BSQUARE Reports 1999 Financial Results; 1999 Revenue up 62%.Business Editors BELLEVUE Bellevue (bĕl`vy  ).1 City (1990 pop. 30,982), Sarpy co., E Nebr., a suburb of Omaha, on the Missouri River; inc. 1855. , Wash.--(BUSINESS WIRE)--Jan. 27, 2000 BSQUARE Corporation (Nasdaq:BSQR) announced today record revenue of $39.9 million for the year ended December December: see month. 31, 1999, a 62% increase over 1998 revenue of $24.6 million. Net income and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the year were $1.7 million and $0.06 per share, respectively. Revenue for the fourth quarter was $11.4 million, a 57% increase over the $7.2 million reported in the same quarter last year. Net income and diluted earnings per share for the fourth quarter were $0.6 million and $0.02 per share, respectively. &uot;We are very pleased with our financial results, which reflect the continued growth in the intelligent computing computing - computer device market,&uot; stated Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. V. Turner, chief financial officer at BSQUARE. &uot;With our recent initial public offering we are now set to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the growth in this dynamic market.&uot; BSQUARE completed its initial public offering on October October: see month. 19, 1999 in which it raised approximately $54 million in proceeds. Concurrent with the offering BSQUARE received additional proceeds of approximately $19 million from an investment by Vulcan Vulcan, in astronomy Vulcan, in astronomy, hypothetical planet whose existence was proposed by Leverrier to explain part of the advance of the perihelion of Mercury, not all of which could be accounted for by gravitational effects of the other planets under Ventures. Recent activities by BSQUARE include acquisitions, new partnership agreements, and new product and service offerings. BSQUARE recently announced the acquisition of BlueWater Coordinates:
Bluewater is a super-regional shopping centre, opened on 16 March 1999. Systems Inc. in a pooling of interest Noun 1. pooling of interest - an accounting method used in the merging of companies; the balance sheets are added together item by item; this method is tax-free transaction. BlueWater is a leading provider of software development toolkits and system integration services for the creation of Windows(R) powered intelligent computing devices. Through the acquisition of BlueWater Systems, BSQUARE will expand from its traditional expertise in Windows CE (Windows Consumer Electronics) Microsoft's version of Windows for handheld devices and embedded systems that use x86, ARM, MIPS and SHx CPUs. Windows CE .NET superseded Windows CE 3.0. and Windows NT Embedded See Windows XP Embedded. to provide additional software solutions for computing devices based on other Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. (R) Windows operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. including Windows 2000, Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. , Windows 98 and Windows for SmartCard See smart card. . BlueWater Systems is now a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of BSQUARE Corporation. &uot;The BlueWater Systems acquisition reflects our strategy of offering a combined suite of turnkey See turnkey system. solutions and top quality development tools to allow OEMs to bring any Windows powered ICD ICD International Classification of Diseases (of the World Health Organization); intrauterine contraceptive device. ICD abbr. to market more rapidly,&uot; said William Baxter William Baxter may refer to:
BSQUARE was also recently named the premier provider of software engineering services to customers of Microsoft's new Porting Partner Program. The Porting Partner Program opened up the Windows CE operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. to support all microprocessor microprocessor, integrated circuit containing the arithmetic, logic, and control circuitry required to interpret and execute instructions from a computer program. architectures. Simultaneously, BSQUARE and Microsoft executed a revision to BSQUARE's existing Microsoft Tools contract. In this agreement, BSQUARE provides software engineering services for Windows CE development tools to Microsoft. The new revision eliminates the non-compete clause A non-compete clause, or covenant not to compete (CNC), is a term used in contract law under which one party (usually an employee) agrees to not pursue a similar profession or trade in competition against another party (usually the employer). , enabling BSQUARE to perform software tools work outside of Microsoft and the Microsoft family of operating systems. &uot;We were honored hon·or n. 1. High respect, as that shown for special merit; esteem: the honor shown to a Nobel laureate. 2. a. Good name; reputation. b. to be selected as Microsoft's premier partner in the new Porting Partner Program, and consider it indicative of Microsoft's satisfaction as one of our customers,&uot; stated William Baxter &uot;Now we will expand our software engineering services to include not only the current microprocessor manufacturers we're already working with on behalf of Microsoft, but also the emerging microprocessor manufacturers who are actively seeking to integrate support for Windows CE. In the new Tools contract, the elimination of the non-compete clause opens new doors for BSQUARE to offer a wider array of software products and services. Both of these agreements support our strategy of providing complete software products and services to the rapidly growing market for intelligent computing devices.&uot; &uot;With the acquisition of BlueWater and the signing of the new Porting Partner agreement BSQUARE is now squarely square·ly adv. 1. Mathematics At right angles: sawed the beam squarely. 2. In a square shape. 3. positioned to be the premier one-stop shop One-Stop Shop A company or a location that offers a multitude of services to a client or a customer. The idea is to provide convenient and efficient service and also to create the opportunity for the company to sell more products to clients and customers. for OEMs bringing ICDs to market,&uot; stated Baxter. &uot;I am very excited about the market opportunities unfolding before BSQUARE and believe that we have the team in place to help advance this market.&uot; In the fourth quarter, BSQUARE announced several new products, services, and partnerships in support of its strategy of providing a complete set of software tools, infrastructures, and end-user software to developers and end-users of intelligent computing devices. National Semiconductor selected BSQUARE to help create software development kits for set-top boxes The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. , web pads See Webpad. , and Windows-based Terminals A specialized terminal or slimmed-down PC used as a client to Windows Terminal Server. See Windows terminal. based on Windows CE. BSQUARE released its second version of bUseful(TM) Utilities Pak, which for the second year in a row was a finalist for the Best of Comdex award by PC Week. BSQUARE also released CE Interface Composer, a unique tool used to design user interfaces on Windows CE-based devices. To expand the distribution of BSQUARE products and services abroad, new distributors were signed in countries throughout Asia and Europe. BSQUARE launched Windows CE training services, featuring the Microsoft Official Curriculum, and successfully sold out its first session in January. BSQUARE was also named the twelfth fastest growing technology company in America by Deloitte and Touche. For the quarter and year ended December 31, 1999, BSQUARE had $0.7 and $2.8 million of non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) . Capital expenditures for the fourth quarter and year were $5.0 and $7.0 million, respectively. At December 31, 1999, BSQUARE had approximately 380 employees of whom 300 were engineers and 35 were in sales and marketing. About BSQUARE BSQUARE (Nasdaq:BSQR) is a dynamic software company working with Fortune 500 companies to enable the age of intelligent computing devices. Specializing in the Microsoft Windows See Windows. (operating system) Microsoft Windows - Microsoft's proprietary window system and user interface software released in 1985 to run on top of MS-DOS. Widely criticised for being too slow (hence "Windoze", "Microsloth Windows") on the machines available then. family of operating systems, BSQUARE supplies software products and services for the development and use of PC Companions, Internet appliances Also called "information appliance," "smart appliance," and "Web appliance," it is a device specialized for accessing the Web and/or e-mail. Designed for ease of use, it plugs into a telephone jack or LAN connection for Internet hookup. , industrial automation devices, Windows-based terminals, and other intelligent computing devices. From development tools to software infrastructures to end-user applications, BSQUARE's touch is on many embedded Inserted into. See embedded system. Windows-based devices available in the market today. For more information, visit BSQUARE at http://www.bsquare.com or call 888/820-4500. BSQUARE is a registered trademark of BSQUARE Corporation. All names, product names, and tradenames are trademarks or registered trademarks of their respective holders. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our business that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words &uot;believe,&uot; &uot;expect,&uot; &uot;intend,&uot; &uot;anticipate,&uot; variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect BSQUARE's actual results include adverse changes in BSQUARE's relationship with Microsoft, a decline in the market for Windows-based intelligent computing devices or the failure of such market to develop as anticipated, delays or announcements of delays by Microsoft of Windows CE product releases, the failure of BSQUARE to attract microprocessor vendors and to secure contracts on sufficiently profitable terms, factors that may affect BSQUARE's ability to complete work under contract, competition and intellectual property risks. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in BSQUARE's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. , in the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: &uot;Risk Factors.&uot; Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. BSQUARE undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release or to reflect the occurrence of unanticipated events.
BSQUARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
December 31,
1998 1999
(unaudited)
Current assets:
Cash and cash equivalents $ 5,324 $55,029
Short-term investments 1,582 27,368
Accounts receivable, net of allowance for
doubtful Accounts of $67 in 1998,
and $142 in 1999 5,487 4,203
Prepaid expenses and
other current assets 289 616
Deferred income tax asset 237 1,048
------- -------
Total current assets 12,919 88,264
Furniture, equipment and
leasehold improvements, net 3,061 7,150
Deposits and other assets 178 210
------- -------
Total assets $16,158 $95,624
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 676 $ 579
Accrued compensation 1,331 2,274
Accrued expenses 465 3,116
Deferred revenue 167 1,117
----------- -----------
Total current liabilities 2,639 7,086
Long-term obligations 400 --
----------- -----------
Total liabilities 3,039 7,086
----------- -----------
Commitments and contingencies (Note 7)
Mandatorily redeemable convertible
Series A preferred Stock, no par value:
Authorized 10,000,000 shares, issued
and outstanding 8,333,333 shares in 1998
no shares in 1999, preference in
liquidation of $15,000,000 14,417 --
Shareholders' equity (deficit):
Common stock, no par value:
Authorized 50,000,000 shares,
18,161,605 shares in 1998, and
32,294,833 in 1999 2,123 90,842
Deferred stock option compensation (401) (868)
Cumulative foreign currency
translation adjustment 5 (15)
Retained earnings (accumulated deficit) (3,025) (1,421)
----------- -----------
Total shareholders'
equity (deficit) (1,298) 88,538
----------- -----------
Total liabilities and
shareholders' equity $ 16,158 $ 95,624
=========== ===========
BSQUARE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands, except per share amounts)
Year Ended December 31,
1997 1998 1999
--------- --------- --------
(unaudited)
Revenue:
Service $ 14,021 $ 23,393 $ 38,082
Product 384 1,219 1,856
-------- -------- --------
Total revenue 14,405 24,612 39,938
-------- -------- --------
Cost of revenue:
Service 5,566 11,039 18,819
Product 78 166 475
-------- -------- --------
Total cost of revenue 5,644 11,205 19,294
-------- -------- --------
Gross profit 8,761 13,407 20,644
-------- -------- --------
Operating expenses:
Research and development 1,391 3,628 6,658
Selling, general and
administrative 2,725 6,438 11,522
Amortization of unearned
stock compensation 81 171 583
-------- -------- --------
Total operating expenses 4,197 10,237 18,763
-------- -------- --------
Income from operations 4,564 3,170 1,881
-------- -------- --------
Interest income (expense) (12) 319 911
-------- -------- --------
Income before income taxes 4,552 3,489 2,792
Provision for income taxes 746 1,189 1,101
-------- -------- --------
Net income $ 3,806 $ 2,300 $ 1,691
======== ======== ========
Foreign currency translation
adjustment -- (5) 20
-------- -------- --------
Comprehensive net income $ 3,806 $ 2,295 $ 1,711
======== ======== ========
Basic earnings per share $ 0.18 $ 0.12 $ 0.06
======== ======== ========
Weighted average shares outstanding
used to compute basic earnings
per share 21,400 18,372 27,858
======== ======== ========
Diluted earnings per share $ 0.17 $ 0.08 $ 0.06
======== ======== ========
Weighted average shares
outstanding used to compute
diluted earnings per share 21,781 27,475 30,539
======== ======== ========
BSQUARE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands, except per share amounts)
Quarter Ended December 31,
1998 1999
---------- ---------
(unaudited)
Revenue:
Service $ 6,878 $ 10,597
Product 353 765
-------- --------
Total revenue 7,231 11,362
-------- --------
Cost of revenue:
Service 3,226 5,321
Product 36 263
-------- --------
Total cost of revenue 3,262 5,584
-------- --------
Gross profit 3,969 5,778
-------- --------
Operating expenses:
Research and development 1,181 2,236
Selling, general and administrative 2,470 3,313
Amortization of unearned
stock compensation 48 146
-------- --------
Total operating expenses 3,699 5,695
-------- --------
Income from operations 270 83
-------- --------
Interest income (expense) 82 704
-------- --------
Income before income taxes 352 787
Provision for income taxes 71 224
-------- --------
Net income $ 281 $ 563
======== ========
Foreign currency translation adjustment (5) 1
-------- --------
Comprehensive net income $ 276 $ 564
======== ========
Basic earnings per share $ 0.01 $ 0.02
======== ========
Weighted average shares outstanding
used to compute basic
earnings per share 18,155 31,395
======== ========
Diluted earnings per share $ 0.01 $ 0.02
======== ========
Weighted average shares
outstanding used to compute
diluted earnings per share 28,163 32,539
======== ========
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