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Bitstream Releases Q1 Results, Revenue Increases 31%

Monday, May 16, 2011

Press release from the issuing company

Marlborough, Mass. - Bitstream Inc. today reported that total revenue increased by $1,605,000 or 31% to $6,813,000 for the three months ended March 31, 2011 as compared to total revenue of $5,208,000 for the three months ended March 31, 2010 and by $294,000 or 5% sequentially as compared to $6,519,000 for the three months ended December  31, 2010.  The Company's aggregate cash, cash equivalents, and investments at March 31, 2011 totaled $11,456,000, an increase of $188,000 from a balance of $11,268,000 at December 31, 2010.

"We are pleased to report that revenues increased sequentially for the fourth consecutive quarter to $6,813,000 for the first quarter of 2011," said Amos Kaminski, Executive Chairman and Chief Executive Officer.  "The increase from the prior year was the result of increased sales across all of our product lines. MyFonts sales, with the addition of Webfonts, continue to grow and exceeded our expectations. Our OEM font product line closed several large licenses during the quarter that include possible royalties in future quarters. In addition to closing Pageflex Storefront licenses, our publishing line also received OEM revenue from our acquired iWay product.  We continue to strengthen the relationships with our iWay OEM partners and additionally have signed contracts with iWay resellers in the US and Europe. Our BOLT browser team, built over the past year, is focused on generating revenue opportunities through a variety of channels and establishing BOLT's brand recognition."

The increase in cost of license revenue for the three months ended March 31, 2011 as compared to the three months ended March 31, 2010 is due to the increase in direct third party cost of $473,000 primarily from royalties associated with e-commerce sales and $47,000 for amortization expense related to the acquisition of iWay technology.  Cost of services increased primarily due to the additional personnel added with the iWay acquisition.

Operating expenses increased $1,558,000 to $4,496,000 for the three months ended March 31, 2011 from $2,938,000 for the three months ended March 31, 2010. The increase includes increases in general and administrative ("G&A") expenses of $144,000 in professional fees and $100,000 in salaries and benefits from an increase in personnel.  We also invested approximately $1 million in iWay technology and increased our investment in the BOLT technology by approximately $300,000.

On May 1, 2011, Anna Chagnon, Bitstream's President and CEO, resigned as an employee and director of the Company. Approximately $685,000 in expenses related to this resignation will be recorded as a G&A expense during its second quarter.

GAAP Loss

Our loss from operations increased $602,000 to $1,005,000 for the three months ended March 31, 2011, as compared to $403,000 for the three months ended March 31, 2010. Our net loss increased $636,000 to $1,034,000 or $0.10 per share for the three months ended March 31, 2011 as compared to $398,000 or $0.04 per share for the three months ended March 31, 2010.

Non-GAAP Loss

Our non-GAAP results 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 increased $511,000 to $680,000 for the three months ended March 31, 2011, as compared to $169,000 for the three months ended March 31, 2010. Our non-GAAP net loss increased $545,000 to $709,000 or $0.07 per share for the three months ended March 31, 2011, as compared to $164,000 or $0.02 per share for the three months ended March 31, 2010.  A reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

 

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