Bridgewater Systems Reports Q3 2009 Results and Updates Financial Outlook for
2009
- Q3 Revenue: $15.8 million, an increase of 53% over prior year - Q3 Net Earnings: $1.7 million, or $0.07 per share fully diluted, compared with net earnings of $0.5 million, or $0.02 per share fully diluted, in Q3 2008 - Cash, cash equivalents and short-term investments increased to $61.5 million
"The Company delivered strong financial performance in the third quarter, highlighted by significant revenue and earnings growth over the prior year," said Ed Ogonek, CEO of Bridgewater Systems. "In addition to continued success in our core markets, we made important progress in the third quarter with our strategy to expand into the 4G market. We introduced a comprehensive product suite for the LTE market and built on our early leadership with WiMAX operators.
"Supported by a strong financial position, high revenue visibility, and our new business pipeline, we are increasing investments in growth initiatives in the coming quarters," added
Financial Highlights
- Q3 2009 revenue increased 53% to $15.8 million, compared with $10.3 million for the same period last year. The year-over-year increase mainly reflects license revenue from a significant project, as well as revenue from the delivery of the WideSpan systems to Verizon Wireless and Cricket Communications. - Revenue for the first nine months of 2009 was $45.9 million, 50% higher than revenue in the first nine months of fiscal 2008. - Q3 2009 gross margin was $10.1 million (64% of revenue) versus $7.7 million (75% of revenue) in Q3 2008, reflecting increases in direct product costs and anticipated 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 Q3 2009 were $8.5 million (54% of revenue), compared with $7.5 million (73% of revenue) in the same period last year. - Net earnings for Q3 2009 were $1.7 million, or $0.07 per share fully diluted, compared to $0.5 million, or $0.02 per share fully diluted, in the prior year period. - Net earnings for the year-to-date period increased to $8.7 million, or $0.35 per share fully diluted, compared with $1.1 million, or $0.04 per share fully diluted, for the same period in 2008. - Increased cash, cash equivalents and short-term investments to $61.5 million, compared with $50.4 million at December 31, 2008.
Business Highlights
- Unveiled Bridgewater's LTE product suite for the Evolved Packet Core, including the Bridgewater(R) Home Subscriber Server and Policy Controller. These solutions help service providers rapidly trial and launch LTE services and manage mobile data traffic, subscribers, applications, and devices. Several global trials with major service providers are in the planning and implementation stages. - Expanded the Company's 4G partner and interoperability ecosystem for LTE and WiMAX, Some of the companies in our ecosystem include: Starent Networks, Alvarion, Motorola, NEC, Hitachi, Samsung, WiChorus, and Verint. - Extended global market leadership in WiMAX with five new wins in the quarter, bringing the total number of WiMAX customers to 38. Bridgewater announced selection by Global Mobile, one of Taiwan's leading 4G operators. The Company also announced selection by 4 US-based WiMAX service providers to accelerate the launch of 4G broadband services to rural communities as part of broadband stimulus initiatives. In addition, Bridgewater received United States Department of Agriculture Rural Utility Service acceptance for its WiMAX solutions. - Awarded approximately US$18.8 million in additional orders by Verizon Wireless for its WideSpan(R) integrated system, including subscriber data management and service control, to manage the rapid growth in the company's popular mobile data services. - Won xchange magazine's Best of 4G award in the Best Mobile Internet Application category for Bridgewater's myPolicy(TM) solution for the Apple(R) iPhone and Research in Motion's BlackBerry(R).
Outlook
Based on its year-to-date performance, Bridgewater increased its annual guidance to:
- Revenues of $62 to $64 million - Net earnings of $9.5 to $10.0 million.
Factors supporting Bridgewater's annual outlook include: high revenue visibility due to significant multi-year contracts with Tier 1 customers; a large installed customer base in existing and emerging markets; long-term industry trends, particularly the growth in mobile data services and applications.
The complete financial statements and management's discussion and analysis for the three and nine months ended
Conference Call and Webcast
A conference call and webcast will be held today,
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,
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.
Certain statements in this release, including the guidance provided above, constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws and are made pursuant to the "safe harbour" provisions of such laws. These statements are subject to certain assumptions, risks and uncertainties. Readers are cautioned not to place undue reliance on such statements. Risk factors that may cause the actual results, performance, achievements or developments of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements can be found in the public documents filed by the Company with Canadian securities regulatory authorities. In particular, actual results could differ materially from those expressed in any forward-looking statements. For a list of risk factors, please refer to Bridgewater's Annual Information Form dated
BRIDGEWATER SYSTEMS CORPORATION Consolidated Statements of Earnings and Comprehensive Earnings (expressed in Canadian dollars) (unaudited) ------------------------------------------------------------------------- Three months ended Nine months ended --------------------------- --------------------------- September 30, September 30, September 30, September 30, 2009 2008 2009 2008 ------------- ------------- ------------- ------------- ------------- ------------- Revenue Product $ 11,550,556 $ 5,963,509 $ 33,967,118 $ 19,667,267 Service and support 4,218,772 4,330,185 11,979,795 10,987,453 ------------------------------------------------------------------------- 15,769,328 10,293,694 45,946,913 30,654,720 Cost of sales 5,636,789 2,555,297 13,043,502 6,609,576 ------------------------------------------------------------------------- Gross margin 10,132,539 7,738,397 32,903,411 24,045,144 ------------------------------------------------------------------------- Expenses Sales and marketing 3,408,637 3,329,261 9,623,026 9,825,762 Research and development 3,863,831 3,215,931 11,045,295 11,599,745 General and administration 1,100,750 920,117 4,204,437 2,867,302 Bad debt (recovery) expense - (9,854) (263,897) 57,612 Stock-based compensation 100,598 72,050 271,086 168,818 ------------------------------------------------------------------------- 8,473,816 7,527,505 24,879,947 24,519,239 ------------------------------------------------------------------------- Earnings (loss) before undernoted items 1,658,723 210,892 8,023,464 (474,095) Foreign exchange (loss) gain (225,009) 76,922 (130,401) 627,553 Interest and other income 74,095 275,595 472,989 987,097 ------------------------------------------------------------------------- Earnings before income taxes 1,507,809 563,409 8,366,052 1,140,555 Future income tax recovery (expense) 143,000 (80,000) 313,000 (80,000) ------------------------------------------------------------------------- NET EARNINGS AND COMPREHENSIVE EARNINGS $ 1,650,809 $ 483,409 $ 8,679,052 $ 1,060,555 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net earnings per share - basic $ 0.07 $ 0.02 $ 0.36 $ 0.05 Net earnings per share - diluted 0.07 0.02 0.35 0.04 Weighted average number of shares outstanding - basic 24,359,491 22,758,098 23,940,792 22,546,214 Weighted average number of shares outstanding - diluted 25,237,721 24,208,862 24,909,273 24,216,263 BRIDGEWATER SYSTEMS CORPORATION Consolidated Balance Sheets (expressed in Canadian dollars) (unaudited) ------------------------------------------------------------------------- September 30, December 31, 2009 2008 -------------- -------------- -------------- CURRENT ASSETS Cash and cash equivalents $ 43,326,794 $ 50,363,771 Short-term investments 18,166,784 - Accounts receivable 16,552,336 13,423,994 Unbilled receivables 8,336,658 968,363 Deferred cost of sales 8,334,939 3,518,085 Prepaid expenses and other assets 5,864,554 1,735,267 Future income tax asset 2,567,000 2,557,000 ------------------------------------------------------------------------- 103,149,065 72,566,480 DEFERRED COST OF SALES - 5,525,354 FUTURE INCOME TAX ASSET 6,066,000 5,763,000 CAPITAL ASSETS 4,124,488 3,351,911 ------------------------------------------------------------------------- $ 113,339,553 $ 87,206,745 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CURRENT LIABILITIES Accounts payable and accrued liabilities $ 6,493,218 $ 7,305,923 Deferred revenue 42,120,710 24,013,113 ------------------------------------------------------------------------- 48,613,928 31,319,036 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Share capital 69,596,430 68,444,332 Contributed surplus 838,006 834,041 Deficit (5,708,811) (13,390,664) ------------------------------------------------------------------------- 64,725,625 55,887,709 ------------------------------------------------------------------------- $ 113,339,553 $ 87,206,745 ------------------------------------------------------------------------- ------------------------------------------------------------------------- BRIDGEWATER SYSTEMS CORPORATION Consolidated Statements of Cash Flows (expressed in Canadian dollars) (unaudited) ------------------------------------------------------------------------- Three months ended Nine months ended --------------------------- --------------------------- September 30, September 30, September 30, September 30, 2009 2008 2009 2008 ------------- ------------- ------------- ------------- ------------- ------------- NET (OUTFLOW) INFLOW OF CASH RELATED TO THE FOLLOWING ACTIVITIES: OPERATING Net earnings $ 1,650,809 $ 483,409 $ 8,679,052 $ 1,060,555 Items not affecting cash Bad debt expense - - 223,838 67,466 Stock-based compensation 100,598 72,050 271,086 168,818 Foreign exchange loss (gain) on cash held in foreign currency 1,541,372 (311,360) 3,192,622 (322,264) Future income tax (recovery) expense (143,000) 80,000 (313,000) 80,000 Amortization of capital assets 419,057 385,226 1,012,178 997,811 ------------------------------------------------------------------------- 3,568,836 709,325 13,065,776 2,052,386 Changes in non-cash operating working capital items 2,833,209 (1,654,967) 2,802,205 (1,905,827) ------------------------------------------------------------------------- 6,402,045 (945,642) 15,867,981 146,559 ------------------------------------------------------------------------- INVESTING Repayment of note receivable - - - 10,000,000 Purchase of short-term investments (18,166,784) - (18,166,784) - Purchases of capital assets (474,191) (90,516) (1,433,330) (995,842) ------------------------------------------------------------------------- (18,640,975) (90,516) (19,600,114) 9,004,158 ------------------------------------------------------------------------- FINANCING Proceeds from issuance of common shares 204,124 363,179 2,374,927 932,534 Repurchase of shares under normal course issuer bid (698,807) - (2,487,149) - Share issuance costs - - - (66,558) ------------------------------------------------------------------------- (494,683) 363,179 (112,222) 865,976 ------------------------------------------------------------------------- Foreign exchange (loss) gain on cash held in foreign currency (1,541,372) 311,360 (3,192,622) 322,264 ------------------------------------------------------------------------- NET CASH (OUTFLOW) INFLOW (14,274,985) (361,619) (7,036,977) 10,338,957 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 57,601,779 39,271,815 50,363,771 28,571,239 ------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 43,326,794 $ 38,910,196 $ 43,326,794 $ 38,910,196 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Supplementary information: Cash on hand and bank balances $ 12,514,071 $ 11,485,740 $ 12,514,071 $ 11,485,740 Cash equivalents 30,812,723 27,424,456 30,812,723 27,424,456 ------------------------------------------------------------------------- Total cash and cash equivalents $ 43,326,794 $ 38,910,196 $ 43,326,794 $ 38,910,196 --------------------------------------------- --------------------------- --------------------------------------------- --------------------------- Interest received $ 74,095 $ 275,595 $ 469,596 $ 987,097 BRIDGEWATER SYSTEMS CORPORATION Consolidated Statements of Shareholders' Equity (expressed in Canadian dollars) (unaudited) ------------------------------------------------------------------------- Common Shares Contributed Number Amount Surplus ------ ------ ------- ------------------------------------------------------------------------- Three months ended September 30, 2009 ------------------- Balance at June 30, 2009 24,361,445 $ 69,732,077 $ 762,411 ------------------------------------------------------------------------- Stock-based compensation - - 100,598 Repurchase of shares under normal course issuer bid (128,345) (364,774) Exercise of stock options 96,895 229,127 (25,003) Net earnings - - - ------------------------------------------------------------------------- Balance at September 30, 2009 24,329,995 $ 69,596,430 $ 838,006 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Nine months ended September 30, 2009 ------------------- Balance at December 31, 2008 22,969,701 $ 68,444,332 $ 834,041 ------------------------------------------------------------------------- Stock-based compensation - - 271,086 Repurchase of shares under normal course issuer bid (528,485) (1,489,950) - Exercise of stock options 1,888,779 2,642,048 (267,121) Net earnings - - - ------------------------------------------------------------------------- Balance at September 30, 2009 24,329,995 $ 69,596,430 $ 838,006 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Shareholders' Deficit Equity ------- ------ ----------------------------------------------------------- Three months ended September 30, 2009 ------------------- Balance at June 30, 2009 $ (7,025,587) $ 63,468,901 ----------------------------------------------------------- Stock-based compensation - 100,598 Repurchase of shares under normal course issuer bid (334,033) (698,807) Exercise of stock options - 204,124 Net earnings 1,650,809 1,650,809 ----------------------------------------------------------- Balance at September 30, 2009 $ (5,708,811) $ 64,725,625 ----------------------------------------------------------- ----------------------------------------------------------- Nine months ended September 30, 2009 ------------------- Balance at December 31, 2008 $(13,390,664) $ 55,887,709 ----------------------------------------------------------- Stock-based compensation - 271,086 Repurchase of shares under normal course issuer bid (997,199) (2,487,149) Exercise of stock options - 2,374,927 Net earnings 8,679,052 8,679,052 ----------------------------------------------------------- Balance at September 30, 2009 $ (5,708,811) $ 64,725,625 ----------------------------------------------------------- -----------------------------------------------------------
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
Share this article