B.O.S. Reports First Quarter 2019 Financial Results
May 30 2019 - 8:30AM
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 first quarter ended March
31, 2019.
Revenues for the first quarter of 2019 were $7.8
million compared to $8.3 million in the comparable quarter last
year. The decrease in revenues is attributed to the timing of
orders and based on our backlog, we expect to make up the first
quarter revenue decrease during the balance of 2019, and realize
consolidated revenue growth for the full year.
Gross profit margin for the first quarter of
2019 increased to 21.3% from 20.0% in the comparable period last
year.
General and administrative expenses for the
first quarter of 2019 increased to $573,000 from $461,000 in the
comparable period last year. The increase is attributed to costs
associated with a special shareholders meeting convened at the
demand of an activist shareholder, and to expenses related to the
Imdecol acquisition.
Net income for the first quarter of 2019 was
$156,000 or $0.04 per basic share compared to net income of
$205,000 or $0.06 per basic share in the first quarter of 2018.
Net income, on a non-GAAP basis, for the first
quarter of 2019 was $288,000 or $0.08 per basic share compared to
$233,000 or $0.07 per basic share in the comparable quarter last
year. Non-GAAP net income excludes amortization of intangible
assets, acquisition expenses, stock-based compensation and costs
associated with the special shareholders meeting in the first
quarter of 2019.
Yuval Viner, BOS’ Co-CEO commented, “During the
first quarter we announced our acquisition of Imdecol and
anticipate that we will close the acquisition this week. The
addition of Imdecol is a transformative development for our Company
that brings advanced technology robotic systems that enhance the
productivity of production lines. We are excited about these new
capabilities that are expected to significantly expand our product
offering and broaden our appeal to a larger base of global
customers.
Eyal Cohen, Co-CEO and CFO “As we move through
2019 we are focused on:
- Completing Imdecol acquisition and integrating it into
BOS,
- Increasing the global exposure of BOS' enhanced product
offering, which would now include robotics systems,
- Improving the gross profit margin of the RFID and Mobile
division,
- Expanding the offering of our Supply Chain division, and
- Enhancing the efficiency of our operations.”
Outlook
In the year 2019 BOS expects that:
- Revenues will grow from $33 million in year 2018 to above $36
million
- Non-GAAP net income and Non-GAAP earning per basic shares will
grow from $1.1 million or $0.32 per basic share in 2018 to above
$1.3 million or $0.34 per basic share
The net income and earnings per share data is
provided on a Non-GAAP basis since this excludes amortization of
intangible assets related to the Imdecol acquisition. This
amortization is the subject of a purchase price allocation analysis
that is currently being conducted.
The Non-GAAP data also excludes acquisition
expenses, stock-based compensation and costs associated with the
special shareholders meeting in the first quarter of
2019.
Longer term, BOS is positioned to drive revenue
and profitability growth by:
- Its entry, by Imdecol acquisition, into the global growing
manufacturing automation vertical, known as Smart Factory,
- Its entry, by strategic agreement with RFKeeper, into the Smart
Store segment,
- Expanding BOS offering and technological capabilities in
the Automatic Warehouse segment and by,
- BOS' established position in the Supply Chain and RFID &
Mobile markets
BOS will host a conference call on Thursday, May
30, 2019 at 10 a.m. EDT - 5:00 p.m., Israel Time. 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 |
|
|
Three months ended March 31, |
|
Year ended December 31, |
|
2019 |
|
2018 |
|
2018 |
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
|
Revenues |
$ |
7,763 |
|
$ |
8,291 |
|
$ |
32,650 |
Cost of revenues |
|
6,113 |
|
|
6,630 |
|
|
25,907 |
Gross profit |
1,650 |
|
1,661 |
|
6,743 |
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
Sales and marketing |
|
901 |
|
|
913 |
|
|
3,705 |
General and administrative |
|
573 |
|
|
461 |
|
|
1,834 |
Total operating costs and expenses |
|
1,474 |
|
|
1,374 |
|
|
5,539 |
|
|
|
|
|
|
Operating Income |
|
176 |
|
|
287 |
|
|
1,204 |
Financial expenses, net |
|
(2) |
|
|
(85) |
|
|
(255) |
Income before taxes on income |
|
174 |
|
|
202 |
|
|
949 |
Taxes on income (tax benefit) |
|
(18) |
|
|
(3) |
|
|
(41) |
Net income |
$ |
156 |
|
$ |
205 |
|
$ |
990 |
|
|
|
|
|
|
Basic and diluted net income per share |
$ |
0.04 |
|
$ |
0.06 |
|
$ |
0.28 |
|
|
|
|
|
|
Weighted average number of shares used in computing basic and
diluted net income per share |
|
3,648 |
|
|
3,357 |
|
|
3,500 |
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
March 31, 2019 |
|
December 31, 2018 |
|
(Unaudited) |
|
(Audited) |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
$ |
2,177 |
|
$ |
1,410 |
Restricted bank deposits |
|
325 |
|
|
332 |
Trade receivables |
|
8,401 |
|
|
8,624 |
Other accounts receivable and prepaid expenses |
|
1,296 |
|
|
829 |
Inventories |
|
3,565 |
|
|
2,874 |
|
|
|
|
Total current assets |
|
15,764 |
|
|
14,069 |
|
|
|
|
LONG-TERM ASSETS |
|
144 |
|
|
177 |
|
|
|
|
PROPERTY AND EQUIPMENT, NET |
|
1,235 |
|
|
1,108 |
|
|
|
|
OPERATING LEASE RIGHT-OF-USE ASSETS, NET |
|
777 |
|
|
- |
|
|
|
|
OTHER INTANGIBLE ASSETS, NET |
|
76 |
|
|
81 |
|
|
|
|
GOODWILL |
|
4,676 |
|
|
4,676 |
|
|
|
|
|
|
Total assets |
$ |
22,672 |
|
$ |
20,111 |
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
March 31, 2019 |
|
December 31, 2018 |
|
(Unaudited) |
|
(Audited) |
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
Current maturities of long term loans |
$ |
482 |
|
$ |
467 |
Trade payables |
|
5,068 |
|
|
4,106 |
Employees and payroll accruals |
|
713 |
|
|
778 |
Deferred revenues |
|
686 |
|
|
768 |
Operating lease liabilities, current |
|
377 |
|
|
- |
Accrued expenses and other liabilities |
|
233 |
|
|
313 |
|
|
|
|
Total current liabilities |
|
7,559 |
|
|
6,432 |
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
Long-term loans, net of current maturities |
|
1,806 |
|
|
1,867 |
Operating lease liabilities, non-current |
|
400 |
|
|
- |
Accrued severance pay |
|
306 |
|
|
301 |
|
|
|
|
Total long-term liabilities |
|
2,512 |
|
|
2,168 |
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
12,601 |
|
|
11,511 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
22,672 |
|
$ |
21,407 |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS |
(U.S. dollars in thousands) |
|
|
Three months ended March 31, |
|
Year ended December 31, |
|
2019 |
|
2018 |
|
2018 |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Net Income as reported |
$ |
156 |
|
$ |
205 |
|
$ |
990 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
5 |
|
|
14 |
|
|
57 |
Stock based compensation |
|
19 |
|
|
14 |
|
|
66 |
Special Shareholders' meeting and acquisition expenses |
|
108 |
|
|
- |
|
|
- |
Total Adjustments |
$ |
132 |
|
$ |
28 |
|
$ |
123 |
Net Income on a Non-GAAP basis |
$ |
288 |
|
$ |
233 |
|
$ |
1,113 |
|
|
CONDENSED CONSOLIDATED EBITDA |
(U.S. dollars in thousands) |
|
|
Three months ended March 31, |
|
|
Year ended December 31, |
|
2019 |
|
2018 |
|
|
2018 |
|
|
|
|
|
|
|
Operating income |
$ |
176 |
|
$ |
287 |
|
$ |
1,204 |
Add: |
|
|
|
|
|
|
Amortization of intangible assets |
|
5 |
|
|
14 |
|
|
57 |
Stock based compensation |
|
19 |
|
|
14 |
|
|
66 |
Depreciation |
|
65 |
|
|
50 |
|
|
232 |
EBITDA |
$ |
265 |
|
$ |
365 |
|
$ |
1,559 |
|
|
|
|
|
|
|
|
SEGMENT INFORMATION |
(U.S. dollars in thousands) |
|
|
RFID and Mobile
Solutions |
|
SupplyChain Solutions |
|
Intercompany |
|
Consolidated |
|
RFID and Mobile
Solutions |
|
SupplyChain Solutions |
|
Intercompany |
|
Consolidated |
|
Three months ended March
31, 2019 |
|
Three months ended March
31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
3,776 |
|
$ |
4,039 |
|
$ |
(52 |
) |
|
$ |
7,763 |
|
$ |
3,822 |
|
$ |
4,595 |
|
$ |
(126 |
) |
|
$ |
8,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
800 |
|
$ |
850 |
|
$ |
- |
|
|
$ |
1,650 |
|
$ |
976 |
|
$ |
685 |
|
$ |
- |
|
|
$ |
1,661 |
|
|
|
|
RFID and Mobile Solutions |
|
SupplyChain Solutions |
|
Intercompany |
|
Consolidated |
|
year ended December
31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
14,633 |
|
$ |
18,205 |
|
$ |
(188 |
) |
|
$ |
32,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
3,371 |
|
$ |
3,372 |
|
$ |
- |
|
|
$ |
6,743 |
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