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| 8-K - LIVE FILING - LIONBRIDGE TECHNOLOGIES INC /DE/ | htm_43381.htm |
LIONBRIDGE REPORTS Q3 REVENUE OF $107.6 MILLION, GAAP EPS OF $0.04 AND
NON-GAAP EARNINGS OF $0.09
Grows Revenue 8% and Expands GAAP Earnings by $6.2 Million or $0.10 Year-on-Year,
Generates $4.5 Million of Cash Flow from Operations
WALTHAM, Mass. – November 03, 2011 — Lionbridge Technologies, Inc. (Nasdaq: LIOX) today announced financial results for the quarter ended September 30, 2011. Financial and business highlights for the third quarter include:
| • | Revenue of $107.6 million, an increase of $8.4 million or 8% from the quarter ended September 30, 2010. |
| • | GAAP net income of $2.4 million, or $0.04 per share based on 59.6 million fully diluted common shares outstanding. This is an increase of $6.2 million, or $0.10 per share, compared to the third quarter of 2010. |
| • | Non-GAAP earnings of $5.3 million or $0.09 per share. The Company defines non-GAAP earnings as GAAP 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 $4.5 million during the quarter. |
| • | An ending cash balance of $20.8 million. |
| • | Lionbridge secured several new client programs during the quarter, including contracts with a leading provider of computing devices, a leading contract research organization, a medical technology company and a leading US retailer. |
The Company also announced two updates to its GeoFluent real-time translation technology:
| • | An engagement with a large technology provider for translation of user-generated content. Initially the client will use GeoFluent to translate real-time blog and forum content with opportunities for further expansion. |
| • | A partnership agreement with LivePerson, Inc., to market and promote Lionbridge GeoFluent for LivePerson Chat, a powerful, integrated cloud-based multilingual chat application that gives contact centers and enterprises on-demand, customized translation within their existing LivePerson chat application. |
“In the third quarter we continued to demonstrate momentum in a number of important areas. Most significantly, our multi-quarter investments in sales and marketing across end markets are starting to pay off. This is seen by our total 8% year-on-year revenue growth and 12% growth excluding revenue related to a large technology client. As we expand relationships with our established clients and secure new client programs across industry sectors, our proven cost management is allowing us to show solid margin and profit growth,” said Rory Cowan, CEO of Lionbridge. “With this positive revenue and earnings growth in our services businesses and building market demand for our emerging technology solutions, we are well positioned for earnings acceleration in 2012 and beyond.”
The Company provided revenue expectations for the fourth quarter with estimated revenue of $108-$111 million, which would reflect approximately 8-11% year-on-year growth for the quarter.
The Company also provided a preliminary outlook for FY 2012 with expected revenue growth of 5-10% year-on-year and gross margin improvement of approximately 100 basis points year-on-year in constant currency.
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 online or on the financial events page of the investor relations section of the Lionbridge website at http://investors.lionbridge.com
Non-GAAP Financial Measures
In this release, the Company’s 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 client’s 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 for the Company’s solutions,
profitability, and expected revenue and earnings growth of Lionbridge in the fourth quarter of
2011, FY 2012 and beyond. Lionbridge’s 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 timing or scope of services procured by Lionbridge
customers; given that a substantial portion of Lionbridge’s 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 Lionbridge’s 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 impact of foreign currency fluctuations on revenue,
margins, costs, operating results and profitability and the Company’s ability to successfully
manage this exposure through hedge instruments and other strategies; the cost, complexity, timing
and speed of development and commercialization activities associated with GeoFluent real-time
machine translation technology initiatives and customer and user acceptance of such technologies;
Lionbridge’s ability to provide and maintain high quality services at a competitive price and
related customer satisfaction with such service delivery; reduced demand for the Company’s services
that adversely impacts Lionbridge’s future revenues, cash flows, results of operations and
financial condition; the ability of Lionbridge to realize the expected benefits of its technology
initiatives and the timing of the realization of such benefits; global economic conditions that may
affect the demand for Lionbridge’s services by customers and prospective customers; market
acceptance of and customer demand for the Company’s SaaS-based technology offerings; errors,
interruptions or delays in SaaS-based technology or Web hosting; breaches of security measures;
the success of Lionbridge’s partnership with IBM; risks associated with the financial aspects of
the subscription model utilized in connection with the Translation Workspace and GeoFluent; 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 any
global economic downturn in particular jurisdictions; risks associated with competition; costs
associated with restructuring, 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; Lionbridge’s ability
to forecast revenue, profitability, technology adoption, customer demand and operating results;
changes in tax rates applicable to the Company and changes to the interpretations of applicable tax
rates; the Company’s dependence on clients’ product releases, production schedules and procurement
strategies to generate revenues; the impact of competing language technology on the Company’s
existing customer relationships and ability to secure new customers; the failure of Lionbridge to
keep pace with technological changes or changing customer needs; Lionbridge’s ability to further
develop and deploy its translation technologies, including Translation Workspace and GeoFluent; 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 Company’s Annual
Report on Form 10-K for the year ended December 31, 2010 and subsequent filings with the SEC
(copies of which may be accessed through the SEC’s 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, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue.............................................................................. |
$ | 107,574 | $ | 99,221 | $ | 320,471 | $ | 304,873 | ||||||||
Operating expenses: |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization
shown separately below)............................................................ |
73,662 | 67,564 | 224,206 | 206,152 | ||||||||||||
Sales and marketing............................................................ |
7,976 | 8,190 | 24,955 | 22,623 | ||||||||||||
General and administrative.................................................... |
19,438 | 18,032 | 56,720 | 55,522 | ||||||||||||
Research and development.................................................... |
1,383 | 1,021 | 4,297 | 2,731 | ||||||||||||
Depreciation and amortization................................................ |
1,615 | 1,266 | 4,341 | 3,571 | ||||||||||||
Amortization of acquisition-related intangible assets..................... |
583 | 1,223 | 1,749 | 3,669 | ||||||||||||
Restructuring and other charges.............................................. |
556 | 4,026 | 3,302 | 5,881 | ||||||||||||
Total operating expenses................................................ |
105,213 | 101,322 | 319,570 | 300,149 | ||||||||||||
Income (loss) from operations...................................................... |
2,361 | (2,101 | ) | 901 | 4,724 | |||||||||||
Interest expense: |
||||||||||||||||
Interest on outstanding debt................................................... |
192 | 191 | 526 | 770 | ||||||||||||
Amortization of deferred financing costs................................. |
25 | 199 | 75 | 287 | ||||||||||||
Interest income........................................................................ |
17 | 30 | 49 | 63 | ||||||||||||
Other (income) expense, net......................................................... |
(231 | ) | 1,607 | 650 | 1,150 | |||||||||||
Income (loss) before income taxes................................................. |
2,392 | (4,068 | ) | (301 | ) | 2,580 | ||||||||||
Provision for (benefit from) income taxes........................................ |
(23 | ) | (295 | ) | 1,008 | 1,318 | ||||||||||
Net income (loss).................................................................. |
$ | 2,415 | $ | (3,773 | ) | $ | (1,309 | ) | $ | 1,262 | ||||||
Net income (loss) loss per share of common stock: |
||||||||||||||||
Basic |
$ | 0.04 | $ | (0.07 | ) | $ | (0.02 | ) | $ | 0.02 | ||||||
Diluted |
$ | 0.04 | $ | (0.07 | ) | $ | (0.02 | ) | $ | 0.02 | ||||||
Weighted average number of common shares outstanding: |
||||||||||||||||
Basic |
58,012 | 56,814 | 57,791 | 56,606 | ||||||||||||
Diluted |
59,585 | 56,814 | 57,791 | 59,240 | ||||||||||||
LIONBRIDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands)
| September 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents................................................... |
$ | 20,797 | $ | 28,206 | ||||
Accounts receivable, net of allowances of $600 at
September 30, 2011 and $500 at December 31,
2010........................................ |
56,738 | 57,763 | ||||||
Unbilled receivables............................................................ |
23,343 | 17,471 | ||||||
Other current assets............................................................. |
11,346 | 9,585 | ||||||
Total current assets....................................................... |
112,224 | 113,025 | ||||||
Property and equipment, net......................................................... |
21,637 | 16,394 | ||||||
Goodwill............................................................................... |
9,675 | 9,675 | ||||||
Other intangible assets, net.......................................................... |
7,839 | 9,588 | ||||||
Other assets............................................................................ |
8,398 | 8,294 | ||||||
Total assets................................................................ |
$ | 159,773 | $ | 156,976 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable............................................................... |
$ | 19,654 | $ | 18,185 | ||||
Accrued compensation and benefits....................................... |
19,364 | 17,080 | ||||||
Other accrued expenses and current liabilities.............................. |
23,937 | 25,892 | ||||||
Deferred revenue............................................................... |
8,364 | 11,073 | ||||||
Total current liabilities................................................... |
71,319 | 72,230 | ||||||
Long-term debt..................................................................... |
24,700 | 24,700 | ||||||
Deferred income taxes, long-term................................................. |
730 | 730 | ||||||
Other long-term liabilities.......................................................... |
15,484 | 14,142 | ||||||
Total stockholders’ equity......................................................... |
47,540 | 45,174 | ||||||
Total liabilities and stockholders’ equity.............................. |
$ | 159,773 | $ | 156,976 | ||||
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EPS (Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income (loss) |
$ | 2,415 | $ | (3,773 | ) | $ | (1,309 | ) | $ | 1,262 | ||||||
Amortization of acquisition-related intangible assets..................... |
583 | 1,223 | 1,749 | 3,669 | ||||||||||||
Stock-based compensation.................................................... |
1,736 | 970 | 4,215 | 2,964 | ||||||||||||
Restructuring and other charges.............................................. |
556 | 4,026 | 3,302 | 5,881 | ||||||||||||
Adjusted earnings......................................................... |
$ | 5,290 | $ | 2,446 | $ | 7,957 | $ | 13,776 | ||||||||
Fully diluted weighted average number of common shares outstanding |
59,585 | 59,695 | 59,534 | 59,240 | ||||||||||||
Adjusted EPS |
$ | 0.09 | $ | 0.04 | $ | 0.13 | $ | 0.23 | ||||||||
Contact:
Sara Buda
Lionbridge Technologies, Inc.
(781) 434-6190
sara.buda@lionbridge.com