them recurring revenue that creates the type of visibility that we do not have in the Content Services business. So my prediction for the Content Services business is that it continues to be what it is. It continues to be a good business for us, it will be somewhat unpredictable and it will be lumpy. But we do a good job for our clients and we believe that we will continue to earn their trust and see new engagements coming. In terms of growth, I think the new businesses that we’re investing in have huge growth potential. We’re seeing that now in terms of how we’re managing late-stage pipeline in the Synodex investment. Like we’ve made the right investments last year, we’ve got differentiating products we’ve got a lot of people interested in that. That should bring us growth. MediaMiser is, it’s just a jam, it’s got wonderful technology, wonderful customer references, great ideas for new products and a very ambitious, talented management team. So we’re expecting growth from there too and of course it has almost an entirely recurring revenue base, subscription like revenue base we have a great retainage. So I’m very confident that growth will come from those things.

Okay and then the recurring revenue of course is, we all know it’s exceedingly important that is again having followed and invested in this company for number of years, I’m wondering if it wouldn’t be much better as a part of a larger enterprise and given time to look at strategic alternative. Any thing going on there, any thoughts on that?

Sure, now well our Board is always looking at strategy and you know how should we be best positioned and how do we best create value? And I think, especially as we see some of the work that we’ve been over the past couple of years, now starting to bear fruit for us and creating return on that investment. It will be important to continue to look at that, how do we best create shareholder value under those circumstances? So you certainly have my assurance that that’s always part of the Board agenda and will continue to be part of the Board agenda as we move forward into 2015.

Okay, about $50 million in sales with another organization that can then strip out some of the costs, if you guys, I perceive there is a lot of more value in this company, especially with the potential for the growth, but may be its time to look at putting the company up for sale. But I do appreciate your work and hope that might be considered.

Thank you for you thoughts.

[Operator Instructions] And it appears there are no further questions.

Thank you, operator. So I’ll close I guess with a quick summary. Our most significant fourth quarter accomplishment was the successful launch of our Synodex 3.0 platform. And we have been producing data now on this new platform since mid-November for our first large client on the platform and they are real happy with results they have been getting and it seems they have been spreading the word, life insurance is a close knit industry and it seems good news travels fast and we had five potential clients seek us out for meetings in the past couple of months and that gives couple of big prospects. More importantly we’ve got several contract negotiations going on right now with new Synodex customers that we expect could close in the first quarter or early in the second. And on top of that, there are some large potential clients who have expressed their desire to integrate Synodex 3.0 into their operations. These would likely be the next wave of contract closings. In Content Services, our large eBook client requested that we accelerate production of certain publisher lists, to some of the production we were anticipating for Q1 moved into Q4 resulting in higher revenues in this quarter than we were expecting. We have offset, unfortunately is that we’ll see lower revenues in Content Services next quarter. In part, as a result of this, in part, as a result of some Q4 project ends and a devalued Euro as O’Neil explained. That said we see improvements likely coming in the second quarter. In our Media Intelligence Segment, we acquired Bulldog Reporter with its daily outreach 70,000 U.S. public relations professionals, we think Bulldog Reporter provides MediaMiser really a great way of opening doors in the U.S. as it seeks to expand beyond the Canadian borders. In 2015, we will be focused on harvesting value from all the work that we did last year in creating the new Synodex 3.0 platform and in establishing our new Media Intelligence division. So thank you, everyone for joining us on today’s call and for your continued support and your continued interest. Thank you.

And that concludes the presentation. Today’s conference is available for replay by dialing 719-457-0820 or 888-203-1112 and the pass code is 2972181, again those numbers are 719-457-0820 or 888-203-1112 and the pass code is 2972181. That concludes today’s conference. You may now disconnect.