BSQUARE Reports First Quarter Cash Based Earnings of $.06 Per Share; Revenue Increases 40% to $18.6 Million.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)--April 26, 2001 BSQUARE Corporation (Nasdaq:BSQR), a leading provider of software, tools and technology to power intelligent computing computing - computer devices, today reported total revenue increased 40% to $18.6 million over the first quarter of 2000, led by a 108% increase in product revenue. This was BSQUARE's twenty-fifth consecutive quarter of profitable cash basis operating results. Net income for the first quarter ended March 31, 2001 was $830,000, or $.02 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $995,000, or $.03 per diluted share, in the like quarter a year ago. Included in net income for the current quarter are non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. of $1.4 million. Cash-based earnings, which management believes is a better measurement of BSQUARE's results of operations, rose 38% to $2.2 million, or $.06 per diluted share, compared to $1.6 million, or $.05 per diluted share, in the like quarter a year ago. The increase in cash-based earnings reflects the company's ability to leverage its infrastructure and business model. Cash generated from operations for the first quarter was $5.2 million. "We are pleased that we surpassed our analysts' consensus revenue estimates of $18.5 million, considering the unstable unstable, adj 1. not firm or fixed in one place; likely to move. 2. capable of undergoing spontaneous change. A nuclide in an unstable state is called radioactive. An atom in an unstable state is called excited. economic environment," said William Baxter William Baxter may refer to:
A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. we have not changed our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. vision and strategy. We see great interest in our products and services, and remain committed to profitability and positive cash flow. Our customers continue to invest in BSQUARE's compelling and comprehensive solutions that will enable them to meet the demand for innovative devices." Over the last twelve months, BSQUARE has gained market share with original equipment manufacturers. Total revenue from these customers reached 37% compared to 18% for Q1 2000. Further evidence of the OEMs acceptance of BSQUARE's products and services is the company's decreasing dependency dependency In international relations, a weak state dominated by or under the jurisdiction of a more powerful state but not formally annexed by it. Examples include American Samoa (U.S.) and Greenland (Denmark). on 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. for the majority of revenue. For the most recent quarter only 45% of total revenue was generated from Microsoft compared to 77% in Q1 of 2000. Design wins for the current quarter totaled 109 compared to 124 for the fourth quarter last year. "Average dollar value per design win has increased during a period in which we have seen a decrease in the total number of design wins. Looking at our recent design wins; the trend is for larger scale complete device solutions that utilize our products and services to take a device from development to deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. to remote management. In addition, our sales force continues to generate a record number of leads with high quality customers, greatly enhancing our design win pipeline. Leads increased 40% over the fourth quarter of 2000," said Brian Turner The name Brian Turner can apply to:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "This illustrates the enhanced capabilities BSQUARE now offers. Due to the technology building blocks we have developed or acquired, our customers are now turning to us for the complete solution." "In the first quarter, some of our customers and potential customers reduced their budgets and work forces. As a result, we have experienced order postponements. In response, during the first quarter we moderated our spending to match our revenue growth," continued Baxter Bax´ter n. 1. A baker; originally, a female baker. . "We will continue to manage our growth for the future, retain our employees, increase our suite of compelling technology and enhance our service offerings. Whatever economic situation we are presented with, we are confident that we can manage BSQUARE to be financially healthy. While we are concerned about the state of the economy and its effects on our industry, we believe the fundamentals of BSQUARE are strong. We view the sales trend of increasing leads and bids as encouraging, but are guarded in our near term outlook due to the lack of clear macro economic momentum. As such, we expect revenue and earnings for the second quarter of 2001 to be similar to first quarter results. This will still reflect a half-year period revenue growth of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 25% to 30% for 2001, compared to the first six months of 2000. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the encouraging signs of growth for the latter half of 2001, it is too early to comment on Q3 and Q4. We remain confident that the intelligent computing device market will be at the center of technology to come. Regardless of the health of the economy, we will manage BSQUARE to capture business opportunities while diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d focusing on the bottom line," concluded Baxter. Highlights for the first quarter 2001 included: Achievements -- Recent award of a patent for BSQUARE's innovative quality assurance technology, CEValidator. -- Named Microsoft's "Embedded Partner of the Year." -- Named the sole "Systems Integrator for Stinger Smart Phone Platform" by Microsoft. New Business -- Achievement of 109 design wins in the quarter. -- Greater penetration of BSQUARE solutions in auto PCs, consumer 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. , enterprise thin client computing See thin client. , and consumer smart phones. New Customers -- Expansion of BSQUARE's customer base with 99 new customers in Q1 2001. -- New design wins for 10 repeat customers. -- Leads in the first quarter increased by 71% over Q1 2000. Products -- Introduction of 4 new products that expand BSQUARE's market reach. -- Improvement in one of BSQUARE's most valuable products- RDA RDA abbr. recommended daily allowance Recommended Dietary Allowance (RDA) The Recommended Dietary Allowances (RDAs) are quantities of nutrients in the diet that are required to maintain good health in people. - and announcement of the flagship product A primary product of a company, which is typically why the company was founded and/or what made it well known. For example, MS-DOS, Windows and the Microsoft Office suite have been flagship products of Microsoft. CorelDRAW is a flagship product of Corel Corporation. iWin. Investments -- Current headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. of 524 employees comprised of 406 engineers, 56 sales and marketing and 62 general and administrative employees. Conference Call The company will host a conference call with management at 2:00 p.m. Pacific Time today to discuss the first quarter results. You may listen to our live webcast at www.bsquare.com. 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 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. , BSQUARE supplies software products and services for the development and use of PC Companions, Internet appliances, industrial automation devices, Windows-based terminals A specialized terminal or slimmed-down PC used as a client to Windows Terminal Server. See Windows terminal. , and other intelligent computing devices. From development tools to software infrastructures to end-user (job) end-user - The person who uses a computer application, as opposed to those who developed or support it. The end-user may or may not know anything about computers, how they work, or what to do if something goes wrong. 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 sales that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . 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 the effect of changing economic conditions, the ability to control costs and expenses, a decline in the market for Windows-based intelligent computing devices or the failure of such market to develop as anticipated, the failure of BSQUARE to attract microprocessor microprocessor, integrated circuit containing the arithmetic, logic, and control circuitry required to interpret and execute instructions from a computer program. vendors and to secure contracts on sufficiently profitable terms, 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-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , 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: "Risk Factors." 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, Dec. 31,
2001 2000
--------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 29,141 $ 39,566
Short-term investments 45,459 32,785
Accounts receivable, net 12,584 12,617
Deferred income tax asset 1,518 867
Prepaid expenses and other
current assets 2,433 3,209
--------- ---------
Total current assets 91,135 89,044
Furniture, equipment and leasehold
improvements, net 6,765 5,640
Intangible assets, net 19,480 20,956
Investments 4,226 4,628
Deposits and other assets 731 916
--------- ---------
Total assets $ 122,337 $ 121,184
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 216 $ 725
Accrued expenses 7,822 8,107
Deferred revenue 5,757 3,652
--------- ---------
Total current liabilities 13,795 12,484
--------- ---------
Long-term debt 282 353
--------- ---------
Shareholders' equity:
Common stock 109,296 109,268
Deferred stock option compensation (245) (314)
Cumulative foreign currency
translation adjustment (579) (254)
Accumulated other comprehensive loss (708) --
Retained earnings (deficit) 496 (353)
--------- ---------
Total shareholders' equity 108,260 108,347
--------- ---------
Total liabilities and shareholders'
equity $ 122,337 $ 121,184
========= =========
BSQUARE CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share amounts)
Three Months
Ended March 31,
2001 2000
-------- --------
(unaudited)
Revenue:
Service $ 16,533 $ 12,284
Product 2,095 1,008
-------- --------
Total revenue 18,628 13,292
-------- --------
Cost of revenue:
Service 8,214 6,197
Product 401 152
-------- --------
Total cost of revenue 8,615 6,349
-------- --------
Gross profit 10,013 6,943
-------- --------
Operating expenses:
Research and development 3,045 2,044
Selling, general and administrative 4,647 3,520
Amortization of intangible assets 1,355 --
Amortization of deferred stock option
compensation 69 171
-------- --------
Total operating expenses 9,116 5,735
-------- --------
Income from operations 897 1,208
Other income (expense), net:
Investment income, net 564 826
Acquisition related expenses -- (620)
-------- --------
Income before income taxes 1,461 1,414
Provision for income taxes 631 419
-------- --------
Net income $ 830 $ 995
======== ========
Basic earnings per share $ 0.02 $ 0.03
======== ========
Weighted average shares outstanding used
to compute basic earnings per share 34,003 32,566
======== ========
Diluted earnings per share $ 0.02 $ 0.03
======== ========
Weighted average shares outstanding used
to compute diluted earnings per share 35,368 35,628
======== ========
Reconciliation of net income per share
to cash-based earnings per share:
Net income per diluted share: $ 0.02 $ 0.03
Acquisition related expenses, net of
tax effect -- 0.01
Amortization of intangible assets, net
of tax effect 0.04 --
Amortization of deferred stock option
compensation, net of tax effect -- 0.01
-------- --------
Cash-based earnings per share $ 0.06 $ 0.05
======== ========
Net income: $ 830 $ 995
Acquisition related expenses, net of
tax effect -- 515
Amortization of intangible assets, net
of tax effect 1,355 --
Amortization of deferred stock option
compensation, net of tax effect 45 111
-------- --------
Cash-based net income $ 2,230 $ 1,621
======== ========
Weighted average shares outstanding to
compute cash-based diluted earnings
per share 35,368 35,628
======== ========
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