Bridgeline Digital, Inc. (NASDAQ: BLIN), The Digital
Engagement Company™, today announced financial results for its
fiscal first quarter ended December 31, 2019.
“Bridgeline is winning new customers at its
fastest rate ever, averaging more than 15 new logos per year, in
addition to sales into our existing customer base, and the rate of
wins is continuing to accelerate,” said Ari Kahn, Bridgeline’s
President and Chief Executive Officer. “Since our
acquisitions last year, Bridgeline’s engineering team has focused
on bringing
the Salesforce.com capabilities from the
OrchestraCMS acquisition and the Artificial Intelligence
features from Celebros Search together with our
traditional Unbound software suite to provide highly differentiated
products and out of the box features that have helped to accelerate
our sales cycle. New sales have a higher ratio of SaaS
licenses to professional services and we expect our revenue mix to
be increasingly weighted towards licenses.”
First Quarter Summary:
- Total revenue increased 19% to $2.8 million for the
quarter ended December 31, 2019, as compared to $2.4 million for
the same period last year.
- Recurring revenue, which is comprised of SaaS licenses,
maintenance and hosting revenue, increased 51% to $1.7 million for
the quarter ended December 31, 2019, from $1.2 million for the same
period last year.
- Subscription and perpetual licenses revenue, which
is comprised of recurring revenue and perpetual license
revenue increased 33% to $1.7 million for the quarter ended
December 31, 2019, from $1.3 million for the same period last
year.
- Services revenue was consistent at $1.1 million for the
quarters ended December 31, 2019, and 2018,
respectively. As a percentage of total revenue, Services
revenue decreased to 39% of total revenue for the quarter ended
December 31, 2019, compared to 45% for the same period last
year.
- Operating expenses increased 22% or $400 thousand to $2.5
million for the quarter ended December 31, 2019 as compared to $2.1
million (excluding a goodwill impairment charge of $3.7
million) for the same quarter last
year.
- Net income for the quarter ended December 31, 2019 was
$136 thousand, compared to a net loss of $1.2 million (excluding a
goodwill impairment charge of $3.7 million) for the same quarter
last year. Included within the $136 thousand of net
income for the three months ended December 31, 2019 was a non-cash
gain of $1.1 million attributable to the change in fair value of
certain derivative warrant liabilities.
Financial Results
First Quarter
Revenue for the period ended December 31, 2019
was $2.8 million, compared to $2.4 million for the same period last
year. Recurring revenue, which is comprised of SaaS
licenses, maintenance and hosting revenue, increased 51% to
$1.7 million for the period ended December 31, 2019 from $1.2
million for the same period last year. Subscription and
perpetual licenses revenue, which is comprised of recurring
revenue and perpetual license revenue increased 33% to $1.7
million for the quarter ended December 31, 2019, compared to $1.3
million for the same period last year.
Gross Margin increased to 54% for the quarter
ended December 31, 2019, compared to 44% for the same period last
year. Cost of revenue was consistent at $1.3 million for
the periods ended December 31, 2019 and
2018.
Operating expenses increased 22% or $400
thousand to $2.5 million from $2.1 million (excluding a goodwill
impairment charge of $3.7 million) for the quarter ended December
31, 2019 and 2018, respectively.
Net loss applicable to common shareholders was
$2.3 million for the fiscal quarter ended December 31, 2019,
compared to $5.0 million for the same period last
year. Reflected in net results for the fiscal quarter
ended December 31, 2019 is a non-cash net adjustment to other
income of $1.1 million attributable to the change in fair value of
certain derivative warrant liabilities and a deemed dividend
expense on amendment of convertible preferred stock of $2.4
million, respectively.
Adjusted EBITDA loss for the quarter ended
December 31, 2019 is $669 thousand, compared to $1.0 million for
the same period in 2018.
Non-GAAP Financial Measures
This 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,
non-cash stock-based compensation, goodwill impairment charges,
restructuring and acquisition-related costs, 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, non-cash stock-based compensation charges,
goodwill impairment charges, restructuring and acquisition-related
costs, changes in fair value of derivative liabilities and warrant
expense, amortization of debt discounts, 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 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," 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 Unbound platform is a Digital Experience
Platform that deeply integrates Web Content Management, eCommerce,
Marketing Automation, Site Search, Authenticated Portals, Social
Media Management, Translation and Web Analytics to help the goal of
assisting marketers to help organizations deliver digital
experiences that attract, engage, nurture and convert their
customers across all channels and streamline business
operations. OrchestraCMS is the only content and digital
experience platform built 100% native on Salesforce.com.
OrchestraCMS helps Salesforce.com create digital experiences for
their customers and partners; combining content with business data,
processes and applications across multiply channels and device
including Salesforce.com Communities, social media, portals,
intranets, websites, applications and services. Celebros
Search is a commerce oriented, site search product that provides
for Natural Language Processing with artificial intelligence to
present very relevant search results in seven
languages. Headquartered in Woburn, Mass., Bridgeline
customers 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. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Dollars in thousands, except share and per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
December 31 |
|
|
|
|
2019 |
|
2018 |
Revenue: |
|
|
|
|
|
|
Digital engagement services |
|
$ 1,096 |
|
$ 1,073 |
|
Subscription and perpetual licenses |
|
1,736 |
|
1,302 |
|
|
Total
revenue |
|
2,832 |
|
2,375 |
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
Digital engagement services |
|
583 |
|
855 |
|
Subscription and perpetual licenses |
|
728 |
|
486 |
|
|
Total cost of
revenue |
|
1,311 |
|
1,341 |
|
|
Gross
profit |
|
1,521 |
|
1,034 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Sales and marketing |
|
1,076 |
|
814 |
|
General and administrative |
|
754 |
|
778 |
|
Research and development |
|
390 |
|
418 |
|
Depreciation and amortization |
|
258 |
|
26 |
|
Goodwill impairment charge |
|
- |
|
3,732 |
|
Restructuring and acquisition-related |
|
5 |
|
- |
|
|
Total
operating expenses |
|
2,483 |
|
5,768 |
Loss from operations |
|
(962) |
|
(4,734) |
|
Interest income (expense), net |
|
- |
|
(79) |
|
Amortization of debt discount |
|
- |
|
(150) |
|
Other income (expense), net |
|
1,101 |
|
12 |
Income/(loss) before income taxes |
|
139 |
|
(4,951) |
|
Provision for income taxes |
|
3 |
|
4 |
Net income/(loss) |
|
$ 136 |
|
$ (4,955) |
Dividends on convertible preferred stock |
|
(79) |
|
(79) |
Deemed dividend on amendment of Series A convertible preferred |
|
|
|
|
stock |
|
|
(2,314) |
|
- |
Net income/(loss) applicable to common shareholders |
|
$ (2,257) |
|
$ (5,034) |
Net income/(loss) per share attributable to common
shareholders: |
|
|
|
|
|
Basic net income/(loss) per share |
|
$ (0.81) |
|
$ (22.87) |
|
Diluted net income/(loss) per share |
|
$ (0.81) |
|
$ (22.87) |
Number of weighted average shares outstanding: |
|
|
|
|
|
Basic |
|
|
2,798,475 |
|
220,156 |
|
Diluted |
|
2,798,475 |
|
220,156 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BRIDGELINE DIGITAL, INC. |
CONSOLIDATED BALANCE SHEETS |
(Dollars in thousands, except share and per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
December 31 |
|
September 30 |
|
|
|
|
|
2019 |
|
2018 |
Current Assets: |
|
|
|
|
|
Cash
and cash equivalents |
|
$408 |
|
$296 |
|
Accounts receivable, net |
|
1,086 |
|
979 |
|
Prepaid expenses |
|
379 |
|
351 |
|
Other
current assets |
|
46 |
|
49 |
|
|
|
Total current
assets |
|
1,919 |
|
1,675 |
Property and equipment, net |
|
283 |
|
299 |
Operating lease assets |
|
462 |
|
- |
Intangible assets, net |
|
3,269 |
|
3,509 |
Goodwill |
|
5,557 |
|
5,557 |
Other
assets |
|
83 |
|
115 |
|
|
|
Total assets |
|
$ 11,573 |
|
$ 11,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
Current portion of operating lease liabilities |
|
$209 |
|
$ - |
|
Accounts payable |
|
1,910 |
|
1,740 |
|
Accrued liabilities |
|
936 |
|
835 |
|
Debt,
current |
|
- |
|
- |
|
Deferred revenue |
|
1,963 |
|
1,262 |
|
|
|
Total current
liabilities |
|
5,018 |
|
3,837 |
Debt,
net of current portion |
|
- |
|
- |
Operating lease liabilities, net of current portion |
|
253 |
|
- |
Warrant liabilities |
|
2,413 |
|
3,514 |
Other
long-term liabilities |
|
5 |
|
8 |
|
|
|
Total
liabilities |
|
7,689 |
|
7,359 |
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
Preferred stock - $0.001 par value; 1,000,000
shares authorized; |
|
|
|
|
|
|
Series C Convertible Preferred Stock: |
|
|
|
|
|
|
|
11,000 shares
authorized; 441 shares issued and outstanding at December 31, 2019
and September 30, 2019 |
|
- |
|
- |
|
|
Series A Convertible Preferred Stock: |
|
|
|
|
|
|
|
264,000 and
262,310 at December 31, 2019 and 264,000 and 262,310 at September
30, 2019 issued and outstanding (liquidation preference $2,782 at
December 31, 2019) |
|
- |
|
- |
|
Common stock - $0.001 par value; 50,000,000
shares authorized; |
|
|
|
|
|
|
2,798,475 at December 31, 2019 and 2,798,475 at September 30, 2019,
issued and outstanding |
|
3 |
|
3 |
|
Additional paid-in-capital |
|
77,964 |
|
75,620 |
|
Accumulated deficit |
|
(73,746) |
|
(71,489) |
|
Accumulated other comprehensive loss |
|
(337) |
|
(338) |
|
|
|
Total
stockholders' equity |
|
3,884 |
|
3,796 |
|
|
|
Total liabilities
and stockholders' equity |
|
$11,573 |
|
$11,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BRIDGELINE DIGITAL, INC. |
RECONCILIATION OF GAAP TO NON-GAAP RESULTS |
(Dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
December 31 |
|
|
|
2019 |
|
2018 |
Reconciliation of GAAP net income/(loss)
to |
|
|
|
|
non-GAAP adjusted net income/(loss): |
|
|
|
|
|
GAAP net
income/(loss) |
|
$136 |
|
$(4,955) |
|
Amortization
of intangible assets |
|
238 |
|
4 |
|
Stock-based
compensation |
|
30 |
|
97 |
|
Goodwill
impairment charge |
|
- |
|
3,732 |
|
Restructuring
and acquisition-related charges |
|
5 |
|
- |
|
Non-GAAP
adjusted net income/(loss) |
|
$409 |
|
$(1,122) |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP net earnings/(loss) per diluted
share to |
|
|
|
|
non-GAAP adjusted net earnings/(loss) per diluted
share: |
|
|
|
|
|
GAAP net
income/(loss) |
|
$0.05 |
|
$(22.51) |
|
Amortization
of intangible assets |
|
0.09 |
|
0.02 |
|
Stock-based
compensation |
|
0.01 |
|
0.44 |
|
Goodwill
impairment charge |
|
- |
|
16.95 |
|
Restructuring
and acquisition-related charges |
|
0.00 |
|
- |
|
Non-GAAP
adjusted net earnings/(loss) per diluted share |
|
$0.15 |
|
$(5.10) |
|
|
|
|
|
|
Reconciliation of GAAP net income/(loss) to Adjusted
EBITDA: |
|
|
|
|
|
GAAP net
income/(loss) |
|
$136 |
|
$(4,955) |
|
Provision for
income tax |
|
3 |
|
4 |
|
Interest and
other expense, net |
|
- |
|
79 |
|
Change in fair
value of warrants/warrant expense |
|
(1,101) |
|
(12) |
|
Amortization
of intangible assets |
|
238 |
|
4 |
|
Depreciation |
|
15 |
|
20 |
|
Goodwill
impairment charge |
|
- |
|
3,732 |
|
Restructuring
and acquisition-related charges |
|
5 |
|
- |
|
Other
amortization |
|
5 |
|
15 |
|
Stock-based
compensation |
|
30 |
|
97 |
|
Adjusted
EBITDA |
|
$(669) |
|
$(1,016) |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP net earnings/(loss) per diluted
share to |
|
|
|
|
Adjusted EBITDA per diluted share: |
|
|
|
|
|
GAAP net
income/(loss) |
|
$0.05 |
|
$(22.51) |
|
Provision for
income tax |
|
0.00 |
|
0.02 |
|
Interest and
other expense, net |
|
- |
|
0.36 |
|
Change in fair
value of warrants/warrant expense |
|
(0.39) |
|
(0.05) |
|
Amortization
of intangible assets |
|
0.09 |
|
0.02 |
|
Depreciation |
|
0.01 |
|
0.09 |
|
Goodwill
impairment charge |
|
- |
|
16.95 |
|
Restructuring
and acquisition-related charges |
|
0.00 |
|
- |
|
Other
amortization |
|
0.00 |
|
0.07 |
|
Stock-based
compensation |
|
0.01 |
|
0.44 |
|
Adjusted
EBITDA per diluted share |
|
$(0.24) |
|
$(4.61) |
Bridgeline Digital, Inc.
Mark G. Downey
Chief Financial Officer
(631) 203-6820
mdowney@bridgeline.com
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