• Dec 29, 2009
  • Quinn Murphy

Bridgeline Reports Record Sales, Record Profits, and Record Cash Generation from Operations for Fiscal Year 2009

BURLINGTON, Mass., Dec. 29, 2009 (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 2009 fiscal year ended September 30, 2009.

Highlights from the 2009 fiscal year include:

  • Record revenue of $23.9 million for fiscal 2009, a 12% increase over revenue of $21.3 million for fiscal 2008. Revenue from software subscription and perpetual licenses grew 63%.
  • Bridgeline has 676 customers, of which 504 or 75% of these customers paid a monthly subscription fee or a monthly managed service fee. This is an increase of 96 customers, or 24%, that pay a monthly fee from one year ago.
  • Bridgeline has sold over 100 iAPPS licenses. Companies such as Honeywell, Sun Chemical, Blue Cross Blue Shield, JohnsonDiversey, Mayfran International, William T. Grant Foundation, American Academy of Pediatrics, Kettering Foundation, Tennant, Marsh, Berkshire Life and Berkshire Bank selected iAPPS for their critical web content management or web analytic needs in fiscal 2009.
  • Bridgeline received over 10 industry-related awards in fiscal 2009, and BtoB Magazine named Bridgeline as one of the top interactive technology companies in America.
  • Record gross profit of $13.4 million in fiscal 2009, a 22% increase over gross profit in fiscal 2008.
  • Record Non-GAAP net income of $1.8 million and Non-GAAP diluted earnings per share of $.16 in fiscal 2009.
  • Record income from operations of $829 thousand, net income of $758 thousand and diluted income per share of $.07 in fiscal 2009.
  • Record EBITDA (Earnings before interest, taxes, depreciation and amortization) and before stock compensation of $2.9 million and EBITDA per diluted share of $.25 in fiscal 2009.
  • Record cash generated from operations of $3 million in fiscal 2009.
  • A year-end balance sheet with total assets of $24.3 million and only $4.4 million in total liabilities.

“In today's challenging economic environment, we believe the cost efficiencies and productivity gains offered by Bridgeline become even more relevant for both current and future customers,” stated Thomas Massie, Chairman and Chief Executive Officer of Bridgeline. “Our web-based software combined with interactive technology solutions provide customers with enhanced sales opportunities, reduced administrative costs, and improved operational efficiencies. ”Massie continued, “We are committed to building our recurring revenue business through the ongoing sales and development of our flagship product iAPPS. We are very pleased with our record financial results in fiscal 2009.”

Recurring Revenue Trends

Of Bridgeline’s 676 customers as of September 30, 2009, 504 or 75% paid either a monthly subscription license fee or a managed service fee. Bridgeline’s customer retention rate during the fiscal year ended September 30, 2009 was 82%.

FY 09 FY 08
Annual Recurring Revenues $3,115,000 $2,582,000
Year over Year Growth % 21%
Retention Rate 82%

Results of Operations for the fiscal year ended September 30, 2009

For the year ended September 30, 2009 we achieved record revenue, record gross profit, record operating income and record net income. Revenue was $23.9 million compared with $21.3 million for the same period of 2008, a 12% increase. Year over year revenue from software subscription and perpetual licenses grew 63%. Gross profit was $13.4 million in fiscal 2009 compared with $11 million for the same period of 2008, representing a 22% year over year increase. Income from operations was $829 thousand compared with a loss from operations of ($10.3) million for the same period of 2008. Fiscal 2008 included non-cash impairment charges for intangible assets and goodwill of $9.8 million. As a percentage of total sales, operating expense declined to 52% in fiscal 2009 compared with 54% in fiscal 2008 (excluding impairment charges in fiscal 2008). Net income increased to $758 thousand in fiscal 2009 from a loss of ($10.3) million in fiscal 2008, or by $11.1 million. Diluted earnings per share was $.07 compared with a diluted loss per share of ($1.09) for the same period of 2008. Non-GAAP net income was $1.8 million and non-GAAP diluted earnings per share was $.16 in fiscal 2009

For further information, please refer to our annual report on Form 10-K for the year ended September 30, 2009 as filed with

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, impairment charges, 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 before stock compensation and impairment charges. Bridgeline uses Adjusted EBITDA as a supplemental measure of our performance that is 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 business.

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 measure. 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, our ability to maintain an effective system of internal controls, or risks associated with our contracts with the U.S. federal government, 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 Software, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS 
(Dollars in thousands, except share and per share data)

Year Ended September 30,
2009 2008
Reconciliation of GAAP net income (loss) to non-GAAP
adjusted net income (loss)
   GAAP net income (loss) $ 758 $ (10,309)
   Impairment of intangible assets and goodwill -- 9,828
   Amortization of intangible assets 517 537
   Stock based compensation 538 425
   Tax effect of non-GAAP adjustments (40) --
   Non-GAAP adjusted net income (loss) $ 1,773 $ 481
Reconciliation of GAAP diluted earnings per share to non-GAAP 
adjusted diluted earnings per share
   GAAP diluted net earnings (loss) per share $ .07 $ (1.09)
   Impairment of intangible assets and goodwill -- 1.04
   Amortization of intangible assets .05 .06
   Stock based compensation .05 .04
   Tax effect of non-GAAP adjustments (.01) --
   Non-GAAP adjusted diluted earnings (loss) per share $ .16 $ .05
Reconciliation of GAAP net income (loss) to EBITDA
   GAAP net income (loss) $ 758 $ (10,309)
   Taxes 31 --
   Interest 40 61
   Impairment of intangible assets and goodwill -- 9,828
   Amortization of intangible assets 517 537
   Depreciation 795 578
   Other amortization 180 135
   Stock based compensation $ 538 $ 425
   EBITDA $ 2,859 $ 1,255
Reconciliation of GAAP diluted net earnings (loss) per share to EBITDA
diluted earnings per share
   GAAP diluted net earnings (loss) per share $ .07 $ (1.09)
   Taxes -- --
   Interest -- .01
   Impairment of intangible assets and goodwill -- 1.04
   Amortization of intangible assets .05 .06
   Depreciation .07 .06
   Other amortization .01 .01
    Stock based compensation .05 .04
   EBITDA diluted earnings per share $ .25 $ .13

Bridgeline Software, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS 
(Dollars in thousands, except share and per share data)

Year Ended September 30,
2009 2008
Revenue:
   Web application development services $ 20,272 $ 18,231
   Managed service hosting 2,202 2,188
   Subscription and perpetual licenses 1,427 876
     Total revenue 23,901 21,295
Cost of revenue:
   Web application development services 9,422 9,579
   Managed service hosting services 595 444
   Subscription and perpetual licenses 516 282
     Total cost of revenue 10,533 10,305
    Gross profit 13,368 10,990
Operating expenses:
   Sales and marketing 6,192 6,294
   General and administrative 4,001 3,531
   Research and development 1,124 619
   Depreciation and amortization 1,222 1,051
   Impairment of intangible assets -- 76
   Impairment of goodwill -- 9,752
     Total operating expenses 12,539 21,323
Income (loss) from operations 829 (10,333)
   Other income (expense) net -- 85
   Interest income (expense) net (40) (61)
Income (loss) before income taxes 789 (10,309)
   Income taxes 31 --
Net income (loss) $ 758 $ (10,309)
Net income (loss) per share:
   Basic $ .07 $ (1.09)
   Diluted $ .07 $ (1.09)
Number of weighted average shares:
   Basic 11,008,879 9,473,408
   Diluted 11,272,190 9,473,408

Bridgeline Software, Inc.
CONSOLIDATED BALANCE SHEETS 
(Dollars in thousands, except share and per share data)

ASSETS September 30,
2009 2008
Current assets:
   Cash and cash equivalents $ 3,060 $ 1,911
   Accounts receivable, net 3,468 5,662
   Prepaid expenses and other current assets 320 467
     Total current assets 6,848 8,040
Equipment and improvements, net 1,448 1,763
Intangible assets, net 1.490 2,980
Goodwill, net 13,899 10,725
Other assets 570 751
Net cash provided by (used in) operating activities 1,102 (25 )
     Total assets $ 24,255 24,259
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
   Accounts payable $ 714 $ 1,770
   Accrued liabilities 1,194 1,529
   Line of credit 1,000 1,000
   Capital lease obligations, current 77 105
   Deferred revenue 890 1,176
     Total current liabilities 3,875 5,580
Capital lease obligations, net of current portion 62 139
Other long term liabilities 414 350
     Total liabilities 4,351 6,069
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; 11,182,209 and 10,665,553 shares issued and outstanding, respectively 11 11
   Additional paid-in capital 35,620 34,647
   Accumulated deficit (15,611) (16,369)
   Accumulated other comprehensive income (116) (99)
     Total stockholders’ equity 19,904 18,190
     Total liabilities and stockholders’ equity $ 24,255 $ 24,259

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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