INNODATA Reports Third Quarter Results.

BROOKLYN, N.Y.--(BUSINESS WIRE)--Nov. 13, 1997--INNODATA Corporation (NASDAQ NMS-INOD) today announced results for its third quarter ended September 30, 1997.

Revenues for the third quarter ended September 30, 1997 were $5,269,000, an increase of $318,000, or 6%, over the comparable period in 1996. Net loss for the 1997 period was $(1,278,000), or $(.28) per share, compared to a net loss of $(405,000) in the 1996 period, or $(.09) per share. The 1997 loss includes a charge of $1,000,000 for an unrealized loss on foreign currency forward contracts which are presently in dispute. In addition, no tax benefits have been provided in connection with the loss incurred in 1997.

Revenues for the nine months ended September 30, 1997 were $15,289,000, a decrease of $503,000, or 3%, from the comparable period in 1996. Net loss for the 1997 period was $(4,142,000), or $(.92) per share, compared to a net loss of $(67,000), or $(.01) per share, in the 1996 period. The 1997 loss includes a charge of $1,500,000 for restructuring costs and an asset impairment write-down and an unrealized loss on foreign currency forward contracts of $1,000,000. In addition, no tax benefits have been provided in connection with the loss incurred in 1997.

"Certainly we are pleased to report an increase in quarterly revenues over the comparable quarter of 1996," said Jack Abuhoff, Innodata's newly installed CEO and President. "However, losses continued as revenues are short of plan and have not been sufficient to justify the increased capacity investments.

"I am mounting a turnaround plan which is designed to lower our operating expenses, better manage the costs associated with production, sales and overhead, and realign sales and marketing resources to more aggressively pursue increased market share within our core business of data conversion and related services for the Internet.

"Toward this end, we have recently merged our east and west coast imaging operations and are in the process of migrating certain publishing-related production processes from the U.S. to Manila, reducing U.S. overhead without compromising our ability to seize future opportunity. In addition, we are opening a new production facility in India; implementing an enterprise-wide customer support application complete with a Web-based front-end to facilitate customer access to information; incorporating state-of-the-art OCR production solutions; and completing ISO 9000 certification in our Philippines production facility.

"In the fourth quarter we will continue to take aggressive steps to stabilize Innodata's business. Once these actions are behind us, we believe the stage will be set for restoring revenue growth and profitability in 1998."

INNODATA is a worldwide electronic publishing services company specializing in superior quality data conversion for Internet, CD-ROM, print and online database publishers around the globe. Services include all the necessary steps for product development and data capture: the highest accuracy data entry (99.995%+), OCR, SGML and custom coding, hypertext linking, imaging and document management systems, page composition, copyediting, indexing and abstracting, and applications programming. The Company also offers medical transcription services to health-care providers through its Statline division. Web site location: http://www.inod.com -0-

Forward-looking statements in this release are made under the Safe Harbor Reform Act of 1996. These statements are based on current expectations and actual results may differ materially due to risks, uncertainties, and other factors. Additional information covering factors that could cause results to differ materially from projected statements can be found in Innodata's 10-K and 10-Q filings, as well as its annual report. -0-

                         FINANCIAL HIGHLIGHTS

                               Three Months Ended
                                  September 30

                            1997              1996
                            ----              ----
   Revenues              $5,269,000        $4,951,000

   Net loss              (1,278,000) (a)     (405,000)

   Loss per share             $(.28)            $(.09)

                                 Nine Months Ended
                                   September 30

                             1997              1996
                             ----              ----

 Revenues               $15,289,000        $15,792,000

 Net loss                (4,142,000) (a)(b)    (67,000)

 Loss per share               $(.92)             $(.01)


(a) Includes an unrealized loss of $1,000,000 on foreign currency
forward contracts.  No tax benefits have been provided in connection
with the loss incurred in 1997.
(b) Includes restructuring costs and impairment write-down of
$1,500,000.

CONTACT: Cindy Belmore

Investor Relations

e-mail: [e-mail]