BSQUARE Reports First Quarter Results In Line With Revised Guidance.Business Editors, High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers 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 25, 2002 In line with revised guidance issued on April 9, 2002, BSQUARE Corporation (Nasdaq:BSQR) today reported first quarter 2002 revenue of $8.7 million with a cash-based net loss of $(4.9) million, or $(0.14) per share, and a net loss of $(9.2) million, or $(0.26) per share. In the first quarter last year, the company reported revenue of $18.6 million with cash-based net income of $2.2 million, or $0.06 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, and net income of $830,000, or $0.02 per diluted share. "During the quarter, we saw continued pressure on service revenue due to the industry-wide weakness in technology spending and the expected decline in the level of services we provide 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. ," said Bill Baxter
William Robert Baxter (born November 3, 1946) is a former Australian politician and the current Victorian State President of The Nationals. , chairman, president and chief executive officer of BSQUARE. "Following revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to our Master Agreement in July July: see month. 2001, service revenue from Microsoft declined to $2.2 million in the first quarter of 2002, down from $8.4 million in the first quarter of 2001. While professional services' revenue held steady, total service revenue declined to $6.0 million from $16.5 million a year ago. On a positive note, product revenue grew 28 percent to $2.7 million and accounted for 31 percent of total revenue during the quarter." "I am pleased with our success at controlling expenses and improving margins during this period when sales activity continued to slow," added Baxter Bax´ter n. 1. A baker; originally, a female baker. . "Gross margin was 37 percent, an improvement over the fourth quarter 2001 level of 32 percent, but below the level of 54 percent in the same quarter a year earlier. The mix of the products sold contributed to the sequential One after the other in some consecutive order such as by name or number. improvement in product margins as well as the benefit of cost reductions taken early in the first quarter of 2002." "Along with the company-wide reduction in workforce and the closing of our office in Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces in January January: see month. ," Baxter said, "we took steps to improve our operating structure and realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. our strategy to meet the challenges of the current business cycle. As a result of these actions, we recorded a $2.2 million restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , or $0.06 per share." As of January 1, 2002, BSQUARE adopted the newly mandated SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142. Under SFAS 142, amortization of goodwill and certain other 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. are no longer amortized but will be reviewed annually for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. . The amortization expense of $421,000 in the current quarter relates to certain intangible assets that will continue to be amortized. Baxter added that the company had made a strategic decision to increase its investment in research and development. "Our R&D expenses are higher than the industry average as a percentage of revenue because we remain committed to utilizing our engineers for product development to help us enhance our offerings and improve our competitive position. In addition, we intend to leverage our technology and expertise to expand our market share and profitably grow BSQUARE. To accomplish this we will be taking steps to improve the effectiveness of our operations by strategically realigning our sales and engineering organizations, focusing on three major markets -- Handheld handheld: see personal digital assistant. , Home and Automotive -- and concentrating on our foreign markets with the strongest growth potential." To expand its offerings in the automotive smart device space, BSQUARE acquired InfoGation, a developer of vehicle navigation See GPS and vehicle tracking. systems, on March 13, 2002. "We are excited about this new technology acquisition, and the customers we obtained with it," said Baxter. "The vehicle information and navigation navigation, science and technology of finding the position and directing the course of vessels and aircraft. Early Navigational Techniques In ancient times, mariners navigated by the guidance of the sun and stars and landmarks along the coast. space, also called telematics Originally coined to mean the convergence of telecommunications and information processing, the term later evolved to refer to automation in automobiles. GPS navigation, integrated hands-free cellphones, wireless communications and automatic driving assistance systems all come under the , is a high growth area and InfoGation is an industry leader. We expect this acquisition will increasingly add to earnings as vehicles with InfoGation's technology installed enter the U.S. and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. markets over the next 18 months." The purchase transaction was valued at approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $8 million, of which $3.65 million was in cash and the remainder in BSQUARE stock. Related to the acquisition, BSQUARE incurred a charge of $1.7 million in the quarter for in-process research and development. Following the acquisition, the company had approximately $58 million in cash, cash equivalents and short term investments and no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . "I believe the company's solid financial position will enable us to continue investing in our future as we reposition the company to navigate (1) "Surfing the Web." To move from page to page on the Web. (2) To move through the menu structure in a software application. through these difficult economic times," Baxter said. Given the challenging business environment and the decline in revenue from Microsoft, the company has set a revenue target in the range of $6.5 million to $7.5 million for the second quarter of 2002, with an expected loss in the range of $(0.20) to $(0.25) per share. For the full year of 2002, management believes that revenue will be between $30 million to $40 million. Conference Call Management will host a conference call today, April 25, 2002, at 2:00 PM Pacific Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time. To access the call, please dial 706/634-1118 and reference BSQUARE. The call may also be accessed at www.BSQUARE.com in the investor relations Investor relations The process by which the corporation communicates with its investors. section. Telephonic and webcast replays of the call will be available later in the day. To access the telephonic replay, please dial 706/645-9291 and reference confirmation code 3637288. The telephonic replay will be available for three days following the call, and the webcast replay will be available for seven days following the call. About BSQUARE BSQUARE Corporation is a global leader in providing solutions for smart devices in consumer, enterprise, industrial, and automotive markets. As a leading Windows Embedded Inserted into. See embedded system. Partner of Microsoft, BSQUARE empowers the creation, connection, and management of Windows Embedded-powered smart devices through software, hardware, and service solutions. BSQUARE has an extensive product portfolio of software development and quality assurance tools, device and device management software and complete end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. managed device solutions. BSQUARE provides critical engineering services including device development, quality assurance, and system integration as well as services for managing client devices deployed into the market. For more information, visit BSQUARE at 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 computing - computer 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 Annual 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, except per share amounts)
March 31, Dec. 31,
2002 2001
--------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 23,935 $ 30,303
Short-term investments 34,299 39,408
Accounts receivable, net 9,949 8,833
Income tax receivable 2,246 1,469
Deferred income tax asset 3,657 5,792
Prepaid expenses and
other current assets 4,201 2,840
--------- ---------
Total current assets 78,287 88,645
Furniture, equipment and
leasehold improvements, net 6,391 6,509
Investments 2,596 2,319
Intangible assets, net 23,757 17,569
Deposits and other assets 864 624
--------- ---------
Total assets $ 111,895 $ 115,666
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,449 $ 435
Accrued compensation 2,585 3,570
Accrued restructuring costs 5,461 4,534
Accrued expenses 3,758 4,291
Deferred income taxes 1,345 1,071
Deferred revenue 2,496 2,944
--------- ---------
Total current liabilities 17,094 16,845
--------- ---------
Shareholders' equity:
Preferred stock, no par value:
authorized 10,000,000 shares;
no shares issued and outstanding -- --
Common stock, no par value:
authorized 50,000,000 shares,
36,359,411 shares issued and
outstanding as of March 31, 2002
and 34,875,585 shares issued and
outstanding as of December 31, 2001 116,600 111,459
Deferred stock option compensation (274) (121)
Cumulative foreign currency
translation adjustment (563) (513)
Accumulated other comprehensive
loss, net of tax (1,090) (1,367)
Retained earnings (deficit) (19,872) (10,637)
--------- ---------
Total shareholders' equity 94,801 98,821
--------- ---------
Total liabilities and
shareholders' equity $ 111,895 $ 115,666
========= =========
BSQUARE CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share amounts)
Three Months
Ended March 31,
2002 2001
-------- --------
(unaudited)
Revenue:
Service $ 6,007 $ 16,533
Product 2,689 2,095
-------- --------
Total revenue 8,696 18,628
-------- --------
Cost of revenue:
Service 4,384 8,214
Product 1,051 401
-------- --------
Total cost of revenue 5,435 8,615
-------- --------
Gross profit 3,261 10,013
-------- --------
Operating expenses:
Research and development 4,142 3,045
Selling, general and administrative 4,557 4,647
Amortization of intangible assets 421 1,355
In-process research and development 1,698 --
Restructuring charge 2,205 --
Amortization of deferred stock
option compensation 37 69
-------- --------
Total operating expenses 13,060 9,116
-------- --------
Income (loss) from operations (9,799) 897
Other income (expense), net:
Investment income, net 535 564
-------- --------
Income (loss) before income taxes (9,264) 1,461
Provision (benefit) for income taxes (29) 631
-------- --------
Net (loss) income $ (9,235) $ 830
======== ========
Basic earnings (loss) per share $ (0.26) $ 0.02
======== ========
Weighted average shares
outstanding used to compute
basic earnings (loss) per share 35,364 34,003
======== ========
Diluted earnings (loss) per share $ (0.26) $ 0.02
======== ========
Weighted average shares
outstanding used to compute
diluted earnings (loss) per share 35,364 35,368
======== ========
Reconciliation of net income (loss) per
share to cash-based earnings (loss)
per share:
Net income (loss) per diluted share: $ (0.26) $ 0.02
Amortization of intangible assets 0.01 0.04
In-process research and development 0.05 --
Restructuring charge 0.06 --
Amortization of deferred stock
option compensation -- --
-------- --------
Cash-based earnings (loss) per share $ (0.14) $ 0.06
======== ========
Net income: $(9,235) $ 830
Amortization of intangible assets 421 1,355
In-process research and development 1,698 --
Restructuring charge 2,205 --
Amortization of deferred stock
option compensation 37 45
-------- --------
Cash-based net income (loss) $ (4,874) $ 2,230
======== ========
Weighted average shares outstanding
to compute cash-based diluted earnings
(loss) per share 35,364 35,368
======== ========
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