Bridgeline Digital Announces Fourth Quarter and Fiscal 2012 Financial Results

Bridgeline Digital Announces Fourth Quarter and Fiscal 2012 Financial Results

In Fiscal 2012 Bridgeline Digital Achieved Record Revenues of $26.3M, iAPPS
Related Revenue Increased 37%, iAPPS Licenses Sold Increased 25%, and
Recurring Revenues Increased 27%

BURLINGTON, Mass., Dec. 4, 2012 (GLOBE NEWSWIRE) -- Bridgeline Digital, Inc.
(Nasdaq:BLIN), The Digital Engagement Company™, today announced financial
results for its fourth quarter and year ended September 30, 2012.

"In fiscal 2012, Bridgeline Digital continued to post strong iAPPS revenue
growth, achieved positive non-GAAP income and EBITDA and significantly
expanded its gross profit margins," said Thomas Massie, Bridgeline Digital's
President and Chief Executive Officer. "We expect overall top-line growth will
improve in 2013 as an increased percentage of our revenue will come from iAPPS
related engagements. Customers continue to recognize our unique value
proposition by selecting iAPPS to power their next generation websites."

Fourth Quarter Highlights:

  oRevenue for the fourth quarter of 2012 was $6.7 million, compared to $6.6
    million in the fourth quarter of 2011.
    
  oiAPPS related revenue increased 32% to $4.5 million, compared to $3.4
    million in the fourth quarter of 2011.
    
  oRecurring revenue from subscription and managed service hosting increased
    25% to $1.1 million, compared to $868 thousand in the fourth quarter of
    2011.
    
  oGross profit margin increased to 57% compared to 52% in the fourth quarter
    of 2011.
    
  oAdjusted EBITDA (Earnings before interest, taxes, depreciation and
    amortization and stock-based compensation) increased 31% to $583 thousand
    compared to $444 thousand in the fourth quarter of 2011.
    
  oNon-GAAP adjusted net income was $268 thousand compared to $250 thousand
    in the fourth quarter of 2011.
    
  oCash generated from operations was $1.1 million in the fourth quarter
    compared to $314 thousand in the fourth quarter of 2011.

Fiscal 2012 Highlights:

  oRevenue for fiscal 2012 was $26.3 million, compared to $26.3 million in
    fiscal 2011.
    
  oiAPPS related revenue increased 37% to $16.6 million compared to $12.1
    million in fiscal 2011.
    
  oRecurring revenue from subscription and managed service hosting increased
    27% to $4.2 million compared to $3.3 million for fiscal 2011.
    
  oIn fiscal 2012, a record 267 iAPPS licenses were sold, a 25% increase over
    fiscal 2011.
    
  oGross profit margin increased to 55%, compared to 51% in fiscal 2011.
    
  oAdjusted EBITDA (Earnings before interest, taxes, depreciation and
    amortization and stock-based compensation) increased 33% to $2.0 million,
    compared to $1.5 million in fiscal 2011.
    
  oNon-GAAP adjusted net income increased 21% to $470 thousand compared to
    $387 thousand in fiscal 2011.

2012 Business Highlights

  oIn June, Bridgeline Digital and UPS Logistics announced that they had
    signed a multi-year agreement to offer an end-to-end eCommerce solution
    comprised of Bridgeline's "eCommerce Fulfilled™" technology platform and
    UPS logistics and fulfillment services.
    
  oBridgeline Digital launched iAPPS ds (distributed subscription), a new
    platform that empowers large franchises and dealer networks with
    state-of-the-art digital engagement management while providing superior
    oversight of corporate branding.
    
  oIn July, a large national franchise signed a multi-year, multi-million
    dollar agreement with Bridgeline Digital to provide iAPPS ds to over 4,300
    of their franchises.
    
  oThe iAPPS platform was selected as a finalist for two 2012 CODiE awards –
    Best Content Management Solution, globally and Best Electronic Commerce
    Solution, globally.
    
  oKMWorld magazine editors selected the iAPPS platform as a trend setting
    product of the year.
    
  oB2B Interactive named Bridgeline Digital as one of the top interactive
    technology companies in America.
    
  oDeliotte named Bridgeline Digital to its 2012 Fast 500 listing,
    recognizing Bridgeline Digital as one of the 500 fastest growing
    technology companies in North America.

Fiscal 2013 Outlook

Bridgeline Digital expects fiscal 2013 revenue will be approximately $29
million, with iAPPS related revenue increasing 40% from fiscal 2012. This
revenue projection includes a projected reduction of non-iAPPS related legacy
revenue of approximately $3.0 million.

In addition, Bridgeline Digital expects to continue to generate positive
non-GAAP income and positive adjusted EBITDA for fiscal 2013.

Conference Call Information

Bridgeline Digital will host a conference call to discuss fourth quarter and
fiscal 2012 results at 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, 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 stock-based
compensation charges. Bridgeline uses non-GAAP adjusted net income and
Adjusted EBITDA as supplemental measures of our performance that are 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 financial
performance.

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 measures.
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.

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, or our ability to maintain an effective system of internal
controls 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.

About Bridgeline Digital

Bridgeline Digital (Nasdaq:BLIN), The Digital Engagement Company™, enables its
customers to maximize the performance of their mission critical websites,
intranets, and online stores. Bridgeline's iAPPS^® platform deeply integrates
Web Content Management, eCommerce, eMarketing, and Web Analytics to help
marketers deliver online experiences that attract, engage and convert their
customers across all digital channels. Bridgeline provides end-to-end Digital
Engagement solutions and boasts an award-winning team of interactive services
professionals. Headquartered in Burlington, Mass., with nine additional
locations throughout the U.S. and an Asia Pacific headquarters in Bangalore,
India, Bridgeline has thousands of customers that range from middle market
organizations to Fortune 1000 companies. To learn more, please visit
www.bridgelinedigital.com or call (800) 603-9936.

                                                                 
BRIDGELINE DIGITAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(Dollars in thousands, except per share data)
                                                                 
                                                                 
                                    Three Months Ended    Twelve Months Ended
                                     September 30,         September 30,
                                    2012       2011       2012      2011
                                                                 
Reconciliation of GAAP net loss to                       
non-GAAP adjusted net income:
GAAP net loss                        $(40)    $(51)    $(946)  $(782)
Acquisition, integration and other   --        48        --       48
one-time costs
Amortization of intangible assets    179       183       750      765
Impairment of intangible asset       --        --        281      --
Stock-based compensation             129       70        385      356
Non-GAAP adjusted net income(loss)   $268     $250     $470    $387
                                                                 
                                                                 
Reconciliation of GAAP loss per
diluted share to non-GAAP adjusted
earnings per diluted share:
GAAP net loss per share              $(0.00)  $(0.00)  $(0.07) $(0.06)
Acquisition, integration and other   --       --       --      --
one-time costs
Amortization of intangible assets    0.01      0.01      0.06     0.06
Impairment of intangible asset       --       --       0.02     --
Stock-based compensation             0.01      0.01      0.03     0.03
Non-GAAP adjusted net income(loss)   $0.02    $0.02    $0.04   $0.03
                                                                 
                                                                 
Reconciliation of GAAP net loss to                                
adjusted EBITDA:
GAAP net loss                        $(40)    $(51)    $(946)  $(782)
Provision for income tax             (21)      (39)      69       24
Interest expense (income),net        42        45        276      211
Amortization of intangible assets    179       183       750      765
Impairment of intangible asset       --        --        281      --
Depreciation                         254       149       979      603
EBITDA                               414       287       1,409    821
Other amortization                   40        87        170      350
Stock-based compensation             129       70        385      356
Adjusted EBITDA                      $583     $444     $ 1,964  $1,527
                                                                 
                                                                 
Reconciliation of GAAP net loss per diluted share to adjusted EBITDA 
per diluted share:
GAAP net loss per share              $(0.00)  $(0.00)  $(0.07) $(0.06)
Provision for income tax             --       --       0.01     --
Interest expense (income),net        --       --       0.02     0.02
Amortization of intangible assets    0.01      0.01      0.06     0.06
Impairment of intangible asset       --       --       0.02     --
Depreciation                         0.02      0.01      0.07     0.05
Other amortization                   --       0.01      0.01     0.03
Stock-based compensation             0.01      0.01      0.03     0.03
Adjusted EBITDA                      $0.04    $0.04    $0.15   $0.13

                                                               

BRIDGELINE DIGITAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share data)
(Unaudited)
                                                               
                                                               
                              Three Months Ended      Twelve Months Ended
                               September 30,           September 30,
                              2012        2011        2012        2011
Revenue:                                                        
Web application development    $5,464    $5,465    $21,268   $21,873
services
Managed service hosting        659        530        2,517      2,006
Subscription and perpetual     613        598        2,512      2,388
licenses
Total revenue                  6,736      6,593      26,297     26,267
                                                               
Cost of revenue:                                                
Web application development    2,712      2,916      10,949     11,871
services
Managed service hosting        83         88         372        443
Subscription and perpetual     114        160        451        681
licenses
Total cost of revenue          2,909      3,164      11,772     12,995
Gross profit                   3,827      3,429      14,525     13,272
                                                               
Operating expenses:                                             
Sales and marketing            2,203      1,684      7,729      6,738
General and administrative     1,007      890        3,931      3,875
Research and development       203        566        1,456      1,866
Depreciation and amortization  433        334        1,729      1,340
Impairment of intangible asset --         --         281        --
Total operating expenses       3,846      3,474      15,126     13,819
Income/(Loss) from operations  (19)       (45)       (601)      (547)
Interest income (expense), net (42)       (45)       (276)      (211)
Loss before income taxes       (61)       (90)       (877)      (758)
Provision for income taxes     (21)       (39)       69         24
Net loss                       $(40)     $(51)     $(946)    $(782)
                                                               
Net loss per share:                                             
Basic and diluted              $(0.00)   $(0.00)   $(0.07)   $(0.06)
Number of weighted average                                      
shares:
Basic and diluted              14,706,869 12,306,207 13,084,095 12,187,767

                                                               

BRIDGELINE DIGITAL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share data)
(Unaudited)
                                                               
ASSETS                                                          
                                                  September 30, September 30,
                                                   2012          2011
Current Assets:                                                 
Cash and cash equivalents                          $2,126      $2,528
Accounts receivable and unbilled revenues, net     3,977        4,274
Prepaid expenses and other current assets          648          494
Total current assets                               6,751        7,296
Equipment and improvements, net                    2,735        1,779
Intangible assets, net                             1,527        1,527
Goodwill                                           21,545       20,122
Other assets                                       1,132        685
Total assets                                       $33,690     $31,409
                                                               
                                                               
LIABILITIES AND STOCKHOLDERS' EQUITY                            
                                                               
Current liabilities:                                            
Accounts payable                                   $1,132      $1,291
Accrued liabilities                                1,306        1,081
Accrued earnouts, current                          375          295
Debt, current                                      1,424        1,750
Capital lease obligations, current                 230          216
Deferred revenue                                   1,144        1,169
Total current liabilities                          5,611        5,802
Accrued earnouts, net of current portion           990          772
Debt, net of current portion                       2,988        3,017
Capital lease obligations, net of current portion  127          215
Other long term liabilities                        1,004        395
Total liabilities                                  $10,720     $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;
15,209,538 and 12,306,207 shares issued and        15           12
outstanding, respectively
Additional paid-in-capital                         40,847       38,083
Accumulated deficit                                (17,716)     (16,770)
Accumulated other comprehensive loss               (176)        (117)
Total stockholders' equity                         22,970       21,208
Total liabilities and stockholders' equity         $33,690     $31,409

CONTACT: Bridgeline Digital, Inc.
         Kim Brown
         Director of Corporate Communications
         781.995.0888
         kbrown@blinedigital.com
 
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