In a release issued earlier today by B.O.S. Better Online Solutions
Ltd. (NASDAQ: BOSC), the company is updating two figures in the
CONSOLIDATED STATEMENTS OF OPERATIONS table: Sales and marketing
for Six months ended June 30, 2019 should be 1,899 and Total
operating costs and expenses for Six months ended June 30, 2019
should be 3,057. The updated release follows:
B.O.S. Better Online Solutions Ltd. ("BOS" or
the "Company") (NASDAQ: BOSC), a global provider of intelligent
systems and services for production and logistics, reported its
financial results for the second quarter and six months ended June
30, 2019.
Second Quarter 2019 Results:
Revenues for the second quarter grew by 16% to
$8.8 million from $7.6 million in the comparable quarter last
year.
The growth was attributed to the Supply Chain
division, whose revenues for the second quarter grew by 32%, to
$5.6 million, from $4.2 million in the comparable period last year.
The growth engine of the Supply Chain continues to be international
sales, which accounted for 56% of its revenues in the second
quarter of 2019 as compared to 53% in the year 2018 and 46% of
revenues in the year 2017.
Revenues in the Intelligent Robotics and RFID
division amounted to $3.3 million in the second quarter of 2019,
roughly the same as in the second quarter of 2018. The Company
completed its acquisition of the Robotics business in June.
Robotics revenues are recognized upon reaching certain production
milestones that take time to achieve. With just one month of
operation, the Robotics business was not in the position to meet
these milestones, thus had no significant impact on the second
quarter 2019 revenues.
Net income for the second quarter of 2019 was
$20,000 or $0.00 per basic share compared to net income of $192,000
or $0.05 per basic share in the second quarter of 2018.
Net income, on a non-GAAP basis, for the second
quarter of 2019 was $219,000 or $0.05 per basic share compared to
$220,000 or $0.06 per basic share in the comparable quarter last
year.
First Six Months 2019 Results:
Revenues for the first six months of 2019 grew
by 4% to $16.5 million from $15.8 million in the first six months
of 2018.
Net income for the first six months of 2019 was
$176,000 or $0.05 per basic share compared to net income of
$397,000 or $0.12 per basic share in the first six months of
2018.
Net income, on a non-GAAP basis, for the first
half of 2019 was $507,000 or $0.13 per basic share compared to
$453,000 or $0.13 per basic share in the comparable period last
year.
A reconciliation of Non-GAAP financial results
for the three months and the six months ending June 30, 2019 is
presented along with the GAAP financials at the end of this
document. Eyal Cohen, BOS’ Co-CEO commented: "Our
second quarter represented a period of intense activity for BOS'
management and employees. In June, we completed the acquisition of
Imdecol’s business, and welcomed the former Imdecol employees into
the BOS family. We have been extremely focused on integrating
Imdecol's operational and financial activities.
"Our mission is to
enhance our Robotics operational and international sales platform
to realize the tremendous long-term opportunity in the global
industrial robotics market. Based on Market Research Engine, this
market is expected to grow at a CAGR of 11.5% and exceed $98
billion by 2024.1"
Yuval Viner, BOS’
Co-CEO added: "We have started to enhance the Robotics operation
and strengthen its competitive advantage by improving production
efficiency and capacity as well as expanding its technological
capabilities and customer service. This involves long-term
investments that we expect shall gradually yield consistent and
sustained growth in our Robotics international revenues.
Additionally, we have merged the RFID and Robotics sales teams and
created an international sales group and a local market (Israel)
sales group."
Outlook for the year
2019
BOS reiterates the
following expectations for full-year 2019:
- Year 2019 revenues will grow to above $36 million from $33.6
million in the year 2018. Revenues for the first six months of 2019
amounted to $16.5 million. Revenues for the second half of 2019 are
expected to grow to $19.5 million.
- Non-GAAP net income and earnings per basic share will increase
to above $1.3 million or $0.34 per basic share from $1.1 million or
$0.32 per basic share in 2018. Non-GAAP net income for the first
six months of 2019 amounted to $507,000 ($0.13 per basic share).
Non-GAAP net income for the second half of 2019 is expected to grow
to $790,000 ($0.21 per basic share).
Our expectations for
growth in revenues, net income and earnings per basic share on a
non-GAAP basis in the second half of 2019 are based upon a full six
months of operation of the Robotics business and a traditional
strong fourth quarter.
Conference Call Details
BOS will host a conference call today, Tuesday,
August 27, 2019 at 10:30 a.m. EDT - 5:30 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.boscorporate.com.
About BOS
B.O.S is a global provider of intelligent
systems and services for production and logistics. BOS’
Robotics and RFID Division, offers intelligent robotics and RFID
systems for industrial and logistics processes as well as for
retail store management. BOS' Supply Chain Division provides
electronic components, mainly for the aerospace, defense and other
industries worldwide. Its services include the consolidation of
components from a vast number of suppliers, long term scheduling
and kitting. For more information, please visit:
www.boscorporate.com or contact:
Investor Relations Contact: John
Nesbett/Jennifer BelodeauIMS Investor Relations (203)
972-9200jnesbett@institutionalms.com |
Company Contact: Eyal Cohen,
CO-CEO & CFO B.O.S Better Online Solutions Ltd.
+972-542525925 |
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, failure to successfully integrate
and achieve the potential benefits of the acquisition of the
business operations of Imdecol Ltd., 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.
____________________
1Market Research Engine:
https://www.marketresearchengine.com/Industrial-Robotics-Market
CONSOLIDATED STATEMENTS OF OPERATIONS |
U.S. dollars in thousands |
|
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
2018 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
16,549 |
|
|
$ |
15,843 |
|
|
$ |
8,786 |
|
|
|
7,552 |
|
|
Cost of revenues |
|
|
13,167 |
|
|
|
12,626 |
|
|
|
7,054 |
|
|
|
5,996 |
|
|
Gross profit |
|
|
3,382 |
|
|
|
3,217 |
|
|
|
1,732 |
|
|
|
1,556 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
1,899 |
|
|
|
847 |
|
|
|
998 |
|
|
|
934 |
|
|
General and administrative |
|
|
1,158 |
|
|
|
850 |
|
|
|
585 |
|
|
|
389 |
|
|
Total operating costs and expenses |
|
|
3,057 |
|
|
|
697 |
|
|
|
1,583 |
|
|
|
1,323 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
325 |
|
|
|
520 |
|
|
|
149 |
|
|
|
233 |
|
|
Financial expenses, net |
|
|
(129 |
) |
|
|
(123 |
) |
|
|
(127 |
) |
|
|
(41 |
) |
|
Income before taxes on income |
|
|
196 |
|
|
|
397 |
|
|
|
22 |
|
|
|
192 |
|
|
Taxes on income (tax benefit) |
|
|
20 |
|
|
|
- |
|
|
|
2 |
|
|
|
- |
|
|
Net income |
|
$ |
176 |
|
|
$ |
397 |
|
|
$ |
20 |
|
|
$ |
192 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income per share |
|
$ |
0.05 |
|
|
$ |
0.12 |
|
|
$ |
0.00 |
|
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computing basic net
income per share |
|
|
3,845 |
|
|
3,446 |
|
|
|
4,040 |
|
|
|
|
3,534 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computing diluted net
income per share |
|
|
3,847 |
|
|
3,446 |
|
|
|
4,042 |
|
|
|
|
3,534 |
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
|
June 30,
2019 |
|
|
December 31, 2018 |
|
|
(Unaudited) |
|
|
(Audited) |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,435 |
|
$ |
1,410 |
|
Restricted bank deposits |
|
|
327 |
|
|
332 |
|
Trade receivables |
|
|
8,945 |
|
|
8,624 |
|
Other accounts receivable and prepaid expenses |
|
|
1,695 |
|
|
829 |
|
Inventories, net of advances |
|
|
4,272 |
|
|
2,874 |
|
|
|
|
|
|
|
Total current assets |
|
|
16,674 |
|
|
14,069 |
|
|
|
|
|
|
|
LONG-TERM ASSETS |
|
|
165 |
|
|
177 |
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT, NET |
|
|
1,299 |
|
|
1,108 |
|
|
|
|
|
|
|
OPERATING LEASE RIGHT-OF-USE ASSETS, NET |
|
|
929 |
|
|
- |
|
|
|
|
|
|
|
OTHER INTANGIBLE ASSETS, NET |
|
|
1,015 |
|
|
81 |
|
|
|
|
|
|
|
GOODWILL |
|
|
5,147 |
|
|
4,676 |
|
|
|
|
|
|
|
Total assets |
|
$ |
25,229 |
|
$ |
20,111 |
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
|
June 30, 2019 |
|
December 31, 2018 |
|
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
Current maturities of long term loans |
|
$ |
634 |
|
$ |
467 |
Operating lease liabilities, current |
|
|
527 |
|
|
- |
Trade payables |
|
|
5,527 |
|
|
4,106 |
Employees and payroll accruals |
|
|
822 |
|
|
778 |
Deferred revenues |
|
|
819 |
|
|
768 |
Advances net of inventory in progress |
|
|
57 |
|
|
- |
Accrued expenses and other liabilities |
|
|
222 |
|
|
313 |
|
|
|
|
|
Total current liabilities |
|
|
8,608 |
|
|
6,432 |
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
Long-term loans, net of current maturities |
|
|
2,280 |
|
|
1,867 |
Operating lease liabilities, non-current |
|
|
460 |
|
|
- |
Accrued severance pay |
|
|
274 |
|
|
301 |
|
|
|
|
|
Total long-term liabilities |
|
|
3,014 |
|
|
2,168 |
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
13,607 |
|
|
11,511 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
25,229 |
|
$ |
20,111 |
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS |
(U.S. dollars in thousands) |
|
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Net Income as reported |
|
$ |
176 |
|
$ |
397 |
|
$ |
20 |
|
$ |
192 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
19 |
|
|
28 |
|
|
14 |
|
|
14 |
Stock based compensation |
|
|
39 |
|
|
28 |
|
|
20 |
|
|
14 |
Cost associated with a special shareholders' meeting convened at
the demand of an activist shareholder* |
|
|
88 |
|
|
- |
|
|
17 |
|
|
- |
Imdecol' acquisition expenses* |
|
|
128 |
|
|
- |
|
|
91 |
|
|
- |
Currency diff. due to operating lease liabilities ** |
|
|
57 |
|
|
- |
|
|
57 |
|
|
- |
Total Adjustments |
|
|
331 |
|
|
56 |
|
|
199 |
|
|
28 |
Net Income on a Non-GAAP basis |
|
$ |
507 |
|
$ |
453 |
|
$ |
219 |
|
$ |
220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.05 |
|
$ |
0.06 |
*No additional cost expected in year 2019
**According to US GAAP, commencing January 1, 2019,
operating lessees will no longer be provided with a source of
off-balance-sheet financing and lessees must recognize lease assets
and lease liabilities. Since the Company's operating lease
liabilities are linked to the NIS, the devaluation of the US $
against the NIS caused a currency differences cost of $57,000 in
the first six months of 2019. The Company will hedge this exposure
going forward to minimize currency differences underlying operating
lease liability.
|
CONDENSED CONSOLIDATED EBITDA |
(U.S. dollars in thousands) |
|
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
325 |
|
$ |
520 |
|
$ |
149 |
|
$ |
233 |
Add: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
19 |
|
|
28 |
|
|
14 |
|
|
14 |
Stock based compensation |
|
|
39 |
|
|
28 |
|
|
20 |
|
|
14 |
Depreciation |
|
|
134 |
|
|
106 |
|
|
69 |
|
|
56 |
EBITDA |
|
$ |
517 |
|
$ |
682 |
|
$ |
252 |
|
$ |
317 |
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION |
(U.S. dollars in thousands) |
|
|
|
Intelligent Robotics and RFID Division |
|
SupplyChain Solutions |
|
Intercompany |
|
Consolidated |
|
Intelligent Robotics and RFID Division |
|
SupplyChain Solutions |
|
Intercompany |
|
Consolidated |
|
|
|
Six months ended June
30, 2019 |
|
Three months ended June
30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
7,027 |
|
$ |
9,616 |
|
$ |
(94 |
) |
|
$ |
16,549 |
|
$ |
3,251 |
|
$ |
5,577 |
|
$ |
(42 |
) |
|
$ |
8,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
1,404 |
|
$ |
1,978 |
|
$ |
- |
|
|
$ |
3,382 |
|
$ |
604 |
|
$ |
1,128 |
|
$ |
- |
|
|
$ |
1,732 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intelligent Robotics and RFID Division |
|
SupplyChain Solutions |
|
Intercompany |
|
Consolidated |
|
Intelligent Robotics and RFID Division |
|
SupplyChain Solutions |
|
Intercompany |
|
Consolidated |
|
|
|
Six months ended June
30, 2018 |
|
Three months ended June
30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
7,145 |
|
$ |
8,740 |
|
$ |
(42 |
) |
|
$ |
15,843 |
|
$ |
3,323 |
|
$ |
4,235 |
|
$ |
(6 |
) |
|
$ |
7,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
1,696 |
|
$ |
1,521 |
|
$ |
- |
|
|
$ |
3,217 |
|
$ |
720 |
|
$ |
836 |
|
$ |
- |
|
|
$ |
1,556 |
|
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