Lionbridge Announces Q2 2008 Results with Record Revenue of $125.5 Million and GAAP...

Lionbridge Announces Q2 2008 Results with Record Revenue of $125.5 Million and
GAAP EPS of $0.02
$0.10 Per Share Sequential Quarter Improvement and $10.8 Million of Cash Flow
from Operations Indicate Strong Momentum for Second Half

WALTHAM, Mass., Aug. 5 /PRNewswire-FirstCall/ -- Lionbridge Technologies,
Inc. (Nasdaq: LIOX) today announced financial results for the second quarter
ended June 30, 2008.
Financial highlights for the second quarter include:
-- Record revenue of $125.5 million, an increase of 9.5% compared to the
second quarter of 2007 and a sequential increase of 7.2% compared to the first
quarter of 2008.
-- GAAP net income of $908,000 or $0.02 per share based on 56.5 million
weighted average fully diluted shares outstanding. This compares to GAAP net
income of $187,000 or $0.00 per share in the second quarter of 2007.
Sequential quarter GAAP net income increased by $5.3 million or $0.10 per
share compared to the $4.4 million loss or ($0.08) per share in the first
quarter of 2008.
-- Non-GAAP cash earnings of $4.8 million or $0.08 per share, an increase
of $5.3 million or $0.09 per share compared to the first quarter of 2008. The
Company defines non-GAAP cash earnings as net income excluding merger,
restructuring and related costs, stock-based compensation, amortization of
acquisition-related intangible assets and unusual, one-time charges. 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 $10.8 million. Lionbridge repaid $3.0
million of its long term debt during the quarter. During the quarter, the
Company also acquired 800,000 shares of its common stock for $2.0 million.
-- An ending cash balance of $28.8 million, an increase of $2.8 million
from the prior quarter.
"Organic revenue growth is beginning to return and many of our recent cost
management initiatives are taking effect. The sequential quarter improvements
in revenue, gross margin and earnings suggest that we are offsetting many of
the currency-exposed components of our income statement and repositioning our
production programs to our advantage," said Rory Cowan, CEO, Lionbridge.
"These achievements, combined with strong cash flows and a solid pipeline of
business, give us confidence in our ability to deliver solid revenue growth
and to further accelerate earnings and cash flow in the second half of 2008."
The Company provided its revenue outlook for the third quarter of 2008
with estimated revenue of $118.0 to $122.0 million. For the full year 2008,
the Company reiterated that it expects to achieve the high end of its
previously provided guidance of 6-10% year-on-year revenue growth.
The Company will host a conference call today at 9:00 am ET regarding the
content of this release as well as the Company's overall outlook going forward
and other matters. The conference call will be carried live on the Internet.
Instructions for listening to the call over the Internet are available on the
Investor's page of the Lionbridge web site at
http://www.lionbridge.com/webcast/aug5/ . A replay will be available at this
location for one week.
About Lionbridge
Lionbridge Technologies, Inc. (Nasdaq: LIOX) is a provider of
globalization and offshoring services. 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
globalization, 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, earnings and cash flow growth of Lionbridge in the second half of
2008; anticipated customer demand, and the expected impact of currency
management initiatives. These statements are not historical facts, but
instead represent only the Company's expectations, estimates and projections
regarding future events. These statements are not guarantees of future
performance and involve certain risks and uncertainties that are difficult to
predict. Lionbridge's actual experiences, actions, financial and operating
results may differ materially from those discussed in the forward-looking
statements. Subsequent information or events may lead to material differences
between the financial results described in this Press Release and the
financial results described in the Company's Quarterly Report on Form 10-Q for
the second fiscal quarter of 2008. Those differences may be adverse. Factors
that might cause such a difference include the loss of a major client or
customer; 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 realize the expected benefits of its systems
deployment initiatives and the timing of the realization of such benefits; 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; degradation in the Company's market value during the
year such that it falls below the Company's book value and may result in a
material impairment to goodwill; Lionbridge's ability to provide and maintain
high quality services at a competitive price and related customer satisfaction
with such service delivery; political, economic and business fluctuations as
well as risks of additional downturns in conditions generally, and in the
information technology and software industries specifically, and risks
associated with competition; Lionbridge's ability to forecast revenue,
profitability, technology adoption, customer demand and operating results;
Lionbridge's ability to attract and retain highly skilled resources to meet
customer demands; 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; Lionbridge's ability to resolve taxation questions regarding
acquired businesses; changes in tax rates applicable to the Company and
changes to the interpretations of applicable tax rates; the Company's
dependence on clients' product releases, production schedules and procurement
strategies to generate revenues; the timing and speed of customer and user
acceptance of Lionbridge's language technology; the impact of competing
language technology on the Company's existing customer relationships and
ability to secure new customers; customer delays or postponements of services;
the ability of the Company's Freeway or Logoport offerings to keep pace with
technological changes or changing customer needs; Lionbridge's ability to
further develop and deploy Logoport; the ability of Lionbridge to respond to
fluctuations in the complexity, timing and mix of services required by
customers; costs associated with restructuring of certain operations in Europe
and other locations, the timing of any anticipated benefits and the ability to
realize such benefits; changes in customer procurement strategies; risks
associated with management of growth 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
most recent Annual Report on Form 10-K and subsequent filings with the SEC
(copies of which may be accessed through the SEC's website at
http://www.sec.gov).
Contact:
Sara Buda
Lionbridge Technologies
(781) 434-6190
sara.buda@lionbridge.com

LIONBRIDGE TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands, except per share data)

Three Months Six Months
Ended Ended
June 30, June 30,
2008 2007 2008 2007

Revenue $125,475 $114,591 $242,523 $223,207
Operating expenses:
Cost of revenue (excluding
depreciation and
amortization shown
separately below) 85,921 74,806 166,796 147,024
Sales and marketing 8,903 8,571 17,720 16,522
General and administrative 22,807 21,319 45,982 41,901
Research and development 1,337 785 2,449 1,502
Depreciation and
amortization 1,272 1,324 2,411 2,618
Amortization of
acquisition-related
intangible assets 2,113 2,113 4,226 4,227
Merger, restructuring and
other charges 221 972 427 1,250
Total operating expenses 122,574 109,890 240,011 215,044

Income from operations 2,901 4,701 2,512 8,163

Interest expense:
Interest on outstanding debt 971 1,388 2,093 2,806
Amortization of deferred
financing costs and discount
on debt 45 49 89 95
Interest income 102 119 249 325
Other expense, net 478 598 2,889 1,089

Income (loss) before
income taxes 1,509 2,785 (2,310) 4,498
Provision for income taxes 601 2,598 1,217 4,079

Net income (loss) $908 $187 $(3,527) $419

Net income (loss) per share
of common stock:
Basic $0.02 $0.00 $(0.06) $0.01
Diluted $0.02 $0.00 $(0.06) $0.01

Weighted average number of
common shares outstanding:
Basic 55,915 59,540 56,028 59,432
Diluted 56,486 60,929 56,028 60,822

LIONBRIDGE TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands)

June 30, December 31,
2008 2007

ASSETS
Current assets:
Cash and cash equivalents $28,804 $32,248
Accounts receivable, net of allowances
of $685 and $689 at June 30, 2008 and
December 31, 2007, respectively 82,310 83,611
Work in process 26,440 23,335
Other current assets 13,831 12,329

Total current assets 151,385 151,523

Property and equipment, net 16,744 13,449
Goodwill 130,770 131,213
Other intangible assets, net 24,215 28,441
Other assets 7,912 8,437

Total assets $331,026 $333,063

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of
long-term debt $219 $304
Accounts payable 21,385 20,217
Accrued compensation and benefits 22,915 21,164
Other accrued expenses and current liabilities 27,898 29,364
Deferred revenue 11,235 16,014

Total current liabilities 83,652 87,063

Long-term debt, less current portion 68,786 71,751
Deferred income taxes, long-term 7,741 7,504
Other long-term liabilities 11,325 10,591

Total stockholders' equity 159,522 156,154

Total liabilities and stockholders' equity $331,026 $333,063

Reconciliation of GAAP Net Income to Cash EPS Comparison to Q1 2008
(UNAUDITED)

Three Months Ended
June 30, March 31,
2008 2008

Net income (loss) $908 ($4,435)

Amortization of acquisition-related
intangible assets 2,113 2,113
Merger, restructuring and other charges 221 206
Stock-based compensation 1,526 1,603
Cash earnings $4,768 ($513)

Fully diluted weighted average number of common
shares outstanding 56,486 56,147
Adjusted EPS $0.08 ($0.01)

SOURCE Lionbridge Technologies, Inc.

Sara Buda of Lionbridge Technologies, +1-781-434-6190,
sara.buda@lionbridge.com