WALTHAM, Mass., Aug. 3 /PRNewswire-FirstCall/ -- Lionbridge Technologies, Inc. (Nasdaq: LIOX), a leading provider of globalization and testing services, today announced financial results for the second quarter ended June 30, 2005. Financial and business highlights for the quarter include:

• Revenue of $41.3 million, an increase of approximately 7% compared to revenue of $38.8 million for the first quarter of 2005. Revenue from the Company's core globalization business increased approximately 10% from the prior quarter.
• Gross margin of 36%, an increase of approximately 310 basis points from gross margin achieved in the first quarter of 2005.
• Net income of $1.4 million, or $0.03 per share, based on 49.2 million weighted average fully diluted common shares outstanding. This compares to a net loss of $217,000, or $0.00 per share for the first quarter of 2005, based on 47.0 million weighted average fully diluted common shares outstanding.
• Positive cash flow from operations of $5.0 million, the highest single quarter cash flow in the Company's history. This resulted in an ending cash and short term investments balance of $39.9 million.
• During the quarter, the Company announced its agreement to acquire Bowne Global Solutions (BGS), a division of Bowne & Co., Inc. (NYSE: BNE), for at least $180 million (excluding cash received), in a combination of cash and common stock. The transaction is expected to be accretive to Lionbridge earnings within the first full quarter of combined operations, excluding restructuring and related expenses.
• On Friday, July 29, 2005, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 as amended, expired in connection with the Company's pending acquisition of Bowne Global Solutions. The Company expects to close the acquisition in the third quarter of 2005.

"The traction from our field sales force is finally becoming visible. We are driving mid-teens sales growth from non-major accounts, margins are strengthening and cash flows are at the highest levels in our history," said Rory Cowan, CEO, Lionbridge. "While our testing business is still overcoming its customer concentration challenge, our core globalization business delivered another sequential quarter of solid growth. This trend provides a strong platform for combining the best of breed within Lionbridge and BGS to maximize efficiencies and drive continued innovation for our collective clients."

The Company will host a conference call today at 4:30 pm ET 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/Aug3/. A replay will be available at this location for a week.

About Lionbridge

Lionbridge Technologies, Inc. (Nasdaq: LIOX) is a leading provider of globalization and testing services. Lionbridge combines global onshore, near shore and offshore 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 in all industries 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 21 solution centers in 9 countries 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 expected financial performance of Lionbridge, the consummation of the acquisition of Bowne Global Solutions, Lionbridge's ability to achieve the expected synergies and financial results as a result of the acquisition, and the expected timing for closing the acquisition. The closing of the acquisition is subject to various risks, including the risk that Lionbridge does not obtain the bank financing to fund the cash portion of the purchase price. Lionbridge's actual experiences, actions, financial and operating results may differ materially from those discussed in the forward- looking statements. These forward-looking statements are neither promises nor guarantees, but are subject to risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that might cause such a difference include the loss of a major client or customer; 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; Lionbridge's inability to successfully integrate Bowne Global Solutions and its employees into Lionbridge and achieve expected synergies; the Company's ability to accurately forecast the acquisition related restructuring costs and allocation of the purchase price, goodwill and other intangibles acquisition related and other asset adjustments, as well as the impact of equity based compensation expense associated with FAS 123R; 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 Bowne Global Solutions and benefits realized from the acquisition; Lionbridge being held liable for defects or errors in its service offerings; political, economic and business fluctuations; 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 Lionbridge's ability to forecast revenue and operating results. For a more detailed description of the risk factors associated with Lionbridge, please refer to and Lionbridge's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2005 and the 8-K filed on June 28, 2005.

    Contact:
     Sara Buda
     Lionbridge Technologies
     (781) 434-6190
     sara_buda@lionbridge.com


                        LIONBRIDGE TECHNOLOGIES, INC.

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (UNAUDITED)
                (Amounts in thousands, except per share data)


                            Three Months Ended          Six Months Ended
                                 June 30,                   June 30,
                            2005         2004         2005          2004

    Revenue               $ 41,338     $ 40,962     $ 80,158     $ 80,827
    Operating expenses:
     Cost of revenue
      (excluding
      depreciation and
      amortization shown
      separately below)     26,453       24,559       52,488       49,130
     Sales and marketing     4,051        3,673        7,864        7,257
     General and\
      administrative         7,913        7,660       15,628       15,810
     Research and
      development              238           54          382          179
     Depreciation and
      amortization             569          775        1,228        1,640
     Amortization of
      acquisition-related
      intangible assets          9            9           18          108
     Merger, restructuring
      and other charges         --          241          449        1,854
     Stock-based compensation  503          124          819          243
      Total operating
       expenses             39,736       37,095       78,876       76,221

    Income from operations   1,602        3,867        1,282        4,606

    Interest income            156           74          336          159
    Other expense, net         160           29          222           67

    Income before
     income taxes            1,598        3,912        1,396        4,698
    Provision for
     income taxes              212          201          227          294

    Net income              $1,386       $3,711       $1,169       $4,404

    Net income per share
     of common stock:
     Basic                   $0.03        $0.08        $0.02        $0.09
     Diluted                  0.03         0.08         0.02         0.09

    Weighted average
     number of common
     shares outstanding:
     Basic                  47,067       46,496       47,010       46,412
     Diluted                49,249       48,754       49,274       48,713


                        LIONBRIDGE TECHNOLOGIES, INC.

                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (UNAUDITED)
                            (Amounts in thousands)


                                                    June 30,    December 31,
                                                      2005          2004

    ASSETS
    Current assets:
     Cash and cash equivalents                       $24,116        $38,450
     Short-term investments                           15,800          4,000
     Restricted cash                                      89            114
     Accounts receivable, net of allowances
      of $428 and $364 at June 30, 2005 and
      December 31, 2004, respectively                 24,886         21,065
     Work in process                                   9,832          9,199
     Other current assets                              2,573          1,889

      Total current assets                            77,296         74,717

    Property and equipment, net                        3,299          2,685
    Goodwill                                          34,916         34,916
    Other intangible assets, net                          46             64
    Other assets                                       1,626          1,006

      Total assets                                  $117,183       $113,388

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
     Accounts payable                                  8,223          6,322
     Accrued expenses and other current liabilities   14,997         15,171
     Deferred revenue                                  3,733          3,263

      Total current liabilities                       26,953         24,756

    Other long-term liabilities                        1,164          1,166

    Total stockholders' equity                        89,066         87,466

      Total liabilities and stockholders' equity    $117,183       $113,388

SOURCE Lionbridge Technologies, Inc.
08/03/2005

CONTACT: Sara Buda of Lionbridge Technologies, +1-781-434-6190, sara_buda@lionbridge.com

Web site: http://www.lionbridge.com
(LIOX BNE)