Bridgeline Digital Announces Fourth Quarter and Fiscal 2013 Financial Results

Bridgeline Digital Announces Fourth Quarter and Fiscal 2013 Financial Results

Fourth Quarter 2013 Subscription and Perpetual License Revenue Increased 117%
   and Fiscal 2013 Subscription and Perpetual License Revenue Increased 60%

             Fourth Quarter 2013 Recurring Revenues Increased 36%

BURLINGTON, Mass., Dec. 10, 2013 (GLOBE NEWSWIRE) -- Bridgeline Digital, Inc.
(Nasdaq:BLIN), The Digital Engagement Company™, today announced financial
results for its fourth quarter and fiscal year ended September 30, 2013.

"We continue to ardently focus on building a highly scalable iAPPS business as
thousands of quality customers rely on iAPPS for their mission-critical
website, intranets, and web stores," said Thomas Massie, Bridgeline Digital's
President and Chief Executive Officer. "Fiscal 2014 will be an inflection year
as our legacy revenue becomes an insignificant part of our total revenue and
our core business continues to grow rapidly."

Fourth Quarter Highlights:

  *Revenue from our core business, iAPPS and the ElementsLocal platform,
    increased 30% to $5.8 million in the fourth quarter of 2013, compared to
    $4.5 million in the fourth quarter of 2012.
    
  *Revenue for the fourth quarter of 2013 was $6.7 million, compared to $6.7
    million in the fourth quarter of 2012.
    
  *Subscription and perpetual license revenue increased 117% to $1.3 million
    in the fourth quarter of 2013, compared to $0.6 million in the fourth
    quarter of 2012.
    
  *Recurring revenue increased 36% in the fourth quarter to $1.5 million,
    compared to $1.1 million the fourth quarter of 2012.
    
  *76 iAPPS enterprise licenses and 63 iAPPS ds licenses were sold in the
    fourth quarter of 2013.
    
  *Cash generated from operations in the fourth quarter of 2013 was $300,000.

Fiscal 2013 Highlights:

  *Revenue from our core business, iAPPS and ElementsLocal related revenue,
    increased 16%, to $19.2 million in fiscal 2013 compared to $16.6 million
    in fiscal 2012.
    
  *Subscription and perpetual license revenue increased 60% to $4 million in
    fiscal 2013, compared to $2.5 million in fiscal 2012.
    
  *Recurring revenue increased 21% in fiscal 2013 to $5.1 million, compared
    to $4.2 million in fiscal 2012.
    
  *Achieved record new bookings of iAPPS related bookings of $21.4 million in
    fiscal 2013.
    
  *250 iAPPS enterprise licenses and 2,223 iAPPS ds licenses were sold in
    fiscal 2013. A total of 945 iAPPS enterprise licenses have been sold and a
    total of 2,223 iAPPS ds licenses have been sold since iAPPS was launched
    in 2008. iAPPS has an 84% retention rate.
    
  *In fiscal 2013 the Company made significant capital investments and
    improvements into the iAPPS co-managed Network Operations Center to
    support the planned scale of potentially driving tens of thousands of
    iAPPS driven websites, micro-sites or web stores.
    
  *In August, Bridgeline Digital acquired franchise web platform developer
    ElementsLocal, who has over 3,200 franchises on their web platform.
    
  *Bridgeline Digital was honored with 26 various industry related awards for
    iAPPS driven websites or web stores.

Fiscal 2014 Outlook

"For fiscal 2014, revenue is expected to be approximately $28 million, an
increase from $24.5 million in 2013. I expect we will generate positive
Adjusted EBITDA for the fiscal year. Further, in fiscal 2014 our revenue
projection includes a projected increase of the Company's core business of
approximately 32% from fiscal 2013 and a reduction of non-iAPPS related legacy
revenue of approximately $2.5 million. Fiscal 2014 will validate the type of
growth company we are," said Thomas Massie, President and CEO of the Company.

Conference Call Information

Bridgeline Digital will host a conference call to discuss fourth quarter and
fiscal 2013 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.
As a result 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," or
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, The Digital Engagement Company™, enables its customers to
maximize the performance of their mission critical websites, intranets, and
online stores. Bridgeline's iAPPS® web engagement platform deeply integrates
Content Management, eCommerce, eMarketing, Social Media management, 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 and a .NET development
center in Bangalore, India. Bridgeline has thousands of quality customers that
range from small and medium-sized organizations to Fortune 1000 companies. To
learn more, please visit www.bridgeline.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,
                                      2013      2012      2013      2012
Reconciliation of GAAP net loss to                                
non-GAAP adjusted net income:
GAAP net loss                          $(705)  $(40)   $(3,598) $(946)
Amortization of intangible assets      120      179      511      750
Impairment of intangible asset         --       --       --       281
Stock-based compensation               103      129      438      386
Non-GAAP adjusted net income(loss)     $(482)  $268    $(2,649) $471
                                                                 
                                                                 
Reconciliation of GAAP loss per
diluted share to non-GAAP adjusted     
earnings per diluted share:
GAAP net loss per share                $(0.04) $(0.00) $(0.23) $(0.07)
Amortization of intangible assets      0.01     0.01     0.03     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   $(0.17) $0.04
                                                                 
                                                                 
Reconciliation of GAAP net loss to                                
Adjusted EBITDA:
GAAP net loss                          $(705)  $(40)   $(3,598) $(946)
Provision for income tax               61       (21)     171      68
Interest expense (income), net         79       42       273      276
Amortization of intangible assets      120      179      511      750
Impairment of intangible asset         --       --       --       281
Depreciation                           344      254      1,179    979
EBITDA                                 (101)    414      (1,464)  1,408
Other amortization                     113      40       314      170
Stock-based compensation               103      129      438      386
Adjusted EBITDA                        $115    $583    $(712)  $1,964
                                                                 
                                                                 
Reconciliation of GAAP net loss per
diluted share to Adjusted EBITDA per            
diluted share:
GAAP net loss per share                $(0.04) $(0.00) $(0.23) $(0.07)
Provision for income tax               --      --      0.01     0.01
Interest expense (income), net         --      --      0.02     0.02
Amortization of intangible assets      0.01     0.01     0.03     0.06
Impairment of intangible asset         --      --      --      0.02
Depreciation                           0.02     0.02     0.07     0.07
Other amortization                     0.01     --      0.02     0.01
Stock-based compensation               --      0.01     0.03     0.03
Adjusted EBITDA                        $0.00   $0.04   $(0.05) $0.15

                                                               
                                                               
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,
                              2013        2012        2013        2012
Revenue:                                                        
Digital engagement services    $4,971    $5,464    $18,585   $21,268
Managed service hosting        466        659        1,921      2,517
Subscription and perpetual     1,274      613        4,000      2,511
licenses
Total revenue                  6,711      6,736      24,506     26,296
                                                               
Cost of revenue:                                                
Digital engagementservices    2,548      2,712      10,114     10,949
Managed service hosting        93         83         317        372
Subscription and perpetual     338        114        1,107      450
licenses
Total cost of revenue          2,979      2,909      11,538     11,771
Gross profit                   3,732      3,827      12,968     14,525
                                                               
Operating expenses:                                             
Sales and marketing            2,326      2,203      8,593      7,730
General and administrative     1,034      1,007      4,474      3,931
Research and development       473        203        1,365      1,456
Depreciation and amortization  464        433        1,690      1,729
Impairment of intangible asset --         --         --         281
Total operating expenses       4,297      3,846      16,122     15,127
Loss from operations           (565)      (19)       (3,154)    (602)
Interest income (expense), net (79)       (42)       (273)      (276)
Loss before income taxes       (644)      (61)       (3,427)    (878)
Provision for income taxes     61         (21)       171        68
Net loss                       $(705)    $(40)     $(3,598)  $(946)
                                                               
Net loss per share:                                             
Basic and diluted              $(0.04)   $(0.00)   $(0.23)   $(0.07)
Number of weighted average                                      
shares:
Basic and diluted              17,525,722 14,706,869 15,558,244 13,084,095

                                                               
                                                               
BRIDGELINE DIGITAL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share data)
(Unaudited)
                                                               
ASSETS                                                          
                                                  September 30, September 30,
                                                   2013          2012
Current Assets:                                                 
Cash and cash equivalents                          $2,830      $2,126
Accounts receivable and unbilled revenues, net     3,194        3,977
Prepaid expenses and other current assets          963          648
Total current assets                               6,987        6,751
Equipment and improvements, net                    3,065        2,735
Intangible assets, net                             1,517        1,527
Goodwill                                           23,777       21,545
Other assets                                       1,631        1,132
Total assets                                       $36,977     $33,690
                                                               
                                                               
LIABILITIES AND STOCKHOLDERS' EQUITY                            
                                                               
Current liabilities:                                            
Accounts payable                                   $1,746      $1,132
Accrued liabilities                                1,093        1,306
Accrued earnouts, current                          561          375
Debt, current                                      1,165        1,424
Capital lease obligations, current                 397          230
Deferred revenue                                   1,960        1,042
Total current liabilities                          6,922        5,509
Accrued earnouts, net of current portion           950          990
Debt, net of current portion                       4,725        2,988
Capital lease obligations, net of current portion  544          127
Other long term liabilities                        1,088        1,106
Total liabilities                                  $14,229     $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; 30,000,000
shares authorized; 18,294,761 and 15,203,538       18           15
shares issued and outstanding, respectively
Additional paid-in-capital                         44,206       40,847
Accumulated deficit                                (21,314)     (17,716)
Accumulated other comprehensive loss               (162)        (176)
Total stockholders' equity                         22,748       22,970
Total liabilities and stockholders' equity         $36,977     $33,690

CONTACT: Bridgeline Digital, Inc.
         Michael Prinn
         Executive Vice President
         & Chief Financial Officer
         781.497.3016
         mprinn@blinedigital.com

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