$9.6 Million Sequential Quarter Revenue Growth Drives $6.2 Million Incremental Income from Operations Excluding Restructuring; Reflects Strengthening Revenue and Cost Management

WALTHAM, Mass., Aug. 4 /PRNewswire-FirstCall/ -- Lionbridge Technologies, Inc. (Nasdaq: LIOX) today announced financial results for the quarter ended June 30, 2009. Financial and business highlights for the quarter include:

• Revenue of $98.0 million, an increase of $9.6 million or 11% from the first quarter of 2009.
• Total gross profit of $32.3 million, an increase of $5.1 million from the prior quarter. Gross margin was 33.0%, an improvement of 220 bps from the prior quarter.
• Income from operations of $3.2 million excluding restructuring, a sequential quarter improvement of $6.2 million from the first quarter of 2009. This excludes the restructuring expense described below. The Company's sequential quarter gross margin and operating income increases reflect strengthening revenue and ongoing cost management.
• Restructuring expense of $1.6 million, reflecting the Company's continued implementation of its previously-announced cost reduction program.
• GAAP net loss of $248,000 or ($0.00) per share based on 56.0 million weighted average common shares outstanding. This compares to a GAAP net loss of ($0.09) per share in Q1 of 2009.
• Non-GAAP earnings of $3.7 million or $0.07 per share, an improvement of $0.10 per share from the prior quarter. The Company defines non-GAAP earnings as net income excluding merger, restructuring and related costs, stock-based compensation, amortization of acquisition-related intangible assets and unusual, one-time charges. 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 $12.5 million during the quarter.
• Ending cash balance of $28.0 million or $0.50 per share.
• Net debt of $8.7 million, a sequential quarter decrease of $13.1 million from the first quarter of 2009. The Company has reduced its net debt by $31.5 million from the second quarter of 2008.
• The Company also announced several new client engagements during the quarter including a six year, $100 million contract with the US Department of Justice, and an estimated $8 million per year contract with Dell.
• During the quarter, Lionbridge was also added to the Russell 3000 Index.
  

"As expected, our strengthening revenue is generating significant incremental operating profit as we reduce costs and optimize our advanced language platform," said Rory Cowan, Lionbridge CEO. "Despite the effects of the global economic slowdown, we continue to establish long-term relationships with the world's most trusted organizations. We are implementing our cost reduction program to reduce fixed costs and enhance our profitability model. And we continue to generate cash and reduce our debt. All of these trends indicate a solid second half 2009 and further acceleration in 2010."

The Company provided its outlook for the third quarter of 2009 with estimated revenue of $93 to $98 million, reflecting traditional third quarter seasonality.

The Company will host a conference call today at 9:00 am ET regarding the content of this release as well as the Company's overall outlook going forward and other matters. 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/aug4. A replay will be available at this location for a week.

Non-GAAP Financial Measures

In this release, the Company's Non-GAAP Earnings disclosures 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 or cash provided by operating activities. Non-GAAP Earnings represents GAAP Earnings excluding amortization of acquisition-related intangible assets, merger, restructuring and related costs, unusual, one time items and stock based compensation expenses. Non-GAAP earnings are presented because management believes it provides additional information with respect to both the performance of our fundamental business activities as well as the Company's ability to meet future debt service and working capital requirements. Management believes the non-GAAP earnings information is useful to investors for these reasons. Non-GAAP EPS 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 is net income and has provided a reconciliation of Non-GAAP Earnings to net income on the last page of this release.

About Lionbridge

Lionbridge Technologies, Inc. (Nasdaq: LIOX) is a provider of translation, development and testing 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 translation, 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 Waltham, Mass., Lionbridge maintains solution centers in 26 countries and provides services under the Lionbridge and VeriTest brands.