EX-99.1 2 b61700liexv99w1.htm EX-99.1 PRESS RELEASE DATED JULY 25, 2006 exv99w1
 

(Lightbridge Logo)
Lightbridge Announces Second Quarter 2006 Financial Results
Authorize.Net Revenue Grows 29% over Prior Year
Cash Balance, Excluding Merchant Reserves, totals $89.7 Million
Burlington, MA — July 25, 2006 — Lightbridge, Inc. (NASDAQ: LTBG), a leading e-commerce, analytics and decisioning company, today reported financial results for the quarter ended June 30, 2006.
Results
Revenue from continuing operations for the second quarter of 2006 was $25.2 million compared to $26.6 million for the second quarter of 2005. This represents a decrease of 5% compared to the prior year due to lower revenue from Telecom Decisioning Services (TDS) clients. Authorize.Net revenue for the second quarter of 2006 was a record $13.9 million, an increase of 29% over the $10.7 million reported in the second quarter of 2005.
Income from continuing operations was $854,000, or $0.03 per fully diluted share, for the second quarter of 2006, versus $2.4 million, or $0.09 per fully diluted share, reported for the second quarter of 2005.
Second quarter 2006 results included share-based compensation expense of approximately $1.2 million reflecting the adoption of SFAS 123(R), restructuring and related asset impairment charges of $937,000, and a patent litigation settlement of $1.5 million. The restructuring and related asset impairment charges were attributable to the planned closure of the Liverpool, Nova Scotia contact center, and the patent litigation settlement was with NetMoneyIN, Inc., both previously announced on May 24, 2006. There were no significant comparative charges in the second quarter of 2005. For the second quarter of 2006, income from continuing operations before share-based compensation expense, restructuring and related asset impairment charges and the patent litigation settlement (a non-GAAP financial measure) was $4.4 million, or $0.16 per fully diluted share. A detailed reconciliation of the GAAP and non-GAAP measures is included at the end of this release.
Total revenue from continuing operations for the first six months of 2006 was $51.8 million compared to $53.7 million for the first six months of 2005. Income from continuing operations for the first six months of 2006 was $2.0 million, or $0.07 per fully diluted share, versus income from continuing operations of $3.5 million, or $0.13 per fully diluted share, for the first six months of 2005. The six months ended June 30, 2006 results include share-based compensation expense of $2.8 million, restructuring and asset impairment

 

Lightbridge Announces Second Quarter 2006 Financial Results—Page 2
charges of $2.3 million and the above-mentioned patent litigation settlement of $1.5 million. Included in the first six months of 2005 was $376,000 in restructuring charges.
For the first six months of 2006, income from continuing operations before share-based compensation expense, restructuring and related asset impairment charges and the patent litigation settlement (a non-GAAP financial measure) was $8.6 million, or $0.31 per fully diluted share. A detailed reconciliation of the GAAP and non-GAAP measures is included at the end of this release.
Business Perspective
“Lightbridge had a solid second quarter, with Authorize.Net enjoying continued strong year over year financial performance,” said Bob Donahue, president and CEO. “Authorize.Net generated record revenue, transaction volumes, dollars processed and net new merchants in the second quarter which reflects the strength of this business.”
Donahue continued, “Telecom Decisioning achieved major milestones in product launches and rollouts in the second quarter. We extended a contract with one of our large clients, Alltel, which we expect to transition to our EDM platform over the next few months. Also, we continued our diligent efforts to control costs and took quick measures to restructure our contact center operations following our announcement of T-Mobile’s plan to consolidate its contact center vendors.”
Authorize.Net Metrics
•   Processed a record $7.4 billion of merchant transactions in the second quarter, up 32% compared to the same period in 2005.
•   Processed a record 73.2 million transactions in the second quarter, a 25% increase over the comparable quarter last year.
•   Added a record 17,557 new merchants in the second quarter of 2006 with net new merchant additions totaling 8,016.
•   Active Merchants as of June 30, 2006 were a record 150,000, up 21% over the prior year.
Selected Highlights
•   Added to the Russell 3000 index.
•   Rolled out best in class Enhanced Disaster Recovery service to all TDS clients.
•   Announced a multi-year contract extension with Alltel.
•   Launched Enhanced Decision Management 3.0, a new platform that allows clients to run credit and risk strategies from their desktops.

 

Lightbridge Announces Second Quarter 2006 Financial Results—Page 3
Cash and Short-Term Investments
At June 30, 2006, Lightbridge’s cash and short-term investment position was $98.2 million, compared to $84.8 million at December 31, 2005. This includes funds held for merchants of $8.5 million compared to $7.1 million at December 31, 2005.
Company Performance versus Previous Guidance — Second Quarter 2006
Lightbridge’s revenue of $25.2 million was within the Company’s guidance of $24.8 to $26.5 million for the second quarter of 2006. The Company’s guidance included revenue expectations for Authorize.Net of $13.8 to $14.5 million with actual results for this business reported at $13.9 million.
Lightbridge’s earnings per share of $0.03 was at the midpoint of the guidance issued on May 24, 2006 of $(0.01) to $0.07 for the second quarter of 2006.
Business Outlook
Guidance for the third quarter of 2006 is only current as of today, Tuesday, July 25, 2006. The Company undertakes no obligation to update its estimates.
•   The Company anticipates revenue for the third quarter of 2006 to be in the range of $22.4 million to $24.2 million, reflecting reduced T-Mobile revenue expectations. Authorize.Net expects to contribute in the range of $13.9 to $14.7 million.
•   The Company anticipates net income per fully diluted share for the third quarter of 2006 to be in the range of $0.03 to $0.11. The Company anticipates share-based compensation expense in the third quarter of 2006 associated with the expensing of stock options in accordance with SFAS 123(R) in the range of $700,000 to $900,000, or $0.02 to $0.03 per fully diluted share. The Company uses the modified prospective method to report compensation charges associated with the expensing of stock options. The Company expects to record restructuring charges in the third quarter related to the closure of the Liverpool, Nova Scotia facility in the range of $500,000 to $700,000, or approximately $0.02 per fully diluted share.
•   For the third quarter of 2006, net income per fully diluted share before share-based compensation expense and restructuring charges related to the closure of the Liverpool, Nova Scotia contact center (a non-GAAP financial measure) is anticipated to be in the range of $0.08 to $0.16.

 

Lightbridge Announces Second Quarter 2006 Financial Results—Page 4
Non-GAAP Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, (GAAP), the Company has provided non-GAAP financial measures which it believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. Such measures exclude share-based compensation expense, restructuring and related asset impairment charges and the patent litigation settlement in the second quarter of 2006. The Company uses the modified prospective method to report compensation charges associated with the expensing of stock options. Results for prior periods have not been adjusted to reflect non-GAAP financial performance. Management believes these non-GAAP financial measures assist in providing a more complete understanding of the Company’s underlying operational results and trends and in allowing for a more comparable presentation of results in the reported period to those in prior periods that did not include SFAS 123(R) share-based compensation. Management uses these measures along with their corresponding GAAP financial measures to help manage the Company’s business and to help evaluate its performance compared to the marketplace. However, the presentation of non-GAAP financial measures is not meant to be considered in isolation or as superior to or as a substitute for financial information provided in accordance with GAAP. The non-GAAP financial measures used by the Company may be calculated differently from, and, therefore, may not be comparable to, similarly titled measures used by other companies. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to the comparable GAAP results, contained in the attached exhibits and found on the Company’s website at: www.lightbridge.com.
Conference Call Information
Lightbridge will conduct a conference call today, Tuesday, July 25, 2006 at 5:00 pm (ET) to discuss the information contained in this news release. Investors wishing to listen to a webcast of the conference call should link to the “Investor Relations” section of www.lightbridge.com at least 15 minutes prior to the broadcast and follow the instructions provided to assure the necessary audio applications are downloaded and installed. The call will be available online at the Company’s website for one week. The call can also be accessed live over the phone by dialing 1-877-427-0636 or for international callers by dialing 973-935-8515. The replay will be available one hour after the call and can be accessed by dialing 877-519-4471 or for international callers by dialing 973-341-3080. The passcode number is 7548773. The replay will be available until Tuesday, August 8, 2006.
About Lightbridge
Lightbridge, Inc. (NASDAQ:LTBG) is a leading e-commerce, analytics and decisioning company that businesses trust to manage customer transactions. Lightbridge adds value to fraud screening, credit qualification, and payment authorization. Lightbridge solutions leverage intelligent automated systems and human expertise, delivered primarily through the efficiencies and cost savings of an outsourced business model. Businesses use Lightbridge to make smarter decisions, deliver better services, provide secure

 

Lightbridge Announces Second Quarter 2006 Financial Results—Page 5
payments, reduce costs and enhance the lifetime value of their customers. For more information, visit www.lightbridge.com.
###
Contact:
Lynn Ricci
Director, Investor & Media Relations
Lightbridge, Inc.
781/359-4854
lricci@lightbridge.com
Note to Editors: LIGHTBRIDGE and AUTHORIZE.NET are registered trademarks, and the Lightbridge logo, EDM and Enhanced Decision Management are trademarks of Lightbridge, Inc. All other trademarks and registered trademarks are the properties of their respective owners.
Forward-looking Statements
Certain statements in this news release that are not historical facts, including, without limitation, those relating to the Company’s expectations with respect to its EDM platform and efforts to control costs, the Company’s belief that its presentation of non-GAAP financial measures is useful to investors, and the third quarter of 2006 financial guidance are forward-looking statements that involve risks and uncertainties. Such statements are based upon the current beliefs and expectations of the management of the Company. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, (i) dependence on a limited number of clients, (ii) the Company’s revenue concentration in the wireless telecommunications business and the declining subscriber growth rate in that business, (iii) continuing rapid change in the telecommunications industry, payment processing industry, and other markets in which the Company does business that may affect both the Company and its clients, (iv) current and future economic conditions generally and particularly in the telecommunications and payment processing industry, (v) uncertainties about the Company’s ability to execute on, and about the impact on the Company’s business and operations of, its objectives, plans or strategies as a result of potential technological, market or competitive factors, or the acquisition of Authorize.Net, (vi) the impact of compensation expense, restructuring and other charges on the Company’s business and operations, (vii) integration, employee retention, recognition of cost and other benefits and revenue synergies, and other risks associated with acquisitions including the acquisition of Authorize.Net, (viii) the industry risks associated with Authorize.Net’s business and operations including, without limitation, illegal or improper uses of Authorize.Net’s payment system, unauthorized intrusions and attacks on Authorize.Net’s payment system that may impair the operation of its payment systems, changes in or failures to comply with credit card association rules, governmental regulation and the application of existing laws to Authorize.Net’s business and dependence on relationships with third party payment processors, and (ix) the factors disclosed in the Company’s filings with the U.S. Securities and Exchange Commission including, without limitation, its 2005 Annual Report on Form 10-K, first quarter 2006 Quarterly Report on Form 10-Q, and other public filings. The Company undertakes no obligation to update any forward-looking statements.

 

Lightbridge Announces Second Quarter 2006 Financial Results—Page 6
Lightbridge, Inc. and Subsidiaries
Unaudited, Condensed, Consolidated Income Statement (a)
(in thousands, except per share data)
Restated for discontinued operations
                         
    Three Months Ended  
    June 30, 2006     March 31, 2006     June 30, 2005  
Revenues
   $ 25,223     $ 26,542     $ 26,564  
 
                        
Cost of revenues
     10,782       11,737       12,016  
 
                  
 
                        
Gross profit
     14,441       14,805       14,548  
 
                  
 
                        
Operating expenses:
                        
Engineering and development
     2,946       3,237       3,554  
Sales and marketing
     4,939       4,771       4,444  
General and administrative
     5,781       4,759       4,091  
Restructuring charges and related asset impairments
     937       1,393       (8 )
 
                  
Total operating expenses
     14,603       14,160       12,081  
 
                        
Income (loss) from operations
     (162 )     645       2,467  
 
                  
 
                        
Other income, net
     1,099       1,010       328  
 
                  
 
                        
Income from continuing operations before provision for income taxes
     937       1,655       2,795  
 
                        
Provision for income taxes
     83       491       442  
 
                  
 
                        
Income from continuing operations
     854       1,164       2,353  
 
                  
Discontinued operations, net of income taxes:
                        
Gain on sale of INS business
     —       —       12,689  
Discontinued operations
     —       468       170  
 
                  
Total discontinued operations, net of income taxes
     —       468       12,859  
 
                        
Net income
   $ 854     $ 1,632     $ 15,212  
 
                  
 
                        
Net income per common share (basic):
                        
From continuing operations
   $ 0.03     $ 0.04     $ 0.09  
From discontinued operations
     —       0.02       0.48  
 
                  
Net income per common share (basic):
   $ 0.03     $ 0.06     $ 0.57  
 
                  
Net income per common share (diluted):
                        
From continuing operations
   $ 0.03     $ 0.04     $ 0.09  
From discontinued operations
     —       0.02       0.47  
 
                  
Net income per common share (diluted):
   $ 0.03     $ 0.06     $ 0.56  
 
                  
 
                        
Basic weighted average shares
     27,243       27,023       26,623  
 
                  
 
                        
Diluted weighted average shares
     28,331       27,561       27,014  
 
                  
 
                        
(a) Share-based compensation expense is included in the above expense categories:
                        
 
                        
Cost of revenues
   $ 51     $ 95     $ —  
Engineering and development
     106       181       —  
Sales and marketing
     27       42       —  
General and administrative
     971       1,293       —  
 
                  
 
                        
 
   $ 1,155     $ 1,611     $ —  
 
                  
(a): On January 1, 2006, Lightbridge, Inc. adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123(R)). Lightbridge Inc’s financial statements as of and for the three months ended March 31, 2006 and June 30, 2006 reflect the impact of SFAS 123(R). Prior to adoption of SFAS 123(R), Lightbridge Inc. accounted for stock compensation under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25). In accordance with APB 25, Lightbridge, Inc. accounted for stock-based awards using the intrinsic value method. Since Lightbridge, Inc. adopted the modified prospective transition method, results for prior period have not been restated under the fair value method. Therefore, for periods prior to January 1, 2006, no stock-based compensation expense had been recognized in Lightbridge, Inc’s statement of operations as the exercise price of options granted equaled the estimated fair market value of the underlying stock at date of grant.

 

Lightbridge Announces Second Quarter 2006 Financial Results — Page 7
Lightbridge, Inc. and Subsidiaries
Unaudited, Condensed, Consolidated Income Statement (a)
(in thousands, except per share data)
Restated for discontinued operations
                 
    Six Months Ended  
 
    June 30, 2006     June 30, 2005  
 
                
Revenues
   $ 51,765     $ 53,737  
 
                
Cost of revenues
     22,519       25,512  
 
            
 
                
Gross profit
     29,246       28,225  
 
            
 
                
Operating expenses:
                
Engineering and development
     6,183       7,476  
Sales and marketing
     9,710       8,915  
General and administrative
     10,540       7,621  
Restructuring charges and related asset impairments
     2,330       376  
 
            
Total operating expenses
     28,763       24,388  
 
                
Income from operations
     483       3,837  
 
            
 
                
Other income, net
     2,109       590  
 
            
 
                
Income from continuing operations before provision for income taxes
     2,592       4,427  
 
                
Provision for income taxes
     574       920  
 
            
 
                
Income from continuing operations
     2,018       3,507  
 
            
 
                
Discontinued operations, net of income taxes:
                
Gain on sale of INS business
     —       12,689  
Discontinued operations
     468       (2,084 )
 
            
Total discontinued operations, net of income taxes
     468       10,605  
 
                
Net income
   $ 2,486     $ 14,112  
 
            
 
                
Net income per common share (basic):
                
From continuing operations
   $ 0.07     $ 0.13  
From discontinued operations
     0.02       0.40  
 
            
Net income per common share (basic):
   $ 0.09     $ 0.53  
 
            
 
                
Net income per common share (diluted):
                
From continuing operations
   $ 0.07     $ 0.13  
From discontinued operations
     0.02       0.39  
 
            
Net income per common share (diluted):
   $ 0.09     $ 0.52  
 
            
 
                
Basic weighted average shares
     27,134       26,592  
 
            
 
                
Diluted weighted average shares
     28,059       26,963  
 
            
 
                
(a) Share-based compensation expense is included in the above expense categories:
                
 
                
Cost of revenues
   $ 146     $ —  
Engineering and development
     287       —  
Sales and marketing
     69       —  
General and administrative
     2,264       —  
 
            
 
                
 
   $ 2,766     $ —  
 
            
(a): On January 1, 2006, Lightbridge, Inc. adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123(R)). Lightbridge Inc’s financial statements as of and for the six months ended June 30, 2006 reflect the impact of SFAS 123(R). Prior to adoption of SFAS 123(R), Lightbridge Inc. accounted for stock compensation under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25). In accordance with APB 25, Lightbridge, Inc. accounted for stock-based awards using the intrinsic value method. Since Lightbridge, Inc. adopted the modified prospective transition method, results for prior period have not been restated under the fair value method. Therefore, for periods prior to January 1, 2006, no stock-based compensation expense had been recognized in Lightbridge, Inc’s statement of operations as the exercise price of options granted equaled the estimated fair market value of the underlying stock at date of grant.

 

Lightbridge Announces Second Quarter 2006 Financial Results—Page 8
Lightbridge, Inc. and Subsidiaries
Unaudited Segment Financial Information (a)
(in thousands, except percentage amounts)
Restated for discontinued operations
                         
    Three Months Ended  
    June 30, 2006     March 31, 2006     June 30, 2005  
Revenues:
                        
TDS
   $ 11,306     $ 13,089     $ 15,817  
Payment Processing
     13,917       13,453       10,747  
 
                  
Total revenues
   $ 25,223     $ 26,542     $ 26,564  
 
                  
 
                        
Gross Profit:
                        
TDS
   $ 3,452     $ 4,310     $ 6,078  
Payment Processing
     11,040       10,590       8,470  
 
                  
Sub-total — Reportable segments
     14,492       14,900       14,548  
Reconciling items (1)
     (51 )     (95 )     —  
 
                  
Total gross profit
   $ 14,441     $ 14,805     $ 14,548  
 
                  
 
                        
Gross Profit %:
                        
TDS
     30.5 %     32.9 %     38.4 %
Payment Processing
     79.3 %     78.7 %     78.8 %
 
                  
Sub-total — Reportable segments
     57.5 %     56.1 %     54.8 %
Reconciling items (1)
     -0.2 %     -0.4 %     0.0 %
 
                  
Total gross profit %
     57.3 %     55.8 %     54.8 %
 
                  
 
                        
Operating Income (loss):
                        
TDS
   $ 1,345     $ 2,195     $ 3,204  
Payment Processing
     4,180       3,989       2,453  
 
                  
Sub-total — Reportable segments
     5,525       6,184       5,657  
Reconciling items (2)
     (5,687 )     (5,539 )     (3,190 )
 
                  
Consolidated total
   $ (162 )   $ 645     $ 2,467  
 
                  
(1) — Represents share-based compensation unallocated to gross profit.
 
(2) — Reconciling items from segment operating income to consolidated operating loss include the following:
                         
    Quarter Ended  
    June 30, 2006     March 31, 2006     June 30, 2005  
Restructuring costs
   $ (937 )   $ (1,393 )   $ 8  
Share-based compensation expense
     (1,104) ) (a)   (1,516) ) (a)   —  
Litigation settlement, net
     (1,500 )     —       —  
Unallocated corporate and centralized marketing, general and administrative expenses
     (2,146 )     (2,630 )     (3,198 )
 
                  
Total
   $ (5,687 )   $ (5,539 )   $ (3,190 )
 
                  
(a): On January 1, 2006, Lightbridge, Inc. adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123(R)). Lightbridge Inc’s financial statements as of and for the three months ended March 31, 2006 and June 30, 2006 reflect the impact of SFAS 123(R). Prior to adoption of SFAS 123(R), Lightbridge Inc. accounted for stock compensation under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25). In accordance with APB 25, Lightbridge, Inc. accounted for stock-based awards using the intrinsic value method. Since Lightbridge, Inc. adopted the modified prospective transition method, results for prior period have not been restated under the fair value method. Therefore, for periods prior to January 1, 2006, no stock-based compensation expense had been recognized in Lightbridge, Inc’s statement of operations as the exercise price of options granted equaled the estimated fair market value of the underlying stock at date of grant.

 

Lightbridge Announces Second Quarter 2006 Financial Results — Page 9
Lightbridge, Inc. and Subsidiaries
Unaudited Segment Financial Information (a)
(in thousands, except percentage amounts)
Restated for discontinued operations
                 
    Six Months Ended  
    June 30, 2006     June 30, 2005  
Revenues:
                
TDS
   $ 24,395     $ 32,890  
Payment Processing
     27,370       20,847  
 
            
Total revenues
   $ 51,765     $ 53,737  
 
            
 
                
Gross Profit:
                
TDS
   $ 7,762     $ 11,950  
Payment Processing
     21,630       16,275  
 
            
Sub-total — Reportable segments
     29,392       28,225  
Reconciling items (1)
     (146 )     —  
 
            
Total gross profit
   $ 29,246     $ 28,225  
 
            
 
                
Gross Profit %:
                
TDS
     31.8 %     36.3 %
Payment Processing
     79.0 %     78.1 %
 
            
Sub-total — Reportable segments
     56.8 %     52.5 %
Reconciling items (1)
     -0.3 %     0.0 %
 
            
Total gross profit %
     56.5 %     52.5 %
 
            
 
                
Operating Income:
                
TDS
   $ 3,540     $ 5,679  
Payment Processing
     8,169       4,550  
 
            
Sub-total — Reportable segments
     11,709       10,229  
Reconciling items (2)
     (11,226 )     (6,392 )
 
            
Consolidated total
   $ 483     $ 3,837  
 
            
(1) — Represents share-based compensation unallocated to gross profit.
(2) — Reconciling items from segment operating income to consolidated operating loss include the following:
                 
    Six Months Ended  
    June 30, 2006     June 30, 2005  
 
                
Restructuring costs
   $ (2,330 )   $ (376 )
Share-based compensation expense
     (2,620 )(a)     —  
Litigation settlement, net
     (1,500 )     —  
Unallocated corporate and centralized marketing, general and administrative expenses
     (4,776 )     (6,016 )
 
                
 
            
Total
   $ (11,226 )   $ (6,392 )
 
            
(a): On January 1, 2006, Lightbridge, Inc. adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123(R)). Lightbridge Inc’s financial statements as of and for the six months ended June 30, 2006 reflect the impact of SFAS 123(R). Prior to adoption of SFAS 123(R), Lightbridge Inc. accounted for stock compensation under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25). In accordance with APB 25, Lightbridge, Inc. accounted for stock-based awards using the intrinsic value method. Since Lightbridge, Inc. adopted the modified prospective transition method, results for prior period have not been restated under the fair value method. Therefore, for periods prior to January 1, 2006, no stock-based compensation expense had been recognized in Lightbridge, Inc’s statement of operations as the exercise price of options granted equaled the estimated fair market value of the underlying stock at date of grant.

 

Lightbridge Announces Second Quarter 2006 Financial Results—Page 10
Lightbridge, Inc. and Subsidiaries
Unaudited, Condensed, Consolidated Balance Sheets
(in thousands)
                 
    June 30, 2006     December 31,
2005		  
Assets
                
Current assets:
                
Cash and cash equivalents
   $ 96,310     $ 83,120  
Short-term investments
     1,917       1,688  
 
            
Total cash and short term investments
     98,227       84,808  
Accounts receivable, net
     10,449       11,911  
Other current assets
     2,812       3,432  
 
            
Total current assets
     111,488       100,151  
 
                
Property and equipment, net
     8,763       10,804  
Other assets, net
     635       438  
Restricted cash
     2,100       2,100  
Goodwill
     57,628       57,628  
Intangible assets, net
     16,998       18,414  
 
            
Total assets
   $ 197,612     $ 189,535  
 
            
 
                
Liabilities and Stockholders’ Equity
                
 
                
Current liabilities:
                
Accounts payable and accrued liabilities
   $ 11,796     $ 14,375  
Deferred rent obligation
     633       656  
Deferred revenues
     3,074       2,863  
Funds due to merchants
     8,455       7,112  
Reserve for restructuring
     877       989  
 
            
Total current liabilities
     24,835       25,995  
Deferred rent, less current portion
     2,304       2,548  
Deferred tax liability
     3,553       3,074  
Long-term liabilities
     1,246       965  
 
            
Total liabilities
     31,938       32,582  
 
            
 
                
Commitments and contingencies
                
 
                
Stockholders’ equity:
                
Common stock
     307       303  
Additional paid-in capital
     175,810       169,648  
Accumulated other comprehensive gain
     179       110  
Retained earnings
     10,165       7,679  
 
            
Total
     186,461       177,740  
Less: treasury stock, at cost
     (20,787 )     (20,787 )
 
            
Total stockholders’ equity
     165,674       156,953  
 
            
 
                
Total liabilities and stockholders’ equity
   $ 197,612     $ 189,535  
 
            

 

Lightbridge Announces Second Quarter 2006 Financial Results — Page 11
Lightbridge, Inc. and Subsidiaries
Unaudited, Condensed, Consolidated Income Statement (a)
GAAP to Non-GAAP Reconciliation

(in thousands, except per share data)

Restated for discontinued operations
                         
    Three Months Ended  
                   
    GAAP     Non-GAAP     Non-GAAP June  
    June 30, 2006     Adjustments     30, 2006  
 
                        
Revenues
   $ 25,223     $ —     $ 25,223  
 
                        
Cost of revenues
     10,782       (51) (b)     10,731  
 
                  
 
                        
Gross profit
     14,441       51       14,492  
 
                  
 
                        
Operating expenses:
                        
Engineering and development
     2,946       (106) (b)     2,840  
Sales and marketing
     4,939       (27) (b)     4,912  
General and administrative
     5,781       (2,471) (c)     3,310  
Restructuring charges and related asset impairments
     937       (937 )     —  
 
                  
Total operating expenses
     14,603       (3,541 )     11,062  
 
                        
Income (loss) from operations
     (162 )     3,592       3,430  
 
                  
 
                        
Other income, net
     1,099       —       1,099  
 
                  
 
                        
Income from continuing operations before provision for income taxes
     937       3,592       4,529  
 
                        
Provision for income taxes
     83       —       83  
 
                  
 
                        
Income from continuing operations
     854       3,592       4,446  
 
                  
 
                        
Discontinued operations, net of income taxes:
                        
Discontinued operations
     —       —       —  
 
                  
Total discontinued operations, net of income taxes
     —       —       —  
 
                        
Net income
   $ 854     $ 3,592     $ 4,446  
 
                  
 
                        
Net income per common share (basic):
                        
From continuing operations
   $ 0.03     $ 0.13     $ 0.16  
From discontinued operations
     —       —       —  
 
                  
Net income per common share (basic):
   $ 0.03     $ 0.13     $ 0.16  
 
                  
Net income per common share (diluted):
                        
From continuing operations
   $ 0.03     $ 0.13     $ 0.16  
From discontinued operations
     —       —       —  
 
                  
Net income per common share (diluted):
   $ 0.03     $ 0.13     $ 0.16  
 
                  
 
                        
Basic weighted average shares
     27,243       27,243       27,243  
 
                  
 
                        
Diluted weighted average shares
     28,331       28,331       28,331  
 
                  
(a): On January 1, 2006, Lightbridge, Inc. adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123(R)). Lightbridge Inc’s financial statements as of and for the three months ended March 31, 2006 and June 30, 2006 reflect the impact of SFAS 123(R). Prior to adoption of SFAS 123(R), Lightbridge Inc. accounted for stock compensation under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25). In accordance with APB 25, Lightbridge, Inc. accounted for stock-based awards using the intrinsic value method. Since Lightbridge, Inc. adopted the modified prospective transition method, results for prior period have not been restated under the fair value method. Therefore, for periods prior to January 1, 2006, no stock-based compensation expense had been recognized in Lightbridge, Inc’s statement of operations as the exercise price of options granted equaled the estimated fair market value of the underlying stock at date of grant.
(b): Represents share-based compensation expense.
(c): Represents share-based compensation expense of $971 and a litigation settlement expense of $1,500.

 

Lightbridge Announces Second Quarter 2006 Financial Results — Page 12
Lightbridge, Inc. and Subsidiaries
Unaudited, Condensed, Consolidated Income Statement (a)
GAAP to Non-GAAP Reconciliation
(in thousands, except per share data)
Restated for discontinued operations
                         
    Six Months Ended  
 
    GAAP             Non-GAAP  
    June 30, 2006     Non-GAAP Adjustments     June 30, 2006  
 
                        
Revenues
   $ 51,765     $ —     $ 51,765  
 
                        
Cost of revenues
     22,519       (146) (b)     22,373  
 
                  
 
                        
Gross profit
     29,246       146       29,392  
 
                  
 
                        
Operating expenses:
                        
Engineering and development
     6,183       (287) (b)     5,896  
Sales and marketing
     9,710       (69) (b)     9,641  
General and administrative
     10,540       (3,764) (c)     6,776  
Restructuring charges and related asset impairments
     2,330       (2,330 )     —  
 
                  
Total operating expenses
     28,763       (6,450 )     22,313  
 
                        
Income from operations
     483       6,596       7,079  
 
                  
 
                        
Other income, net
     2,109       —       2,109  
 
                  
 
                        
Income from continuing operations before provision for income taxes
     2,592       6,596       9,188  
 
                        
Provision for income taxes
     574       —       574  
 
                  
 
                        
Income from continuing operations
     2,018       6,596       8,614  
 
                  
 
                        
Discontinued operations, net of income taxes:
                        
Discontinued operations
     468       —       468  
 
                  
Total discontinued operations, net of income taxes
     468       —       468  
 
                        
Net income
   $ 2,486     $ 6,596     $ 9,082  
 
                  
 
                        
Net income per common share (basic):
                        
From continuing operations
   $ 0.07     $ 0.24     $ 0.32  
From discontinued operations
     0.02       —       0.01  
 
                  
Net income per common share (basic):
   $ 0.09     $ 0.24     $ 0.33  
 
                  
 
                        
Net income per common share (diluted):
                        
From continuing operations
   $ 0.07     $ 0.24     $ 0.31  
From discontinued operations
     0.02       —       0.01  
 
                  
Net income per common share (diluted):
   $ 0.09     $ 0.24     $ 0.32  
 
                  
 
                        
Basic weighted average shares
     27,134       27,134       27,134  
 
                  
 
                        
Diluted weighted average shares
     28,059       28,059       28,059  
 
                  
(a): On January 1, 2006, Lightbridge, Inc. adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123(R)). Lightbridge Inc’s financial statements as of and for the six months ended June 30, 2006 reflect the impact of SFAS 123(R). Prior to adoption of SFAS 123(R), Lightbridge Inc. accounted for stock compensation under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25). In accordance with APB 25, Lightbridge, Inc. accounted for stock-based awards using the intrinsic value method. Since Lightbridge, Inc. adopted the modified prospective transition method, results for prior period have not been restated under the fair value method. Therefore, for periods prior to January 1, 2006, no stock-based compensation expense had been recognized in Lightbridge, Inc’s statement of operations as the exercise price of options granted equaled the estimated fair market value of the underlying stock at date of grant.
(b): Represents share-based compensation expense.
(c): Represents share-based compensation expense of $2,264 and a litigation settlement expense of $1,500.

 

Lightbridge Announces Second Quarter 2006 Financial Results — Page 13
Lightbridge, Inc. and Subsidiaries
Q3 2006 Guidance Summary
GAAP to Non-GAAP Reconciliation
(in millions, except per share data)
Lightbridge’s future performance involves risks and uncertainties, and the Company’s actual results could differ materially from such performance. Some of the factors that could affect the Company’s operating results are set forth under the caption “Forward-Looking Statements” above in this press release. Additional information about factors that could affect Lightbridge’s operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q.
     
    Guidance to
    Three months ending
    September 30, 2006
Revenues
  $22.4 — $24.2
Net income per diluted share
  $0.03 — $0.11
Share-based compensation expense
  $0.7 — $0.9
Restructuring charges
  $0.5 — $0.7
Net income per diluted share before share-based compensation expense and restructuring charges (a)
  $0.08 — $0.16
(a) : Represents a non-GAAP financial measure