WALTHAM, Mass. - January 29, 2002 - Lionbridge Technologies, Inc. (Nasdaq: LIOX), today announced financial results for the fourth quarter and year ended December 31, 2001. The Company reported revenue of $25.3 million for the fourth quarter of 2001, compared to revenue of $27.7 million in the fourth quarter of 2000. Lionbridge reported positive earnings before interest, taxes, depreciation and amortization (EBITDA) of $119,000 for the quarter, marking the first positive EBITDA quarter since third quarter 2000.
Lionbridge reported a net loss of $3.6 million, or $0.12 per share, for the fourth quarter of 2001 based on 31.2 million weighted average common shares outstanding. This compares to a net loss of $5.1 million or $0.19 per share for the fourth quarter of 2000.
On a "cash EPS" basis (which excludes amortization of acquisition-related intangible assets and merger and restructuring charges), the manner in which Lionbridge is carried by First Call, the Company reported a loss of $0.05 per share for the fourth quarter of 2001. This compares to a cash EPS loss of $0.13 for the fourth quarter of 2000.
At the end of the fourth quarter of 2001, the Company's cash position was $11.7 million, compared to $10.1 million for third quarter 2001.
"The fourth quarter marked a significant milestone for the Company. Not only did we exceed expectations with our first quarter of positive EBITDA this year, but we also returned gross margins to the 40% level," said Rory Cowan, CEO, Lionbridge.
For the year ended December 31, 2001, the Company reported total revenue of $101.2 million, compared to revenues of $115.1 million for the year ended December 31, 2000. The Company reported a net loss attributable to common stockholders of $24.5 million, or $0.83 per share, compared to $23.8 million or $0.96 per share, for the year ended December 31, 2000.
"2001 was a year of challenge and uncertainty with major decline throughout the technology markets. However, due to a strong team and early focus on cost, Lionbridge weathered the downturn better than most, while continuing to execute on our path to profitability," said Cowan. "We expect 2002 to be a year of focus and execution, with estimated year-on-year revenue growth in the 20 - 25 percent range. Our pipeline appears strong and we have built a stable management team."
For the localization business, the Company was negatively impacted early in the year by the downturn in its telecommunications customer base. The Company was able to offset some of that downturn by expanding into new industry sectors with new customers in the pharmaceutical, financial services, manufacturing and defense industries, marking a steady evolution of the globalized Internet into new industries.
The VeriTest business unit of Lionbridge is seeing increased demand for certification as enterprise applications become more complex. VeriTest certification is seeing demand not only for Microsoft platforms but also in other sectors such as wireless, storage computing and financial services. As a result, VeriTest expects 2002 to be a year of focused growth.
"The Lionbridge value proposition is strengthening as global companies outside of the IT sector begin leveraging the Internet as a mechanism for global cost-efficiency. As the need for global, reliable infrastructure grows, both localization and testing are seeing significant opportunities for continued expansion," continued Cowan.
Highlights for the year included:
- Operational management: Despite the challenging economy, a decline in revenue
from customers in the telecommunications sector, and costs associated with the
DDI integration, Lionbridge was able to return gross margins to the 40% level
in the fourth quarter, a quarterly level not seen in more than a year.
- Customer growth and satisfaction: Lionbridge's pipeline has been enhanced and
strengthened during the year. While expanding into new sectors, Lionbridge was
also able to attain the highest customer satisfaction ratings in its history
and to maintain long-term customer relationships, as evidenced by
approximately 70% of Lionbridge revenue coming from customers of more than
eight consecutive quarters.
- Expansion of the VeriTest business: The Company strengthened VeriTest's position as one of the
most comprehensive software certification and outsourced software test
organizations in the industry with the acquisition of Data Dimensions, Inc.
With integration of these businesses largely complete, Lionbridge believes
VeriTest is poised for growth as enterprise customers benefit from the
Company's advanced global testing and certification infrastructure.
- Strong technology leading to strong partnerships: The Lionbridge Globalization Platform is rapidly being accepted by leading content management companies as a cost-effective solution for customers to manage multilingual content within existing systems. During the year, Lionbridge secured or expanded relationships with Documentum, Vignette and Stellent, and is actively selling joint solutions to enterprise customers worldwide.
The Company will host a conference call today at 5:00 pm 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/Jan29/. 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 England, Ireland, The Netherlands, France, Germany, China, South Korea, Japan, Taiwan, 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. These forward-looking statements include management's plans and objectives for future operations, expected profitability and expected revenue growth as well as statements regarding the expected growth and expansion at VeriTest and in the Company's localization business. 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; customer delays or postponements of services; political, economic and business fluctuations in international markets; as well as risks of continued downturns in economic conditions generally, and in the information technology and software industries specifically, resulting from September 11 or otherwise; the loss of a major client; the size, timing and recognition of revenue from major clients; 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 and risks associated with competition and competitive pricing pressures; the difficulties Lionbridge may encounter as it continues to integrate the operations of Data Dimensions, Inc. ("DDI") as well as its ability to realize the anticipated benefits of its acquisition of DDI. 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 2, 2001, Registration Statement on Form S-4 filed with the Securities and Exchange Commission on April 9, 2001; and the amendment thereto filed on May 10, 2001; and its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2001.
FINANCIAL STATEMENTS FOLLOW
LIONBRIDGE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
| |
|
Three Months Ended December 31, |
|
Year Ended
December 31, |
|
|
|
2001 |
2000 |
|
2001 |
2000 |
| |
|
(unaudited) |
|
(unaudited) |
|
| |
|
|
|
|
|
|
| Revenue |
|
$ 25,307 |
$ 27,720 |
|
$101,204 |
$115,149 |
| Cost of revenue |
|
15,043 |
17,540 |
|
63,123 |
72,746 |
| Gross profit |
|
10,264 |
10,180 |
|
38,081 |
42,403 |
| |
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
| Sales and marketing |
|
2,568 |
3,023 |
|
11,342 |
11,384 |
| General and administrative |
|
7,731 |
8,886 |
|
34,382 |
33,143 |
| Research and development |
|
479 |
615 |
|
2,297 |
2,518 |
| Amortization of acquisition-related intangible assets |
|
1,835 |
1,681 |
|
6,651 |
6,503 |
| Merger, restructuring and other charges |
|
300 |
--- |
|
2,853 |
4,266 |
| Stock-based compensation |
|
124 |
168 |
|
565 |
799 |
| Total operating expenses |
|
13,037 |
14,373 |
|
58,090 |
58,613 |
| |
|
|
|
|
|
| Loss from operations |
|
(2,773) |
(4,193) |
|
(20,009) |
(16,210) |
| Interest expense, net |
|
930 |
647 |
|
3,165 |
2,735 |
| Other (income) expense, net |
|
(72) |
170 |
|
838 |
714 |
| Loss before income taxes |
|
(3,631) |
(5,010) |
|
(24,012) |
(19,659) |
| Provision for income taxes |
|
12 |
136 |
|
439 |
616 |
| Net loss |
|
(3,643) |
(5,146) |
|
(24,451) |
(20,275) |
| Accrued dividends on preferred stock |
|
--- |
--- |
|
--- |
3,574 |
| Net loss attributable to common stockholders |
|
$(3,643) |
$(5,146) |
|
$(24,451) |
$(23,849) |
| Basic and diluted net loss per share attributable to common stockholders |
|
$ (0.12) |
$ (0.19) |
|
$ (0.83) |
$ (0.96) |
| Shares used in computing basic and diluted net loss per share attributable to common stockholders |
|
31,153 |
27,414 |
|
29,528 |
24,871 |
LIONBRIDGE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
| |
|
December 31, |
December 31, |
|
|
|
2001 |
2000 |
| |
|
(unaudited) |
|
| ASSETS |
|
|
|
| Current assets: |
|
|
|
| Cash and cash equivalents |
|
$ 11,711 |
$ 16,741 |
| Accounts receivable, net of allowances of $932 and $699 at December 31, 2001 and December 31, 2000, respectively |
|
16,791 |
16,355 |
| Work in process |
|
4,286 |
6,710 |
| Other current assets |
|
1,336 |
1,795 |
| Total current assets |
|
34,124 |
41,601 |
| Property and equipment, net |
|
4,463 |
4,932 |
| Goodwill and other intangible assets, net |
|
14,969 |
14,865 |
| Other assets |
|
1,191 |
648 |
| Total assets |
|
$ 54,747 |
$ 62,046 |
| |
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
| Current liabilities: |
|
|
|
| Short-term debt and current portion of long-term debt |
|
$ 18,169 |
$ 11,337 |
| Current portion of capital lease obligations |
|
67 |
255 |
| Accounts payable |
|
7,121 |
6,669 |
| Accrued expenses |
|
13,204 |
15,303 |
| Deferred revenue |
|
3,053 |
3,578 |
| Deferred income taxes |
|
--- |
224 |
| Total current liabilities |
|
41,614 |
37,366 |
| |
|
|
|
| Long-term debt, net of discount and current portion |
|
8,767 |
13,265 |
| Capital lease obligations, net of current portion |
|
77 |
114 |
| Other long-term liabilities |
|
841 |
117 |
| |
|
|
|
| Total stockholders' equity |
|
3,448 |
11,184 |
| |
|
|
|
| |
|
|
|
| Total liabilities and stockholders' equity |
|
$ 54,747 |
$ 62,046 |