Bridgeline Digital Announces Financial Results for the First Quarter of Fiscal 2013

Bridgeline Digital Announces Financial Results for the First Quarter of Fiscal
2013

Subscription and Perpetual License Revenue Increased 33% and Recurring Revenue
Increased 20% Year over Year

BURLINGTON, Mass., Feb. 14, 2013 (GLOBE NEWSWIRE) -- Bridgeline Digital, Inc.
(Nasdaq:BLIN), developer of the award-winning iAPPS Web Engagement Management
platform and related interactive technology solutions, today announced
financial results for its first quarter ended December 31, 2012.

First Quarter 2013 Highlights:

  oRevenue in the first quarter of 2013 was $6.2 million, compared to revenue
    of $6.5 million in the first quarter of 2012.
    
  oSubscription and perpetual license revenue increased 33% to $787 thousand
    in the first quarter, compared to $593 thousand in the first quarter of
    2012.
    
  oRecurring revenue increased 20% in the first quarter to $1.2 million,
    compared to $1.0 million in the first quarter of 2012.
    
  oiAPPS revenue increased 17% in the first quarter to $4.2 million, compared
    to $3.6 million in the first quarter of 2012.
    
  oiAPPS revenue as a percentage of total revenue increased to 69% in the
    first quarter compared to 55% in the first quarter of 2012.
    
  oTotal gross margin was 52% in the first quarter compared to 53% in the
    first quarter of 2012.
    
  oAdjusted EBITDA (Earnings before interest, taxes, depreciation and
    amortization and stock-based compensation) was $50 thousand compared to
    $428 thousand in the first quarter of 2012.
    
  oCash generated from operations increased $291 thousand, or 306%, to $386
    thousand in the first quarter compared to $95 thousand in the first
    quarter of 2012.

Fiscal 2013 Outlook

Bridgeline Digital expects fiscal 2013 revenue will be in the range of $27
million to $28 million. Fiscal 2013 iAPPS related revenue is expected to be
approximately $21 million, up from $16.5 million in fiscal 2012. This revenue
projection also includes a projected reduction of non-iAPPS related legacy
revenue of approximately $3.5 million.

In addition, Bridgeline Digital expects to continue to generate positive
adjusted EBITDA for fiscal 2013.

Conference Call Today at 4:30pm EST

Bridgeline Digital will host a discussion of its first 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, 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
                                                           December 31,
                                                          2012      2011
Reconciliation of GAAP net loss to non-GAAP adjusted net            
income:
GAAP net loss                                              $(642)  $(463)
Amortization of intangible assets                          156      195
Impairment of intangible asset                             --       281
Stock-based compensation                                   127      60
Non-GAAP adjusted net income(loss)                         $(359)  $73
                                                                   
                                                                   
Reconciliation of GAAP loss per diluted share to non-GAAP  
adjusted earnings per diluted share:
GAAP net loss per share                                    $(0.04) $(0.04)
Acquisition, integration and other one-time costs          --      --
Amortization of intangible assets                          0.01     0.02
Impairment of intangible asset                             --      0.02
Stock-based compensation                                   0.01     0.01
Non-GAAP adjusted net income(loss)                         $(0.02) $0.01
                                                                   
                                                                   
Reconciliation of GAAP net loss to Adjusted EBITDA:                 
GAAP net loss                                              $(642)  $(463)
Provision for income tax                                   21       21
Interest expense (income), net                             76       64
Amortization of intangible assets                          156      195
Impairment of intangible asset                             --       281
Depreciation                                               268      220
EBITDA                                                     (121)    318
Other amortization                                         44       50
Stock-based compensation                                   127      60
Adjusted EBITDA                                            $50     $428
                                                                   
                                                                   
Reconciliation of GAAP net loss per diluted share to Adjusted EBITDA 
per diluted share:
GAAP net loss per share                                    $(0.04) $(0.04)
Provision for income tax                                   --      --
Interest expense (income), net                             0.01     0.01
Amortization of intangible assets                          0.01     0.02
Impairment of intangible asset                             --      0.02
Depreciation                                               0.01     0.02
Other amortization                                         --      --
Stock-based compensation                                   0.01     --
Adjusted EBITDA                                            $0.00   $0.03

                                               
                                               
BRIDGELINE DIGITAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share data)
(Unaudited)
                                               
                                               
                                    Three Months Ended
                                     December 31,
                                    2012        2011
Revenue:                                        
Web application development services $4,850    $5,308
Managed service hosting              556        616
Subscription and perpetual licenses  787        593
Total revenue                        6,193      6,517
                                               
Cost of revenue:                                
Web application development services 2,754      2,855
Managed service hosting              72         106
Subscription and perpetual licenses  168        120
Total cost of revenue                2,994      3,081
Gross profit                         3,199      3,436
                                               
Operating expenses:                             
Sales and marketing                  1,834      1,715
General and administrative           1,354      1,000
Research and development             132        403
Depreciation and amortization        424        415
Impairment of intangible asset       --         281
Total operating expenses             3,744      3,814
Loss from operations                 (545)      (378)
Interest income (expense), net       (76)       (64)
Loss before income taxes             (621)      (442)
Provision for income taxes           21         21
Net loss                             $(642)    $(463)
                                               
Net loss per share:                             
Basic and diluted                    $(0.04)   $(0.04)
Number of weighted average shares:              
Basic and diluted                    14,782,615 12,319,643

                                                               
                                                               
BRIDGELINE DIGITAL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share data)
(Unaudited)
                                                               
ASSETS                                                          
                                                               
                                                   December 31, September 30,
                                                    2012         2012
Current Assets:                                                 
Cash and cash equivalents                           $2,395     $2,126
Accounts receivable and unbilled revenues, net      4,488       3,977
Prepaid expenses and other current assets           677         648
Total current assets                                7,560       6,751
Equipment and improvements, net                     2,673       2,735
Intangible assets, net                              1,375       1,527
Goodwill                                            21,724      21,545
Other assets                                        1,395       1,132
Total assets                                        $34,727    $33,690
                                                               
                                                               
LIABILITIES AND STOCKHOLDERS' EQUITY                            
                                                               
Current liabilities:                                            
Accounts payable                                    $988       $1,132
Accrued liabilities                                 903         1,306
Accrued earnouts, current                           354         375
Debt, current                                       1,383       1,424
Capital lease obligations, current                  262         230
Deferred revenue                                    2,852       1,144
Total current liabilities                           6,742       5,611
Accrued earnouts, net of current portion            990         990
Debt, net of current portion                        3,271       2,988
Capital lease obligations, net of current portion   126         127
Other long term liabilities                         991         1,004
Total liabilities                                   $12,120    $10,720
                                                               
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;
15,332,768 and 15,203,538 shares issued and         15          15
outstanding, respectively
Additional paid-in-capital                          41,087      40,847
Accumulated deficit                                 (18,358)    (17,716)
Accumulated other comprehensive loss                (137)       (176)
Total stockholders' equity                          22,607      22,970
Total liabilities and stockholders' equity          $34,727    $33,690

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