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We are a global provider of business process, information technology (IT) and professional services that are focused on digital enablement. We operate in three reporting segments: Content Services (CS), Innodata Advanced Data Solutions (IADS) and Media Intelligence Solutions (MIS).

The following table sets forth, for the period indicated, certain financial data expressed for the three years ended December 31, 2014 :

In our IADS segment we recognize revenues primarily based on the quantity delivered, and the period in which services are performed and deliverables are made as per contracts.

Revenues include reimbursement of out-of-pocket expenses, with the corresponding out-of-pocket expenses included in direct operating costs.

Selling and Administrative Expenses

Adjusted EBITDA Performance Metric

Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for results reported under GAAP. Some of these limitations are:

Adjusted EBITDA does not reflect tax payments and such payments reflect a

reduction in cash available to us;

Adjusted EBITDA does not reflect changes in, or cash requirements for, our

working capital needs and for our cash expenditures or future requirements for

capital expenditures or contractual commitments;

Adjusted EBITDA excludes the potential dilutive impact of stock-based

compensation expense related to our workforce, interest income (expense) and

Although depreciation and amortization are non-cash charges, the assets being

depreciated and amortized may have to be replaced in the future, and Adjusted

EBITDA does not reflect cash capital expenditure requirements for such

replacements or for new capital expenditure requirements; and

Other companies, including companies in our own industry, may calculate

Adjusted EBITDA differently from our calculation, limiting its usefulness as a

Adjusted EBITDA should be considered as a supplement to, and not as a substitute for, or superior to, GAAP net income.

The following table shows a reconciliation from net income (loss) to Adjusted EBITDA for the periods presented (in thousands):

) $ 7,473

Year Ended December 31, 2014 Compared to the Year Ended December 31, 2013

During the fourth quarter of 2014 we recorded an impairment charge of $0.4 million representing the write-off of certain long lived assets primarily on account of the consolidation of two India -based production facilities.

Selling and Administrative Expenses

We continued to restructure our operations in 2014 which resulted in cost savings. This led to a decline in selling and administrative expenses for the CS segment during the year ended December 31, 2014 compared to the year ended December 31, 2013 .

Selling and administrative expenses for the CS segment, as a percentage of CS segment revenues was 24% for the years ended December 31, 2014 and 2013. A significant portion of our selling and administrative expenses is fixed in nature.

The decline in selling and administrative expenses for the IADS segment is primarily on account of a reduction in Synodex personnel in 2014.

We are subject to various tax audits and claims which arise in the ordinary course of business. Management currently believes that the ultimate outcome of these audits and claims will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

Direct operating costs for the IADS segment consist primarily of certain production costs for pilot and other initial engagements, as well as facility overhead costs for our delivery center in Asia .

Selling and Administrative Expenses

Selling and administrative expenses were $17.3 million and $22.2 million for the years ended December 31, 2013 and 2012, respectively, a decrease of $4.9 million. or approximately 22%. Selling and administrative costs for the CS segment were $15.2 million and $19.3 million in these respective periods. Selling and administrative expenses for the IADS segment for the respective periods were $2.1 million and $2.9 million. net of intersegment profits.

The decline in selling and administrative expenses for the IADS segment is primarily on account of restructuring our docGenix operations in the fourth quarter of 2012.

We are subject to various tax audits and claims which arise in the ordinary course of business. Management currently believes that the ultimate outcome of these audits and claims will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Liquidity and Capital Resources

In July 2014 we acquired MediaMiser and paid $4.1 million towards the purchase price at closing. We funded this payment from our overseas cash on hand. We acquired intellectual property and related assets of Bulldog Reporter in December 2014 for approximately $0.2 million .

In March 2014 we borrowed $0.9 million in a three year sale-leaseback transaction at an effective interest rate of 6%.

Net Cash Provided by Operating Activities

Net Cash Used in Investing Activities

For the year 2015, we anticipate that capital expenditures for ongoing technology, equipment and infrastructure upgrades will approximate $3.0 to $4.0 million. a portion of which we may finance.

Net Cash Provided by (Used in) Financing Activities

Fluctuations in exchange rates also affect the value of funds held by our foreign subsidiaries. We do not currently intend to hedge these assets.

The table below summarizes our contractual obligations (in thousands) at December 31, 2014. and the effect that those obligations are expected to have on our liquidity and cash flows in future periods.

Future expected obligations under our pension benefit plans have not been included in the contractual cash obligations table above.

Inflation, Seasonality and Prevailing Economic Conditions

Critical Accounting Policies and Estimates

Basis of Presentation and Use of Estimates

Allowance for Doubtful Accounts

In our IADS segment our revenues are recognized primarily based on the quantity delivered, and in the period in which the services are performed and deliverables are made as per contracts.

Revenues include reimbursement of out-of-pocket expenses, with the corresponding out-of-pocket expenses included in direct operating costs.

During the fourth quarter of 2014 we recorded an impairment charge of $0.4 million representing the write-off of certain long lived assets on account of the consolidation of two India -based production facilities.

As of December 31, 2014. MediaMiser has available net operating loss carryforwards and research and development expenditures available to reduce taxable income of future years. The potential benefits from balances have not been recognized for financial statement purposes.

Goodwill and Other Intangible Assets

In the annual impairment test conducted by us as of September 30, 2014. 2013 and 2012, the estimated fair value of the reporting unit exceeded its carrying amount, including goodwill. As such, no impairment was identified or recorded.

Accounting for Stock-Based Compensation

We are authorized to grant stock options to officers, directors, employees and others who render services to us under the 2013 Stock Plan approved by the stockholders.

Recent Accounting Pronouncements

Edgar Online, source Glimpses