Bridgewater Systems Reports Q1 2009 Results and Updates Outlook for 2009



    
    -   Q1 Revenue: $14.0 million - an increase of 64% year over year

    -   Q1 Net Earnings: $2.9 million ($0.12 per share) compared with net
        loss of $0.7 million ($0.03 per share) in Q1 2008

    -   Cash and Cash Equivalents: $ 53.9 million
    

    OTTAWA, May 1 /CNW/ - Bridgewater Systems (TSX: BWC), the mobile
personalization company, today announced first quarter revenues of $14.0
million and net earnings of $2.9 million or $0.12 per share. All amounts are
stated in Canadian dollars unless otherwise noted.
    "We showed strong sales momentum in the first quarter due to a solid base
of customer engagements highlighted by additional policy and WideSpan
revenue," said Ed Ogonek, CEO of Bridgewater Systems. "This growth resulted in
a sizeable increase in profitability, demonstrating the success of our
business model as we expand our mobile personalization portfolio. Bridgewater
was recently recognized by Infonetics Research as the global market leader in
mobile policy - an area of growth for us as service providers seek to manage
mobile data traffic growth and deliver personalized services."
    "We continue to diversify our customer base, adding six new customers in
the quarter including four in EMEA, one in the U.S. and one in Asia. Our
improved outlook for 2009, which includes revenue of $54 to $58 million
(representing growth of 23% to 31%) and net earnings of $7 to $9 million, is
reinforced by ongoing growth in mobile data traffic and revenue. With a strong
cash position, long-term contracts that provide significant revenue
visibility, a large installed base of customers and leadership in high growth
markets, we are well positioned to achieve these targets."

    
    Financial Highlights

    -   Q1 2009, revenue of $14.0 million, compared to $8.6 million for the
        same period last year, representing an increase of 64%. The increase
        is mainly due to the delivery of the Policy Controller solution with
        a Tier 1 mobile service provider and the delivery of the WideSpan
        integrated solution with Verizon Wireless and Cricket Communications.

    -   Revenue derived from the migration of 3G to 4G networks contributed
        11% of revenue, compared with 8% in Q1 2008; CDMA-EVDO customers
        accounted for 63% of revenue versus 60% in the prior year; and
        wireline revenue accounted for 26% of total revenue, most of which
        was related to the Alcatel-Lucent Source Code License Agreement and
        resale of products and services through the Alcatel-Lucent reseller
        agreement.

    -   Gross margin was $10.7 million (76% of revenue) versus $6.8 million
        (79% of revenue) in Q1 2008.

    -   Net earnings were $2.9 million, or $0.12 per share (basic and
        diluted), compared with a net loss of $0.7 million, or $0.03 per
        share (basic and diluted), in the prior year period.

    -   Cash as at March 31, 2009 was $53.9 million, compared with $50.4
        million as at December 31, 2008. The $3.6 million net cash inflow was
        primarily the result of net earnings of $2.9 million and net proceeds
        from the exercise of options of $1.7 million.

    -   During the quarter, Bridgewater acquired 53,235 common shares for
        $0.2 million on the Toronto Stock Exchange (TSX) pursuant to the
        Normal Course Issuer Bid (NCIB) announced on March 13, 2009.

    Business Highlights

    -   Bridgewater secured a multi-million dollar order with a Tier 1 mobile
        service provider which provides further validation of our market
        leadership in policy control.

    -   Subscriber Data Broker was launched which provides open access to
        third-party applications, and rapidly creates and delivers a
        personalized subscriber experience.

    -   New PCRF-compliant policy control systems were unveiled that
        intelligently manage network resources, applications, and subscriber
        policies in real time.

    -   A current customer, Iusacell, is live with Bridgewater Systems
        solutions for 3G Mobile Services. Their 3G deployment now serves over
        1 million subscribers in Mexico.

    -   Bridgewater's WideSpan System was installed at Cricket Communications
        to support mobile data and subscriber acquisition.
    

    Outlook

    Based on the strong Q1 performance, Bridgewater updates annual outlook
for 2009 for revenues of between $54 million and $58 million (representing
annual growth of 22-31%) and net earnings of between $7 million and $9
million. The market outlook for Bridgewater's solutions remains positive,
however a difficult global economic environment will continue to be an
overriding theme for 2009.
    Factors supporting Bridgewater's annual outlook include: high revenue
visibility due to significant multi-year contracts with Tier 1 customers; a
large installed customer base in existing and emerging markets; long-term
industry trends, particularly the growth in mobile data services and
applications; and a balance sheet with cash of $53.9 million and no debt.
    A complete set of financial statements and the management's discussion
and analysis for the three months ended March 31, 2009 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, Friday, May 1, 2009, at
8:30 am EDT to discuss this announcement. The telephone numbers to access the
call are 416-644-3416 or 1-800-733-7560. To access the live webcast, please
visit www.bridgewatersystems.com or www.newswire.ca. Participants will require
Windows Media Player(TM) to listen to the webcast.

    About Bridgewater Systems

    Bridgewater Systems, the mobile personalization company, enables service
providers to efficiently manage and profit from mobile data services, content
and commerce. The company's market leading mobile personalization portfolio
provides a real-time, unified view of subscribers including entitlements,
devices, networks, billing profiles, preferences and context. Anchored by
Bridgewater's Subscriber Data Broker(TM), the portfolio of carrier-grade and
standards-based products includes the Bridgewater(R) Service Controller (AAA),
the Bridgewater(R) Policy Controller (PCRF) and the Bridgewater(R) Home
Subscriber Server (HSS). More than 120 leading service providers including
America Movil, Bell Canada, Clearwire, Hutchison Telecom, Iusacell, Scartel,
SmarTone-Vodafone, Sprint, Tata Teleservices, Tatung, Telmex, Telstra, and
Verizon Wireless use Bridgewater's solutions to rapidly deliver innovative
mobile services to over 150 million subscribers. For more information, visit
us at www.bridgewatersystems.com.
    Bridgewater, Bridgewater Systems, the Bridgewater Systems logo, WideSpan,
Subscriber Data Broker and Smart Caps 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.

    Certain statements in this release, including the guidance provided
above, constitute forward-looking statements or forward-looking information
within the meaning of applicable securities laws and are made pursuant to the
"safe harbour" provisions of such laws. These statements are subject to
certain assumptions, risks and uncertainties. Readers are cautioned not to
place undue reliance on such statements. Risk factors that may cause the
actual results, performance, achievements or developments of the Company to
differ materially from the results, performance, achievements or developments
expressed or implied by such forward-looking statements can be found in the
public documents filed by the Company with Canadian securities regulatory
authorities. In particular, actual results could differ materially from those
expressed in any forward-looking statements. For a list of risk factors,
please refer to Bridgewater's Annual Information Form dated March 31, 2009.
The Company assumes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.


    
    BRIDGEWATER SYSTEMS CORPORATION
    Consolidated Statements of Earnings (Loss) and
    Comprehensive Earnings (Loss)
    For the three months ended March 31, 2009 and 2008
    (expressed in Canadian dollars)
    (unaudited)
    -------------------------------------------------------------------------
                                                      Three months ended
                                               ------------------------------
                                                     March 31,      March 31,
                                                         2009           2008
                                               --------------- --------------
    Revenue
      Product                                   $  10,737,290  $   6,546,994
      Service and support                           3,305,807      2,018,513
    -------------------------------------------------------------------------
                                                   14,043,097      8,565,507

    Cost of sales                                   3,323,068      1,775,287
    -------------------------------------------------------------------------

    Gross margin                                   10,720,029      6,790,220
    -------------------------------------------------------------------------

    Expenses
      Sales and marketing                           2,932,558      3,288,832
      Research and development                      3,427,970      4,344,101
      General and administration                    1,501,276        958,962
      Bad debt expense                                223,838         38,070
      Stock-based compensation                         75,488         40,726
    -------------------------------------------------------------------------
                                                    8,161,130      8,670,691
    -------------------------------------------------------------------------
    Earnings (loss) before undernoted items         2,558,899     (1,880,471)

    Foreign exchange (loss) gain                       (3,697)       808,401
    Interest and other income                         230,023        389,535
    -------------------------------------------------------------------------

    Earnings (loss) before income taxes             2,785,225       (682,535)

    Future income tax recovery                        100,000              -
    -------------------------------------------------------------------------
    NET EARNINGS (LOSS) AND COMPREHENSIVE
     EARNINGS (LOSS)                            $   2,885,225  $    (682,535)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings per share - basic              $        0.12  $       (0.03)

    Net earnings per share - diluted                     0.12          (0.03)

    Weighted average number of shares
     outstanding - basic                           23,107,823     22,303,427

    Weighted average number of shares
      outstanding - diluted                        24,401,989     22,303,427



    BRIDGEWATER SYSTEMS CORPORATION
    Consolidated Balance Sheets
    as at March 31, 2009 and December 31, 2008
    (expressed in Canadian dollars)
    (unaudited)
    -------------------------------------------------------------------------

                                                     March 31,   December 31,
                                                         2009           2008
                                               --------------- --------------
    CURRENT ASSETS

      Cash and cash equivalents                 $  53,938,055  $  50,363,771
      Accounts receivable                          19,818,555     13,423,994
      Unbilled receivables                          4,886,758        968,363
      Deferred cost of sales                        3,718,158      3,518,085
      Prepaid expenses and other assets             2,653,235      1,735,267
      Future income tax asset                       2,810,000      2,557,000
    -------------------------------------------------------------------------

                                                   87,824,761     72,566,480

    DEFERRED COST OF SALES                          4,784,006      5,525,354
    FUTURE INCOME TAX ASSET                         5,610,000      5,763,000
    CAPITAL ASSETS                                  3,443,882      3,351,911
    -------------------------------------------------------------------------

                                                $ 101,662,649  $  87,206,745
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CURRENT LIABILITIES

      Accounts payable and accrued liabilities  $   4,522,726  $   7,305,923
      Deferred revenue                             36,763,380     24,013,113
    -------------------------------------------------------------------------

                                                   41,286,106     31,319,036
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

      Share capital                                70,222,830     68,444,332
      Contributed surplus                             713,912        834,041
      Deficit                                     (10,560,199)   (13,390,664)
    -------------------------------------------------------------------------

                                                   60,376,543     55,887,709
    -------------------------------------------------------------------------

                                                $ 101,662,649  $  87,206,745
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BRIDGEWATER SYSTEMS CORPORATION
    Consolidated Statements of Cash Flows
    For the three months ended March 31, 2009 and 2008
    (expressed in Canadian dollars)
    (unaudited)
    -------------------------------------------------------------------------
                                                      Three months ended
                                               ------------------------------
                                                     March 31,      March 31,
                                                         2009           2008
                                               --------------- --------------
    NET INFLOW OF CASH RELATED TO
     THE FOLLOWING ACTIVITIES:

    OPERATING
      Net earnings (loss)                       $   2,885,225  $    (682,535)
      Items not affecting cash
        Bad debt expense                              223,838         38,070
        Stock-based compensation                       75,488         40,726
        Foreign exchange (gain) on cash
         held in foreign currency                    (437,144)      (260,420)
        Future income tax (recovery)                 (100,000)             -
        Amortization of capital assets                281,896        297,275
    -------------------------------------------------------------------------
                                                    2,929,303       (566,884)

      Changes in non-cash operating working
       capital items                               (1,687,765)     3,805,422
    -------------------------------------------------------------------------
                                                    1,241,538      3,238,538
    -------------------------------------------------------------------------

    INVESTING
      Repayment of note receivable                          -     10,000,000
      Deferred cost of sales                          741,348              -
      Purchases of capital assets                    (373,867)       (53,341)
    -------------------------------------------------------------------------
                                                      367,481      9,946,659
    -------------------------------------------------------------------------

    FINANCING
      Proceeds from issuance of common shares       1,736,412        274,444
      Repurchase of shares under normal course
       issuer bid                                    (208,291)             -
      Share issuance costs                                  -        (66,558)
    -------------------------------------------------------------------------
                                                    1,528,121        207,886
    -------------------------------------------------------------------------
    Foreign exchange gain on cash held
     in foreign currency                              437,144        260,420
    -------------------------------------------------------------------------

    NET CASH INFLOW                                 3,574,284     13,653,503

    CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                           50,363,771     28,571,239
    -------------------------------------------------------------------------
    CASH AND CASH EQUIVALENTS,
     END OF PERIOD                              $  53,938,055  $  42,224,742
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Supplementary information:

      Cash on hand and bank balances            $   9,375,368  $   6,584,268
      Short-term investments                       44,562,687     35,640,474
    -------------------------------------------------------------------------

      Total cash and cash equivalents           $  53,938,055  $  42,224,742
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

      Interest received                         $     226,630  $     389,535
    





For further information:

For further information: Contacts: Investor Relations, Kim Butler, Chief
Financial Officer, Bridgewater Systems, kim.butler@bridgewatersystems.com,
(613) 591-9104 extension 6023; Vanessa Beresford, The Equicom Group Inc.,
vberesford@equicomgroup.com, (416) 815-0700 extension 227; Media Relations,
David Sharpley, Senior Vice President, Marketing and Product Management,
Bridgewater Systems, david.sharpley@bridgewatersystems.com, (613) 591-9104
extension 2121

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BRIDGEWATER SYSTEMS

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