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8-K - LIVE FILING - LIONBRIDGE TECHNOLOGIES INC /DE/ | htm_34991.htm |
EX-10.1 - EX-10.1 - LIONBRIDGE TECHNOLOGIES INC /DE/ | exhibit1.htm |
LIONBRIDGE ANNOUNCES THIRD QUARTER 2009 RESULTS WITH
REVENUE OF $97.8 MILLION AND NON-GAAP EPS OF $0.04
Grows Operating Income Excluding Restructuring by $1.3 Million Year-on-Year; Indicates Positive
Momentum and Earnings Expansion for 2010 with Strengthening New Business Pipeline and Ongoing Cost
Reductions
WALTHAM, Mass. November 05, 2009 Lionbridge Technologies, Inc. (Nasdaq: LIOX) today announced financial results for the third quarter ended September 30, 2009. Financial and business highlights for the third quarter include:
| Revenue of $97.8 million, reflecting the top end of previously provided guidance of $93-98 million. |
| Income from operations of $2.2 million excluding restructuring expenses outlined below, an improvement of $1.3 million compared to the third quarter of 2008, despite the $16 million year-on-year revenue decline. This reflects the benefits of the Companys ongoing cost management initiatives which reduced SG&A expenses by $5.0 million as compared to the third quarter of 2008. |
| Restructuring expense of $1.3 million, reflecting the Companys continued implementation of its previously-announced cost reduction program. |
| GAAP net loss of $1.0 million or ($0.02) per share based on 56.1 million weighted average common shares outstanding. GAAP net loss is in line with current analyst consensus. |
| Excluding restructuring expenses, the Companys generated net income of $325,000 or $0.01 per share. |
| Non-GAAP adjusted earnings of $2.4 million, or $0.04 per share. The Company defines non-GAAP earnings as net income excluding merger, restructuring and related costs, stock-based compensation and amortization of acquisition-related intangible assets. Please see the section of this release entitled Non-GAAP Financial Measures and the attached table for details and reconciliations of this measure to the comparable GAAP measure. |
| Cash flow from operations of $806,000. |
| Ending cash balance of $24.2 million or $0.43 per share. |
| Lionbridge repaid $5.0 million of its long term debt during the quarter. The Company has reduced its debt by $28 million from the third quarter of 2008. As a result, the Companys net debt is now $7.5 million, the lowest since 2005. |
| The Company also secured several new, large client agreements including a world-leading biotech company, a global manufacturer of wireless devices and a provider of human capital management solutions. |
In October, Lionbridge announced its Translation Workspace, the translation industrys first Software-as-a-Service (SaaS)-based language technology platform. By making the Companys proven translation technology platform available to individual translators and agencies in a subscription-based licensing model, Lionbridge is expanding its market opportunities while bringing innovative technology solutions to market.
The third quarter reinforced several positive trends. Our pipeline of new business in our core language segment is the strongest it has been in over seven quarters. Our existing customers are beginning to recover as they experience growth in global markets. And we are benefitting from our initial cost reduction efforts. Despite some currency headwinds during the quarter, the business seems to be strengthening on all fronts, said Rory Cowan, CEO, Lionbridge. We expect a positive finish to a challenging year. Our pipeline is improving. We are expanding our market opportunities with a new technology platform. And we are continuing to reduce costs to enhance profitability. This indicates positive momentum for 2010.
The Company provided its outlook for the fourth quarter of 2009 with estimated revenue of $98 -$102 million.
For FY 2010 Lionbridge provided a preliminary outlook with estimated revenue growth of 5-10% and solid expansion of income as the Company realizes the benefits of a strengthening demand environment and its ongoing cost reductions.
The Company will host a conference call today at 9:00 am ET regarding the content of this release as well as the Companys overall outlook going forward and other matters. The conference call will be carried live on the Internet. Instructions for listening to the call over the Internet are available on the Investors page of the Lionbridge web site at http://www.lionbridge.com/webcast/nov5/ . A replay will be available at this location for one week.
Non-GAAP Financial Measures
In this release, the Companys non-GAAP Adjusted Earnings disclosures are not presented in
accordance with generally accepted accounting principles (GAAP) and are not intended to be used in
lieu of GAAP presentations of results of operations or cash provided by operating activities.
Adjusted Earnings represents GAAP net income excluding amortization of acquisition-related
intangible assets, merger, restructuring and related costs and stock based compensation expenses.
Adjusted Earnings are presented because management believes it provides additional information with
respect to both the performance of our fundamental business activities as well as the Companys
ability to meet future debt service and working capital requirements. Management believes the
adjusted earnings information is useful to investors for these reasons. Management believes the
most directly comparable GAAP financial measure is net income and has provided a reconciliation of
Adjusted Earnings to net income at the end of this release.
About Lionbridge
Lionbridge Technologies, Inc. (NASDAQ: LIOX) is a provider of globalization and offshoring
services. Lionbridge combines global resources with proven program management methodologies to
serve as an outsource partner throughout a clients product and content lifecycle from
development to globalization, testing and maintenance. Global organizations rely on Lionbridge
services to increase international market share, speed adoption of global products and content, and
enhance their return on enterprise applications and IT system investments. Based in Waltham,
Mass., Lionbridge maintains solution centers in 26 countries and provides services under the
Lionbridge and VeriTest brands. To learn more, visit http://www.lionbridge.com
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties,
including expected financial performance and expected revenue and earnings growth of Lionbridge in
the fourth quarter and FY 2010, anticipated customer demand, conversion of pipeline to revenue as
well as expected cost savings and improvements to profitability, financial performance, anticipated
benefits of the Companys planned restructuring and the timing of such activities. Lionbridges
actual experiences, actions, cost savings, financial and operating results may differ materially
from those discussed in the forward-looking statements. Factors that might cause such a difference
include the effect of the global economic conditions on the demand for Lionbridges services by
customers and prospective customers; a reduction in demand for outsourced business processes
generally and within the industries served by Lionbridge in particular; the effect of global
economic conditions on the timing or scope of services procured by Lionbridge customers; given that
a substantial portion of Lionbridges revenue is generated from a limited number of customers, the
loss of or reduction in demand from one or more major client or customer would materially reduce
revenue and cash flow and adversely effect Lionbridges business; the termination of customer
contracts or engagements prior to the end of their term; the size, timing and recognition of
revenue from clients; the ability of Lionbridge to realize the expected benefits of its technology
initiatives and the timing of the realization of such benefits; the impact of foreign currency
fluctuations on revenue, margins, costs, operating results and profitability and the Companys
ability to successfully manage this exposure through hedge instruments and other strategies; the
portion of the Companys service engagements that are subject to the impact of foreign currency
fluctuations; Lionbridges ability to provide and maintain high quality services at a competitive
price and related customer satisfaction with such service delivery; continued uncertainty,
volatility or deterioration in global economic conditions that could negatively affect demand for
the Companys services; continued tightening of the credit markets which could negatively affect
Lionbridges business, demand for its services and ability to get paid promptly for such services,
including inability of customers to obtain credit to finance purchases of the Companys services
and/or customer insolvencies; reduced demand for the Companys services that adversely impacts
Lionbridges future revenues, cash flows, results of operations and financial condition; risks
associated with conducting business outside of the United States, including compliance with
changing and potentially conflicting laws and regulations, restrictions on downsizing operations in
Europe and other jurisdictions (i.e. regulatory or works council restrictions) and expenses and
delays associated with any such activities; longer collection cycles and deeper impact of the
global economic downturn in particular jurisdictions; risks associated with competition; costs
associated with restructuring of certain operations in Europe and other locations, the timing of
actions and any anticipated benefits and the ability to realize such benefits; the duration and
outcome of negotiations with works councils with respect to the timing of restructuring and the
details of proposed actions; Lionbridges ability to forecast revenue, profitability, technology
adoption, customer demand and operating results; Lionbridges ability to perform services in lower
cost operational locations and the timing of its transfer of service execution to such locations,
and customer acceptance of service execution in such locations; changes in tax rates applicable to
the Company and changes to the interpretations of applicable tax rates; changes to or elimination
of the international tax holiday for companies doing business in India; the Companys dependence on
clients product releases, production schedules and procurement strategies to generate revenues;
the timing and speed of customer and user acceptance of Lionbridges language technology; the
impact of competing language technology on the Companys existing customer relationships and
ability to secure new customers; the failure of Lionbridge to keep pace with technological changes
or changing customer needs; Lionbridges ability to further develop and deploy Logoport; the
ability of Lionbridge to respond to fluctuations in the complexity, timing and mix of services
required by customers; and Lionbridge being held liable for defects or errors in its service
offerings. For a more detailed description of the risk factors associated with Lionbridge, please
refer to the Companys Annual Report on Form 10-K and subsequent filings with the SEC (copies of
which may be accessed through the SECs website at http://www.sec.gov).
LIONBRIDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands, except per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenue ........................................ |
$ | 97,822 | $ | 114,290 | $ | 284,253 | $ | 356,813 | ||||||||
Operating expenses: |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization shown
separately below) ........................................ |
67,384 | 78,640 | 194,260 | 245,436 | ||||||||||||
Sales and marketing ........................................ |
6,921 | 8,059 | 21,636 | 25,779 | ||||||||||||
General and administrative ........................................ |
17,909 | 21,737 | 55,154 | 67,719 | ||||||||||||
Research and development ........................................ |
919 | 1,634 | 3,200 | 4,083 | ||||||||||||
Depreciation and amortization ........................................ |
1,155 | 1,242 | 3,450 | 3,653 | ||||||||||||
Amortization of acquisition-related intangible assets ..................... |
1,380 | 2,104 | 4,140 | 6,330 | ||||||||||||
Merger, restructuring and other charges ........................................ |
1,340 | | 3,978 | 427 | ||||||||||||
Total operating expenses ........................................ |
97,008 | 113,416 | 285,818 | 353,427 | ||||||||||||
Income (loss) from operations ........................................ |
814 | 874 | (1,565 | ) | 3,386 | |||||||||||
Interest expense: |
||||||||||||||||
Interest on outstanding debt ........................................ |
426 | 917 | 1,428 | 3,010 | ||||||||||||
Amortization of deferred financing costs and discount on debt ......... |
44 | 44 | 133 | 133 | ||||||||||||
Interest ........................................ |
19 | 141 | 98 | 390 | ||||||||||||
Other (income) expense, net ........................................ |
2,990 | (1,265 | ) | 3,715 | 1,624 | |||||||||||
Income (loss) before income taxes ........................................ |
(2,627 | ) | 1,319 | (6,743 | ) | (991 | ) | |||||||||
Benefit from income taxes ........................................ |
(1,612 | ) | (1,846 | ) | (404 | ) | (629 | ) | ||||||||
Net income (loss) ........................................ |
$ | (1,015 | ) | $ | 3,165 | $ | (6,339 | ) | $ | (362 | ) | |||||
Net income (loss) loss per share of common stock: |
||||||||||||||||
Basic |
$ | (0.02 | ) | $ | 0.06 | $ | (0.11 | ) | $ | (0.01 | ) | |||||
Diluted |
$ | (0.02 | ) | $ | 0.06 | $ | (0.11 | ) | $ | (0.01 | ) | |||||
Weighted average number of common shares outstanding: |
||||||||||||||||
Basic and diluted |
56,099 | 55,636 | 55,993 | 55,891 | ||||||||||||
Diluted |
56,099 | 56,167 | 55,993 | 55,891 |
LIONBRIDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands)
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents ........................................ |
$ | 24,170 | $ | 37,978 | ||||
Accounts receivable, net of allowance of $685 at
September 30, 2009 and December 31, 2008 ................... |
53,286 | 67,184 | ||||||
Work in process ........................................ |
19,589 | 17,893 | ||||||
Other current assets ........................................ |
9,250 | 9,615 | ||||||
Total current assets ........................................ |
106,295 | 132,670 | ||||||
Property and equipment, net ........................................ |
12,721 | 14,077 | ||||||
Goodwill ........................................ |
9,675 | 9,675 | ||||||
Other intangible assets, net ........................................ |
15,860 | 20,000 | ||||||
Other assets ........................................ |
6,940 | 7,760 | ||||||
Total assets ........................................ |
$ | 151,491 | $ | 184,182 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Short-term debt and current portion of long-term debt |
$ | | $ | 22 | ||||
..................... |
||||||||
Accounts payable ........................................ |
19,243 | 20,218 | ||||||
Accrued compensation and benefits ........................................ |
17,576 | 20,122 | ||||||
Other accrued expenses and current liabilities |
25,095 | 24,868 | ||||||
.............................. |
||||||||
Deferred revenue ........................................ |
8,016 | 10,277 | ||||||
Total current liabilities ........................................ |
69,930 | 75,507 | ||||||
Long-term debt, less current portion ........................................ |
31,700 | 55,700 | ||||||
Deferred income taxes, long-term ........................................ |
529 | 737 | ||||||
Other long-term liabilities ........................................ |
11,094 | 12,568 | ||||||
Total stockholders equity ........................................ |
38,238 | 39,670 | ||||||
Total liabilities and stockholders equity ..................... |
$ | 151,491 | $ | 184,182 | ||||
Reconciliation of GAAP Net Income (Loss) to Adjusted EPS Comparison to Q3 2008
(UNAUDITED)
(Amounts in thousands, except per share data)
Three Months Ended | ||||||||
September 30, 2009 | September 30, | |||||||
2008 | ||||||||
Net income (loss) ........................................ |
$ | (1,015 | ) | $ | 3,165 | |||
Amortization of acquisition-related intangible assets ............ |
1,380 | 2,104 | ||||||
Merger, restructuring and other charges ........................................ |
1,340 | | ||||||
Stock-based compensation ........................................ |
696 | 1,209 | ||||||
Adjusted earnings ........................................ |
$ | 2,401 | $ | 6,478 | ||||
Fully diluted weighted average number of common shares outstanding |
57,160 | 56,167 | ||||||
Adjusted EPS ........................................ |
$ | 0.04 | $ | 0.12 | ||||
Contact:
Sara Buda
Lionbridge Technologies
(781) 434-6190
sara.buda@lionbridge.com