Lionbridge Announces FY 2015 Results With Revenue of $560 Million, GAAP EPS of $0.23 and Non-GAAP EPS of $0.63

Delivers Record Revenue and Earnings; Affirms 2016 Outlook of 5-8% Revenue Growth and 20-30% Adjusted EBITDA Expansion

11 Feb, 2016, 08:17 ET from Lionbridge Technologies, Inc.

WALTHAM, Mass., Feb. 11, 2016 /PRNewswire/ -- Lionbridge Technologies, Inc. (Nasdaq: LIOX), today announced financial results for the fourth quarter and year ended December 31, 2015.

Financial highlights for FY 2015 include:

  • Revenue of $560.0 million, an increase of $69.4 million or 14% from the year ended December 31, 2014. In constant currency revenue, the Company grew $88.9 million or 18% year-on-year.
  • GAAP net income of $14.2 million or $0.23 per share based on 62.4 million fully diluted shares outstanding. GAAP net income grew $6.1 million or $0.10 per diluted share in FY 2015, reflecting 76% year-on-year growth, despite spending an incremental $6.5 million in restructuring and other charges during the year, primarily related to the integration of CLS Communication, which is now largely complete.
  • Adjusted earnings of $39.1 million or $0.63 per share. The Company defines adjusted earnings, a non-GAAP measure, as net income (loss) excluding restructuring and other charges, 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.
  • Adjusted EBITDA of $48.6 million. The Company defines adjusted EBITDA, a non-GAAP measure, as income from operations excluding depreciation and amortization, amortization of acquisition-related intangible assets, restructuring and other charges and stock-based compensation. 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 $21.3 million.
  • Ending cash balance of $27.8 million.  
  • During the year, the Company acquired 1.4 million shares of its common stock under its share repurchase program for an aggregate purchase price of $7.4 million

Business highlights for FY 2015 include:

  • Secured more than 36 new enterprise engagements with world-leading brands across industry sectors including industrial and manufacturing, retail, aerospace, automotive, entertainment, and life sciences industries.
  • Continued to successfully scale its global marketing offering aimed at helping global marketing executives manage and optimize digital marketing campaigns in international markets. Lionbridge estimates that revenue from its global marketing services grew approximately 14% year on year and accounted for approximately $85 million of the Company's revenue in 2015.
  • Scaled Lionbridge onDemand™, a new, online revenue and delivery channel. In only its second year of operation, Lionbridge onDemand delivered projects for 665 clients in 2015 and grew revenue more than 60% year-on-year to approximately $5.2 million.
  • Successfully integrated CLS Communication, a market-leader in translation solutions to clients in the financial services, industrial and public sector end markets. Lionbridge acquired CLS Communication in January 2015 and has now completed the majority of its planned integration and cost synergies related to the business combination.
  • Continued to grow its revenue with clients in new vertical markets.  Most notably, in 2015 the Company grew its life sciences, manufacturing and automotive verticals each more than 20% year-on-year in constant currency.  In November 2015 the Company also added expertise in the legal vertical with the acquisition of Geotext, a niche provider of translation services to law firms and corporations.  These achievements reflect the Company's ongoing strategy to diversify its revenue into verticals outside of its traditional technology sector.  In 2015 non-technology verticals accounted for approximately 47% of total company revenue, as compared to 37% of total revenue in 2014.

"In 2015, we delivered our strongest financial performance in history with record revenue, ongoing margin expansion and record earnings despite currency and customer concentration headwinds," said Rory Cowan, CEO, Lionbridge.  "As we enter 2016, we have positive momentum across our business. Revenue from our largest client has remained stable for the past several quarters.  Our CLS integration and restructuring process is largely complete.  Demand for our marketing and translation services continues to grow.  I am proud of our end market growth and continued customer diversification, a strategy we committed to three years ago. These achievements provide a strong foundation for ongoing revenue and earnings growth in 2016."

Highlights for the fourth quarter ended December 31, 2015 include:

  • Revenue of $140.8 million, an increase of $21.1 million, or 18% from the fourth quarter of 2014.
  • GAAP net income of $2.9 million or $0.05 per share, based on 62.5 million weighted average diluted shares outstanding. This compares to a GAAP net loss of $1.2 million or $0.02 per share in the fourth quarter of 2014.
  • Adjusted earnings of $9.8 million or $0.16 per share.
  • Adjusted EBITDA of $11.8 million.
  • Acquired 1.2 million shares of its common stock in the quarter for an aggregate purchase price of $6.0 million as part of its new share repurchase program announced in November 2015. 

The Company provided an outlook for the first quarter of 2016 with revenue of $137-141 million, reflecting traditional Q1 seasonality. The Company also affirmed its expectations for FY 2016 revenue growth of approximately 5-8% and adjusted EBITDA growth of approximately 20-30% year on year, depending on fluctuations in exchange rates as well as the timing of the benefits related to recent cost actions.

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 800-988-9535 and international callers can dial 312-470-7395. The pass code for the call is Lionbridge. The conference call will also be available on the financial events page of the investor relations section of the Lionbridge website at www.lionbridge.com.

Non-GAAP Financial Measures

In this release, the Company's adjusted earnings, adjusted earnings per share and adjusted EBITDA 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 EBITDA" as well as "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, respectively, and has provided a reconciliation of GAAP net income to adjusted earnings, adjusted earnings per share and adjusted EBITDA at the end of this release.

The Company includes the impact of changes in foreign currency in its reporting of GAAP revenue. In addition, the Company provides revenue growth and growth rates in constant currency to exclude the impact of foreign currency translation, in order to facilitate an evaluation of our current revenue performance and a comparison to our past revenue performance. To calculate historical revenue and revenue growth rates in constant currency, we convert actual net sales from local currency to U.S. dollars using constant foreign currency exchange rates in the current and prior period. Revenue growth rates that exclude the impact of sales from changes in foreign currency exchange rates are not in accordance with U.S. GAAP and should not be considered in isolation from or as a replacement for GAAP reporting.

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 28 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 Company's services, expected financial performance, expected revenue, adjusted EBITDA and profit growth, and the momentum, pace and strengthening of such growth in FY 2016. These forward-looking statements reflect management's 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. 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 Lionbridge's 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 Lionbridge's business; reorganization or restructuring initiatives of one or more major clients or customers, which may impact such customer's demand or requirements for Lionbridge's services; Lionbridge's ability to expand its relationships with existing clients, including by offering its expanded range of services to existing customers; Lionbridge's ability to broaden its client base; the Company's 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 Lionbridge OnDemand and digital marketing service offerings; the impact of competing technologies and platforms on the Company's 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, including CLS and Geotext, and maintain 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 Company's ability to successfully manage this exposure through hedge instruments and other strategies; the portion of the Company's 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 Company's services and technologies; 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; 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 in the jurisdictions in which the Company conducts business; 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 and governmental authorities outside of the United States; 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; network outages; security breaches; 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 Company's Annual Report on Form 10-K for the year ended December 31, 2014 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. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended  December 31,

Twelve Months Ended  December 31,

(In thousands, except per share amounts)

2015

2014

2015

2014

Revenue

$

140,812

$

119,678

$

559,984

$

490,612

Operating expenses:

Cost of revenue (exclusive of depreciation and amortization included below)

93,824

80,978

371,649

334,537

Sales and marketing

12,649

10,861

47,812

40,230

General and administrative

22,641

19,563

91,665

80,150

Research and development

1,872

1,751

7,932

6,945

Depreciation and amortization

3,045

2,080

9,967

7,851

Amortization of acquisition-related intangible assets

1,145

864

4,124

3,317

Restructuring and other charges

3,724

4,797

13,083

6,624

Total operating expenses

138,900

120,894

546,232

479,654

Income (loss) from operations

1,912

(1,216)

13,752

10,958

Non-operating expense (income), net

Interest expense:

Interest on outstanding debt

498

134

1,937

547

Amortization of deferred financing charges

94

21

373

100

Interest expense (income)

(18)

(16)

(68)

(75)

Other expense (income), net

(438)

(944)

(2,773)

(1,097)

Total non-operating expense (income), net

136

(805)

(531)

(525)

Income (loss) before income taxes

1,776

(411)

14,283

11,483

(Benefit from) provision for income taxes

(1,135)

796

46

3,376

Net income (loss)

$

2,911

$

(1,207)

$

14,237

$

8,107

Net income (loss) per share of common stock:

Basic

$

0.05

$

(0.02)

$

0.24

$

0.13

Diluted

$

0.05

$

(0.02)

$

0.23

$

0.13

Weighted average number of common shares outstanding:

Basic

60,446

59,798

60,547

60,149

Diluted

62,511

59,798

62,449

63,040

 

 

LIONBRIDGE TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands)

December 31,  2015

December 31,  2014

ASSETS

Current assets:

Cash and cash equivalents

$

27,831

$

36,893

Accounts receivable, net of allowance of $250 at December 31, 2015 and December 31, 2014

86,645

66,479

Unbilled receivables

23,250

25,843

Other current assets

12,440

12,090

Total current assets

150,166

141,305

Property and equipment, net

25,259

23,622

Goodwill

65,305

21,937

Acquisition-related intangible assets, net

48,991

12,232

Other assets

10,539

5,677

Total assets

$

300,260

$

204,773

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Debt, current portion

$

4,375

$

Accounts payable

28,101

21,885

Accrued compensation and benefits

21,242

17,249

Accrued outsourcing

9,874

10,429

Accrued restructuring

4,612

3,492

Income taxes payable

5,164

2,123

Accrued expenses and other current liabilities

9,878

10,485

Deferred revenue

9,398

11,866

Total current liabilities

92,644

77,529

Long-term debt, net of current portion

87,485

27,000

Deferred income taxes, net of current portion

5,360

704

Other long-term liabilities

21,634

13,786

Total liabilities

207,123

119,019

Stockholders' equity:

Preferred stock

Common stock

637

635

Additional paid-in capital

270,225

272,252

Accumulated deficit

(189,660)

(203,897)

Accumulated other comprehensive income

11,935

16,764

Total stockholders' equity

93,137

85,754

Total liabilities and stockholders' equity

$

300,260

$

204,773

 

 

Reconciliation of GAAP Net Income to Adjusted EBITDA

and GAAP Net Income to Non-GAAP Adjusted Earnings (Unaudited)

Three Months Ended  December 31,

Year Ended December 31,

(In thousands)

2015

2014

2015

2014

Net income (loss)

$

2,911

$

(1,207)

$

14,237

$

8,107

Depreciation and amortization

3,045

2,080

9,967

7,851

Amortization of acquisition-related intangible assets

1,145

864

4,124

3,317

Stock-based compensation

2,017

1,670

7,680

7,484

Restructuring and other charges

3,724

4,797

13,083

6,624

Non-operating expense (income), net

136

(805)

(531)

(525)

(Benefit from) provision for income taxes

(1,135)

796

46

3,376

Adjusted EBITDA

$

11,843

$

8,195

$

48,606

$

36,234

Three Months Ended  December 31,

Year Ended December 31,

(In thousands, except per share amounts)

2015

2014

2015

2014

Net income (loss)

$

2,911

$

(1,207)

$

14,237

$

8,107

Amortization of acquisition-related intangible assets

1,145

864

4,124

3,317

Stock-based compensation

2,017

1,670

7,680

7,484

Restructuring and other charges

3,724

4,797

13,083

6,624

Adjusted earnings

$

9,797

$

6,124

$

39,124

$

25,532

Fully diluted weighted-average number of common shares outstanding

62,511

59,798

62,449

63,040

Adjusted EPS

$

0.16

$

0.10

$

0.63

$

0.41

 

 

Contact: Sara Buda  Lionbridge  +1-978-964-1404  sara.buda@lionbridge.com

 

SOURCE Lionbridge Technologies, Inc.



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