Final Results

NetDimensions (Holdings) Limited

("NetDimensions" or the "Company" or the "Group")

Final Results for the Year Ended 31 December 2013

NetDimensions (AIM: NETD; OTCQX: NETDY), a global provider of performance, knowledge, and learning management systems, is pleased to announce its final results for the year ended 31 December 2013.

Financial Highlights

· 17% revenue growth to US$16.2M (2012: US$13.8M)

· 36% revenue growth in our global hosted secure Software as a Service ("SaaS") offering to US$6.1M (2012: US$4.5M)

· 55% revenue growth in the key North America market to US$6.8M (2012: US$4.4M)

· 25% increase in deferred revenue to US$7.6M (2012: US$6.1M)

· 13% increase in net cash to US$7.7M (2012: US$6.8M)

· 25% increase in Dividend payment to US$1.0 cent (GBP 0.6 pence) per ordinary share (2012: US$0.8 cent or GBP 0.5 pence)

Operations Highlights

· US$6M raised from share placing in May 2013

· US$5M finance facility with Silicon Valley Bank completed in September 2013

· Formation of NetDimensions healthcare on the back of the US$3.5M acquisition of eHealthcareIT in March 2013

· Launch of NetDimensions Denmark to service the Nordics Market (Norway, Sweden, Finland and Denmark). The Nordic countries have large global businesses, many of which operate in high consequence industries offering good potential for NetDimensions to grow its Business in this region

· Headcount increased by 37 (28%) to 167 with sales quota carrying heads increasing by 12 (71%) to 29

· 67 new clients added through direct and reseller channels including Royal Caribbean Cruises Limited, KPMG LLC, General Mills (Häagen-Dazs), Omron, Jaguar Land Rover Limited, Globus Medical, Babcock, BCD Travel, Digicel Group, Emdeon, The Nature Conservancy and Musculoskeletal Transplant Foundation

Roger Durn, Chairman of NetDimensions, commented: "The major investment phase of the three-year Business plan was substantially completed in 2013. The current financial year is about maintaining focus on high consequence industries such as healthcare, life sciences, financial services, energy, manufacturing and transportation. The Company continues to make progress towards achieving its goal of becoming a leading provider of Talent Management Systems and related compliance solutions for high consequence industries, and will continue to drive recurring revenue growth to achieve long-term sustainable profitability."

The annual report will be available on the Company's website and sent to shareholders shortly.

Enquiries:

About NetDimensions

Established in 1999, NetDimensions (AIM: NETD; OTCQX: NETDY) is a global provider of performance, knowledge and learning management solutions.

NetDimensions provides companies, government agencies and other organizations with talent management solutions to personalize learning, share knowledge, enhance performance, foster collaboration and manage compliance programs for employees, customers, partners and suppliers.

Recognized as one of the talent management industry's top-rated technology suppliers, NetDimensions has been chosen by leading organizations worldwide including ING, Cathay Pacific, Hunter Douglas, Chicago Police Department, Geely Automotive, Fugro Group and Fresenius Medical Care. 

NetDimensions is ISO 9001 certified and NetDimensions hosted services are ISO 27001 certified.

For more information, visit www.NetDimensions.com or follow @netdimensions on Twitter. 

Chairman's Statement for the Year Ended 31 December 2013

The twelve months to 31 December 2013 was a year of investment, focus and progress. In the year, the Board committed substantial investment in the Company in line with the three-year business plan to substantially grow sales revenues with a focus on high consequence industries (heavily compliant and highly regulated industries). I am pleased to report that the Company made excellent progress in the year achieving a record high for reported revenue, which increased by 17% to US$16.2M (2012: US$13.8M).

Financial Highlights

· 17% revenue growth to US$16.2M (2012: US$13.8M)

· 15% invoiced sales growth to US$17.6M (2012: US$15.3M)

· 36% revenue growth in our global hosted secure Software as a Service ("SaaS") offering to US$6.1M (2012: US$4.5M)

· 55% revenue growth in the key North America market to US$6.8M (2012: US$4.4M)

· 25% increase in deferred revenue to US$7.6M (2012: US$6.1M)

· 13% increase in net cash to US$7.7M (2012: US$6.8M)

· 25% increase in Dividend payment to US$1.0 cent per ordinary share (2012: US$0.8 cent)

Financial Summary

The financial results for the year ending 31 December 2013 give an early indication of the success of the business plan implemented earlier in the year with progress made on all fronts. In particular I am pleased to report that revenue increased by 17% to US$16.2M (2012: US$13.8M). The revenue for the year included US$1.3M from NetDimensions Healthcare, our new Healthcare division formed on the 1 March 2013 on the back of the acquisition of eHealthcareIT. Prior to the acquisition, eHealthcareIT was a reseller of NetDimensions in North America. Therefore the net effect of the acquisition on 2013 reported revenues, after adjusting for the revenue that we would have declared had eHealthcareIT remained a reseller, was US$0.6M.

The Group continues to improve direct sales efforts and in the period the invoiced sales value from direct clients was US$14.1M representing 80% (2012: US$11.2M, 73%) of total invoiced sales. Increasing focus on direct sales in high consequence industries has led us into bigger deals with the average first-year deal size for new direct clients hitting US$101K in the year (2012: US$71K), an increase of 42% over the prior year. Invoiced Sales to clients in high consequence industries represented 76% of total invoiced sales, an increase of 19% over the prior year, providing a further indication that we are executing to plan.

The EMEA region ("Europe, Middle East and Africa") maintained its position as the largest market for the Group, comprising 44% of Group revenues. The North America region accounted for 42% of Group revenues, which included 10 months of contribution from the new Healthcare division. Asia Pacific including China comprised 9% of Group revenues and the rest of the world 5%.

The Group saw substantial growth in the North America market with revenues up 55% to US$6.8M (2012: US$4.4M), benefitting from growth in our global secure SaaS service along with an immediate contribution from our new Healthcare division. In addition, the Group ended the period with a strong deferred revenue balance of US$7.6M (2012: US$6.1M), some 25% higher than the prior year balance.

The Group continues to focus on supplying software via its global hosted secure SaaS service and we are pleased to report that revenues from this product offering increased by 36% to US$6.1M (2012: US$4.5M). The Group also continued to develop its professional services business with revenues increasing by 38% in the period to US$4.0M (2012: US$2.9M). Recurring revenues under contract totalled US$9.8M at the end of the year of which US$6.6M will be recognised in 2014. This, combined with deferred revenue of US$7.6M, of which US$7.5M will be recognised in 2014, provides the Group with an excellent start to the current financial year.

The Group's adjusted loss before tax, excluding net foreign exchange (losses) / gain (US$0.1M), intangible asset amortisation (US$0.5M) and non-cash share-based payments (US$0.3m), was US$4.0M (2012: profit of US$0.4M). NetDimensions' loss before tax was US$4.9M (2012: US$0.2M). The increased loss in the period is a result of substantial investment in the Company as part of the three-year Business plan. This investment totalled US$4.9M for the year, of which US$3.4M was spent on new hires, US$0.7M on additional marketing & promotional activities, US$0.4M on infrastructure, including new and enlarged premises and upgraded data centres, and US$0.4M on professional fees related to the acquisition of eHealthcareIT, the Silicon Valley Bank ("SVB") loan facility and the share placing.

Cash used in operating activities was US$2.5M in the year (2012: US$0.8M generated) as the Group made a total Investment of US$4.9M in the Company, in line with the Business plan. Net increase in cash for the period, after US$2.2M in cash consideration payments for the acquisition of eHealthcareIT and US$6M net receipts from the share placing, was US$0.9M (2012: decrease in cash US$0.1M). The Group's cash balance remained healthy at US$7.7M (2012: US$6.8M) and along with an accounts receivable balance of US$6.6M (2012: US$5.7M) provides the Group with a strong liquidity position. In addition the Group has a facility of up to US$5M with SVB, the balance of which remains undrawn, providing the Group with substantial headroom going forward.

Taking into consideration the Group's increased sales and strong cash balance, the Board recommends a final dividend of GBP 0.6 pence (or US$1.0 cent) to be paid from the share premium account. If approved, the dividend will be paid on 18 July 2014 to shareholders on the register at the close of business on 20 June 2014. The Company's AGM will be held on Monday 9 June 2014 at 2:30pm in the afternoon on the 18th floor, Siu On Centre, 188 Lockhart Road, Hong Kong.

No material income tax provision was made in the year (2012: US$0.1M).

Operations Review

In May 2013 the Board commenced the implementation of the three-year Business plan to substantially increase market share, targeting high consequence industries.

I am pleased to report on the following progress:

· US$6M raised from share placing in May 2013

· US$5M finance facility with SVB completed in September 2013

· Formation of NetDimensions healthcare on the back of the US$3.5M acquisition of eHealthcareIT in March 2013

· Headcount increased by 37 (28%) to 167 with Sales quota carrying heads increasing by 12 (71%) to 29

· Appointment of key senior executives; Chief Financial Officer, Chief Sales Officer, Chief Human Resources Officer, Global Alliances & Key Accounts Executive and General Counsel

· 67 new clients added through direct and reseller channels including Royal Caribbean Cruises Limited, KPMG LLC, General Mills (Häagen-Dazs), Omron, Jaguar Land Rover Limited, Globus Medical, Babcock, BCD Travel, Digicel Group, Emdeon, The Nature Conservancy and Musculoskeletal Transplant Foundation

· New enlarged offices in the UK, Hong Kong and Atlanta

· Launch of NetDimensions Denmark to service the Nordics Market (Norway, Sweden, Finland and Denmark). The Nordic countries have large global businesses, many of which operate in high consequence industries offering good potential for NetDimensions to grow its Business in this region

· The launch of NetDimensions Analytics, a powerful SaaS solution for learning, performance and talent data analytics

· NetDimensions positioned as a 'Core Leader' in Elearnity's 9-Grid™ report for Learning Management Systems and recognised for its strong presence in regulated industries

Board and Management Changes

On 2 January 2013, Matthew Chaloner was appointed Chief Financial Officer and on 25 October 2013, James Dominic Brooke was appointed Non-Executive Director.

Outlook

The investment phase of the three-year Business plan was substantially completed in 2013. The current financial year is about maintaining focus on high consequence industries such as healthcare, life sciences, financial services, energy, manufacturing and transportation. The Company continues to make progress towards achieving its goal of becoming a leading provider of Talent Management Systems and related compliance solutions to high consequence industries, and will continue to drive recurring revenue growth to achieve long-term sustainable profitability.

The Board will continue to explore new markets and opportunities for expansion and with a strengthened management team, strong balance sheet and the addition of the SVB facility we have the resources and funding in place to explore and implement multiple opportunities to grow the business.

Finally, we would like to thank all of the people who work at NetDimensions for their hard work, loyalty and dedication in 2013.

We look forward to another successful year with them, along with our clients, partners and shareholders in 2014.

NETDIMENSIONS(HOLDINGS) LIMITED

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2013

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2013

On behalf of the Board

_______________________ __________________________

Jay Mervin Shaw Matthew Chaloner

Director Director

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2013

Attributable to equity holders of the Company

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2013

Attributable to equity holders of the Company

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2013

NOTES TO THE FINANCIAL STATEMENTS

1 Notes to the consolidated statement of cash flows

(a) Reconciliation of loss before income tax to net cash (used in)/generated from operations:

(b) In the consolidated statement of cash flows, proceeds from disposal of property, plant and equipment comprise:

NOTES TO THE FINANCIAL STATEMENTS

2 Business combination

As part of the Group's strategy to become a premier global provider of talent management solutions for highly-regulated industries, on 1 March 2013, the Group entered into a sale and purchase agreement with an independent third party to acquire the business of eHealthcareIT at a consideration consisting of (i) US$2,000,000 in cash; (ii) 1,500,000 ordinary shares of the Company; and (iii) a contingent consideration calculated based on contracted sales of eHealthcareIT for the ten months ended December 2013, subject to a ceiling of US$500,000. The acquired business is engaged in providing e-learning and compliance solutions to the U.S. healthcare market. The acquisition was completed on 1 March 2013. After the acquisition, the eHealthcareIT business immediately became the Group's new dedicated division, NetDimensions Healthcare, providing talent, learning and compliance management solutions specifically to the healthcare market internationally.

The goodwill of US$1,147,553 arising from the acquisition is attributable to the specialisation in the provision of e-learning and compliance solutions in the US healthcare marketfrom combining the operations of the Group and eHealthcareIT, which cannot be separately recognised as intangible assets.

The following table summarises the consideration paid and payable for the acquisition and the fair value of the assets acquired and liabilities assumed at the acquisition date.

Recognised amounts of identifiable assets acquired and liabilities assumed:

NOTES TO THE FINANCIAL STATEMENTS

2 Business combination (Continued)

The fair value of the 1,500,000 ordinary shares issued as part of the consideration paid for eHealthcareIT of US$989,973 was based on the published share price on 1 March 2013.

The potential amount for all future payments that the Group should be required to make for aforesaid contingent consideration is between US$ Nil and US$500,000. The fair value of the contingent consideration of US$500,000 was based on the actual performance of eHealthcareIT from 1 Mar 2013 to 31 December 2013.

Cash and contingent consideration in total amount of US$2,241,962 was settled during the year.

Acquisition-related costs of US$223,992 have been charged to operating expenses in the consolidated income statement for the year ended 31 December 2013.