BSQUARE Reports Second Quarter Cash Based Earnings of $.05 Per Share.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)--July 26, 2001 BSQUARE Corporation (Nasdaq:BSQR), a leading provider of software, tools and technology to power smart devices, today reported revenue and cash based earnings per share in line with previously announced expectations. Revenue increased 16% to $18.2 million compared to $15.7 million in the second quarter of 2000. Product revenue increased 54% to $2.3 million compared to $1.5 million in the second quarter of 2000. Total revenue for the first six months of 2001 rose 27% to $36.8 million compared to $29.0 million in the like period last year. Net income for the second quarter ended June June: see month. 30, 2001 was $461,000, or $.01 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. Included in net income in the current quarter were 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. In the second quarter of 2000, BSQUARE reported a net loss of $2.5 million, or $.07 per diluted share, which included a $4.1 million, or $.12 per share, charge for acquired in-process research and development. Cash-based earnings for the quarter were $1.9 million, or $.05 per diluted share, in 2001, compared to $2.1 million, or $.06 per diluted share, in the second quarter a year ago. Net income for the first six months of 2001 reached $1.3 million, or $.04 per share, compared to a loss of $1.5 million, or $.05 per share, in the like period a year ago. Amortization of intangible assets, for the first six months of 2001 totaled $2.8 million. Cash-based earnings for the first six months of 2001 were $4.2 million, or $.12 per share, compared to $3.8 million, or $.10 per share, for the first six months of 2000. "As anticipated, our second quarter results were similar to those of the prior quarter," 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 are encouraged by indications of growth in our OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and business. We should begin to benefit from newly signed OEM contracts in future quarters as these projects ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale ." BSQUARE continues to obtain exciting new contracts with original equipment manufacturers. OEMs now represent 41% of the company's total revenue in Q2 2001 compared to 29% in the like quarter a year ago. Design wins for Q2 2001 totaled 119 compared to 109 in the second quarter last year. For the first six months of 2001, design wins totaled 230. During the second quarter of 2001, the company added managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality to its suite of products and services. As a managed service provider, BSQUARE can remotely install software upgrades and fix bugs on smart devices, as well as deliver future applications to deployed devices. "Through an acquisition of technology in the most recent quarter, we added an enhanced capability to meet the needs of customers who have expressed an interest in utilizing a service provider for their devices," added Baxter Bax´ter n. 1. A baker; originally, a female baker. . "BSQUARE's managed services not only enhance our revenue stream, but further complete our suite of offerings for remote device management." The company is currently taking action to trim operating costs operating costs npl → gastos mpl operacionales in response to a near term reduction in revenue. As announced earlier this month, the company expects revenue reductions in the third quarter based on two recently cancelled contracts and the project reductions from the recently negotiated 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. Master Agreement. On July July: see month. 16, 2001, BSQUARE implemented a number of budget reductions. Based on these measures, BSQUARE expects to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge in the third quarter of 2001. "We remain confident in our business model, our growth strategies, our talented team and our overall market opportunity," said 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, President and COO (Cell Of Origin) See mobile positioning. . "Our balance sheet is healthy, with 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. and cash and equivalents of over $73 million. Our commitment to delivering the best products and services that will enable the growth of the smart device market continues. We believe BSQUARE will emerge from the current environment a stronger company." Outlook for Third Quarter Taking into account the contract developments announced earlier this month, the company anticipates revenue between $14.0 million to $15.5 million for the third quarter of 2001. Based on the impact of various cost control measures, BSQUARE expects cash based earnings per share near breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations , before one-time charges. Conference Call BSQUARE will detail the second quarter results in a conference call Thursday, July 26, 2001, at 2:00 PM Pacific Daylight Time. The call may be accessed by dialing 612/332-0819 and referencing 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. A web cast replay will be available later in the day. A telephonic replay of the call may also be accessed later in the day by calling 320/365-3844 and referencing confirmation code 593851. The telephonic replay will be available for three days following the call. About BSQUARE BSQUARE (Nasdaq:BSQR) is a dynamic software company working with Fortune 500 companies to enable the age of intelligent computing computing - computer 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 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 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 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. 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-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: "Factors That May Affect Future Results." 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)
June 30, Dec. 31,
2001 2000
-----------------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 26,317 $ 39,566
Short-term investments 47,283 32,785
Accounts receivable, net 11,521 12,617
Deferred income tax asset 1,569 867
Prepaid expenses and other
current assets 1,866 3,209
--------- ---------
Total current assets 88,556 89,044
Furniture, equipment and
leasehold improvements, net 8,000 5,640
Intangible assets, net 21,764 20,956
Investments 3,046 4,628
Deposits and other assets 682 916
--------- ---------
Total assets $ 122,048 $ 121,184
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 171 $ 725
Accrued expenses 8,370 8,107
Deferred revenue 3,452 3,652
--------- ---------
Total current liabilities 11,993 12,484
--------- ---------
Long-term debt -- 353
--------- ---------
Shareholders' equity:
Common stock 110,514 109,268
Deferred stock option compensation (197) (314)
Cumulative foreign currency
translation adjustment (555) (254)
Accumulated other comprehensive loss (645) --
Retained earnings (deficit) 938 (353)
--------- ---------
Total shareholders' equity 110,055 108,347
--------- ---------
Total liabilities and
shareholders' equity $ 122,048 $ 121,184
========= =========
BSQUARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------------------------
2001 2000 2001 2000
-------------------------------------------
(unaudited)
Revenue:
Service $ 15,901 $ 14,195 $ 32,434 $ 26,479
Product 2,318 1,505 4,413 2,513
-------- -------- -------- --------
Total revenue 18,219 15,700 36,847 28,992
-------- -------- -------- --------
Cost of revenue:
Service 8,417 6,907 16,631 13,104
Product 415 514 816 666
-------- -------- -------- --------
Total cost of
revenue 8,832 7,421 17,447 13,770
-------- -------- -------- --------
Gross profit 9,387 8,279 19,400 15,222
-------- -------- -------- --------
Operating expenses:
Research and
development 2,696 2,201 5,741 4,245
Selling, general
and administrative 5,434 4,354 10,081 7,874
Acquired in-process
research and
development -- 4,100 -- 4,100
Amortization of
intangible assets 1,415 350 2,770 350
Amortization of
deferred stock
option compensation 48 147 117 318
-------- -------- -------- --------
Total operating
expenses 9,593 11,152 18,709 16,887
-------- -------- -------- --------
Income (loss) from
operations (206) (2,873) 691 (1,665)
Other income
(expense), net:
Investment income, net 798 1,008 1,362 1,834
Acquisition related
expenses -- -- -- (620)
-------- -------- -------- --------
Income (loss) before
income taxes 592 (1,865) 2,053 (451)
Provision for
income taxes 131 610 762 1,029
-------- -------- -------- --------
Net income (loss) $ 461 $ (2,475) $ 1,291 $ (1,480)
======== ======== ======== ========
Basic earnings
(loss) per share $ 0.01 $ (0.07) $ 0.04 $ (0.05)
======== ======== ======== ========
Weighted average shares
outstanding used to
compute basic earnings
(loss) per share 34,190 33,076 34,097 32,821
======== ======== ======== ========
Diluted earnings
(loss) per share $ 0.01 $ (0.07) $ 0.04 $ (0.05)
======== ======== ======== ========
Weighted average shares
outstanding used to
compute diluted earnings
(loss) per share 35,615 33,076 35,523 32,821
======== ======== ======== ========
Reconciliation of net
income (loss) per share
from operations to
cash-based earnings
per share:
Net income (loss) per
diluted share $ 0.01 $ (0.07) $ 0.04 $ (0.05)
Acquired in-process
research and
development -- 0.12 -- 0.12
Acquisition related
expenses, net of
tax effect -- -- -- 0.01
Amortization of
intangible assets 0.04 0.01 0.08 0.01
Amortization of
deferred stock option
compensation, net of
tax effect -- -- -- 0.01
-------- -------- -------- --------
Cash-based earnings
per share $ 0.05 $ 0.06 $ 0.12 $ 0.10
======== ======== ======== ========
Net income (loss) $ 461 $ (2,475) $ 1,291 $ (1,480)
Acquired in-process
research and
development -- 4,100 -- 4,100
Acquisition related
expenses, net of tax
effect -- -- -- 515
Amortization of
intangible assets 1,415 350 2,770 350
Amortization of deferred
stock option
compensation, net of
tax effect 48 147 117 318
-------- -------- -------- --------
Cash-based net income $ 1,924 $ 2,122 $ 4,178 $ 3,803
======== ======== ======== ========
Weighted average shares
outstanding to compute
cash-based earnings per
share 35,615 35,757 35,523 35,920
======== ======== ======== ========
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