Company News

  • Feb 13, 2017
  • Burlington, MA

Bridgeline Digital Announces 11.3% Increase in SaaS Revenues, Continued Margin Improvement for First Quarter of Fiscal 2017

Burlington, Mass., February 13, 2017 - Bridgeline Digital, Inc. (NASDAQ: BLIN), The Digital Engagement Company™, today announced financial results for its fiscal first quarter ended December 31, 2016.

“We made significant progress in the first quarter, including double-digit year-over-year increases in both SaaS and iAPPS recurring revenue,” said Ari Kahn, Bridgeline’s President and Chief Executive Officer. “In addition, gross margin improved more than six percentage points, validating our strategic shift to a higher-margin SaaS model. This transition, coupled with our focused efforts to eliminate lower margin, non-strategic revenue, enabled us to create a well-positioned Company with revenues tied to a profitable and strategic business upon which we can grow a stronger company and greater shareholder value.”

First Quarter Highlights:

  • iAPPS recurring revenue increased 13.9% to $1.7 million in the first quarter of fiscal 2017, compared to $1.5 million in the first quarter of fiscal 2016. This is part of Bridgeline’s continued strategy to focus solely on iAPPS products.
  • SaaS revenue increased 11.3% to $1.4 million in the first quarter of fiscal 2017, compared to $1.2 million in the first quarter of fiscal 2016.
  • Subscription and perpetual license revenue increased 13.2% to $1.7 million in the first quarter of fiscal 2017, compared to $1.5 million in the first quarter of fiscal 2016.
  • License and iAPPS hosting revenue combined in the first quarter of fiscal 2017 comprised 49.2% of total revenue, compared to 44.1% of total revenue in the first quarter of fiscal 2016.
  • Gross margin improved to 57.5% in the first quarter of fiscal 2017, from 50.8% in the first quarter of fiscal 2016. Cost of revenue was reduced by $394,000, or 18.9%, to $1.7 million in the first quarter of fiscal 2017, compared to $2.1 million in the first quarter of fiscal 2016.
  • Operating expenses were reduced by $552,000, or 17.2% to $2.7 million in the first quarter of fiscal 2017, from $3.2 million in the first quarter of fiscal 2016.

First Quarter Financial Results

Revenue for the first quarter of fiscal 2017 was $4.0 million, compared to $4.2 million in the first quarter of fiscal 2016. Subscription and perpetual license revenue increased 13.2% to $1.7 million in the first quarter of fiscal 2017, compared to $1.5 million in the first quarter of fiscal 2016. License and hosting revenue combined in the first quarter of fiscal 2017 comprised 49.2% of total revenue, compared to 44.1% of total revenue in the first quarter of fiscal 2016. SaaS revenue increased 11.3% to $1.4 million in the first quarter of fiscal 2017, compared to $1.2 million in the first quarter of fiscal 2016.

Gross margin improved to 57.5% in the first quarter of fiscal 2017, from 50.8% in the first quarter of fiscal 2016, reflecting a larger mix of recurring revenue. Cost of revenue was reduced by $394,000, or 18.9%, to $1.7 million in the first quarter of fiscal 2017, compared to $2.1 million in the first quarter of fiscal 2016.

Operating expenses were reduced by $552,000, or 17.2% to $2.7 million in the first quarter of fiscal 2017, compared to $3.2 million in the first quarter of fiscal 2016, reflecting management’s ongoing expense control initiatives. Loss from Operations was $365,000 in the first quarter of fiscal 2017, compared to $1.1 million in the first quarter of fiscal 2016.

Net loss was $408,000 in the first quarter of fiscal 2017, compared to a net loss of $1.3 million in the first quarter of fiscal 2016. 

Adjusted EBITDA was $10,000 in the first quarter of fiscal 2017, compared to $65,000 in the first quarter of fiscal 2016.

Financial Outlook

For the second quarter of fiscal 2017 the Company expects revenue in the range of $3.9 million to $4.1 million.

Conference Call Information

Bridgeline Digital will host a conference call to discuss first quarter 2017 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, restructuring charges, preferred stock dividends and any related tax effects. 

Adjusted EBITDA and Adjusted EBITDA per diluted share are defined as earnings before interest, taxes, depreciation and amortization, stock-based compensation charges, restructuring charges, preferred stock dividends and any related tax effects. 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 ability to maintain our listing on the NASDAQ Capital market, the ability to raise capital, 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™, helps customers maximize the performance of their full digital experience – from websites and intranets to online stores and campaigns. Bridgeline’s iAPPS® platform deeply integrates Web Content Management, eCommerce, eMarketing, Social Media management, and Web Analytics to help marketers deliver digital experiences that attract, engage and convert their customers across all channels. Headquartered in Burlington, Mass., 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.

Contact:

Bridgeline Digital, Inc.
Michael D. Prinn
Chief Financial Officer
781.497.3016
mprinn@bridgeline.com

BRIDGELINE DIGITAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(Dollars in thousands, except per share data)
Three Months Ended
December 31
2016 2015
Reconciliation of GAAP net loss to
non-GAAP adjusted net loss:
GAAP net loss $ (476) $ (1,380)
Amortization of intangible assets 71 107
Stock-based compensation 145 72
Restructuring charges 31 586
Preferred stock dividends 68 32
Non-GAAP adjusted net loss $ (161) $ (583)
Reconciliation of GAAP net loss per share to
non-GAAP adjusted net income(loss) per share:
GAAP net loss per share $ (0.02) $ (0.25)
Amortization of intangible assets -- 0.02
Stock-based compensation 0.02 0.01
Restructuring charges -- 0.11
Preferred stock dividends -- --
Non-GAAP adjusted net income(loss) per share $ 0.00 $ (0.11)
Reconciliation of GAAP net loss to Adjusted EBITDA:
GAAP net loss $ (476) $ (1,380)
Provision for income tax 12 6
Interest expense, net 31 283
Amortization of intangible assets 71 107
Depreciation 89 231
Restructuring charges 31 586
Other amortization 39 128
Stock-based compensation 145 72
Preferred stock dividends 68 32
Adjusted EBITDA $ 10 $ 65
Reconciliation of GAAP net loss per share to
Adjusted EBITDA per share:
GAAP net loss per share $ (0.02) $ (0.25)
Provision for income tax -- --
Interest expense, net -- 0.06
Amortization of intangible assets -- 0.02
Depreciation -- 0.04
Restructuring charges -- 0.11
Other amortization -- 0.02
Stock-based compensation 0.02 0.01
Preferred stock dividends -- --
Adjusted EBITDA per share $ 0.00 $ 0.01

 

BRIDGELINE DIGITAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share data)
(Unaudited)
Three Months Ended
December 31
2016 2015
Revenue:
Digital engagement services $2,026 $2,373
Subscription and perpetual licenses 1,725 1,523
Managed service hosting 240 347
Total revenue 3,991 4,243
Cost of revenue:
Digital engagement services 1,128 1,454
Subscription and perpetual licenses 496 558
Managed service hosting 71 77
Total cost of revenue 1,695 2,089
Gross profit 2,296 2,154
Operating expenses:
Sales and marketing 1,294 1,068
General and administrative 791 862
Research and development 360 341
Depreciation and amortization 185 356
Restructuring charges 31 586
Total operating expenses 2,661 3,213
Loss from operations (365) (1,059)
Interest expense, net (31) (283)
Loss before income taxes (396) (1,342)
Income Taxes 12 6
Net loss $(408) $(1,348)
Dividends on convertible preferred stock (68) (32)
Net loss applicable to common shareholders $(476) $(1,380)
Net loss per share attributable to common shareholders:
Basic and diluted $(0.02) $(0.25)
Number of weighted average shares outstanding:
Basic and diluted 20,022,720 5,164,809

 

 

BRIDGELINE DIGITAL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share data)
(Unaudited)
ASSETS
December 31 September 30
2016 2016
Current Assets:
Cash and cash equivalents $1,428 $661
Accounts receivable and unbilled revenues, net 2,630 2,549
Prepaid expenses and other current assets 344 381
Total current assets 4,402 3,591
Equipment and improvements, net 423 512
Intangible assets, net 477 548
Goodwill 12,641 12,641
Other assets 416 436
Total assets $18,359 $17,728
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $915 $1,285
Accrued liabilities 979 1,021
Capital lease obligations, current 33 45
Deferred revenue 1,547 1,360
Total current liabilities 3,474 3,711
Debt, net of current portion 2,390 2,115
Other long term liabilities 420 400
Total liabilities 6,284 6,226
Commitments and contingencies
Stockholders' equity:
Preferred stock - $0.001 par value; 1,000,000 sharesauthorized;
222,822 and 221,092 issued and outstanding -- --
Common stock - $0.001 par value; 50,000,000 sharesauthorized;
20,783,747 and 18,637,709 issued and outstanding 21 19
Additional paid-in-capital 65,247 64,202
Accumulated deficit (52,842) (52,366)
Accumulated other comprehensive loss (351) (353)
Total stockholders' equity 12,075 11,502
Total liabilities and stockholders' equity $18,359 $17,728

 

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