Bridgewater Posts Q1

Net earnings of $4.6M, or $0.19 per share fully diluted, compared with net earnings of $2.9M, or $0.12 per share fully diluted, in Q1 2009

April 29, 2010

2 Min Read

OTTAWA -- Bridgewater Systems (TSX: BWC), the mobile personalization company, today announced financial results for the three months ended March 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.

"Current customer engagements drove significant increases in revenues and earnings in the first quarter," said Ed Ogonek, CEO of Bridgewater Systems. "Mobile service providers globally are increasingly challenged by the surge in data traffic, which is generating growing interest in our intelligent control solutions, reflected in a robust new business pipeline. We are focused on converting this interest into new customer wins during 2010, particularly outside North America, while expanding our business with current customers as they manage quickly growing mobile data traffic across 3G and 4G networks."

Financial Highlights

- Revenue of $24.5 million for Q1 2010 represents an increase of 74% compared with $14.0 million for Q1 2009. Product revenue for Q1 2010 was $18.9 million, an increase of 76%, compared with $10.7 million for Q1 2009. Service and support revenue was $5.6 million for Q1 2010 compared to $3.3 million for Q1 2009, an increase of 71%.

- The increase in product revenue primarily reflects the delivery and acceptance of the WideSpan systems for Verizon Wireless and the advancement of revenue due to an expected transition in the Company's business with Verizon Wireless. Going forward, the Company expects continued license of its software and solutions by Verizon Wireless in a software-based transaction license model as Verizon Wireless transitions its requirements to provide for greater hardware platform flexibility and to support increased transaction capacity.

- Q1 2010 gross margin was $16.3 million (67% of revenue) versus $10.7 million (76% of revenue) in Q1 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 Q1 2010 were $9.9 million (40% of revenue), net of $0.4 million of investment tax credits, compared with $8.2 million (58% of revenue) in the same period last year.

- Net earnings before income taxes rose to $5.7 million in Q1 2010, versus $2.8 million in Q1 2009.

- Net earnings for Q1 2010 increased to $4.6 million, or $0.19 per share fully diluted, versus $2.9 million, or $0.12 per share fully diluted, in the prior year.

- Cash and cash equivalents, and short-term investments grew to $84.3 million, compared with $67.3 million at December 31, 2009.

Bridgewater Systems Corp. (Toronto: BWC)

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