EX-99.1 2 liox-2016930xexx991.htm EXHIBIT 99.1 Exhibit

LIONBRIDGE REPORTS Q3 RESULTS WITH REVENUE OF $135.2 MILLION,
GAAP EPS OF $0.05 AND NON-GAAP EPS OF $0.13

Secures More than 10 New, Multi-Million Dollar, Client Engagements with Combined Estimated Annual Contract Value of $25 Million; Expects Strong Revenue and Earnings Outlook for 2017

WALTHAM, Mass. November 08, 2016 - Lionbridge Technologies, Inc. (Nasdaq: LIOX), today announced revenue and earnings for the third quarter ended September 30, 2016.

Highlights for the third quarter include:
Revenue of $135.2 million, a decrease of $3.4 million or 2% compared to the third quarter of 2015 largely related to the Company’s decision to exit a contract with the US Department of Justice (DOJ) in November of 2015.
GAAP earnings of $2.7 million, or $0.05 per diluted share, based on 59.0 million weighted average fully diluted common shares outstanding. GAAP net income decreased $66,000 or ($0.00) as compared to the third quarter of 2015.
Non-GAAP adjusted earnings of $7.7 million, or $0.13 per diluted share, a decrease of $1.0 million or $0.01 per share year-on-year. Please see the section of this release entitled "Non-GAAP Financial Measures" and the attached table for details and reconciliations of this measure to the comparable GAAP measure.
Non-GAAP Adjusted EBITDA of $13.1 million, an increase of $294,000 as compared to the third quarter of 2015. Please see the section of this release entitled “Non-GAAP Financial Measures” and the attached table for details and reconciliations of this measure to the comparable GAAP measure.
A combined reduction in sales and marketing and general and administrative expenses of $3.3 million as compared to the second quarter of 2016.
Cash flow from operations of $5.8 million.
An ending cash balance of $23.9 million.
The Company repurchased 737,000 shares of its common stock in Q3 for an aggregate purchase price of $3.3 million. Year-to-date through September 30, 2016, the Company repurchased 3.3 million shares of its common stock for an aggregate purchase price of $15.1 million.

The Company recently secured a number of new, multi-million dollar customer engagements, including a contract to be the exclusive translation provider for a Canadian government agency for up to seven years, a contract with a global clinical research organization (CRO), a program with a large American manufacturer and a five-year, $5 million program for over the phone interpretation and other services with US Immigration and Customs Enforcement The Company also secured new large programs with several existing clients, including a large consumer technology company, a market leader in online search and advertising, and a worldwide leader in IT, as well as two sole source programs with its largest client.
“2016 has been a year of transformation. Our reconfiguration into business units is proving to be the right decision. Our leaders are focused and energized. Our new business momentum is returning. We are seeing larger, longer-term contracts. We are reducing our SG&A expenses to maximize profitability. And, despite some lumpiness in the quarter, we are starting to see new growth opportunities in some of our largest accounts,” said Rory Cowan, CEO, Lionbridge. “With our organizational transformation complete, we expect to return to revenue growth in 2017 with ongoing earnings expansion.”
Lionbridge provided outlook for the fourth quarter of 2016 with estimated revenue of $134-138 million. The Company also provided a preliminary outlook for FY 2017 with estimated year-on-year revenue growth of 4-6%, and double-digit Adjusted EBITDA growth year-on-year. Please see the section of this release entitled "Non-GAAP Financial Measures" for details of this measure to the comparable GAAP measure.

Lionbridge management will conduct a conference call at 9:00 a.m. ET this morning to discuss financial performance for the quarter and other matters, including matters related to its future performance. To participate, callers within the United States can dial 888-950-9564 and international callers can dial 212-547-0316. The pass code for the call is “Lionbridge”. The conference call will also be available live via this link.

Non-GAAP Financial Measures
In this release, the Company's adjusted EBITDA, adjusted earnings and adjusted earnings per share 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. These measures are presented because management believes they provide additional information to investors with respect to the performance of the Company’s fundamental business activities. In particular, management believes that adjusted EBITDA, which excludes anticipated non-operational, non-cash or non-recurring losses or gains, provides investors with a consistent comparison of the Company’s operating results, and that adjusted earnings and adjusted earnings per share illustrates the Company’s operating results excluding non-cash acquisition related expense items and other restructuring expenses as well as non-cash stock based compensation and thus provides a supplemental view of the Company’s financial performance based on underlying operational factors. “Adjusted EBITDA”, “Adjusted earnings” and “Adjusted Earnings per Share (EPS)” are Non-GAAP financial measures and should not be viewed as alternatives to GAAP measures of performance. Management uses these measures as part of its evaluation of operational results and to make financial and operational decisions, including decisions regarding compensation. Management believes the most directly comparable GAAP financial measure for adjusted EBITDA and adjusted earnings is net income and believes the most directly comparable GAAP financial measure for adjusted EPS is diluted net income per share of common stock. Accordingly, management has provided a detailed reconciliation of these non-GAAP measures to their respective comparable GAAP financial measures at the end of this release.

For FY 2017, the Company has provided guidance for Adjusted EBITDA, which is not presented in accordance with generally accepted accounting principles (GAAP) and is not intended to be used in lieu of GAAP presentations of results of operations. This guidance measure is presented because management believes that Adjusted EBITDA, which excludes certain non-operational, non-cash or non-recurring expense, income, losses and gains, provides investors with a consistent comparison of the Company’s operating results. This guidance measure is also presented because the Company has difficulty projecting the future impact of items such as other income/expense, which is the currency effect of the revaluation of certain balance sheet accounts including intercompany balances, and provision for income taxes, which difficulty means that the Company cannot reconcile to such GAAP measure without unreasonable effort. The Company therefore believes that Adjusted EBITDA provides a useful measure of the Company’s expected financial performance based on underlying operational factors.

About Lionbridge
Lionbridge enables more than 800 world-leading brands to increase international market share, speed adoption of products and effectively engage their customers in local markets worldwide. Using our innovative cloud technology platforms and our global crowd of more than 100,000 professional cloud workers, we provide translation, online marketing, global content management and application testing solutions that ensure global brand consistency, local relevancy and technical usability across all touch points of the customer lifecycle. Based in Waltham, Mass., Lionbridge maintains solution centers in 28 countries. To learn more, visit http://www.lionbridge.com.

This press release contains forward-looking statements that involve risks and uncertainties, including the expected impact of new customer engagements, efforts to maximize profitability, expected financial performance, expected growth in revenue, income from operations and profit growth, and the momentum, pace and strengthening of such growth and performance in Q4 2016 and FY 2017. These forward-looking statements reflect management’s current views and Lionbridge does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date hereof except as required by law. Lionbridge's actual experiences, actions, financial and operating results may differ materially from those discussed in the forward-looking statements. Factors that might cause such a difference include the impact of foreign currency fluctuations on revenue, margins, costs, operating results and profitability and the Company's ability to successfully manage this exposure through hedge instruments and other strategies; the timing and effect of the Company’s reconfiguration into business units; its ability to provide and maintain high quality services at a competitive price and related customer satisfaction with such service delivery; the loss of or reduction in demand from one or more major client or customer, which would materially affect Lionbridge’s business; Lionbridge’s ability to expand its relationships with existing clients and within key industry verticals; Lionbridge’s ability to broaden its client base; the Company's dependence on clients' product releases, production schedules and procurement strategies to generate revenues; the anticipated benefits of expansion of global language workflow technologies; the impact of competing language technology on the Company's existing customer relationships and ability to secure new customers; the ability of Lionbridge to realize the expected benefits of its technology initiatives and acquisitions and the timing of the realization of such benefits; errors, interruptions or delays in cloud-based technology; breaches of security measures; the termination of customer contracts or engagements prior to the end of their term; the size, timing and recognition of revenue from clients; the ability of Lionbridge to integrate acquisitions and expand its customer relationships and the timing and success of such activities; the portion of the Company's service engagements that are subject to the impact of foreign currency fluctuations; continued uncertainty and volatility in global economic conditions that could negatively affect demand for the Company's services and technologies; reduced demand for the Company’s services that adversely impacts Lionbridge’s future revenues, cash flows, results of operations and financial condition; Lionbridge's ability to perform services in lower cost operational locations and the timing of its transfer of service execution to such locations, and customer acceptance of service execution in such locations; risks associated with conducting business outside of the United States, including compliance with changing and potentially conflicting laws and regulations and expenses and delays associated with any such activities; longer collection cycles in particular jurisdictions; risks associated with competition; Lionbridge's ability to forecast revenue, profitability, technology adoption, customer demand and operating results; changes in tax rates applicable to the Company and changes to the interpretations of applicable tax rates; changes in interpretation of statutory and regulatory positions by international tax authorities in countries in which Lionbridge conducts business; changes in interpretation of employment and tax positions by U.S. state and federal authorities; the failure of Lionbridge to keep pace with technological changes or changing customer needs; the risk of claims by third parties of intellectual property claims; the ability of Lionbridge to respond to fluctuations in the complexity, timing and mix of services required by customers; and Lionbridge being held liable for defects or errors in its service offerings. For a more detailed description of the risk factors associated with Lionbridge, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2015, the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, and subsequent filings with the SEC (copies of which may be accessed through the SEC's website at http://www.sec.gov.






LIONBRIDGE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)



 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
(In thousands, except per share amounts)
2016
 
2015
 
2016
 
2015
Revenue
$
135,182

 
$
138,604

 
$
415,837

 
$
419,172

Operating expenses:
 
 
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization included below)
89,595

 
92,977

 
276,426

 
277,825

Sales and marketing
10,788

 
11,083

 
34,511

 
35,163

General and administrative
21,280

 
21,888

 
66,546

 
69,024

Research and development
2,332

 
1,903

 
6,628

 
6,060

Depreciation and amortization
2,493

 
2,340

 
7,001

 
6,922

Amortization of acquisition-related intangible assets
1,293

 
993

 
3,943

 
2,979

Restructuring and other charges
1,869

 
2,957

 
5,283

 
9,359

Total operating expenses
129,650

 
134,141

 
400,338

 
407,332

Income from operations
5,532

 
4,463

 
15,499

 
11,840

Non-operating expense (income), net
 
 
 
 
 
 
 
Interest expense:
 
 
 
 
 
 
 
Interest on outstanding debt
543

 
482

 
1,582

 
1,439

Amortization of deferred financing charges
93

 
94

 
281

 
279

Interest income
(10
)
 
(13
)
 
(32
)
 
(50
)
Interest expense, net
626

 
563

 
1,831

 
1,668

Other expense (income), net
614

 
417

 
2,704

 
(2,335
)
Total non-operating expense (income), net
1,240

 
980

 
4,535

 
(667
)
Income before income taxes
4,292

 
3,483

 
10,964

 
12,507

Provision for income taxes
1,630

 
755

 
4,014

 
1,181

Net income
$
2,662

 
$
2,728

 
$
6,950

 
$
11,326

 
 
 
 
 
 
 
 
Net income per share of common stock:
 
 
 
 
 
 
 
Basic
$
0.05

 
$
0.04

 
$
0.12

 
$
0.19

Diluted
$
0.05

 
$
0.04

 
$
0.12

 
$
0.18

Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
57,868

 
60,683

 
58,633

 
60,558

Diluted
58,960

 
62,623

 
59,532

 
62,528






LIONBRIDGE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS

 
(Unaudited)
 
 
(In thousands)
September 30, 
 2016
 
December 31, 
 2015
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
23,881

 
$
27,831

Accounts receivable, net of allowance of $250 at September 30, 2016 and December 31, 2015
82,300

 
86,645

Unbilled receivables
27,309

 
23,250

Other current assets
14,645

 
13,306

Total current assets
148,135

 
151,032

Property and equipment, net
26,080

 
25,259

Goodwill
69,136

 
67,694

Acquisition-related intangible assets, net
45,888

 
48,991

Other assets
5,278

 
5,292

Total assets
$
294,517

 
$
298,268

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Debt, current portion
$
4,594

 
$
4,375

Accounts payable
24,368

 
27,726

Accrued compensation and benefits
18,669

 
21,242

Accrued outsourcing
13,251

 
9,874

Accrued restructuring
1,524

 
4,612

Income taxes payable
1,496

 
2,436

Accrued expenses and other current liabilities
7,388

 
9,877

Deferred revenue
7,317

 
9,398

Total current liabilities
78,607

 
89,540

Long-term debt, net of current portion
98,407

 
87,093

Deferred income taxes, net of current portion
6,961

 
6,833

Other long-term liabilities
21,385

 
21,665

Total liabilities
205,360

 
205,131

Stockholders’ equity:
 
 
 
Preferred stock

 

Common stock
617

 
637

Additional paid-in capital
259,563

 
270,225

Accumulated deficit
(182,710
)
 
(189,660
)
Accumulated other comprehensive income
11,687

 
11,935

Total stockholders’ equity
89,157

 
93,137

Total liabilities and stockholders’ equity
$
294,517

 
$
298,268












Reconciliation of GAAP Net Income to Adjusted EBITDA,
GAAP Net Income to Non-GAAP Adjusted Earnings and Diluted Net Income per
Share of Common Stock to Adjusted Earnings per Share (Unaudited)

The following table reconciles net income to Adjusted EBITDA:
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
(In thousands)
2016
 
2015
 
2016
 
2015
Net income
$
2,662

 
$
2,728

 
$
6,950

 
$
11,326

Depreciation and amortization
2,493

 
2,340

 
7,001

 
6,922

Amortization of acquisition-related intangible assets
1,293

 
993

 
3,943

 
2,979

Stock-based compensation
1,867

 
2,007

 
5,350

 
5,663

Restructuring and other charges
1,869

 
2,957

 
5,283

 
9,359

Interest expense, net
626

 
563

 
1,831

 
1,668

Other expense (income), net
614

 
417

 
2,704

 
(2,335
)
Provision for income taxes
1,630

 
755

 
4,014

 
1,181

Adjusted EBITDA
$
13,054

 
$
12,760

 
$
37,076

 
$
36,763

The following table reconciles net income to Adjusted Earnings and presents Adjusted Earnings per Share:
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
(In thousands, except per share amounts)
2016
 
2015
 
2016
 
2015
Net income
$
2,662

 
$
2,728

 
$
6,950

 
$
11,326

Amortization of acquisition-related intangible assets
1,293

 
993

 
3,943

 
2,979

Stock-based compensation
1,867

 
2,007

 
5,350

 
5,663

Restructuring and other charges
1,869

 
2,957

 
5,283

 
9,359

Impact on provision for income taxes

 

 

 

Adjusted Earnings
$
7,691

 
$
8,685

 
$
21,526

 
$
29,327

Fully diluted weighted-average number of common shares outstanding
58,960

 
62,623

 
59,532

 
62,528

Adjusted Earnings per Share
$
0.13

 
$
0.14

 
$
0.36

 
$
0.47

The following table reconciles diluted net income per share of common stock to adjusted earnings per share:
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2016
 
2015
 
2016
 
2015
Diluted net income per share of common stock
$
0.05

 
$
0.04

 
$
0.12

 
$
0.18

Amortization of acquisition-related intangible assets
0.02

 
0.02

 
0.07

 
0.05

Stock-based compensation
0.03

 
0.03

 
0.09

 
0.09

Restructuring and other charges
0.03

 
0.05

 
0.09

 
0.15

Impact on provision for income taxes

 

 

 

Adjusted Earnings per Share
$
0.13

 
$
0.14

 
$
0.36

 
$
0.47


Contact:
Sara Buda
Lionbridge
+1-978-964-1404
sara.buda@lionbridge.com