Lionbridge Announces Record Q3 2003 Operating EPS of $0.07 Net of
Previously- Announced Items Accelerated Debt Payoff and Strategic
Acquisition Trigger Unusual Expenses and Items WALTHAM, Mass., Oct.
27 /PRNewswire-FirstCall/ -- Lionbridge Technologies, Inc. , today
announced financial results for the quarter ended September 30,
2003. Financial and business highlights for the quarter include: --
Revenue of $36.7 million, consistent with the Company's stated
expectations for the quarter and an 8% increase over the third
quarter of 2002. For the nine months ended September 30, 2003,
Lionbridge revenue is $104.8 million, reflecting 19% year-over-year
growth versus FY 2002. -- GAAP earnings were $114,000 or $0.00 per
share based on 42.2 million weighted average fully diluted common
shares outstanding. This compares to a net loss of $246,000 or
($0.01) per share based on 31.7 million basic weighted average
common shares outstanding for the same period last year. --
Earnings, excluding items detailed below, were $2.8 million or
$0.07 per share, representing growth of approximately $1.6 million
over the prior year quarter. -- Lionbridge completed a follow-on
public offering of 12,340,000 shares of its common stock which
generated $70.4 million net proceeds to the Company. -- The Company
paid off approximately $28.0 million of debt, representing the
Company's subordinated debt and bank line of credit in their
entirety. -- Lionbridge acquired Mumbai, India-based Mentorix, for
approximately $21.3 million, net of cash of approximately $7.0
million that was acquired with the business. For the third quarter
2003, Lionbridge net income, in accordance with Generally Accepted
Accounting Principles (GAAP), was $114,000 or $0.00 per share based
on 42.2 million weighted average fully diluted common shares
outstanding. Net income included restructuring expenses of
$379,000, expenses related to the accelerated recognition of
financing costs and discounts on early repayment of debt totaling
approximately $2.1 million, and other acquisition-related items of
$165,000. Excluding these items, net income for its third quarter
2003 was $2.8 million or $0.07 based on 42.2 million weighted
average fully diluted common shares outstanding. The adjusted $2.8
million net income amount is 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 gains or
losses or expenses that are unusual in nature. "Our third quarter
accomplishments set the table for a strong finish to 2003 and
continued growth in 2004. We strengthened our balance sheet and
expanded our offshore infrastructure. Our globalization and testing
businesses are performing well and it looks as if our India
operation will offer even more cost and growth opportunities than
we had originally anticipated," said Rory Cowan, CEO, Lionbridge.
"Our operational results for the quarter show our ability to grow
revenue while keeping our fixed expenses flat. This leverage, when
combined with our two pillars of growth -- organic expansion and
the strength of our expanded offshore offering -- gives us
increasing confidence for a stronger than expected Q4 and continued
revenue and earnings growth in 2004." The Company also provided its
fourth quarter expectations and updated its FY 2003 guidance. For
the fourth quarter Lionbridge expects revenue of between $37.0 -
$38.0 million and income of $3.5 - $4.5 million, excluding any
acquisition-related expenses and restructuring charges as described
above, or $2.5 - $3.5 million on a GAAP basis. For 2003 Lionbridge
expects to achieve the high end of the revenue range it previously
provided for the year with revenue of $142.0 - $143.0 million. This
represents strong organic growth over FY 2002 as well as added
revenue from its recent acquisition. Lionbridge expects net income
for 2003 of $7.5 - $8.5 million, excluding any acquisition- related
expenses or restructuring charges expenses described above, or $4.0
- $5.0 million on a GAAP basis. For 2004 Lionbridge reiterated that
it expects revenue of $160.0 - $170.0 million and GAAP net income
of $15.0 - $19.0 million for 2004. Lionbridge will host a
conference call today at 4:30 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
http://www.lionbridge.com/webcast/oct27/. A replay will be
available at these locations for a week. To access the call via
telephone, please dial (888) 428-4473 (domestic) or (651) 291-0900
(international) and ask for the Lionbridge Q3 Earnings
teleconference. About Lionbridge Lionbridge Technologies, Inc. is a
leading provider of globalization and testing services that enable
Global 2000 organizations to confidently and cost effectively
deliver products and content worldwide. Lionbridge leverages its
global infrastructure and advanced language technologies to provide
multilingual content management, localization, testing and
development services that speed adoption, increase utilization and
reduce maintenance costs of global applications and content. Based
in Waltham, Mass., Lionbridge maintains facilities in Ireland, The
Netherlands, France, Germany, China, South Korea, Japan, Brazil,
India and the United States and provides services under the
Lionbridge and VeriTest brands. To learn more, visit
http://www.lionbridge.com/. Forward-Looking Statements This press
release contains forward-looking statements that involve risks and
uncertainties, including guidance provided for its fourth quarter,
FY 2003 and 2004. Lionbridge's actual experiences, actions,
financial and operating results for the quarter, the year and 2004
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 and production
schedules to generate revenues; the loss of a major client or
customer; the impact of foreign currency fluctuations on its
operating results and profitability; the size, timing and
recognition of revenue from major clients; customer delays or
postponements of services; costs associated with restructuring of
certain European operations; risks associated with management of
growth; the failure to keep pace with the rapidly changing
requirements of its clients; Lionbridge's ability to attract and
retain key personnel; costs associated with and consequential to
the acquisition and integration of Mentorix and benefits realized
from the acquisition; Lionbridge being held liable for defects or
errors in its service offerings; political, economic and business
fluctuations, including the impact of diseases, in international
markets; as well as risks of additional 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 Registration Statements on Form S-3 filed with the
Securities and Exchange Commission on July 1, 2003 and August 7,
2003 (File No. 333-106693 and File No. 107753), its Annual Report
on Form 10-K, filed March 31, 2003 (SEC File No. 000-26933) and its
quarterly report on Form 10-Q filed on August 14, 2003. LIONBRIDGE
TECHNOLOGIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) (Amounts in thousands, except per share data) Three
Months Ended Nine Months Ended September 30, September 30, 2003
2002 2003 2002 Revenue $36,701 $ 33,911 $104,822 $88,283 Cost of
revenue 21,931 20,247 63,407 53,567 Gross profit 14,770 13,664
41,415 34,716 Operating expenses: Sales and marketing 3,411 3,197
9,500 8,394 General and administrative 7,112 7,905 21,978 21,851
Research and development 147 268 498 967 Depreciation and
amortization 747 796 2,422 2,295 Amortization of
acquisition-related intangible assets 115 115 346 412 Merger,
restructuring and other charges 379 -- 379 -- Stock-based
compensation 69 179 295 674 Total operating expenses 11,980 12,460
35,418 34,593 Income from operations 2,790 1,204 5,997 123 Interest
expense: Interest expense, net 255 793 1,856 2,308 Accretion of
discount on notes payable 51 153 356 458 Accelerated recognition of
discount and deferred financing charges on early repayment of debt
2,139 -- 2,139 -- Other (income) expense, net (6) 311 226 829
Income (loss) before income taxes 351 (53) 1,420 (3,472) Provision
for income taxes 237 193 22 14 Net income (loss) $114 $ (246)
$1,398 $(3,486) Net income (loss) per share of common stock: Basic
$0.00 $(0.01) $0.04 $(0.11) Diluted 0.00 (0.01) 0.04 (0.11)
Weighted average number of common shares outstanding: Basic 39,706
31,656 34,433 31,607 Diluted 42,246 31,656 37,573 31,607 LIONBRIDGE
TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS (Amounts in
thousands) September 30, December 31, 2003 2002 (unaudited) ASSETS
Current assets: Cash and cash equivalents $27,621 $10,916
Restricted cash --- 352 Accounts receivable, net of allowances of
$475 and $425 at September 30, 2003 and December 31, 2002,
respectively 21,816 17,303 Work in process 10,584 6,062 Other
current assets 2,713 2,054 Total current assets 62,734 36,687
Property and equipment, net 4,837 5,013 Goodwill 35,316 15,142
Other intangible assets, net 315 551 Other assets 1,108 771 Total
assets $104,310 $58,164 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Short-term debt and current portion of
long-term debt $--- $3,215 Accounts payable 7,903 8,570 Accrued
expenses and other current liabilities 15,940 14,415 Deferred
revenue 3,218 3,753 Total current liabilities 27,061 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 1,912
1,769 Total stockholders' equity 75,337 1,714 Total liabilities and
stockholders' equity $104,310 $58,164 Contact: Sara Buda Lionbridge
Technologies (781) 434-6190 DATASOURCE: Lionbridge Technologies,
Inc. CONTACT: Sara Buda of Lionbridge Technologies,
+1-781-434-6190, Web site: http://www.lionbridge.com/
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