GlobeNewswire Inc | Dec 20, 2021 04:08PM EST

December 20, 2021

Fiscal 2021 Revenue Increases 22% Versus Prior Year

Strong Cash Position for Additional Investment in Growth

WOBURN, Mass., Dec. 20, 2021 (GLOBE NEWSWIRE) -- Bridgeline Digital, Inc. (NASDAQ: BLIN), a provider of cloud-based marketing technology software, today announced financial results for its fiscal fourth quarter ended September 30, 2021.

Bridgeline grew by 22% this year with our Hawksearch software leading much of our growth, said Ari Kahn, Bridgelines President, and Chief Executive Officer. Mr. Kahn continued, We have a strong cash position and will invest in expanding our market position with innovations to our products and a larger sales and marketing team in 2022.

Financial Highlights Fourth Quarter of Fiscal Year 2021

-- Total revenue was $4.1 million, an increase of $1.4 million or 52%, from $2.7 million in the fourth quarter of fiscal 2020. -- Subscription and licenses revenue grew by 67% to $3.4 million. -- Gross profit was $2.8 million, an increase of 53% from $1.8 million in the same period in 2020. -- Gross margin percentage increased to 68% compared to 67% for the same period in 2020.

Financial Highlights Fiscal Year 2021

-- Total revenue was $13.3 million, an increase of $2.3 million, or 22%, from $10.9 million in fiscal 2020. -- Subscription and licenses revenue grew by 33% to $10.0 million. -- Gross profit was $8.7 million, an increase of 36% from $6.4 million in fiscal 2020. -- Gross margin percentage increased to 66% compared to 59% in fiscal 2020.

Business Highlights

-- Corporate Highlights: The Company made two acquisitions in 2021: Woorank SRL offers an SEO optimization application that helps companies increase traffic to their Web site.Hawk Search, Inc. offers a site search application that helps companies convert site visitors to customers to grow online revenue. -- Product Highlights:The Company launched Data Bravo, a web intelligence platform that helps Sales Professionals and Market Analysts grow revenue with AI-driven trend identification and prediction about web technologies and usage.

-- Partner Highlights: Bridgeline has expanded its partner network to increase deal flow: Optimizely Optimizely partnered with Bridgeline to develop the first out-of-the-box site search connector for the Optimizely B2B Commerce Cloud. The connector helps B2B buyers accelerating product discovery to grow online reviews with higher conversion rates.Salesforce Bridgeline launched an updated Lightning-Ready integration of our Hawksearch product for Salesforce B2B Commerce Cloud on Salesforce AppExchange.BigCommerce Bridgeline released the Hawksearch B2B Edition connect for BigCommerce to accelerate time to market for BigCommerce customers to grow revenue with the Hawksearch site search and recommendation engines.

Financial Results - Fourth Quarter of Fiscal Year 2021

-- Total revenue, which is comprised of both Subscription and Licenses revenue and Services revenue, was $4.1 million for the quarter ended September 30, 2021, as compared to $2.7 million for the same period in 2020. Subscription and licenses revenue grew by 67% and Services revenue grew by 7%.Subscription and licenses revenue, which is comprised of SaaS licenses, maintenance and hosting revenue and perpetual license revenue, increased 67% to $3.4 million for the quarter ended September 30, 2021, from $2.0 million for the same period in 2020.As a percentage of total revenue, Subscription and licenses revenue increased 8% to 82% of total revenue for the quarter ended September 30, 2021, compared to 74% for the same period in 2020.Services revenue increased 7% to $0.8 million for the quarter ended September 30, 2021, as compared to $0.7 million for the same period in 2020.As a percentage of total revenue, Services revenue accounted for 18% of total revenue for the quarter ended September 30, 2021, compared to 26% for the same period in 2020. -- Cost of revenue increased 49% or $0.4 million to $1.3 million for the quarter ended September 30, 2021, compared to $0.9 million for the same period in 2020. -- Gross profit increased 53% or $1.0 million to $2.8 million for the quarter ended September 30, 2021, as compared to $1.8 million for the same period in 2020. -- Gross margin percentage increased to 68% for the quarter ended September 30, 2021, compared to 67% for the same period in 2020. Subscription and licenses gross margin percentage was 75% for three months ended September 30, 2021, as compared to 76% for the same period in 2020.Services gross margin percentage was 37% for the three months ended September 30, 2021, as compared to 43% for the same period in 2020. -- Operating expenses increased $1.8 million to $3.4 million for the quarter ended September 30, 2021, from $1.7 million for the same period in 2020. Included within the quarterly totals as of September 30, 2021, are additional investment in sales and marketing, and acquisition related costs associated with the integration of both Woorank and Hawksearch. -- Operating loss for the quarter ended September 30, 2021, was $0.6 million as compared to $0.2 million operating profit for the same period in 2020. -- Net loss for the quarter ended September 30, 2021, was $1.3 million, compared to net income of $1.1 million for the same period in 2020. -- Net loss attributable to common shareholders for the quarter ended September 30, 2021, was $3.4 million, reflecting a $2.0 million deemed dividend on convertible preferred stock. -- Adjusted EBITDA for the quarter ended September 30, 2021, was $0.2 million, compared to $0.5 million for the same period in 2020.

Financial Results - Fiscal Year 2021

-- Total revenue, which is comprised of both Subscription and Licenses revenue and Services revenue, increased to $13.3 million for the twelve months ended September 30, 2021, as compared to $10.9 million for the same period in 2020. Subscription and licenses revenue grew by 33% and Services revenue decreased by 3%. Subscription and licenses revenue, which is comprised of SaaS licenses, maintenance and hosting revenue and perpetual license revenue, increased 33% to $10.0 million for the twelve months ended September 30, 2021, from $7.5 million for the same period in 2020.As a percentage of total revenue, Subscription and licenses revenue increased 6% to 75% of total revenue for the twelve months ended September 30, 2021, compared to 69% for the same period in 2020.Services revenue decreased 3% or $0.1 million to $3.3 million for the twelve months ended September 30, 2021, as compared to $3.4 million for the same period in 2020.As a percentage of total revenue, Services revenue accounted for 25% of total revenue for the twelve months ended September 30, 2021, compared to 31% for the same period in 2020. -- Cost of revenue increased 1% to $4.5 million for the twelve months ended September 30, 2021. -- Gross profit increased 36% or $2.3 million to $8.7 million for the twelve months ended September 30, 2021, as compared to $6.4 million for the same period in 2020. -- Gross margin percentage increased to 66% for the twelve months ended September 30, 2021, compared to 59% for the same period in 2020. Subscription and licenses gross margin percentage was 72% for the twelve months ended September 30, 2021, as compared to 64% for the same period in 2020.Services gross margin percentage was 47% for the twelve months ended September 30, 2021, as compared to 46% for the same period in 2020. -- Operating expenses increased $1.9 million to $9.9 million for the twelve months ended September 30, 2021, from $8.0 million for the same period in 2020. Included within the annual totals as of September 30, 2021, are additional investment in sales and marketing, and acquisition related costs associated with the integration of both Woorank and Hawksearch. -- Operating loss for the twelve months ended September 30, 2021, was $1.2 million as compared to $1.6 million for the same period in 2020. -- Net loss for the twelve months ended September 30, 2021, was $6.7 million, compared to $0.3 million for the same period in 2020. For the twelve months ended September 30, 2021, the warrant liability revaluation which considers the overall change in our market share price as of September 30, resulted in a cumulative $5.9 million non-cash loss attributable to the change in the fair value of the warrant liabilities, as compared to a non-gash gain of $1.0 million in the same period in 2020. -- Net loss attributable to common shareholders for the year was $8.7 million, reflecting a $2.0 million deemed dividend on convertible preferred stock. Net loss attributable to common shareholders for the year ended September 30, 2020, was $2.1 million, reflecting a $2.3 million deemed dividend on convertible preferred stock. -- Adjusted EBITDA for the twelve months ended September 30, 2021, was $1.4 million, compared to a negative adjusted EBITDA of $0.1 million for the same period in 2020.

Conference Call

Bridgeline Digital, Inc. will hold a conference call today, December 20, 2021, at 4:30 p.m. Eastern Time to discuss these results. The Company's President and Chief Executive Officer, Ari Kahn and Chief Financial Officer, Thomas Windhausen will host the call, followed by a question and answer period.

The details of the conference call and replay are as follows:

What:Bridgeline Digital Fourth Quarter 2021 Earnings Call

When:Monday, December 20, 2021

Time:4:30 p.m. ET

Live Call:(877) 837-3910, Domestic(973) 796-5077, International

Replay:(855) 859-2056(404) 537-3406

Conference ID:4392602



Please call the conference telephone number 5 10 minutes prior to the start time. An operator will register your name and organization.

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 and Adjusted EBITDA.

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 is 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).

Bridgelines 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 for Forward-Looking Statements 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 within the meaning of the Private Securities Litigation Reform Act of 1995, 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 statements appear in a number of places in this press release and include statements regarding the intent, belief or current expectations of Bridgeline Digital, Inc. 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 COVID 19 pandemic and related public health measures that may affect our financial results; business operations and the business of our customers, suppliers and partners; our ability to retain and upgrade current customers, increasing our recurring revenue, our ability to attract new customers, our revenue growth rate; our history of net loss and our ability to achieve or maintain profitability; our liability for any unauthorized access to our data or our users content, including through privacy and data security breaches; any decline in demand for our platform or products; changes in the interoperability of our platform across devices, operating systems, and third party applications that we do no control; competition in our markets; our ability to respond to rapid technological changes, extend our platform, develop new features or products, or gain market acceptance for such new features or products, particularly in light of potential disruptions to the productivity of our employees resulting from remote work; our ability to manage our growth or plan for future growth, and our acquisition of other businesses and the potential of such acquisitions to require significant management attention, disrupt our business, or dilute stockholder value; the volatility of the market price of our common stock, the ability to maintain our listing on the NASDAQ Capital Market, 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. Bridgeline Digital, Inc. assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release, except as required by applicable law.

About Bridgeline Digital

Bridgeline helps companies grow online revenues by increasing their traffic, conversion rate, and average order value with its Unbound platform and suite of apps. To learn more, please visit www.bridgeline.comor call (800) 603-9936.

Contact:

Bridgeline Digital, Inc.Thomas WindhausenChief Financial Officertwindhausen@bridgeline.com

BRIDGELINE DIGITAL, INC.CONSOLIDATED BALANCE SHEETS(in thousands, except share and per share data) ASSETS September 30 September 30 2021 2020 Current assets: Cash and cash equivalents $ 8,852 $ 861 Accounts receivable, net 1,370 665 Prepaid expenses 179 268 Other current assets 17 111 Total current assets 10,418 1,905 Property and equipment, net 252 238 Operating lease assets 481 294 Intangible assets, net 7,755 2,617 Goodwill 15,985 5,557 Other assets 76 49 Total assets $ 34,967 $ 10,660 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 732 $ - Current portion of operating lease 161 96 liabilities Accounts payable 974 1,311 Accrued liabilities 908 599 Purchase price and contingent 3,463 - consideration payable, current portion Paycheck Protection Program liability - 88 Deferred revenue 2,097 1,511 Total current liabilities 8,335 3,605 Long-term debt, net of current portion 1,197 - Operating lease liabilities, net of current 320 198 portionPurchase price and contingent consideration 2,360 - payable, net of current portionWarrant liabilities 4,404 2,486 Other long-term liabilities 774 15 Total liabilities 17,390 6,304 Commitments and contingencies Stockholders' equity: Preferred stock - $0.001 par value; 1,000,000 sharesauthorized; Series A Convertible Preferred stock: 264,000 shares authorized; no shares - - outstanding at September 30, 2021 and 2020 Series C Convertible Preferred stock: 11,000 shares authorized; 350 shares issued and outstanding at September 30, - - 2021 and 2020 Series D Convertible Preferred Stock: 4,200 shares authorized; no shares issued and oustanding at September 30, 2021 and - - 2020 Common stock - $0.001 par value; 50,000,000 sharesauthorized; 10,187,128 shares at September 30, 2021 and 4,420,170 shares at September 30, 10 4 2020, issued and outstanding Additional paid-in-capital 100,207 78,316 Accumulated deficit (82,287 ) (73,583 ) Accumulated other comprehensive loss (353 ) (381 ) Total stockholders' equity 17,577 4,356 Total liabilities and stockholders' equity $ 34,967 $ 10,660

BRIDGELINE DIGITAL, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except share and per share data) Three Months Ended Twelve Months Ended September 30, September 30, 2021 2020 2021 2020 Net revenue: Digital engagement $ 753 $ 701 $ 3,296 $ 3,409 services Subscription and perpetual 3,351 2,004 9,963 7,498 licenses Total net 4,104 2,705 13,259 10,907 revenue Cost of revenue: Digital engagement 472 399 1,743 1,831 services Subscription and perpetual 844 486 2,790 2,676 licenses Total cost 1,316 885 4,533 4,507 of revenue Gross 2,788 1,820 8,726 6,400 profit Operating expenses: Sales and 997 484 2,726 2,614 marketing General and 678 519 2,359 2,455 administrative Research and 934 423 2,387 1,641 development Depreciation and 425 237 1,202 968 amortization Restructuring and acquisition 373 (7 ) 1,235 366 related expenses Total operating 3,407 1,656 9,909 8,044 expensesIncome (loss) (619 ) 164 (1,183 ) (1,644 )from operations Interest expense and (876 ) (4 ) (883 ) (7 ) other, net Government - 960 88 960 grant income Change in fair value of 135 (50 ) (5,885 ) 1,028 warrant liabilitiesIncome (loss)before income (1,360 ) 1,070 (7,863 ) 337 taxes Provision for (benefit from) 1 2 (1,174 ) 11 income taxesNet income (loss) $ (1,361 ) $ 1,068 $ (6,689 ) $ 326 Dividends onSeries A - - - (106 )convertiblepreferred stockDeemed dividendon convertible (2,015 ) - (2,015 ) (2,314 )preferred stockNet income (loss)attributable to $ (3,376 ) $ 1,068 $ (8,704 ) $ (2,094 )commonshareholdersNet income (loss) per share attributable to common shareholders: Basic $ (0.40 ) $ 0.28 $ (1.47 ) $ (0.59 ) Diluted $ (0.40 ) $ 0.21 $ (1.47 ) $ (0.59 )Number ofweighted average sharesoutstanding: Basic 8,381,657 3,876,677 5,935,981 3,555,032 Diluted 8,381,657 5,165,438 5,935,981 3,555,032

BRIDGELINE DIGITAL, INC.RECONCILIATION OF GAAP TO NON-GAAP RESULTS(in thousands, except per share data) Three Months Ended Twelve Months Ended September 30 September 30 2021 2020 2021 2020 Reconciliation of GAAP net income (loss) tonon-GAAP adjusted net income (loss): GAAP net income $ (1,361 ) $ 1,068 $ (6,689 ) $ 326 (loss) Amortization of 404 213 1,130 891 intangible assets Stock-based 55 61 188 194 compensation Restructuring and acquisition-related 373 (7 ) 1,235 366 charges Non-GAAP adjusted $ (529 ) $ 1,335 $ (4,136 ) $ 1,777 net income/(loss) Reconciliation of GAAPnet earnings (loss) per diluted share tonon-GAAP adjusted netearnings (loss) per diluted share: GAAP net income $ (0.16 ) $ 0.21 $ (1.13 ) $ 0.09 (loss) Amortization of 0.05 0.04 0.19 0.25 intangible assets Stock-based 0.01 0.01 0.03 0.05 compensation Restructuring and acquisition-related 0.04 (0.00 ) 0.21 0.10 charges Non-GAAP adjusted net earnings/(loss) $ (0.06 ) $ 0.26 $ (0.70 ) $ 0.50 per diluted share Reconciliation of GAAPnet income (loss) to Adjusted EBITDA: GAAP net income $ (1,361 ) $ 1,068 $ (6,689 ) $ 326 (loss) Provision for (benefit from) 1 2 (1,174 ) 11 income tax Interest and other 876 4 883 7 expense, net Government grant - (960 ) (88 ) (960 ) income Change in fair value of warrant (135 ) 50 5,885 (1,028 ) liabilities Amortization of 404 213 1,130 891 intangible assets Depreciation 32 21 70 61 Restructuring and acquisition-related 373 (7 ) 1,235 366 charges Other amortization (11 ) 3 2 16 Stock-based 55 61 188 194 compensation Adjusted EBITDA $ 234 $ 455 $ 1,442 $ (116 )