• Dec 23, 2015
  • Quinn Murphy

Bridgeline Digital Announces Fourth Quarter and Fiscal 2015 Financial Results

Company Achieves Positive Adjusted EBITDA in the Fourth Quarter of Fiscal 2015

BURLINGTON, Mass., August 14, 2015 (GLOBE NEWSWIRE) -- Bridgeline Digital, Inc. (NASDAQ:BLIN), a provider in cloud-based Web Content Management, eCommerce and Marketing Automation software, announced

financial results for its fourth quarter and fiscal year ended September 30, 2015.

“We are pleased to report positive Adjusted EBITDA in the fourth quarter of 2015. We have managed through a number of significant changes in fiscal 2015, most importantly, changes in leadership, the implementation of significant expense reductions and the launch of new express solution offerings. All of these changes will help us improve our bottom line,” said Joni Kahn, Bridgeline Digital’s Chairperson. “I am excited about executing our operating plan for fiscal 2016, which continues to drive the transformation to a true SaaS business with higher license revenue and recurring revenue.”

Fourth Quarter Summary:

  • Adjusted EBITDA was $21 thousand for the fourth quarter of fiscal 2015, compared to ($602) thousand in the fourth quarter of fiscal 2014, an improvement of $623 thousand.
  • Subscription and perpetual license revenue increased 13% to $1.5 million in the fourth quarter of 2015, compared to $1.4 million in the fourth quarter of 2014.
  • Revenue for the fourth quarter of fiscal 2015 was $4.6 million, compared to $5.8 million in the fourth quarter of fiscal 2014.
  • Gross margin improved to 50% in the fourth quarter of fiscal 2015, from 48% in the fourth quarter of fiscal 2014.
  • Operating expenses (excluding a goodwill impairment and restructuring charge) in the fourth quarter of fiscal 2015 were $2.8 million, compared to $4.2 million in the fourth quarter of fiscal 2014, a decrease of 32%.
  • iAPPSds was named a Strong Performer in “The Forrester Wave™: Through-Channel Marketing Automation Platforms, Q3 2015” report and earned the highest score possible for industry strategy and number of customers.
  • The iAPPS Digital Engagement Platform was named to EContent Magazine's 2015 Trendsetting Products List.

Fiscal 2015 Summary:

  • Subscription and perpetual license revenue was $5.8 million for both fiscal 2015 and fiscal 2014.
  • Recurring revenue remained constant in fiscal 2015 compared to fiscal 2014 at $6.9 million.
  • Recurring revenue for fiscal 2015 as a percentage of total revenue was 35%, an increase from 29% in fiscal 2014.
  • Revenue from our non-iAPPS, or legacy business, decreased by approximately 48% in fiscal 2015, when compared to fiscal 2014.
  • iAPPS Content Manager was awarded the 2015 CODiE Award for Best Content Management Platform globally and iAPPS Commerce was named a 2015 CODiE Award finalist for Best eCommerce System globally.
  • Throughout fiscal 2015, we implemented expense reduction initiatives aimed at aligning the cost structure with our revenue forecast and driving positive Adjusted EBITDA. The combined annualized impact of these expense reductions since January 2015 is over $6.0 million.

Conference Call Information

Bridgeline Digital will host a conference call to discuss fourth quarter 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 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.

 BRIDGELINE DIGITAL, INC.
 RECONCILIATION OF GAAP TO NON-GAAP RESULTS
 (Dollars in thousands, except per share data)
 
 
  Three Months Ended Nine Months Ended
  June 30, June 30,
  2015 2014 2015 2014
Reconciliation of GAAP net loss to         
non-GAAP adjusted net loss:        
GAAP net loss applicable to common shareholders  $ (1,141)  $ (1,306)  $ (5,375)  $ (4,397)
Amortization of intangible assets  141  157  447  498
Stock-based compensation  81  134  244  301
Preferred stock dividends  31  --   82  -- 
Non-GAAP adjusted net loss  $ (888)  $ (1,015)  $ (4,602)  $ (3,598)
         
         
Reconciliation of GAAP loss per diluted share to        
non-GAAP adjusted loss per diluted share:        
GAAP net loss per share applicable to common shareholders  $ (0.26)  $ (0.31)  $ (1.24)  $ (1.16)
Amortization of intangible assets  0.03  0.04  0.10  0.13
Stock-based compensation  0.02  0.03  0.06  0.08
Preferred stock dividends  0.01  --   0.02  -- 
Non-GAAP adjusted net loss  $ (0.20)  $ (0.24)  $ (1.06)  $ (0.95)
         
Reconciliation of GAAP net loss to Adjusted EBITDA:        
GAAP net loss applicable to common shareholders  $ (1,141)  $ (1,306)  $ (5,375)  $ (4,397)
Provision for income tax  25  24  88  80
Interest expense, net  220  190  585  524
Amortization of intangible assets  141  157  447  498
Depreciation  258  333  814  980
Net loss on disposal of fixed assets  58  --   58  -- 
EBITDA  (439)  (602)  (3,383)  (2,315)
Other amortization  137  132  411  375
Stock-based compensation  81  134  244  301
Preferred stock dividends  31  --   82  -- 
Adjusted EBITDA  $ (190)  $ (336)  $ (2,646)  $ (1,639)
         
         
Reconciliation of GAAP net loss per diluted share to         
Adjusted EBITDA per diluted share:        
GAAP net loss per share applicable to common shareholders  $ (0.26)  $ (0.31)  $ (1.24)  $ (1.16)
Provision for income tax  0.01  0.01  0.02  0.02
Interest expense, net  0.05  0.04  0.13  0.14
Amortization of intangible assets  0.03  0.04  0.10  0.13
Depreciation  0.06  0.08  0.19  0.26
Net loss on disposal of fixed assets  0.01  --   0.01  -- 
Other amortization  0.03  0.03  0.10  0.10
Stock-based compensation  0.02  0.03  0.06  0.08
Preferred stock dividends  0.01  --   0.02  -- 
Adjusted EBITDA  $ (0.04)  $ (0.08)  $ (0.61)  $ (0.43)
         
BRIDGELINE DIGITAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share data)
(Unaudited)
 
  Three Months Ended Nine Months Ended
  June 30, June 30,
  2015 2014 2015 2014
Revenue:        
Digital engagement services  $ 2,956  $ 4,233  $ 9,227  $ 12,392
Subscription and perpetual licenses  1,505  1,510  4,260  $ 4,394
Managed service hosting  415  409  1,188  1,181
Total revenue  4,876  6,152  14,675  17,967
         
Cost of revenue:        
Digital engagement services  2,114  2,531  7,190  7,703
Subscription and perpetual licenses  473  422  1,366  1,271
Managed service hosting  76  66  224  218
Total cost of revenue  2,663  3,019  8,780  9,192
Gross profit  2,213  3,133  5,895  8,775
         
Operating expenses:        
Sales and marketing  1,245  1,992  4,590  6,030
General and administrative  980  1,110  3,110  3,308
Research and development  373  613  1,442  1,715
Depreciation and amortization  422  510  1,315  1,515
Total operating expenses  3,020  4,225  10,457  12,568
Loss from operations  (807)  (1,092)  (4,562)  (3,793)
Interest and other expense, net  (278)  (190)  (643)  (524)
Loss before income taxes  (1,085)  (1,282)  (5,205)  (4,317)
Provision for income taxes  25  24  88  80
Net loss  $ (1,110)  $ (1,306)  $ (5,293)  $ (4,397)
Dividends on convertible preferred stock  (31)  --  (82)  --
Net loss applicable to common shareholders  $ (1,141)  $ (1,306)  $ (5,375)  $ (4,397)
Net loss per share attributable to common shareholders:        
Basic and diluted  $ (0.26)  $ (0.31)  $ (1.24)  $ (1.16)
Number of weighted average shares outstanding:        
Basic and diluted  4,348,865  4,259,297  4,321,132  3,805,689
         
BRIDGELINE DIGITAL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share data)
(Unaudited)
 
ASSETS    
  June 30, September 30,
  2015 2014
Current Assets:    
Cash and cash equivalents  $ 583  $ 1,256
Accounts receivable and unbilled revenues, net  3,155  3,342
Prepaid expenses and other current assets  605  747
Total current assets  4,343  5,345
Equipment and improvements, net  1,585  2,175
Intangible assets, net  1,136  1,582
Goodwill  23,141  23,141
Other assets  937  1,317
Total assets  $ 31,142  $ 33,560
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable  $ 1,256  $ 1,126
Accrued liabilities  955  957
Dividends payable  31  -- 
Accrued earnouts, current  507  487
Debt, current  360  985
Capital lease obligations, current  399  364
Deferred revenue  2,191  1,990
Total current liabilities  5,699  5,909
Accrued earnouts, net of current portion  76  381
Debt, net of current portion  7,593  5,935
Capital lease obligations, net of current portion  29  247
Other long term liabilities  1,008  1,155
Total liabilities  14,405  13,627
     
Commitments and contingencies    
     
Stockholders' equity:    
Preferred stock -- $0.001 par value; 1,000,000 shares authorized; 205,132 and 0, issued and outstanding, respectively (liquidation preference $2,082)  --  --
Common stock -- $0.001 par value; 50,000,000 shares authorized; 4,441,381 and 4,388,583 shares issued and outstanding, respectively  5  5
Additional paid-in-capital  49,993  47,790
Accumulated deficit  (32,904)  (27,529)
Accumulated other comprehensive loss  (357)  (333)
Total stockholders' equity  16,737  19,933
Total liabilities and stockholders' equity

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 Unbound (formerly iAPPS®) platform deeply integrates Web Content Management, eCommerce, eMarketing, Social Media management, and Web Analytics to help marketers deliver digital experiences that attract, engage, nurture 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.

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