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8-K - FORM 8-K - Bridgeline Digital, Inc.bridgelinedig_8k-051112.htm
Exhibit 99.1
 
   
 FOR IMMEDIATE RELEASE
 

 
Bridgeline Digital Reports Financial Results
for the Second Quarter of Fiscal 2012
 
iAPPS Revenue Increased 54% Year over Year
 
Recurring Revenue Increased 21% Year over Year


Burlington, MA, May 11, 2012 - Bridgeline Digital, Inc. (NASDAQ: BLIN), developer of the award-winning iAPPS web engagement platform and related interactive solutions, today announced financial results for its second quarter and six month period ended March 31, 2012.
 
Second Quarter Highlights:
 
·
Revenue in the second quarter of 2012 was $6.7 million, compared to revenue of $6.6 million in the second quarter of 2011.
·
iAPPS related revenue increased 54% to $4.3 million, compared to $2.8 million in the second quarter of 2011.
·
Recurring revenue increased 21% to $1 million, compared to $826 thousand in the second quarter of 2011.
·
Total gross profit margin increased to 56% compared to 51% in the second quarter of 2011.
·
Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization and stock-based compensation) increased 105% to $524 thousand compared to $256 thousand in the second quarter of 2011.
·
Non-GAAP net income was $120 thousand compared to a loss of $67 thousand in the second quarter of 2011.
 
First Six Months Highlights:
 
·
Revenue in the first six months of 2012 was $13.2 million, compared to revenue of $13.1 million in the first six months of 2011.
·
iAPPS related revenue increased 41% to $7.9 million, compared to $5.6 million in the first six months of 2011.
·
Recurring revenue increased 25% to $2 million, compared to $1.6 million in the first six months of 2011.
·
Total gross profit margin increased to 54% compared to 50% in the first six months of 2011.
·
Adjusted EBITDA increased 28% to $952 thousand compared to $741 thousand in the first six months of 2011.
·
Non-GAAP net income was $193 thousand compared to $100 thousand in the first six months of 2011.
 
 
 

 
 
Fiscal 2012 Outlook
 
Bridgeline Digital expects Fiscal 2012 revenue to be in the range of $27 million to $28 million.  The Company’s revenue strategy will continue to focus on higher gross margin iAPPS driven opportunities, while discontinuing relationships with lower margin based customers. This strategy reflects a reduction of approximately $2.5 million of revenue generated in fiscal 2011 from lower margin, non-iAPPS related customer relationships.
 
In addition, the Company expects to continue to generate positive non-GAAP income and positive Adjusted EBITDA for fiscal 2012.
 
Bridgeline Digital recently signed a multi-year agreement with a strategic Fortune 500 Company.  We believe this alliance will be a significant catalyst for Bridgeline and iAPPS for years to come.  Due to the nature of iAPPS selling cycles and integration lead times, Bridgeline does not believe it will see a financial impact of the newly formed iAPPS alliance until its fiscal fourth quarter of 2012.  Bridgeline plans to announce the details of the powerful iAPPS alliance in mid 2012.
 
Conference Call Today at 4:30pm EST
 
Bridgeline Digital will host a discussion of its second quarter results at approximately 4:30 p.m. ET today. To listen to the conference call, please dial (877) 837-3910 within the U.S. or (973) 796-5077 for international callers.
 
Non-GAAP Financial Measures
 
This press release contains the following non-GAAP financial measures: non-GAAP adjusted net income, non-GAAP adjusted earnings per diluted share, Adjusted EBITDA and Adjusted EBITDA per diluted share.
 
Non-GAAP adjusted net income and non-GAAP adjusted earnings per diluted share are calculated as net income or net income per share on a diluted basis, excluding, where applicable, impairment charges, amortization of intangible assets, stock based compensation and the related tax effects.
 
Adjusted EBITDA and Adjusted EBITDA per diluted share are defined as earnings before interest, taxes, depreciation and amortization and before stock compensation and impairment charges.  Bridgeline uses Adjusted EBITDA as a supplemental measure of our performance that is not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”).
 
Bridgeline’s management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, Bridgeline management presents non-GAAP financial measures in connection with GAAP results. Bridgeline urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which is included in this press release, and not to rely on any single financial measure to evaluate Bridgeline's business.
 
Our definitions of non-GAAP adjusted net income and Adjusted EBITDA may differ from and therefore may not be comparable with similarly titled measures used by other companies, thereby limiting their usefulness as comparative measure. Because of the limitations that non-GAAP adjusted net income and Adjusted EBITDA have as an analytical tool, investors should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP.
 
 
 

 
 
BRIDGELINE DIGITAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(Dollars in thousands, except per share data)
 
 
 
   
Three Months Ended
   
Six Months Ended
 
   
March 31,
   
March 31,
 
   
2012
   
2011
   
2012
   
2011
 
Reconciliation of GAAP net loss to
                       
non-GAAP adjusted net income:
                       
GAAP net loss
  $ (166 )   $ (329 )   $ (629 )   $ (485 )
Amortization of intangible assets
    191       190       386       398  
Impairment of intangible asset
    -       -       281       -  
Stock-based compensation
    95       72       155       187  
Non-GAAP adjusted net income(loss)
  $ 120     $ (67 )   $ 193     $ 100  
                                 
                                 
Reconciliation of GAAP loss per diluted share to
                               
non-GAAP adjusted earnings per diluted share:
                               
GAAP net loss per share
  $ (0.01 )   $ (0.03 )   $ (0.05 )   $ (0.04 )
Amortization of intangible assets
    0.02       0.02       0.03       0.03  
Impairment of intangible asset
    -       -       0.02       -  
Stock-based compensation
    -       0.01       0.01       0.02  
Non-GAAP adjusted net income(loss)
  $ 0.01     $ 0.00     $ 0.02     $ 0.01  
                                 
Reconciliation of GAAP net loss to Adjusted EBITDA:
                         
GAAP net loss
  $ (166 )   $ (329 )   $ (629 )   $ (485 )
Provision for income tax
    48       21       69       42  
Interest expense (income),net
    72       61       136       112  
Amortization of intangible assets
    191       190       386       398  
Impairment of intangible asset
    -       -       281       -  
Depreciation
    244       150       464       312  
EBITDA
    389       93       707       379  
Other amortization
    40       91       90       175  
Stock-based compensation
    95       72       155       187  
Adjusted EBITDA
  $ 524     $ 256     $ 952     $ 741  
                                 
                                 
Reconciliation of GAAP net loss per diluted share to
                         
Adjusted EBITDA per diluted share:
                               
GAAP net loss per share
  $ (0.01 )   $ (0.03 )   $ (0.05 )   $ (0.04 )
Provision for income tax
    -       -       0.01       -  
Interest expense (income),net
    0.01       -       0.01       0.01  
Amortization of intangible assets
    0.02       0.02       0.03       0.04  
Impairment of intangible asset
    -       -       0.02       -  
Depreciation
    0.02       0.01       0.04       0.03  
Other amortization
    -       0.01       0.01       0.01  
Stock-based compensation
    -       0.01       0.01       0.01  
Adjusted EBITDA
  $ 0.04     $ 0.02     $ 0.08     $ 0.06  
 
 
 

 
 
BRIDGELINE DIGITAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share data)
(Unaudited)
 
   
Three Months Ended
   
Six Months Ended
 
   
March 31,
   
March 31,
 
   
2012
   
2011
   
2012
   
2011
 
Revenue:
                       
Web application development services
  $ 5,441     $ 5,381     $ 10,749     $ 10,924  
Managed service hosting
    611       501       1,227       968  
Subscription and perpetual licenses
    620       731       1,213       1,250  
Total revenue
    6,672       6,613       13,189       13,142  
                                 
Cost of revenue:
                               
Web application development services
    2,771       2,963       5,626       5,976  
Managed service hosting
    85       115       191       261  
Subscription and perpetual licenses
    100       178       220       361  
Total cost of revenue
    2,956       3,256       6,037       6,598  
Gross profit
    3,716       3,357       7,152       6,544  
                                 
Operating expenses:
                               
Sales and marketing
    1,846       1,779       3,561       3,422  
General and administrative
    1,001       1,022       2,001       1,920  
Research and development
    480       470       883       852  
Depreciation and amortization
    435       333       850       681  
Impairment of intangible asset
    -       -       281       -  
Total operating expenses
    3,762       3,604       7,576       6,875  
Loss from operations
    (46 )     (247 )     (424 )     (331 )
Interest income (expense), net
    (72 )     (61 )     (136 )     (112 )
Loss before income taxes
    (118 )     (308 )     (560 )     (443 )
Provision for income taxes
    48       21       69       42  
Net loss
  $ (166 )   $ (329 )   $ (629 )   $ (485 )
                                 
Net loss per share:
                               
Basic and diluted
  $ (0.01 )   $ (0.03 )   $ (0.05 )   $ (0.04 )
Number of weighted average shares:
                               
Basic and diluted
    12,338,156       12,254,793       12,328,899       12,069,326  
 
 
 

 
 
BRIDGELINE DIGITAL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share data)
(Unaudited)
 
ASSETS
           
   
March 31,
   
September 30,
 
   
2012
   
2011
 
Current Assets:
           
Cash and cash equivalents
  $ 1,352     $ 2,528  
Accounts receivable and unbilled revenues, net
    3,672       4,274  
Prepaid expenses and other current assets
    846       494  
Total current assets
    5,870       7,296  
Equipment and improvements, net
    3,082       1,779  
Intangible assets, net
    1,270       1,527  
Goodwill
    20,809       20,122  
Other assets
    664       685  
Total assets
  $ 31,695     $ 31,409  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
Current liabilities:
               
Accounts payable
  $ 987     $ 1,291  
Accrued liabilities
    937       1,081  
Accrued earnouts, current
    527       295  
Debt, current
    1,366       1,750  
Capital lease obligations, current
    200       216  
Deferred revenue
    1,206       1,169  
Total current liabilities
    5,223       5,802  
Accrued earnouts, net of current portion
    923       772  
Debt, net of current portion
    3,344       3,017  
Capital lease obligations, net of current portion
    209       215  
Other long term liabilities
    1,206       395  
Total liabilities
  $ 10,905     $ 10,201  
                 
Commitments and contingencies
               
                 
Stockholders' equity:
               
Preferred stock - $0.001 par value; 1,000,000 shares authorized;
         
none issued and outstanding
    -       -  
Common stock - $0.001 par value; 20,000,000 shares authorized;
         
12,605,511 and 12,306,207 shares issued and outstanding, respectively
    13       12  
Additional paid-in-capital
    38,329       38,083  
Accumulated deficit
    (17,399 )     (16,770 )
Accumulated other comprehensive loss
    (153 )     (117 )
Total stockholders' equity
    20,790       21,208  
Total liabilities and stockholders' equity
  $ 31,695     $ 31,409  
 
 
 

 
 
About Bridgeline Digital, Inc
 
Bridgeline Digital is developer of the award-winning iAPPS® Web Engagement Platform and related interactive solutions.
 
The iAPPS platform deeply integrates Web Content Management, eCommerce, eMarketing, and web Analytics capabilities within the heart of mission critical websites or eCommerce web stores.   iAPPS enables customers to enhance and optimize the value of their web properties. Combined with award-winning interactive development capabilities, Bridgeline helps customers cost-effectively accommodate the changing needs of today’s rapidly evolving web properties; allowing them to maximize revenue, improve customer loyalty, enhance employee knowledge, and reduce operational costs.
 
The iAPPS product suite is delivered through a Cloud-based SaaS business model, whose flexible architecture provides customers with state-of-the-art deployments that provide maintenance and daily technical operation and support; or via a traditional perpetual licensing business model, in which the iAPPS software resides on a dedicated server in either the customer’s facility or Bridgeline’s co-managed hosting facility.
 
Bridgeline Digital is headquartered near Boston with additional locations in Atlanta, Baltimore, Chicago, Denver, New York, Philadelphia, Tampa, and Bangalore, India. Bridgeline has hundreds of customers ranging from middle market organizations to divisions within Fortune 1,000 companies that include: L’Oreal, Sun Chemical, Parametric Technologies Corp, Blue Cross Blue Shield, Novartis, Shaw Flooring, Endo Pharmaceuticals, Guardian Life, Tosoh, Dover, ViaWest, PODS, AARP, Cadaret Grant & Co., CFO Magazine, and the American Academy of Pediatrics.  To learn more about Bridgeline Digital, please visit www.bridgelinedigital.com.
 
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
 
All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions, including, but not limited to, the impact of the weakness in the U.S. and international economies on our business, our inability to manage our future growth effectively or profitably, fluctuations in our revenue and quarterly results, our license renewal rate, the impact of competition and our ability to maintain margins or market share, the limited market for our common stock, the volatility of the market price of our common stock, the performance of our products, our ability to respond to rapidly evolving technology and customer requirements, our ability to protect our proprietary technology, the security of our software, our dependence on our management team and key personnel, our ability to hire and retain future key personnel, our ability to maintain an effective system of internal controls, or risks associated with our contracts with the U.S. federal government, as well as other risks described in our filings with the Securities and Exchange Commission.  Any of such risks could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. We expressly disclaim any obligation to update any forward-looking statement.

Contact:
Bridgeline Digital, Inc.
Kimberly Brown
Director, Investor Relations
781-995-0888
kbrown@blinedigital.com