Bitstream Inc. Reports Fourth Quarter Results for 2010
The Company reported its highest quarterly revenue amount since going public, revenue for the fourth quarter increased 17% to $6,519,000 as compared to the fourth quarter of 2009, as well as 9% sequentially as compared to the third quarter of 2010.
Marlborough, Massachusetts — March 10, 2011 —March 21, 2011—Bitstream Inc. (Nasdaq: BITS) today reported that total revenue increased by $940,000 or 17% to $6,519,000 for the three months ended December 31, 2010 as compared to total revenue of $5,579,000 for the three months ended December 31, 2009 and by $537,000 or 9% sequentially as compared to $5,982,000 for the three months ended September 30, 2010. The Company’s aggregate cash, cash equivalents, and investments at December 31, 2010 totaled $11,412,000, a decrease of $1,333,000 from a balance of $12,745,000 at September 30, 2010 and a decrease of $6,753,000, as compared to a balance of $18,165,000 at December 31, 2009, reflecting the use of $6,528,000 of cash in the second quarter of 2010 to purchase certain assets of Press-sense Ltd.
“We are excited to report that revenues increased to $6,519,000 for the fourth quarter, our highest quarterly revenue since going public in 1996," said Anna Magliocco-Chagnon, President and Chief Executive Officer. "This growth was the result of increased sales across all of our product lines. E-commerce sales continue to grow and now include our first sales of Webfonts. Our OEM font business closed several large licenses during the quarter that include possible royalties in future quarters. Our Pageflex publishing business experienced increases in both licensing and services revenue. We also received OEM revenue from our new iWay product while we continue building our relationships with our new publishing OEM partners and look forward to growing this business as these partners relaunch the iWay product through their sales channels. Our BOLT browser business closed its first carrier deal and recorded its first advertising revenue. We are also excited about the team we are building for our BOLT browser product line and the level of experience that they bring as we continue to focus on signing deals to monetize our BOLT through a variety of channels."
The increase in our e-commerce sales for the three months ended December 31, 2010 contributed to an increase in direct third party cost of revenue, consisting primarily of royalty expenses; of $480,000, or approximately 28%, as compared to the three months ended December 31, 2009. Cost of services increased due to the additional headcount added with the iWay acquisition. Operating expenses increased $1,440,000 to $4,476,000 for the three months ended December 31, 2010 from $3,036,000 for the three months ended December 31, 2009. We reported increases in marketing and sales (“M&S”), research and development (“R&D”) and general and administrative (“G&A”) expenses of $237,000, $753,000 and $450,000, respectively. The increase in M&S expense includes an increase in iWay sales and marketing resources of approximately $232,000. The increase in R&D expense consisted primarily of $567,000 due to the addition of R&D resources related to the iWay product line. The increase of G&A expense resulted from $263,000 in increases of G&A resources including the establishment of the office in Israel, and $271,000 in professional services.
GAAP Results
Our loss from operations was $(880,000) for the three-months ended December 31, 2010, as compared to operating income for the three-months ended December 31, 2009 of $273,000. Our net loss for the three months ended December 31, 2010 was ($979,000) or ($0.10) per share as compared to net income for the three months ended December 31, 2009 of $167,000 or $0.02 per fully diluted share.
Non-GAAP Results
Our Non-GAAP results for the three months ended December 31, 2010 exclude stock-based compensation expense, the amortization of intangible assets primarily acquired from Press-sense Ltd. and acquisition costs for certain assets of Press-sense Ltd. Our Non-GAAP loss from operations was $(579,000) for the three months ended December 31, 2010, as compared to operating income for the three months ended December 31, 2009 of $472,000. Our Non-GAAP net loss was $(678,000) or $(0.07) per share for the three months ended December 31, 2010, as compared to net income for the three months ended December 31, 2009 of $366,000 or $0.04 per fully diluted share. A reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
Bitstream Inc. and Subsidiaries
Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
|
|
|
Year Ended
December 31, |
|
|
|
2010 |
|
|
|
|
|
2009 |
|
|
|
|
|
2010 |
|
|
|
|
|
2009 |
| Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Software license |
|
$ |
5,269 |
|
|
|
|
$ |
4,443 |
|
|
|
|
$ |
18,344 |
|
|
|
|
$ |
16,804 |
| Services |
|
|
1,250 |
|
|
|
|
|
1,136 |
|
|
|
|
|
4,800 |
|
|
|
|
|
4,685 |
| Total revenue |
|
|
6,519 |
|
|
|
|
|
5,579 |
|
|
|
|
|
23,144 |
|
|
|
|
|
21,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Software license |
|
|
2,395 |
|
|
|
|
|
1,832 |
|
|
|
|
|
9,039 |
|
|
|
|
|
6,778 |
| Services |
|
|
528 |
|
|
|
|
|
438 |
|
|
|
|
|
2,000 |
|
|
|
|
|
2,060 |
| Total cost of revenue |
|
|
2,923 |
|
|
|
|
|
2,270 |
|
|
|
|
|
11,039 |
|
|
|
|
|
8,838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross profit |
|
|
3,596 |
|
|
|
|
|
3,309 |
|
|
|
|
|
12,105 |
|
|
|
|
|
12,651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Marketing and selling |
|
|
1,064 |
|
|
|
|
|
827 |
|
|
|
|
|
3,711 |
|
|
|
|
|
3,605 |
| Research and development |
|
|
2,104 |
|
|
|
|
|
1,351 |
|
|
|
|
|
7,180 |
|
|
|
|
|
4,992 |
| General and administrative |
|
|
1,308 |
|
|
|
|
|
858 |
|
|
|
|
|
4,302 |
|
|
|
|
|
3,053 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total operating expenses |
|
|
4,476 |
|
|
|
|
|
3,036 |
|
|
|
|
|
15,193 |
|
|
|
|
|
11,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss) |
|
|
(880 |
) |
|
|
|
|
273 |
|
|
|
|
|
(3,088 |
) |
|
|
|
|
1,001 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest and other income, net |
|
|
67 |
|
|
|
|
|
6 |
|
|
|
|
|
176 |
|
|
|
|
|
59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before provision for income taxes |
|
|
(813 |
) |
|
|
|
|
279 |
|
|
|
|
|
(2,912 |
) |
|
|
|
|
1,060 |
| Provision for income taxes |
|
|
166 |
|
|
|
|
|
112 |
|
|
|
|
|
324 |
|
|
|
|
|
208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
(979 |
) |
|
|
|
$ |
167 |
|
|
|
|
$ |
(3,236 |
) |
|
|
|
$ |
852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic net income (loss) per share |
|
$ |
(0.10 |
) |
|
|
|
$ |
0.02 |
|
|
|
|
$ |
(0.33 |
) |
|
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted net income (loss) per share |
|
$ |
(0.10 |
) |
|
|
|
$ |
0.02 |
|
|
|
|
$ |
(0.33 |
) |
|
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
|
10,058 |
|
|
|
|
|
9,817 |
|
|
|
|
|
9,923 |
|
|
|
|
|
9,782 |
Diluted weighted average shares outstanding |
|
|
10,058 |
|
|
|
|
|
10,399 |
|
|
|
|
|
9,923 |
|
|
|
|
|
10,249 |
Bitstream Inc. and Subsidiaries
Consolidated Balance Sheets
(In Thousands)
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
December 31, |
ASSETS |
|
2010 |
|
|
|
2009 |
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,057 |
|
|
|
$ |
17,915 |
Accounts receivable, net |
|
|
1,999 |
|
|
|
|
1,689 |
Prepaid expenses and other current assets |
|
|
793 |
|
|
|
|
802 |
Short-term investments-certificates of deposit |
|
|
114 |
|
|
|
|
114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
5,963 |
|
|
|
|
20,520 |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
606 |
|
|
|
|
643 |
|
|
|
|
|
|
|
|
|
Other assets: |
|
|
|
|
|
|
|
|
Long-term investments |
|
|
8,241 |
|
|
|
|
136 |
Goodwill |
|
|
3,526 |
|
|
|
|
727 |
Intangible assets |
|
|
3,479 |
|
|
|
|
78 |
Total other assets |
|
|
15,246 |
|
|
|
|
941 |
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
21,815 |
|
|
|
$ |
22,104 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
1,028 |
|
|
|
$ |
1,091 |
Accrued payroll and other compensation |
|
746 |
|
|
|
|
261 |
Other accrued expenses |
|
794 |
|
|
|
|
808 |
Deferred revenue |
|
2,413 |
|
|
|
|
1,762 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
4,981 |
|
|
|
|
3,922 |
|
|
|
|
|
|
|
|
Long-term deferred revenue |
|
105 |
|
|
|
|
--- |
Long-term deferred rent |
|
530 |
|
|
|
|
536 |
Total long-term liabilities |
|
635 |
|
|
|
|
536 |
|
|
|
|
|
|
|
|
Total liabilities |
|
5,616 |
|
|
|
|
4,458 |
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
16,199 |
|
|
|
|
17,646 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
21,815 |
|
|
|
$ |
22,104 |
Bitstream Inc. and Subsidiaries
Non-GAAP Results
(In Thousands, Except Per Share Data)
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table shows Bitstream’s non-GAAP results reconciled to GAAP results included in this release. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
|
2009 |
|
|
2010 |
|
|
|
2009 |
| Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss) |
|
$ |
(880 |
) |
|
$ |
273 |
|
$ |
(3,088 |
) |
|
$ |
1,001 |
| Stock-based compensation |
|
|
191 |
|
|
|
192 |
|
|
969 |
|
|
|
808 |
| Amortization of intangible assets |
|
|
103 |
|
|
|
7 |
|
|
252 |
|
|
|
28 |
| Acquisition costs |
|
|
7 |
|
|
|
--- |
|
|
438 |
|
|
|
--- |
| Non-GAAP operating income (loss) |
|
$ |
(579 |
) |
|
$ |
472 |
|
$ |
(1,429 |
) |
|
$ |
1,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP net income (loss) |
|
$ |
(979 |
) |
|
$ |
167 |
|
$ |
(3,236 |
) |
|
$ |
852 |
| Stock-based compensation |
|
|
191 |
|
|
|
192 |
|
|
969 |
|
|
|
808 |
| Amortization of intangible assets |
|
|
103 |
|
|
|
7 |
|
|
252 |
|
|
|
28 |
| Acquisition costs |
|
|
7 |
|
|
|
--- |
|
|
438 |
|
|
|
--- |
| Non-GAAP net income (loss) |
|
$ |
(678 |
) |
|
$ |
366 |
|
$ |
(1,577 |
) |
|
$ |
1,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted Net Income (loss) Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP net income (loss) per share |
|
$ |
(0.10 |
) |
|
$ |
0.02 |
|
$ |
(0.33 |
) |
|
$ |
0.08 |
| Stock-based compensation per share |
|
|
0.02 |
|
|
|
0.02 |
|
|
0.10 |
|
|
|
0.08 |
| Amortization of intangible assets per share |
|
|
0.01 |
|
|
|
--- |
|
|
0.03 |
|
|
|
--- |
| Acquisition costs per share |
|
|
--- |
|
|
|
--- |
|
|
0.04 |
|
|
|
--- |
| Non-GAAP net income (loss) per share |
|
$ |
(0.07 |
) |
|
$ |
0.04 |
|
$ |
(0.16 |
) |
|
$ |
0.16 |
CONFERENCE CALL REMINDER
Today, March 21, 2011 at 4:30 p.m. EST, Bitstream will host a conference call with the financial community to discuss its results for the quarter ended December 31, 2010:
• Domestic Dial-in number: 1-866-814-1912
• International Dial-in number: 1-703-639-1356
Call into the conference number 5-10 minutes prior to the start time. An operator will request that you provide your name and organization and ask you to wait until the call begins. If you have any difficulty connecting with the conference call number, please contact Bitstream at (617) 497-6222.
A replay of the conference call will be available through March 31, 2011 (access code): 1520216
• Domestic Replay number: 1-888-266-2081
• International Replay number: 1-703-925-2533
|
