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.
