Lightbridge, Inc. Reports Record Revenues and Earnings for Q3 1999 - Company Financial Information

Cambridge Telcom Report, Oct 25, 1999

Lightbridge, Inc. (Nasdaq:LTBG), a leading provider of customer acquisition, retention and risk management solutions for the converged telecom market, Tuesday reported financial results for the third quarter ended September 30, 1999. Revenues were a record $23.8 million, up 52.6% from $15.6 million for the third quarter of 1998. Net income was a record $2.3 million, or $0.13 per share on a diluted basis, compared to $0.3 million, or $0.02 per share on a diluted basis for the quarter ended September 30, 1998.

Revenues from the Company's transaction processing business were $15.2 million during the quarter, compared to $10.7 million in the same quarter of 1998, an increase of 42.5%. Software revenues were $5.3 million, up 112.6% from revenues of $2.5 million in the same quarter of 1998. Consulting services revenues were $3.3 million, compared to $2.4 million in the same quarter of 1998, a 35.3% increase.

Revenues for the nine months ended September 30, 1999 were $65.4 million, up 48.5% from $44.1 million in the same period of 1998. Net income for the nine months ended September 30, 1999 was $5.6 million, or $0.32 per share on a diluted basis, compared with a net loss of $0.6 million, or $(0.04) per share on a diluted basis, for the first nine months of 1998.

Revenues from the Company's transaction processing business were $44.0 million during the first nine months of 1999, compared to $27.7 million in the same period of 1998, an increase of 59.2%. Software revenues were $10.3 million, up 3.0% from revenues of $10.0 million for the first nine months of 1998. Consulting services revenues were $11.0 million, compared to $6.4 million in the same period in 1998, an increase of 73.3%.

Pamela D.A. Reeve, Lightbridge's president and chief executive officer, commented, "This was another great quarter for the company, with strength particularly in our transaction and software businesses. These results reflect acceptance of Lightbridge solutions for customer acquisition, fraud management, retention, and distribution channels from retail stores to e-stores. While this was also a good quarter for consulting, we believe our clients' focus on retail selling and Y2K readiness in the fourth quarter may adversely affect this segment. Overall, we continue to make progress in extending our leadership, and are uniquely positioned to benefit from the dynamic growth of the telecommunications industry driven both by convergence and competitive forces."

Quarterly Highlights

Since the previous earnings release, Lightbridge issued the following announcements:

-- Entel S.A., the first carrier in Bolivia to implement a fraud fighting system, purchased Lightbridge's FraudBuster through its partner North Supply Chile.

-- Lightbridge's FraudBuster helped Rogers Cantel reduce fraud write-offs by 72 percent.

Lightbridge, Inc. (Nasdaq:LTBG), based in Burlington, Mass., is a leading provider of software, transaction management and consulting services that help telecom carriers quickly acquire customers and retain them over time. Lightbridge has a flexible solution for flow-through provisioning and customer interaction in the converged telecom market. The Company provides a fully integrated workflow and transaction management process for carrier business operations necessary to quickly initiate bundled service offerings to high value, low risk customers. Lightbridge's Telesto, a network of integrated customer acquisition, retention and risk management solutions, leverages these provisioning capabilities with best-in-class credit, fraud, churn, channel and market performance offerings. Lightbridge's clients include ALLTEL Communications, AT&T Wireless Services, Global Telecom, KG Telecom, Omnipoint Communications, Orange plc, Powertel, Sprint PCS, TeleCorp PCS, Telia Telecom A/S, TM Touch, Triton PCS and Western Wireless. Visit http://www.lightbridge.com for more information.

Lightbridge, Inc.
Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share data)
                          Three Months Ended     Nine Months Ended
                             September 30,          September 30,
                            1998      1999       1998        1999
Revenues:
 Transaction              $10,682    $15,225    $27,668    $44,045
 Software licensing
  and maintenance           2,499      5,314     10,020     10,324
 Consulting services        2,423      3,277      6,364     11,030

 Total revenues            15,604     23,816     44,052     65,399

Cost of revenues:
 Transaction                5,804      7,060     15,924     21,139
 Software licensing
  and maintenance           1,160      1,646      3,664      3,610
 Consulting services        1,293      2,280      3,743      6,077

 Total cost of revenues     8,257     10,986     23,331     30,826

Gross profit                7,347     12,830     20,721     34,573

Operating expenses:
 Development                2,328      3,310      7,049      9,048
 Sales and marketing        1,610      1,703      5,281      5,747
 General and administrative 1,894      3,095      6,360      8,666
 Amortization of goodwill
  and acquired workforce      746        348      2,237      1,045

Total operating expenses    6,578      8,456     20,927     24,506

Income (loss) from operations 769      4,374       (206)    10,067

Other income, net             118        189        540        903

Income before provision
 for income taxes             887      4,563        334     10,970

Income tax provision          623      2,236        952      5,376

Net income (loss)            $264     $2,327      $(618)    $5,594

Basic earnings (loss)
 per share                  $0.02      $0.14     $(0.04)     $0.35

Basic shares               15,861     16,169     15,789     15,960

Diluted earnings (loss)
 per share                  $0.02      $0.13     $(0.04)     $0.32

Diluted shares             17,309     18,263     15,789     17,549

Supplemental Statements
 of Operations Data:

  Depreciation and
   amortization            $2,496     $2,246     $7,701     $6,584


Lightbridge, Inc.
Unaudited Condensed Consolidated Balance Sheets

(In thousands)

                                        December 31, September 30,
                                            1998          1999
 Assets

Cash and cash equivalents                  $16,437       $25,752
Accounts receivable, net                    18,832        20,772
Other current assets                         1,399         1,794

 Total current assets                       36,668        48,318

Property and equipment, net                 13,454        15,177
Acquired intangible assets, net              4,025         2,911
Goodwill, net                                2,145         1,726
Other assets, net                            1,485           548

   Total assets                            $57,777       $68,680

         Liabilities and Stockholders' Equity

Accounts payable and accrued liabilities   $ 9,508       $12,678
Short-term borrowings and current portion
 of notes payable                              653           500
Deferred revenues                            1,460         2,987

 Total current liabilities                  11,621        16,165

Long-term liabilities                        1,709         1,250

   Total liabilities                        13,330        17,415

Stockholders' equity                        44,447        51,265

       Total liabilities and
    stockholders' equity                   $57,777       $68,680

Certain reclassifications have been made to the 1998 financial
statements to conform with the 1999 presentation.