B.O.S. Reports Third Quarter Revenue Growth of 6.7%; Net Income Increases by 63.6%
November 26 2018 - 4:01PM
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 third quarter and nine months ended September 30, 2018.
BOS reported revenues of $7.7 million for the third quarter
ended September 30, 2018, a 6.7% increase as compared to $7.2
million in the comparable quarter in 2017. Net income for the
third quarter of 2018 increased 63.6% to $216,000, or $0.06 per
basic and diluted share, as compared to net income of $132,000, or
$0.04 per basic and diluted share, in the third quarter of 2017.
EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization) improved to $368,000 for the third quarter of 2018 as
compared to $281,000 for the third quarter of 2017 (For a
reconciliation of Operating Income to EBITDA see the supplemental
table included at the end of this release).
BOS reported revenues of $23.6 million for the nine months ended
September 30, 2018, a 12.1% increase as compared to $21.0 million
in the comparable period in 2017. Net income for the nine month
period increased by 37.8% to $613,000, or $0.18 per basic and
diluted share, as compared to net income of $445,000, or $0.14 per
basic and diluted share, in the prior year period. The
Company reported EBITDA of $1.1 million for the first nine months
of 2018 as compared to $907,000 for the first nine months of
2017.
Yuval Viner, Co-CEO at BOS, stated, “We are pleased with our
financial results for the third quarter and first nine months of
2018. As we move through the remainder of 2018, we continue
to expect to meet our forecast for fiscal 2018 of revenues
exceeding $29 million and net income surpassing $800,000.”
Eyal Cohen, Co-CEO at BOS, added, “Revenues of
our Supply Chain division, in the first nine months and in the
third quarter of 2018, grew by 17% and 23%, respectively, as
compared to the comparable periods of 2017. The growth was
attributed mainly to sales outside of Israel that increased by 41%
to $6.8 million in the first nine months of 2018 from $4.8 million
in the comparable period in 2017. Revenues in the RFID and Mobile
division, for the first nine months of 2018, grew by 6% to $10.2
million from $9.6 million in the comparable period last year.
Revenues in the RFID and Mobile division for the third quarter of
2018 decreased by 11% to $3 million from $3.4 million in the
comparable period last year. The decrease reflects the impact of
the Israeli holidays’ season on the revenues of the RFID and Mobile
division, all of which are currently derived from Israel. In 2018,
the holidays fell in the third quarter whereas in 2017 the holiday
season was in the fourth quarter of the year. We remain focused on
our efforts to grow our businesses both organically and through
acquisitions.”
Conference Call Information
BOS will host a conference call on Tuesday, November 27, 2018 at
10 a.m. EST - 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) |
|
|
|
|
|
|
|
Nine months ended September 30, |
|
Three months ended September
30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
23,557 |
|
|
$ |
21,007 |
|
|
$ |
7,714 |
|
|
$ |
7,227 |
|
Cost of revenues |
|
|
18,736 |
|
|
|
16,615 |
|
|
|
6,110 |
|
|
|
5,747 |
|
Gross profit |
|
|
4,821 |
|
|
|
4,392 |
|
|
|
1,604 |
|
|
|
1,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing |
|
|
2,725 |
|
|
|
2,470 |
|
|
|
878 |
|
|
|
879 |
|
General
and administrative |
|
|
1,302 |
|
|
|
1,242 |
|
|
|
452 |
|
|
|
397 |
|
Total operating costs
and expenses |
|
|
4,027 |
|
|
|
3,712 |
|
|
|
1,330 |
|
|
|
1,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
794 |
|
|
|
680 |
|
|
|
274 |
|
|
|
204 |
|
Financial expenses,
net |
|
|
(170 |
) |
|
|
(228 |
) |
|
|
(47 |
) |
|
|
(65 |
) |
Income before taxes
on income |
|
|
624 |
|
|
452 |
|
|
|
227 |
|
|
|
139 |
|
Taxes on income |
|
|
11 |
|
|
|
7 |
|
|
|
11 |
|
|
|
7 |
|
Net income |
|
$ |
613 |
|
|
$ |
445 |
|
|
$ |
216 |
|
|
$ |
132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
income per share |
|
$ |
0.18 |
|
|
$ |
0.14 |
|
|
$ |
0.06 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares used in computing basic net income per share |
|
|
3,483 |
|
|
|
3,113 |
|
|
|
3,554 |
|
|
|
3,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares used in computing diluted net income per share |
|
|
3,483 |
|
|
|
3,113 |
|
|
|
3,556 |
|
|
|
3,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
September 30, 2018 |
|
|
December 31, 2017 |
|
|
|
(Unaudited) |
|
|
(Audited) |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
1,420 |
|
$ |
1,533 |
Restricted bank deposits |
|
|
310 |
|
|
247 |
Trade
receivables |
|
|
8,309 |
|
|
9,804 |
Other
accounts receivable and prepaid expenses |
|
|
914 |
|
|
898 |
Inventories |
|
|
2,991 |
|
|
3,240 |
|
|
|
|
|
|
|
Total current
assets |
|
|
13,944 |
|
|
15,722 |
|
|
|
|
|
|
|
LONG-TERM ASSETS |
|
|
184 |
|
|
220 |
|
|
|
|
|
|
|
PROPERTYAND EQUIPMENT,
NET |
|
|
1,091 |
|
|
651 |
|
|
|
|
|
|
|
OTHER INTANGIBLE
ASSETS, NET |
|
|
95 |
|
|
138 |
|
|
|
|
|
|
|
GOODWILL |
|
|
4,676 |
|
|
4,676 |
|
|
|
|
|
|
|
Total assets |
|
$ |
19,990 |
|
$ |
21,407 |
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
September 30,
2018 |
|
December 31, 2017 |
|
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Current maturities of
long term loans |
|
$ |
482 |
|
$ |
505 |
Trade
payables |
|
|
4,273 |
|
|
5,951 |
Employees
and payroll accruals |
|
|
557 |
|
|
822 |
Deferred
revenues |
|
|
921 |
|
|
798 |
Accrued
expenses and other liabilities |
|
|
245 |
|
|
304 |
|
|
|
|
|
Total current
liabilities |
|
|
6,478 |
|
|
8,380 |
|
|
|
|
|
LONG-TERM
LIABILITIES: |
|
|
|
|
Long-term
loans, net of current maturities |
|
|
2,050 |
|
|
2,523 |
Accrued
severance pay |
|
|
271 |
|
|
286 |
|
|
|
|
|
Total long-term
liabilities |
|
|
2,321 |
|
|
2,809 |
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY |
|
|
11,191 |
|
|
10,218 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
|
$ |
19,990 |
|
$ |
21,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL
RESULTS |
(U.S. dollars in thousands) |
|
|
|
Nine months ended |
|
Three months ended |
|
|
September 30, |
|
September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income as
reported |
|
$ |
613 |
|
$ |
445 |
|
$ |
216 |
|
$ |
132 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets |
|
|
43 |
|
|
43 |
|
|
15 |
|
|
15 |
Stock based
compensation |
|
|
46 |
|
|
45 |
|
|
18 |
|
|
13 |
Total Adjustments |
|
|
89 |
|
|
88 |
|
|
33 |
|
|
28 |
Net Income on a
Non-GAAP basis |
|
$ |
702 |
|
$ |
533 |
|
$ |
249 |
|
$ |
160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED EBITDA |
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
Nine months ended |
|
Three months ended |
|
|
September
30, |
|
September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
794 |
|
$ |
680 |
|
$ |
274 |
|
$ |
204 |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets |
|
|
43 |
|
|
43 |
|
|
15 |
|
|
15 |
Stock based
compensation |
|
|
46 |
|
|
45 |
|
|
18 |
|
|
13 |
Depreciation |
|
|
167 |
|
|
139 |
|
|
61 |
|
|
49 |
EBITDA |
|
$ |
1,050 |
|
$ |
907 |
|
$ |
368 |
|
$ |
281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION |
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RFID andMobileSolutions |
|
|
SupplyChainSolutions |
|
|
Intercompany |
|
|
|
Consolidated |
|
|
RFID andMobileSolutions |
|
|
SupplyChainSolutions |
|
|
Intercompany |
|
|
|
Consolidated |
|
|
|
|
|
|
|
Nine months ended September
30,2018 |
|
Three months
ended September
30,2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
10,159 |
|
$ |
13,491 |
|
$ |
(93 |
) |
|
$ |
23,557 |
|
$ |
3,014 |
|
$ |
4,751 |
|
$ |
(51 |
) |
|
$ |
7,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
2,342 |
|
$ |
2,479 |
|
$ |
- |
|
|
$ |
4,821 |
|
$ |
646 |
|
$ |
958 |
|
$ |
- |
|
|
$ |
1,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RFID andMobileSolutions |
|
|
SupplyChainSolutions |
|
|
Intercompany |
|
|
|
Consolidated |
|
|
RFID andMobileSolutions |
|
|
SupplyChainSolutions |
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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