Q4 of Fiscal 2017 Financials | Bridgeline

Dec 19, 2017 Burlington, MA Bridgeline Digital Announces 13.7% Increase in Revenue for Fourth Quarter of Fiscal 2017 License Revenue Increases 17.3% in the Fourth Quarter of Fiscal 2017Bridgeline Digital, Inc. (NASDAQ: BLIN), The Digital Engagement Company™, today announced financial results for its fiscal fourth quarter and fiscal year ended September 30, 2017."We delivered a 17.3% increase in revenue for the fourth quarter, along with our fourth sequential quarter of positive Adjusted EBITDA and a significant improvement in our bottom line Adjusted EBITDA for the year of over $900 thousand," said Ari Kahn, Bridgeline's President and Chief Executive Officer. "Our financial improvements derive not only from stronger customer acquisition but also from expansion within our existing customer base where our customers found new opportunities to grow their business with Bridgeline's latest products and services. In fiscal 2017, we were selected by Fortune 500 companies and large multi-national businesses that have even greater growth potential for the upcoming year."Fourth Quarter Highlights:Total revenue increased 13.7% to $4.2 million in the fourth quarter of fiscal 2017, compared to $3.7 million in the fourth quarter of fiscal 2016.Subscription and perpetual license revenue increased 17.3% to $1.8 million in the fourth quarter of fiscal 2017, compared to $1.5 million in the fourth quarter of fiscal 2016.Services revenue increased 15.2% to $2.2 million in the fourth quarter of fiscal 2017, compared to $1.9 million in the fourth quarter of fiscal 2016.iAPPS SaaS revenue increased 6.1% to $1.4 million in the fourth quarter of fiscal 2017, compared to $1.3 million in the fourth quarter of fiscal 2016.iAPPS recurring revenue increased 5.7% to $1.8 million in the fourth quarter of fiscal 2017, compared to $1.7 million in the fourth quarter of fiscal 2016.Operating expenses were reduced by $404 thousand, or 13.6% to $2.6 million in the fourth quarter of fiscal 2017, from $3.0 million in the fourth quarter of fiscal 2016.Net loss improved by $3.1 million, from a net loss of $3.4 million in the fourth quarter of fiscal 2016 to $332 thousand in the fourth quarter of fiscal 2017. The fourth quarter of fiscal 2016 included a non-cash charge of $2.7 million related to the inducement of convertible notes.Adjusted EBITDA improved by $341 thousand, to $41 thousand in the fourth quarter of fiscal 2017, from a loss of $300 thousand in the fourth quarter of fiscal 2016. This was the fourth sequential quarter of positive Adjusted EBITDA. Year to Date Highlights:Total revenue for the year increased 2.5% to $16.3 million in fiscal 2017, compared to $15.9 million in fiscal 2016.Subscription and perpetual license revenue for the year increased 11.6% to $6.8 million in fiscal 2017, compared to $6.1 million in fiscal 2016.Total SaaS revenue for the year increased 6.6% to $5.5 million in fiscal 2017, compared to $5.2 million in fiscal 2016. iAPPS SaaS revenue for the year increased 16.0% to $5.5 million in fiscal 2017, compared to $4.7 million in fiscal 2016.iAPPS recurring revenue increased 8.8% to $7.0 million in fiscal 2017, compared to $6.4 million in fiscal 2016.Gross margin for the year improved to 56.1% in fiscal 2017, from 54.2% in fiscal 2016. Cost of revenue for the year was reduced by $122 thousand, or 1.7% to $7.2 million in fiscal 2017, from $7.3 million in fiscal 2016.Operating expenses for the year were reduced by $1.6 million, or 13.5% to $10.5 million in fiscal 2017, from $12.2 million in fiscal 2016.Net loss for the year improved by $6.2 million, from a net loss of $7.8 million in fiscal 2016 to $1.6 million in fiscal 2017.Adjusted EBITDA for the year improved by $907 thousand to $122 thousand in fiscal 2017, from a loss of $785 thousand in fiscal 2016.Financial ResultsFourth QuarterRevenue for the fourth quarter of fiscal 2017 increased 13.7% to $4.2 million, from $3.7 million in the fourth quarter of fiscal 2016. Services revenue increased 15.2% to $2.2 million in the fourth quarter of fiscal 2017, from $1.9 million in the fourth quarter of fiscal 2016. SaaS revenue increased 1.9% to $1.4 million in the fourth quarter of fiscal 2017, from $1.3 million in the fourth quarter of fiscal 2016. Subscription and perpetual license revenue increased 17.3% to $1.8 million in the fourth quarter of fiscal 2017, from $1.5 million in the fourth quarter of fiscal 2016. License and hosting revenue combined in the fourth quarter of fiscal 2017 comprised 48.0% of total revenue, compared to 48.7% of total revenue in the fourth quarter of fiscal 2016.Gross margin was 54.8% in the fourth quarter of fiscal 2017, compared to 59.3% in the fourth quarter of fiscal 2016. Cost of revenue increased by $398 thousand, or 26.3%, to $1.9 million in the fourth quarter of fiscal 2017, compared to $1.5 million in the fourth quarter of fiscal 2016.Operating expenses were reduced by $404,000, or 13.6% to $2.6 million in the fourth quarter of fiscal 2017, compared to $3.0 million in the fourth quarter of fiscal 2016, reflecting management's ongoing expense control initiatives. Loss from Operations was $250 thousand in the fourth quarter of fiscal 2017, compared to $766 thousand in the fourth quarter of fiscal 2016.Net loss was $332 thousand in the fourth quarter of fiscal 2017, compared to a net loss of $3.4 million in the fourth quarter of fiscal 2016. In the fourth quarter of fiscal 2016, we recorded a non-cash charge of $2.7 million related to the inducement of convertible notes. Excluding the non-cash charge of $2.7 million, our net income improved $419 thousand from the fourth quarter of fiscal 2016 to the fourth quarter of fiscal 2017.Adjusted EBITDA improved by $341 thousand to $41 thousand in the fourth quarter of fiscal 2017, compared to a loss of $300 thousand in the fourth quarter of fiscal 2016.Year to DateTotal revenue for the year increased 2.5% to $16.3 million, compared to $15.9 million in fiscal 2016. Subscription and perpetual license revenue for the year increased 11.6% to $6.8 million in fiscal 2017, compared to $6.1 million in fiscal 2016. SaaS revenue for the year increased 6.6% to $5.5 million in fiscal 2017, compared to $5.2 million in fiscal 2016. License and hosting revenue combined for the year comprised 47.8% of total revenue in fiscal 2017, compared to 46.4% of total revenue in fiscal 2016.Gross margin for the year improved to 56.1% in fiscal 2017, from 54.2% in fiscal 2016, reflecting a larger mix of recurring revenue as well as an improvement in our resource utilization and services gross margin. Cost of revenue for the year was reduced by $122 thousand, or 1.7%, to $7.2 million in fiscal 2017, compared to $7.3 million in fiscal 2016.Operating expenses for the year were reduced by $1.6 million, or 13.6% to $10.5 million in fiscal 2017, compared to $12.2 million in fiscal 2016, reflecting management's ongoing expense control initiatives. Loss from Operations for the year was $1.4 million in fiscal 2017, compared to $3.5 million in fiscal 2016.Net loss for the year was $1.6 million in fiscal 2017, compared to a net loss of $7.8 million in fiscal 2016, which includes a non-cash charge of $3.4 million related to the inducement of convertible notes. Excluding the non-cash charge of $3.4 million, our net income improved $2.8 million from fiscal 2016 to fiscal 2017.Adjusted EBITDA for the year was $122 thousand in fiscal 2017, compared to a loss of $785 thousand in fiscal 2016.Financial OutlookFor fiscal 2018, the Company expects revenue to be higher than the $16.3 million that was reported for fiscal 2017, and management expects to generate positive Adjusted EBITDA for full year fiscal 2018.Conference Call InformationBridgeline Digital will host a conference call to discuss fourth quarter 2017 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/ (loss), non-GAAP adjusted earnings/(loss) per diluted share, Adjusted EBITDA and Adjusted EBITDA per diluted share.Non-GAAP adjusted net income/(loss) and non-GAAP adjusted earnings/(loss) per diluted share are calculated as net income/(loss) or net income/(loss) 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/(loss) 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/(loss) 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 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.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 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.Company Contact:Bridgeline Digital, Inc.Michael D. PrinnChief Financial Officer(781) 497-3016mprinn@bridgeline.com BRIDGELINE DIGITAL, INC.RECONCILIATION OF GAAP TO NON-GAAP RESULTS(Dollars in thousands, except per share data)Three Months EndedTwelve Months EndedSeptember 30September 302017201620172016Reconciliation of GAAP net loss to non-GAAP adjusted net loss:GAAP net loss $ (406) $ (3,473) $ (1,883) $ (7,955)Amortization of intangible assets 71 157 285 480Stock-based compensation 126 112 559 320Loss on inducement of convertible notes - 2,688 - 3,414Restructuring charges 37 53 286 879Preferred stock dividends 74 34 281 131Non-GAAP adjusted net loss $ (98) $ (429) $ (472) $ (2,731)Reconciliation of GAAP net loss per diluted share tonon-GAAP adjusted net loss per diluted share:GAAP net loss per share $ (0.10) $ (1.00) $ (0.45) $ (4.20)Amortization of intangible assets 0.02 0.05 0.07 0.25Stock-based compensation 0.03 0.03 0.13 0.17Loss on inducement of convertible notes - 0.77 - 1.81Restructuring charges 0.01 0.02 0.07 0.46Preferred stock dividends 0.02 0.01 0.07 0.07Non-GAAP adjusted net loss per diluted share $ (0.02) $ (0.12) $ (0.11) $ (1.44)Reconciliation of GAAP net loss to Adjusted EBITDA:GAAP net loss $ (406) $ (3,473) $ (1,883) $ (7,955)Provision(benefit) for income tax 3 (92) 16 (47)Interest expense, net 34 77 128 914Loss on inducement of convertible notes - 2,688 - 3,414Amortization of intangible assets 71 157 285 480Depreciation 41 100 256 707Loss on disposal of fixed assets 45 - 94 -Restructuring charges 37 53 286 879Other amortization 16 44 100 372Stock-based compensation 126 112 559 320Preferred stock dividends 74 34 281 131Adjusted EBITDA $ 41 $ (300) $ 122 $ (785)Reconciliation of GAAP net loss per diluted share to Adjusted EBITDA per diluted share:GAAP net loss per share $ (0.10) $ (1.00) $ (0.45) $ (4.20)Provision(benefit) for income tax - (0.03) - (0.02)Interest expense, net 0.01 0.02 0.03 0.48Loss on inducement of convertible notes - 0.77 - 1.81Amortization of intangible assets 0.02 0.05 0.07 0.25Depreciation 0.01 0.03 0.06 0.37Loss on disposal of fixed assets 0.01 - 0.02 - Restructuring charges 0.01 0.02 0.07 0.46Other amortization - 0.01 0.03 0.20Stock-based compensation 0.03 0.03 0.13 0.17Preferred stock dividends 0.02 0.01 0.07 0.07Adjusted EBITDA per diluted share $ 0.01 $ (0.09) $ 0.03 $ (0.41)(1) Non-GAAP adjusted net loss per diluted share and Adjusted EBITDA per diluted share have been adjusted for a reverse stock split for all periods presented. BRIDGELINE DIGITAL, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except share and per share data)(Unaudited)Three Months EndedTwelve Months EndedSeptember 30September 302017201620172016Revenue:Digital engagement services $ 2,201 $ 1,909 $ 8,498 $ 8,520Subscription and perpetual licenses 1,770 1,509 6,788 6,084Managed service hosting 263 306 1,007 1,291Total revenue 4,234 3,724 16,293 15,895Cost of revenue:Digital engagement services 1,342 1,034 4,911 5,143Subscription and perpetual licenses 501 411 1,969 1,835Managed service hosting 71 71 280 304Total cost of revenue 1,914 1,516 7,160 7,282Gross profit (exclusive of depreciation and 2,320 2,208 9,133 8,613 amortization reflected below)Operating expenses:Sales and marketing 1,147 1,406 4,807 4,934General and administrative 861 795 3,256 3,456Research and development 412 433 1,587 1,578Depreciation and amortization 113 287 582 1,309Restructuring charges 37 53 286 879Total operating expenses 2,570 2,974 10,518 12,156Loss from operations (250) (766) (1,385) (3,543)Interest and other expense, net (79) (77) (201) (914)Loss in inducement of convertible notes - (2,688) - (3,414)Loss before income taxes (329) (3,531) (1,586) (7,871)Provision(benefit) for income taxes 3 (92) 16 (47)Net loss $ (332) $ (3,439) $ (1,602) $ (7,824)Dividends on convertible preferred stock (74) (34) (281) (131)Net loss applicable to common shareholders $ (406) $ (3,473) $ (1,883) $ (7,955)Net loss per share attributable to common shareholders:Basic and diluted $ (0.10) $ (1.00) $ (0.45) $ (4.20)Number of weighted average shares outstanding:Basic and diluted 4,200,119 3,470,948 4,147,140 1,893,003(1) Basic and diluted net loss per share and weighted average shares outstanding have been adjusted for a reverse stock split for all periods presented BRIDGELINE DIGITAL, INC.CONSOLIDATED BALANCE SHEETS(Dollars in thousands, except share and per share data)(Unaudited)ASSETSSeptember 30September 3020172016Current Assets:Cash and cash equivalents $ 748 $ 661Accounts receivable and unbilled revenues, net 3,026 2,549Prepaid expenses and other current assets 352 381Total current assets 4,126 3,591Property and equipment, net 209 512Intangible assets, net 263 548Goodwill 12,641 12,641Other assets 334 436Total assets $ 17,573 $ 17,728LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 1,241 $ 1,285Accrued liabilities 920 946Accrued earnouts - 75Capital lease obligations - 45Deferred revenue 1,466 1,360Total current liabilities 3,627 3,711Debt 2,500 2,115Other long term liabilities 172 400Total liabilities 6,299 6,226Commitments and contingenciesStockholders' equity:Preferred stock - $0.001 par value; 1,000,000 shares authorized; 243,536 and 221,092 issued and outstanding - -Common stock - $0.001 par value; 50,000,000 shares authorized;4,200,219 and 3,725,863 issued and outstanding 4 4Additional paid-in-capital 65,869 64,217Accumulated deficit (54,249) (52,366)Accumulated other comprehensive loss (350) (353)Total stockholders' equity 11,274 11,502Total liabilities and stockholders' equity $ 17,573 $ 17,728(1) Common stock issued and outstanding has been adjusted for a reverse stock split for all periods presented. License Revenue Increases 17.3% in the Fourth Quarter of Fiscal 2017BURLINGTON, Mass., Dec. 19, 2017 (GLOBE NEWSWIRE) -- Bridgeline Digital, Inc. (NASDAQ:BLIN), The Digital Engagement Company™, today announced financial results for its fiscal fourth quarter and fiscal year ended September 30, 2017."We delivered a 17.3% increase in revenue for the fourth quarter, along with our fourth sequential quarter of positive Adjusted EBITDA and a significant improvement in our bottom line Adjusted EBITDA for the year of over $900 thousand," said Ari Kahn, Bridgeline's President and Chief Executive Officer. "Our financial improvements derive not only from stronger customer acquisition but also from expansion within our existing customer base where our customers found new opportunities to grow their business with Bridgeline's latest products and services. In fiscal 2017, we were selected by Fortune 500 companies and large multi-national businesses that have even greater growth potential for the upcoming year."Fourth Quarter Highlights:Total revenue increased 13.7% to $4.2 million in the fourth quarter of fiscal 2017, compared to $3.7 million in the fourth quarter of fiscal 2016.Subscription and perpetual license revenue increased 17.3% to $1.8 million in the fourth quarter of fiscal 2017, compared to $1.5 million in the fourth quarter of fiscal 2016.Services revenue increased 15.2% to $2.2 million in the fourth quarter of fiscal 2017, compared to $1.9 million in the fourth quarter of fiscal 2016.iAPPS SaaS revenue increased 6.1% to $1.4 million in the fourth quarter of fiscal 2017, compared to $1.3 million in the fourth quarter of fiscal 2016.iAPPS recurring revenue increased 5.7% to $1.8 million in the fourth quarter of fiscal 2017, compared to $1.7 million in the fourth quarter of fiscal 2016.Operating expenses were reduced by $404 thousand, or 13.6% to $2.6 million in the fourth quarter of fiscal 2017, from $3.0 million in the fourth quarter of fiscal 2016.Net loss improved by $3.1 million, from a net loss of $3.4 million in the fourth quarter of fiscal 2016 to $332 thousand in the fourth quarter of fiscal 2017. The fourth quarter of fiscal 2016 included a non-cash charge of $2.7 million related to the inducement of convertible notes.Adjusted EBITDA improved by $341 thousand, to $41 thousand in the fourth quarter of fiscal 2017, from a loss of $300 thousand in the fourth quarter of fiscal 2016. This was the fourth sequential quarter of positive Adjusted EBITDA.Year to Date HighlightsTotal revenue for the year increased 2.5% to $16.3 million in fiscal 2017, compared to $15.9 million in fiscal 2016.Subscription and perpetual license revenue for the year increased 11.6% to $6.8 million in fiscal 2017, compared to $6.1 million in fiscal 2016.Total SaaS revenue for the year increased 6.6% to $5.5 million in fiscal 2017, compared to $5.2 million in fiscal 2016. iAPPS SaaS revenue for the year increased 16.0% to $5.5 million in fiscal 2017, compared to $4.7 million in fiscal 2016.iAPPS recurring revenue increased 8.8% to $7.0 million in fiscal 2017, compared to $6.4 million in fiscal 2016.Gross margin for the year improved to 56.1% in fiscal 2017, from 54.2% in fiscal 2016. Cost of revenue for the year was reduced by $122 thousand, or 1.7% to $7.2 million in fiscal 2017, from $7.3 million in fiscal 2016.Operating expenses for the year were reduced by $1.6 million, or 13.5% to $10.5 million in fiscal 2017, from $12.2 million in fiscal 2016.Net loss for the year improved by $6.2 million, from a net loss of $7.8 million in fiscal 2016 to $1.6 million in fiscal 2017.Adjusted EBITDA for the year improved by $907 thousand to $122 thousand in fiscal 2017, from a loss of $785 thousand in fiscal 2016.Financial ResultsFourth QuarterRevenue for the fourth quarter of fiscal 2017 increased 13.7% to $4.2 million, from $3.7 million in the fourth quarter of fiscal 2016. Services revenue increased 15.2% to $2.2 million in the fourth quarter of fiscal 2017, from $1.9 million in the fourth quarter of fiscal 2016. SaaS revenue increased 1.9% to $1.4 million in the fourth quarter of fiscal 2017, from $1.3 million in the fourth quarter of fiscal 2016. Subscription and perpetual license revenue increased 17.3% to $1.8 million in the fourth quarter of fiscal 2017, from $1.5 million in the fourth quarter of fiscal 2016. License and hosting revenue combined in the fourth quarter of fiscal 2017 comprised 48.0% of total revenue, compared to 48.7% of total revenue in the fourth quarter of fiscal 2016.Gross margin was 54.8% in the fourth quarter of fiscal 2017, compared to 59.3% in the fourth quarter of fiscal 2016. Cost of revenue increased by $398 thousand, or 26.3%, to $1.9 million in the fourth quarter of fiscal 2017, compared to $1.5 million in the fourth quarter of fiscal 2016.Operating expenses were reduced by $404,000, or 13.6% to $2.6 million in the fourth quarter of fiscal 2017, compared to $3.0 million in the fourth quarter of fiscal 2016, reflecting management's ongoing expense control initiatives. Loss from Operations was $250 thousand in the fourth quarter of fiscal 2017, compared to $766 thousand in the fourth quarter of fiscal 2016.Net loss was $332 thousand in the fourth quarter of fiscal 2017, compared to a net loss of $3.4 million in the fourth quarter of fiscal 2016. In the fourth quarter of fiscal 2016, we recorded a non-cash charge of $2.7 million related to the inducement of convertible notes. Excluding the non-cash charge of $2.7 million, our net income improved $419 thousand from the fourth quarter of fiscal 2016 to the fourth quarter of fiscal 2017.Adjusted EBITDA improved by $341 thousand to $41 thousand in the fourth quarter of fiscal 2017, compared to a loss of $300 thousand in the fourth quarter of fiscal 2016.Year to DateTotal revenue for the year increased 2.5% to $16.3 million, compared to $15.9 million in fiscal 2016. Subscription and perpetual license revenue for the year increased 11.6% to $6.8 million in fiscal 2017, compared to $6.1 million in fiscal 2016. SaaS revenue for the year increased 6.6% to $5.5 million in fiscal 2017, compared to $5.2 million in fiscal 2016. License and hosting revenue combined for the year comprised 47.8% of total revenue in fiscal 2017, compared to 46.4% of total revenue in fiscal 2016.Gross margin for the year improved to 56.1% in fiscal 2017, from 54.2% in fiscal 2016, reflecting a larger mix of recurring revenue as well as an improvement in our resource utilization and services gross margin. Cost of revenue for the year was reduced by $122 thousand, or 1.7%, to $7.2 million in fiscal 2017, compared to $7.3 million in fiscal 2016.Operating expenses for the year were reduced by $1.6 million, or 13.6% to $10.5 million in fiscal 2017, compared to $12.2 million in fiscal 2016, reflecting management's ongoing expense control initiatives. Loss from Operations for the year was $1.4 million in fiscal 2017, compared to $3.5 million in fiscal 2016.Net loss for the year was $1.6 million in fiscal 2017, compared to a net loss of $7.8 million in fiscal 2016, which includes a non-cash charge of $3.4 million related to the inducement of convertible notes. Excluding the non-cash charge of $3.4 million, our net income improved $2.8 million from fiscal 2016 to fiscal 2017.Adjusted EBITDA for the year was $122 thousand in fiscal 2017, compared to a loss of $785 thousand in fiscal 2016.Financial OutlookFor fiscal 2018, the Company expects revenue to be higher than the $16.3 million that was reported for fiscal 2017, and management expects to generate positive Adjusted EBITDA for full year fiscal 2018.Conference Call InformationBridgeline Digital will host a conference call to discuss fourth quarter 2017 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/ (loss), non-GAAP adjusted earnings/(loss) per diluted share, Adjusted EBITDA and Adjusted EBITDA per diluted share.Non-GAAP adjusted net income/(loss) and non-GAAP adjusted earnings/(loss) per diluted share are calculated as net income/(loss) or net income/(loss) 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/(loss) 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/(loss) 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 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.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 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.Contact:Company Contact Bridgeline Digital, Inc.: Michael D. Prinn Chief Financial Officer (781)497-3016 mprinn@bridgeline.com BRIDGELINE DIGITAL, INC. RECONCILIATION OF GAAP TO NON-GAAP RESULTS (Dollars in thousands, except per share data) Three Months Ended Twelve Months Ended September 30 September 30 2017 2016 2017 2016 Reconciliation of GAAP net loss to non-GAAP adjusted net loss: GAAP net loss $ (406) $ (3,473) $ (1,883) $ (7,955) Amortization of intangible assets 71 157 285 480 Stock-based compensation 126 112 559 320 Loss on inducement of convertible notes - 2,688 - 3,414 Restructuring charges 37 53 286 879 Preferred stock dividends 74 34 281 131 Non-GAAP adjusted net loss $ (98) $ (429) $ (472) $ (2,731) Reconciliation of GAAP net loss per diluted share to non-GAAP adjusted net loss per diluted share: GAAP net loss per share $ (0.10) $ (1.00) $ (0.45) $ (4.20) Amortization of intangible assets 0.02 0.05 0.07 0.25 Stock-based compensation 0.03 0.03 0.13 0.17 Loss on inducement of convertible notes - 0.77 - 1.81 Restructuring charges 0.01 0.02 0.07 0.46 Preferred stock dividends 0.02 0.01 0.07 0.07 Non-GAAP adjusted net loss per diluted share $ (0.02) $ (0.12) $ (0.11) $ (1.44) Reconciliation of GAAP net loss to Adjusted EBITDA: GAAP net loss $ (406) $ (3,473) $ (1,883) $ (7,955) Provision(benefit) for income tax 3 (92) 16 (47) Interest expense, net 34 77 128 914 Loss on inducement of convertible notes - 2,688 - 3,414 Amortization of intangible assets 71 157 285 480 Depreciation 41 100 256 707 Loss on disposal of fixed assets 45 - 94 - Restructuring charges 37 53 286 879 Other amortization 16 44 100 372 Stock-based compensation 126 112 559 320 Preferred stock dividends 74 34 281 131 Adjusted EBITDA $ 41 $ (300) $ 122 $ (785) Reconciliation of GAAP net loss per diluted share to Adjusted EBITDA per diluted share: GAAP net loss per share $ (0.10) $ (1.00) $ (0.45) $ (4.20) Provision(benefit) for income tax - (0.03) - (0.02) Interest expense, net 0.01 0.02 0.03 0.48 Loss on inducement of convertible notes - 0.77 - 1.81 Amortization of intangible assets 0.02 0.05 0.07 0.25 Depreciation 0.01 0.03 0.06 0.37 Loss on disposal of fixed assets 0.01 - 0.02 - Restructuring charges 0.01 0.02 0.07 0.46 Other amortization - 0.01 0.03 0.20 Stock-based compensation 0.03 0.03 0.13 0.17 Preferred stock dividends 0.02 0.01 0.07 0.07 Adjusted EBITDA per diluted share $ 0.01 $ (0.09) $ 0.03 $ (0.41) (1) Non-GAAP adjusted net loss per diluted share and Adjusted EBITDA per diluted share have been adjusted for a reverse stock split for all periods presented. BRIDGELINE DIGITAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended Twelve Months Ended September 30 September 30 2017 2016 2017 2016 Revenue: Digital engagement services $ 2,201 $ 1,909 $ 8,498 $ 8,520 Subscription and perpetual licenses 1,770 1,509 6,788 6,084 Managed service hosting 263 306 1,007 1,291 Total revenue 4,234 3,724 16,293 15,895 Cost of revenue: Digital engagement services 1,342 1,034 4,911 5,143 Subscription and perpetual licenses 501 411 1,969 1,835 Managed service hosting 71 71 280 304 Total cost of revenue 1,914 1,516 7,160 7,282 Gross profit (exclusive of depreciation and 2,320 2,208 9,133 8,613 amortization reflected below) Operating expenses: Sales and marketing 1,147 1,406 4,807 4,934 General and administrative 861 795 3,256 3,456 Research and development 412 433 1,587 1,578 Depreciation and amortization 113 287 582 1,309 Restructuring charges 37 53 286 879 Total operating expenses 2,570 2,974 10,518 12,156 Loss from operations (250) (766) (1,385) (3,543) Interest and other expense, net (79) (77) (201) (914) Loss in inducement of convertible notes - (2,688) - (3,414) Loss before income taxes (329) (3,531) (1,586) (7,871) Provision(benefit) for income taxes 3 (92) 16 (47) Net loss $ (332) $ (3,439) $ (1,602) $ (7,824) Dividends on convertible preferred stock (74) (34) (281) (131) Net loss applicable to common shareholders $ (406) $ (3,473) $ (1,883) $ (7,955) Net loss per share attributable to common shareholders: Basic and diluted $ (0.10) $ (1.00) $ (0.45) $ (4.20) Number of weighted average shares outstanding: Basic and diluted 4,200,119 3,470,948 4,147,140 1,893,003 (1) Basic and diluted net loss per share and weighted average shares outstanding have been adjusted for a reverse stock split for allperiods presented BRIDGELINE DIGITAL, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share data) (Unaudited) ASSETS September 30 September 30 2017 2016 Current Assets: Cash and cash equivalents $ 748 $ 661 Accounts receivable and unbilled revenues, net 3,026 2,549 Prepaid expenses and other current assets 352 381 Total current assets 4,126 3,591 Property and equipment, net 209 512 Intangible assets, net 263 548 Goodwill 12,641 12,641 Other assets 334 436 Total assets $ 17,573 $ 17,728 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,241 $ 1,285 Accrued liabilities 920 946 Accrued earnouts - 75 Capital lease obligations - 45 Deferred revenue 1,466 1,360 Total current liabilities 3,627 3,711 Debt 2,500 2,115 Other long term liabilities 172 400 Total liabilities 6,299 6,226 Commitments and contingencies Stockholders' equity: Preferred stock - $0.001 par value; 1,000,000 shares authorized; 243,536 and 221,092 issued and outstanding - - Common stock - $0.001 par value; 50,000,000 shares authorized; 4,200,219 and 3,725,863 issued and outstanding 4 4 Additional paid-in-capital 65,869 64,217 Accumulated deficit (54,249) (52,366) Accumulated other comprehensive loss (350) (353) Total stockholders' equity 11,274 11,502 Total liabilities and stockholders' equity $ 17,573 $ 17,728 (1) Common stock issued and outstanding has been adjusted for a reverse stock split for all periods presented.

   Discover How Bridgeline Can Grow Your Business

Contact us