Bridgeline Digital(US:BLIN)2021-02-10 16:00Financial Performance - Total revenue for the three months ended December 31, 2020, was $2.8 million, a slight increase of $4 thousand compared to $2.8 million for the same period in 2019[132]. - The company reported a net loss of $1.2 million for the three months ended December 31, 2020, compared to a net income of $136 thousand for the same period in 2019[132]. - Adjusted EBITDA for the three months ended December 31, 2020, was $672 thousand, compared to a loss of $669 thousand for the same period in 2019[134]. - Adjusted EBITDA increased to $672 thousand for the three months ended December 31, 2020, compared to a loss of $669 thousand for the same period in 2019, primarily due to increases in revenues and cost control measures[156]. - Cash provided by operating activities was $451 thousand for the three months ended December 31, 2020, compared to $110 thousand for the same period in 2019[157]. Revenue Breakdown - Revenue from digital engagement services decreased by $259 thousand, or 24%, to $837 thousand for the three months ended December 31, 2020[136]. - Revenue from subscription and perpetual licenses increased by $263 thousand, or 15%, to $2.0 million for the three months ended December 31, 2020[137]. - Revenue is derived from two main sources: Software Licenses and Digital Engagement Services, with revenue recognized when control of services is transferred to customers[176][177]. Cost Management - Total cost of revenue decreased by $401 thousand, or 30%, to $957 thousand for the three months ended December 31, 2020[138]. - Cost of digital engagement services decreased by $194 thousand, or 34%, to $374 thousand for the three months ended December 31, 2020[139]. - Cost of subscription and perpetual licenses decreased by $207 thousand, or 26%, to $583 thousand for the three months ended December 31, 2020[140]. - Operating expenses decreased by $783 thousand, or 32%, to $1.7 million for the three months ended December 31, 2020, compared to $2.5 million for the same period in 2019[147]. - Sales and marketing expenses decreased by $588 thousand, or 57%, to $444 thousand for the three months ended December 31, 2020, compared to $1.0 million for the same period in 2019, representing 16% of total revenue in 2020 versus 36% in 2019[142]. - General and administrative expenses decreased by $286 thousand, or 38%, to $465 thousand for the three months ended December 31, 2020, compared to $751 thousand for the same period in 2019, representing 16% of total revenue in 2020 versus 27% in 2019[143]. - Research and development expenses decreased by $41 thousand, or 11%, to $349 thousand for the three months ended December 31, 2020, compared to $390 thousand for the same period in 2019, representing 12% of total revenue in 2020 versus 14% in 2019[144]. Restructuring and Acquisition - The company experienced a significant increase in restructuring and acquisition-related expenses, which rose to $210 thousand, a 4,100% increase compared to $5 thousand in the previous year[134]. - The company incurred acquisition-related expenses of $210 thousand during the three months ended December 31, 2020, related to the acquisition of Woorank, representing 7% of total revenue[146]. - The company entered into a Share Purchase Agreement to acquire Woorank for an unconditional purchase price of approximately €3.3 million, with certain conditions for adjustments based on revenue targets[163]. Accounting Policies - The company uses a five-step model for revenue recognition, which includes identifying customer contracts and performance obligations[178]. - An allowance for doubtful accounts is maintained to estimate losses from clients' inability to make payments, based on historical percentages and payment history[179][180]. - Implementation costs for cloud computing arrangements are capitalized and amortized over the term of the arrangement, in accordance with ASC 350-40[181]. - Goodwill is tested for impairment annually, with potential impairment factors including operational and economic uncertainties[183][184]. - Stock-based compensation is recognized based on fair values, with expenses recorded over the service period, generally three years[186][187]. - The company accounts for the Paycheck Protection Program (PPP) loan as a government grant, recognizing income separately within other income[190]. Lease Obligations - The company has total payment obligations for operating leases amounting to $683 million over the years FY21 to FY25, with $142 million in FY21 and $84 million in FY25[174]. Operational Strategy - The company executed an operating plan that reduced operating expenses, resulting in three consecutive quarters of operating income[167]. - The company plans to submit the PPP loan forgiveness application in the near term, having expended all loan proceeds on qualified expenses incurred during the period[150].