Exhibit 99.1
Contact:
Sara Buda
Lionbridge Technologies
(781) 434-6190
sara_buda@lionbridge.com
LIONBRIDGE ANNOUNCES THIRD QUARTER 2005 RESULTS;
RECORD REVENUE OF $58.4 MILLION; GAAP EPS OF ($0.05) AND
NON-GAAP ADJUSTED EBITDA OF $0.05 PER SHARE
Reflects One Month of Combined Operations from Acquisition of Bowne Global
Solutions; Cost Synergies, Revenue and Earnings Growth Tracking On Plan
WALTHAM, Mass. – November 4, 2005 — Lionbridge Technologies, Inc. (Nasdaq: LIOX) today announced financial results for the quarter ended September 30, 2005.
Financial and business highlights for the quarter include:
| | • | | Revenue for the quarter of $58.4 million, a 55% increase over the third quarter of 2004, reflecting one month of combined operations of Bowne Global Solutions (“BGS”), which Lionbridge acquired from Bowne & Co. on September 1, 2005. For the nine months ended September 30, 2005, Lionbridge revenue was $138.6 million, reflecting 17% year-over-year growth versus the same period in 2004. Revenue for the third quarter and first nine months ended September 30, 2005 includes $18.5 million of revenue from BGS. |
| | • | | Revenue from the Company’s Globalization business during the quarter increased approximately 68% in total and 10% organically (excluding BGS) compared to the third quarter of 2004. Revenue from the Company’s testing business during the third quarter decreased 6% year-over-year. However, revenue from the Company’s Testing business increased slightly from the prior quarter, indicating early stages of recovery. |
| | • | | GAAP net loss for the quarter of ($2.4) million or ($0.05) per share based on 50.4 million weighted average fully diluted common shares outstanding. This includes expenses of $1.9 million of restructuring and integration costs related to the Company’s acquisition of BGS. Lionbridge generated GAAP net income of $1.4 million or $0.03 per share based on 49.5 million weighted average fully diluted common shares outstanding during the same period last year. |
| | • | | Excluding restructuring and integration expenses of $1.9 million, Lionbridge non-GAAP earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter was $2.6 million or $0.05 per share based on 50.4 million weighted average fully diluted common shares outstanding. (See the section of this release entitled “Non-GAAP Financial Measures” and the attached table for discussion of this adjusted EBITDA measure, and reconciliations of this measure to the comparable GAAP measure.) |
| | • | | The Company generated cash flow from operations of $2.3 million during the quarter, resulting in an ending cash balance of $20.6 million. |
“The theme for our acquisition integration is thoughtful velocity. Client and employee response remains positive and we are well on our way to achieving our cost synergy targets as we consolidate redundant back office and administrative activities,” said Rory Cowan, CEO, Lionbridge. “As we exited the quarter we saw positive results of our newly aligned sales force and global scale. As we execute our integrated technology services strategy, we are enhancing our R&D focus and deploying our language technology and global workflow systems. All indicators point to revenue expansion and earnings growth in 2006 and beyond.”
Lionbridge 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. 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 athttp://www.lionbridge.com/webcast/nov1/.
Non-GAAP Financial Measures
In this release, the Company’s adjusted EBITDA and adjusted EPS disclosures 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 or cash provided by operating activities. Adjusted EBITDA represents GAAP earnings excluding interest, taxes, depreciation and amortization expenses and further by excluding restructuring and integration costs related to the Company’s acquisition of BGS which the Company finalized on September 1, 2005. Adjusted EBITDA is presented because management believes it provides additional information with respect to both the performance of our fundamental business activities as well as the Company’s ability to meet future debt service and working capital requirements. Management believes the adjusted EBITDA information is useful to investors for these reasons. Adjusted EBITDA is a non-GAAP financial measure and should not be viewed as an alternative to GAAP measures of performance. Management believes the most directly comparable GAAP financial measure is net income and has provided a reconciliation of adjusted EBITDA to net income in this press release.
About Lionbridge
Lionbridge Technologies, Inc. (NASDAQ: LIOX) is a provider of globalization and offshoring services. Lionbridge combines global onshore, near-shore and offshore 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 more than 50 solution centers in 25 countries and provides services under the Lionbridge and VeriTest brands. To learn more, visithttp://www.lionbridge.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including expected financial performance of Lionbridge and its integration of Bowne Global Solutions, Lionbridge’s ability to achieve the expected synergies as a result of the acquisition as well as the strengthening of Lionbridge’s position in the globalization outsourcing market as a result of the acquisition. Lionbridge’s actual experiences, actions, financial and operating results for the year and FY2006 may differ materially from those discussed in the forward-looking statements. Factors that might cause such a difference include
the loss of a major client or customer; the termination of customer contracts prior to the end of their term; Lionbridge’s dependence on clients’ product releases and production schedules to generate revenues; Lionbridge’s inability to successfully integrate Bowne Global Solutions and its employees into Lionbridge and achieve expected synergies; Lionbridge’s ability to accurately forecast the acquisition related restructuring costs and allocation of the purchase price, goodwill and other acquisition related intangibles and other asset adjustments, costs associated with and consequential to the acquisition and integration of BGS and benefits realized from the acquisition; the impact of equity based compensation expense associated with FAS 123R; the impact of foreign currency fluctuations on its operating results and profitability; the size, timing and recognition of revenue from major clients; customer delays or postponements of services; costs associated with restructuring of certain European operations; risks associated with management of growth; the failure to keep pace with the rapidly changing requirements of its clients; Lionbridge’s ability to attract and retain key personnel; Lionbridge being held liable for defects or errors in its service offerings; 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; and Lionbridge’s ability to forecast revenue and operating results. For a more detailed description of the risk factors associated with Lionbridge, please refer to Lionbridge’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2005.
LIONBRIDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands, except per share data)
| | | | | | | | | | | | | | |
| | | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | | 2005
| | | 2004
| | 2005
| | | 2004
|
Revenue | | $ | 58,417 | | | $ | 37,630 | | $ | 138,575 | | | $ | 118,457 |
Operating expenses: | | | | | | | | | | | | | | |
Cost of revenue (excluding depreciation and amortization shown separately below) | | | 38,195 | | | | 24,292 | | | 90,682 | | | | 73,422 |
Sales and marketing | | | 5,078 | | | | 3,443 | | | 12,942 | | | | 10,700 |
General and administrative | | | 11,472 | | | | 7,466 | | | 27,084 | | | | 23,276 |
Research and development | | | 448 | | | | 79 | | | 830 | | | | 258 |
Depreciation and amortization | | | 916 | | | | 650 | | | 2,145 | | | | 2,290 |
Amortization of acquisition-related intangible assets | | | 630 | | | | 10 | | | 648 | | | | 118 |
Merger, restructuring and other charges | | | 1,879 | | | | — | | | 2,344 | | | | 1,854 |
Stock-based compensation | | | 331 | | | | 176 | | | 1,150 | | | | 419 |
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Total operating expenses | | | 58,949 | | | | 36,116 | | | 137,825 | | | | 112,337 |
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Income (loss) from operations | | | (532 | ) | | | 1,514 | | | 750 | | | | 6,120 |
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Interest on outstanding debt | | | 693 | | | | — | | | 693 | | | | — |
Interest income | | | 147 | | | | 109 | | | 477 | | | | 268 |
Other expense, net | | | 246 | | | | 41 | | | 463 | | | | 108 |
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Income (loss) before income taxes | | | (1,324 | ) | | | 1,582 | | | 71 | | | | 6,280 |
Provision for income taxes | | | 1,120 | | | | 136 | | | 1,346 | | | | 430 |
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Net income (loss) | | $ | (2,444 | ) | | $ | 1,446 | | $ | (1,275 | ) | | $ | 5,850 |
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Net income (loss) per share of common stock: | | | | | | | | | | | | | | |
Basic | | $ | (0.05 | ) | | $ | 0.03 | | $ | (0.03 | ) | | $ | 0.13 |
Diluted | | $ | (0.05 | ) | | $ | 0.03 | | $ | (0.03 | ) | | $ | 0.12 |
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Weighted average number of common shares outstanding: | | | | | | | | | | | | | | |
Basic | | | 50,362 | | | | 46,606 | | | 48,135 | | | | 46,474 |
Diluted | | | 50,362 | | | | 49,450 | | | 48,135 | | | | 49,550 |
LIONBRIDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands)
| | | | | | |
| | | September 30, | | December 31, |
| | | 2005
| | 2004
|
ASSETS | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | | $ | 20,557 | | $ | 38,564 |
Short-term investments | | | — | | | 4,000 |
Accounts receivable, net of allowances of $343 and $364 at September 30, 2005 and December 31, 2004 respectively | | | 66,752 | | | 21,065 |
Work in process | | | 30,879 | | | 9,199 |
Other current assets | | | 6,795 | | | 1,889 |
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Total current assets | | | 124,983 | | | 74,717 |
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Property and equipment, net | | | 20,973 | | | 2,685 |
Goodwill | | | 124,842 | | | 34,916 |
Other intangible assets, net | | | 42,618 | | | 64 |
Other assets | | | 3,042 | | | 1,006 |
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Total assets | | $ | 316,458 | | $ | 113,388 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
Current liabilities: | | | | | | |
Short-term debt and current portion of long-term debt | | | 1,051 | | | — |
Accounts payable | | | 17,201 | | | 6,322 |
Accrued compensation and benefits | | | 17,961 | | | 5,415 |
Other accrued expenses and current liabilities | | | 26,102 | | | 9,756 |
Deferred revenue | | | 6,379 | | | 3,263 |
Deferred income taxes | | | 2,024 | | | — |
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Total current liabilities | | | 70,718 | | | 24,756 |
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Long-term debt, less current portion | | | 97,893 | | | — |
Other long-term liabilities | | | 3,725 | | | 1,166 |
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Total stockholders’ equity | | | 144,122 | | | 87,466 |
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Total liabilities and stockholders’ equity | | $ | 316,458 | | $ | 113,388 |
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Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
| | | | | | | | | | | | | | |
| | | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | | 2005
| | | 2004
| | 2005
| | | 2004
|
Net income (loss) | | $ | (2,444 | ) | | $ | 1,446 | | $ | (1,275 | ) | | $ | 5,850 |
Depreciation and amortization | | | 916 | | | | 650 | | | 2,145 | | | | 2,290 |
Amortization of acquisition-related intangible assets | | | 630 | | | | 10 | | | 648 | | | | 118 |
Provision for income taxes | | | 1,120 | | | | 136 | | | 1,346 | | | | 430 |
Interest on outstanding debt | | | 693 | | | | — | | | 693 | | | | — |
Interest income | | | 147 | | | | 109 | | | 477 | | | | 268 |
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EBITDA | | | 768 | | | | 2,133 | | | 3,080 | | | | 8,420 |
Merger, restructuring and other charges | | | 1,879 | | | | — | | | 2,344 | | | | 1,854 |
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Adjusted EBITDA | | $ | 2,647 | | | $ | 2,133 | | $ | 5,424 | | | $ | 10,274 |
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