Bitstream Inc. Reports Second Quarter 2005 Results; Total revenue increased by $1,001,000 or 36% resulting in the highest quarterly revenue since the Company went public in 1996
CAMBRIDGE, Mass.--Aug. 9, 2005--Bitstream(R) Inc. today reported that its total revenue increased $1,001,000 or 36% to $3,808,000 for the three months ended June 30, 2005 as compared to $2,807,000 for the three months ended June 30, 2004. The Company recorded net income of $6,000 for the three months ended June 30, 2005, a $166,000 improvement from the net loss of ($160,000) recorded for the three months ended June 30, 2004. The net income for the three months ended June 30, 2005 reflects the impact of $310,000 in legal costs incurred in connection with the Company's defense of a lawsuit filed by Monotype Imaging, which went to trial during the quarter and was subsequently won by the Company on all counts. Net Income for the three months ended June 30, 2005 would have been $316,000 without these non-recurring costs. The Company's cash and cash equivalents at June 30, 2005 totaled $4,230,000, an increase of $135,000 as compared to $4,095,000 at March 31, 2005."Due to the growth in sales in all of our product lines as compared to the first quarter of 2005, we significantly exceeded our goal of increasing revenue by 20% allowing us to achieve our highest quarterly revenue level since the Company went public." said Anna M. Chagnon, President and Chief Executive Officer. "The increase in revenue helped the Company achieve profitability for the second quarter, notwithstanding the legal costs incurred in conjunction with winning on all counts the case brought by Monotype Imaging. To support our ongoing plan to grow revenue, we also continued to increase our investment in sales and marketing personnel and activities to drive revenue growth in future quarters while maintaining a significant level of investment in research and development activities for all of our technologies."
SECOND QUARTER 2005 HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS
-- On August 8, 2005 Bitstream announced that it joined the Symbian Platinum Program to support the growing market for data-enabled mobile phones, also known as smartphones, based on Symbian OS(TM). On August 1, 2005 Bitstream also announced that it integrated Font Fusion(R) 3.0, the company's smallest, most advanced font rasterizing engine, and the fastest font engine on the market today, with Symbian OS(TM). Symbian develops and licenses Symbian OS, the operating system that powers today's most popular smartphones.
-- On July 21, 2005 Bitstream announced that Judge Amy J. St. Eve of the U.S. District Court for the Northern District of Illinois Eastern Division ruled in favor of Bitstream on all counts in the case of Monotype Imaging, Inc. (formerly Agfa Monotype Corporation) and International Typeface Corporation v. Bitstream Inc.
-- On July 13, 2005 Bitstream announced that Pocket PC magazine nominated ThunderHawk, the company's breakthrough wireless browsing technology, for the publication's Best Software of 2005 Awards. The awards, now in their fifth year, honor companies that produce outstanding software for Windows Mobile Pocket PC and Smartphone users.
-- On June 28, 2005 Bitstream announced that it received certification of its GB18030 font, Bitstream Hei, from both the SLC (State Language Committee) and CITS/CESI (Committee on Information Technology Standards / China Electronics Standardization Institute) allowing Bitstream to extend its font business into China.
-- On June 21, 2005 Bitstream announced the addition of full Java(TM) support to ThunderHawk 2.1 Pocket PC Edition. New Java capabilities enable subscribers to run powerful, interactive Web applets utilizing the company's award-winning browser that provides enterprise clients and end users with a familiar, secure desktop browsing experience on mobile devices.
-- On June 20, 2005 Bitstream announced the release of version 2.0 of Bitstream Panorama, a small, portable line layout engine that enables developers to compose complex lines of text. The product features high-level APIs to lay out, position, substitute, and render characters in all international languages. This major release of Bitstream Panorama includes full support for Arabic, Hebrew, Indian and other complex language scripts
-- On June 13, 2005, the Company announced that its publishing product was successfully launched by e-Integrity (www.eintegrity-usa.com), the technology division of Integrity Graphics Inc., one of New England's premier graphics communications companies.
-- On June 7, 2005, the Company announced that four Pageflex customer case studies were included in the newly-released report PODi Best Practices in Digital Print. This highly acclaimed report showcases case studies in a broad range of vertical markets and business applications. Each of the four Pageflex customer case studies have been judged to contribute to PODi's best practices principles. Two of the four case studies were also judged finalists in the PODi Best Practices award competition, with one of these ultimately winning the best practices award.
-- On June 6, 2005, Bitstream announced the release of Font Fusion(R) 3.0, the company's smallest, most advanced font rasterizing engine, and the fastest font engine on the market today. This major release provides new support for font compression of all font formats
-- On May 24, 2005, Bitstream Inc. announced that BroadVision extended its agreement with Bitstream to license Bitstream font rendering technology and over 100 fonts for BroadVision's self-service web applications.
-- On May 23, 2005, the Company announced that VirtuosoWorks licensed a set of high-quality fonts for use with NOTION(TM), its music composition and performance software. VirtuosoWorks selected the font set from Bitstream's typeface library.
-- On May 1, 20057, 2005, the Company announced the premier of Pageflex Storefront 2.5 at On Demand. Pageflex Storefront 2.5 is a major new release incorporating fully integrated e-commerce support, such as integrated pricing, purchasing, and shipping features.
-- On May 9, 2005, the Company announced that the U.S. Patent and Trademark Office awarded a patent for MyFonts' system for selecting and distributing fonts in conjunction with its e-commerce system.
CONFERENCE CALL REMINDER
Today, August 9, 2005, at 4:30 p.m. EST, Bitstream will host a conference call with the financial community to discuss its second quarter 2005 results:
-- International Dial-in number: 1-703-639-1368
-- Domestic Dial-in number: 1-866-814-8449
Call into the conference number 5-10 minutes prior to the start time. An operator will check 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 Bitstream at (617) 497-6222.
A replay of the conference call will be available through August 19, 2005 (access code): 752022
-- International Replay number: 1-703-925-2533
-- Domestic Replay number: 1-888-266-2081
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, 2004.
About Bitstream
Bitstream(R) Inc. 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 or servicemarks, 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 owners.
Bitstream Inc.
Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2005 2004 2005 2004
-------- -------- -------- ------
Revenue:
Software license $ 3,187 $ 2,357 $ 5,996 $4,641
Services 621 450 1,208 896
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Total revenue 3,808 2,807 7,204 5,537
Cost of revenue:
Software license 1,081 796 2,086 1,477
Services 285 195 601 375
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Total cost of revenue 1,366 991 2,687 1,852
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Gross profit 2,442 1,816 4,517 3,685
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Operating expenses:
Marketing and selling 772 682 1,441 1,375
Research and development 975 940 1,981 1,970
General and administrative 701 447 1,186 943
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Total operating expenses 2,448 2,069 4,608 4,288
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Loss from operations (6) (253) (91) (603)
Other income:
Income on investment in
DiamondSoft, Inc. --- 91 --- 91
Other income, net 12 15 26 43
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Income (loss)before
provision for income taxes 6 (147) (65) (469)
Provision for income taxes --- 13 1 36
------------------------------- ------
Net income (loss) $ 6 $ (160) $ (66) $ (505)
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Basic and diluted net income
(loss) per share $ 0.00 $ (0.02) $ (0.01) $(0.06)
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Basic weighted average shares
outstanding 8,650 8,483 8,644 8,466
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Diluted weighted average
shares outstanding 9,472 8,483 8,644 8,466
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Bitstream Inc.
Consolidated Balance Sheets
(In Thousands)
(unaudited)
June 30, Dec. 31,
ASSETS 2005 2004
--------- --------
Current assets:
Cash and cash equivalents $ 4,230 $ 4,405
Accounts receivable, net 1,747 962
Prepaid expenses and other current assets 180 233
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Total current assets 6,157 5,600
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Property and equipment, net 336 282
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Other assets:
Restricted cash 250 250
Goodwill 727 727
Intangible assets 150 174
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Total other assets 1,127 1,151
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Total assets $ 7,620 $ 7,033
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 953 $ 278
Accrued expenses 941 1,199
Deferred revenue 990 792
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Total current liabilities 2,884 2,269
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Long-term liabilities 197 200
-------- --------
-------- --------
Total liabilities 3,081 2,469
-------- --------
Total stockholders' equity 4,539 4,564
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Total liabilities and stockholders' equity $ 7,620 $ 7,033
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