Bridgeline Software Reports Record Revenues and Record Income for the Second Quarter of Fiscal 2008

May 01, 2008

Woburn, Mass, May 1, 2008 - Bridgeline Software, Inc. (NASDAQ: BLSW), a developer of SaaS-based web application management software and award-winning web applications, today 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 liabilities
Highlights 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, 2008

Bridgeline 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, 2008

Bridgeline 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 Trends

Of 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%.

  Q207 Q208
Annualized Recurring Revenues $644,000 $2,248,000
Sequential Growth from fiscal Q108    18%
Year over Year Growth %    249%
Retention Rate    97%

Bridgeline Software, Inc.

Condensed Consolidated Statements of Operations
(Dollars in thousands except per share data)

  Three Months Ended Six Months Ended
March 31, 2008 March 31, 2007 March 31, 2008 March 31, 2007
Revenue $ 5,398 $ 2,223 $ 9,601 $ 4,532
Cost of revenue   2,459  Ă 1,015   4,481   2,156
Gross profit   2,939   1,208   5,120   2,376
Operating 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   105
Total operating expenses   2,823   1,565   4,995   3,018
Income / (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   176
EBITDA 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, 2008 September 30, 2007
Assets
Current assets:
    Cash and cash equivalents $ 3,491 $ 5,219
    Accounts receivables and other current assets   4,343   3,439
Total current assets   7,834   8,658
 
Other assets   1,6Ă1   1,234
Intangible assets, net   2,321   1,441
Goodwill   16,536   14,426
 
Total assets $ 28,342 $ 25,759
         
Liabilities and stockholders’ equity
Current liabilities:
 
    Current liabilities and accrued expenses   3,072   2,719
Total current liabilities   3,072   2,719
 
Other liabilities   178   165
Total liabilities   3,250   2,884
Stockholders’ 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   9
Additional paid-in capital   30,968   28,908
Accumulated other comprehensive income   25 18
Accumulated deficit   (5,911)   (6,060)
Total stockholders’ equity   25,093   22,875
 
Total liabilities and stockholders’ equity $ 28,342 $ 25,759
         

 
About Bridgeline Software, Inc

Bridgeline Software is a developer of SaaS based web application management software and award-winning web applications that help organizations optimize business processes. The iAPPS® Framework and Product Suite are innovative SaaS solutions that unify Content Management, Analytics, eCommerce, and eMarketing capabilities – enabling business users to swiftly enhance and optimize the value of their web properties. Combined with award-winning application development services, Bridgeline Software helps customers cost-effectively accommodate the rapidly changing needs of mission-critical web applications. Bridgeline Software's teams of developers specialize in web application development, information architecture, usability engineering, SharePoint development, rich media development, and search engine optimization.

Bridgeline Software is headquartered near Boston with additional locations in Atlanta, Chicago, Cleveland, Minneapolis, New York, Washington D.C., and Bangalore India. We are a recipient of the Inc. 500 award for America’s fastest growing companies and currently have over 500 customers ranging from middle market organizations to divisions of Fortune 1,000 companies. To learn more about Bridgeline Software, please visit www.bridgelinedigital.com.

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