Fiscal 2009 Financial Report Bridgeline

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 TrendsOf 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 08Annual Recurring Revenues $3,115,000 $2,582,000Year over Year Growth % 21% Retention Rate 82%Results of Operations for the fiscal year ended September 30, 2009For 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 2009For further information, please refer to our annual report on Form 10-K for the year ended September 30, 2009 as filed withNon-GAAP Financial MeasuresThis 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 1995All 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 30,20092008Reconciliation of GAAP net income (loss) to non-GAAPadjusted net income (loss) GAAP net income (loss)$758$(10,309) Impairment of intangible assets and goodwill--9,828 Amortization of intangible assets517537 Stock based compensation538425 Tax effect of non-GAAP adjustments(40)-- Non-GAAP adjusted net income (loss)$1,773$481Reconciliation of GAAP diluted earnings per share to non-GAAP adjusted diluted earnings per share GAAP diluted net earnings (loss) per share$.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$.05Reconciliation of GAAP net income (loss) to EBITDA GAAP net income (loss)$758$(10,309) Taxes31-- Interest4061 Impairment of intangible assets and goodwill--9,828 Amortization of intangible assets517537 Depreciation795578 Other amortization180135 Stock based compensation$538$425 EBITDA$2,859$1,255Reconciliation of GAAP diluted net earnings (loss) per share to EBITDAdiluted earnings per share GAAP diluted net earnings (loss) per share$.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$.13Bridgeline Software, INC.CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except share and per share data)Year Ended September 30,20092008Revenue: Web application development services$20,272$18,231 Managed service hosting2,2022,188 Subscription and perpetual licenses1,427876 Total revenue23,90121,295Cost of revenue: Web application development services9,4229,579 Managed service hosting services595444 Subscription and perpetual licenses516282 Total cost of revenue10,53310,305 Gross profit13,36810,990Operating expenses: Sales and marketing6,1926,294 General and administrative4,0013,531 Research and development1,124619 Depreciation and amortization1,2221,051 Impairment of intangible assets--76 Impairment of goodwill--9,752 Total operating expenses12,53921,323Income (loss) from operations829(10,333) Other income (expense) net--85 Interest income (expense) net(40)(61)Income (loss) before income taxes789(10,309) Income taxes31--Net income (loss)$758$(10,309)Net income (loss) per share: Basic$.07$(1.09) Diluted$.07$(1.09)Number of weighted average shares: Basic11,008,8799,473,408 Diluted11,272,1909,473,408Bridgeline Software, Inc.CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share data)ASSETSSeptember 30,20092008Current assets: Cash and cash equivalents$3,060$1,911 Accounts receivable, net3,4685,662 Prepaid expenses and other current assets320467 Total current assets6,8488,040Equipment and improvements, net1,4481,763Intangible assets, net1.4902,980Goodwill, net13,89910,725Other assets570751Net cash provided by (used in) operating activities1,102(25 ) Total assets$24,25524,259LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilities: Accounts payable$714$1,770 Accrued liabilities1,1941,529 Line of credit1,0001,000 Capital lease obligations, current77105 Deferred revenue8901,176 Total current liabilities3,8755,580Capital lease obligations, net of current portion62139Other long term liabilities414350 Total liabilities4,3516,069Commitments and contingenciesStockholders’ 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, respectively1111 Additional paid-in capital35,62034,647 Accumulated deficit(15,611)(16,369) Accumulated other comprehensive income(116)(99) Total stockholders’ equity19,90418,190 Total liabilities and stockholders’ equity$24,255$24,259About Bridgeline DigitalBridgeline 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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