Lionbridge Announces Fourth Quarter and FY 2008 Results; Reports Record Quarterly Cash Flow From Operations of $13.1m; Grows Fourth Quarter Earnings Year-on-Year Excluding Non-Cash Charge
Posted on: Wednesday, 11 February 2009, 07:00 CST
Accelerates Operating Performance; Continued Strong Liquidity and Expanding New Business Pipeline Underscore Resilience of Business
Financial and business highlights for the fourth quarter include:
- Revenue of
$104.6 million , a decrease of 10.8% from the quarter endedDecember 31, 2007 reflecting the effect of the stronger US Dollar and project delays from certain clients in response to uncertain global economic conditions. - During the quarter the Company won a record number of large new client programs. The Company expects that these new programs will generate
$25-30 million in FY 2009. The company expects that new business should dampen potential effects of the global economic slowdown in FY 2009. For details of the new client wins, please see the Company's press release datedJanuary 27th, 2009 . - Gross margin of 34.3% in Q4, an increase of 270 bps from the prior year's fourth quarter and an increase of 310 bps sequentially from the third quarter of 2008. This reflects the benefits of the Company's cost management actions and improved currency environment.
- Preliminary GAAP net loss for the quarter of
$118.9 million or($2.14) per share based on 55.7 million weighted average common shares outstanding. Included in the preliminary GAAP net loss for the quarter is a non-cash charge of$120.6 million for goodwill impairment and a related tax benefit of approximately$1.6 million . - Excluding this non-cash goodwill impairment charge and the related tax benefit, preliminary non-GAAP adjusted net income in the fourth quarter was
$47,000 or$0.00 per share, an estimated increase of$0.07 per share compared to a GAAP net loss of$4.0 million or($0.07) per share in the quarter endedDecember 31, 2007 . 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. - Record cash flow from operations of
$13.1 million during the quarter. - Ending cash balance of
$38.0 million or$0.68 per share, the highest cash balance since 2004. - The Company's net debt is
$17.7 million , a decrease of$22.1 million from the quarter endedDecember 31, 2007 . - Final determination of the GAAP net loss and the non-GAAP adjusted net income are subject to the completion of an analysis of the utilization of net operating loss carryforwards under Section 382 of the Internal Revenue Code.
"We are accelerating our performance in the face of deteriorating global economic conditions. In the fourth quarter we improved our gross margins by almost 300 bps and increased our income from operations excluding our one time charge. And we generated record cash flow from operations," said
For the year ended
On a GAAP basis, the Company reported a preliminary net loss of
For the fiscal year 2008, the Company generated
The Company provided an outlook of its revenue expectations for the first quarter of 2009 with estimated revenue of
Lionbridge will host a conference call today at
Goodwill Impairment Analysis
As required by SFAS 142, "Goodwill and Other Intangible Assets," Lionbridge conducted its annual goodwill impairment test as of
Non-GAAP Financial Measures
In this release, the Company's adjusted net income 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 measure is presented because management believes it provides additional information to investors with respect to the performance of our fundamental business activities. Adjusted net income is a Non-GAAP financial measure and should not be viewed as an alternative to GAAP measures of performance. Management believes the most directly comparable GAAP financial measure for adjusted net income is net loss and has provided a reconciliation of adjusted net income to net loss at the end of this release.
About Lionbridge
Lionbridge Technologies, Inc. (Nasdaq: LIOX) is a provider of globalization and offshoring services. Lionbridge combines global 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 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
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including expected financial performance and expected revenue and earnings growth of Lionbridge in FY 2009, preliminary estimates of GAAP net loss and non-GAAP adjusted net income, anticipated customer demand as well as trends in the currency markets. 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 effect of the global economic conditions on the demand for Lionbridge's services by customers and prospective customers; the results of the analysis of the utilization of net operating loss carryforwards under Section 382 of the Internal Revenue Code and the deviation, if any, from the analysis used in determining preliminary GAAP loss and preliminary non-GAAP adjusted net income; a reduction in demand for outsourced business processes generally and within the industries served by Lionbridge in particular; the effect of global economic conditions on the timing or scope of services procured by Lionbridge customers; given that a substantial portion of Lionbridge's revenue is generated from a limited number of customers, the loss of or reduction in demand from one or more major client or customer would materially reduce our revenue and cash flow and adversely effect our business; 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 realize the expected benefits of its technology initiatives and the timing of the realization of such benefits; 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 portion of the Company's service engagements that are subject to the impact of foreign currency fluctuations; Lionbridge's ability to provide and maintain high quality services at a competitive price and related customer satisfaction with such service delivery; continued uncertainty, volatility or deterioration in global economic conditions that could negatively affect demand for the Company's services; continued fluctuations in political, economic and business conditions, and additional downturns in worldwide economic conditions generally, and in the information technology and software industries specifically; continued tightening of the credit markets which could negatively affect Lionbridge's business, demand for its services and ability to get paid promptly for such services, including inability of customers to obtain credit to finance purchases of the Company's services and/or customer insolvencies; risks associated with conducting business outside of
LIONBRIDGE TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Amounts in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2008 2007 2008 2007 Revenue $104,619 $117,243 $461,432 $451,994 Operating expenses: Cost of revenue (excluding depreciation and amortization shown separately below) 68,701 80,215 314,137 302,059 Sales and marketing 7,772 8,590 33,551 32,841 General and administrative 20,153 24,333 87,872 87,041 Research and development 1,190 1,022 5,273 3,375 Depreciation and amortization 1,088 1,268 4,741 5,186 Amortization of acquisition- related intangible assets 2,111 2,113 8,441 8,453 Goodwill impairment 120,587 --- 120,587 --- Merger, restructuring and other charges 580 2,410 1,007 4,019 Total operating expenses 222,182 119,951 575,609 442,974 Income (loss) from operations (117,563) (2,708) (114,177) 9,020 Interest expense: Interest on outstanding debt 862 1,273 3,872 5,403 Amortization of deferred financing costs and discount on debt 44 47 177 190 Interest income 137 210 527 699 Other expense, net 979 923 2,603 3,347 Income (loss) before income taxes (119,311) (4,741) (120,302) 779 Provision for (benefit from) income taxes * (368) (776) (997) 4,991 Net loss * $(118,943) $(3,965) $(119,305) $(4,212) Net loss per share of common stock *: Basic and diluted $(2.14) $(0.07) $(2.14) $(0.07) Weighted average number of common shares outstanding: Basic and diluted 55,696 58,690 55,837 59,297 * Preliminary estimate subject to completing final analysis of the utilization of net operating loss carryforwards under Section 382 of the Internal Revenue Code. LIONBRIDGE TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Amounts in thousands) December 31, December 31, 2008 2007 ASSETS Current assets: Cash and cash equivalents $37,978 $32,248 Accounts receivable, net of allowances of $685 and $689 at December 31, 2008 and 2007, respectively 67,184 83,611 Work in process 17,893 23,335 Other current assets 9,615 12,329 Total current assets 132,670 151,523 Property and equipment, net 14,077 13,449 Goodwill 9,675 131,213 Other intangible assets, net 19,999 28,441 Other assets 7,760 8,437 Total assets $184,181 $333,063 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt and current portion of long-term debt $22 $304 Accounts payable 20,218 20,217 Accrued compensation and benefits 20,122 21,164 Other accrued expenses and current liabilities * 24,868 29,364 Deferred revenue 10,277 16,014 Total current liabilities 75,507 87,063 Long-term debt, less current portion 55,700 71,751 Deferred income taxes, long-term 737 7,504 Other long-term liabilities 12,567 10,591 Total stockholders' equity * 39,670 156,154 Total liabilities and stockholders' equity $184,181 $333,063 * Preliminary estimate subject to completing final analysis of the utilization of net operating loss carryforwards under Section 382 of the Internal Revenue Code. Reconciliation of Preliminary GAAP Net Income (Loss) to Preliminary Non-GAAP Adjusted Net Income (Loss) and Adjusted EPS (Unaudited) (Amounts in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2008 2007 2008 2007 Net loss* $(118,943) $(3,965) $(119,305) $(4,212) Goodwill impairment charge 120,587 - 120,587 - Goodwill impairment related tax benefit (1,597) - (1,597) - Adjusted net income (loss)* 47 (3,965) (315) (4,212) Basic weighted average number of common shares outstanding 55,696 58,690 55,837 59,297 Fully diluted weighted average number of common shares outstanding 55,737 58,690 55,837 59,297 Adjusted EPS* $0.00 $(0.07) $(0.01) $(0.07) * Preliminary estimate subject to completing final analysis of the utilization of net operating loss carryforwards under Section 382 of the Internal Revenue Code.
SOURCE Lionbridge Technologies, Inc.
Source: PR Newswire
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