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8-K - LIVE FILING - LIONBRIDGE TECHNOLOGIES INC /DE/ | htm_38589.htm |
LIONBRIDGE REPORTS HIGHEST QUARTERLY PROFIT IN ITS HISTORY; POSTS Q2 REVENUE OF $104.9 MILLION
AND RECORD GAAP EARNINGS OF $4.6 MILLION, GAAP EPS OF $0.08 AND NON-GAAP EPS OF $0.13
Year-on-Year Revenue and Profit Expansion Reflects Strong Sales Execution and Positive Earnings
Conversion
WALTHAM, Mass. August 04, 2010 - Lionbridge Technologies, Inc. (Nasdaq: LIOX), today announced revenue and earnings for the second quarter ended June 30, 2010.
Financial highlights for the second quarter include:
| Revenue of $104.9 million, an increase of 7% compared to the second quarter of 2009. |
| For the six months ended June 30, 2010, the Company reported revenue of $205.7 million, an increase of 10% compared to revenue in the first half of 2009. |
| GAAP net income of $4.6 million or $0.08 per share based on 59.9 million weighted average fully diluted common shares outstanding, marking the highest quarterly net income in the Companys history. This compares with a net loss of $248,000 or $(0.00) per share for the quarter ended June 30, 2009. |
| For the six months ended June 30, 2010 the Company reported GAAP net income of $5.0 million or $0.09 per share, an increase of $10.4 million or $0.18 per share from the same period of 2009. |
| Non-GAAP adjusted earnings of $7.5 million or $0.13 per share, an increase of $3.8 million or $0.06 per share from the second quarter of 2009. For the six months ended June 30, 2010, non-GAAP adjusted earnings were $11.3 million, an increase of $9.2 million or $0.15 per share from the same period of 2009. The Company defines non-GAAP adjusted 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 these measures to the comparable GAAP measure. |
| Positive cash flow from operations of $8.6 million. |
| An ending cash balance of $28.9 million or $0.48 per share. |
During the quarter, the Company secured several significant new customer engagements, including a world leader in mobile media and computing devices, a market leading automobile manufacturer and a global wireless company.
Our strong revenue growth and record earnings reflect positive momentum across our business, said
Rory Cowan, CEO of Lionbridge. As revenue increases, we are growing margins and expanding
profits. Most importantly, we had yet another quarter of strong incremental revenue to profit
conversion. Customer demand remains firm. Our new SaaS offering, Translation Workspace, is
gaining momentum. Our ongoing cost management is paying off. And we continue to generate strong
cash flow. With these positive trends we expect a solid second half of 2010 and continued
expansion in 2011.
Lionbridge also offered an outlook for Q3 of 2010 with revenue of $98-$102 million, reflecting
traditional Q3 seasonality.
Lionbridge management will conduct a conference call at 9:00 a.m. ET this morning to discuss financial performance for the quarter and other matters, including matters related to its future performance. To participate, callers within the United States can dial 800-857-9821 and international callers can dial 210-234-0023. The pass code for the call is Lionbridge. The conference call will also be available live via the Internet by accessing www.lionbridge.com/webcast/Q22010
Non-GAAP Financial Measures
In this release, the Companys adjusted earnings and adjusted earnings per share 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. These measures are presented because
management believes they provide additional information to investors with respect to the
performance of our fundamental business activities. Adjusted earnings and Adjusted Earnings Per
Share (EPS) are Non-GAAP financial measures and should not be viewed as alternatives to GAAP
measures of performance. Management believes the most directly comparable GAAP financial measure
for adjusted earnings and adjusted earnings per share are net income and net income per share and
has provided a reconciliation of adjusted earnings and adjusted earnings per share to net income
(loss) at the end of this release.
About Lionbridge
Lionbridge Technologies, Inc. (NASDAQ: LIOX) is a provider of translation, development and testing
solutions. 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 translation, 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, anticipated customer demand, profitability, and expected
revenue and earnings growth of Lionbridge in the second half of 2010 and FY 2011. Lionbridges
actual experiences, actions, 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; 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 affect
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; market acceptance of and customer demand for the Companys SaaS-based technology
offerings; errors, interruptions or delays in SaaS-based technology or Web hosting; breaches of
security measures; risks associated with the financial aspects of the subscription model utilized
in connection with the Translation Workspace; [the success of Lionbridges partnership with IBM;
the cost, complexity, timing and speed of development and commercialization activities associated
with real-time machine translation technology initiatives and customer and user acceptance of such
technologies; 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 and its 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 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 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 its translation
technologies, including Translation Workspace and real-time translation software; the risk of
claims by third parties of intellectual property claims; 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 for the year ended December 31, 2009 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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue............................................................................... |
$ | 104,872 | $ | 98,028 | $ | 205,652 | $ | 186,431 | ||||||||
Operating expenses: |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization shown
separately below) ............................................................. |
69,643 | 65,703 | 138,588 | 126,876 | ||||||||||||
Sales and marketing............................................................. |
7,465 | 7,022 | 14,433 | 14,715 | ||||||||||||
General and administrative...................................................... |
18,698 | 18,442 | 37,490 | 37,245 | ||||||||||||
Research and development...................................................... |
952 | 1,096 | 1,710 | 2,281 | ||||||||||||
Depreciation and amortization................................................ |
1,175 | 1,154 | 2,305 | 2,295 | ||||||||||||
Amortization of acquisition-related intangible assets..................... |
1,223 | 1,380 | 2,446 | 2,760 | ||||||||||||
Merger, restructuring and other charges....................................... |
666 | 1,645 | 1,855 | 2,638 | ||||||||||||
Total operating expenses................................................ |
99,822 | 96,442 | 198,827 | 188,810 | ||||||||||||
Income (loss) from operations...................................................... |
5,050 | 1,586 | 6,825 | (2,379 | ) | |||||||||||
Interest expense: |
||||||||||||||||
Interest on outstanding debt ................................................ |
282 | 465 | 579 | 1,002 | ||||||||||||
Amortization of deferred financing costs and discount on debt ....... |
44 | 45 | 88 | 89 | ||||||||||||
Interest income ............................................................. |
8 | 20 | 33 | 79 | ||||||||||||
Other (income) expense, net ...................................................... |
(731 | ) | 720 | (457 | ) | 725 | ||||||||||
Income (loss) before income taxes............................................. |
5,463 | 376 | 6,648 | (4,116 | ) | |||||||||||
Provision for income taxes......................................................... |
905 | 624 | 1,613 | 1,208 | ||||||||||||
Net income (loss) ............................................................. |
$ | 4,558 | $ | (248 | ) | $ | 5,035 | $ | (5,324 | ) | ||||||
Net income (loss) loss per share of common stock: |
||||||||||||||||
Basic |
$ | 0.08 | $ | 0.00 | $ | 0.09 | $ | (0.10 | ) | |||||||
Diluted |
$ | 0.08 | $ | 0.00 | $ | 0.09 | $ | (0.10 | ) | |||||||
Weighted average number of common shares outstanding: |
||||||||||||||||
Basic and diluted |
56,619 | 56,011 | 56,495 | 55,935 | ||||||||||||
Diluted |
59,854 | 56,011 | 59,191 | 55,935 |
LIONBRIDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands)
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents................................................ |
$ | 28,852 | $ | 27,432 | ||||
Accounts receivable, net of allowances of $500 at June
30, 2010 and December 31, 2009 ............... |
55,043 | 55,501 | ||||||
Unbilled receivables......................................................... |
19,180 | 17,246 | ||||||
Other current assets......................................................... |
9,972 | 8,290 | ||||||
Total current assets................................................... |
113,047 | 108,469 | ||||||
Property and equipment, net................................................... |
15,003 | 12,681 | ||||||
Goodwill ..................................................................... |
9,675 | 9,675 | ||||||
Other intangible assets, net................................................... |
12,034 | 14,480 | ||||||
Other assets..................................................................... |
7,786 | 7,414 | ||||||
Total assets............................................................. |
$ | 157,545 | $ | 152,719 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable............................................................. |
$ | 18,158 | $ | 20,831 | ||||
Accrued compensation and benefits.................................... |
18,827 | 16,524 | ||||||
Other accrued expenses and current liabilities............................ |
24,993 | 23,448 | ||||||
Deferred revenue............................................................. |
9,908 | 11,484 | ||||||
Total current liabilities................................................ |
71,886 | 72,287 | ||||||
Long-term debt............................................................. |
24,700 | 24,700 | ||||||
Deferred income taxes, long-term....................................... |
643 | 643 | ||||||
Other long-term liabilities...................................................... |
13,977 | 14,060 | ||||||
Total stockholders equity ................................................... |
46,339 | 41,029 | ||||||
Total liabilities and stockholders equity................ |
$ | 157,545 | $ | 152,719 | ||||
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EPS (Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income (loss) ............................................................. |
$ | 4,558 | $ | (248 | ) | $ | 5,035 | $ | (5,324 | ) | ||||||
Amortization of acquisition-related intangible assets............... |
1,223 | 1,380 | 2,446 | 2,760 | ||||||||||||
Stock-based compensation................................................... |
1,099 | 960 | 1,994 | 2,083 | ||||||||||||
Merger, restructuring and other charges.............................. |
666 | 1,645 | 1,855 | 2,638 | ||||||||||||
Adjusted earnings...................................................... |
$ | 7,546 | $ | 3,737 | $ | 11,330 | $ | 2,157 | ||||||||
Fully diluted weighted average number of common shares outstanding |
59,854 | 56,218 | 59,191 | 56,062 | ||||||||||||
Adjusted EPS |
$ | 0.13 | $ | 0.07 | $ | 0.19 | $ | 0.04 |