Bridgewater Systems (TSX: BWC) announced financial results for the fourth quarter and year ended December 31, 2007. All amounts are stated in Canadian dollars.
Fiscal 2007 Highlights
- Revenue increased 27% to $39.2 million, compared with $31.0 million in fiscal 2006;
- Revenue in common currency rose 32% over 2006;
- Sales outside North America increased to 18% of total revenue, from 12% in 2006;
- Q4 2007 represented the Company's fifteenth consecutive quarter of profitability;
- Customer deployments through direct and indirect channels surpassed 100;
- Completed an initial public offering on the Toronto Stock Exchange in December 2007, raising net proceeds of $17.3 million.
"Our solid financial performance continued in 2007, highlighted by record full-year revenue. Our core CDMA business continued to perform strongly, and we made significant progress building a platform for growth in 3G GSM and 4G access technologies such as WiMAX and LTE," said Ed Ogonek, CEO of Bridgewater Systems. "We expect increased operating margins and continued strong top-line growth this year as we focus on increasing our penetration of our existing customer base, growing our business outside North America, expanding our product portfolio, and capitalizing on the evolution of broadband 3G and 4G network technologies."
Financial Review
Fourth Quarter 2007
For the fourth quarter of 2007, revenue was $11.8 million, a 24% increase from the fourth quarter of 2006. Net income for the fourth quarter of 2007 was $1.9 million, or $0.09 per diluted share, compared to $9.2 million, or $0.45 per diluted share, in the comparable period. The most significant changes year-over-year relate to:
- a future income tax recovery which decreased by $7.0 million,
- net foreign exchange fluctuations of $0.8 million, and
- a $0.5 million decrease in Canadian federal investment tax credits (ITCs). As a public entity, fewer ITCs are available to the Company.
Excluding these items, net income would have been $1.4 million in the fourth quarter of 2007, compared to $0.3 million in the same period in 2006. This is a non-GAAP measure that does not have any prescribed meaning by GAAP and is unlikely to be comparable to similar measures presented by other issuers. This may be a useful measure for investors to help further understand how operating results compare excluding these items.
Fiscal 2007
For the year ended December 31, 2007, revenue rose 27% to $39.2 million, compared with $31.0 million in the prior year. Revenue growth in common currency was 32%. Currently, greater than 90% of the Company's revenue is in U.S. dollars. Net income for the year ended December 31, 2007 was $2.7 million, or $0.13 per diluted share, compared to $10.8 million, or $0.55 per diluted share, in the prior year. The major differences in net income for fiscal 2007 versus fiscal 2006 related to:
- a future income tax recovery which decreased by $7.0 million,
- net foreign exchange fluctuations of $1.8 million, and
- a $1.0 million decline in ITCs.
Excluding these items, net income would have been $2.9 million in fiscal 2007, compared to $1.2 million in fiscal 2006, which provides management assessment of income from operations activities. This is a non-GAAP measure that does not have any prescribed meaning by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. This may be auseful measure for investors to help further understand how operating results compare excluding these items.
Operational Highlights
During 2007, Bridgewater made progress building a solid foundation for growth in new and adjacent wireless markets such as 3G GSM, WiMAX and LTE. The Company completed core development to extend its product offerings into 3G GSM and WiMAX solutions. Bridgewater's AAA Service Controller was certified by the WiMAX Forum in August. Bridgewater also completed a number of WiMAX interoperability tests with key partners such as Alvarion, Motorola, Nortel, Nokia Siemens, Starent, Verint Systems and Verisign.
By the end of the year, the Company had two 3G GSM customers in Asia and active WiMAX engagements with major providers in North America, EMEA and APAC. To date, Bridgewater has been selected by seven WiMAX service providers around the world, including a Tier 1 North American service provider. These selections are expected to lead to network deployments during 2008. The Company has also executed WiMAX reseller agreements with Alvarion, Motorola and Nortel.
Outlook
For 2008, the Company expects revenue growth to be consistent with the prior year. Revenue growth in our core CDMA market is expected due to the expansion of broadband services, the introduction of an integrated solution, and product expansion to support open access architectures and early transition toward 4G deployments. The Company anticipates revenue growth and diversification from Bridgewater's expansion into the 3G GSM and 4G markets through direct sales and channel partner relationships.
During 2008, the Company is planning to introduce an integrated system that will provide hardware, software and services. This new product will further simplify deployment and expansion of Bridgewater's software in the network by providing a single integrated platform to customers. The Company expects to begin introducing this product to selected customers in late 2008, with broader market deployments beginning in 2009. -- www.cnxmarketlink.com
Comment and add to the story without registration, but keep the comments meaningful please. Links are not accepted.
