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8-K - LIVE FILING - LIONBRIDGE TECHNOLOGIES INC /DE/ | htm_42539.htm |
LIONBRIDGE REPORTS Q2 REVENUE OF $113.2 MILLION AND GAAP EPS OF $0.03
14% Sequential Quarter Revenue Growth and Strong Earnings Conversion Reflect Growing Customer
Demand and Momentum; Reiterates Guidance for Second Half 2011 Strength
WALTHAM, Mass. August 02, 2011 - Lionbridge Technologies, Inc. (Nasdaq: LIOX), today announced revenue and earnings for the second quarter ended June 30, 2011.
Financial highlights for the second quarter include:
| Revenue of $113.2 million, an increase of $13.6 million or 14% compared to the first quarter of 2011 and an increase of $8.4 million or 8% year-on-year compared to the second quarter of 2010. |
| GAAP net income of $1.7 million or $0.03 per share based on 59.5 million weighted average fully diluted common shares outstanding. GAAP net income increased $7.2 million or $0.12 per share sequentially compared to Q1 2011. GAAP net income decreased $2.8 million or ($0.05) per share year-on-year compared to Q2 of 2010 due to a weakening of the US dollar compared to other currencies and changing work mix. |
| Non-GAAP adjusted earnings of $4.3 million or $0.07 per share, a sequential quarter increase of $6.0 million or $0.10 per share from the first quarter of 2011 and a decrease of $3.2 million or ($0.05) year-on-year compared to Q2 of 2010. The Company defines non-GAAP adjusted earnings as 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 these measures to the comparable GAAP measure. |
| An ending cash balance of $20.1 million. |
During the quarter, the Company secured several significant new customer engagements, including a multi-year agreement with a leading US automobile manufacturer, and new programs with a multinational life sciences and clinical diagnostics company.
Our positive second quarter results reflect the progress of our business on all levels. Our new business is accelerating. Our large accounts are returning to growth ahead of plan. Our technology is scaling to new levels of quality and speed, said Rory Cowan, CEO of Lionbridge. With a solid revenue momentum and growing profit conversion, we expect strong performance in the second half of 2011 and continued expansion in 2012.
Lionbridge provided outlook for Q3 of 2011 with expected revenue of $108-$111 million, reflecting traditional Q3 seasonality. The Company also expects strong sequential quarter and year-on-year revenue growth in Q4. For FY 2011 the Company expects revenue to be above the mid range of its 5-10% year-on-year growth estimate.
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 the Internet .
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 adjusted earnings and adjusted earnings per share are net income and net income per share and
has provided a reconciliation of adjusted earnings and adjusted earnings per share 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 clients 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 and expected revenue and earnings growth of Lionbridge in
third quarter of 2011, the second half of 2011 and any continuation thereof in 2012, anticipated
customer demand, including any acceleration of existing customers spending, and expected
improvements to profitability and financial performance. 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 the timing or scope of services
procured by Lionbridge customers; given that a substantial portion of Lionbridges 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
Lionbridges business; 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
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; Lionbridges ability to provide and maintain high quality services
at a competitive price and related customer satisfaction with such service delivery; reduced demand
for the Companys services that adversely impacts Lionbridges future revenues, cash flows, results
of operations and financial condition; the ability of Lionbridge to realize the expected benefits
of its technology initiatives and the timing of the realization of such benefits; global economic
conditions that may affect the demand for Lionbridges services by customers and prospective
customers; market acceptance of and customer demand for the Companys SaaS-based technology
offerings; errors, interruptions or delays in SaaS-based technology or Web hosting; breaches of
security measures; the success of Lionbridges partnership with IBM; the cost, complexity, timing
and speed of development and commercialization activities associated with GeoFluent real-time
machine translation technology initiatives and customer and user acceptance of such technologies;
risks associated with the financial aspects of the subscription model utilized in connection with
the Translation Workspace and GeoFluent; risks associated with conducting business outside of the
United States, including compliance with changing and potentially conflicting laws and regulations,
restrictions on downsizing operations in Europe and other jurisdictions (i.e. regulatory or works
council restrictions) and expenses and delays associated with any such activities; longer
collection cycles and deeper impact of any global economic downturn in particular jurisdictions;
risks associated with competition; costs associated with restructuring, the timing of actions and
any anticipated benefits and the ability to realize such benefits; the duration and outcome of
negotiations with works councils with respect to the timing of restructuring and the details of
proposed actions; Lionbridges ability to forecast revenue, profitability, technology adoption,
customer demand and operating results; 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; changes in tax rates applicable to the
Company and changes to the interpretations of applicable tax rates; the Companys dependence on
clients product releases, production schedules and procurement strategies to generate revenues;
the impact of competing language technology on the Companys existing customer relationships and
ability to secure new customers; the failure of Lionbridge to keep pace with technological changes
or changing customer needs; Lionbridges ability to further develop and deploy its translation
technologies, including Translation Workspace and GeoFluent; 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 Companys 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 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, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue ........................................ |
$ | 113,245 | $ | 104,872 | $ | 212,897 | $ | 205,652 | ||||||||
Operating expenses: |
||||||||||||||||
Cost of revenue (excluding depreciation and amortization
shown separately below)............................................................ |
78,808 | 69,643 | 150,544 | 138,588 | ||||||||||||
Sales and marketing............................................................ |
8,701 | 7,465 | 16,979 | 14,433 | ||||||||||||
General and administrative................................................... |
18,657 | 18,698 | 37,282 | 37,490 | ||||||||||||
Research and development................................................... |
1,518 | 952 | 2,914 | 1,710 | ||||||||||||
Depreciation and amortization. ............................................. |
1,435 | 1,175 | 2,726 | 2,305 | ||||||||||||
Amortization of acquisition-related intangible assets..................... |
583 | 1,223 | 1,166 | 2,446 | ||||||||||||
Restructuring and other charges............................................. |
643 | 666 | 2,746 | 1,855 | ||||||||||||
Total operating expenses............................................. |
110,345 | 99,822 | 214,357 | 198,827 | ||||||||||||
Income (loss) from operations................................................... |
2,900 | 5,050 | (1,460 | ) | 6,825 | |||||||||||
Interest expense: |
||||||||||||||||
Interest on outstanding debt ................................................ |
185 | 282 | 334 | 579 | ||||||||||||
Amortization of deferred financing costs ................................. |
25 | 44 | 50 | 88 | ||||||||||||
Interest income ...................................................................... |
15 | 8 | 32 | 33 | ||||||||||||
Other (income) expense, net ...................................................... |
423 | (731 | ) | 881 | (457 | ) | ||||||||||
Income (loss) before income taxes............................................. |
2,282 | 5,463 | (2,693 | ) | 6,648 | |||||||||||
Provision for income taxes...................................................... |
560 | 905 | 1,031 | 1,613 | ||||||||||||
Net income (loss) ................................................................ |
$ | 1,722 | $ | 4,558 | $ | (3,724 | ) | $ | 5,035 | |||||||
Net income (loss) loss per share of common stock: |
||||||||||||||||
Basic |
$ | 0.03 | $ | 0.08 | $ | (0.06 | ) | $ | 0.09 | |||||||
Diluted |
$ | 0.03 | $ | 0.08 | $ | (0.06 | ) | $ | 0.09 | |||||||
Weighted average number of common shares outstanding: |
||||||||||||||||
Basic and diluted |
57,815 | 56,619 | 57,671 | 56,495 | ||||||||||||
Diluted |
59,548 | 59,854 | 57,671 | 59,191 |
LIONBRIDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands)
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents................................................... |
$ | 20,084 | $ | 28,206 | ||||
Accounts receivable, net of allowances of $500 at June 30,
2011 and December 31, 2010 .......................................... |
67,739 | 57,763 | ||||||
Unbilled receivables............................................................ |
17,346 | 17,471 | ||||||
Other current assets............................................................ |
12,840 | 9,585 | ||||||
Total current assets............................................................ |
118,009 | 113,025 | ||||||
Property and equipment, net.................................................... |
20,298 | 16,394 | ||||||
Goodwill ........................................................................ |
9,675 | 9,675 | ||||||
Other intangible assets, net...................................................... |
8,422 | 9,588 | ||||||
Other assets........................................................................ |
8,126 | 8,294 | ||||||
Total assets............................................................ |
$ | 164,530 | $ | 156,976 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable............................................................ |
$ | 22,553 | $ | 18,185 | ||||
Accrued compensation and benefits....................................... |
18,598 | 17,080 | ||||||
Other accrued expenses and current liabilities............................ |
26,970 | 25,892 | ||||||
Deferred revenue............................................................ |
11,245 | 11,073 | ||||||
Total current liabilities...................................................... |
79,366 | 72,230 | ||||||
Long-term debt..................................................................... |
24,700 | 24,700 | ||||||
Deferred income taxes, long-term................................................ |
730 | 730 | ||||||
Other long-term liabilities............................................................ |
15,265 | 14,142 | ||||||
Total stockholders equity ............................................................ |
44,469 | 45,174 | ||||||
Total liabilities and stockholders equity............................... |
$ | 164,530 | $ | 156,976 | ||||
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EPS (Unaudited)
Comparison to Three and Six Months Ended June 30, 2010
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income (loss) ........................................ |
$ | 1,722 | $ | 4,558 | $ | (3,724 | ) | $ | 5,035 | |||||||
Amortization of acquisition-related intangible assets..................... |
583 | 1,223 | 1,166 | 2,446 | ||||||||||||
Stock-based compensation................................................... |
1,388 | 1,099 | 2,479 | 1,994 | ||||||||||||
Restructuring and other charges........................................... |
643 | 666 | 2,746 | 1,855 | ||||||||||||
Adjusted earnings...................................................... |
$ | 4,336 | $ | 7,546 | $ | 2,667 | $ | 11,330 | ||||||||
Fully diluted weighted average number of common shares outstanding |
59,548 | 59,854 | 59,539 | 59,191 | ||||||||||||
Adjusted EPS |
$ | 0.07 | $ | 0.13 | $ | 0.04 | $ | 0.19 |
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EPS (Unaudited)
Comparison to Three Months Ended March 31, 2011
Q2 2011 | Q1 2011 | |||||||
Net income (loss) ............................................................ |
$ | 1,722 | $ | (5,446 | ) | |||
Amortization of acquisition-related intangible assets............ |
583 | 583 | ||||||
Stock-based compensation................................................ |
1,388 | 1,091 | ||||||
Restructuring and other charges............................................. |
643 | 2,103 | ||||||
Adjusted earnings...................................................... |
$ | 4,336 | $ | (1,669 | ) | |||
Fully diluted weighted average number of common shares outstanding |
59,548 | 57,523 | ||||||
Adjusted EPS |
$ | 0.07 | $ | (0.03 | ) |