Exhibit 99.3
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Page
----
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS:
Introduction........................................................................................................ F-2
Unaudited Pro Forma Combined Condensed Statement of Operations for the Three Months Ended March 31, 2001............ F-3
Unaudited Pro Forma Combined Condensed Balance Sheet as of March 31, 2001........................................... F-4
Notes to Unaudited Pro Forma Combined Condensed Financial Statements................................................ F-5
Unaudited Pro Forma Combined Condensed Statement of Operations for the Year Ended December 31, 2000................. F-6
Notes to Unaudited Pro Forma Combined Condensed Financial Statements................................................ F-7
F-1
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
On June 21, 2001, Lionbridge Technologies, Inc. (the "Company" or
"Lionbridge") completed its acquisition of all of the capital stock of Data
Dimensions, Inc., a Delaware corporation ("Data Dimensions"). The transaction
was a tax-free, stock-for-stock transaction, accounted for using the purchase
method of accounting. Lionbridge issued 2,588,316 shares of its common stock in
exchange for all of the capital stock of Data Dimensions. Additionally,
Lionbridge will issue up to approximately 633,000 shares of its common stock
upon the exercise of outstanding options and warrants of Data Dimensions being
assumed by Lionbridge.
The unaudited pro forma combined condensed financial information should be
read in conjunction with the historical financial statements and the related
notes thereto of Lionbridge and Data Dimensions which are presented in the
Company's Registration Statement on Form S-4 filed on May 10, 2001 (File No.
333-58564). The unaudited pro forma combined condensed balance sheet gives
effect to the acquisition as if it had occurred on March 31, 2001 and includes
all material pro forma adjustments necessary for this purpose. The unaudited pro
forma combined condensed statements of operations combine Lionbridge's operating
results for the three months and year ended March 31, 2001 and December 31,
2000, respectively, with the operating results of Data Dimensions for the same
periods. The unaudited pro forma combined condensed statements of operations for
the three months ended March 31, 2001 and the year ended December 31, 2000 give
effect to the acquisition as if it had occurred on January 1, 2001 and 2000,
respectively, and include all material pro forma adjustments necessary for this
purpose.
Lionbridge has incurred costs of the acquisition principally in the quarter
in which the acquisition was consummated. Such costs, which are currently
estimated to total approximately $500,000, primarily consist of fees to legal
counsel and independent accountants, and printing and other expenses relating to
the preparation of the joint proxy statement/prospectus and this Form 8-K/A. The
unaudited pro forma combined condensed financial statements reflect these total
estimated transaction costs.
The unaudited pro forma combined condensed financial statements are
presented for illustrative purposes only and are not necessarily indicative of
the operating results or financial position that would have been achieved if the
acquisition had been consummated as of the beginning of the periods presented,
nor are they necessarily indicative of the future operating results or financial
position of the combined company.
F-2
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2001
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
DATA PRO FORMA PRO FORMA
LIONBRIDGE DIMENSIONS ADJUSTMENTS (2) COMBINED
---------- ---------- --------------- ---------
Revenue....................................... $27,280 $ 6,452 $33,732
Cost of revenue............................... 17,065 4,494 $ 44 21,603
------- ------- ------- -------
Gross profit................................. 10,215 1,958 (44) 12,129
------- ------- ------- -------
Operating expenses:
Sales and marketing.......................... 3,126 --- 1,037 4,163
General and administrative................... 8,931 4,591 (263) 5(a) 12,178
(1,081)
Research and development..................... 644 --- 644
Amortization of acquisition-related
intangible assets......................... 1,670 --- 1,670
Merger, restructuring and other 125 --- 125
charge....................................
Stock-based compensation..................... 148 --- - 148
------- ------- ------- -------
Total operating expenses................... 14,644 4,591 (307) 18,928
------- ------- ------- -------
Loss from operations.......................... (4,429) (2,633) 263 (6,799)
Interest on outstanding debt.................. 542 --- (30) 512
Other (income) expense, net................... 418 62 30 510
------- ------- ------- -------
Loss before income taxes...................... (5,389) (2,695) 263 (7,821)
Provision for income taxes.................... 143 130 - 273
------- ------- ------- -------
Net loss...................................... $(5,532) $(2,825) $ 263 $(8,094)
======= ======= ======= =======
Basic and diluted net loss per share.......... $(0.20) $(0.21) $(0.27)
Shares used in computing basic and
diluted net loss per share attributable
to common stockholders (1)................. 27,826 13,561 30,415
See accompanying notes to unaudited pro forma combined condensed financial
statements.
F-3
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 2001
(AMOUNTS IN THOUSANDS)
PRO FORMA
LIONBRIDGE DATA DIMENSIONS ADJUSTMENTS (2) PRO FORMA COMBINED
----------- --------------- ----------------- ------------------
ASSETS
Current assets:
Cash and cash equivalents............... $ 9,982 $ 1,932 $ 11,914
Accounts receivable, net................ 17,232 7,539 $ (1,529) 23,242
Work in process......................... 6,125 --- 1,529 7,654
Income tax receivable................... --- 4,809 4,809
Other current assets.................... 1,661 1,065 2,726
-------- ------- -------- --------
Total current assets.................. 35,000 15,345 --- 50,345
Property and equipment, net.............. 4,568 2,924 (1,589) 6(a) 5,903
Goodwill and other intangible assets..... 13,593 --- 13,593
Other assets............................. 646 660 1,306
-------- ------- -------- --------
Total assets......................... $ 53,807 $18,929 $(1,589) $ 71,147
======== ======= ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Short-term debt and current portion of $ 15,568 $ --- $ 15,568
long-term debt.........................
Accounts payable........................ 7,187 861 8,048
Accrued expenses and other current
liabilities............................ 14,096 1,950 $ 500 6(d) 16,507
(39)
Deferred revenue........................ 2,909 --- 39 2,948
-------- ------- -------- --------
Total current liabilities............. 39,760 2,811 500 43,071
-------- ------- -------- --------
Long-term debt, less current portion..... 7,210 --- 7,210
Other long-term liabilities.............. 403 198 601
Accumulated deficit...................... (84,856) (5,354) 5,354 6(b) (84,856)
Other stockholders' equity............... 91,290 21,274 (21,274) 6(b) 105,121
13,831 6(c)
--------
Total stockholders' equity............ 6,434 15,920 (2,089) 20,265
-------- ------- -------- --------
Total liabilities and $ 53,807 $18,929 $ (1,589) $ 71,147
stockholders' equity.............. ======== ======= ======== ========
See accompanying notes to unaudited pro forma combined condensed financial
statements.
F-4
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS
(1) The unaudited pro forma combined per share amount is based on the combined
weighted-average number of Lionbridge common shares and Data Dimensions
common shares outstanding for the period presented based on Data Dimensions
stockholders receiving 0.190884 of a Lionbridge common share for each share
of Data Dimensions common stock held.
(2) Certain reclassifications have been made to the Data Dimensions statement
of operations and balance sheet to classify certain expenses and
liabilities on a basis consistent with the Lionbridge presentation. None
of the expense reclassifications affect the reported loss.
(3) There were no financial transactions between Lionbridge and Data Dimensions
during the period presented.
(4) Restructuring costs are anticipated to be incurred in connection with the
acquisition of Data Dimensions. Such costs, which have not yet been
estimated in total, may include amounts with respect to the elimination of
excess facilities and employee severance costs. These costs have not been
reflected in the unaudited pro forma combined condensed financial
statements.
(5) Adjustments to reflect the acquisition of Data Dimensions as if it had
occurred as of January 1, 2001 are as follows:
(a) To reduce depreciation expense of Data Dimensions due to write down of
fixed assets assuming three months of a three to five year
amortization period (see Note (6)a).
(6) Adjustments to reflect the acquisition of Data Dimensions as if it had
occurred as of March 31, 2001 are as follows:
(a) To allocate the excess of the fair value of assets and liabilities of
Data Dimensions as of March 31, 2001 over the purchase price to the
fixed assets of Data Dimensions. No amount of the excess has been
allocated to the other long-term assets of Data Dimensions as these
principally represent deferred taxes and cash deposits. The final
allocation of the purchase price to the fair value of assets and
liabilities of Data Dimensions has not yet been determined. Therefore,
for purposes of the unaudited pro forma combined condensed financial
information, the excess of the book value of net assets acquired of
Data Dimensions over the purchase price has been allocated to fixed
assets.
(b) To reverse pre-acquisition stockholders' equity of Data Dimensions.
(c) To record issuance of 2,588,316 shares of Lionbridge common stock at a
value of $4.89 per share, the average closing price of Lionbridge
common stock for five days before and after the announcement of the
acquisition, as well as the fair value of options and warrants to be
assumed by Lionbridge for the purchase of approximately 633,000 shares
of Lionbridge common stock, estimated to be $1,179,000.
(d) To record estimated total transaction costs.
F-5
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PRO FORMA PRO FORMA
LIONBRIDGE DATA DIMENSIONS ADJUSTMENTS (2) COMBINED
----------- --------------- ------------------- -------------
Revenue....................................... $115,149 $ 32,408 $147,557
Cost of revenue............................... 72,746 22,448 $ 204 95,398
-------- -------- ------- --------
Gross profit............................... 42,403 9,960 (204) 52,159
-------- -------- ------- --------
Operating expenses:
Sales and marketing........................ 11,384 --- 5,802 17,186
General and administrative................. 33,143 25,748 (1,052) 5(a) 51,833
(6,006)
Research and development................... 2,518 --- 2,518
Amortization of acquisition-related
intangible assets....................... 6,503 --- 6,503
Merger, restructuring and other
charges (credits)....................... 4,266 (136) 4,130
Stock-based compensation................... 799 --- - 799
-------- -------- ------- --------
Total operating expenses............... 58,613 25,612 (1,256) 82,969
-------- -------- ------- --------
Loss from operations.......................... (16,210) (15,652) 1,052 (30,810)
Interest on outstanding debt.................. 2,735 22 (270) 2,487
Other (income) expense, net................... 714 (211) 270 773
-------- -------- ------- --------
Loss from continuing operations before
income taxes............................... (19,659) (15,463) 1,052 (34,070)
Provision for (benefit from) income taxes on
continuing operations...................... 616 (4,361) - (3,745)
-------- -------- ------- --------
Net loss from continuing operations........... (20,275) (11,102) 1,052 (30,325)
Accrued dividends on preferred stock.......... 3,574 --- - 3,574
-------- -------- ------- --------
Net loss from continuing operations
attributable to common stockholders........ $(23,849) $(11,102) $ 1,052 $(33,899)
======== ======== ======= ========
Basic and diluted net loss per share from
continuing operations attributable to
common stockholders (1).................... $(0.96) $(0.82) $(1.23)
======== ======== ========
Shares used in computing basic and
diluted net loss per share attributable
to common stockholders (1)................. 24,871 13,560 27,459
See accompanying notes to unaudited pro forma combined condensed financial
statements.
F-6
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS
(1) The unaudited pro forma combined per share amounts are based on the
combined weighted-average number of Lionbridge common shares and Data
Dimensions common shares outstanding for the period presented based on Data
Dimensions stockholders receiving 0.190884 of a Lionbridge common share for
each share of Data Dimensions common stock held.
(2) Certain reclassifications have been made to the Data Dimensions statement
of operations to classify certain expenses on a basis consistent with the
Lionbridge presentation. None of the expense reclassifications affect the
reported net loss from continuing operations.
(3) There were no financial transactions between Lionbridge and Data Dimensions
during the period presented.
(4) Restructuring costs are anticipated to be incurred in connection with the
acquisition of Data Dimensions. Such costs, which have not yet been
estimated in total, may include amounts with respect to the elimination of
excess facilities and employee severance costs. These costs have not been
reflected in the unaudited pro forma combined condensed financial
statements.
(5) Adjustments to reflect the acquisition of Data Dimensions as if it had
occurred as of January 1, 2000 are as follows:
(a) To reduce depreciation expense of Data Dimensions due to write down of
fixed assets assuming one year of a three to five year amortization
period (see Note (6)a on page F-5).
F-7