WALTHAM, Mass. - August 13, 2002 - Lionbridge Technologies, Inc. (Nasdaq: LIOX) today announced financial results for the quarter ended June 30, 2002. The Company reported total revenues of $29.5 million for the quarter, an increase of 30% compared to revenue of $22.7 million for the second quarter of 2001, and an increase of 18% compared to revenue of $24.9 million for the first quarter of 2002. The Company reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $521,000, and a net loss of $1.4 million on a GAAP basis, for the quarter ended June 30, 2002.
The Company's reported revenue and earnings for the second quarter include the impact of $1.3 million of charges related to the transformation of the Company's ChinaConnect subsidiary, which is within the range of prior estimates provided by the Company. As previously announced, during the second quarter, Lionbridge decided to exit the non-core ChinaConnect business and utilize its existing infrastructure in Beijing for expansion of its growing VeriTest testing business.
For the second quarter of 2002, Lionbridge reported a net loss of $0.04 per share, based on 31.6 million weighted average common shares outstanding. This compares to a net loss of $0.27 per share for the second quarter of 2001, which included merger, restructuring and other charges of approximately $2.1 million and amortization of goodwill of approximately $1.2 million, or $0.12 per share (pre-tax) of this loss.
Excluding the effect of charges related to ChinaConnect, Lionbridge generated EBITDA of $1.8 million, a GAAP net loss of $70,000 and breakeven earnings per share for the second quarter of 2002, marking one of the Company's strongest earnings growth quarters in its history. The organic revenue and earnings growth stemmed from the Company's increased volumes within existing accounts, its ability to secure new Global 100 customer wins and its continued focus on delivering the highest quality to customers.
"Lionbridge is realizing outstanding quarter-on-quarter organic revenue and earnings growth, even with the impact of ChinaConnect. This strong financial and operational performance of our core globalization and testing business demonstrates that we have achieved the scale necessary to deliver the quality and value customers need," said Rory Cowan, CEO, Lionbridge. "Our existing customers are growing with us, and we are continuing to expand into new accounts. In fact, this quarter, we secured several new multimillion dollar, multi-year contracts with Global 100 customers outside the technology industry. It is clear to us that Lionbridge has become the partner of choice for global organizations looking to outsource critical business processes."
Lionbridge confirmed its plan for achieving positive GAAP net income in the third quarter of 2002, and provided Q3 revenue estimates in the $31-33 million range. The Company reiterated its forecast of fiscal 2002 revenue in the $115 -120 million range, with estimated $5-7 million of EBITDA. Lionbridge also confirmed its 2003 revenue outlook with estimated revenues of approximately $130 million, which would yield about $12 million of EBITDA or approximately $5 million of GAAP net income.
During the second quarter, Lionbridge also announced that VeriTest, the Company's testing division of Lionbridge, expanded its testing operations into Beijing, China. The expanded China operations strengthen VeriTest's industry-leading software testing and certification services, which combine "onshore" project management with cost-effective "near shore" testing operations in Ballina, Ireland and "offshore" testing in Beijing, China.
This VeriTest expansion into China, combined with Lionbridge's recently announced acquisition of eTesting Labs from Ziff Davis Media, reflects the Company's global response to customer demand for flexible, highly scalable testing solutions that deliver the highest value for the lowest cost.
The Company will host a conference call today at 4:00 pm 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 at www.lionbridge.com/webcast/Aug13. A replay will be available at this location for one week.
About Lionbridge
Lionbridge Technologies, Inc. provides solutions for worldwide deployment of technology and content to Global 2000 companies in the technology, life sciences and financial services industries. Lionbridge testing and compatibility services, globalization solutions, and multilingual content management technologies help clients reduce cost, speed time to market, and ensure the integrity of global brands. Based in Waltham, Mass., Lionbridge maintains facilities in Ireland, The Netherlands, France, Germany, China, South Korea, Japan, Brazil and the United States. To learn more, visit www.lionbridge.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including those statements relating to expected growth, net income, revenue, results and performance for the third quarter, the current fiscal year and 2003. Lionbridge's actual experience may differ materially from those discussed in the forward-looking statements. Factors that might cause such a difference include the termination of customer contracts prior to the end of their term; Lionbridge's dependence on clients' product releases to generate revenues; the loss of a major client or customer; the size, timing and recognition of revenue from major clients; Lionbridge's ability to collect accounts receivables and realize work-in-process from the ChinaConnect business; Lionbridge's ability to raise additional capital; customer delays or postponements of services; the impact of foreign currency fluctuations on its operating results and revenue growth; risks associated with management of growth; market acceptance of new service offerings; 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 solutions; one or more of Lionbridge's multi-year outsourcing relationships may be unprofitable; political, economic and business fluctuations in international markets; as well as risks of downturns in conditions generally, and in the information technology and software industries specifically, and risks associated with competition and competitive pricing pressures; 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 Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2002 and the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 15, 2002.
LIONBRIDGE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Revenue $ 29,482 $ 22,693 $ 54,372 $ 49,973
Cost of revenue 17,928 14,435 33,319 31,500
Gross profit 11,554 8,258 21,053 18,473
________ ________ ________ ________
Operating expenses:
Sales and marketing 2,758 2,821 5,198 5,947
General and
administrative 8,147 7,920 15,445 16,851
Research and development 280 594 698 1,238
Amortization of
acquisition-related
intangible assets 115 1,628 297 3,298
Merger, restructuring
and other charges --- 2,088 --- 2,213
Stock-based compensation 270 165 495 313
Total operating
expenses 11,570 15,216 22,133 29,860
________ ________ ________ ________
Loss from operations (16) (6,958) (1,080) (11,387)
Interest expense 950 565 1,820 1,107
Other expense, net 312 102 518 520
Loss before income
taxes (1,278) (7,625) (3,418) (13,014)
Provision for
(benefit from)
income taxes 77 89 (178) 232
Net loss (1,355) (7,714) (3,240) (13,246)
Basic and diluted
net loss per share
attributable to
common stockholders
$(0.04) $(0.27) $(0.10) $(0.47)
Shares used in
computing basic
and diluted net
loss per share
attributable to
common stockholders 31,629 28,214 31,578 28,022
LIONBRIDGE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
June 30, December 31,
2002 2001
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $12,187 $11,711
Accounts receivable, net of allowances of
$551 and $932 at June 30, 2002 and
December 31, 2001, respectively 16,558 16,791
Work in process 6,195 4,286
Other current assets 2,261 1,336
Total current assets 37,201 34,124
Property and equipment, net 3,640 4,463
Goodwill, net 14,050 13,890
Other intangible assets, net 782 1,079
Other assets 1,672 1,191
Total assets $57,345 $54,747
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion
of long-term debt $14,336 $9,600
Accounts payable 9,207 7,121
Accrued expenses 13,347 12,641
Deferred revenue 2,137 3,053
Total current liabilities 39,027 32,415
Long-term debt, less current portion and
net of discount of $2,593 and $2,898
at June 30, 2002 and December 31, 2001,
respectively 14,901 17,318
Other long-term liabilities 1,461 1,566
Total stockholders' equity 1,956 3,448
Total liabilities and stockholders' equity $57,345 $54,747