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Lionbridge Technologies' CEO Discusses Q2 2012 Results - Earnings Call Transcript

So first let’s talk about the quarter. As you saw, revenue grew about $6 million or about 5% year-on-year despite a currency headwind. Constant currency revenue growth was almost 9% year-on-year. This increase was largely driven from solid growth in many of our large accounts, and the benefit of a lot of new business which continues to ramp as well. I’ll talk a little more about our positive demand environment shortly, but clearly we had a very strong first half and we expect continued strength in the second half in spite of the global uncertainly we all are reading about.

Secondly, we grew gross margins by 200 basis points year-over-year to 32.4%. This reflects really solid growth across all of our segments. And operating profit for the quarter was almost $7 million excluding one-time items. The underlying profit potential of the business is really becoming evident now.

GAAP earnings were about $2.5 million or $0.04 per share and that includes $6.7 million of European restructuring expenses, impaired items related to real estate technology which I’ll talk to you about shortly, and some one-time acquisition costs. Non-GAAP earnings, which exclude these items, was about $11 million or $0.18 per share.

This is our strongest adjusted earnings quarter ever, and when you adjust for the $3.2 million tax benefit our non-GAAP earnings were still a record $8 million. So clearly we’re seeing strong profit momentum no matter how you look at it.

Finally, we continue to generate cash. This quarter we generated about $6.6 million in cash flow from operations and we paid down $4 million of the $10 million in debt related to our PRI acquisition we closed on June 1. All in all, Q2 marked a very strong quarter. We’ve seated our earnings and revenues forecast once again with solid growth across all in-markets and we delivered our highest adjusted profit in history.

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