The financial results for the second quarter of 2010 ended June 30, 2010 have been reported by BluePhoenix Solutions (News - Alert), a premier provider of IT modernization software and services for enterprises.

Revenues in the second quarter were $16.2 million, as compared to $17.3 million in the previous quarter and $19 million in the second quarter of 2009.

In the second quarter of 2010, net income on a non-GAAP basis was $0.13 million or $0.01 per diluted share, compared to $0.2 million or $0.01 per diluted share in the previous quarter, and $1.2 million dollar or $0.06 per diluted share in the second quarter of 2009.

On a GAAP basis for the second quarter of 2010, net loss was $1.1 million or per share, as compared to a net loss of $2.2 million or per share in the previous quarter, and a net loss of $1.9 million or per share in the second quarter of 2009.

"During the second quarter, we made progress on our plan that we outlined last quarter," Arik Kilman, CEO of BluePhoenix, commented. "Our revenues and non-GAAP earnings per share came in at the higher end of our guidance range, we generated positive cash flow from operations excluding payments for our cost savings plan, and we sold a portion of our consulting business."

"Going forward, we will focus on improving our profitability through concentrating on sales of tools in our IT modernization business, as well as focus on other lines of business, including knowledge modernization. We expect the result will be a smaller, but more profitable company, and one which forms the basis for organic growth."

Non-GAAP financial measures:

Non-GAAP financial measures, including non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and non-GAAP diluted earnings per share are included in the release. The following items have been excluded from these non-GAAP measures:

--Amortization of purchased intangible assets and capitalized software;

--Stock-based compensation;

--One- time expenses related to cost saving plan and one time charges;

--Revaluation of warrants and issuance costs;

The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

It is believed by the management of BluePhoenix that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain charges, gains and tax effects that may not be indicative of BluePhoenix's core business operating results.

According to BluePhoenix, both management and investors benefit from referring to these non-GAAP financial measures in assessing the company's performance. Comparisons to the company's historical performance and its competitors' operating results are facilitated by these non-GAAP financial measures.

Since management believes they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making, therefore BluePhoenix includes these non-GAAP financial measures. Non-GAAP measures are reconciled to comparable GAAP measures in the table entitled "Reconciliation of GAAP to Non-GAAP."

In related news, BluePhoenix Solutions, a supplier of modernization solutions, has been awarded a CoolGen to Java migration contract worth $1.8 million.