Feb 11, 2016 Quinn Murphy Bridgeline Digital Announces First Quarter of Fiscal 2016 Financial Results Express Product Offering Wins New Customers in both Franchise and Commerce Markets ~ Company Reports Positive Adjusted EBITDA for the Second Consecutive Quarter ~ Gross Margin Improved to 51% in the First Quarter of Fiscal 2016BURLINGTON, Mass., Feb. 11, 2016 (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 first quarter ended December 31, 2015.“Bridgeline’s new express products are attracting customers faster than we anticipated with wins in both the franchise and the commerce markets,” said Ari Kahn, Bridgeline’s President and Chief Operating Officer. “Our express products are driving the Company’s transformation to a stronger SaaS business with higher license revenue and recurring revenue. We are also pleased to have delivered positive Adjusted EBITDA for the second consecutive quarter and are focused on continuing to drive positive Adjusted EBITDA in future quarters and increase shareholder value.”First Quarter Highlights:Adjusted EBITDA improved by $1.3 million to $65 thousand for the first quarter of fiscal 2016, compared to ($1.25) million in the first quarter of fiscal 2015.Subscription and perpetual license revenue increased 10% to $1.5 million in the first quarter of fiscal 2016, compared to $1.4 million in the first quarter of fiscal 2015.Gross margin improved to 51% in the first quarter of fiscal 2016, from 39% in the first quarter of fiscal 2015.Operating expenses reduced by 33% (excluding restructuring charges) to $2.6 million in the first quarter of fiscal 2016 from $3.9 million in the first quarter of fiscal 2015.Conference Call InformationBridgeline Digital will host a conference call to discuss first quarter 2016 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 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, 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 and charges on conversion of debt, 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 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," 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 statementBRIDGELINE DIGITAL, INC.RECONCILIATION OF GAAP TO NON-GAAP RESULTS(Dollars in thousands, except per share data) Three Months Ended December 31, 2015 2014 Reconciliation of GAAP net loss to non-GAAP adjusted net loss: GAAP net loss applicable to common shareholders $(1,380) $(2,131) Amortization of intangible assets 107 152 Stock-based compensation 72 89 Restructuring charge 586 - Preferred stock dividends 32 21 Non-GAAP adjusted net loss $(583) $(1,869) Reconciliation of GAAP loss per diluted share to non-GAAP adjusted loss per diluted share: GAAP net loss per share applicable to common shareholders $(0.25) $(0.49) Amortization of intangible assets 0.02 0.03 Stock-based compensation 0.01 0.02 Restructuring charge 0.11 - Preferred stock dividends - - Non-GAAP adjusted net loss per diluted share $(0.11) $(0.43) Reconciliation of GAAP net loss to Adjusted EBITDA: GAAP net loss applicable to common shareholders $(1,380) $(2,131) Provision for income tax 6 35 Interest expense, net 283 162 Amortization of intangible assets 107 152 Depreciation 231 279 Restructuring charge 586 - Other amortization 128 146 Stock-based compensation 72 89 Preferred stock dividends 32 21 Adjusted EBITDA $65 $(1,247) Reconciliation of GAAP net loss per diluted share to Adjusted EBITDA per diluted share: GAAP net loss per share applicable to common shareholders $(0.25) $(0.49) Provision for income tax - 0.01 Interest expense, net 0.06 0.04 Amortization of intangible assets 0.02 0.03 Depreciation 0.04 0.07 Restructuring charge 0.11 - Other amortization 0.02 0.03 Stock-based compensation 0.01 0.02 Preferred stock dividends - - Adjusted EBITDA per diluted share $0.01 $(0.29) BRIDGELINE DIGITAL, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except share and per share data)(Unaudited) Three Months Ended December 31, 2015 2014 Revenue: Digital engagement services $2,373 $3,231 Subscription and perpetual licenses 1,523 1,380 Managed service hosting 347 401 Total revenue 4,243 5,012 Cost of revenue: Digital engagement services 1,454 2,564 Subscription and perpetual licenses 558 430 Managed service hosting 77 74 Total cost of revenue 2,089 3,068 Gross profit 2,154 1,944 Operating expenses: Sales and marketing 1,068 1,810 General and administrative 862 993 Research and development 341 602 Depreciation and amortization 356 452 Restructuring charge 586 - Total operating expenses 3,213 3,857 Loss from operations (1,059) (1,913) Interest expense, net (283) (162)Loss before income taxes (1,342) (2,075) Provision for income tax 6 35 Net loss $(1,348) $(2,110)Dividends on convertible preferred stock (32) (21)Net loss applicable to common shareholders$(1,380) $(2,131)Net loss per share attributable to common shareholders: Basic and diluted $(0.25) $(0.49)Number of weighted average shares outstanding: Basic and diluted 5,164,809 4,343,023 BRIDGELINE DIGITAL, INC.CONSOLIDATED BALANCE SHEETS(Dollars in thousands, except share and per share data)(Unaudited) ASSETS December 31, September 30, 2015 2015 Current Assets: Cash and cash equivalents $580 $337 Accounts receivable and unbilled revenues, net 2,507 2,463 Prepaid expenses and other current assets 624 680 Total current assets 3,711 3,480 Equipment and improvements, net 1,084 1,315 Intangible assets, net 921 1,028 Goodwill 12,641 12,641 Other assets 635 723 Total assets $18,992 $19,187 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,282 $1,626 Accrued liabilities 1,396 1,046 Accrued earnouts, current 301 468 Debt, current 500 92 Capital lease obligations, current 216 320 Deferred revenue 1,592 1,542 Total current liabilities 5,287 5,094 Debt, net of current portion 7,879 7,695 Other long term liabilities 784 726 Total liabilities 13,950 13,515 Commitments and contingencies Stockholders' equity: Preferred stock - $0.001 par value; 1,000,000 shares authorized; 211,393 and 0, issued and outstanding, respectively (liquidation preference $2,146) - - Common stock - $0.001 par value; 50,000,000 shares authorized; 5,326,615 and 4,637,684 shares issued and outstanding, respectively 5 5 Additional paid-in-capital 51,183 50,434 Accumulated deficit (45,791) (44,411) Accumulated other comprehensive loss (355) (356) Total stockholders' equity 5,042 5,672 Total liabilities and stockholders' equity $18,992 $19,187 About 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.