Welcome!

IoT User Interface Authors: Peter Galvin, Elizabeth White, Dana Gardner, Nicole Bryan, Kevin Benedict

News Feed Item

Bsquare Reports First Quarter 2014 Results

BELLEVUE, WA -- (Marketwired) -- 05/15/14 -- BSQUARE Corporation (NASDAQ: BSQR), a leading enabler of smart, connected systems, today announced financial results for the first quarter ended March 31, 2014. Total revenue for the quarter was $22.7 million, down 12% compared to the fourth quarter of 2013 and up 9% year-over-year. The net loss for the quarter was $393,000, or $0.03 per share, compared to a net loss of $23,000, or $0.00 per share, in the fourth quarter of 2013 and a loss of $862,000, or $0.08 per share, in the year-ago quarter. Adjusted EBITDAS for the quarter was $210,000 compared to $345,000 in the fourth quarter of 2013 and negative $485,000 in the year-ago quarter. The Company ended the quarter with $23.2 million in cash and investments, up $2.2 million from December 31, 2013.

Details as follows (unaudited, in 000's except per share amounts):



                                     ---------------------------------------
                                                Three Months Ended
                                     ---------------------------------------
                                        3/31/2014   12/31/2013    3/31/2013
                                     ---------------------------------------
Revenue:
  Third-party Software                $    17,695  $    21,142  $    15,491
  Engineering Services                      4,281        4,243        4,359
  Proprietary Software                        755          444        1,020
                                     ---------------------------------------
Total Revenue                              22,731       25,829       20,870
                                     ---------------------------------------
Total Gross Profit                          3,535        4,516        3,347
Gross Margins:
  Third-party Software                         13%          19%          16%
  Engineering Services                         15%           7%           0%
  Proprietary Software                         78%          56%          83%
                                     ---------------------------------------
Total Gross Margin                             16%          17%          16%
                                     ---------------------------------------
Total Operating Expenses                    3,732        4,491        4,294
                                     ---------------------------------------
Net Loss                              $      (393) $       (23) $      (862)
                                     =======================================
  Per Share-Diluted                   $     (0.03) $     (0.00) $     (0.08)
                                     =======================================
Adjusted EBITDAS                      $       210  $       345  $      (485)
                                     =======================================
Cash and Investments EoQ              $    23,226  $    21,055  $    20,297
                                     ---------------------------------------


Notes:
Adjusted EBITDAS = Operating income (loss) before depreciation, amortization and stock compensation expense. Adjusted EBITDAS is a non-GAAP measurement (reconciliation provided after financial statement tables).
Cash and Investments EoQ includes both short and long-term amounts (long-term at 3/31/14 = $250,000).

CEO Commentary

Jerry Chase, President and Chief Executive Officer of Bsquare, commented, "During Q1 we made solid progress on our commitment to return Bsquare to profitability, as evidenced by the $562,000 reduction in operating expenses and the $695,000 positive swing in Adjusted EBITDAS compared to the year-ago quarter. We continue to engage with potential customers and partners around our Internet of Things initiative, and believe IoT is a promising direction for Bsquare. We currently anticipate revenue from this initiative beginning in 2015. Looking forward, we currently expect to be GAAP profitable in Q2 2014 and believe we have the business structure in place to position Bsquare for success in the coming quarters."

Financial Commentary on First Quarter Results (Comparison to Fourth Quarter Results)

  • The decline in third-party software sales, down $3.4 million or 16%, was primarily due to a significant Adobe Flash sale which benefited the fourth quarter;
  • The decline in third-party software margin, down 32% or six percentage points, was driven by the significant Adobe Flash sale which benefited the fourth quarter;
  • The increase in engineering services margin, up 114% or 8 percentage points, was driven primarily by utilization improvement resulting from the cost reductions enacted in the fourth quarter;
  • The decrease in operating expenses, down $759,000 or 17%, was driven primarily by the cost reductions enacted in the fourth quarter; and
  • The increase in cash, up $2.2 million or 10%, from December 31, 2013 was driven primarily by positive working capital effects.

Outlook

The Company currently has the following expectations for Q2 2014:

  • Total revenue is expected to be in the range of $21 million to $23 million; and
  • Cash and investments are projected to be down approximately $1.5 million from March 31, 2014 due to negative working capital effects.

Conference Call

Management will host a conference call today, May 15, 2014, at 5 p.m. Eastern Daylight Time (2 p.m. Pacific Daylight Time). To access the call dial 1-877-941-2068 or +1-480-629-9712 for international callers, and reference "BSQUARE Corporation First Quarter 2014 Earnings Conference Call." A replay will be available for two weeks following the call by dialing 1-877-870-5176, or +1-858-384-5517 for international callers; reference pin number 4680691. A live and replay Webcast of the call will be available at www.bsquare.com in the investor relations section.

About BSQUARE Corporation

Bsquare, a global leader in embedded solutions, applies experience and expertise on leading platforms to create new connections with customers, new business models and to enable new ways of working and communicating. Bsquare serves customers by forging connections among the partners, people, tools and technology needed to create smart connected devices. For more information, visit www.bsquare.com.

This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, among others, statements we make regarding: our financial results in future periods such as anticipated revenue, profitability, and cash and investments; our strategies for customer retention, growth, and market position, including within the Internet of Things market; our sales opportunities or pipeline; and anticipated effects of our 2013 restructuring. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: whether we are able to maintain our favorable relationship with Microsoft; the extent to which we are successful in retaining existing customers and adding new long-term relationships; our ability to execute our sales and marketing strategies around the Internet of Things and our product and service offerings more generally; our management of risks associated with protection of intellectual property and potential infringement claims; risks associated with recent changes in our senior management team; risks associated with our ability to achieve the anticipated benefits of our 2013 restructuring; and such other risk factors as discussed in our most recent Annual Report on Form 10-K and other filings with the SEC. Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. Except as may be required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

BSQUARE is a registered trademark of BSQUARE Corporation. All other product and company names herein may be trademarks of their respective owners.



                            BSQUARE CORPORATION
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                    (In thousands, except share amounts)

                                                    March 31,     December
                                                       2014       31, 2013
                                                   -----------  -----------
                                                   (Unaudited)
                      ASSETS
Current assets:
  Cash and cash equivalents                        $    16,845  $    13,510
  Short-term investments                                 6,131        7,295
  Accounts receivable, net of allowance for
   doubtful accounts of $215 at March 31, 2014 and
   $214 at December 31, 2013                            13,130       15,893
  Deferred income taxes                                     12           12
  Prepaid expenses and other current assets              1,808        2,313
                                                   -----------  -----------

    Total current assets                                37,926       39,023
Equipment, furniture and leasehold improvements,
 net                                                     1,496          411
Restricted cash                                            250          250
Deferred income taxes                                      304          304
Intangible assets, net                                     830          863
Goodwill                                                 3,738        3,738
Other non-current assets                                    57           59
                                                   -----------  -----------

    Total assets                                   $    44,601  $    44,648
                                                   ===========  ===========

       LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Third-party software fees payable                $    11,424  $    12,746
  Accounts payable                                         187          634
  Accrued compensation                                   1,722        2,383
  Other accrued expenses                                 1,711        1,249
  Deferred revenue                                       2,707        2,177
                                                   -----------  -----------

    Total current liabilities                           17,751       19,189
Deferred incomes taxes                                     144          144
Deferred rent                                            1,827          644
Shareholders' equity:
  Preferred stock, no par value: 10,000,000 shares
   authorized; no shares issued and outstanding             --           --
  Common stock, no par value: 37,500,000 shares
   authorized; 11,459,676 shares issued and
   outstanding at March 31, 2014 and 11,294,682
   shares issued and outstanding at December 31,
   2013                                                129,946      129,423
  Accumulated other comprehensive loss                    (682)        (759)
  Accumulated deficit                                 (104,385)    (103,993)
                                                   -----------  -----------

    Total shareholders' equity                          24,879       24,671
                                                   -----------  -----------

    Total liabilities and shareholders' equity     $    44,601  $    44,648
                                                   ===========  ===========




                            BSQUARE CORPORATION
   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
            (In thousands, except per share amounts) (Unaudited)


                                                      Three Months Ended
                                                           March 31,
                                                   ------------------------
                                                       2014         2013
                                                   -----------  -----------
Revenue:
  Software                                         $    18,450  $    16,511
  Service                                                4,281        4,359
                                                   -----------  -----------

    Total revenue                                       22,731       20,870
                                                   -----------  -----------

Cost of revenue:
  Software                                              15,555       13,167
  Service                                                3,641        4,356
                                                   -----------  -----------

    Total cost of revenue                               19,196       17,523
                                                   -----------  -----------

      Gross profit                                       3,535        3,347
Operating expenses:
  Selling, general and administrative                    3,300        3,631
  Research and development                                 432          663
                                                   -----------  -----------

    Total operating expenses                             3,732        4,294
                                                   -----------  -----------

Loss from operations                                      (197)        (947)
Other income (expense), net                                (91)          90
                                                   -----------  -----------

Loss before income taxes                                  (288)        (857)
Income tax expense                                        (105)          (5)
                                                   -----------  -----------

Net loss                                           $      (393) $      (862)
                                                   ===========  ===========

Basic loss per share                               $     (0.03) $     (0.08)
                                                   ===========  ===========

Diluted loss per share                             $     (0.03) $     (0.08)
                                                   ===========  ===========

Shares used in calculation of loss per share:
  Basic                                                 11,390       11,107
                                                   ===========  ===========

  Diluted                                               11,390       11,107
                                                   ===========  ===========

Comprehensive loss:
Net loss                                           $      (393) $      (862)
Other comprehensive income (expense):
  Foreign currency translation, net of tax                  77          (96)
  Change in unrealized losses on investments, net
   of tax                                                    -           (2)
                                                   -----------  -----------

        Total other comprehensive income (expense)          77          (98)
                                                   -----------  -----------

Comprehensive loss                                 $      (316) $      (960)
                                                   ===========  ===========




                            BSQUARE CORPORATION
    NON-GAAP INFORMATION AND RECONCILIATION TO COMPARABLE GAAP FINANCIAL
                                  MEASURES
                         (In thousands, unaudited)

                                                Three Months Ended
                                       ------------------------------------
                                        March 31,     December   March 31,
                                           2014       31, 2013      2013
                                       -----------  ----------- -----------

Adjusted EBITDAS:
 Operating income (loss), as reported  $      (197) $        25 $      (947)
 Depreciation and amortization                 163          148         210
 Stock-based compensation expense              244          172         252
                                       -----------  ----------- -----------

Adjusted EBITDAS (1)                   $       210  $       345 $      (485)
                                       ===========  =========== ===========

(1) Adjusted EBITDAS is a non-GAAP financial measure. Generally, a non-GAAP
 financial measure is a numerical measure of a company's performance,
 financial position or cash flow that either excludes or includes amounts
 that are not normally excluded or included in the most directly comparable
 measure calculated and presented in accordance with GAAP. Adjusted EBITDAS
 is defined as operating income (loss) before depreciation expense on fixed
 assets and amortization expense (including impairment) on intangible
 assets, and stock-based compensation expense. Adjusted EBITDAS should not
 be construed as a substitute for net income (loss) or net cash provided by
 (used in) operating activities (all as determined in accordance with GAAP)
 for the purpose of analyzing our operating performance, financial position
 and cash flows, as Adjusted EBITDAS is not defined by GAAP. However, the
 Company regards Adjusted EBITDAS as a complement to net income and other
 GAAP financial performance measures, including an indirect measure of
 operating cash flow.


Bsquare Contact:
Scott Mahan
BSQUARE Corporation
+1 425.519.5900
Email Contact

Investor Contact:
Brett Maas
Hayden IR
+ 1 646.536.7331
Email Contact

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@CloudExpo Stories
You are moving to the Cloud. The question is not if, it’s when. Now that your competitors are in the cloud and lapping you, your “when” better hurry up and get here. But saying and doing are two different things. In his session at @DevOpsSummit at 18th Cloud Expo, Robert Reeves, CTO of Datical, explained how DevOps can be your onramp to the cloud. By adopting simple, platform independent DevOps strategies, you can accelerate your move to the cloud. Spoiler Alert: He also makes sure you don’t...
What does it look like when you have access to cloud infrastructure and platform under the same roof? Let’s talk about the different layers of Technology as a Service: who cares, what runs where, and how does it all fit together. In his session at 18th Cloud Expo, Phil Jackson, Lead Technology Evangelist at SoftLayer, an IBM company, spoke about the picture being painted by IBM Cloud and how the tools being crafted can help fill the gaps in your IT infrastructure.
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Your business relies on your applications and your employees to stay in business. Whether you develop apps or manage business critical apps that help fuel your business, what happens when users experience sluggish performance? You and all technical teams across the organization – application, network, operations, among others, as well as, those outside the organization, like ISPs and third-party providers – are called in to solve the problem.
Amazon has gradually rolled out parts of its IoT offerings, but these are just the tip of the iceberg. In addition to optimizing their backend AWS offerings, Amazon is laying the ground work to be a major force in IoT - especially in the connected home and office. In his session at @ThingsExpo, Chris Kocher, founder and managing director of Grey Heron, explained how Amazon is extending its reach to become a major force in IoT by building on its dominant cloud IoT platform, its Dash Button strat...
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
Digital Initiatives create new ways of conducting business, which drive the need for increasingly advanced security and regulatory compliance challenges with exponentially more damaging consequences. In the BMC and Forbes Insights Survey in 2016, 97% of executives said they expect a rise in data breach attempts in the next 12 months. Sixty percent said operations and security teams have only a general understanding of each other’s requirements, resulting in a “SecOps gap” leaving organizations u...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change t...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
It's easy to assume that your app will run on a fast and reliable network. The reality for your app's users, though, is often a slow, unreliable network with spotty coverage. What happens when the network doesn't work, or when the device is in airplane mode? You get unhappy, frustrated users. An offline-first app is an app that works, without error, when there is no network connection. In his session at 18th Cloud Expo, Bradley Holt, a Developer Advocate with IBM Cloud Data Services, discussed...
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
The pace of innovation, vendor lock-in, production sustainability, cost-effectiveness, and managing risk… In his session at 18th Cloud Expo, Dan Choquette, Founder of RackN, discussed how CIOs are challenged finding the balance of finding the right tools, technology and operational model that serves the business the best. He also discussed how clouds, open source software and infrastructure solutions have benefits but also drawbacks and how workload and operational portability between vendors ...
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...