Lionbridge Announces Fourth Quarter and FY 2003 Results; Achieves 20% Year-Over-Year Revenue Growth and Increases GAAP EPS By $0.21 Over Prior Year
Increased Demand and Scalable Operational Structure Fuel Record Annual Earnings and Revenue
WALTHAM, Mass. — February 2, 2004 — Lionbridge Technologies, Inc. (Nasdaq: LIOX), a leading provider of globalization and testing services, today announced financial results for the fourth quarter and year ended December 31, 2003.
Financial and business highlights for FY 2003 are as follows:
- Revenue of $141.7 million, representing 16% organic growth (which excludes revenue from the Company's India acquisition) and 20% total growth compared to revenue of $118.3 million for the year ended December 31, 2002.
- GAAP net income of $2.5 million or $0.06 per share based on 40.5 million weighted average fully diluted common shares outstanding. This compares to a net loss of $4.8 million or ($0.15) per share based on 31.6 million weighted average common shares outstanding for 2002.
- Excluding restructuring and other unusual items, the Company reported adjusted net income of $5.8 million or $0.14 per share based on based on 40.5 million weighted average fully diluted common shares outstanding. These previously-announced unusual items include restructuring and other expenses of approximately $940,000, expenses related to the accelerated recognition of financing costs and a discount on early repayment of debt totaling $2.1 million and other acquisition-related items of $165,000.
- Complete repayment of $28.0 million of debt, representing the entire amount of the Company's subordinated debt and bank line of credit.
- The acquisition in September 2003 of Mentorix, a development company based in Mumbai, India, which provides the Company with an expanded offshore capability to meet customer demand and increase efficiencies.
For the fourth quarter of 2003, the Company reported revenue of $36.9 million, 23% higher than revenue of $30.0 million for the fourth quarter of 2002. On a GAAP basis, the Company reported net income of $1.1 million for the fourth quarter of 2003, or $0.02 per share. This compares to a GAAP net loss of $1.3 million, or ($0.04) per share, for the fourth quarter of 2002. Net income for the quarter included restructuring expenses of approximately $565,000. Excluding restructuring expenses, the Company reported net income of $1.7 million, or $0.03 per share for the quarter.
The adjusted net income amounts for the fourth quarter and the year ended December 31, 2003 are not determined in accordance with GAAP. Lionbridge management uses this non-GAAP measure in its analysis of the Company's performance solely to provide information in a manner that management believes is most useful to investors - in this case, to highlight the exclusion of significant expenses that are unusual in nature.
"2003 was a remarkable year. We grew our revenue by 16% organically, we had record profitability despite the headwinds from some of the most volatile foreign exchange fluctuations in history, we paid off our debt, ended the year with an operating cash flow positive Q4 and expanded our offshore capabilities with the addition of our India operations," said Rory Cowan, CEO, Lionbridge. "In the midst of this activity, we continued to grow our existing customers and added several new large-scale customer programs as demand for our globalization and testing services increased. All of these activities in 2003 serve as a platform for continued revenue growth and earning expansion in 2004."
The Company provided estimates for its first quarter expectations. For the first quarter Lionbridge expects revenue of between $37.0 - $38.5 million and adjusted income of $2.0-$3.5 million, excluding acquisition-related expenses and restructuring charges.
Lionbridge also confirmed its previously released 2004 guidance of approximately $160-170 million in revenue and adjusted net income of $15-19 million.
"With the early success of our India operations we are identifying new opportunities to accelerate our European reconfiguration," continued Cowan. "All of these activities underscore our ability to further leverage our global scale, expanded customer base and offshore execution to drive growth."
The Company will host a conference call today at 11:00 am EST 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 at www.lionbridge.com/webcast/Feb2. A replay will be available at this location for a week.
About Lionbridge
Lionbridge Technologies, Inc. (NASDAQ: LIOX) is a provider of globalization and testing 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 in all industries 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 20 solution centers in 10 countries and provides services under the Lionbridge and VeriTest brands. To learn more, visit www.lionbridge.com.
LIONBRIDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
Revenue $36,884 $30,036 $141,706 $118,319
Cost of revenue 22,452 17,706 85,859 71,272
Gross profit 14,432 12,330 55,847 47,047
Operating expenses:
Sales and marketing 3,483 3,205 12,983 11,600
General and
administrative 7,688 7,545 29,666 29,399
Research and
development 115 228 613 1,194
Depreciation and
amortization 876 732 3,298 3,024
Amortization of
acquisition-related
intangible assets 124 116 470 528
Merger, restructuring
and other charges 564 -- 943 --
Stock-based
compensation 126 177 421 851
Total operating
expenses 12,976 12,003 48,394 46,596
Income from operations 1,456 327 7,453 451
Interest expense:
Interest (income)
expense, net (52) 846 1,804 3,154
Accretion of
discount on debt -- 152 356 610
Accelerated recognition
of discount and
deferred financing
charges on early
repayment of debt, net -- -- 2,139 --
Other expense, net 62 705 288 1,534
Income (loss) before
income taxes 1,446 (1,376) 2,866 (4,847)
Provision for
(benefit from)
income taxes 312 (77) 334 (62)
Net income (loss) $1,134 $ (1,299) $2,532 $(4,785)
Net income (loss) per share of common stock:
Basic $0.02 $(0.04) $0.07 $(0.15)
Diluted 0.02 (0.04) 0.06 (0.15)
Weighted average number of common shares outstanding:
Basic 46,011 31,706 37,406 31,632
Diluted 48,750 31,706 40,548 31,632
LIONBRIDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands)
December 31, December 31,
2003 2002
ASSETS
Current assets:
Cash and cash equivalents $29,451 $10,916
Restricted cash 383 352
Accounts receivable, net of
allowances of $591 and $425
at December 31, 2003 and 2002, respectively 24,653 17,303
Work in process 8,609 6,062
Other current assets 2,188 2,054
Total current assets 65,284 36,687
Property and equipment, net 4,445 5,013
Goodwill 34,994 15,142
Other intangible assets, net 191 551
Other assets 1,076 771
Total assets $105,990 $58,164
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and
current portion of long-term debt $--- $3,215
Accounts payable 8,318 8,570
Accrued expenses and other current liabilities 14,278 14,415
Deferred revenue 3,850 3,753
Total current liabilities 26,446 29,953
Long-term debt, less current
portion and net of discount of $2,288
at December 31, 2002 --- 24,728
Other long-term liabilities 1,914 1,769
Total stockholders' equity 77,630 1,714
Total liabilities and
stockholders' equity $105,990 $58,164