BELLEVUE, Wash., Aug. 12, 2019 /PRNewswire/ -- Bsquare Corporation (NASDAQ: BSQR) today announced financial results for the second quarter of 2019.

"In May of 2019 we announced a series of initiatives called 'One Bsquare' that recognize and build on the connection between our smart device business and associated third-party software business and the IoT opportunity.  We believe the promise of IoT will be realized through the development of intelligent devices and intelligent systems that are cloud-enabled, contribute data, facilitate distributed control and decision making, and operate securely at scale," said Bsquare President and CEO Ralph C. Derrickson.  "We have an opportunity to help companies transform their businesses and operations to these intelligent systems that leverages our unique combination of expertise with embedded operating systems and IoT software and services."

"In Q2 we started implementation of the One Bsquare initiatives.  During the quarter we restructured our executive team, flattening the organization and adding entrepreneurial leaders, and we formed a new team to focus on strategic partnerships.  We downsized our software development organization and initiated the sales and marketing of our software and services for intelligent devices and systems.  And, we announced a new customer in the facilities management space - Arcus FM - that we believe is representative of the customers we'll be closing moving forward."

"Our revenue was on the high end of our guidance and margins were in-line with guidance. Our efforts to manage expense are starting to impact our financials as our on-going operating expense, excluding restructuring costs, were at the lowest level since Q4 2016s.  While I am pleased with these results, it will take another two or three quarters before the full impact of our rebuilding efforts is consistently reflected in our operating results," concluded Mr. Derrickson.

Second Quarter 2019 Financial Highlights

• Revenue was $14.2 million, down by $900,000 from $15.1 million in the first quarter of 2019, down 26.2% compared to the second quarter of 2018 and down 6.1% compared to the first quarter of 2018, primarily due to lower sales of Microsoft Windows Embedded operating systems.
• Operating expenses in the second quarter included a $1.4 million charge for restructuring costs associated with a workforce reduction plan approved by the Board of Directors during the quarter.
• GAAP net loss for the current quarter was $3.9 million, or $0.30 per diluted share, compared to net loss of $3.7 million, or $0.29 per diluted share, in the second quarter of 2018 and net loss of $2.8 million, or $0.22 per diluted share, in the first quarter of 2019. The GAAP net loss for the quarter includes $1.4 million in restructuring costs.
• Excluding the charge for restructuring costs of $1.4 million, net loss for the current quarter was $2.5 million, or $(0.19) per diluted share, as adjusted (1).
• Adjusted EBITDAS (2) was negative $2.2 million, compared to negative $3.6 million in the second quarter of 2018 and negative $2.5 million in the first quarter of 2019.
• Cash, cash equivalents, restricted cash, and short-term investments on June 30, 2019 totaled $12.6 million, a decrease of approximately $2.7 million from March 31, 2019 and a decrease of $4.4 million from December 31, 2018.

Details as follows (unaudited, in thousands except percentages and per share amounts):

Financial Commentary on Second Quarter 2019 Results (Compared to Second Quarter 2018)

• Third-party software revenue decreased for the quarterly period, driven by lower sales of Microsoft Embedded and Windows Mobile operating systems in Europe. 
• Proprietary software revenue decreased for the quarterly period, primarily due to lower DataV software sales.
• Professional engineering service revenue increased when compared to the prior year quarterly period, primarily from completion of a customer project in the current quarter.
• Operating expenses, excluding the charge for restructuring costs of $1.0 million, decreased when compared to the second quarter of 2018 due to lower salary, benefit and marketing costs from spending reductions initiated in second half of 2018 and first half of 2019.
• Excluding the charge for restructuring costs of $1.0 million, net loss for the current quarter decreased by $1.2 million, or $(0.10) per diluted share, as adjusted, vs. the second quarter of 2018.

Third Quarter 2019 Outlook

In the third quarter, we will continue with and accelerate the implementation of the previously announced One Bsquare initiatives to realign our business. 

Management currently has the following expectations for the third quarter of 2019:

• Revenue in the range of $12.5 million to $14.5 million; and
• Blended gross margin in the 15% to 17% range.

Conference Call

Management will host a conference call today, August 12, 2019, at 5 p.m. Eastern Time (2 p.m. Pacific Time). To access the call dial 1-800-239-9838 or 1-856-344-9316 for international callers, and reference "BSQUARE Corporation Second Quarter 2019 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 6669112. A live and replay Webcast of the call will be available at www.bsquare.com in the investor relations section.

About Bsquare Corporation

Bsquare builds technology that is powering the next generation of intelligent devices and the systems in which they operate.  We believe the promise of IoT will be realized through the development of intelligent devices and intelligent systems that are cloud-enabled, contribute data, facilitate distributed control & decision making, and operate securely at scale. Bsquare's suite of services and software components allow our customers to create new revenue streams and operating models while providing new opportunities for lowering costs and improving operations. We serve a global customer base from offices in Bellevue, Washington, the United Kingdom and Taiwan. For more information, visit www.bsquare.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," "believe," "plan," "strategy," "future," "may," "should," "will," and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding 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 around DataV™, the Internet of Things, and our product and service offerings more generally; 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; 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 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, the Bsquare Logo, and DataV are trademarks of Bsquare Corporation in the U.S. and other countries. Other names and brands herein may be trademarks of others.

View original content to download multimedia:http://www.prnewswire.com/news-releases/bsquare-reports-second-quarter-2019-financial-results-300900248.html

SOURCE Bsquare