Business News

Bitstream Inc. Reports First Quarter Results for 2010

Wednesday 19. May 2010 - The Company reported that first quarter revenue increased 4% to $5,208,000, as compared to the first quarter of 2009, and that its aggregate cash, cash equivalents and marketable securities balance increased by $2,011,000 during the three-month period ended March 31, 2010.

Bitstream Inc. (Nasdaq: BITS) today reported that total revenue increased by $207,000 or 4% to $5,208,000 for the three months ended March 31, 2010 as compared to total revenue of $5,001,000 for the three months ended March 31, 2009. The Company’s aggregate cash, cash equivalents, and investments at March 31, 2010 totaled $20,040,000, as compared to a balance of $18,029,000 at December 31, 2009, an increase of $2,011,000.

GAAP Results

Our e-commerce sales increased during the three months ended March 31, 2010, which led to an increase in direct third party cost of revenue, consisting primarily of royalty expenses, of $579,000 or approximately 39%, as compared to the three months ended March 31, 2009. The lower gross margins realized from e-commerce sales contributed to our operating loss increasing to ($403,000) for the three-months ended March 31, 2010, as compared to an operating loss of ($166,000) for the three-months ended March 31, 2009. Despite reducing total operating expenses for the three months ended March 31, 2010 by $81,000 or approximately 3%, as compared to the three months ended March 31, 2009, a $525,000 increase in cost of revenue during the three months ended March 31, 2010 caused our net loss to increase from ($153,000) or ($.02) per diluted share for the three months ended March 31, 2009 to ($398,000) or ($.04) per diluted share for the three months ended March 31, 2010.

“We are pleased with the substantial increase in our e-commerce sales and we hope that such growth is an indication that we are coming out of the economic downturn,” said Anna Magliocco-Chagnon, President and Chief Executive Officer. “Also, during the first quarter we continued to invest in the research and development of our BOLT web browsing product and we began to invest in new sales and marketing resources related to that BOLT browsing product line. We expect to continue to expand that investment during the second quarter of 2010. In addition to the investments we are making to increase revenue from our browsing product line, we agreed to acquire substantially all of the assets of Press-sense Ltd. for $6.5 million in cash and the assumption of liabilities related to deferred revenue. As stated in our press release earlier today, Press-sense is a leading developer of business flow automation systems based in Israel. The Press-sense business will complement and expand our Pageflex product line of enterprise brand management and web-to-print solutions to create one of the most robust end-to-end offering of business management tools available in the marketing and print industries. By fully automating the creation, production, and back-office processes for document orders, we will provide the tools to enable our customers to maximize production efficiency, monitor and reduce costs, and increase profits.”

Non-GAAP Results

Our loss from operations, not including the effect of stock-based compensation expense, was $(176,000) for the three months ended March 31, 2010, as compared to operating income of $28,000 for the three months ended March 31, 2009. Our net loss, not including the effect of stock-based compensation expense, was $(171,000) or $(0.02) per diluted share for the three months ended March 31, 2010, as compared to net income of $41,000 or $0.00 per diluted share for the three months ended March 31, 2009.

http://www.bitstream.com
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