Bridgeline Digital Acquires Franchise Web Platform Developer Elements Local

Bridgeline Digital Acquires Franchise Web Platform Developer Elements Local

Over 3,200 Franchises on Elements Local Web Platform

BURLINGTON, Mass., Aug. 1, 2013 (GLOBE NEWSWIRE) -- Bridgeline Digital, Inc.
(Nasdaq:BLIN) announced today that it has acquired Elements Local, expanding
Bridgeline Digital's presence in the Franchise marketplace.

Located in Central coast California, Elements Local has developed an online
marketing SaaS platform for the Franchise marketplace that incorporates brand
reputation management tools, web content management, social media, eMarketing,
and web analytics.

Elements Local is a respected web platform brand in the Franchise
market.Strategically, Bridgeline Digital believes the acquisition of Elements
Local will accelerate Bridgeline Digital's time to market into the Franchise
marketplace and strengthen Bridgeline Digital's credibility and acceptance in
the Franchise marketplace.Elements Local currently has 35 Franchisor
customers and over 3,200 Franchises on their web platform.Over the past
twelve months Elements Local has experienced a 95% retention rate.Most of
Elements Local customers are national Franchise brands such as Sports Clips,
MAACO, Glass Doctor, Pearle Vision, Molly Maids, and Mr. Handyman.In 2013
Elements Local is on track to having a record revenue year of over $2 million,
of which the majority of this revenue is recurring.To learn more about
Elements Local please visit www.elementslocal.com

Bridgeline Digital acquired Elements Local for $2.5 million, in a combination
of cash, common stock, and earn-out consideration based on certain future
financial performance.Elements Local founder and Chief Executive Officer,
Jeremy LaDuque, has joined Bridgeline Digital as its Sr. Vice President of
Franchise and Large Dealer Networks.Jeremy LaDuque is a Certified Franchise
Expert and an active member of the International Franchise Association.He
was awarded the Pacific Coast Business Times' "Top 40 Under 40" for his
professional excellence and commitment to the community.Prior to starting
Elements Local, Jeremy LaDuque was the Director of Web Services at Best 1
Internet.

"We are very excited about our merger with Bridgeline," stated Jeremy LaDuque,
Chief Executive Officer of Elements Local. "We are impressed with iAPPSds, and
we believe our customers will be very interested in the strong value
proposition the iAPPSds platform provides. It's an impressive and powerful
web engagement management product suite for the franchise and large dealer
marketplace." 

Thomas Massie, Bridgeline Digital's Chairman and Chief Executive Officer,
stated, "We are ecstatic about our merger with the Elements Local team.They
have an excellent reputation in the franchise market and combined with
Bridgeline we believe we can quickly become a market leader in this
space.There are over 750,000 franchises in North America and over 200,000
large dealer networks.We believe this market is vast and from a web platform
perspective, we believe it is technologically underserved."

About Bridgeline Digital

Bridgeline Digital, 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 United States, Bridgeline has thousands of customers that range from small
organizations to Fortune 1000 companies. To learn more, please visit
www.bridgelinedigital.com or call (800) 603-9936.

FREQUENTLY ASKED QUESTIONS

1. Who is Elements Local?

Elements Local is a developer of an online marketing SaaS platform for the
Franchise marketplace that incorporates brand reputation management tools, web
content management, social media, eMarketing, and web analytics.Elements
Local currently has 35 Franchisor customers and over 3,200 Franchises on their
web platform.Most of Elements Local customers are national Franchise brands
such as Sports Clips, MAACO, Glass Doctor, Pearle Vision, Molly Maids, and Mr.
Handyman.

2. How large is Elements Local in annual revenues, and how much of their
revenues are recurring?

For the 2013 calendar year Elements Local is on track to generate $2.1M of
annual revenue of which 80% is recurring revenues. Half of the recurring
revenue is generated by an email marketing product solution Elements Local
resells and makes 50% gross profit margin, the remaining recurring revenue is
SaaS licensing revenue with a gross profit margin of 75%.Once Elements Local
customers migrate to iAPPSds, the email marketing solution Elements Local
resells will become iAPPS Marketier and the gross profit margin generated will
be approximately 75%.

3. Why is Bridgeline acquiring Elements Local?

In North America there are approximately 750,000 franchises and approximately
200,000 large dealer network organizations. From a web platform perspective we
believe this market is vast and technologically underserved.The competition
in this large vertical market are typically small companies, with limited
resources, and antiquated technology.We believe iAPPSds is a superior web
platform solution for the franchise and dealer networks.iAPPS is feature
rich, tightly integrated, and provides scale. Bridgeline entered this market 9
months ago and is new and relatively unknown.With a growing pipeline and a 12
month sales cycle, we believe Bridgeline would benefit from a strategic
acquisition that accelerates iAPPSds time to market and market acceptance.
Elements Local not only provides this, the acquisition is immediately
accretive, and more than half of the $2.5M purchased price is leveraged over
the next 3 years.

4. What are the financial terms of the transaction?

The purchase price of the acquisition is $2.5M of which $400k was paid at the
closing, $197K of debt was assumed, and $604k of Bridgeline Digital common
stock was issued to 4 shareholders.The stock is unregistered and subject to a
one year lock up agreement. In addition the 4 owners of Elements Local will
have the opportunity to earn $1.3M or $108k a quarter over a 12 quarter period
in a combination of cash and stock.Certain quarterly revenue results must be
achieved in order to earn the $108k quarterly earn out.

5. When will the acquisition be closed?

The transaction is closed and does not require shareholder approval.

6. How many Elements Local employees are joining Bridgeline Digital?

Approximately 15 employees are expected to join Bridgeline Digital.

7. How are customers expected to benefit from the acquisition?

As a result of the acquisition Bridgeline Digital will be able to provide
Elements Local customers with significantly more resources and
capabilities.In addition once migrated to the iAPPSds platform, Elements
Local customers will have access to more features, improved site performance,
and superior scalability.However, because the key employees of Elements Local
are now valued Bridgeline employees, Elements Local customers will receive the
same level of care and attention.

8. How will Bridgeline Digital begin to integrate Elements Local web
platform?

Bridgeline Digital will immediately begin the process of introducing the
feature rich iAPPSds platform.As Elements Local customers license agreements
expire, each customer will be presented with an iAPPSds migration plan and
proposal to migrate to iAPPSds.

9. Will Elements Local agreements continue to be honored?

Bridgeline Digital will continue to honor the terms and conditions of all
existing agreements for current Elements Local customers.

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 the risks described
in our filings with the Securities and Exchange Commission that 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: Michael Prinn
         Executive Vice President &
         Chief Financial Officer
         Bridgeline Digital, Inc.
         781-497-3016
         mprinn@blinedigital.com
        
        
         Jeremy LaDuque
         Chief Executive Officer
         Elements Local
         (805) 547-1160 x 201
         jladuque@elementsinc.net

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