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Bridgeline Digital Announces Financial Results for the Second Quarter and First Six Months of Fiscal 2013



Bridgeline Digital Announces Financial Results for the Second Quarter and
First Six Months of Fiscal 2013

Subscription and Perpetual License Revenue Increased 61% and Recurring Revenue
Increased 30% Year over Year

BURLINGTON, Mass., May 15, 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 second quarter ended March 31, 2013.

Second Quarter 2013 Highlights:

  o Revenue in the second quarter of 2013 was $6.0 million, compared to
    revenue of $6.7 million in the second quarter of 2012.
     
  o Subscription and perpetual license revenue increased 61% to $1.0 million
    in the second quarter, compared to $620 thousand in the second quarter of
    2012.
     
  o Recurring revenue increased 30% in the second quarter to $1.3 million,
    compared to $1.0 million in the second quarter of 2012.
     
  o iAPPS revenue as a percentage of total revenue increased to 78% in the
    second quarter compared to 64% in the second quarter of 2012.
     
  o 52 iAPPS enterprise licenses and 500 iAPPS ds licenses were sold in the
    second quarter of 2013.
     
  o Cash generated from operations increased to $594 thousand in the second
    quarter of 2013 compared to $55 thousand of cash used in the second
    quarter of 2012.

First Six Months Highlights:

  o Revenue in the first six months of 2013 was $12.2 million, compared to
    revenue of $13.2 million in the first six months of 2012.
     
  o Subscription and perpetual license revenue increased 50% to $1.8 million
    in the first six months of 2013, compared to $1.2 million in the first six
    months of 2013.
     
  o Recurring revenue increased 25% in the first six months to $2.5 million,
    compared to $2.0 million in the first six months of 2012.
     
  o 148 iAPPS enterprise licenses and 2,050 iAPPS ds licenses were sold in the
    first six months of 2013.
     
  o Cash generated from operations increased to $980 thousand in the first six
    months of 2013 compared to $40 thousand in the first six months of 2012.
     
  o Deferred revenue increased 173% in the first six months of 2013 to $3.0
    million, compared to $1.1 million at September 30, 2012. 

Fiscal 2013 Outlook

Fiscal 2013 iAPPS related revenue is expected to be approximately $19 million
to $20 million, up from $16.5 million in fiscal 2012. Bridgeline Digital
expects fiscal 2013 revenue will be approximately $25 million to $26 million.
This revenue projection also includes a projected reduction of non-iAPPS
related legacy revenue of approximately $4 million.

Fiscal 2013 bookings are expected to be approximately $30 million, up from $26
million in fiscal 2012.

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

Conference Call Today at 4:30pm EDT

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  Six Months Ended
                                      March 31,           March 31,
                                      2013      2012      2013       2012
Reconciliation of GAAP net loss to                                    
non-GAAP adjusted net income:
GAAP net loss                          $ (687)   $ (166)   $ (1,329)  $ (629)
Amortization of intangible assets      118       191       274        386
Impairment of intangible asset         --        --        --         281
Stock-based compensation               152       95        279        155
Non-GAAP adjusted net income(loss)     $ (417)   $ 120     $ (776)    $ 193
                                                                      
                                                                      
Reconciliation of GAAP loss per
diluted share to non-GAAP adjusted     
earnings per diluted share:
GAAP net loss per share                $ (0.05)  $ (0.01)  $ (0.09)   $ (0.05)
Amortization of intangible assets      0.01      0.02      0.02       0.03
Impairment of intangible asset         --        --        --         0.02
Stock-based compensation               0.01      --        0.02       0.01
Non-GAAP adjusted net income(loss)     $ (0.03)  $ 0.01    $ (0.05)   $ 0.02
                                                                      
Reconciliation of GAAP net loss to                                    
Adjusted EBITDA:
GAAP net loss                          $ (687)   $ (166)   $(1,329)   $ (629)
Provision for income tax               68        48        89         69
Interest expense (income),net          59        72        135        136
Amortization of intangible assets      118       191       274        386
Impairment of intangible asset         --        --        --         281
Depreciation                           272       244       540        464
EBITDA                                 (170)     389       (291)      707
Other amortization                     35        40        79         90
Stock-based compensation               152       95        279        155
Adjusted EBITDA                        $ 17      $ 524     $ 67       $ 952
                                                                      
                                                                      
Reconciliation of GAAP net loss per diluted share                     
to Adjusted EBITDA per diluted share:
GAAP net loss per share                $ (0.05)  $ (0.01)  $ (0.09)   $ (0.05)
Provision for income tax               --        --        0.01       0.01
Interest expense (income),net          --        0.01      0.01       0.01
Amortization of intangible assets      0.01      0.02      0.02       0.03
Impairment of intangible asset         --        --        --         0.02
Depreciation                           0.02      0.02      0.04       0.04
Other amortization                     --        --        0.01       0.01
Stock-based compensation               0.01      --        0.02       0.01
Adjusted EBITDA                        $ 0.00    $ 0.04    $ 0.00     $ 0.08

                                                                    
                                                                    
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,
                               2013        2012        2013        2012
Revenue:                                                            
Web application development     $ 4,489     $ 5,441     $ 9,339     $ 10,749
services
Managed service hosting         491         611         1,047       1,227
Subscription and perpetual      1,024       620         1,811       1,213
licenses
Total revenue                   6,004       6,672       12,197      13,189
                                                                    
Cost of revenue:                                                    
Web application development     2,494       2,771       5,248       5,626
services
Managed service hosting         76          85          148         191
Subscription and perpetual      247         100         415         220
licenses
Total cost of revenue           2,817       2,956       5,811       6,037
Gross profit                    3,187       3,716       6,386       7,152
                                                                    
Operating expenses:                                                 
Sales and marketing             2,164       1,846       3,998       3,561
General and administrative      946         1,001       2,300       2,001
Research and development        247         480         379         883
Depreciation and amortization   390         435         814         850
Impairment of intangible asset  --          --          --          281
Total operating expenses        3,747       3,762       7,491       7,576
Loss from operations            (560)       (46)        (1,105)     (424)
Interest income (expense), net  (59)        (72)        (135)       (136)
Loss before income taxes        (619)       (118)       (1,240)     (560)
Provision for income taxes      68          48          89          69
Net loss                        $ (687)     $ (166)     $ (1,329)   $ (629)
                                                                    
Net loss per share:                                                 
Basic and diluted               $ (0.05)    $ (0.01)    $ (0.09)    $ (0.05)
Number of weighted average                                          
shares:
Basic and diluted               14,878,361  12,338,156  14,830,488  12,328,899

                                                                  
 
BRIDGELINE DIGITAL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share data)
(Unaudited)
                                                                  
ASSETS                                                            
                                                       March 31, September 30,
                                                       2013      2012
Current Assets:                                                   
Cash and cash equivalents                               $ 1,799   $ 2,126
Accounts receivable and unbilled revenues, net          3,742     3,977
Prepaid expenses and other current assets               821       648
Total current assets                                    6,362     6,751
Equipment and improvements, net                         2,541     2,735
Intangible assets, net                                  1,142     1,527
Goodwill                                                21,880    21,545
Other assets                                            1,742     1,132
Total assets                                            $ 33,667  $ 33,690
                                                                  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY                              
                                                                  
Current liabilities:                                              
Accounts payable                                        $ 1,159   $ 1,132
Accrued liabilities                                     1,062     1,306
Accrued earnouts, current                               399       375
Debt, current                                           1,342     1,424
Capital lease obligations, current                      227       230
Deferred revenue                                        2,996     1,144
Total current liabilities                               7,185     5,611
Accrued earnouts, net of current portion                616       990
Debt, net of current portion                            2,890     2,988
Capital lease obligations, net of current portion       112       127
Other long term liabilities                             952       1,004
Total liabilities                                       $ 11,755  $ 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; 15,332,968 and 15,203,538 shares issued     15        15
and outstanding, respectively
Additional paid-in-capital                              41,067    40,847
Accumulated deficit                                     (19,045)  (17,716)
Accumulated other comprehensive loss                    (125)     (176)
Total stockholders' equity                              21,912    22,970
Total liabilities and stockholders' equity              $ 33,667  $ 33,690

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

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