Mar. 2, 2011 (Canada NewsWire Group) --
OTTAWA, March 2 /CNW/ - Bridgewater Systems (TSX: BWC), the leader in
intelligent broadband control, today announced financial results for
the three and 12 months ended December 31, 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.
"Fiscal 2010 was a successful year for Bridgewater as we delivered solid
financial performance and made good progress with our growth
initiatives," said Ed Ogonek, CEO of Bridgewater Systems. "Among the
main accomplishments, we significantly increased our customer base,
grew our presence and capabilities in EMEA and APAC, and generated
momentum in the important 4G/LTE markets."
Mr. Ogonek added: "Increasingly, mobile operators want to leverage the
strategic value of the independent intelligent control plane in solving
the challenges caused by the explosive growth in data traffic and
applications. In 2011 we will continue to expand our business
internationally and deliver portfolio innovation and expansion.
Targeted investments in these areas will enable us to capture the
significant long-term growth opportunities we see in our markets and
fortify our position as a market leader in intelligent broadband
controls."
Financial Summary
-
Revenue of $93.4 million for 2010, an increase of 40% (or 52% in USD)
compared with $66.7 million for 2009. Q4 2010 revenue was $22.2
million, compared with $20.7 million in Q4 2009.
-
Gross margin for 2010 was $64.8 million (69% of revenue) versus $45.7
million (69% of revenue) in 2009.
-
Earnings before income taxes increased to $31.3 million in 2010, versus
$12.7 million in 2009. Q4 2010 earnings before income taxes rose to
$15.7 million, compared with $4.3 million for the same period in 2009.
-
Net earnings for 2010 were $23.0 million, or $0.90 per share fully
diluted, versus $11.2 million, or $0.44 per share fully diluted, in the
prior year. For Q4 2010, net earnings were $11.8 million, or $0.46 per
share fully diluted, compared to $2.5 million, or $0.10 per share fully
diluted, in the fourth quarter of 2009.
-
Non-GAAP earnings before income taxes¹, which exclude the impact of the
recognition of non-refundable investment tax credits, were $20.4
million for full-year 2010 and $4.8 million for Q4 2010, compared with
$12.7 million and $4.3 million in the comparable 2009 periods.
-
Non-GAAP net earnings for 2010¹, which exclude the impact of the
recognition of non-refundable investment tax credits and related future
tax expenses, were $14.8 million, or $0.58 per diluted share, compared
with $11.2 million, or $0.44 per diluted share in 2009. For Q4 2010,
Non-GAAP net earnings were $3.6 million, or $0.14 per share, versus
$2.5 million, or $0.10 per share, in Q4 2009.
-
Cash and cash equivalents, and short-term investments were $67.6 million
at December 31, 2010.
Business Highlights
-
Expanded footprint with existing customers, including Verizon Wireless,
Mobily and a key mobile operator in India.
-
Increased the Company's customer base, adding 42 new service provider
customers in 2010. The Company also made further progress with its
international expansion strategy, adding 27 new customers in EMEA and
APAC.
-
Demonstrated momentum with our intelligent broadband controls portfolio.
Highlights include five new LTE customers, as well as the live
deployment with MetroPCS - the first operator to launch LTE services in
North America.
-
Developed global channel partners, including relationships with Cisco
and, subsequent to year end, the addition of Juniper Networks as a
global reseller partner.
-
Broadened product and solutions portfolio, highlighted by the
introduction of intelligent broadband controls "cookbook," RAN
Congestion solution, and Mobile Data Offload solution.
Outlook
With the release of its 2010 results, Bridgewater provided full-year
guidance based on IFRS for 2011. For 2011, the Company is expecting:
-
Revenues of $88.0 to $100.0 million
-
Earnings before taxes of $15.0 to $20.0 million
-
Net earnings of $10.5 to $14.0 million
Factors supporting Bridgewater's annual outlook include: Canadian dollar
remains at parity with US dollar, current contracted revenue and
backlog; a large installed customer base with identified growth
opportunities; 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 12 months ended December 31, 2010 can be
found at www.bridgewatersystems.com or at www.sedar.com.
Conference Call and Webcast
A conference call and webcast will be held today, Wednesday, March 2,
2011 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™ to listen to the
webcast.
About Bridgewater Systems
Bridgewater Systems, the leader in intelligent broadband controls,
provides pre-integrated solutions for mobile and converged operators to
transform their networks, optimize mobile data growth, and innovate
with new services. The Bridgewater portfolio of carrier-grade
products includes Service Controller (AAA), Policy Controller (PCRF)
and Home Subscriber Server (HSS), anchored by a common identity and
device management system. More than 150 leading service providers
worldwide leverage Bridgewater to create and deliver profitable
services to consumer, enterprise, cloud and machine markets. For more
information, visit us at www.bridgewatersystems.com.
Bridgewater, Bridgewater Systems, the Bridgewater Systems logo,
WideSpan, Smart Caps, 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.
Forward-Looking Statements
Certain statements in this release, including the estimates of future
revenues, earnings before taxes, 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;
-
visibility into the deployment plans of Bridgewater's major customers;
-
Bridgewater's ability to maintain and grow its installed customer base
in existing and emerging markets;
-
expectations regarding profile and timing of new customer acquisitions,
with associated revenue weighted toward the second half of the year;
-
expectations regarding long-term industry trends in growth in mobile
data services and applications; and
-
macroeconomic factors including expected growth in the markets served by
Bridgewater
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 March 1, 2011, 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 is exposed to risks associated with foreign exchange
fluctuations, and in particular, most of Bridgewater's revenues are
received in US dollars while most of its expenses are payable in
Canadian dollars;
-
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.
| BRIDGEWATER SYSTEMS CORPORATION |
|
|
|
|
|
| Consolidated Statements of Earnings and |
|
|
|
|
|
| Comprehensive Earnings |
|
|
|
|
|
| years ended December 31, 2010 and 2009 |
|
|
|
|
|
| (expressed in Canadian dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2010 |
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Product
|
| $ 71,198,394 |
|
$ 49,372,413
|
|
|
|
Service and support
|
| 22,177,430 |
|
17,303,896
|
|
|
|
| 93,375,824 |
|
66,676,309
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
| 28,611,395 |
|
20,951,811
|
|
|
|
|
|
|
|
|
|
Gross margin
|
| 64,764,429 |
|
45,724,498
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Sales and marketing
|
| 16,336,003 |
|
13,880,517
|
|
|
|
Research and development
|
| 23,651,683 |
|
15,718,157
|
|
|
|
General and administration
|
| 4,755,982 |
|
5,428,610
|
|
|
|
Investment tax credit carryforwards recognized
|
| (13,225,000) |
|
(2,000,000)
|
|
|
|
Bad debt (recovery) expense
|
| (49,929) |
|
(158,278)
|
|
|
|
Stock-based compensation
|
| 885,431 |
|
370,817
|
|
|
|
|
|
|
|
|
|
|
| 32,354,170 |
|
33,239,823
|
|
|
|
|
|
|
|
|
|
Earnings before undernoted items
|
| 32,410,259 |
|
12,484,675
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss
|
| (1,484,212) |
|
(189,619)
|
|
|
Interest and other income
|
| 486,204 |
|
543,585
|
|
|
Loss on disposal of property, equipment and intangible assets
|
| (133,855) |
|
(130,820)
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
| 31,278,396 |
|
12,707,821
|
|
|
|
|
|
|
|
|
|
Current income tax expense
|
| 2,325,000 |
|
2,000,000
|
|
|
Future income tax expense (recovery)
|
| 5,958,000 |
|
(496,000)
|
|
|
|
|
|
|
|
|
|
NET EARNINGS AND COMPREHENSIVE EARNINGS
|
| $ 22,995,396 |
|
$ 11,203,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share - basic
|
| $ 0.93 |
|
$ 0.46
|
|
|
|
|
|
|
|
|
|
Net earnings per share - diluted
|
| $ 0.90 |
|
$ 0.44
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding - basic
|
| 24,671,459 |
|
24,179,224
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding - diluted
|
| 25,586,245 |
|
25,248,147
|
|
|
|
|
|
|
|
|
| BRIDGEWATER SYSTEMS CORPORATION |
|
|
|
|
| Consolidated Balance Sheets |
|
|
|
|
| as at December 31, 2010 and 2009 |
|
|
|
|
| (expressed in Canadian dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2010 |
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
| $ 61,711,508 |
|
$ 53,828,859
|
|
|
Short-term investments
|
| 5,886,942 |
|
13,459,190
|
|
|
Accounts receivable
|
| 22,076,889 |
|
24,879,197
|
|
|
Unbilled receivables
|
| 2,699,631 |
|
1,360,741
|
|
|
Deferred cost of sales
|
| 3,140,423 |
|
12,324,813
|
|
|
Prepaid expenses and other assets
|
| 2,984,933 |
|
3,229,227
|
|
|
Investment tax credit recoverable
|
| 1,600,000 |
|
-
|
|
|
Future income tax asset
|
| 1,775,000 |
|
5,113,000
|
|
|
|
|
|
|
|
|
| 101,875,326 |
|
114,195,027
|
|
|
|
|
|
|
|
INVESTMENT TAX CREDIT RECOVERABLE
|
| 9,300,000 |
|
-
|
|
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
|
| 2,576,371 |
|
3,604,811
|
|
FUTURE INCOME TAX ASSET
|
| 1,083,000 |
|
3,703,000
|
|
RECOVERABLE TAXES
|
| 394,641 |
|
-
|
|
|
|
|
|
|
|
|
| $ 115,229,338 |
|
$ 121,502,838
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
| $ 7,043,848 |
|
$ 9,617,441
|
|
|
Deferred revenue
|
| 15,677,226 |
|
44,288,403
|
|
|
|
|
|
|
|
|
| 22,721,074 |
|
53,905,844
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
| 71,055,409 |
|
69,872,842
|
|
|
Contributed surplus
|
| 1,641,501 |
|
908,194
|
|
|
Retained earnings (Deficit)
|
| 19,811,354 |
|
(3,184,042)
|
|
|
|
|
|
|
|
|
| 92,508,264 |
|
67,596,994
|
|
|
|
|
|
|
|
|
| $ 115,229,338 |
|
$ 121,502,838
|
|
|
|
|
|
|
| BRIDGEWATER SYSTEMS CORPORATION |
|
|
|
|
|
| Consolidated Statements of Cash Flows |
|
|
|
|
|
| years ended December 31, 2010 and 2009 |
|
|
|
|
|
| (expressed in Canadian dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2010 |
|
2009
|
|
|
|
|
|
|
|
|
NET INFLOW (OUTFLOW) OF CASH RELATED
|
|
|
|
|
|
|
TO THE FOLLOWING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
|
|
|
|
|
|
|
|
Net earnings
|
|
| $ 22,995,396 |
|
$ 11,203,821
|
|
|
Items not affecting cash
|
|
|
|
|
|
|
|
|
Bad debt expense
|
|
| - |
|
332,461
|
|
|
|
Stock-based compensation
|
|
| 885,431 |
|
370,817
|
|
|
|
Foreign exchange loss on cash held in foreign currency
|
|
| 1,378,972 |
|
3,658,289
|
|
|
|
Loss on disposal of property, equipment and intangibles
|
|
| 133,855 |
|
130,820
|
|
|
|
Future income tax expense (recovery)
|
|
| 5,958,000 |
|
(496,000)
|
|
|
|
Investment tax credits recoverable
|
|
| (10,900,000) |
|
-
|
|
|
|
Amortization of property, equipment and intangible assets
|
|
| 1,347,579 |
|
1,494,768
|
|
|
|
|
|
|
|
|
|
|
| 21,799,233 |
|
16,694,976
|
|
|
|
|
|
|
|
|
|
Recoverable taxes paid
|
|
| (394,641) |
|
-
|
|
|
Changes in non-cash operating working
|
|
|
|
|
|
|
|
|
capital items
|
|
| (20,196,188) |
|
5,531,388
|
|
|
|
|
|
|
|
|
|
|
| 1,208,404 |
|
22,226,364
|
|
|
|
|
|
|
|
|
|
INVESTING
|
|
|
|
|
|
|
|
|
Redemption (purchase) of short-term investments
|
|
| 7,572,248 |
|
(13,459,190)
|
|
|
|
Purchases of property, equipment and intangible assets
|
|
| (549,474) |
|
(1,778,444)
|
|
|
|
|
|
|
|
|
|
|
| 7,022,774 |
|
(15,237,634)
|
|
|
|
|
|
|
|
|
|
FINANCING
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common shares
|
|
| 1,030,443 |
|
2,621,796
|
|
|
|
Repurchase of shares under normal course issuer bid
|
|
| - |
|
(2,487,149)
|
|
|
|
|
|
|
|
|
|
|
| 1,030,443 |
|
134,647
|
|
|
|
|
|
|
|
|
Foreign exchange loss on cash held in foreign currency
|
|
| (1,378,972) |
|
(3,658,289)
|
|
|
|
|
|
|
|
|
NET CASH INFLOW
|
|
| 7,882,649 |
|
3,465,088
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS,
|
|
|
|
|
|
|
BEGINNING OF PERIOD
|
|
| 53,828,859 |
|
50,363,771
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS,
|
|
|
|
|
|
|
END OF PERIOD
|
|
| $ 61,711,508 |
|
$ 53,828,859
|
|
|
|
|
|
|
|
|
Supplementary information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash on hand and bank balances
|
|
| $ 16,151,440 |
|
$ 17,485,505
|
|
|
Cash equivalents
|
|
| 45,560,068 |
|
36,343,354
|
|
|
|
|
|
|
|
|
|
Total cash and cash equivalents
|
|
| $ 61,711,508 |
|
$ 53,828,859
|
|
|
|
|
|
|
|
|
|
Interest received
|
|
| $ 481,085 |
|
$ 485,749
|
|
|
Taxes paid
|
|
| $ 394,641 |
|
$ -
|
|
|
|
|
|
|
|
|
| BRIDGEWATER SYSTEMS CORPORATION |
|
|
|
|
|
|
|
|
|
| Consolidated Statements of Shareholders' Equity |
|
|
|
|
|
|
|
|
|
| years ended December 31, 2010 and 2009 |
|
|
|
|
|
|
|
|
|
| (expressed in Canadian dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
|
|
Contributed
|
|
Retained Earnings
|
|
Shareholders'
|
|
| Number |
| Amount |
| Surplus |
| (Deficit) |
| Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2008
|
22,969,701
|
|
$ 68,444,332
|
|
$ 834,041
|
|
$ (13,390,664)
|
|
$ 55,887,709
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
-
|
|
-
|
|
370,817
|
|
-
|
|
370,817
|
|
Repurchase of shares under normal course issuer bid
|
(528,485)
|
|
(1,489,950)
|
|
-
|
|
(997,199)
|
|
(2,487,149)
|
|
Exercise of stock options
|
1,991,252
|
|
2,918,460
|
|
(296,664)
|
|
-
|
|
2,621,796
|
|
Net earnings
|
-
|
|
-
|
|
-
|
|
11,203,821
|
|
11,203,821
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2009
|
24,432,468
|
|
$ 69,872,842
|
|
$ 908,194
|
|
$ (3,184,042)
|
|
$ 67,596,994
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
-
|
|
-
|
|
885,431
|
|
-
|
|
885,431
|
|
Exercise of stock options
|
453,507
|
|
1,182,567
|
|
(152,124)
|
|
-
|
|
1,030,443
|
|
Net earnings
|
-
|
|
-
|
|
-
|
|
22,995,396
|
|
22,995,396
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at December 31, 2010 | 24,885,975 |
| $ 71,055,409 |
| $ 1,641,501 |
| $ 19,811,354 |
| $ 92,508,264
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP Financial Measures
The following table shows non-GAAP financial measures for the three and
twelve month periods ended December 31, 2010 and 2009. These non-GAAP
financial measures which are used internally by management to evaluate
the Company's ongoing performance exclude the impact of the Company
recognizing the balance of non-refundable investment tax credits of
$10.9 million as investment tax credits recoverable and related future
income tax expense of $2.7 million (referred to as "Excluded items").
The Company provides these non-GAAP financial measures as it is in the
Company's view that the recognition of the investment tax credit
recoverable is (i) not part of its normal day-to-day operations and
(ii) represents a "non-cash" accounting benefit that do not increase
its cash resources. Accordingly, the Company believes that such
financial measures may also be useful to investors in enhancing their
understanding of the Company's operating performance. The following
non-GAAP measures are not recognized under Canadian GAAP and do not
have a standardized meaning prescribed by Canadian GAAP. Therefore it
is unlikely to be comparable to similarly titled measures reported by
other issuers. Non-GAAP financial measures should be considered in the
context of the Company's GAAP results.
|
|
Three months ended December 31,
|
Fiscal year ended December 31,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(unaudited)
|
|
|
|
| (in thousands of dollars, except percentages and per share amounts)
|
|
|
|
|
|
|
| Net earnings before income taxes |
$ 15,671
|
$ 4,342
|
$ 31,278
|
$ 12,708
|
| Excluded items |
|
|
|
|
|
|
Investment tax credits recognized
|
(10,900)
|
-
|
(10,900)
|
-
|
| Non-GAAP net income before income taxes |
$ 4,771
|
$ 4,342
|
$20,378
|
$12,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
Fiscal year ended December 31,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(unaudited)
|
|
|
|
| (in thousands of dollars, except percentages and per share amounts) |
|
|
|
|
|
|
| Net earnings |
$ 11,770
|
$ 2,525
|
$ 22,995
|
$ 11,204
|
| Excluded items |
|
|
|
|
|
|
Investment tax credits recognized
|
(10,900)
|
-
|
(10,900)
|
-
|
|
|
Future tax expense
|
2,700
|
-
|
2,700
|
-
|
| Non-GAAP net earnings |
$ 3,570
|
$ 2,525
|
$ 14,975
|
$ 11,204
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per share |
0.46
|
0.10
|
0.90
|
0.44
|
|
|
Impact of excluded items on diluted earnings per share
|
(0.32)
|
-
|
(0.32)
|
-
|
| Non-GAAP diluted earnings per share |
0.14
|
0.10
|
0.58
|
0.44
|
Investor Relations
Kim Butler, Chief Financial Officer
Bridgewater Systems
kim.butler@bridgewatersystems.com
+1 613-591-9104 extension 6023
Craig Armitage
The Equicom Group Inc.
carmitage@equicomgroup.com
+1 416-815-0700 extension 278
Media Relations
Ann Hatchell, Director Solutions & Partner Marketing
Bridgewater Systems
Ann.Hatchell@bridgewatersystems.com
+1 613-591-9104 extension 2030