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Form 8-K LIONBRIDGE TECHNOLOGIES For: Nov 09

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November 9, 2015 8:11 AM EST

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
 
November 6, 2015
Lionbridge Technologies, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
Delaware
000-26933
04-3398462
_____________________
(State or other jurisdiction
_____________
(Commission
______________
(I.R.S. Employer
of incorporation)
File Number)
Identification No.)
  
 
 
1050 Winter Street, Suite 2300, Waltham, Massachusetts
 
02451
_________________________________
(Address of principal executive offices)
 
___________
(Zip Code)
 
 
 
Registrant’s telephone number, including area code:
 
781-434-6000
Not Applicable
______________________________________________
Former name or former address, if changed since last report
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 2.02 Results of Operations and Financial Condition.
Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for the registrant for the third quarter of fiscal year 2015, and forward-looking statements relating to 2015, as presented in a press release of November 9, 2015. The information in this Current Report on Form 8-K is furnished under Item 2.02 - "Results of Operations and Financial Condition." Such information, including the exhibits attached hereto, shall not be deemed "filed" for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 6, 2015, the Board of Directors of Lionbridge Technologies, Inc. (the “Company”) appointed Marc Litz as Chief Financial Officer (principal financial officer and principal accounting officer) of the Company, effective immediately. Donald Muir, formerly Senior Vice President and Chief Financial Officer (and principal financial officer), is leaving the Company to pursue new opportunities. Mr. Muir will remain with the Company in an advisory role until January 15, 2016 to assist in the transition.
Mr. Litz, age 39, has served as Vice President Finance and Corporate Controller of the Company since August 2012. Before joining the Company, Mr. Litz served as Director of Finance and Assistant Corporate Controller for Sapient Corporation from June 2006 through August 2012.
In connection with Mr. Muir’s departure from the Company, the Company entered into a letter agreement with Mr. Muir that provides him with (a) the payment of cash severance equal to 52 weeks of his base salary, (b) the payment of his annual cash incentive compensation for 2015, if earned, in accordance with the Company’s Management Incentive Plan, and (c) payment by the Company of the employer portion of the premium for continued coverage under the Company’s group dental and medical insurance plans under COBRA during the severance pay period and for one year thereafter. The letter agreement includes a general release of claims by Mr. Muir and covenants relating to certain continuing obligations of Mr. Muir. The foregoing summary of the letter agreement does not purport to be complete and is qualified in its entirety by reference to the Transition Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Item 8.01 Other Events
On November 9, 2015, the Company announced that its Board of Directors authorized a share repurchase program allowing the Company to repurchase up to $50 million of the Company’s common stock through the end of fiscal year 2018, and that the Company has acquired Geotext Translations, Inc., a privately held provider of legal translation services. The stock repurchase program and the acquisition of Geotext Translations, Inc. are further described in press releases attached as Exhibits 99.2 and 99.3, respectively.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release issued by Lionbridge Technologies, Inc. dated November 9, 2015.




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Lionbridge Technologies, Inc.
  
 
 
 
 
November 9, 2015
 
By:
 
/S/    MARC E. LITZ        
 
 
 
 
Marc E. Litz
 
 
 
 
Title: Chief Financial Officer




Exhibit Index

Exhibit No.
 
Description
10.1
 
Transition agreement dated November 06, 2015
99.1
 
Press release dated November 09, 2015
99.2
 
Press release dated November 09, 2015
99.3
 
Press release dated November 09, 2015





TRANSITION AGREEMENT
It is hereby agreed by and between Donald Muir, hereinafter referred to as "Employee,” and Lionbridge Technologies, Inc. (hereinafter referred to as the "Company” or “Lionbridge"), on November 6, 2015 (the “Effective Date”) for good and sufficient consideration more fully described below, that:
1.
Employment Status.     Employee's employment status with Lionbridge shall terminate on January 15, 2016 (the "Termination Date”). As of the Termination Date, Employee's salary will cease and any entitlement he has under any Company-provided benefit programs (including, but not limited to, participation in or eligibility for Lionbridge’s Management Incentive Plan for 2015 or 2016 performance and the Change of Control Policy and Change of Control Agreement between Employee and Lionbridge) will terminate, except as required by federal or state law or otherwise described below. In addition, Employee resigns from all director, officer and management positions held by him in Lionbridge or any of its affiliates or subsidiaries, and agrees to execute on request and prior to the Termination Date letters of resignation and any other documentation necessary to effect such resignation.
2.
Consideration.
a.
Payment. In consideration of Employee’s promises and undertakings set forth in this Agreement, and contingent on Employee’s performance of all his obligations to or in favor of Lionbridge having arisen or arising in the future under this Agreement and that certain Business Protection Agreement entered into by and between Lionbridge and Employee and effective as of September 10, 2007 (the “Business Protection Agreement”); Lionbridge shall pay to Employee (i) over a period of twelve (12) months after the Termination Date at regular intervals in accordance with Lionbridge’s payroll practices then in effect, less legally required withholdings and deductions, $360,000, plus (ii) over a two year period, upon Employee’s proper and timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, an amount equal to the premiums for continuing health coverage for less the amount Employee (and any of her qualified dependents covered as of the Effective Date) would have contributed to receive such benefits if he had remained an employee of Lionbridge, as determined by Lionbridge in its reasonable discretion and subject to applicable changes in rates under the Corporation’s health plans. The Termination Date will be treated as a qualifying event under the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”), and Employee will receive COBRA information under separate cover. If Employee dies before receiving the entire severance payment stated herein, the balance will be paid to his spouse, but if she is not alive at the time, the remaining payments will be paid to his estate.
b.
Equity and MIP. Employee acknowledges and agrees that (a) any stock options that have not vested as of the Termination Date will expire and be forfeited as of the Termination Date; (b) any shares of restricted stock that have not vested as of the Termination Date described below will expire and be forfeited as of the Termination Date, and (c) any long-term incentive awards that have not vested as of the Termination Date will expire and be forfeited as of the Termination Date (including for the avoidance of doubt, all shares granted under long-term incentive awards granted on January 13, 2014 and February 4, 2015). Lionbridge’s agreement to provide for a Termination Date that is a period of time following the Effective Date is additional consideration and is intended to allow for the vesting of equity through and including the Termination Date. Notwithstanding the foregoing, Employee will be entitled to receive an award under the terms and conditions of the Company’s 2015 MIP as and when approved by the Nominating and Compensation Committee of the Board of Directors, including an MBO payout at 57%, but will not participate in the Company’s 2016 MIP. Stock options that have vested but have not been exercised as of the Termination Date will continue to be exercisable for a period of 60 days from Termination Date in accordance with the applicable Stock Incentive Plan and award agreement.
c.
Full Payment. Apart from the payments and obligations set forth in this section 2, Lionbridge shall have no additional or continuing liability to Muir for any compensation, bonuses, equity, or benefits of employment.
d.
Company Files, Documents and Other Property. As soon as possible, but no later than three (3) business days following the Termination Date, Employee will return to Lionbridge all Company computers, files, reports, books, data and other documents, and any keys, credit cards or other items or equipment that he might have in his or her possession or under her control that are the property of Lionbridge, except as Lionbridge may otherwise agree. Employee agrees not to use any of the foregoing Company materials at any time, for any purpose.
3.
Release.
a.
In exchange for the compensation described in paragraph 2 herein, and other good and valuable consideration, receipt of which is hereby acknowledged, Employee hereby agrees that he, his representatives, agents, estate, predecessors, successors and assigns, release and forever discharge Lionbridge and/or its successors, assigns, directors, shareholders, officers, employees and/or agents, both individually and in their official capacities with Lionbridge (the “Lionbridge Released Parties”), from any and all actions or causes of action, suits, claims, complaints, contracts, liabilities, agreements, promises, debts and damages, whether existing or contingent, known or unknown, which arise out of Employee’s




employment with or termination of employment from Lionbridge (the “Claims”). This release is intended by Employee to be all encompassing and to act as a full and total release of any Claims that Employee may have or has had against the Lionbridge Released Parties, including, but not limited to, any federal, state or municipal law or regulation dealing with either employment or employment discrimination such as those laws or regulations concerning discrimination on the basis of age, race, color, religion, creed, sex, sexual orientation, national origin, handicap status, marital status or status as a disabled or Vietnam era veteran; any contract, whether oral or written, express or implied; or common law.
i.
Without limitation, specifically included in this paragraph are any Claims arising under the federal Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Civil Rights Act of 1866 and 1871, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Genetic Information Nondiscrimination Act, the Occupational Safety and Health Act, the Americans With Disabilities Act and any similar and applicable Massachusetts or other state or local statute or regulation, all of the foregoing as amended.
ii.
Claims under any other local, state or federal employment related statute, regulation or executive order (as they may have been amended through the Effective Date) relating to wages, hours or any other terms and conditions of employment. Without limitation, specifically included in this paragraph are any Claims arising under the Fair Labor Standards Act, the Family and Medical Leave Act of 1993, the Lilly Ledbetter Fair Pay Act of 2009, the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, COBRA, and any similar and applicable Massachusetts or other state or local statute or regulation.
iii.
Claims under any local, state or federal common law theory including, without limitation, wrongful discharge, breach of express or implied contract, promissory estoppel, unjust enrichment, breach of covenant of good faith and fair dealing, violation of public policy, defamation, interference with contractual relations, intentional or negligent infliction of emotional distress, invasion of privacy, misrepresentation, deceit, fraud or negligence.
iv.
Claims (a) arising or resulting from or connected in any way to the negotiation and execution of this Agreement (including without limitation for fraudulent inducement); (b) arising or resulting from or connected in any way to the operation or management of Lionbridge; (c) for any salary, bonus, incentive, reimbursement of expenses or other payment or compensation in connection with the employment relationship, except for the severance payment set forth in Section 2 above; or (d) based on any other act, conduct or omission of Lionbridge up to the execution of this Agreement.
b.
Employee agrees not only to release and discharge the Lionbridge Released Parties from any and all Claims as stated above that Employee could make on his own behalf or on behalf of others, but also those Claims which might be made by any other person or organization on behalf of Employee, and Employee specifically waives any right to become, and promises not to become, a member of any class in a case in which a claim or claims against the Lionbridge Released Parties are made involving any matters which arise out of Employee’s employment with or termination from Lionbridge. Nothing in this Agreement is to be construed as an admission by the Lionbridge Released Parties of any liability or unlawful conduct whatsoever.
c.
This release does not include any claim under the workers compensation or unemployment compensation statutes. Also, this Agreement is not intended to affect the rights and responsibilities of government agencies such as the Equal Employment Opportunity Commission (the “EEOC”), the National Labor Relations Board (the “NLRB”), or any other federal, state or local agency, to enforce the laws within their jurisdiction. This means that by signing this Agreement Employee may still exercise his or her protected right to (i) file a charge with, or participate in an investigation or proceeding conducted by, the EEOC, the NLRB, or any other federal, state or local government entity and (ii) exercise Employee’s rights under Section 7 of the National Labor Relations Act to engage in joint activity with other employees. Notwithstanding the foregoing, Employee agrees that (x) if Employee files a charge with the EEOC, the NLRB, or any other federal, state or local government entity or (y) if one of the foregoing agencies commences an investigation or other legal action on Employee’s behalf, Employee specifically waive and release his or her right to recover, if any, individual monetary damages or other individual benefits or remedies of any sort whatsoever arising from the charge you filed or from the governmental action
d.
Employee acknowledges the payments and benefits set forth in this Agreement, together with payments and benefits previously provided to Employee by Lionbridge, are the only payments and benefits he will receive in connection with her employment or its termination, other than unemployment benefits which he may apply for after January 31, 2016. The Company neither guarantees nor warranties that Employee’s application for unemployment compensation benefits will be granted by the Department of Unemployment Assistance.






4.
Waiver of Rights and Claims Under the Age Discrimination and Employment Act and the Older Workers Benefit Protection Act.
a.
Employee has been informed that since he is 40 years of age or older, he has or might have specific rights and/or claims under the Age Discrimination and Employment Act and/or the Older Workers Benefit Protection Act. In consideration for the compensation described in paragraph 2 herein, Employee specifically waives such rights and/or claims to the extent that such rights and/or claims arose prior to the date this Agreement was executed.
b.
Employee was advised by Lionbridge of his right to consult with an attorney prior to executing this Agreement.
c.
Employee was further advised when he was presented with this Agreement on or before November 6, 2015, and that he had 21 days within which to consider the Agreement, until the close of business on November 27, 2015.
d.
Employee was also advised that he may revoke this Agreement within seven days after signing it, by delivering a signed notice of revocation by mail, overnight mail, fax, email, or hand delivery, to Lionbridge, attention: Michele Erwin, [email protected] or 1050 Winter Street, Waltham, MA, within the seven day deadline.
5.
Confidentiality.
a.
All obligations and restrictive covenants as set forth in any existing employment agreement between Employee and the Company regarding the protection of the Company’s trade secrets, confidential information, works made for hire and inventions, as well as any agreements regarding the solicitation or hiring of employees or customers, including but not limited to the Business Protection Agreement or the like, shall remain in full force and effect notwithstanding this Agreement, including but not limited to, provisions and/or restrictions relating to trade secrets, confidential information, works made for hire and inventions, solicitation, hiring, Company property, etcetera.
b.
Other than as permitted in Section 4(c) above, the Employee shall not divulge or publish, directly or indirectly, any information whatsoever regarding the financial terms of this Agreement to any person or organization, other than the attorneys, accountants and/or financial advisors of the Company and the Employee, or as required by law.
c.
Nothing in this paragraph 5 shall bar Employee or Lionbridge from providing truthful testimony in any legal proceeding or in communicating with any governmental agency, or from making any other truthful disclosure required or authorized by law, including, if required, disclosure of this Agreement; provided, however, that in providing such testimony or making such disclosures or communications, the parties will use their best efforts to ensure that this paragraph 7 is complied with to the maximum extent possible.
6.
Representations and Governing Law.
a.
This Agreement represents a complete understanding between the parties, supersedes any and all other agreements and understandings, whether oral or written. Employee understands that his Change of Control Agreement and Indemnification Agreement terminate automatically as of the Effective Date. This Agreement may not be modified, altered or changed except upon written consent of both parties.
b.
This Agreement shall be governed by and construed in accordance with the laws of Massachusetts, without giving effect to the principles of conflicts of law thereof.
c.
Employee acknowledges that any breach of the obligations and covenants set forth in this Agreement would cause Lionbridge immediate and irreparable harm and, therefore, that Lionbridge shall be entitled to injunctive relief in addition to any other remedies Lionbridge may have at law or in equity.
d.
Employee represents that he has read the foregoing Agreement, fully understands the terms and conditions of such Agreement, and is voluntarily executing the same. In entering into this Agreement, Employee does not rely on any representation, promise or inducement made by Lionbridge, with the exception of the consideration described in this document.
e.
In the event that any provision in this Agreement is determined to be legally invalid, the affected provision shall be stricken from the Agreement, and the remaining terms of the Agreement and its enforceability shall remain unaffected thereby. The language of all parts of this Agreement shall in all cases be construed as a whole according to its fair meaning and not strictly for or against any of the parties.
f.
This Agreement may be executed in any number of counter-parts, each of which shall constitute an original, but which taken together shall constitute one instrument.
g.
Headings. Paragraph, section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.




7.
Effective Date. As set out in 4(d), Employee may revoke this Agreement for a period of seven (7) days following its execution, and the Agreement shall not become effective or enforceable until this revocation period has expired.

Executed this 6th day of November, 2015.

 
 
/S/    DONALD MUIR        
 
 
Donald Muir
 
 
 
 
 
 
 
 
Lionbridge Technologies, Inc.
 
 
 
 
 
 
 
 
/S/    RORY J. COWAN        
 
 
Rory J. Cowan
 
Title:
Chief Executive Officer



LIONBRIDGE REPORTS Q3 RESULTS WITH REVENUE OF $138.6 MILLION,
GAAP EPS OF $0.04 AND NON-GAAP EPS OF $0.14

Announces Acquisition of Geotext Translations and New $50 Million Share Repurchase Program
WALTHAM, Mass. – November 09, 2015 - Lionbridge Technologies, Inc. (Nasdaq: LIOX), today announced revenue and earnings for the third quarter ended September 30, 2015.
Financial highlights for the third quarter include:
•
Revenue of $138.6 million, an increase of $18.4 million or 15% compared to the third quarter of 2014.
•
GAAP earnings of $2.7 million, or $0.04 per diluted share based on 62.6 million weighted average fully diluted common shares outstanding. GAAP net income decreased $0.9 million, or $0.02 per diluted share, compared to the third quarter of 2014, primarily due to a $2.3 million increase in restructuring and other charges.
•
Non-GAAP adjusted earnings of $8.7 million or $0.14 per diluted share, an increase of $1.6 million or $0.03 per diluted share compared to the third quarter of 2014. The Company defines non-GAAP adjusted earnings as net income excluding merger, restructuring and acquisition-related costs, asset impairment costs, stock-based compensation, and amortization of acquisition-related intangible assets. 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.
•
Cash flow from operations of $7.9 million for the quarter.
The Company recently secured several significant new customer engagements, including a Taiwanese manufacturer of smartphones, a large US retailer and a British luxury automobile manufacturer.
For the nine months ended September 30, 2015 revenue increased $48.2 million year-on-year, GAAP net income increased $2.0 million or $0.03 per diluted share and non-GAAP earnings increased $9.9 million or $0.16 per diluted share as compared to the first nine months of 2014.
Separately, the Company announced the acquisition of Geotext Translations, Inc., a New York-based translation company that specializes in the legal translation market. Geotext had unaudited trailing twelve months of revenue of approximately $17 million for the period ended September 30, 2015. Lionbridge is purchasing Geotext for a total estimated cash consideration of approximately $11 million and additional earn-out potential which would be payable in cash over three years, subject to the attainment of certain revenue metrics. The consideration is being satisfied using Lionbridge’s existing cash resources. The Company expects the acquisition will contribute modestly to non-GAAP earnings in 2016, including minimal acquisition and integration costs.
The Company also announced today that its Board of Directors has authorized a share repurchase program allowing the Company to repurchase up to $50 million of the Company’s common stock through fiscal year 2018. The new authorization is almost three times as large as the previous $18 million share repurchase program that was announced in November of 2012 and which has now expired.
“With our strong organic growth in verticals such as life sciences and industrials and the ongoing successful integration of CLS Communication, we are well on path to achieve our goals to establish and grow recurring relationships with clients across vertical markets,” said Rory Cowan, CEO of Lionbridge. “While Q3 revenue was behind expectations, largely due to delays from certain technology clients, we continue to generate solid year-on-year growth and cash flow remains strong. We have firming demand across our business. The addition of Geotext furthers our ongoing vertical market expansion. And the new, accelerated buyback program underscores our confidence in the long term profit and cash flow growth of the Company. We expect a strong finish to 2015 and ongoing expansion in 2016.”
Lionbridge provided outlook for the fourth quarter of 2015 with estimated revenue of $140-143 million, which would reflect year-on-year growth of approximately 18% as compared to the fourth quarter of 2014. The Company also provided a preliminary outlook for FY 2016 with estimated year-on-year revenue growth of 5-8%, and continued growth in income from operations.
The Company is also announcing today that Donald Muir, Lionbridge’s Chief Financial Officer will retire from Lionbridge. Muir will remain with the company through mid-January in support of the transition. Muir will be succeeded by Marc Litz, currently Lionbridge’s Vice President, Finance and Corporate Controller, who has been with the Company for three years.

“Don has been instrumental in shaping our financial strategy over the past 8 years during a time of significant growth and diversification for the Company. We appreciate his dedication to the successful expansion of our business and to building a world-class global finance organization. He leaves behind a strong team and we thank Don for his many contributions,” said Rory Cowan, CEO.
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 888-390-1050 and international callers can dial 312-470-7236. The pass code for the call is “Lionbridge”. The conference call will also be available live via the Internet at http://www.lionbridge.com.
Non-GAAP Financial Measures
In this release, the Company's 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 our fundamental business activities. “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 believes the most directly comparable GAAP financial measure for these measures are net income and diluted net income per share and has provided a reconciliation of GAAP net income to adjusted earnings and adjusted earnings per share at the end of this release.
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 expected financial performance, expected growth in revenue, income from operations and profit growth, and the momentum, pace and strengthening of such growth in Q4 2015 and FY 2016 as well as expected benefit of the Company’s acquisition of Geotext Translations, and the success of the integration of CLS Communication (“CLS”), which the Company acquired in January of 2015. 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 Lionbridge's ability to fully integrate Geotext Translations and CLS and the pace of such integration actions; the timing of the realization of any synergies associated with the acquisition of Geotext Translations and CLS; 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; 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, 2014 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)
2015
 
2014
 
2015
 
2014
Revenue
$
138,604

 
$
120,191

 
$
419,172

 
$
370,934

Operating expenses:
 
 
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization included below)
92,977

 
80,608

 
277,825

 
253,559

Sales and marketing
11,083

 
9,685

 
35,163

 
29,369

General and administrative
21,888

 
19,868

 
69,024

 
60,587

Research and development
1,903

 
1,698

 
6,060

 
5,194

Depreciation and amortization
2,340

 
2,033

 
6,922

 
5,771

Amortization of acquisition-related intangible assets
993

 
842

 
2,979

 
2,453

Restructuring and other charges
2,957

 
611

 
9,359

 
1,827

Total operating expenses
134,141

 
115,345

 
407,332

 
358,760

Income from operations
4,463

 
4,846

 
11,840

 
12,174

Interest expense:
 
 
 
 
 
 
 
Interest on outstanding debt
482

 
164

 
1,439

 
413

Amortization of deferred financing charges
94

 
25

 
279

 
79

Interest income
13

 
9

 
50

 
59

Other expense (income), net
417

 
(42
)
 
(2,335
)
 
(153
)
Income before income taxes
3,483

 
4,708

 
12,507

 
11,894

Provision for income taxes
755

 
1,066

 
1,181

 
2,580

Net income
$
2,728

 
$
3,642

 
$
11,326

 
$
9,314

 
 
 
 
 
 
 
 
Net income per share of common stock:
 
 
 
 
 
 
 
Basic
$
0.04

 
$
0.06

 
$
0.19

 
$
0.15

Diluted
$
0.04

 
$
0.06

 
$
0.18

 
$
0.15

Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
60,683

 
60,012

 
60,558

 
60,263

Diluted
62,623

 
62,646

 
62,528

 
63,070




LIONBRIDGE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)


(In thousands)
September 30, 
 2015
 
December 31, 
 2014
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
30,926

 
$
36,893

Accounts receivable, net of allowance of $250 at September 30, 2015 and December 31, 2014
86,966

 
66,479

Unbilled receivables
27,321

 
25,843

Other current assets
14,780

 
12,090

Total current assets
159,993

 
141,305

Property and equipment, net
26,193

 
23,622

Goodwill
62,031

 
21,937

Acquisition-related intangible assets, net
44,556

 
12,232

Other assets
6,906

 
5,677

Total assets
$
299,679

 
$
204,773

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Debt, current portion
$
3,719

 
$
—

Accounts payable
27,004

 
21,885

Accrued compensation and benefits
23,465

 
17,249

Accrued outsourcing
11,448

 
10,429

Accrued restructuring
2,228

 
3,492

Income taxes payable
2,357

 
2,123

Accrued expenses and other current liabilities
10,070

 
10,485

Deferred revenue
8,619

 
11,866

Total current liabilities
88,910

 
77,529

Long-term debt, net of current portion
90,427

 
27,000

Deferred income taxes, net of current portion
4,827

 
704

Other long-term liabilities
20,823

 
13,786

Total liabilities
204,987

 
119,019

Stockholders’ equity:
 
 
 
Preferred stock
—

 
—

Common stock
645

 
635

Additional paid-in capital
273,818

 
272,252

Accumulated deficit
(192,571
)
 
(203,897
)
Accumulated other comprehensive income
12,800

 
16,764

Total stockholders’ equity
94,692

 
85,754

Total liabilities and stockholders’ equity
$
299,679

 
$
204,773










Reconciliation of GAAP Net Income to Non-GAAP Adjusted Earnings (Unaudited)
Comparison of Three and Nine Months Ended September 30, 2015 to
Three and Nine Months Ended September 30, 2014

 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
(In thousands, except per share amounts)
2015
 
2014
 
2015
 
2014
Net income
$
2,728

 
$
3,642

 
$
11,326

 
$
9,314

Amortization of acquisition-related intangible assets
993

 
842

 
2,979

 
2,453

Stock-based compensation
2,007

 
2,008

 
5,663

 
5,814

Restructuring and other charges
2,957

 
611

 
9,359

 
1,827

Adjusted earnings
$
8,685

 
$
7,103

 
$
29,327

 
$
19,408

Fully diluted weighted-average number of common shares outstanding
62,623

 
62,646

 
62,528

 
63,070

Adjusted diluted earnings per share
$
0.14

 
$
0.11

 
$
0.47

 
$
0.31






Lionbridge Announces $50 Million Share Repurchase Program

WALTHAM, Mass. - November 09, 2015 -- Lionbridge Technologies, Inc. (Nasdaq: LIOX) today announced that its Board of Directors has authorized a share repurchase program allowing the Company to repurchase up to $50 million of the Company’s common stock through then end of fiscal year 2018. The new authorization represents an increase of $32 million from the previous $18 million share repurchase program that was announced in November of 2012 and which has now expired.
“This new share repurchase program marks a significant increase from our previous buyback program, underscoring our ongoing confidence in the long-term financial success of Lionbridge and our commitment to increase shareholder value,” said Rory Cowan, chief executive officer. “We will continue to use our capital to fund growth both organically or by acquisitions.  With recurring revenue streams across diverse end markets, increasing demand for our global crowd-in-the-cloud offerings, and our expectations for ongoing profit and cash flow expansion, we believe Lionbridge is well positioned to proceed with both acquisitions and share repurchases while maintaining our leverage at a reasonable level.
Under the program, the Company’s common stock may be purchased through a combination of a 10b5-1 automatic trading plan and discretionary purchases on the open market, through block trades or in privately negotiated transactions as permitted under Securities Exchange Act of 1934 Rule 10b-18 . The amount of shares purchased and the timing of the purchases will depend on a number of factors, including trading price, trading volume and general market conditions, as well as on working capital requirements, general business conditions and other factors, including alternative investment opportunities.
About Lionbridge 
Lionbridge (Nasdaq LIOX) 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.
Forward-Looking Statements
Statements made in this press release regarding the Company’s share repurchase program, expected customer demand for the Company’s technologies, products and services, and future revenue, earnings and cash flow performance are forward-looking statements. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Among other things, sufficient shares may not be available at appropriate prices, alternative uses may develop for the Company’s funds, and market and other conditions may change.  In addition, anticipated customer demand for the Company’s products and services may change due to changing customer strategies or priorities, competing technologies or services, or other external business or economic conditions.  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.  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, 2014 and subsequent filings with the SEC (copies of which may be accessed through the SEC’s website at http://www.sec.gov

Contact
Sara Buda
Lionbridge Technologies, Inc.
978-964-1404





LIONBRIDGE ACQUIRES LEGAL TRANSLATION FIRM GEOTEXT TRANSLATIONS
Market Leader in Translation Services for the Legal Industry Augments Lionbridge End-Market Diversification, Expands Opportunities with New and Existing Clients
WALTHAM, Mass. - November 09, 2015 - Lionbridge Technologies, Inc. (Nasdaq: LIOX) today announced that it has acquired New York-based Geotext Translations, Inc., a privately held provider of legal translation services. The addition of Geotext will enable Lionbridge to meet growing demand for integrated, high-quality legal translation solutions and access Geotext’s long-standing relationships with clients in the legal industry.
“International transactions and commerce have fueled the need for specialized legal translation services, from patent translation, to support for eDiscovery in complex litigation, to translation of commercial contracts. As content in the legal market continues to grow, the demand for integrated, high-quality translation services is accelerating,” said Rory Cowan, CEO, Lionbridge. “Geotext is the ideal partner for Lionbridge, with a proven track record of providing trusted legal translation services that offer clients unparalleled value, knowledge and experience. We will build upon Geotext’s skills as we expand relationships with clients in this growing market sector.”
“Geotext realizes significant benefits by becoming part of Lionbridge,” said Joe Duncan, CEO of Geotext. “We gain a powerful worldwide sales channel and a proven global delivery platform to complement our New York, London and San Francisco operations. The relationship will increase our production capacity while expanding our footprint across diverse international legal markets such as Brazil, China, Germany, Korea and beyond. Our clients will benefit from Lionbridge’s global team of experts in offices across 28 countries and cutting-edge technology solutions that can be applied to large-scale litigations and investigations around the world.”
Geotext had unaudited trailing twelve months of revenue of approximately $17 million for the period ended September 30, 2015. Lionbridge is purchasing Geotext for a total estimated cash consideration of approximately $11 million and additional earn-out potential which would be payable in cash over three years, subject to the attainment of certain revenue metrics. The consideration is being satisfied using Lionbridge’s existing cash resources. The Company expects the acquisition will contribute modestly to non-GAAP earnings in 2016, including minimal acquisition and integration costs.
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 technology platforms and our global network of more than 100,000 independent, in-country professionals, 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.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including expectations for revenue and earnings related to the acquisition of Geotext for 2016. 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 timing and cost of integration activities; customer acceptance of the transaction; integration expense; risks associated with management of growth, transition and integration; the failure to keep pace with the rapidly changing requirements of its clients; inherent uncertainties of litigation and associated need for translation services; costs associated with and consequential to the acquisition and integration of Geotext and benefits realized from the acquisition; 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and subsequent filings with the SEC (copies of which may be accessed through the SEC’s website at http://www.sec.gov).

Media Contacts:
Sara Buda                
Lionbridge Technologies                    
+1-978-964-1404

Morgen Myrdal
Geotext Translations
+1-212-631-7432



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