Final Results

22 April 2013

NetDimensions (Holdings) Limited

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

Final Results for the year ended 31 December 2012

NetDimensions (LSE AIM: NETD; OTCQX: NETDY), a global provider of enterprise-class performance, knowledge and learning management systems, announces its final results for the year ended 31 December 2012.

Financial Highlights

·; Revenue up by 12% to US$13.8M (FY 2011: US$12.3M)

·; Deferred Revenue up by 36% to US$6.1M (FY 2011: US$4.5M)

·; Invoiced Sales growth of 15% to US$15.3M (FY 2011: US$13.3M)

·; Adjusted profit before tax of US$0.4M (FY 2011: US$1.3M) following substantial investment into global sales expansion and research and development

·; Strong cash balance of US$6.8M (31 December 2011: US$6.9M)

·; Final Dividend maintained at 0.5p

Operations Highlights

·; Headcount increased by 25 (24%) to 130 with Sales headcount increasing by 15 (38%) to 55

·; 71 new clients signed including Fresenius Medical Care, Eisai Pharmaceutical, Thames Water, Finnair, Mitsubishi and Geely Automotive

·; New offices and legal entities established in Germany and Australia

·; Key new alliances, including an independent software vendor ("ISV") partnership with IBM and a global reseller agreement with Qumas

·; New product launches for NetDimensions Talent Suite, an integrated Talent Management System (TMS), and NetDimensions Talent Slate, an innovative tablet application for mobile workforces

Post Period-end Operations Highlights

·; Successful US$3.5M acquisition of eHealthcareIT on 1 March 2013

·; Appointment of Matthew Chaloner as CFO of NetDimensions on 2 January 2013

Roger Durn, Chairman of NetDimensions, commented: "The Board will substantially increase investment in 2013 as part of its long-term growth strategy to increase market share in the global Talent Management System ("TMS") market. We will pursue growth by simultaneously focusing on our core strengths in compliance for highly regulated industries and in the global healthcare industry following our successful acquisition of eHealthcareIT.

"The Board's strategic aim is to be the No. 1 player in the heavily compliant and highly regulated industries sector of the global TMS market. We have already gained traction as a leading specialised TMS provider focusing on clients who operate in these "highly complicated environments with high consequences" and will continue to invest money, time and effort to reach our goals. Our expectation is that since global regulatory requirements are both unavoidable and on the increase, we will enjoy not only higher revenue growth but also improved sales margins over time. We therefore look forward to 2013 with confidence."

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

For further information:

About NetDimensions

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

NetDimensions' flagship product line, the NetDimensions Talent Suite, enables companies, government agencies and other organizations to personalize learning, share knowledge, enhance performance, foster collaboration, and manage compliance programs for employees, customers, partners and suppliers.

Recognised as one of the talent management industry's top-rated technology suppliers in overall customer satisfaction, NetDimensions has been chosen by leading organizations worldwide including ING, Cathay Pacific, Hunter Douglas, Chicago Police Department, Delphi Automotive, Progress Software, and Travelex.

NetDimensions is ISO 9001 certified and NetDimensions hosted services are ISO 27001 certified. For more information, visit www.NetDimensions.com

Chairman's Statement 2012

The year ending 31 December 2012 was another year of solid progress for NetDimensions with both invoiced sales and GAAP revenue (revenue recognised in accordance with International Financial Reporting Standards) increasing to all-time highs. Deferred revenue was US$6.1M, providing us in 2013 with our best start of any financial year for bookable GAAP revenue.

Financial Highlights

·; Deferred Revenue growth of 36% to US$6.1M

·; Invoiced Sales growth of 15%

·; GAAP Revenue growth of 12%

·; Strong cash balance US$6.8M

·; Final Dividend maintained at 0.5 pence

Financial Summary

The financial results for the year ending 31 December 2012 reflect the Board's continuing strategy of investing for future growth with invoiced sales up 15% to US$15.3M (2011: US$13.3M) and GAAP revenue increasing by 12% to US$13.8M (2011: US$12.3M).

The Group continues to build our direct sales capabilities. In 2012, revenue from direct clients was US$11.2M (2011: US$9.3M), representing 73% (2011: 70%) of total invoiced sales.

Europe, Middle East and Africa (EMEA) became the best performing region in 2012 and now accounts for 51% of Group revenue. The North America region accounted for 32% of Group revenue and Asia Pacific (including China) 10%. The rest of the world made up 7% of overall revenue.

In particular, the Group saw substantial growth in the EMEA market with revenue up 42% to US$7.1M (2011: US$5.0M) despite the background of continuing uncertainty within the region. Revenue in the Asia Pacific market grew by 36%. In addition, the Group ended the year with a strong deferred revenue balance of US$6.1M (2011: US$4.5M), some 36% higher than the prior year balance.

In 2012 the Group continued to focus on supplying software applications through our unique "Secure SaaS" (Software as a Service) offering. We are pleased to report that revenue from this service increased by 36% to US$4.5M (2011: US$3.3M). The Group also continued to develop our professional services business with revenue increasing by 53% in 2012 to US$2.9M (2011: US$1.9M). NetDimensions professional services focus on implementation, configuration, customisation and support of our own products and services.

The Group's adjusted profit before tax, excluding intangible asset amortisation (US$0.3M), non-cash share-based payments (US$0.1M) and loss on investment in available-for-sale financial assets (US$0.2M), was US$0.4M (2011: US$1.3M). NetDimensions' loss before tax was US$0.2M (2011: US$0.6M profit).

In 2012 the Group made a tax provision of US$0.1M.

NetDimensions continued to generate cash despite increased investment in the Group. Cash generated from operations was US$1.1M in 2012 (2011 US$1.3M). The end-of-year cash balance was strong at US$6.8M (2011: US$6.9M).

Taking into consideration the Group's increased sales and strong cash balance, the Board recommends a final dividend of GBP0.5 pence (or US$0.8 cents) to be paid from the share premium account. If approved, the dividend will be paid on 19 July 2013 to shareholders on the register at the close of business on 21 June 2013.

Operations Review

In the second half of 2012 the Board started to implement its strategy to substantially increase market share, with particular focus on the heavily compliant and highly regulated industries sector within the global TMS market. A multi-faceted approach was adopted to drive this growth; increasing sales headcount, increased investment in marketing and the establishment of new offices in key strategic markets at a cost of US$0.7M.

We are pleased to report on the following progress:

·; Headcount increased by 25 (24%) to 130 with Sales headcount increasing by 15 (38%) to 55

·; 71 new clients signed including Fresenius Medical Care, Eisai Pharmaceutical, Thames Water, Finnair, Mitsubishi and Geely Automotive

·; New office and legal entity established in Germany, a key TMS market within EMEA

·; New office and legal entity established in Australia, identified as a key market for NetDimensions (based on 57% of Standard and Poor's list of Australia's Top 200 companies being in the highly regulated industries of Healthcare, Finance, Materials and Energy)

·; Key new alliances, including an independent software vendor ("ISV") partnership with IBM and a global reseller agreement with Qumas

·; New product releases for NetDimensions Talent Suite, our fully-integrated, organically-developed TMS, and the launch of NetDimensions Talent Slate, an innovative tablet application for mobile workforces

The Board also recognises the importance of continued product development and enhancement. 2012 investment in our technology groups increased by 15%, with total spend of US$2.3M (2011: US$2.0M).

The Company announced on 7 August 2012 that NetDimensions' shares would be made available for trade on America's OTCQX International stock market in addition to our primary listing on the London Stock Exchange AIM. NetDimensions shares are now offered for trading on OTCQX International in the form of American Depositary Receipts ("ADRs") at a ratio of 1 ADR to 5 ordinary shares.

Post period-end NetDimensions acquired eHealthcareIT for a total consideration of approximately US$3.5M. Founded in 2004 as a provider of e-learning and compliance solutions to U.S. hospitals, eHealthcareIT had delivered its solutions for the last six years via the NetDimensions Talent Suite.

Following the acquisition, eHealthcareIT was immediately rebranded NetDimensions Healthcare, a dedicated division of NetDimensions providing talent, learning, and compliance management solutions to the healthcare market. The acquisition gives NetDimensions a strong foothold in the US healthcare market and provides an excellent opportunity to grow the NetDimensions Healthcare business globally by leveraging our existing worldwide presence, established sales force and expanding product portfolio.

The acquisition is in line with NetDimensions' strategy to become a top global provider of talent management solutions for healthcare and other highly regulated industries. As a result of our long established and close working relationship with eHealthcareIT, the integration is progressing well.

Board and Management Changes

Post period-end on 2 January 2013, Matthew Chaloner was appointed Chief Financial Officer. Matthew worked in a variety of senior financial positions before joining UK-listed engineering group Howle Holdings plc in 2000 as Group Finance Director and later CEO. As CEO, Matthew successfully restructured Howle, returning it to profitability before executing its sale to AIM-listed electronics manufacturer Elektron Technology plc in 2006, where he later acted as Financial Controller for its largest division and set up a Wholly Foreign Owned Enterprise in Shenzen China before successfully offshoring manufacturing.

Matthew's senior management background, considerable UK plc and M&A experience and strong understanding of NetDimensions' key markets are already proving to be of high value to the Company.

Also post period-end, eHealthcareIT founder and CEO Ken Wright was appointed President of NetDimensions Healthcare with a mandate to grow the new division, both in the U.S. and abroad. 

Outlook

The Board will substantially increase investment in 2013 as part of its long-term strategy to increase the Company's market share in the global TMS market.

To this end NetDimensions will pursue a number of growth options whilst continuing to focus on our core strengths in compliance and highly regulated industries.

In addition, the Group's new healthcare division will target the global healthcare industry. This global focus builds on our US$3.5M acquisition of eHealthcareIT on 1 March 2013, a leading provider of compliance and talent management solutions to the U.S. healthcare industry.

The Board's strategic aim is for the Company to become the No. 1 player in the highly regulated industries sector of the global TMS market. We have already gained traction as a leading specialised TMS provider focusing on clients who operate in these "highly complicated environments with high consequences" and will continue to invest money, time and effort to reach our goals. Our expectation is that since global regulatory requirements are both unavoidable and on the increase, we will enjoy not only higher revenue growth but also improved sales margins over time.

Finally, we would like to thank all of the people who work at NetDimensions for their hard work, loyalty and dedication in 2012.

We look forward to another successful year with them, along with our clients, partners and shareholders in 2013.

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

On behalf of the Board

Jay Mervin Shaw Matthew Chaloner

Director Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2012

Attributable to equity holders of the Company

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2012

Attributable to equity holders of the Company

CONSOLIDATED STATEMENT OF CASHFLOWS

FOR THE YEAR ENDED 31 DECEMBER 2012

NOTE TO THE FINANCIAL STATEMENTS

1 Notes to the consolidated statement of cash flows

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

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

NOTE TO THE FINANCIAL STATEMENTS (CONTINUED)

1 Notes to the consolidated statement of cash flows (Continued)

 (c) In the consolidated statement of cash flows, proceeds from disposal of intangible assets comprise:

(d) During the year, the Group acquired office equipment of US$ 8,390 under a finance

lease (2011: Nil).