| Bitstream Inc. Reports Second Quarter 2004 Results Consolidated Revenue for the second quarter exceeds $2.8 million for the first time in six years CAMBRIDGE, MA — August 11, 2004 — Bitstream (NASDAQ: BITS) today reported that consolidated revenue increased $54,000 or 2.0% to $2,807,000 for the three months ended June 30, 2004 as compared to $2,753,000 for the three months ended June 30, 2003 and increased $77,000 or 2.8% as compared to $2,730,000 for the three months ended March 31, 2004. Revenue for the six months ended June 30, 2004 increased $752,000 or 15.7% to $5,537,000 as compared to $4,785,000 for the six months ended June 30, 2003. The Company's consolidated net loss for the three months ended June 30, 2004 was $(160,000), or $(0.02) per share, as compared to net income of $132,000 or $0.01 per diluted share for the three months ended June 30, 2003. The Company's cash position at June 30, 2004 was $ 4,167,000, a decrease of $38,000 from $4,205,000 at March 31, 2004. This compares favorably to a cash decrease of $339,000 for the three months ended June 30, 2003. The cash decrease for the six months ended June 30, 2004 was $200,000 versus a decrease of $1,181,000 for the six months ended June 30, 2003. "Driven by increased market demand for our Pageflex publishing technologies, we achieved our highest quarterly revenues since 1998 during the second quarter, exceeding those from a very strong second quarter last year" said Anna M. Chagnon, President and Chief Executive Officer. "As a result, we came very close to being cash flow breakeven for the quarter, as cash decreased by only $38,000 as compared to a decrease of $339,000 during the same period of the prior year. Given our second quarter performance, the Company remains well positioned to achieve its financial and business goals for the year ended December 31, 2004, including increasing revenue by more than 20% as compared to 2003. To achieve our near and long-term goals, we will continue to devote substantial resources to sales and marketing during the remainder of 2004 to support a growing customer base and prospect list for all of our product lines. We believe the near-term investment in sales and marketing will result in greater revenue growth for the Company." SECOND QUARTER HIGHLIGHTS
CONFERENCE CALL REMINDER
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 call Kristen Colpus at Bitstream: 617.497.6222. A replay of the conference call will be available until 08/16/2004 (access code 531828):
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, 2003. About Bitstream 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 Six Months Ended
Ended June 30, June 30,
----------------- -----------------
2004 2003 2004 2003
------- ------- ------- -------
Revenue:
Software license $ 2,357 $ 2,486 $ 4,641 $ 4,230
Services 450 267 896 555
------- - ------- -------- -------
Total revenue 2,807 2,753 5,537 4,785
Cost of revenue:
Software license 796 609 1,477 1,148
Services 195 114 375 251
------- - ------- -------- -------
Total cost of revenue 991 723 1,852 1,399
------- - ------- -------- -------
Gross profit 1,816 2,030 3,685 3,386
------- - ------- -------- -------
Operating expenses:
Marketing and selling 682 605 1,375 1,325
Research and development 940 959 1,970 2,002
General and administrative 439 426 930 998
------- - ------- -------- -------
Total operating expenses 2,061 1,990 4,275 4,325
------- - ------- -------- -------
(Loss) income from operations (245) 40 (590) (939)
Other income:
Income on investment in
DiamondSoft, Inc. 91 99 91 192
Other income, net 15 21 43 11
------- - ------- -------- -------
(Loss) income before
provision for income
taxes (139) 160 (456) (736)
Provision for income taxes 21 28 49 49
------- - ------- -------- -------
Net (loss) income $ (160) $ 132 $ (505) $ (785)
======= = ======= ======== =======
Basic net (loss) income per
share $ (0.02) $ 0.02 $ (0.06) $ (0.09)
======= = ======= ======== =======
Diluted net (loss) income
per share $ (0.02) $ 0.01 $ (0.06) $ (0.09)
======= = ======= ======== =======
Basic weighted average shares
outstanding 8,483 8,349 8,466 8,349
======= = ======= ======== =======
Diluted weighted average
shares outstanding 8,483 8,901 8,466 8,349
======= = ======= ======== =======
Bitstream Inc.
Consolidated Balance Sheets
(In Thousands)
ASSETS June 30, Dec. 31,
2004 2003
-------- --------
Current assets:
Cash and cash equivalents $ 4,167 $ 4,367
Accounts receivable, net 891 1,016
Prepaid expenses and other current assets 144 60
------ --------
Total current assets 5,202 5,443
------ --------
Property and equipment, net 316 347
------ --------
Other assets:
Restricted cash 250 250
Goodwill 727 727
Intangible assets 214 243
Other assets 1 1
------ --------
Total other assets 1,192 1,221
------ --------
Total assets $ 6,710 $ 7,011
====== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 342 $ 513
Accrued expenses 887 877
Current portion of deferred revenue 716 547
------ --------
Total current liabilities 1,945 1,937
------ --------
Long-term liabilities 202 135
------ --------
Total liabilities 2,147 2,072
------ --------
Total stockholders' equity 4,563 4,939
------ --------
Total liabilities and stockholders' equity $ 6,710 $ 7,011
====== ========
Contact Anna Chagnon or James P. Dore |