B.O.S. Better Online Solutions Ltd. (the "Company", "BOS") (Nasdaq:
BOSC), a leading Israeli provider of RFID and Mobile solutions and
a global provider of Supply Chain solutions to enterprises, today
reported its financial results for the fourth quarter and for the
year ended December 31, 2018.
Year-End 2018 Results:
Revenues for 2018 grew by 13% to $32.7 million as
compared to $28.9 million in 2017.
Net income for 2018 grew by 28% to $1.0 million or
$0.28 per basic share compared to net income of $0.7 million or
$0.24 per basic share in 2017.
Fourth Quarter 2018 Results:
Revenues for the fourth quarter of 2018 grew 15% to
$9.1 million as compared to $7.9 million in the fourth quarter of
2017.
Net income for the fourth quarter of 2018 grew 15%
to $377,000, or $0.11 per basic share as compared to 328,000, or
$0.10 per basic share in the fourth quarter of 2017.
Avidan Zelicovsky, BOS' President, stated: "We are
pleased with our performance in 2018 which reflects continuing
revenue growth and record net income. For the past three years, the
Compounded Annual Growth Rate for net income and revenues, were 49%
and 8.5%, respectively. This growth, which is primarily organic,
demonstrates the success of our efforts to expand our product
offering to existing and new customers globally. In the recent
three months our Supply Chain Division announced orders totaling $5
millions from international customers. This increased backlog is a
significant stepping-stone for our continuing growth globally."
Yuval Viner, BOS' Co-CEO, stated: "We have
successfully transitioned BOS to a growth trajectory, with
increased revenues and sustained profitability. Through our
turnaround strategy and initiatives the Company delivered net
income of $1.0 million for 2018, a substantial improvement from the
net loss of $9.0 million recorded in 2009, the year before our
current management was appointed. Likewise, we have strengthened
our balance sheet, by reducing our bank debt to $0.6 million at
December 31, 2018 as compared to a debt of $14 million in
2009."
Eyal Cohen, BOS' Co-CEO and CFO, stated: “We have a
clear roadmap, the requisite experience, skills and motivation to
grow BOS' businesses both locally and internationally. We have
targeted fields for expansion in 2019 and a robust acquisition
pipeline. As we move forward, we intend to finance our acquisition
strategy through commercial bank loans, internal cash resources and
equity.
Earlier this month, L.I.A Pure Capital requested
that we convene a special meeting of shareholders seeking the
removal of the Company's current directors and the election of Pure
Capital's director nominees in their stead. We are surprised by
this demand and believe it is unwarranted, given the conclusive
achievements of BOS management and its Board of Directors.”
Mr. Cohen concluded, “This is an exciting time for
our Company. We thank our shareholders for their support during
2018 and hope they continue to support BOS management and our board
of directors as we execute our growth plan and M&A
strategy.”
BOS will host a conference call today, Monday,
February 25, 2019, at 10 a.m. EST - 5:00 p.m., Israel Time. A slide
deck will accompany the earnings call and may be found on the
investor relations page of the BOS website at
http://www.boscom.presentation, or click here). A
question-and-answer session will follow management’s presentation.
To access the conference call, please dial one of the following
numbers:
US: +1-888-281-1167, International:
+972-3-9180644.
For those unable to listen to the live call, a
replay of the call will be available the next day on the BOS
website, http://www.boscom.com
About BOS
B.O.S. Better Online Solutions Ltd. (BOSC) is a
leading Israeli provider of RFID and Mobile solutions and a global
provider of Supply Chain solutions to enterprises. BOS' RFID and
Mobile division offers both turnkey integration services as well as
stand-alone products, including best-of-breed RFID and AIDC
hardware and communications equipment, BOS middleware and
industry-specific software applications. The Company's Supply Chain
division provides electronic components consolidation services to
the aerospace, defense, medical and telecommunications industries
as well as to enterprise customers worldwide. For more information,
please visit: www.boscorporate.com.
For more information:
Investor
Relations Contact: John Nesbett/Jennifer
BelodeauInstitutional Marketing Services (IMS) (203)
972-9200jnesbett@institutionalms.com |
Company
Contact: Eyal Cohen, CO-CEO & CFO B.O.S Better Online
Solutions Ltd. +972-542525925eyalc@boscom.com |
Use of Non-GAAP Financial
Information
BOS reports financial results in accordance with
U.S. GAAP and herein provides some non-GAAP measures. These
non-GAAP measures are not in accordance with, nor are they a
substitute for, GAAP measures. These non-GAAP measures are intended
to supplement the Company’s presentation of its financial results
that are prepared in accordance with GAAP. The Company uses the
non-GAAP measures presented to evaluate and manage the Company’s
operations internally. The Company is also providing this
information to assist investors in performing additional financial
analysis that is consistent with financial models developed by
research analysts who follow the Company. The reconciliation set
forth below is provided in accordance with Regulation G and
reconciles the non-GAAP financial measures with the most directly
comparable GAAP financial measures.
Safe Harbor Regarding Forward-Looking
Statements
The forward-looking statements contained herein
reflect management's current views with respect to future events
and financial performance. These forward-looking statements are
subject to certain risks and uncertainties that could cause the
actual results to differ materially from those in the
forward-looking statements, all of which are difficult to predict
and many of which are beyond the control of BOS. These risk
factors and uncertainties include, amongst others, the dependency
of sales being generated from one or few major customers, the
uncertainty of BOS being able to maintain current gross profit
margins, inability to keep up or ahead of technology and to succeed
in a highly competitive industry, inability to maintain marketing
and distribution arrangements and to expand our overseas markets,
uncertainty with respect to the prospects of legal claims against
BOS, the effect of exchange rate fluctuations, general worldwide
economic conditions and continued availability of financing for
working capital purposes and to refinance outstanding indebtedness;
and additional risks and uncertainties detailed in BOS' periodic
reports and registration statements filed with the U.S. Securities
and Exchange Commission. BOS undertakes no obligation to publicly
update or revise any such forward-looking statements to reflect any
change in its expectations or in events, conditions or
circumstances on which any such statements may be based, or that
may affect the likelihood that actual results will differ from
those set forth in the forward-looking statements.
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(U.S. dollars in thousands) |
|
|
|
Year ended December 31, |
|
Three months ended December
31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
32,650 |
|
$ |
28,932 |
|
$ |
9,093 |
|
$ |
7,925 |
Cost of
revenues |
|
25,907 |
|
22,587 |
|
7,171 |
|
5,972 |
Gross
profit |
|
6,743 |
|
6,345 |
|
1,922 |
|
1,953 |
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
Sales and
marketing |
|
3,705 |
|
3,389 |
|
980 |
|
919 |
General
and administrative |
|
1,834 |
|
1,870 |
|
532 |
|
628 |
Total
operating costs and expenses |
|
5,539 |
|
5,259 |
|
1,512 |
|
1,547 |
|
|
|
|
|
|
|
|
|
Operating income |
|
1,204 |
|
1,086 |
|
410 |
|
406 |
Financial expenses, net |
|
(255) |
|
(297) |
|
(85) |
|
(69) |
Income
or before taxes on income |
|
949 |
|
789 |
|
325 |
|
337 |
Taxes on
income (tax benefit) |
|
(41) |
|
16 |
|
(52) |
|
9 |
Net
income |
|
$ |
990 |
|
$ |
773 |
|
$ |
377 |
|
$ |
328 |
|
|
|
|
|
|
|
|
|
Basic
and diluted net income per share |
|
$ |
0.28 |
|
$ |
0.24 |
|
$ |
0.11 |
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computing basic and diluted
net income per share |
|
3,500 |
|
3,171 |
|
3,554 |
|
3,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
|
December 31,
2018 |
|
December 31, 2017 |
|
|
(Unaudited) |
|
(Audited) |
ASSETS |
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
1,410 |
|
$ |
1,533 |
Restricted bank deposits |
|
332 |
|
247 |
Trade
receivables |
|
8,624 |
|
9,804 |
Other
accounts receivable and prepaid expenses |
|
829 |
|
898 |
Inventories |
|
2,874 |
|
3,240 |
|
|
|
|
|
Total
current assets |
|
14,069 |
|
15,722 |
|
|
|
|
|
LONG-TERM ASSETS |
|
177 |
|
220 |
|
|
|
|
|
PROPERTY
AND EQUIPMENT, NET |
|
1,108 |
|
651 |
|
|
|
|
|
OTHER
INTANGIBLE ASSETS, NET |
|
81 |
|
138 |
|
|
|
|
|
GOODWILL |
|
4,676 |
|
4,676 |
|
|
|
|
|
Total
assets |
|
$ |
20,111 |
|
$ |
21,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
|
December 31,
2018 |
|
December 31, 2017 |
|
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Current maturities of
long term loans |
|
$ |
467 |
|
$ |
505 |
Trade
payables |
|
4,106 |
|
5,951 |
Employees
and payroll accruals |
|
778 |
|
822 |
Deferred
revenues |
|
768 |
|
798 |
Accrued
expenses and other liabilities |
|
313 |
|
304 |
|
|
|
|
|
Total
current liabilities |
|
6,432 |
|
8,380 |
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
Long-term
loans, net of current maturities |
|
1,867 |
|
2,523 |
Accrued
severance pay |
|
301 |
|
286 |
|
|
|
|
|
Total
long-term liabilities |
|
2,168 |
|
2,809 |
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
11,511 |
|
10,218 |
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
20,111 |
|
$ |
21,407 |
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL
RESULTS |
(U.S. dollars in thousands) |
|
|
|
Year ended December 31, |
|
Three months ended December
31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income as
reported |
|
$ |
990 |
|
$ |
773 |
|
$ |
377 |
|
$ |
328 |
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
57 |
|
57 |
|
14 |
|
14 |
Stock
based compensation |
|
66 |
|
60 |
|
20 |
|
15 |
Total
Adjustments |
|
123 |
|
117 |
|
34 |
|
29 |
Net
Income on a Non-GAAP basis |
|
$ |
1,113 |
|
$ |
890 |
|
$ |
411 |
|
$ |
357 |
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED EBITDA |
(U.S. dollars in thousands) |
|
|
|
Year ended
December 31, |
|
Three months ended December
31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
1,204 |
|
$ |
1,086 |
|
$ |
410 |
|
$ |
406 |
Add: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
57 |
|
57 |
|
14 |
|
14 |
Stock
based compensation |
|
66 |
|
60 |
|
20 |
|
15 |
Depreciation |
|
232 |
|
188 |
|
65 |
|
49 |
EBITDA |
|
$ |
1,559 |
|
$ |
1,391 |
|
509 |
|
484 |
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION |
(U.S. dollars in
thousands) |
|
|
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December
31, 2018 |
|
Three months ended December
31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
14,633 |
|
$ |
18,205 |
|
$ |
(188) |
|
$ |
32,650 |
|
$ |
4,474 |
|
$ |
4,714 |
|
$ |
(95) |
|
$ |
9,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
3,371 |
|
$ |
3,372 |
|
$ |
- |
|
$ |
6,743 |
|
$ |
1,029 |
|
$ |
893 |
|
$ |
- |
|
$ |
1,922 |
|
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December
31, 2017 |
|
Three months ended December
31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
13,666 |
|
$ |
15,495 |
|
$ |
(229) |
|
$ |
28,932 |
|
$ |
4,059 |
|
$ |
3,991 |
|
$ |
(125) |
|
$ |
7,925 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
3,623 |
|
$ |
2,722 |
|
$ |
- |
|
$ |
6,345 |
|
$ |
1,255 |
|
$ |
698 |
|
$ |
- |
|
$ |
1,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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