Lionbridge Reports Q2 Revenue of $123.4 Million and GAAP EPS of $0.06 Delivers 9% Sequential Quarter Revenue Growth, Increases GAAP Earnings $0.10 sequentially and Buys Back $3.9 million of Stock; Provides Positive Outlook for Q3

WALTHAM, Mass., Aug. 6, 2013 /PRNewswire/ -- Lionbridge Technologies, Inc. (Nasdaq: LIOX), today announced financial results for the second quarter ended June 30, 2013.

Financial highlights for the second quarter include:

  • Revenue of $123.4 million, an increase of $9.7 million or 9% compared to the first quarter of 2013 and an increase of $4.2 million, or 4% year-on-year, compared to the second quarter of 2012.
  • GAAP net income of $3.5 million, or $0.06 per share, based on 62.4 million weighted average fully diluted common shares outstanding.  GAAP net income increased $6.4 million, or $0.10 per share, sequentially compared to Q1 2013 and increased $1.2 million, or $0.02 per share, year-on-year compared to Q2 of 2012. 
  • Non-GAAP adjusted earnings of $7.3 million or $0.12 per share.  The Company defines non-GAAP adjusted earnings as net income excluding merger, restructuring and acquisition-related costs, 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. 
  • During the quarter, the Company acquired 1.3 million shares of its common stock for an aggregate purchase price of $3.9 million

During the quarter, the Company secured several significant new customer engagements, including a global leader in luxury hotels and resorts, an international peer reviewed medical journal, a leading provider of software and services to the process industries and several large programs with a US-based contractor in Intelligence and Reconnaissance systems.

"Our positive second quarter results indicate strengthening demand across our business.  Large accounts are spending again. Our new offerings are scaling.  And our new business is accelerating as we deliver integrated, global crowd-in-the-cloud solutions," said Rory Cowan, CEO of Lionbridge.  "With solid revenue momentum and the benefits of our cost reduction program, we expect performance to strengthen in the second half of 2013 with ongoing expansion in 2014."

Lionbridge provided outlook for Q3 of 2013 with estimated revenue of $118-121 million, which would reflect year-on-year growth of 5-8% as compared to Q3 of 2012.

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 this link.

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 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.

This press release contains forward-looking statements that involve risks and uncertainties, including expected financial performance, expected revenue and profit growth, and the momentum, pace and strengthening of such growth in Q3 2013, FY 2013 and FY 2014. 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; Lionbridge's ability to expand its relationships with existing clients; the cost and timing of cost reduction and restructuring activities; 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 Company's ability to attract and integrate new operational leadership; the anticipated benefits of expansion of global language workflow technologies; the impact of competing language technology 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 SaaS-based technology, technology-enabled delivery platforms 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 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 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 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; reduced demand for the Company's services that adversely impacts Lionbridge's future revenues, cash flows, results of operations and financial condition; 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; 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; 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 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, 2012 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
June  30,


Six Months Ended
June  30,


2013


2012


2013


2012

Revenue

$      123,407


$      119,189


$      237,077


$      231,285

Operating expenses:








Cost of revenue (exclusive of depreciation and

  amortization included below)

84,253


80,573


166,135


158,746

Sales and marketing

9,123


8,630


18,272


17,139

General and administrative

19,188


19,504


38,669


38,680

Research and development

1,819


1,386


3,475


2,748

Depreciation and amortization

1,847


1,688


3,647


3,333

Amortization of acquisition-related intangible assets

828


545


1,656


1,025

Restructuring, impairment, and other charges

1,297


6,719


2,021


7,003









        Total operating expenses

118,355


119,045


233,875


228,674









Income from operations

5,052


144


3,202


2,611

Interest expense:








Interest on outstanding debt

210


182


447


372

Amortization of deferred financing costs

25


25


50


50

Interest income

13


18


39


38

Other expense, net

592


671


884


640









Income (loss) before income taxes

4,238


(716)


1, 860


1,587

Provision for (benefit from) income taxes

771


(2,965)


1,363


(2,383)









Net income

$          3,467


$          2,249


$             497


$          3,970









Net income per share of common stock:








Basic

$            0.06


$            0.04


$            0.01


$            0.07

Diluted

$            0.06


$            0.04


$            0.01


$            0.07

Weighted average number of common shares outstanding:








Basic

60,724


58,880


60,550


58,723

Diluted

62,436


60,390


61,941


59,894

 

LIONBRIDGE TECHNOLOGIES, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(Amounts in thousands)



June 30,


December 31,


2013


2012


(unaudited)



ASSETS




Current assets:




Cash and cash equivalents

$    17,642


$    25,797

Accounts receivable, net of allowances of $250 at June 30, 2013

  and December 31, 2012

75,157


64,152

Unbilled receivables

23,989


22,127

Other current assets

12,840


11,729

        Total current assets

129,628


123,805

Property and equipment, net

19,651


19,430

Asset held for sale

-


727

Goodwill

18,652


18,652

Acquisition-related intangible assets, net

14,525


16,181

Other assets

4,973


5,262

        Total assets

$  187,429


$  184,057





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$   21,311


$   19,897

Accrued compensation and benefits

17,104


14,885

Other accrued expenses and current liabilities

29,450


27,564

Deferred revenue

10,193


9,277

        Total current liabilities

78,058


71,623





Long-term debt

26,700


26,700

Deferred income taxes, long-term

1,143


1,143

Other long-term liabilities

13,778


15,010





Total stockholders' equity

67,750


69,581









        Total liabilities and stockholders' equity

$  187,429


$  184,057

 

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

Comparison to Three and Six Months Ended June 30, 2013



Three Months Ended


Six Months Ended


June 30,


June 30,


2013


2012


2013


2012









Net income

$     3,467


$     2,249


$           497


$ 3,970









Amortization of acquisition-related intangible assets

828


545


1,656


1,025

Stock-based compensation

1,660


1,414


3,310


2,799

Restructuring and acquisition related charges

1,297


2,552


2,021


2,836

Asset impairment

0


4,167


0


4,167

        Adjusted earnings

$     7,252


$     10,927


$      7,484


$      14,797









Fully diluted weighted average number of common shares outstanding

62,436


60,390


61,941


59,894

Adjusted EPS

$ 0.12


$ 0.18


$ 0.12


$ 0.25

 

Contact:
Sara Buda     
Lionbridge Technologies    
(781) 434-6190
sara.buda@lionbridge.com

SOURCE Lionbridge Technologies, Inc.



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