Stable operating results; Exploring strategic options
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.
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