Lionbridge Announces Q4 and FY 2011 Results; Grows Q4 Revenue $7.0 Million and Expands GAAP Earnings by $5.6 Million or $0.09 Year-on-Year Positive Q4 and FY 2011 Results Indicate Strong Client Demand and Favorable Earnings Environment for 2012

WALTHAM, Mass., Feb. 7, 2012 /PRNewswire/ -- Lionbridge Technologies, Inc. (Nasdaq: LIOX) today announced financial results for the fourth quarter and year ended December 31, 2011.  

Financial highlights for the fourth quarter include:

  • Revenue of $107.4 million, an increase of $7.0 million or 7% year-on-year compared to the fourth quarter of 2010.
  • GAAP net income for the quarter of $3.0 million or $0.05 per share based on 59.4 million fully diluted shares outstanding.  This compares to a GAAP net loss of $2.6 million or ($0.04) per share in the fourth quarter of 2010.  
  • Non-GAAP adjusted earnings of $5.0 million or $0.08 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 $8.3 million during the quarter.  
  • The Company ended the quarter in a net cash positive position with an ending cash balance of $25.2 million and long-term debt of $24.7 million as of December 31, 2011.

"The fourth quarter marked yet another strong quarter of solid top line growth, ongoing earnings acceleration and strong cash flow.  We are starting to benefit from our recent investments in sales and marketing, new leadership, new offerings and a refined vertical-market focused sales and delivery model," said Rory Cowan, CEO of Lionbridge.  "Our multi-year cost reduction program is largely behind us.  We have a strong new business pipeline.  The current currency environment is favorable for operating earnings.  As a result, we have positive momentum for 2012 and beyond."

Financial Highlights for Fiscal Year 2011 include:

  • Revenue of $427.9 million, an increase of $22.6 million or 6% year-on-year compared to FY 2010.
  • GAAP net income of $1.7 million or $0.03 per share based on 59.5 million fully diluted shares outstanding.  This compares to a GAAP net loss of $1.3 million or ($0.02) per share in FY 2010.  
  • Non-GAAP adjusted earnings of $12.9 million or $0.22 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 $9.8 million for the year.  

Business highlights for FY 2011 include:

  • Secured approximately 17 new, significant engagements with leading organizations in the aerospace, automotive, life sciences, manufacturing, media, mobile, retail, service, technology and wireless industries, marking one of the strongest annual new business pipeline conversions in several years.  
  • Successfully ramped a new, five-year estimated $25 million new program with an existing client in the technology and printing industry to provide testing services worldwide.
  • Announced general availability and secured the first enterprise engagement for GeoFluent™, the Company's SaaS-based, customizable, real-time translation technology that instantly translates content and communications into multiple languages.  GeoFluent is based on IBM's machine translation engine and is the result of a technology partnership between Lionbridge and IBM.
  • Added more than 1,000 subscribers in 2011 for Translation Workspace™, Lionbridge's cloud-based translation productivity platform.  Within the first two years of introduction, Translation Workspace has more than 3,300 subscriptions from translators and agencies in over 80 countries who rely on Translation Workspace to increase productivity and optimize their translation processes.  
  • Key additions to the Company's senior leadership team including a senior vice president of corporate marketing and a senior vice president for the Company's Global Development and Testing segment.
  • Successfully launched a new Global Marketing Operations (GMO) service offering aimed at helping global marketing executives manage and optimize digital marketing campaigns in international markets.

"In 2011 we continued to strengthen our business and financial performance.  By shifting our focus from cost management to revenue growth and technology innovation we've secured new business with market-leaders that seek to capture and support revenue in international markets," said Rory Cowan, CEO, Lionbridge.  "We enter this year with a multi-quarter track record of strong year-on-year revenue growth, ongoing gross margin expansion, positive GAAP earnings and strengthening cash flow from operations.  As a result, we expect ongoing earnings growth in 2012 and beyond."

The Company provided revenue expectations for the first quarter 2012 with estimated revenue of $103-$107 million, reflecting today's currency environment.  Lionbridge enjoys a broad mix of business that is denominated in various foreign currencies, including the Euro.  A stronger US Dollar as compared to the Euro typically benefits the Company's earnings but may have a dampening effect on revenue.  

Lionbridge also stated it expects sequential quarter revenue growth in the second quarter of 2012. The Company reiterated its expectations for FY 2012 revenue growth of 5-10% with further growth in profitability.  

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 online or on the financial events page of the investor guide on the Lionbridge website www.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. These measures 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 measures for adjusted earnings and adjusted earnings per share are net income and net income per share and has provided a reconciliation of these measures 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 and potential customer demand for the Company's services and technology, profitability, the impact of foreign currency exchange rates, and expected revenue and earnings growth, and the pace and strengthening of such growth, of Lionbridge in Q1 2012, Q2 2012 and FY 2012.  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 the effect of the global economic conditions on the demand for Lionbridge's services and technologies 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 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 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 Company's SaaS-based technology offerings, including Translation Workspace and GeoFluent; 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 its SaaS-based technology offerings; the cost, complexity, timing and speed of continued development and enhancements of  real-time machine translation technology initiatives, including customer and user acceptance of the Company's services and technologies; 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 portion of the Company's service engagements that are subject to the impact of foreign currency fluctuations; Lionbridge's ability to provide and maintain high quality services at a competitive price and related customer satisfaction with such service delivery; continued uncertainty and volatility in global economic conditions that could negatively affect demand for the Company's services and technologies; reduced demand for the Company's services that adversely impacts Lionbridge's 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 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; Lionbridge's 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 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 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; 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


Twelve Months Ended


December 31,


December 31,


2011

2010


2011

2010







Revenue

$ 107,385

$ 100,365


$ 427,856

$ 405,238

Operating expenses:






Cost of revenue (excluding depreciation and amortization shown separately below)

72,015

69,322


296,221

275,474

Sales and marketing

8,608

8,595


33,563

31,218

General and administrative

18,327

18,565


75,047

74,087

Research and development

1,468

1,149


5,765

3,880

Depreciation and amortization

1,615

1,330


5,956

4,901

Amortization of acquisition-related intangible assets

583

1,223


2,332

4,892

Restructuring and other charges

67

1,881


3,369

7,762

Total operating expenses

102,683

102,065


422,253

402,214







Income (loss) from operations

4,702

(1,700)


5,603

3,024







Interest expense:






Interest on outstanding debt  

196

169


722

939

Amortization  of deferred financing costs

25

24


100

311

Interest income  

22

24


71

87

Other (income) expense, net

2,545

599


3,195

1,749

Income (loss) before income taxes

1,958

(2,468)


1,657

112

Provision for (benefit from) income taxes

(1,079)

84


(71)

1,402

Net income (loss)

$    3,037

$  (2,552)


$   1,728

$  (1,290)


Net income (loss) loss per share of common stock:






Basic

$      0.05

$      (0.04)


$     0.03

$     (0.02)

Diluted

$      0.05

$      (0.04)


$     0.03

$     (0.02)







Weighted average number of common shares outstanding:






Basic

58,047

56,927


57,859

56,690

Diluted

59,437

56,927


59,478

56,690




LIONBRIDGE TECHNOLOGIES, INC.


CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(Amounts in thousands)



December 31,


December 31,


2011


2010





ASSETS




Current assets:




Cash and cash equivalents

$    25,219


$    28,206

Accounts receivable, net of allowances of $500 at December 31, 2011 and December 31, 2010

58,413


57,763

Unbilled receivables

20,665


17,471

Other current assets

9,120


9,585


Total current assets

113,417


113,025


Property and equipment, net

21,725


16,394

Goodwill

9,675


9,675

Other intangible assets, net

7,256


9,588

Other assets

5,674


8,294


Total assets

$  157,747


$  156,976





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$    19,347


$   18,185

Accrued compensation and benefits

15,696


17,080

Other accrued expenses and current liabilities

21,802


25,892

Deferred revenue

11,057


11,073


Total current liabilities

67,902


72,230





Long-term debt

24,700


24,700

Deferred income taxes, long-term

641


730

Other long-term liabilities

13,212


14,142





Total stockholders' equity

51,292


45,174









Total liabilities and stockholders' equity

$  157,747


$  156,976




Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EPS (Unaudited)



Three Months Ended


Twelve Months Ended


December 31,


December 31,


2011

2010


2011

2010







Net income (loss)

$     3,037

$     (2,552)


$ 1,728

$ (1,290)







Amortization of acquisition-related intangible assets

583

1,223


2,332

4,892

Stock-based compensation

1,300

1,076


5,515

4,040

Restructuring and other charges

67

1,881


3,369

7,762

Adjusted earnings

$     4,987

$     1,628


$     12,944

$   15,404







Fully diluted weighted average number of common shares outstanding

59,437

59,459


59,478

59,241

Adjusted EPS

$ 0.08

$ 0.03


$ 0.22

$ 0.26




Contact: Sara Buda, +1-781-434-6190, Sara.Buda@lionbridge.com

SOURCE Lionbridge Technologies, Inc.



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