B.O.S. Reports Revenue Growth of 12% and Net Income Growth of 16% in the Second Quarter of 2018
August 20 2018 - 4:00PM
B.O.S. Better Online Solutions Ltd. ("BOS" or the "Company")
(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 fiscal
2018 second quarter and six months ended June 30, 2018.
BOS reported revenues of $7.6 million for the second quarter
ended June 30, 2018, a 12% increase as compared to $6.7 million in
the comparable quarter in 2017. Net income for the second
quarter of 2018 was $192,000, or $0.05 per basic and diluted share,
as compared to net income of $166,000, or $0.05 per basic and
diluted share, in the second quarter of 2017. EBITDA (Earnings
Before Interest, Taxes, Depreciation and Amortization) was
$317,000 for the second quarter of 2018, as compared to $311,000
for the second quarter of 2017 (See Reconciliation of Net Income to
EBITDA in the supplemental table included at the end of this
release).
BOS reported revenues of $15.8 million for the
six months ended June 30, 2018, a 15% increase as compared to $13.8
million in the comparable 2017 period. Net income for the six month
period was $397,000, or $0.12 per basic and diluted share, as
compared to net income of $313,000, or $0.10 per basic and diluted
share, in the prior year period. The Company reported EBITDA
of $682,000 for the first six months of 2018, as compared to
$626,000 for the first six months of 2017.
Shareholders’ equity increased to $10.9 million
($3.07 per share) as of June 30, 2018 from $10.2 million ($3.04 per
share) in December 31, 2017. The increase was primarily related to
the growth in net income for the first half of 2018, as well as to
$400,000 of equity raised in April of 2018. The proceeds raised
were mainly used to finance the Company’s new logistic center that
was launched during the second quarter of 2018.
Yuval Viner, Co-CEO at BOS, stated, “We are
pleased with the organic revenue growth we experienced across our
Supply Chain and RFID and Mobile divisions. As we have stated
in the past, we are focused on strategically building our
international pipeline, specifically for our Supply Chain division,
while leveraging our leading position in Israel as a provider of
RFID and Mobile solutions, and our first half results reflect our
efforts to do so. During the second quarter we announced two
orders for our comprehensive Supply Chain solutions, and have also
completed the delivery of a mobile system order for a top tier
customer in the Israeli market, demonstrating our leadership
position. We look forward to continuing this momentum into the
second half of fiscal 2018, and meet our forecast for fiscal 2018
of revenues exceeding $29 million and net income surpassing
$800,000.”
Eyal Cohen, Co-CEO at BOS, added, “Revenue
growth in the Supply Chain division was primarily due to a 54%
increase in sales to the Far East, and growth in the RFID and
Mobile division was largely attributable to orders from both new
and existing customers within the Israeli market. Our gross
margins decreased slightly as compared to the comparable periods,
due primarily to product mix, but we expect gross margins to
improve in the second half of the year. Furthermore, we
continued to strengthen our balance sheet providing us with a solid
platform for future growth.”
Conference Call Information
BOS will host a conference call on Tuesday,
August 21, 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
integrator 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
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's periodic reports and
registration statements filed with the U.S. Securities 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.
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 |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
U.S. dollars in thousands |
|
|
|
|
|
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Revenues |
$ |
15,843 |
|
$ |
13,780 |
|
$ |
7,552 |
|
$ |
6,716 |
Cost of
revenues |
|
12,626 |
|
|
10,868 |
|
|
5,996 |
|
|
5,252 |
Gross
profit |
|
3,217 |
|
|
2,912 |
|
|
1,556 |
|
|
1,464 |
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
Sales and marketing |
|
1,847 |
|
|
1,591 |
|
|
934 |
|
|
777 |
General and administrative |
|
850 |
|
|
845 |
|
|
389 |
|
|
449 |
Total
operating costs and expenses |
|
2,697 |
|
|
2,436 |
|
|
1,323 |
|
|
1,226 |
|
|
|
|
|
|
|
|
|
Operating income |
|
520 |
|
|
476 |
|
|
233 |
|
|
238 |
Financial expenses, net |
|
(123) |
|
|
(163) |
|
|
(41) |
|
|
(72) |
Net
income |
$ |
397 |
|
$ |
313 |
|
$ |
192 |
|
$ |
166 |
|
|
|
|
|
|
|
|
|
Basic
and diluted net income per share |
$ |
0.12 |
|
$ |
0.10 |
|
$ |
0.05 |
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computing basic and diluted net
income per share |
|
3,446 |
|
|
3,051 |
|
|
3,534 |
|
|
3,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in
thousands) |
|
|
|
|
|
|
|
June 30, 2018 |
|
December 31,
2017 |
|
|
(Unaudited) |
|
(Audited) |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
1,496 |
|
$ |
1,533 |
Restricted bank deposits |
|
|
302 |
|
|
247 |
Trade
receivables |
|
|
8,237 |
|
|
9,804 |
Other
accounts receivable and prepaid expenses |
|
|
1,215 |
|
|
898 |
Inventories |
|
|
2,751 |
|
|
3,240 |
|
|
|
|
|
Total
current assets |
|
|
14,001 |
|
|
15,722 |
|
|
|
|
|
LONG-TERM ASSETS |
|
|
181 |
|
|
220 |
|
|
|
|
|
PROPERTY
AND EQUIPMENT, NET |
|
|
1,010 |
|
|
651 |
|
|
|
|
|
OTHER
INTANGIBLE ASSETS, NET |
|
|
109 |
|
|
138 |
|
|
|
|
|
GOODWILL |
|
|
4,676 |
|
|
4,676 |
|
|
|
|
|
|
|
Total
assets |
|
$ |
19,977 |
|
$ |
21,407 |
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
June 30, 2018 |
|
December 31, 2017 |
|
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Current
maturities of long term loans |
|
|
479 |
|
|
505 |
Trade
payables |
|
|
4,249 |
|
|
5,951 |
Employees
and payroll accruals |
|
|
706 |
|
|
822 |
Deferred
revenues |
|
|
913 |
|
|
798 |
Accrued
expenses and other liabilities |
|
|
277 |
|
|
304 |
|
|
|
|
|
Total
current liabilities |
|
|
6,624 |
|
|
8,380 |
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
Long-term
loans, net of current maturities |
|
|
2,157 |
|
|
2,523 |
Accrued
severance pay |
|
|
270 |
|
|
286 |
|
|
|
|
|
Total
long-term liabilities |
|
|
2,427 |
|
|
2,809 |
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
10,926 |
|
|
10,218 |
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
19,977 |
|
$ |
21,407 |
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL
RESULTS |
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
Six months ended June
30, |
|
Three months ended June
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income as reported |
|
$ |
397 |
|
$ |
313 |
|
$ |
192 |
|
$ |
166 |
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
28 |
|
|
28 |
|
|
14 |
|
|
14 |
Stock
based compensation |
|
|
28 |
|
|
32 |
|
|
14 |
|
|
15 |
Total
Adjustments |
|
|
56 |
|
|
60 |
|
|
28 |
|
|
29 |
Net
Income on a Non-GAAP basis |
|
$ |
453 |
|
$ |
373 |
|
$ |
220 |
|
$ |
195 |
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED EBITDA |
(U.S. dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
520 |
|
$ |
476 |
|
$ |
233 |
|
$ |
238 |
Add: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
28 |
|
|
28 |
|
|
14 |
|
|
14 |
Stock
based compensation |
|
|
28 |
|
|
32 |
|
|
14 |
|
|
15 |
Depreciation |
|
|
106 |
|
|
90 |
|
|
56 |
|
|
44 |
EBITDA |
|
$ |
682 |
|
$ |
626 |
|
$ |
317 |
|
$ |
311 |
|
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION |
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
RFID and Mobile Solutions |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
RFID and Mobile Solutions |
|
SupplyChain
Solutions |
|
Intercompany |
|
Consolidated |
|
|
Six months ended June
30, 2017 |
|
Three months ended June
30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
6,229 |
|
$ |
7,639 |
|
$ |
(88) |
|
$ |
13,780 |
|
$ |
2,918 |
|
$ |
3,823 |
|
$ |
(25) |
|
$ |
6,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
$ |
1,533 |
|
$ |
1,379 |
|
$ |
- |
|
$ |
2,912 |
|
$ |
749 |
|
$ |
715 |
|
$ |
- |
|
$ |
1,464 |
|
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