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8-K - LIVE FILING - LIONBRIDGE TECHNOLOGIES INC /DE/ | htm_50273.htm |
LIONBRIDGE REPORTS Q2 RESULTS WITH RECORD REVENUE OF $130.5 MILLION, GAAP EPS OF $0.06 AND
NON-GAAP EPS OF $0.12
Delivers 9% Sequential Quarter Revenue Growth and Buys Back $2.9 Million of Stock
WALTHAM, Mass. August 06, 2014 - Lionbridge Technologies, Inc. (Nasdaq: LIOX), today announced revenue and earnings for the second quarter ended June 30, 2014.
Financial highlights for the second quarter include:
| Revenue of $130.5 million, an increase of $10.3 million or 9% compared to the first quarter of 2014 and an increase of $7.1 million, or 6% year-on-year, compared to the second quarter of 2013. |
| Revenue grew 9% year-on-year in the Companys Global Language and Content (GLC) segment, led by ongoing marketing services growth within several large existing clients as well as new engagements during the quarter with clients outside of the Companys top ten accounts. |
| GAAP net income of $3.8 million, or $0.06 per share, based on 63.4 million weighted average fully diluted common shares outstanding. GAAP net income increased $1.9 million, or $0.03 per share, sequentially compared to Q1 2014 and increased $0.3 million, or $0.00 per share, year-on-year compared to Q2 2013. |
| Non-GAAP adjusted earnings of $7.5 million or $0.12 per share. The Company defines non-GAAP adjusted earnings as net income excluding merger, restructuring and acquisition-related charges, asset impairment 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 $7.1 million for the three months ended June 30, 2014. |
| During the quarter, the Company acquired 505,000 shares of its common stock under its share repurchase program for an aggregate purchase price of $2.9 million. |
The Company secured several significant new customer engagements in the quarter, including a market-leading global consulting firm, a global aerospace and defense company, and the games division of a large eCommerce company.
Lionbridge was also recently named the worlds number one language services company by independent market research firm Common Sense Advisory (CSA Research) based on size, revenue and service mix.
Our solid second quarter results reflect ongoing revenue growth, particularly in our translation and marketing business. We are expanding our large accounts with ongoing growth in our marketing services offerings. Our new onDemand customer engagement model is scaling. And we continue to execute on our strategy to expand our business across new end markets, said Rory Cowan, CEO of Lionbridge. Despite potential hesitation within our largest account and related short-term slowdowns in our testing segment, we expect solid revenue, earnings and cash flow in the second half of 2014 with acceleration in 2015.
Lionbridge provided an outlook for Q3 of 2014 with estimated revenue of $124-127 million.
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 888-324-3186 and international callers can dial 630-395-0193. The pass code for the call is Lionbridge. The conference call will also be available live via this link.
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 these measures are net income and diluted net income per share and has provided a
reconciliation of GAAP net income to adjusted earnings and adjusted earnings per share at the end
of this release.
About Lionbridge
Lionbridge enables more than 800 world-leading brands to increase international market share, speed
adoption of products and effectively engage their customers in local markets worldwide. Using our
innovative cloud technology platforms and our global crowd of more than 100,000 professional cloud
workers, we provide translation, online marketing, global content management and application
testing solutions that ensure global brand consistency, local relevancy and technical usability
across all touch points of the customer lifecycle. Based in Waltham, Mass., Lionbridge maintains
solution centers in 26 countries. To learn more, visit http://www.lionbridge.com.
Forward Looking Statements.
This press release contains forward-looking statements that involve risks and uncertainties,
including anticipated customer demand for the Companys services, expected financial performance,
expected revenue and profit growth, and the momentum, pace and strengthening of such growth in Q3
2014, H2 2014, FY 2014 and FY 2015. These forward-looking statements reflect managements current
views and Lionbridge does not undertake to update any of these forward-looking statements to
reflect a change in its views or events or circumstances that occur after the date hereof except as
required by law. 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 Lionbridges ability to provide and maintain high quality services at a
competitive price and related customer satisfaction with such service delivery; the loss of or
reduction in demand from one or more major client or customer, which would materially affect
Lionbridges business; reorganization or restructuring initiatives of one or more major clients or
customers, which may impact such customers demand or requirements for Lionbridges services;
Lionbridges ability to expand its relationships with existing clients, including by offering its
expanded range of services to existing customers; Lionbridges ability to broaden its client base;
the Companys dependence on clients product releases, production schedules and procurement
strategies to generate revenues; the anticipated benefits of expansion of global language workflow
technologies; the anticipated growth of its OnDemand, crowdsourcing and digital marketing service
offerings; the impact of competing technologies and platforms on the Companys existing customer
relationships and ability to secure new customers; the ability of Lionbridge to realize the
expected benefits of its technology initiatives and acquisitions, and the timing of the realization
of such benefits; errors, interruptions or delays in cloud-based technology; breaches of security
measures; 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 integrate
acquisitions and expand its customer relationships and the timing and success of such activities;
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; continued uncertainty and volatility in global
economic conditions that could negatively affect demand for the Companys services and
technologies; reduced demand for the Companys services that adversely impacts Lionbridges future
revenues, cash flows, results of operations and financial condition; 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; risks
associated with conducting business outside of the United States, including compliance with
changing and potentially conflicting laws and regulations and expenses and delays associated with
any such activities; longer collection cycles in particular jurisdictions; risks associated with
competition; Lionbridges 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; changes in interpretation of statutory and regulatory
positions by international tax authorities in countries in which Lionbridge conducts business;
changes in interpretation of employment and tax positions by U.S. state and federal authorities;
the failure of Lionbridge to keep pace with technological changes or changing customer needs; 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 resulting from its services or technologies;
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, 2013 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, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenue.............................................................................. |
$ | 130,538 | $ | 123,407 | $ | 250,743 | $ | 237,077 | ||||||||
Operating expenses: |
||||||||||||||||
Cost of revenue (exclusive of
depreciation and amortization included
below)........................................................................ |
89,871 | 84,253 | 172,951 | 166,135 | ||||||||||||
Sales and marketing............................................................ |
9,764 | 9,123 | 19,684 | 18,272 | ||||||||||||
General and administrative................................................... |
20,373 | 19,188 | 40,719 | 38,669 | ||||||||||||
Research and development.................................................... |
1,757 | 1,819 | 3,496 | 3,475 | ||||||||||||
Depreciation and amortization................................................ |
1,889 | 1,847 | 3,738 | 3,647 | ||||||||||||
Amortization of acquisition-related
intangible assets...................... |
813 | 828 | 1,611 | 1,656 | ||||||||||||
Restructuring, impairment, and other
charges.............................. |
882 | 1,297 | 1,216 | 2,021 | ||||||||||||
Total operating
expenses................................................. |
125,349 | 118,355 | 243,415 | 233,875 | ||||||||||||
Income from operations............................................................... |
5,189 | 5,052 | 7,328 | 3,202 | ||||||||||||
Interest expense: |
||||||||||||||||
Interest on outstanding
debt................................................... |
100 | 210 | 249 | 447 | ||||||||||||
Amortization of deferred financing
costs..................................... |
27 | 25 | 54 | 50 | ||||||||||||
Interest income........................................................................... |
31 | 13 | 50 | 39 | ||||||||||||
Other expense (income), net......................................................... |
237 | 592 | (111 | ) | 884 | |||||||||||
Income before income taxes......................................................... |
4,856 | 4,238 | 7,186 | 1,860 | ||||||||||||
Provision for income taxes............................................................. |
1,066 | 771 | 1,514 | 1,363 | ||||||||||||
Net income............................................................................... |
$ | 3,790 | $ | 3,467 | $ | 5,672 | $ | 497 | ||||||||
Net income per share of common stock: |
||||||||||||||||
Basic............................................................................... |
$ | 0.06 | $ | 0.06 | $ | 0.09 | $ | 0.01 | ||||||||
Diluted........................................................................... |
$ | 0.06 | $ | 0.06 | $ | 0.09 | $ | 0.01 | ||||||||
Weighted average number of common shares outstanding: |
||||||||||||||||
Basic.............................................................................. |
60,523 | 60,724 | 60,372 | 60,550 | ||||||||||||
Diluted........................................................................... |
63,410 | 62,436 | 63,515 | 61,941 |
LIONBRIDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands)
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
(unaudited) | ||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents................................................ |
$ | 31,270 | $ | 38,867 | ||||
Accounts receivable, net of allowances of $250 at June 30,
2014 and December 31, 2013.................................................... |
78,131 | 70,431 | ||||||
Unbilled receivables......................................................... |
24,387 | 19,498 | ||||||
Other current assets.......................................................... |
12,946 | 12,938 | ||||||
Total current assets.................................................... |
146,734 | 141,734 | ||||||
Property and equipment, net................................................... |
21,545 | 20,968 | ||||||
Goodwill ........................................................................... |
20,584 | 19,595 | ||||||
Acquisition-related intangible assets, net.................................... |
12,439 | 13,226 | ||||||
Other assets........................................................................ |
4,618 | 5,487 | ||||||
Total assets............................................................ |
$ | 205,920 | $ | 201,010 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable............................................................. |
$ | 26,404 | $ | 21,784 | ||||
Accrued compensation and benefits....................................... |
18,347 | 18,183 | ||||||
Accrued expenses and other current liabilities ........................ |
26,181 | 26,982 | ||||||
Deferred revenue............................................................ |
9,472 | 10,583 | ||||||
Total current liabilities................................................. |
80,404 | 77,532 | ||||||
Long-term debt..................................................................... |
27,000 | 27,000 | ||||||
Deferred income taxes, long-term................................................ |
913 | 913 | ||||||
Other long-term liabilities.......................................................... |
11,604 | 13,172 | ||||||
Total stockholders equity ......................................................... |
85,999 | 82,393 | ||||||
Total liabilities and stockholders equity........................... |
$ | 205,920 | $ | 201,010 | ||||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Earnings (Unaudited)
Comparison to Three and Six Months Ended June 30, 2013
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
GAAP net income ............................................................... |
$ | 3,790 | $ | 3,467 | $ | 5,672 | $ | 497 | ||||||||
Amortization of acquisition-related intangible assets................... |
813 | 828 | 1,611 | 1,656 | ||||||||||||
Stock-based compensation................................................ |
1,992 | 1,660 | 3,806 | 3,310 | ||||||||||||
Restructuring and acquisition-related charges........................... |
882 | 1,297 | 1,216 | 2,021 | ||||||||||||
Non-GAAP adjusted earnings....................................... |
$ | 7,477 | $ | 7,252 | $ | 12,305 | $ | 7,484 | ||||||||
Fully diluted weighted average number of common shares outstanding |
63,410 | 62,436 | 63,515 | 61,941 | ||||||||||||
Non-GAAP adjusted EPS |
$ | 0.12 | $ | 0.12 | $ | 0.19 | $ | 0.12 |