May 01, 2008 Quinn Murphy Bridgeline Software Reports Record Revenues and Record Income for the Second Quarter of Fiscal 2008 BURLINGTON, Mass., May 1, 2008 (GLOBE NEWSWIRE) -- Bridgeline Digital, Inc. (NASDAQ:BLIN), a provider in cloud-based Web Content Management, eCommerce and Marketing Automation software, announced record results for its second fiscal quarter and six months ended March 31, 2008.Highlights from the second quarter of fiscal 2008 results include:Achieved record revenues of $5,398,000 for the quarter ended March 31, 2008, representing a 143% increase over Bridgeline Software’s revenues of $2,223,000 for the same quarter one year earlier.The Company’s customer base as of March 31, 2008 has increased to 528 customers, which is a 272% increase from 142 customers a year ago. Of the Company’s 528 customers, 369 or 70% pay Bridgeline Software a monthly subscription fee or a monthly managed service fee.Net income for the quarter ended March 31, 2008 was $112,000, versus a net loss of $698,000 from the same three month period one year earlier.EBITDA before stock compensation for the quarter ended March 31, 2008 was $547,000, versus an EBITDA loss of -$185,000 from the same three month period one year earlier.Balance sheet remains strong with a current ratio of 2.6:1. As of March 31, 2008 the Company had over $28 million in total assets, and $3.2 million in total liabilitiesHighlights from the first six months of fiscal 2008 results include:Revenues for the six months ended March 31, 2008 were $9,601,000, versus revenues of $4,532,000 for the same six month period in fiscal 2007, representing a 112% increase.Net income for the six months ended March 31, 2008 was $149,000, versus a net loss of -$1,328,000 from the same six month period one year earlier.EBITDA before stock compensation for the six month period ended March 31, 2008 was $861,000, versus an EBITDA loss of -$299,000 from the same six month period one year earlier."Bridgeline has delivered another outstanding quarter highlighted by strong revenue growth, record customer additions, and improved profitability,” stated Thomas Massie, Chairman and Chief Executive Officer of Bridgeline Software. “We believe the level of traction and interest in our on-demand software products from our installed customer base is significant and as we add more customers and products, the opportunity for continued growth becomes greater."Results of Operations for the three-months ended March 31, 2008Bridgeline Software recorded revenue of $5.4 million in the quarter ended March 31, 2008, an increase of $3.2 million, or 143% compared to the same period of the prior year. The Company posted operating income for the quarter ended March 31, 2008, of $116,000 compared to an operating loss of -$357,000 in the same quarter of the prior year. The Company posted net income for the quarter ended March 31, 2008 of $112,000 or $0.01 per diluted share versus a net loss of -$698,000 or -$0.16 per diluted share in the same quarter of the previous year.Results of Operations for the six-months ended March 31, 2008Bridgeline Software recorded revenue of $9.6 million for the six months ended March 31, 2008, an increase of $5.1 million, or 112% compared to the same period of the prior year. The Company posted operating income for the six months ended March 31, 2008, of $125,000 compared to an operating loss of -$642,000 for same period of the prior year. The Company posted net income for the six months ended March 31, 2008 of $149,000 or $0.02 per diluted share versus a net loss of -$1,328,000 or -$0.31 per diluted share in the same period of the previous year.Recurring Revenue TrendsOf the Company’s 528 customers, 369 or 70% pay Bridgeline Software a monthly subscription fee or a monthly managed service fee. Recurring revenue is revenue from customers who pay Bridgeline Software a monthly subscription fee or a monthly managed service fee.On an annualized basis, recurring revenues for the quarter ended March 31, 2008 were $2.2 million compared to annualized recurring revenues for the same period of the prior year of $644,000, representing a year over year increase of 249%. Annualized figures are derived by multiplying the actual results for the quarter by four.Bridgeline Software’s retention rate of such clients during the quarter ended March 31, 2008 was 97%.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, 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.Condensed Consolidated Statements of Operations (Dollars in thousands except per share data) Three Months EndedSix Months EndedMarch 31, 2008March 31, 2007March 31, 2008March 31, 2007Revenue$5,398$2,223$9,601$4,532Cost of revenue 2,459 Ă1,015 4,481 2,156Gross profit 2,939 1,208 5,120 2,376Operating expenses: Sales and marketing 1,672 787 2,739 1,576 General and administrative 779 530 1,524 991 Research & development 132 191 298 346 Depreciation & amortization 240 57 434 105Total operating expenses 2,823 1,565 4,995 3,018Income / (loss) from operations 116 (357) 125 (642)Interest income (expense) (4) (341) 24 (686)Income / (loss) before income taxes 112 (698) 149 (1,328)Income taxes - - - -Net income / (loss)$112$(698)$149$(1,328) Net income / (loss) per share: Basic$0.01$(0.16)$0.02$(0.31)Diluted$0.01$(0.16)$0.02$(0.31) Number of weighted average shares: Basic 9,250,265 4,276,409 8,965,411 4,275,107 Basic and Diluted 9,349,102 4,276,409 9,067,113 4,275,107 EBITDA results (Note 1) Add: Interest expense$14$341$32$686 Depreciation and amortization 289 87 493 167 Stock-based compensation 132 85 187 176EBITDA before stock compensation and Other non-recurring charges 547 (185) 861 (299) EBITDA per diluted share$0.06$-0.04$0.09$-0.07 Note 1: EBITDA before stock compensation is a Non-GAAP Financial Measurement. We use earnings before interest, taxes, depreciation and amortization (“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”). We define EBITDA before stock compensation as net income before interest, taxes, depreciation, amortization and stock-based compensation. We present EBITDA before stock compensation because we consider it an important supplemental measure of our performance by adjusting net income or loss primarily for non-cash and other non-recurring charges. Because the use of EBITDA before stock compensation facilitates comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning and analysis purposes, in assessing acquisition opportunities and in determining how potential external financing sources are likely to evaluate our business. In addition, we believe this measure provides the investor with an accurate measure of our ability to meet our future cash flow requirements.Bridgeline Software, Inc.Condensed Consolidated Balance Sheets(in thousands) March 31, 2008September 30, 2007AssetsCurrent assets: Cash and cash equivalents$3,491$5,219 Accounts receivables and other current assets 4,343 3,439Total current assets 7,834 8,658 Other assets 1,6Ă1 1,234Intangible assets, net 2,321 1,441Goodwill 16,536 14,426 Total assets$28,342$25,759 Liabilities and stockholders’ equityCurrent liabilities: Current liabilities and accrued expenses 3,072 2,719Total current liabilities 3,072 2,719 Other liabilities 178 165Total liabilities 3,250 2,884Stockholders’ equity:Preferred stock - $0.001 par value; 1,000,000 shares authorized;none issued and outstanding - -Common stock - $.001 par value; 20,000,000 shares authorized, 9,489,160 and 8,648,950 shares issued and outstanding, respectively 10 9Additional paid-in capital 30,968 28,908Accumulated other comprehensive income 2518Accumulated deficit (5,911) (6,060)Total stockholders’ equity 25,093 22,875 Total liabilities and stockholders’ equity$28,342$25,759 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.