Stable operating results; Exploring
strategic options
SEATTLE, Aug. 10,
2023 /PRNewswire/ -- Bsquare Corporation (NASDAQ:
BSQR) today announced financial results for the second quarter of
2023. Total revenue was $6.5 million,
a decrease of $1.6 million or 20%
compared to the first quarter of 2023. Gross profit increased by
$0.1 million from the previous
quarter and operating expenses increased by $0.3 million. Loss from operations was
$0.7 million, a $0.3 million decline from the first quarter
operating loss. Cash, cash equivalents, restricted cash and
short-term investments totaled $33.4
million as of June 30,
2023.
On a year-to-date basis, loss from operations was $1.1 million, an improvement of $0.5 million compared to the same period in 2022.
Year-to-date net loss was $0.3
million compared to a net loss of $1.5 million in 2022.
Bsquare Corporation also announced today that they have been
working with Telegraph Hill Advisors, an investment bank that
specializes in IoT, to explore strategic options.
"With Telegraph Hill's assistance, we initiated a process to
explore strategic options for creating shareholder value," said
Ralph C. Derrickson, Bsquare
President and CEO. "While the process is running we will continue
to operate the company as efficiently as possible and seek
opportunities to demonstrate the potential of SquareOne as the
basis for a high-margin SaaS business," added Derrickson.
Second Quarter 2023 Results Compared to
First Quarter 2023
- Revenue for the quarter was $6.5
million, a decrease of $1.6
million or 20%. Partner Solutions revenue decreased by
$1.5 million, while Edge to Cloud
revenue decreased by $0.1
million.
- Second quarter gross profit was $1.4
million, a slight increase from the prior quarter. The
improvement was primarily due to the favorable impact of changes to
Microsoft's incentive earnings program.
- Total operating expenses for the quarter were $2.0 million, an increase of $0.3 million from the prior quarter. The increase
was due to a decrease in Microsoft co-op marketing funds (which
offset marketing expense) and an increase in professional
fees.
- Loss from operations for the quarter was $0.7 million compared to the first quarter loss
from operations of $0.4
million.
- The Company continues to execute a short-term, laddered
investment strategy designed to employ available cash while
maintaining liquidity as strategic options are explored. Interest
income for the quarter totaled $0.4
million.
- During the second quarter of 2023, the Company repurchased
248,509 shares for approximately $0.3
million. In total, we have repurchased 731,004 shares for
$0.9 million.
- Net loss for the quarter was $0.3
million, or $0.01 per diluted
share, compared to the first quarter net loss of $0.1 million, or $0.00 per diluted share.
- Cash, cash equivalents, restricted cash and short-term
investments totaled $33.4 million on
June 30, 2023, a decrease of
$2.3 million compared to December 31, 2022. The liquidity decrease was
driven by changes in working capital and share repurchases.
Details as follows (unaudited, in thousands except percentages
and per share amounts):
|
|
Three Months
Ended
|
|
|
|
June 30,
2023
|
|
|
March 31,
2023
|
|
|
Quarter-
over-
Quarter
Change
|
|
|
June 30,
2022
|
|
|
Year-over-
Year
Change
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partner
Solutions
|
|
$
|
5,751
|
|
|
$
|
7,267
|
|
|
$
|
(1,516)
|
|
|
$
|
9,353
|
|
|
$
|
(3,602)
|
|
Edge to
Cloud
|
|
|
774
|
|
|
|
874
|
|
|
|
(100)
|
|
|
|
1,041
|
|
|
|
(267)
|
|
Total
revenue
|
|
|
6,525
|
|
|
|
8,141
|
|
|
|
(1,616)
|
|
|
|
10,394
|
|
|
|
(3,869)
|
|
Total gross
profit
|
|
$
|
1,372
|
|
|
$
|
1,285
|
|
|
$
|
87
|
|
|
$
|
1,599
|
|
|
$
|
(227)
|
|
Gross margin
(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partner
Solutions
|
|
|
22
|
%
|
|
|
15
|
%
|
|
|
7.0
|
|
|
|
13
|
%
|
|
|
9.0
|
|
Edge to
Cloud
|
|
|
17
|
%
|
|
|
24
|
%
|
|
|
(7.0)
|
|
|
|
34
|
%
|
|
|
(17.0)
|
|
Total gross
margin
|
|
|
21
|
%
|
|
|
16
|
%
|
|
|
5.0
|
|
|
|
15
|
%
|
|
|
6.0
|
|
Total operating
expenses
|
|
$
|
2,024
|
|
|
$
|
1,733
|
|
|
$
|
291
|
|
|
$
|
2,278
|
|
|
$
|
(254)
|
|
Net loss
|
|
|
(260)
|
|
|
|
(71)
|
|
|
|
(189)
|
|
|
|
(625)
|
|
|
|
365
|
|
Per basic and diluted
share
|
|
|
(0.01)
|
|
|
|
0.00
|
|
|
|
(0.01)
|
|
|
|
(0.03)
|
|
|
|
0.02
|
|
Cash, cash equivalents
and restricted cash
|
|
$
|
13,534
|
|
|
$
|
7,741
|
|
|
$
|
5,793
|
|
|
$
|
37,846
|
|
|
$
|
(24,312)
|
|
|
Notes:
|
(1)
|
Quarter-over-quarter
change and year-over-year change represent percentage point
change.
|
Second Quarter 2023 Results Compared to Second
Quarter 2022
- Compared to the second quarter of 2022, total revenue decreased
by $3.9 million. Partner Solutions
revenue decreased $3.6 million while
Edge to Cloud revenue decreased $0.3
million.
- Gross profit decreased $0.2
million driven by the Partner Solutions segment.
- Total operating expenses for the quarter were $2.0 million, a decrease of $0.3 million compared to the second quarter of
2022.
- Loss from operations for the quarter was $0.7 million, which was flat compared to the
second quarter of 2022. Net loss for the quarter was $0.3 million, or $0.01 per diluted share, compared to a net loss
of $0.6 million, or $0.03 per diluted share, in the second quarter of
2022.
Conference Call
Management will host a conference call Thursday, August 10, 2023 at 5 p.m. Eastern Time (2
p.m. Pacific Time). To access the call dial 1-844-825-9789
or 1-412-317-5180 for international callers, and reference "Bsquare
Corporation Second Quarter 2023 Earnings Conference Call."
A replay will be available for two weeks following the call by
dialing 1-844-512-2921, or 1-412-317-6671 for international
callers; reference pin number 10180813. A live and replay webcast
of the call will be available at www.bsquare.com in the investor
relations section.
About Bsquare Corporation
Bsquare helps companies build connected products that
participate intelligently in their own security, deployment,
operation, and management, allowing our customers to realize the
full potential of a connected world. We have extensive experience
designing with Windows, Linux, Android, and other embedded
operating systems and now operate IoT networks ranging in size from
50,000 to more than 1 million devices for our customers. Our
technology is powering devices that help people be productive,
enhance quality of life, and preserve the resources of our planet.
Bsquare serves a global customer base from offices in Seattle, WA, and the United Kingdom. For more information,
visit www.bsquare.com.
About Telegraph Hill Advisors
Telegraph Hill Advisors is a leading technology-focused boutique
investment bank that provides strategic M&A and capital markets
advice to growth-oriented technology companies. They build value
for clients through their substantial domain knowledge, extensive
industry relationships and strong ties within the technology
investment community. Focus sectors include: enterprise software,
AI/ML, communications technology, IoT, digital media and marketing
technology. Telegraph Hill is headquartered in San Francisco and serves clients throughout
the Americas, EMEA and Asia-Pacific regions. For further information,
please visit www.telehilladvisors.com or contact: Phillip B. Courten, Managing Director at
phillip@telehilladvisors.com.
Cautionary Note Regarding Forward-Looking Statements
This release contains "forward-looking statements" within the
meaning of the safe-harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as: "expect,"
"continue," "believe," "plan," "strategy," "future," "may,"
"should," "will," and similar references to future periods.
Examples of forward-looking statements include, among others, the
ability to identify or advance strategic options, express or
implied statements we make regarding the stability of our business,
expected improvements to our IoT and software offerings, expected
operating results in future periods, such as anticipated revenue,
gross margins, profitability, cash and investments, and regarding
strategies for customer retention, growth, new product and service
developments, and market position. Forward-looking statements are
neither historical facts nor assurances about future performance.
Instead, they are based on current beliefs, expectations and
assumptions about the future of our business and other future
conditions. 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: our ability
to execute our development initiatives and sales and marketing
strategies; the extent to which we are successful in gaining new
long-term customers and retaining existing ones; whether we are
able to maintain our favorable relationship with Microsoft as a
systems integrator and distributor; our success in leveraging
strategic partnering initiatives with companies such as Microsoft,
AWS and Intel; the ongoing impact of COVID-19 on our business and
on our customers and vendors; and such other risk factors as
discussed in our most recent Annual Report on Form 10-K and other
filings with the Securities and Exchange Commission. 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 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 and
Investor Contact:
|
Cheryl Wynne
|
Bsquare Corporation, Chief Financial
Officer
|
+1
425.519.5900
|
investorrelations@bsquare.com
|
Bsquare and the Bsquare Logo are trademarks of Bsquare
Corporation in the U.S. and other countries. Other names and brands
herein may be trademarks of others.
BSQUARE
CORPORATION CONDENSED CONSOLIDATED BALANCE
SHEETS (In thousands, except share
amounts) (Unaudited)
|
|
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
13,313
|
|
|
$
|
35,414
|
|
Restricted
cash
|
|
|
221
|
|
|
|
221
|
|
Short-term
investments
|
|
|
19,831
|
|
|
|
7
|
|
Accounts receivable,
net of allowance for doubtful accounts of $50 at June 30,
2023 and December 31, 2022
|
|
|
4,338
|
|
|
|
3,985
|
|
Contract
assets
|
|
|
262
|
|
|
|
—
|
|
Prepaid expenses and
other current assets
|
|
|
544
|
|
|
|
410
|
|
Total current
assets
|
|
|
38,509
|
|
|
|
40,037
|
|
Property and equipment,
net of accumulated depreciation
|
|
|
659
|
|
|
|
813
|
|
Right-of-use lease
assets, net
|
|
|
1,170
|
|
|
|
1,297
|
|
Other non-current
assets
|
|
|
24
|
|
|
|
24
|
|
Total
assets
|
|
$
|
40,362
|
|
|
$
|
42,171
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Third-party software
fees payable
|
|
$
|
3,616
|
|
|
$
|
4,073
|
|
Accounts
payable
|
|
|
247
|
|
|
|
414
|
|
Accrued
compensation
|
|
|
406
|
|
|
|
430
|
|
Other accrued
expenses
|
|
|
183
|
|
|
|
232
|
|
Deferred
revenue
|
|
|
126
|
|
|
|
201
|
|
Operating
lease
|
|
|
373
|
|
|
|
362
|
|
Total current
liabilities
|
|
|
4,951
|
|
|
|
5,712
|
|
Deferred revenue,
long-term
|
|
|
—
|
|
|
|
9
|
|
Operating lease,
long-term
|
|
|
908
|
|
|
|
1,051
|
|
|
|
|
|
|
|
|
|
|
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: 19,843,845 and
20,337,906 shares issued and outstanding at June 30, 2023 and
December 31,
2022, respectively
|
|
|
172,002
|
|
|
|
172,558
|
|
Accumulated other
comprehensive loss
|
|
|
(1,062)
|
|
|
|
(1,053)
|
|
Accumulated
deficit
|
|
|
(136,437)
|
|
|
|
(136,106)
|
|
Total shareholders'
equity
|
|
|
34,503
|
|
|
|
35,399
|
|
Total liabilities and
shareholders' equity
|
|
$
|
40,362
|
|
|
$
|
42,171
|
|
BSQUARE
CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share
amounts) (Unaudited)
|
|
|
|
Three Months
Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partner
Solutions
|
|
$
|
5,751
|
|
|
$
|
9,353
|
|
|
$
|
13,018
|
|
|
$
|
18,485
|
|
Edge to
Cloud
|
|
|
774
|
|
|
|
1,041
|
|
|
|
1,648
|
|
|
|
1,641
|
|
Total
revenue
|
|
|
6,525
|
|
|
|
10,394
|
|
|
|
14,666
|
|
|
|
20,126
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partner
Solutions
|
|
|
4,507
|
|
|
|
8,106
|
|
|
|
10,694
|
|
|
|
15,658
|
|
Edge to
Cloud
|
|
|
646
|
|
|
|
689
|
|
|
|
1,315
|
|
|
|
1,386
|
|
Total cost of
revenue
|
|
|
5,153
|
|
|
|
8,795
|
|
|
|
12,009
|
|
|
|
17,044
|
|
Gross
profit
|
|
|
1,372
|
|
|
|
1,599
|
|
|
|
2,657
|
|
|
|
3,082
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
1,741
|
|
|
|
2,022
|
|
|
|
3,190
|
|
|
|
4,165
|
|
Research and
development
|
|
|
283
|
|
|
|
256
|
|
|
|
567
|
|
|
|
517
|
|
Total operating
expenses
|
|
|
2,024
|
|
|
|
2,278
|
|
|
|
3,757
|
|
|
|
4,682
|
|
Loss from
operations
|
|
|
(652)
|
|
|
|
(679)
|
|
|
|
(1,100)
|
|
|
|
(1,600)
|
|
Other income (expense),
net
|
|
|
392
|
|
|
|
54
|
|
|
|
769
|
|
|
|
87
|
|
Loss before income
taxes
|
|
|
(260)
|
|
|
|
(625)
|
|
|
|
(331)
|
|
|
|
(1,513)
|
|
Income taxes
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net loss
|
|
$
|
(260)
|
|
|
$
|
(625)
|
|
|
$
|
(331)
|
|
|
$
|
(1,513)
|
|
Basic and diluted loss
per share
|
|
$
|
(0.01)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.07)
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
19,946
|
|
|
|
20,406
|
|
|
|
20,070
|
|
|
|
20,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(260)
|
|
|
$
|
(625)
|
|
|
$
|
(331)
|
|
|
$
|
(1,513)
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation, net of tax
|
|
|
(5)
|
|
|
|
(51)
|
|
|
|
(10)
|
|
|
|
(48)
|
|
Total other
comprehensive (loss) income
|
|
|
(5)
|
|
|
|
(51)
|
|
|
|
(10)
|
|
|
|
(48)
|
|
Comprehensive
loss
|
|
$
|
(265)
|
|
|
$
|
(676)
|
|
|
$
|
(341)
|
|
|
$
|
(1,561)
|
|
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SOURCE Bsquare