~EDWARD $TEVEN$ON EXPRE$$~

[EDWARD STEVENSON]

BLSW ($1.25): Bridgeline Reports Record Sales, Record Profits, and Record Cash Generation From Operations for Fiscal Year 2009.

Software Subscription and Perpetual License Revenue Grows 63%
WOBURN, Mass., Dec 28, 2009 (GlobeNewswire via COMTEX) -- Bridgeline Software, Inc. (Nasdaq:BLSW), a developer of SaaS-based web application management software and award-winning interactive technology solutions, today announced financial results for its 2009 fiscal year ended September 30, 2009.
Highlights from the 2009 fiscal year include:

* Record revenue of $23.9 million for fiscal 2009, a 12% increase over revenue of $21.3 million for fiscal 2008. Revenue from software subscription and perpetual licenses grew 63%.

* Bridgeline has 676 customers, of which 504 or 75% of these customers paid a monthly subscription fee or a monthly managed service fee. This is an increase of 96 customers, or 24%, that pay a monthly fee from one year ago.

* Bridgeline has sold over 100 iAPPS licenses. Companies such as Honeywell, Sun Chemical, Blue Cross Blue Shield, JohnsonDiversey,
Mayfran International, William T. Grant Foundation, American Academy of Pediatrics, Kettering Foundation, Tennant, Marsh, Berkshire Life and Berkshire Bank selected iAPPS for their critical web content management or web analytic needs in fiscal 2009.

* Bridgeline received over 10 industry-related awards in fiscal 2009, and BtoB Magazine named Bridgeline as one of the top interactive technology companies in America.

* Record gross profit of $13.4 million in fiscal 2009, a 22% increase over gross profit in fiscal 2008.

* Record Non-GAAP net income of $1.8 million and Non-GAAP diluted
earnings per share of $.16 in fiscal 2009.

* Record income from operations of $829 thousand, net income of
$758 thousand and diluted income per share of $.07 in fiscal 2009.

* Record EBITDA (Earnings before interest, taxes, depreciation and amortization) and before stock compensation of $2.9 million and EBITDA per diluted share of $.25 in fiscal 2009.

* Record cash generated from operations of $3 million in fiscal 2009.

* A year-end balance sheet with total assets of $24.3 million and only $4.4 million in total liabilities.

"In today's challenging economic environment, we believe the cost efficiencies and productivity gains offered by Bridgeline become even more relevant for both current and future customers," stated Thomas Massie, Chairman and Chief Executive Officer of Bridgeline. "Our web-based software combined with interactive technology solutions provide customers with enhanced sales opportunities, reduced administrative costs, and improved operational efficiencies." Massie continued, "We are committed to building our recurring revenue business through the ongoing sales and development of our flagship product iAPPS. We are very pleased with our record financial results in fiscal 2009."

Recurring Revenue Trends.

Of Bridgeline's 676 customers as of September 30, 2009, 504 or 75% paid either a monthly subscription license fee or a managed service fee. Bridgeline's customer retention rate during the fiscal year ended September 30, 2009 was 82%.

FY 09 FY 08
-----------------------
Annual Recurring Revenue $3,115,000 $2,582,000
Year over Year Growth % 21%
Retention Rate 82%

Results of Operations for the fiscal year ended September 30, 2009.

For the year ended September 30, 2009 we achieved record revenue, record gross profit, record operating income and record net income. Revenue was $23.9 million compared with $21.3 million for the same period of 2008, a 12% increase. Year over year revenue from software subscription and perpetual licenses grew 63%. Gross profit was $13.4 million in fiscal 2009 compared with $11 million for the same period of 2008, representing a 22% year over year increase. Income from operations was $829 thousand compared with a loss from operations of ($10.3) million for the same period of 2008. Fiscal 2008 included non-cash impairment charges for intangible assets and goodwill of $9.8 million. As a percentage of total sales, operating expense declined to 52% in fiscal 2009 compared with 54% in fiscal 2008 (excluding impairment charges in fiscal 2008). Net income increased to $758 thousand in fiscal 2009 from a loss of ($10.3) million in fiscal 2008, or by $11.1 million. Diluted earnings per share was $.07 compared with a diluted loss per share of ($1.09) for the same period of 2008. Non-GAAP net income was $1.8 million and non-GAAP diluted earnings per share was $.16 in fiscal 2009.