SaaS License Revenue Increases 11.3%
Bridgeline Digital, Inc. (NASDAQ:BLIN), The Digital Engagement
Company™, today announced financial results for its fiscal first
quarter ended December 31, 2016.
“We made significant progress in the first
quarter, including double-digit year-over-year increases in both
SaaS and iAPPS recurring revenue,” said Ari Kahn, Bridgeline’s
President and Chief Executive Officer. “In addition, gross margin
improved more than six percentage points, validating our strategic
shift to a higher-margin SaaS model. This transition, coupled with
our focused efforts to eliminate lower margin, non-strategic
revenue, enabled us to create a well-positioned Company with
revenues tied to a profitable and strategic business upon which we
can grow a stronger company and greater shareholder value.”
First Quarter Highlights:
- iAPPS recurring revenue increased 13.9% to $1.7 million in the
first quarter of fiscal 2017, compared to $1.5 million in the first
quarter of fiscal 2016. This is part of Bridgeline’s continued
strategy to focus solely on iAPPS products.
- SaaS revenue increased 11.3% to $1.4 million in the first
quarter of fiscal 2017, compared to $1.2 million in the first
quarter of fiscal 2016.
- Subscription and perpetual license revenue increased 13.2% to
$1.7 million in the first quarter of fiscal 2017, compared to $1.5
million in the first quarter of fiscal 2016.
- License and iAPPS hosting revenue combined in the first quarter
of fiscal 2017 comprised 49.2% of total revenue, compared to 44.1%
of total revenue in the first quarter of fiscal 2016.
- Gross margin improved to 57.5% in the first quarter of fiscal
2017, from 50.8% in the first quarter of fiscal 2016. Cost of
revenue was reduced by $394,000, or 18.9%, to $1.7 million in the
first quarter of fiscal 2017, compared to $2.1 million in the first
quarter of fiscal 2016.
- Operating expenses were reduced by $552,000, or 17.2% to $2.7
million in the first quarter of fiscal 2017, from $3.2 million in
the first quarter of fiscal 2016.
First Quarter Financial
Results
Revenue for the first quarter of fiscal 2017 was
$4.0 million, compared to $4.2 million in the first quarter of
fiscal 2016. Subscription and perpetual license revenue increased
13.2% to $1.7 million in the first quarter of fiscal 2017, compared
to $1.5 million in the first quarter of fiscal 2016. License and
hosting revenue combined in the first quarter of fiscal 2017
comprised 49.2% of total revenue, compared to 44.1% of total
revenue in the first quarter of fiscal 2016. SaaS revenue increased
11.3% to $1.4 million in the first quarter of fiscal 2017, compared
to $1.2 million in the first quarter of fiscal 2016.
Gross margin improved to 57.5% in the first
quarter of fiscal 2017, from 50.8% in the first quarter of fiscal
2016, reflecting a larger mix of recurring revenue. Cost of revenue
was reduced by $394,000, or 18.9%, to $1.7 million in the first
quarter of fiscal 2017, compared to $2.1 million in the first
quarter of fiscal 2016.
Operating expenses were reduced by $552,000, or
17.2% to $2.7 million in the first quarter of fiscal 2017, compared
to $3.2 million in the first quarter of fiscal 2016, reflecting
management’s ongoing expense control initiatives. Loss from
Operations was $365,000 in the first quarter of fiscal 2017,
compared to $1.1 million in the first quarter of fiscal 2016.
Net loss was $408,000 in the first quarter of
fiscal 2017, compared to a net loss of $1.3 million in the first
quarter of fiscal 2016.
Adjusted EBITDA was $10,000 in the first quarter
of fiscal 2017, compared to $65,000 in the first quarter of fiscal
2016.
Financial Outlook
For the second quarter of fiscal 2017 the
Company expects revenue in the range of $3.9 million to $4.1
million.
Conference Call Information
Bridgeline Digital will host a conference call
to discuss first 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 Measures
This 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, 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 1995
All 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 Digital
Bridgeline 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 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.
BRIDGELINE DIGITAL, INC. |
RECONCILIATION OF GAAP TO NON-GAAP
RESULTS |
(Dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
December 31 |
|
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
Reconciliation of GAAP net loss to non-GAAP adjusted
net loss: |
|
|
|
|
|
|
GAAP net loss |
|
$ |
(476 |
) |
|
$ |
(1,380 |
) |
|
|
Amortization of
intangible assets |
|
|
71 |
|
|
|
107 |
|
|
|
Stock-based
compensation |
|
|
145 |
|
|
|
72 |
|
|
|
Restructuring
charges |
|
|
31 |
|
|
|
586 |
|
|
|
Preferred stock
dividends |
|
|
68 |
|
|
|
32 |
|
|
|
Non-GAAP adjusted net
loss |
|
$ |
(161 |
) |
|
$ |
(583 |
) |
|
|
|
|
|
|
|
|
Reconciliation of GAAP net loss per share to non-GAAP
adjusted net income(loss) per share: |
|
|
|
|
|
|
GAAP net loss per
share |
|
$ |
(0.02 |
) |
|
$ |
(0.25 |
) |
|
|
Amortization of
intangible assets |
|
|
- |
|
|
|
0.02 |
|
|
|
Stock-based
compensation |
|
|
0.02 |
|
|
|
0.01 |
|
|
|
Restructuring
charges |
|
|
- |
|
|
|
0.11 |
|
|
|
Preferred stock
dividends |
|
|
- |
|
|
|
- |
|
|
|
Non-GAAP adjusted net
income(loss) per share |
|
$ |
0.00 |
|
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
Reconciliation of GAAP net loss to Adjusted
EBITDA: |
|
|
|
|
|
|
GAAP net loss |
|
$ |
(476 |
) |
|
$ |
(1,380 |
) |
|
|
Provision for income
tax |
|
|
12 |
|
|
|
6 |
|
|
|
Interest expense,
net |
|
|
31 |
|
|
|
283 |
|
|
|
Amortization of
intangible assets |
|
|
71 |
|
|
|
107 |
|
|
|
Depreciation |
|
|
89 |
|
|
|
231 |
|
|
|
Restructuring
charges |
|
|
31 |
|
|
|
586 |
|
|
|
Other amortization |
|
|
39 |
|
|
|
128 |
|
|
|
Stock-based
compensation |
|
|
145 |
|
|
|
72 |
|
|
|
Preferred stock
dividends |
|
|
68 |
|
|
|
32 |
|
|
|
Adjusted EBITDA |
|
$ |
10 |
|
|
$ |
65 |
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP net loss per share to Adjusted
EBITDA per share: |
|
|
|
|
|
|
GAAP net loss per
share |
|
$ |
(0.02 |
) |
|
$ |
(0.25 |
) |
|
|
Provision for income
tax |
|
|
- |
|
|
|
- |
|
|
|
Interest expense,
net |
|
|
- |
|
|
|
0.06 |
|
|
|
Amortization of
intangible assets |
|
|
- |
|
|
|
0.02 |
|
|
|
Depreciation |
|
|
- |
|
|
|
0.04 |
|
|
|
Restructuring
charges |
|
|
- |
|
|
|
0.11 |
|
|
|
Other amortization |
|
|
- |
|
|
|
0.02 |
|
|
|
Stock-based
compensation |
|
|
0.02 |
|
|
|
0.01 |
|
|
|
Preferred stock
dividends |
|
|
- |
|
|
|
- |
|
|
|
Adjusted EBITDA per
share |
|
$ |
0.00 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
BRIDGELINE DIGITAL, INC. |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Dollars in thousands, except share and per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
December 31 |
|
|
|
|
|
2016 |
|
2015 |
|
Revenue: |
|
|
|
|
|
Digital engagement services |
$ |
2,026 |
|
|
$ |
2,373 |
|
|
|
Subscription and perpetual licenses |
|
1,725 |
|
|
|
1,523 |
|
|
|
Managed service hosting |
|
240 |
|
|
|
347 |
|
|
|
|
Total revenue |
|
3,991 |
|
|
|
4,243 |
|
|
|
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
Digital engagement services |
|
1,128 |
|
|
|
1,454 |
|
|
|
Subscription and perpetual licenses |
|
496 |
|
|
|
558 |
|
|
|
Managed service hosting |
|
71 |
|
|
|
77 |
|
|
|
|
Total cost of revenue |
|
1,695 |
|
|
|
2,089 |
|
|
|
|
Gross profit |
|
2,296 |
|
|
|
2,154 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Sales and marketing |
|
1,294 |
|
|
|
1,068 |
|
|
|
General and administrative |
|
791 |
|
|
|
862 |
|
|
|
Research and development |
|
360 |
|
|
|
341 |
|
|
|
Depreciation and amortization |
|
185 |
|
|
|
356 |
|
|
|
Restructuring charges |
|
31 |
|
|
|
586 |
|
|
|
|
Total operating expenses |
|
2,661 |
|
|
|
3,213 |
|
|
Loss from operations |
|
(365 |
) |
|
|
(1,059 |
) |
|
|
Interest expense, net |
|
(31 |
) |
|
|
(283 |
) |
|
Loss before income taxes |
|
(396 |
) |
|
|
(1,342 |
) |
|
|
Income Taxes |
|
12 |
|
|
|
6 |
|
|
Net loss |
$ |
(408 |
) |
|
$ |
(1,348 |
) |
|
Dividends on convertible preferred stock |
|
(68 |
) |
|
|
(32 |
) |
|
Net loss applicable to common shareholders |
$ |
(476 |
) |
|
$ |
(1,380 |
) |
|
|
|
|
|
|
Net loss per share attributable to common shareholders: |
|
|
|
|
|
Basic and diluted |
$ |
(0.02 |
) |
|
$ |
(0.25 |
) |
|
Number of weighted average shares outstanding: |
|
|
|
|
|
Basic and diluted |
|
20,022,720 |
|
|
|
5,164,809 |
|
|
|
|
|
|
|
|
|
|
BRIDGELINE DIGITAL, INC. |
|
CONSOLIDATED BALANCE SHEETS |
|
(Dollars in thousands, except share and per share
data) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
December 31 |
|
September 30 |
|
|
|
|
|
2016 |
|
2016 |
|
Current Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,428 |
|
|
$ |
661 |
|
|
|
Accounts receivable and unbilled revenues, net |
|
|
2,630 |
|
|
|
2,549 |
|
|
|
Prepaid expenses and other current assets |
|
|
344 |
|
|
|
381 |
|
|
|
|
Total
current assets |
|
|
4,402 |
|
|
|
3,591 |
|
|
Equipment and improvements, net |
|
|
423 |
|
|
|
512 |
|
|
Intangible assets, net |
|
|
477 |
|
|
|
548 |
|
|
Goodwill |
|
|
12,641 |
|
|
|
12,641 |
|
|
Other assets |
|
|
416 |
|
|
|
436 |
|
|
|
|
Total
assets |
|
$ |
18,359 |
|
|
$ |
17,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
915 |
|
|
$ |
1,285 |
|
|
|
Accrued liabilities |
|
|
979 |
|
|
|
1,021 |
|
|
|
Capital lease obligations, current |
|
|
33 |
|
|
|
45 |
|
|
|
Deferred revenue |
|
|
1,547 |
|
|
|
1,360 |
|
|
|
|
Total
current liabilities |
|
|
3,474 |
|
|
|
3,711 |
|
|
Debt, net of current portion |
|
|
2,390 |
|
|
|
2,115 |
|
|
Other long term liabilities |
|
|
420 |
|
|
|
400 |
|
|
|
|
Total
liabilities |
|
|
6,284 |
|
|
|
6,226 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
Preferred stock - $0.001 par value; 1,000,000
shares authorized; 222,822 and 221,092 issued and
outstanding |
|
|
- |
|
|
|
- |
|
|
|
Common stock - $0.001 par value; 50,000,000
shares authorized; 20,783,747 and 18,637,709 issued and
outstanding |
|
|
21 |
|
|
|
19 |
|
|
|
Additional paid-in-capital |
|
|
65,247 |
|
|
|
64,202 |
|
|
|
Accumulated deficit |
|
|
(52,842 |
) |
|
|
(52,366 |
) |
|
|
Accumulated other comprehensive loss |
|
|
(351 |
) |
|
|
(353 |
) |
|
|
|
Total
stockholders' equity |
|
|
12,075 |
|
|
|
11,502 |
|
|
|
|
Total
liabilities and stockholders' equity |
|
$ |
18,359 |
|
|
$ |
17,728 |
|
|
|
|
|
|
|
|
|
|
Contact:
Bridgeline Digital, Inc.
Michael D. Prinn
Chief Financial Officer
781.497.3016
mprinn@bridgeline.com
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