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Lionbridge Reports First Quarter Results With Revenue of $113.7 Million, GAAP EPS of ($0.05) and Non-GAAP EPS of $0.00



Lionbridge Reports First Quarter Results With Revenue of $113.7 Million, GAAP
                   EPS of ($0.05) and Non-GAAP EPS of $0.00

Increased Revenue and Profit Levels in March and Growing Pipeline Indicate
Strong Sequential Growth in Q2

PR Newswire

WALTHAM, Mass., May 8, 2013

WALTHAM, Mass., May 8, 2013 /PRNewswire/ -- Lionbridge Technologies, Inc.
(Nasdaq: LIOX) today announced financial results for the quarter ended March
31, 2013.  Financial and business highlights for the quarter include:

  o Revenue of $113.7 million, a year-on-year increase of $1.6 million
    compared to the first quarter of 2012.
  o GAAP net loss of $3.0 million, or ($0.05) per share based on 60.2 million
    weighted average shares outstanding.  This marks a year-on-year decrease
    of $4.7 million, or $0.08 per share, compared to the first quarter of
    2012, primarily due to lower spend from select enterprise technology
    clients in the Company's Global Language and Content (GLC) segment during
    the quarter.  
  o Non-GAAP adjusted earnings of $232,000, or $0.00 per share.  The Company
    defines non-GAAP adjusted earnings as net income (loss) 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. 
  o An ending cash balance of $20.6 million. 
  o Strong, 23% year-on-year growth in its Global Development and Testing
    (GDT) segment, led by a large-scale, multi-year, global testing program. 
  o New engagements with leading organizations in the heavy equipment, luxury
    retail and online search industries.
  o A growing pipeline of business related for the Company's new marketing and
    crowdsourcing offerings.

Lionbridge also announced that, as part of a Company-wide operational review,
it is in the process of hiring a senior operations leader to lead the
execution of the Company's strategy for sustainable revenue and profit growth.
In addition, the Company is initiating a 2013 restructuring plan to align
costs and increase efficiencies as it expands its new global language workflow
platform throughout its translation business.  The restructuring program is
expected to result in approximately $5-7 million of restructuring charges in
2013 with an expected six to twelve month benefit.   

"Lower than anticipated spend from several enterprise technology accounts in
our traditional translation business drove the majority of our profit variance
in the quarter.  Despite our disappointing start to the year, our positive
momentum in March and our current activity levels indicate strong sequential
revenue and profit growth in Q2 as we scale existing client programs and
continue to grow our new offerings across end markets," said Rory Cowan, CEO,
Lionbridge.  "At the same time, we are also taking steps to optimize our
delivery model and increase our profit levels by extending our technology
automation, reducing our costs and strengthening our global operational
leadership.  These changes, combined with our growing pipeline of business,
indicate a strengthening second half 2013 and further profit growth in 2014."

Lionbridge also stated that it was engaged in strategic initiatives during the
first quarter that precluded it from executing any purchases under its
authorized stock buyback program. The Company plans to repurchase stock under
the buyback program, provided it is no longer subject to such restrictions and
subject to market conditions.

The Company provided an outlook for the second quarter of 2013 with revenue of
$120-123 million and expectations for quarter gross margin expansion as
compared to the first quarter of 2013.  Based on the lower-than-expected start
to the year, the Company provided expectations for FY 2013 revenue growth of
4-6% year-on-year.  

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 passcode for the call is Lionbridge.  The conference
call will also be available live via the Internet here. 

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
gross margin growth and outlook, and the momentum, pace and strengthening of
such growth, of Lionbridge in Q2 2013 and FY 2013, the benefits of
restructuring activities and the timing thereof, and increase in demand for
its new offerings. 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 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 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
                                                     March 31,
                                                     2013          2012
Revenue                                              $ 113,670     $ 112,096
Operating expenses:
Cost of revenue (excluding depreciation and                         
amortization shown separately below)
                                                     81,882        78,173
Sales and marketing                                  9,149         8,509
General and administrative                           19,481        19,176
Research and development                             1,656         1,362
Depreciation and amortization                        1,800         1,645
Amortization of acquisition-related intangible       828           480
assets
Restructuring and other charges                      724           284
Total operating expenses                             115,520       109,629
(Loss) income from operations                        (1,850)       2,467
Interest expense:
Interest on outstanding debt                         237           190
Amortization of deferred financing costs             25            25
Interest income                                      26            20
Other expense (income), net                          292           (31)
 
                                                     (2,378)       2,303
(Loss) income before income taxes
Provision for income taxes                           592           582
                                                                    

Net (loss) income                                    $   (2,970)   $    1,721
 

Net (loss) income per share of common stock:
Basic                                                $     (0.05)  $      0.03
Diluted                                              $     (0.05)  $      0.03
Weighted average number of common shares
outstanding:
Basic                                                60,195        58,557
Diluted                                              60,195        59,662

 

LIONBRIDGE TECHNOLOGIES, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(Amounts in thousands)
                                                     March 31,    December 31,
                                                     2013         2012
ASSETS
Current assets:
Cash and cash equivalents                            $    20,638  $    25,797
Accounts receivable, net of allowances of $250 at                  
March 31, 2013 and December 31, 2012
                                                     63,727       64,152
Unbilled receivables                                 24,559       22,127
Other current assets                                 13,163       11,729
                                                                   

Total current assets                                 122,087      123,805
                                                                   

Property and equipment, net                          19,928       19,430
Asset held for sale                                  -            727
Goodwill                                             18,652       18,652
Other intangible assets, net                         15,353       16,181
Other assets                                         5,144        5,262
                                                                   

Total assets                                         $  181,164   $  184,057
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                     $   20,215   $   19,897
Accrued compensation and benefits                    16,622       14,885
Other accrued expenses and current liabilities       27,082       27,564
Deferred revenue                                     8,082        9,277
                                                                   

Total current liabilities                            72,001       71,623
Long-term debt                                       26,700       26,700
Deferred income taxes, long-term                     1,143        1,143
Other long-term liabilities                          14,759       15,010
Total stockholders' equity                           66,561       69,581
Total liabilities and stockholders' equity           $  181,164   $  184,057

 

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

(Amounts in thousands, except per share data)
                                                   Three Months Ended
                                                   March 31,
                                                   2013            2012
Net (loss) income                                  $     (2,970)   $     1,721
Amortization of acquisition-related intangible     828             480
assets
Stock-based compensation                           1,650           1,385
Restructuring and other charges                    724             284
Adjusted earnings                                  232             3,870
Fully diluted weighted average number of common    62,398          59,662
shares outstanding
Adjusted EPS                                       $  0.00         $  0.06

 

Contact:
Sara Buda
Lionbridge
+1-781-434-6190
sara.buda@lionbridge.com

SOURCE Lionbridge Technologies, Inc.

Website: http://www.lionbridge.com
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