Q1 Fiscal 2014 Financials

Feb 14, 2014 Quinn Murphy Bridgeline Digital Announces Financial Results for First Quarter of Fiscal 2014 BURLINGTON, Mass., Feb. 14, 2014 (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, 2013."We continue to build a highly scalable iAPPS business as thousands of quality customers rely on the iAPPS platform for their mission critical website, intranets, and web stores", said Thomas Massie, Bridgeline Digital's President and Chief Executive Officer. "iAPPSds for franchises and large dealer networks addresses a very large market opportunity for Bridgeline and over the past year we have seen significant growth in our qualified pipeline of iAPPSds opportunities. In our current quarter we anticipate record new bookings and closing another multi-million dollar, multi-year iAPPSds agreement."First Quarter Highlights:Revenue from our core business (iAPPS and the ElementsLocal platform) increased 33% to $5.6 million in the first quarter of fiscal 2014, compared to $4.2 million in the first quarter of fiscal 2013.Total revenue for the first quarter of 2014 increased 5% to $6.5 million, compared to $6.2 million in the first quarter of fiscal 2013.Subscription and perpetual license revenue increased 100% to $1.6 million in the first quarter of 2014, compared to $0.8 million in the first quarter of fiscal 2013.Recurring revenue increased 42% to $1.7 million in the first quarter of 2014, compared to $1.2 million the first quarter of fiscal 2013.76 iAPPS enterprise licenses and 63 iAPPS ds licenses were sold in the first quarter of fiscal 2014.Bridgeline Digital was honored as a finalist for the 2014 CODiE Award for Best Content Management Solution and the Best Electronic Commerce Solution.Consistent with our long term strategy, revenue from our legacy business decreased 51% in the first quarter, compared to the first quarter of fiscal 2013.Fiscal 2014 OutlookFor fiscal 2014, revenue is expected to be approximately $28 million, an increase from $24.5 million in fiscal 2013 and the Company expects to generate positive Adjusted EBITDA for the fiscal year.Conference Call InformationBridgeline Digital will host a conference call to discuss first quarter and fiscal 2014 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, 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 DIGITAL, INC.RECONCILIATION OF GAAP TO NON-GAAP RESULTS(Dollars in thousands, except per share data)Three Months EndedDecember 31,20142013Reconciliation of GAAP net loss tonon-GAAP adjusted net loss:GAAP net loss$(777)$(642)Amortization of intangible assets125156Stock-based compensation42127Non-GAAP adjusted net loss$(610)$(359)Reconciliation of GAAP loss per diluted share tonon-GAAP adjusted loss per diluted share:GAAP net loss per share$(0.04)$(0.04)Amortization of intangible assets0.010.01Stock-based compensation0.000.01Non-GAAP adjusted net loss$(0.03)$(0.02)Reconciliation of GAAP net loss to Adjusted EBITDA:GAAP net loss$(777)$(642)Provision for income tax2121Interest expense, net16776Amortization of intangible assets125156Depreciation322268EBITDA(142)(121)Other amortization12044Stock-based compensation42127Adjusted EBITDA$20$50Reconciliation of GAAP net loss per diluted share toAdjusted EBITDA per diluted share:GAAP net loss per share$(0.04)$(0.04)Provision for income tax0.000.00Interest expense, net0.010.01Amortization of intangible assets0.010.01Depreciation0.010.01Other amortization0.010.00Stock-based compensation0.000.01Adjusted EBITDA$0.00$(0.00)BRIDGELINE DIGITAL, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except share and per share data)(Unaudited)Three Months EndedDecember 31,20142013Revenue:Digital engagement services$4,549$4,850Subscription and perpetual licenses1,577787Managed service hosting387556Total revenue6,5136,193Cost of revenue:Digital engagement services2,5032,754Subscription and perpetual licenses397168Managed service hosting8472Total cost of revenue2,9842,994Gross profit3,5293,199Operating expenses:Sales and marketing2,1101,834General and administrative1,0311,354Research and development523132Depreciation and amortization454424Total operating expenses4,1183,744Loss from operations(589)(545)Interest expense, net(167)(76)Loss before income taxes(756)(621)Provision for income taxes2121Net loss$(777)$(642)Net loss per share:Basic and diluted$(0.04)$(0.04)Number of weighted average shares outstanding:Basic and diluted17,760,24814,782,615BRIDGELINE DIGITAL, INC.CONSOLIDATED BALANCE SHEETS(Dollars in thousands, except share and per share data)(Unaudited)ASSETSDecember 31,2013September 30,2013Current Assets:Cash and cash equivalents$621$2,830Accounts receivable and unbilled revenues, net4,0413,194Prepaid expenses and other current assets967963Total current assets5,6296,987Equipment and improvements, net2,9093,065Intangible assets, net1,4021,517Goodwill23,83523,777Other assets1,6091,631Total assets$35,384$36,977LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable$1,467$1,746Accrued liabilities8531,093Accrued earnouts, current561561Debt, current201,165Capital lease obligations, current364397Deferred revenue2,0121,960Total current liabilities5,2776,922Accrued earnouts, net of current portion846950Debt, net of current portion5,4704,725Capital lease obligations, net of current portion445544Other long term liabilities1,1511,088Total liabilities13,18914,229Commitments 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; 18,476,041 and 18,313,765 shares issued and outstanding, respectively1918Additional paid-in-capital44,46144,206Accumulated deficit(22,091)(21,314)Accumulated other comprehensive loss(194)(162)Total stockholders' equity22,19522,748Total liabilities and stockholders' equity$35,384$36,977About 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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