Lionbridge Announces FY 2012 Results With Revenue Of $457.1 Million, GAAP EPS Of $0.19 And Non-GAAP EPS Of $0.46

Wed Feb 13, 2013 8:00am EST

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Extends Revenue and Profit Momentum with Growing Demand across Offerings;
Reiterates Outlook for Ongoing Revenue and Profit Growth in 2013
WALTHAM, Mass.,  Feb. 13, 2013  /PRNewswire/ -- Lionbridge Technologies, Inc.
(Nasdaq: LIOX) today announced financial results for the fourth quarter and year
ended  December 31, 2012.   

Financial highlights for FY 2012 include:

* Revenue of  $457.1 million, an increase of  $29.3 million  or 7% from the year
ended  December 31, 2011.     
* GAAP net income of  $11.3 million  or  $0.19  per share based on 61.1 million
fully diluted shares outstanding.  This marks an increase of  $9.6 million  or 
$0.16  per diluted share compared to FY 2011.  FY 2012 GAAP net income includes
restructuring and other charges of  $8.2 million  or  $0.13  per share.  
* Non-GAAP adjusted earnings of  $27.9 million  or  $0.46  per share, an
increase of  $15.0 million  or  $0.24  per diluted share compared to FY 2011.
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.   
* Cash flow from operations of  $18.9 million, an increase of  $9.1 million 
year-on-year.

Business highlights for FY 2012 include:

* Secured more than 20 new engagements with world-leading brands across industry
sectors including entertainment, manufacturing, banking, pharmaceuticals,
retail, aerospace, digital marketing, government, automotive and travel.  
* Announced and closed two acquisitions to support the Company's vertical market
expansion and its enterprise crowdsourcing strategy.  In  June 2012, Lionbridge
acquired Productive Resources, LLC (PRI), an  Indiana, US-based provider of
technical engineering and documentation solutions to clients in the
manufacturing and industrial sectors.  In  November 2012, Lionbridge announced
the acquisition of Virtual Solutions Inc., a provider of  crowdsourcing
solutions  to state and local governments. The Company funded these two
acquisitions with existing cash resources and  $10 million  of debt from its
revolving line of credit.  In 2012, the Company paid down  $8 million  of debt
related to these acquisitions.    
* Successfully scaled its new  Global Marketing Operations (GMO)  service
offering aimed at helping global marketing executives manage and optimize
digital marketing campaigns in international markets. This new service offering
grew more than  $10 million  as compared to FY 2011.  
* Announced that its Board of Directors has authorized a share repurchase
program allowing the Company to repurchase up to  $18 million  of the Company's
common stock.

"2012 marked a turnaround year for Lionbridge as we re-energized our sales teams
with new offerings and new vertical markets.  With this strong new business
momentum and ongoing growth from our existing recurring revenue relationships,
we delivered on our commitment to increase revenue and to accelerate our
profitability across end markets," said  Rory Cowan, CEO, Lionbridge.  "Most
importantly, we extended our track record of strong earnings growth
year-on-year.  As a result, we are well positioned for ongoing revenue and
profit expansion in 2013."  

Highlights for the fourth quarter ended  December 31, 2012  include:

* Revenue of  $113.8 million, an increase of  $6.4 million  or 6% from the
fourth quarter of 2011.  
* GAAP net income of  $3.0 million  or  $0.05  per share based on 62.6 million
fully diluted shares outstanding.  GAAP net income for the fourth quarter of
2012 includes restructuring and related expenses of  $962,000  or  $0.02  per
share. Excluding restructuring and related expenses, fourth quarter net income
was  $4.0 million  or  $0.06  per share.  
* Non-GAAP adjusted earnings of  $6.3 million  or  $0.10  per share, an increase
of  $1.4 million  or  $0.02  year-on-year compared the fourth quarter of FY
2011.   The Company defines non-GAAP adjusted earnings as net income excluding
merger, restructuring and 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.

The Company provided an outlook for the first quarter of 2013 with revenue of 
$115-118 million  with ongoing profit expansion year-on-year.  It also
reiterated its expectations for FY 2013 revenue growth of 6-10% and significant
growth in income from operations.

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 by accessing this  link.   

Non-GAAP Financial Measures
In this release, the Company's adjusted earnings, adjusted earnings per share,
net income excluding restructuring and other charges and net income per share
excluding restructuring and other charges 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," "Adjusted Earnings per Share (EPS)," "Net
income excluding restructuring and other charges" and "Net income per share
excluding restructuring and other charges" 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, adjusted earnings per
share, net income excluding restructuring and other charges and net income per
share excluding restructuring and other charges 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.

Forward-Looking Statements
This press release contains forward-looking statements that involve risks and
uncertainties, including expected financial performance, expected revenue and
operating profit (income from operations) growth and outlook, and the momentum,
pace and strengthening of such growth, of Lionbridge in Q1 2013 and FY 2013, and
increase in demand for its new programs. 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; 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 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, 2011  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,             
                                                                 2012         2011           2012        2011        
                                                                                                                     
 Revenue                                                         $ 113,769    $ 107,385      $ 457,124   $ 427,856   
 Operating expenses:                                                                                                 
 Cost of revenue (excluding depreciation and amortization shown  79,479       72,015         314,401     296,221     
 
separately below)                                                                                                  
 Sales and marketing                                             9,039        8,608          34,091      33,563      
 General and administrative                                      18,088       18,327         75,758      75,047      
 Research and development                                        1,293        1,468          5,399       5,765       
 Depreciation and amortization                                   1,695        1,615          6,616       5,956       
 Amortization of acquisition-related intangible assets           754          583            2,454       2,332       
 Restructuring and other charges                                 962          67             8,206       3,369       
 Total operating expenses                                        111,310      102,683        446,925     422,253     
                                                                                                                     
 Income from operations                                          2,459        4,702          10,199      5,603       
                                                                                                                     
 Interest expense:                                                                                                   
 Interest on outstanding debt                                    189          196            732         722         
 Amortization  of deferred financing costs                       25           25             99          100         
 Interest income                                                 22           22             80          71          
 Other expense, net                                              249          2,545          1,054       3,195       
 Income before income taxes                                      2,018        1,958          8,394       1,657       
 Provision for (benefit from) income taxes                       (1,027)      (1,079)        (2,931)     (71)        
 Net income                                                      $    3,045   $    3,037     $   11,325  $   1,728   
 Net income per share of common stock:                                                                               
 Basic                                                           $      0.05  $      0.05    $     0.19  $     0.03  
 Diluted                                                         $      0.05  $      0.05    $     0.19  $     0.03  
                                                                                                                     
 Weighted average number of common shares outstanding:                                                               
 Basic                                                           59,574       58,047         59,102      57,859      
 Diluted                                                         62,626       59,437         61,119      59,478      


 LIONBRIDGE TECHNOLOGIES, INC.                                                                         
 
                                                                                                     
 
CONDENSED CONSOLIDATED BALANCE SHEETS                                                                
 
(UNAUDITED)                                                                                          
 
(Amounts in thousands)                                                                               
                                                                                                    
                                                                      December 31,    December 31,  
                                                                      2012            2011          
                                                                                                    
 ASSETS                                                                                             
 Current assets:                                                                                    
 Cash and cash equivalents                                            $    25,797     $    25,219   
 Accounts receivable, net of allowances of $250 at December 31, 2012  64,152          58,413        
 
and $500 at December 31, 2011                                                                     
 Unbilled receivables                                                 22,052          20,665        
 Other current assets                                                 11,348          9,120         
 Total current assets                                                 123,349         113,417       
 Property and equipment, net                                          20,142          21,725        
 Goodwill                                                             18,988          9,675         
 Other intangible assets, net                                         16,181          7,256         
 Other assets                                                         5,451           5,674         
 Total assets                                                         $  184,111      $  157,747    
                                                                                                    
 LIABILITIES AND STOCKHOLDERS' EQUITY                                                               
 Current liabilities:                                                                               
 Accounts payable                                                     $    19,897     $    19,347   
 Accrued compensation and benefits                                    14,229          15,696        
 Other accrued expenses and current liabilities                       28,145          21,802        
 Deferred revenue                                                     9,277           11,057        
 Total current liabilities                                            71,548          67,902        
                                                                                                    
 Long-term debt                                                       26,700          24,700        
 Deferred income taxes, long-term                                     1,148           641           
 Other long-term liabilities                                          15,010          13,212        
                                                                                                    
 Total stockholders' equity                                           69,705          51,292        
                                                                                                    
                                                                                                    
 Total liabilities and stockholders' equity                           $  184,111      $  157,747    


 Reconciliation of GAAP Net Income to Non-GAAP Adjusted EPS (Unaudited)                                                           
                                                                                                                               
                                                                     Three Months Ended           Twelve Months Ended          
                                                                     December 31,                 December 31,                 
                                                                     2012         2011           2012          2011          
                                                                                                                             
 Net income                                                          $     3,045  $     3,037    $ 11,325      $ 1,728       
                                                                                                                             
 Amortization of acquisition-related intangible assets               754          583            2,454         2,332         
 Stock-based compensation                                            1,577        1,300          5,916         5,515         
 Restructuring and acquisition related charges                       962          67             3,969         3,369         
 Asset impairment                                                    0            0              4,237         0             
 Adjusted earnings                                                   $     6,338  $     4,987    $     27,901  $     12,944  
                                                                                                                             
 Fully diluted weighted average number of common shares outstanding  62,626       59,437         61,119        59,478        
 Adjusted EPS                                                        $ 0.10       $ 0.08         $ 0.46        $ 0.22        


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


SOURCE  Lionbridge Technologies, Inc.

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