Bitstream Inc. Reports First Quarter 2005 Results.CAMBRIDGE, Mass. -- Adoption of Pageflex technologies and strong MyFonts.com Sales Drive sales drive n → promoción f de ventas sales drive n → campagne commerciale, animation f des ventes 24% Year-Over-Year Quarterly Revenue Growth in Q1 2005 Bitstream Inc. (Nasdaq: BITS) today reported that its total revenue increased $666,000 or 24% to $3,396,000 for the three months ended March 31, 2005 as compared to $2,730,000 for the three months ended March 31, 2004. The Company's operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the three months ended March 31, 2005 decreased $265,000 or 76% to $(85,000) from $(350,000) for the three months ended March 31, 2004. The Company's net loss for the three months ended March 31, 2005 decreased $273,000 or 79% to $(72,000) from $(345,000) for the three months ended March 31, 2004. The Company's cash and cash equivalents at March 31, 2005 totaled $4,095,000, a decrease of $310,000 as compared to $4,405,000 at December 31, 2004. "We exceeded our goal of growing first quarter revenue by 20% allowing us to achieve our highest first quarter calendar year revenue level since the Company went public and the highest quarterly revenue of any quarter since 1997." said Anna M. Chagnon, President and Chief Executive Officer. "The increase in revenue helped the Company decrease its net loss by 79% to $(72,000) for the quarter. 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." FIRST QUARTER 2005 HIGHLIGHTS AND OTHER RECENT DEVELOPMENTS --During the quarter ended March 31, 2005, approximately 9,500 new users downloaded and set up accounts for our ThunderHawk browser browser Software that allows a computer user to find and view information on the Internet. The first text-based browser for the World Wide Web became available in 1991; Web use expanded rapidly after the release in 1993 of a browser called Mosaic, which used bringing the total number of ThunderHawk accounts established to date to more than 69,000 as of March 31, 2005. --During the first quarter of 2005, the Company licensed its font font or typeface or type family Assortment or set of type (alphanumeric characters used for printing), all of one coherent style. Before the advent of computers, fonts were expressed in cast metal that was used as a template for printing. technology and fonts to approximately 40 OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customers, including major manufacturers in the gaming software, digital television, and consumer electronics industries. These placements are a result of our focus on expanding our customer base and commercial applications for our font and font rendering See render. (graphics, text) rendering - The conversion of a high-level object-based description into a graphical image for display. For example, ray-tracing takes a mathematical model of a three-dimensional object or scene and converts it into a bitmap image. technologies. --More than 24,000 users registered during the first quarter on the Company's font-related Web site bringing the total registered users as of March 31, 2005 to over 245,000. More than 45% of the orders placed on the Web site during the first quarter were submitted by users who had previously made purchases. --The number of foundries' making their fonts available on the Company's www.myfonts.com Web site exceeds 210 as of March 31, 2005. The Company also announced that it had sold its 1,000,000th font from its font-related Web site on January 17, 2005. --On January 10, 2005, the Company announced an agreement with ICED (www.iced.net), the International Center for Entrepreneurial en·tre·pre·neur n. A person who organizes, operates, and assumes the risk for a business venture. [French, from Old French, from entreprendre, to undertake; see enterprise. Development, that will bring Pageflex Storefront, with its un-matched document customization and online ordering capabilities, to leading centers among its franchise network, which includes Kwik Kopy Printing, American Wholesale Thermographers, Copy Club, The Ink Well, Franklin's Printing, and Kwik Kopy Business Centers. --On January 18, 2005, the Company announced the release of Pageflex Storefront 2.0, expanding the workflow The automatic routing of documents to the users responsible for working on them. Workflow is concerned with providing the information required to support each step of the business cycle. capabilities for online document customization storefronts with new features including enhanced user and group privilege definition, email notifications, automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. order processing, and user-controlled download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and pick-up of final output. --On March 7, 2005, the Company announced that Wishblade Inc. licensed font sets for use with the Wishblade(TM) Personal Media Cutter cutter, small, one-masted sailing vessel, with a rig similar to that of a sloop except that it usually has a sliding bowsprit and a topmast. From 1800 to 1830 cutters were in service between England and France. . Wishblade selected the fonts from Bitstream's new typeface The design of a set of printed characters, such as Courier, Helvetica and Times Roman. The terms "typeface" and "font" are used interchangeably, but the typeface is the primary design, while the font is the particular implementation and variation of the typeface, such as bold or italics library of "Breaking the Norm" fonts. --On March 8, 2005 the Company announced a new agreement to supply its CCTV CCTV abbr. closed-circuit television CCTV closed-circuit television Font Set to Digeo, Inc. for use with its Moxi(TM) Media Center. Enabling the display of FCC-standard closed captioning, the CCTV Font set helps bring the Moxi Media Center experience to life for the more than 28 million Americans with hearing or vision impairments. --On March 14, 2005, the Company announced the release of ThunderHawk 2.0 Smartphone A cellular telephone with information access. It provides digital voice service as well as any combination of e-mail, text messaging, pager, Web access, voice recognition, still and/or video camera, MP3, TV or video player and organizer (see PDA). Edition, the company's award-winning technology that provides end users and enterprise clients with a familiar, yet secure, desktop browsing See browse. experience on Windows Mobile The Windows platform from Microsoft for handheld devices, including PDAs, cellphones and Portable Media Centers. See Pocket PC, Pocket PC Phone Edition, Smartphone and Portable Media Center. devices. --On March 29, 2005, the Company announced that the Boeing business unit, Connexion by Boeing Connexion by Boeing (CBB) was an in-flight online connectivity service from Boeing. This service allowed travellers to access a high-speed internet connection while on board a plane in flight through a wired Ethernet or a wireless 802.11 Wi-Fi connection. , has licensed Bitstream's Unicode font for its mobile Internet Refers to gaining access to the Internet using a lightweight, handheld device. See Mobile IP, PDA, smartphone and mobile TV. service. The agreement will help ensure that airline passengers from around the world, who wish to access the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , will be able to do so using a simplified font recognition process. --On April 25, 2005, Creo Inc. (NASDAQ: CREO, TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension : CRE CRE Commercial Real Estate CRE Corporate Real Estate CRE Commission for Racial Equality (Scotland) CRE CCD (Charge Coupled Device) and Readout Electronics CRE Camp Response Element ) announced the development of JDF JDF Job Definition Format (XML-based format for workflow and control information) JDF Jamaica Defence Force JDF Juvenile Diabetes Foundation International JDF Job Description Form JDF Japan Defense Force JDF Jackson Drop Forge Company integration between the workflow applications A workflow application is where various applications, components and people must be involved in the processing of data to complete an instance of a process. For example, consider a purchase order that moves through various departments for authorization and eventual purchase. of six leading software vendors, including Bitstream's Pageflex Storefront and the Creo Spire(TM) color server. Creo and these six companies share a common goal of delivering integrated end-to-end digital printing solutions to customers. CONFERENCE CALL REMINDER Today, May 9, 2005, at 4:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. , Bitstream will host a conference call with the financial community to discuss its first quarter 2005 results: --International Dial-in number: 703-639-1228 --Domestic Dial-in number: 866-261-7280 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 May 19, 2005 (access code): 701368 --International Replay number: 703-925-2533 --Domestic Replay number: 888-266-2081 This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2004. About Bitstream Bitstream Inc. (NASDAQ: BITS) is a software development company that makes communications compelling. Bitstream enables customers worldwide to render high-quality text, browse (1) To view the contents of a file or a group of files. Browser programs generally let you view data by scrolling through the documents or databases. In a database program, the browse mode often lets you edit the data. See Web browser. the Web on wireless devices, select from the largest collection of fonts online, and customize documents over the Internet. Its core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
Bitstream and MyFonts.com are registered trademarks, 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 companies.
Bitstream Inc.
Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
Three Months Ended
March 31,
---------------------
2005 2004
---------- ---------
Revenue:
Software license $ 2,809 $ 2,284
Services 587 446
---------- ----------
Total revenue 3,396 2,730
Cost of revenue:
Software license 1,005 681
Services 316 180
---------- ----------
Total cost of revenue 1,321 861
---------- ----------
Gross profit 2,075 1,869
---------- ----------
Operating expenses:
Marketing and selling 669 693
Research and development 1,006 1,030
General and administrative 485 496
---------- ----------
Total operating expenses 2,160 2,219
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Operating loss (85) (350)
Other income, net 14 28
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Loss before provision for income taxes (71) (322)
Provision for income taxes 1 23
---------- ----------
Net loss $ (72) $ (345)
========== ==========
Basic and diluted net earnings
(loss) per share $ (0.01) $ (0.04)
========== ==========
Basic and diluted weighted average
shares outstanding 8,640 8,449
========== ==========
Bitstream Inc.
Consolidated Balance Sheets
(In Thousands)
March 31, December 31,
ASSETS 2005 2004
-------------- ------------
Current assets:
Cash and cash equivalents $ 4,095 $ 4,405
Accounts receivable, net 1,262 962
Prepaid expenses and other current
assets 210 233
------------ ------------
Total current assets 5,567 5,600
------------ ------------
Property and equipment, net 338 282
------------ ------------
Other assets:
Restricted cash 250 250
Goodwill 727 727
Intangible assets 163 174
------------ ------------
Total other assets 1,140 1,151
------------ ------------
Total assets $ 7,045 $ 7,033
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 967 $ 278
Accrued expenses 635 1,199
Deferred revenue 753 792
------------ ------------
Total current liabilities 2,355 2,269
------------ ------------
Long-term liabilities 198 200
------------ ------------
------------ ------------
Total liabilities 2,553 2,469
------------ ------------
Total stockholders' equity 4,492 4,564
------------ ------------
Total liabilities and stockholders'
equity $ 7,045 $ 7,033
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