Bridgewater Systems Reports Financial Results for Fiscal 2009
- Revenue of $66.7 million for fiscal 2009, an increase of 51% over
prior year
- Net earnings of $11.2 million, or $0.44 per share fully diluted,
compared with net earnings of $2.8 million, or $0.11 per share fully
diluted, in 2008
- Cash and cash equivalents, and short-term investments increased to
$67.3 million
- Company issues guidance for continued growth in 2010
OTTAWA, Feb. 26 /CNW/ - Bridgewater Systems (TSX: BWC), the mobile personalization company, today announced financial results for the three and twelve months ended December 31, 2009. This news release contains forward-looking statements. Reference should be made to "Forward-Looking Statements" at the end of this news release. All amounts are stated in Canadian dollars except where otherwise noted.
"Bridgewater delivered solid financial performance in 2009," said Ed Ogonek, CEO of Bridgewater Systems. "This reflects continued robust demand for our technology to support mobile broadband growth, combined with successful operational execution across the company, highlighted by significant new customer wins and key product launches."
"Global mobile data traffic grew significantly in 2009, and this is fuelling demand for our solutions as operators implement network and bandwidth management strategies to reduce costs, while also introducing flexible and dynamic pricing models to better align data revenues with network costs," added Mr. Ogonek. "We are well positioned to capitalize on these trends, and in 2010 are focused on growing our core business, increasing revenue from new products and solutions for 3G and 4G networks, and increasing sales outside North America."
Financial Highlights
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- Revenue of $66.7 million for fiscal 2009 increased 51%, compared with
$44.2 million for fiscal 2008. The year-over-year increase mainly
reflects contribution from new products such as the Home Subscriber
Server and Policy Controller, license revenue from existing
customers, as well as revenue from the delivery of integrated
solutions.
- Q4 2009 revenue was $20.7 million, 53% higher than revenue in the
same period last year.
- 2009 gross margin was $45.7 million (69% of revenue) versus
$34.0 million (77% of revenue) in 2008, reflecting increases in
direct product costs associated with the deployment of integrated
systems and planned investments in operations support infrastructure,
as well as internal and subcontracting costs incurred to support the
increase in professional services engagements.
- Total operating expenses in 2009 were $33.2 million, net of
$2 million of investment tax credit (50% of revenue), compared with
$33.6 million (76% of revenue) in the same period last year.
- Net earnings for 2009 were $11.2 million, or $0.44 per share fully
diluted, versus $2.8 million, or $0.11 per share fully diluted, in
the prior year.
- Net earnings for Q4 2009 increased to $2.5 million, or $0.10 per
share fully diluted, compared with $1.7 million, or $0.07 per share
fully diluted, for the same period in 2008.
- Cash and cash equivalents, and short-term investments of
$67.3 million at December 31, 2009, compared with $50.4 million at
December 31, 2008.
Business Highlights
-------------------
- In 2009, Bridgewater continued to successfully penetrate the 3G and
4G markets globally. In Q4, the Company announced that MetroPCS
selected Bridgewater for its 4G LTE network. The multi-million dollar
order includes the Bridgewater(R) Home Subscriber Server and Policy
Controller. This competitive selection is a strong market validation
of Bridgewater's unique approach to LTE and deep expertise and
leadership in control plane transformations. Bell Canada also
selected the Bridgewater(R) Service Controller for its new national
3G HSPA network in the quarter. During 2009, the Company expanded 3G
deployments with several existing customers and expanded customer
engagements including new engagements with Cox and Mobily.
- Bridgewater continued to increase its international customer base in
2009, adding new customers in Taiwan, the Middle East, Europe, and
China.
- Bridgewater's continued investment in research and development
resulted in the launch of several new 3G and 4G solutions in 2009
with a focus on Policy Control and LTE. New policy products and
solutions included:
- PCRF standards compliant Policy Control systems that continue to
expand the Company's policy market leadership
- Bridgewater's award-winning myPolicy(TM) solution for smartphones
that gives subscribers greater control over their mobile data
usage
- LTE product suite including the Bridgewater(R) Home Subscriber
Server and Policy Controller. Bridgewater(R) EPC 500 which
combines both these products into an innovative LTE trial-ready
system
- The Bridgewater(R) ServiceMAX 500, an entry-level WiMAX system for
small to mid-sized service providers, was also introduced.
Bridgewater expanded business with Verizon Wireless for its
WideSpan(R) integrated system, including subscriber data management
and service control.
Outlook
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With today's release, Bridgewater presented its guidance for 2010. For 2010, the Company is expecting:
- Revenues of $82 to $92 million
- Net earnings of $13 to $16 million
Factors supporting Bridgewater's annual outlook include: high revenue visibility due to significant contracts with Tier 1 customers; a large installed customer base in existing and emerging markets; the long-term industry trends of growth in mobile data services and applications; and continued evolution of our business model for delivering products and services to address higher transaction capacity needs.
The complete financial statements and management's discussion and analysis for the three and twelve months ended December 31, 2009 can be found at www.bridgewatersystems.com or at www.sedar.com.
Forward-Looking Statements
Certain statements in this release, including the estimates of future revenues and net earnings provided above, constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws. These statements are subject to certain assumptions, risks and uncertainties. Material factors and assumptions used to develop such estimates include:
- Bridgewater's ability to maintain its relationships and contracts
with Tier 1 customers;
- Bridgewater's visibility into the deployment plans of its major
customers;
- Bridgewater's ability to maintain and grow its installed customer
base in existing and emerging markets; and
- Bridgewater's expectations regarding long-term industry trends in
growth in mobile data services and applications.
Readers are cautioned not to place undue reliance on such statements. These statements are provided to enable external stakeholders to understand Bridgewater's expectations as of the date of this release and may not be appropriate for other purposes.
Actual results, performance, achievements or developments of Bridgewater may differ materially from the results, performance, achievements or developments expressed or implied by such statements. Risk factors that may cause the actual results, performance, achievements or developments of Bridgewater to differ materially from the results, performance, achievements or developments expressed or implied by such statements can be found in the public documents filed by Bridgewater with Canadian securities regulatory authorities, including, but not limited to Bridgewater's Annual Information Form dated March 31, 2009 and Management's Discussion & Analysis of Financial Condition and Results of Operation dated February 26, 2010, which are available at www.sedar.com, and include the following:
- Bridgewater operates in highly competitive and continually evolving
markets, and if it is not able to compete effectively, it may not be
able to continue to expand its business as expected;
- Bridgewater relies on a limited number of customers for a large
percentage of its revenue, and the loss of, or significant shortfall
in business from, a key customer could significantly reduce its
revenue;
- Bridgewater must continue to evolve its business models and platforms
for delivery of products and services to respond to transaction
capacity needs of its customers;
- Bridgewater's engagements with its customers involve complex
arrangements and the size, timing and contractual terms of orders for
Bridgewater's products may affect when revenue is recognized;
- Bridgewater has a lengthy and variable sales cycle; and
- Bridgewater may engage in future acquisitions that could disrupt its
business and affect its financial condition and operating results.
Bridgewater assumes no obligation to update or revise any forward-looking statements or forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by law.
Conference Call and Webcast
A conference call and webcast will be held today, Friday, February 26, 2010 at 8:30 a.m. ET to discuss this announcement. The telephone numbers to access the call are 647-427-7450 or 1-888-231-8191. To access the live webcast, please visit www.bridgewatersystems.com or www.newswire.ca. Participants will require Windows Media Player(TM) to listen to the webcast.
About Bridgewater Systems
Bridgewater Systems, the mobile personalization company, enables service providers to efficiently manage and profit from mobile data services, content and commerce. The company's market leading mobile personalization portfolio provides a real-time, unified view of subscribers including entitlements, devices, networks, billing profiles, preferences and context. Anchored by Bridgewater's Subscriber Data Broker(TM), the portfolio of carrier-grade and standards-based products includes the Bridgewater(R) Service Controller (AAA), the Bridgewater(R) Policy Controller (PCRF) and the Bridgewater(R) Home Subscriber Server (HSS). More than 140 leading service providers including America Movil, Bell Canada, Clearwire, Cox, Hutchison Telecom, Iusacell, Scartel, SmarTone-Vodafone, Sprint, Tata Teleservices, Tatung, Telmex, Telstra, and Verizon Wireless use Bridgewater's solutions to rapidly deliver innovative mobile services to over 150 million subscribers. For more information, visit us at www.bridgewatersystems.com.
Bridgewater, Bridgewater Systems, the Bridgewater Systems logo, WideSpan, Smart Caps, myPolicy, and Subscriber Data Broker are trademarks or registered trademarks of Bridgewater Systems Corporation. All other company, product names and any registered and unregistered trademarks mentioned are used for identification purposes only and remain the exclusive property of their respective owners.
BRIDGEWATER SYSTEMS CORPORATION
Consolidated Statements of Earnings and
Comprehensive Earnings
years ended December 31, 2009 and 2008
(expressed in Canadian dollars)
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2009 2008
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Revenue
Product $ 49,372,413 $ 28,586,917
Service and support 17,303,896 15,591,272
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66,676,309 44,178,189
Cost of sales 20,951,811 10,226,717
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Gross margin 45,724,498 33,951,472
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Expenses
Sales and marketing 13,880,517 13,372,256
Research and development 15,718,157 14,934,992
General and administration 5,428,610 3,919,694
Investment tax credit carryforwards
recognized (2,000,000) -
Bad debt (recovery) expense (158,278) 1,183,077
Stock-based compensation 370,817 234,827
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33,239,823 33,644,846
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Earnings before undernoted items 12,484,675 306,626
Foreign exchange (loss) gain (189,619) 1,495,851
Interest and other income 543,585 1,260,670
Loss on disposal of property, equipment and
intangible assets (130,820) (118,159)
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Earnings before income taxes 12,707,821 2,944,988
Current income tax expense 2,000,000 -
Future income tax (recovery) expense (496,000) 180,000
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NET EARNINGS AND COMPREHENSIVE EARNINGS $ 11,203,821 $ 2,764,988
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Net earnings per share - basic $ 0.46 $ 0.12
Net earnings per share - diluted $ 0.44 $ 0.11
Weighted average number of shares
outstanding - basic 24,179,224 22,653,503
Weighted average number of shares
outstanding - diluted 25,248,147 24,183,094
BRIDGEWATER SYSTEMS CORPORATION
Consolidated Balance Sheets
as at December 31, 2009 and 2008
(expressed in Canadian dollars)
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2009 2008
-------------- --------------
CURRENT ASSETS
Cash and cash equivalents $ 53,828,859 $ 50,363,771
Short-term investments 13,459,190 -
Accounts receivable 24,879,197 13,423,994
Unbilled receivables 1,360,741 968,363
Deferred cost of sales 12,324,813 3,518,085
Prepaid expenses and other assets 3,229,227 1,735,267
Future income tax asset 5,113,000 2,557,000
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114,195,027 72,566,480
DEFERRED COST OF SALES - 5,525,354
FUTURE INCOME TAX ASSET 3,703,000 5,763,000
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS 3,604,811 3,351,911
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$ 121,502,838 $ 87,206,745
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CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 9,617,441 $ 7,305,923
Deferred revenue 44,288,403 24,013,113
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53,905,844 31,319,036
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SHAREHOLDERS' EQUITY
Share capital 69,872,842 68,444,332
Contributed surplus 908,194 834,041
Deficit (3,184,042) (13,390,664)
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67,596,994 55,887,709
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$ 121,502,838 $ 87,206,745
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BRIDGEWATER SYSTEMS CORPORATION
Consolidated Statements of Cash Flows
years ended December 31, 2009 and 2008
(expressed in Canadian dollars)
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2009 2008
-------------- --------------
NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES:
OPERATING
Net earnings $ 11,203,821 $ 2,764,988
Items not affecting cash
Bad debt expense 332,461 1,183,077
Stock-based compensation 370,817 234,827
Foreign exchange loss (gain) on cash
held in foreign currency 3,658,289 (1,826,193)
Loss on disposal of assets 130,820 118,159
Future income tax (recovery) expense (496,000) 180,000
Amortization of property, equipment and
intangible assets 1,494,768 1,400,482
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16,694,976 4,055,340
Changes in non-cash operating working
capital items 5,531,388 11,619,949
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22,226,364 15,675,289
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INVESTING
Purchase of short-term investments (13,459,190) -
Purchases of property, equipment and
intangible assets (1,778,444) (1,053,072)
Deferred cost of sales - (5,525,354)
Repayment of note receivable - 10,000,000
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(15,237,634) 3,421,574
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FINANCING
Proceeds from issuance of common shares 2,621,796 936,034
Repurchase of shares under normal course
issuer bid (2,487,149) -
Share issuance costs - (66,558)
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134,647 869,476
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Foreign exchange (loss) gain on cash held in
foreign currency (3,658,289) 1,826,193
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NET CASH INFLOW 3,465,088 21,792,532
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 50,363,771 28,571,239
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CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 53,828,859 $ 50,363,771
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Supplementary information:
Cash on hand and bank balances $ 17,485,505 $ 19,661,902
Cash equivalents 36,343,354 30,701,869
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Total cash and cash equivalents $ 53,828,859 $ 50,363,771
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Interest received $ 485,749 $ 1,258,824
BRIDGEWATER SYSTEMS CORPORATION
Consolidated Statements of Shareholders' Equity
years ended December 31, 2009 and 2008
(expressed in Canadian dollars)
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Common Shares Contributed
Number Amount Surplus
------ ------ -------
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Balance at December 31,
2007 22,202,882 $ 67,477,616 $ 696,454
Stock-based compensation - - 234,827
Exercise of stock options 766,819 1,033,274 (97,240)
Share issuance costs - (66,558) -
Net earnings - - -
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Balance at December 31,
2008 22,969,701 $ 68,444,332 $ 834,041
Stock-based compensation - - 370,817
Repurchase of shares under
normal course issuer bid (528,485) (1,489,950) -
Exercise of stock options 1,991,252 2,918,460 (296,664)
Net earnings - - -
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Balance at December 31, 2009 24,432,468 $ 69,872,842 $ 908,194
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Shareholders'
Deficit Equity
------- ------
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Balance at December 31,
2007 $ (16,155,652) $ 52,018,418
Stock-based compensation - 234,827
Exercise of stock options - 936,034
Share issuance costs - (66,558)
Net earnings 2,764,988 2,764,988
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Balance at December 31,
2008 $ (13,390,664) $ 55,887,709
Stock-based compensation - 370,817
Repurchase of shares under
normal course issuer bid (997,199) (2,487,149)
Exercise of stock options - 2,621,796
Net earnings 11,203,821 11,203,821
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Balance at December 31,
2009 $ (3,184,042) $ 67,596,994
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For further information: Investor Relations, Kim Butler, Chief Financial Officer, Bridgewater Systems, [email protected], (613) 591-9104 extension 6023; Craig Armitage, The Equicom Group Inc., [email protected], (416) 815-0700 extension 278; Media Relations, Joanne Steinberg, Marketing Director, Bridgewater Systems, [email protected], (613) 591-9104 extension 2032
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