Exhibit 99.1
Bitstream Inc. Reports Fourth Quarter Results for 2008
The Company reported fourth quarter revenue of $5,638,000 and net income of $709,000 or $0.07 diluted earnings per share.
CAMBRIDGE, MA—(Business Wire) — March 9, 2009—Bitstream Inc. (Nasdaq: BITS) today reported revenue for the three months ended December 31, 2008 of $5,638,000, a decrease of $645,000 or 10% as compared to $6,283,000 for the three months ended December 31, 2007 but an increase of $155,000 or approximately 3% as compared to revenue of $5,483,000 for the three months ended September 30, 2008. Revenue of $24,008,000 for the year ended December 31, 2008 is our highest full year revenue since becoming a publicly traded company, increasing $390,000 or approximately 2% as compared to revenue of $23,618,000 for the year ended December 31, 2008. The Company’s cash and cash equivalents at December 31, 2008 totaled $16,162,000, an increase of $962,000 from its cash and cash equivalents of $15,200,000 at September 30, 2008.
“While the challenging economic environment affected our revenue for the quarter ended December 31, 2008, we are pleased that we have been able to maintain profitability and that we have been able to continue to generate positive cash flow. With our strong balance sheet and no debt, we remain well positioned to take advantage of potential growth opportunities.” said Anna M. Chagnon, President and Chief Executive Officer. “We continue to conservatively manage our business through these uncertain economic times while investing in key strategic areas. During the quarter ended December 31, 2008 we reduced our operating expenses compared to the quarters ended December 31, 2007 and September 30, 2008 by $248,000 and $221,000, respectively. Such reductions contributed to our positive cash flow and net income for the quarter ended December 31, 2008.”
GAAP Results
Our income from operations decreased $284,000 or approximately 28% to $744,000 for the three months ended December 31, 2008 as compared to $1,028,000 for the three months ended December 31, 2007, while net income decreased $465,000 or approximately 40% to $709,000 or $0.07 per diluted share for the three months ended December 31, 2008 as compared to net income of $1,174,000 or $0.11 per diluted share for the three months ended December 31, 2007.
Non-GAAP Results
Our income from operations not including the effect of stock-based compensation expense decreased $245,000 or approximately 21% to $911,000 for the three months ended December 31, 2008 as compared to $1,156,000 for the three months ended December 31, 2007. Net income decreased $426,000 or approximately 33% to $876,000 or $0.09 per diluted share for the three months ended December 31, 2008 as compared to net income of $1,302,000 or $0.12 per diluted share for the three months ended December 31, 2007.
A reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
CONFERENCE CALL REMINDER
Today, March 9, 2009, 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, 2008:
• | Domestic Dial-in number: 1-866-793-1301 |
• | International Dial-in number: 1-703-639-1307 |
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 at Bitstream: (617) 497-6222.
A replay of the conference call will be available through March 19, 2009 (access code): 1339162
• | Domestic Replay number: 1-888-266-2081 |
• | International Replay number: 1-703-925-2533 |
Forward Looking Statements Disclosure
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management’s current expectations. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, including, without limitation, market acceptance of the Company’s products, competition and the timely introduction of new products. Additional information concerning certain risks and uncertainties that would cause actual results to differ materially from those projected or suggested in the forward-looking statements is contained in the Company’s filings with the Securities and Exchange Commission, including Bitstream’s Annual Report on Form 10-K for the year ended December 31, 2007.
About Bitstream
Bitstream Inc. (NASDAQ: BITS) is a software development company that makes communications compelling. Bitstream enables customers worldwide to render high-quality text, browse the Web on wireless devices, select from the largest collection of fonts online, and customize documents over the Internet. Its core competencies include fonts and font technology, browsing technology, and publishing technology. For more information about Bitstream please visit www.bitstream.com.
Bitstream and MyFonts.com are registered trademarks, and Pageflex, the Bitstream logo and ThunderHawk are trademarks, of the Company. Other technologies and brand names are used for information only and remain trademarks or registered trademarks of their respective companies.
Bitstream Inc.
Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
(unaudited)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||
Revenue: | ||||||||||||
Software license | $ | 4,305 | $ | 5,040 | $ | 18,868 | $ | 19,229 | ||||
Services | 1,333 | 1,243 | 5,140 | 4,389 | ||||||||
Total revenue | 5,638 | 6,283 | 24,008 | 23,618 | ||||||||
Cost of revenue: | ||||||||||||
Software license | 1,463 | 1,749 | 7,018 | 6,939 | ||||||||
Services | 626 | 453 | 2,408 | 1,863 | ||||||||
Total cost of revenue | 2,089 | 2,202 | 9,426 | 8,802 | ||||||||
Gross profit | 3,549 | 4,081 | 14,582 | 14,816 | ||||||||
Operating expenses: | ||||||||||||
Marketing and selling | 1,031 | 1,012 | 4,389 | 3,949 | ||||||||
Research and development | 1,133 | 1,225 | 5,181 | 4,739 | ||||||||
General and administrative | 641 | 816 | 2,713 | 2,686 | ||||||||
Total operating expenses | 2,805 | 3,053 | 12,283 | 11,374 | ||||||||
Operating profit | 744 | 1,028 | 2,299 | 3,442 | ||||||||
Other income and expense | ||||||||||||
Interest income, net | 17 | 146 | 177 | 570 | ||||||||
Total other income and expense | 17 | 146 | 177 | 570 | ||||||||
Income before provision for income taxes | 761 | 1,174 | 2,476 | 4,012 | ||||||||
Provision for income taxes | 52 | — | 108 | 21 | ||||||||
Net income | $ | 709 | $ | 1,174 | $ | 2,368 | $ | 3,991 | ||||
Basic net earnings per share | $ | 0.07 | $ | 0.12 | $ | 0.25 | $ | 0.41 | ||||
Diluted net earnings per share | $ | 0.07 | $ | 0.11 | $ | 0.23 | $ | 0.36 | ||||
Basic weighted average shares outstanding | 9,522 | 10,027 | 9,596 | 9,824 | ||||||||
Diluted weighted average shares outstanding | 10,003 | 10,904 | 10,254 | 10,975 | ||||||||
Bitstream Inc.
Consolidated Balance Sheets
(In Thousands)
(unaudited)
December 31, 2008 | December 31, 2007 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 16,162 | $ | 16,420 | ||
Accounts receivable, net | 1,827 | 2,245 | ||||
Prepaid expenses | 404 | 364 | ||||
Other current assets | 273 | 101 | ||||
Total current assets | 18,666 | 19,130 | ||||
Property and equipment, net | 427 | 569 | ||||
Other assets: | ||||||
Restricted cash | — | 150 | ||||
Goodwill | 727 | 727 | ||||
Intangible assets | 81 | 67 | ||||
Total other assets | 808 | 944 | ||||
Total assets | $ | 19,901 | $ | 20,643 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 832 | $ | 1,137 | ||
Accrued payroll and other compensation | 1,057 | 1,232 | ||||
Other accrued expenses | 583 | 527 | ||||
Deferred revenue | 1,937 | 1,720 | ||||
Total current liabilities | 4,409 | 4,616 | ||||
Long-term liabilities | — | 40 | ||||
Total liabilities | 4,409 | 4,656 | ||||
Total stockholders’ equity | 15,492 | 15,987 | ||||
Total liabilities and stockholders’ equity | $ | 19,901 | $ | 20,643 | ||
Bitstream Inc.
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, | ||||||
2008 | 2007 | |||||
GAAP operating income | $ | 744 | $ | 1,028 | ||
SFAS 123R stock-based compensation | 167 | 128 | ||||
Non-GAAP operating income | $ | 911 | $ | 1,156 | ||
GAAP net income | $ | 709 | $ | 1,174 | ||
SFAS 123R stock-based compensation | 167 | 128 | ||||
Non-GAAP net income | $ | 876 | $ | 1,302 | ||
Diluted net income per share: | ||||||
GAAP net income | $ | 0.07 | $ | 0.11 | ||
SFAS 123R stock-based compensation | 0.02 | 0.01 | ||||
Non-GAAP net income | $ | 0.09 | $ | 0.12 | ||
Shares used computing diluted net income per share | 10,003 | 10,904 | ||||
Contact:
Anna M. Chagnon, President and Chief Executive Officer
Bitstream Inc.
or
James P. Dore, Vice President and Chief Financial Officer
Bitstream Inc.