B.O.S. Better Online Solutions Reports Financial Results for the Third Quarter ended September 30, 2017
November 30 2017 - 5:51AM
Updated projection: Net Income in 2017 to
exceed $500,000
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 third
quarter of the fiscal year 2017.
Revenues for the third quarter of 2017 grew by
15% to $7.2 million from $6.3 million in the comparable period last
year.
Net income for the third quarter of 2017
amounted to $132,000 compared to a net loss of $205,000 in the
comparable quarter last year.
Net income for the first nine months of 2017
amounted to $445,000 compared to net income of $141,000 in the
comparable period last year.
Yuval Viner, BOS' Co-CEO, stated: "We are
pleased with the results of the first nine months of 2017, and
especially with the results of the third quarter of 2017. At the
beginning of 2017 we provided an outlook of $500,000 net income for
the year 2017. We are now confident that the net income in 2017
will exceed $500,000."
Eyal Cohen, BOS' Co-CEO and CFO, stated: "Since
2010, we have continuously presented an improvement in our annual
results. Our financial position is also stronger, with $1.3
million EBITDA for the last twelve months and a net bank debt of
$1.1 million. We will announce our outlook for the year 2018 in the
first quarter of 2018."
BOS will host a conference call on Thursday,
November 30, 2017 at 11:00 a.m. EST - 6:00 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
script of the call will be available the next day after the call on
BOS’s website, at: http://www.boscorporate.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:
Eyal Cohen
Co-CEO and CFO
+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, 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) |
|
|
|
Nine months ended September 30, |
|
Three months ended September
30, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
21,007 |
|
|
$ |
20,650 |
|
|
$ |
7,227 |
|
|
$ |
6,275 |
|
Cost of
revenues |
|
|
16,615 |
|
|
|
16,771 |
|
|
|
5,747 |
|
|
|
5,263 |
|
Gross
profit |
|
|
4,392 |
|
|
|
3,879 |
|
|
|
1,480 |
|
|
|
1,012 |
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
Sales and
marketing |
|
|
2,470 |
|
|
|
2,293 |
|
|
|
879 |
|
|
|
747 |
|
General
and administrative |
|
|
1,242 |
|
|
|
1,192 |
|
|
|
397 |
|
|
|
383 |
|
Total
operating costs and expenses |
|
|
3,712 |
|
|
|
3,485 |
|
|
|
1,276 |
|
|
|
1,130 |
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
680 |
|
|
|
394 |
|
|
|
204 |
|
|
|
(118 |
) |
Financial expenses, net |
|
|
(228 |
) |
|
|
(246 |
) |
|
|
(65 |
) |
|
|
(80 |
) |
Income
or (loss) before taxes on income |
|
|
452 |
|
|
|
148 |
|
|
|
139 |
|
|
|
(198 |
) |
Taxes on
income |
|
|
7 |
|
|
|
7 |
|
|
|
|
7 |
|
|
|
7 |
|
Net
income (loss) |
|
$ |
445 |
|
|
$ |
141 |
|
|
|
$ |
132 |
|
|
$ |
(205 |
) |
|
|
|
|
|
|
|
|
|
Basic
and diluted net income (loss) per share |
|
$ |
0.14 |
|
|
$ |
0.06 |
|
|
$ |
0.04 |
|
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computing basic and diluted net
income (loss) per share |
|
|
3,113 |
|
|
|
2,522 |
|
|
|
3,236 |
|
|
|
2,671 |
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
September 30, 2017 |
|
|
December 31, 2016 |
|
|
|
(Unaudited) |
|
|
(Audited) |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
1,662 |
|
$ |
1,286 |
Restricted bank deposits |
|
|
202 |
|
|
196 |
Trade
receivables |
|
|
9,174 |
|
|
7,928 |
Other
accounts receivable and prepaid expenses |
|
|
1,021 |
|
|
992 |
Inventories |
|
|
2,925 |
|
|
2,314 |
|
|
|
|
|
Total
current assets |
|
|
14,984 |
|
|
12,716 |
|
|
|
|
|
LONG-TERM ASSETS |
|
|
216 |
|
|
43 |
|
|
|
|
|
PROPERTY
AND EQUIPMENT, NET |
|
|
573 |
|
|
514 |
|
|
|
|
|
OTHER
INTANGIBLE ASSETS, NET |
|
|
152 |
|
|
195 |
|
|
|
|
|
GOODWILL |
|
|
4,676 |
|
|
4,676 |
|
|
|
|
|
Total
assets |
|
$ |
20,601 |
|
$ |
18,144 |
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
|
September 30,
2017 |
|
December 31, 2016 |
|
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Current
maturities of long term loans |
|
$ |
400 |
|
$ |
400 |
Trade
payables |
|
|
6,048 |
|
|
4,601 |
Employees
and payroll accruals |
|
|
586 |
|
|
677 |
Deferred
revenues |
|
|
764 |
|
|
680 |
Accrued
expenses and other liabilities |
|
|
338 |
|
|
259 |
|
|
|
|
|
Total
current liabilities |
|
|
8,136 |
|
|
6,617 |
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
Long-term
loans, net of current maturities |
|
|
2,553 |
|
|
2,734 |
Accrued
severance pay |
|
|
206 |
|
|
194 |
Deferred
gain |
|
|
- |
|
|
15 |
|
|
|
|
|
Total
long-term liabilities |
|
|
2,759 |
|
|
2,943 |
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
9,706 |
|
|
8,584 |
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
20,601 |
|
$ |
18,144 |
RECONCILIATION OF NON-GAAP FINANCIAL
RESULTS |
(U.S. dollars in thousands) |
|
|
|
Nine months ended September 30, |
|
Three months ended September
30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
2016 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (loss) as reported |
|
$ |
445 |
|
$ |
141 |
|
$ |
132 |
|
$ |
(205 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
43 |
|
|
64 |
|
|
15 |
|
|
10 |
|
Stock
based compensation |
|
|
45 |
|
|
102 |
|
|
13 |
|
|
34 |
|
Acquisition expenses |
|
|
- |
|
|
30 |
|
|
- |
|
|
- |
|
Total
Adjustments |
|
|
88 |
|
|
196 |
|
|
28 |
|
|
44 |
|
Net
Income (loss) on a Non-GAAP basis |
|
$ |
533 |
|
$ |
337 |
|
$ |
160 |
|
$ |
(161 |
) |
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED EBITDA |
(U.S. dollars in thousands) |
|
|
|
Nine months ended
September 30, |
|
Three months ended
September 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
2016 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
680 |
|
$ |
394 |
|
$ |
204 |
|
$ |
(118 |
) |
Add: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
43 |
|
|
64 |
|
|
15 |
|
|
10 |
|
Stock
based compensation |
|
|
45 |
|
|
102 |
|
|
13 |
|
|
34 |
|
Depreciation |
|
|
139 |
|
|
138 |
|
|
49 |
|
|
45 |
|
Acquisition expenses |
|
|
- |
|
|
30 |
|
|
- |
|
|
- |
|
EBITDA |
|
$ |
907 |
|
$ |
728 |
|
|
281 |
|
|
(29 |
) |
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION |
(U.S. dollars in thousands) |
|
|
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
|
Nine months ended September
30, 2017 |
|
Three months ended September
30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
9,607 |
|
$ |
11,504 |
|
$ |
(104 |
) |
|
$ |
21,007 |
|
$ |
3,378 |
|
$ |
3,865 |
|
$ |
(16 |
) |
|
$ |
7,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
$ |
2,368 |
|
$ |
2,024 |
|
$ |
- |
|
|
$ |
4,392 |
|
$ |
835 |
|
$ |
645 |
|
$ |
- |
|
|
$ |
1,480 |
|
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
|
Nine months ended September
30, 2016 |
|
Three months ended September
30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
8,818 |
|
$ |
11,882 |
|
$ |
(50 |
) |
|
$ |
20,650 |
|
$ |
2,784 |
|
$ |
3,514 |
|
$ |
(23 |
) |
|
$ |
6,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
$ |
2,016 |
|
$ |
1,863 |
|
$ |
- |
|
|
$ |
3,879 |
|
$ |
517 |
|
$ |
495 |
|
$ |
- |
|
|
$ |
1,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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