BOSC BOS Better Online Solutions Ltd

B.O.S. Better Online Solutions Ltd. (the "Company", "BOS") (Nasdaq:BOSC), a leading Israeli integrator 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, 2017.

Revenues for year 2017 grew by 5% to $28.9 million as compared to $27.4 million in year 2016. Revenues for the fourth quarter of 2017 grew by 17% to $7.9 million as compared to $6.8 million in the fourth quarter of year 2016

Net profit for year 2017 grew by 115% to $773,000 from $360,000 in year 2016. Net profit for the fourth quarter of 2017 grew by 50% to $328,000 as compared to $219,000 in the fourth quarter of 2016. 

Net income per share for year 2017 grew by 71% to $0.24 per share as compared to $0.14 in year 2016. Net income per share for the fourth quarter of 2017 grew by 25% to $0.10 as compared to $0.08 in the fourth quarter of 2016. 

Yuval Viner, BOS' Co-CEO, stated: "Year 2017 reflects results of our efforts to grow our business by expanding our product offering, increasing our efficiency and our sales margins. Our expectations for 2018 are to continue to grow and increase our revenues and profits as compared to 2017."

Eyal Cohen, BOS’ Co-CEO and CFO added: ‘BOS’ annual EBITDA for 2017 was $1.4 million and our debt net of cash as of December 31, 2017 was $1.5 million. The ratio of market cap, at the beginning of trading today, to EBITDA was 4.9 and the ratio of enterprise value to EBITDA was 6. We expect of EBITDA in 2018 to increase compared to year 2017. In December 2017 we reduced the interest rate on our $3 million bank loans by 38%, from 5.44% to 3.35%. We consider this a vote of confidence by the bank in BOS," concluded Cohen.

BOS will host a conference call on Tuesday, March 27, 2018 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 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)
		Year ended December 31,												Three months ended  December 31,
			2017					2016							2017			2016
		(Unaudited)												(Unaudited)
Revenues		$	28,932				$	27,427						$	7,925				$	6,777
Cost of revenues			22,587					22,112							5,972					5,341
Gross profit			6,345					5,315							1,953					1,436
Operating costs and expenses:
Sales and marketing			3,389					3,111							919					818
General and administrative			1,870					1,498							628					306
Total operating costs and expenses			5,259					4,609							1,547					1,124
Operating income			1,086					706							406					312
Financial expenses, net			(297		)			(339			)				(69	)				(93		)
Income or before taxes  on income			789						367						337					219
Taxes on income			16						7						9					-
Net income		$	773				$	360						$	328				$	219
Basic and diluted net income per share		$	0.24				$	0.14						$	0.10				$	0.08
Weighted average number of shares used in computing basic net income per share			3,171					2,587							3,343					2,783
Weighted average number of shares used in computing diluted net income per share			3,171					2,593							3,343					2,783

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
		December31, 2017						December31, 2016
		(Unaudited)						(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	1,533					$	1,286
Restricted bank deposits			247						196
Trade receivables			9,804						7,928
Other accounts receivable and prepaid expenses			898						992
Inventories			3,240						2,314
Total current assets			15,722						12,716
LONG-TERM ASSETS			220						43
PROPERTYAND EQUIPMENT, NET			651						514
OTHER INTANGIBLE ASSETS, NET			138						195
GOODWILL			4,676						4,676
Total assets		$	21,407					$	18,144

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
		December 31, 2017			December 31, 2016
		(Unaudited)			(Audited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long term loans		$	505		$	400
Trade payables			5,951			4,601
Employees and payroll accruals			822			677
Deferred revenues			798			680
Accrued expenses and other liabilities			304			259
Total current liabilities			8,380			6,617
LONG-TERM LIABILITIES:
Long-term loans, net of current maturities			2,523			2,734
Accrued severance pay			286			194
Deferred gain			-			15
Total long-term liabilities			2,809			2,943
SHAREHOLDERS' EQUITY			10,218			8,584
Total liabilities and shareholders' equity		$	21,407		$	18,144

RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands)
	Year ended December 31,						Three months ended   December 31,
		2017			2016			2017		2016
	(Unaudited)						(Unaudited)
Net Income as reported	$	773		$	360		$	328			$	219
Adjustments:
Amortization of intangible assets		57			64			14				14
Stock based compensation		60			147			15				45
Total Adjustments		117			211			29				59
Net Income on a Non-GAAP basis	$	890		$	571		$	357			$	278

CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)
	Year ended   December 31,						Three months ended  December 31,
		2017			2016			2017		2016
	(Unaudited)						(Unaudited)
Operating income	$	1,086		$	706		$	406			$	312
Add:
Amortization of intangible assets		57			64			14				14
Stock based compensation		60			147			15				45
Depreciation		188			184			49				46
EBITDA	$	1,391		$	1,101		$	484			$	417

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, 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

		RFID and Mobile Solutions			SupplyChain Solutions			Intercompany				Consolidated			RFID and Mobile Solutions			SupplyChain Solutions			Intercompany				Consolidated
		Year ended December 31, 2016													Three months ended  December 31, 2016
Revenues		$	12,197		$	15,291		$	(61	)		$	27,427		$	3,379		$	3,409		$	(11	)		$	6,777
Gross profit		$	2,888		$	2,427		$	-			$	5,315		$	872		$	564		$	-			$	1,436