Asia Pacific – August 3, 2010 – Bridgewater Systems (TSX: BWC), the mobile personalization company, has announced financial results for the three and six months ended June 30, 2010. 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.
“Our investments to expand global sales, service and partnerships are aimed at securing new customers and capitalizing on the growing demand for our solutions to manage rapid mobile data growth, said Ed Ogonek, CEO of Bridgewater Systems. “We are particularly pleased with our progress with Tier 1 partners.”
Financial Highlights
. Revenue of $22.7 million for Q2 2010 represents an increase of 41%
compared with $16.1 million for Q2 2009. Product revenue for Q2 2010 was
$17.1 million, an increase of 47%, compared with $11.7 million for Q2 2009.
. On a year-to-date basis, revenues of $47.2 million are 56% higher
than revenues in the first six months of fiscal 2009.
. Q2 2010 gross margin was $15.0 million (66% of revenue) versus $12.1
million (75% of revenue) in Q2 2009, reflecting increases in direct product costs associated with the delivery of integrated systems, investments in operations support infrastructure, as well as increased global professional
services engagements.
. Total operating expenses in Q2 2010 were $10.7 million (47% of
revenue), net of $0.6 million of investment tax credits, compared with $8.2 million (51% of revenue) in the same period last year. The year-over-year increase in operating expenses mainly reflects higher investments in research and development and sales and marketing to support the Company’s growth initiatives.
. Net earnings before income taxes rose 17% to $4.8 million in Q2
2010, versus $4.1 million in Q2 2009. Net earnings before income taxes for the first half of 2010 increased to $10.5 million, compared with $6.9 million for the same period in 2009.
. Net earnings for Q2 2010 were $3.2 million, or $0.13 per share fully
diluted, versus $4.1 million, or $0.17 per share fully diluted, in the prior year. Net earnings for Q2 2010 include a current income tax expense of $0.6 million and non-cash future income tax expense of $0.9 million.
. Cash and cash equivalents, and short-term investments were $77.6
million, compared with $67.3 million at December 31, 2009.
Business Highlights
. Opened a new India Center of Excellence that is providing technology
development sales, professional services and support services.
. Broadened relationship with Cisco by becoming a Cisco Preferred
Solution Developer for the mobile packet core for 3G and 4G networks.
Successfully completed extensive interoperability testing with Cisco and, subsequent to quarter end, announced the availability of the BridgewaterR Policy Controller and Home Subscriber Server on the Cisco Unified Computing System. This enables service providers to deploy Bridgewater’s complete and pre-integrated control plane portfolio to increase scalability and business agility, and to reduce total cost of ownership.
. Added 17 new customers in the quarter, including 11 in the APAC and
EMEA regions.
Outlook
With the release of its Q2 2010 results, Bridgewater reiterated guidance for 2010. For 2010, the Company is expecting:
. Revenues of $85 to $94 million
. Net earnings before tax of $14 to $17 million
. Net earnings after tax of $10 to $12 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 six months ended June 30, 2010 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, 2010 and Management’s Discussion & Analysis of Financial Condition and Results of Operation dated June 30, 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.
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 suite provides a real-time, unified view of subscribers including entitlements, devices, networks, billing profiles, preferences and context.
Anchored by Bridgewater’s Subscriber Data BrokerT, the portfolio of carrier-grade and standards-based products includes the BridgewaterR Service Controller (AAA), the BridgewaterR Policy Controller (PCRF) and the BridgewaterR Home Subscriber Server (HSS). More than 150 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.
