B.O.S. Better Online Solutions Reports Financial Results for the Third Quarter of Fiscal Year 2016
November 28 2016 - 6:30AM
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 fiscal year 2016.
Net loss of for the third quarter of 2016
amounted to $205,000, as compared to a net profit of $115,000 in
the comparable quarter last year. Net profit for the first nine
months of 2016 amounted to $141,000, as compared to a net profit of
$120,000 in the comparable period last year.
Yuval Viner, BOS' CEO, stated: "Third quarter
results were affected by the results of the Next-Line activity that
we've acquired in January 2016. Next-Line provides inventory
counting services, and most of its business is at year-end.
Consequently, we expect improved results for Next-Line in the
fourth quarter of 2016. In addition, since the acquisition of
Next-Line, we have invested significant resources and implemented
major changes in its operations, in order to support the growing
demand for its services, its expansion to additional markets, and
improved efficiency and control. We believe that the costs incurred
in connection with Next-Line in 2016 will yield positive results in
2017.
"We continue to anticipate that our 2016 results
will reflect an increase in revenues and profits as compared to
2015," Yuval Viner added.
Avidan Zelicovski, BOS’ President, stated: “I am
pleased with the continued expansion of the Supply Chain division
business in India. I believe that the Indian market presents
significant growth potential for the Company going forward.”
Eyal Cohen, BOS' CFO, stated: "As of September
30, 2016, our cash and deposits amounted to $1.3 million and our
bank debt amounted to $3.3 million (decreased by $550,000 as
compared to December 31, 2015). Our last twelve months EBITDA
amounted to $1.1 million. We continue to seek opportunities to grow
our RFID and Mobile division and our Supply Chain division through
acquisition of complementary businesses."
The BOS management team will host a conference
call to discuss third quarter 2016 results on November 28, 2016, at
10 AM EST, 5:00 p.m. Israel time. To access the conference call,
please dial one of the following numbers:US: +1-888-281-1167,
International: +972-3-9180644.
Script of the call will be available the next day
after the call on BOS’ website, at:
http://www.boscorporate.com. 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 BOSB.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.
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.
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(U.S. dollars in thousands) |
|
|
Nine months ended |
|
Three months ended |
|
September 30, |
|
September
30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
Revenues |
$ |
20,650 |
|
|
$ |
18,223 |
|
|
$ |
6,275 |
|
|
$ |
6,295 |
|
Cost of
revenues |
|
16,771 |
|
|
|
14,617 |
|
|
|
5,263 |
|
|
|
5,049 |
|
Gross
profit |
|
3,879 |
|
|
|
3,606 |
|
|
|
1,012 |
|
|
|
1,246 |
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
2,293 |
|
|
|
2,053 |
|
|
|
747 |
|
|
|
683 |
|
General and
administrative |
|
1,192 |
|
|
|
1,134 |
|
|
|
383 |
|
|
|
371 |
|
Total
operating costs and expenses |
|
3,485 |
|
|
|
3,187 |
|
|
|
1,130 |
|
|
|
1,054 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
394 |
|
|
|
419 |
|
|
|
(118 |
) |
|
|
192 |
|
Financial expenses, net |
|
(246 |
) |
|
|
(290 |
) |
|
|
(80 |
) |
|
|
(69 |
) |
Income
or (loss) before taxes on income |
|
148 |
|
|
|
129 |
|
|
|
(198 |
) |
|
|
123 |
|
Taxes on
income |
|
7 |
|
|
|
9 |
|
|
|
7 |
|
|
|
8 |
|
Net
income (loss) |
$ |
141 |
|
|
$ |
120 |
|
|
$ |
(205 |
) |
|
$ |
115 |
|
|
|
|
|
|
|
|
|
Basic
and diluted net income (loss) per share |
$ |
0.06 |
|
|
$ |
0.06 |
|
|
$ |
(0.08 |
) |
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computing basic net income (loss)
per share |
|
2,522 |
|
|
|
1,929 |
|
|
|
2,671 |
|
|
|
2,080 |
|
|
Weighted
average number of shares used in computing diluted net income
(loss) per share |
|
2,526 |
|
|
|
1,929 |
|
|
|
2,671 |
|
|
|
2,080 |
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands) |
|
|
|
September 30,2016 |
|
December 31,2015 |
|
|
(Unaudited) |
|
(Audited) |
ASSETS |
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
1,083 |
|
|
$ |
1,419 |
|
Restricted bank deposits |
|
|
188 |
|
|
|
195 |
|
Trade receivables |
|
|
7,459 |
|
|
|
7,071 |
|
Other accounts receivable and
prepaid expenses |
|
|
1,123 |
|
|
|
725 |
|
Inventories |
|
|
2,340 |
|
|
|
2,503 |
|
|
|
|
|
|
Total
current assets |
|
|
12,193 |
|
|
|
11,913 |
|
|
|
|
|
|
LONG-TERM ASSETS |
|
|
62 |
|
|
|
303 |
|
|
|
|
|
|
PROPERTY
AND EQUIPMENT, NET |
|
|
516 |
|
|
|
480 |
|
|
|
|
|
|
OTHER
INTANGIBLE ASSETS, NET |
|
|
209 |
|
|
|
7 |
|
|
|
|
|
|
GOODWILL |
|
|
4,676 |
|
|
|
4,122 |
|
|
|
|
|
|
Total
assets |
|
$ |
17,656 |
|
|
$ |
16,825 |
|
|
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in
thousands) |
|
|
|
September
30,2016 |
|
December 31,2015 |
|
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Current maturities of long term
loans |
|
$ |
400 |
|
|
$ |
400 |
|
Trade payables |
|
|
4,291 |
|
|
|
4,671 |
|
Employees and payroll accruals |
|
|
581 |
|
|
|
480 |
|
Deferred revenues |
|
|
885 |
|
|
|
796 |
|
Liability related to acquisition of
business |
|
|
156 |
|
|
|
- |
|
Accrued expenses and other
liabilities |
|
|
209 |
|
|
|
320 |
|
|
|
|
|
|
Total
current liabilities |
|
|
6,522 |
|
|
|
6,667 |
|
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
Long-term loans, net of current
maturities |
|
|
2,911 |
|
|
|
3,458 |
|
Liability related to acquisition of
business |
|
|
36 |
|
|
|
- |
|
Accrued severance pay |
|
|
170 |
|
|
|
155 |
|
Deferred gain |
|
|
21 |
|
|
|
40 |
|
|
|
|
|
|
Total
long-term liabilities |
|
|
3,138 |
|
|
|
3,653 |
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
7,996 |
|
|
|
6,505 |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
17,656 |
|
|
$ |
16,825 |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS |
(U.S. dollars in
thousands) |
|
|
|
Nine months ended September 30, |
|
Three months ended September
30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (loss) as reported |
|
$ |
141 |
|
|
$ |
120 |
|
|
$ |
(205 |
) |
|
$ |
115 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
64 |
|
|
|
48 |
|
|
|
10 |
|
|
|
16 |
|
Stock
based compensation |
|
|
102 |
|
|
|
98 |
|
|
|
34 |
|
|
|
19 |
|
Acquisition expenses |
|
|
30 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total
Adjustments |
|
|
196 |
|
|
|
146 |
|
|
|
44 |
|
|
|
35 |
|
Net
Income (loss) on a Non-GAAP basis |
|
$ |
337 |
|
|
$ |
266 |
|
|
$ |
(161 |
) |
|
$ |
150 |
|
|
CONDENSED CONSOLIDATED EBITDA |
(U.S. dollars in
thousands) |
|
|
|
Nine months ended
September 30, |
|
Three months ended
September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
394 |
|
|
$ |
419 |
|
|
$ |
(118 |
) |
|
$ |
192 |
|
Add: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
64 |
|
|
|
48 |
|
|
|
10 |
|
|
|
16 |
|
Stock
based compensation |
|
|
102 |
|
|
|
98 |
|
|
|
34 |
|
|
|
19 |
|
Depreciation |
|
|
138 |
|
|
|
106 |
|
|
|
45 |
|
|
|
36 |
|
Acquisition expenses |
|
|
30 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
EBITDA |
|
$ |
728 |
|
|
$ |
671 |
|
|
|
(29 |
) |
|
$ |
263 |
|
|
SEGMENT INFORMATION |
(U.S. dollars in
thousands) |
|
|
|
RFID andMobileSolutions |
|
SupplyChainSolutions |
|
Intercompany |
|
Consolidated |
|
RFID andMobileSolutions |
|
SupplyChainSolutions |
|
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 |
|
|
|
RFID andMobileSolutions |
|
SupplyChainSolutions |
|
Intercompany |
|
Consolidated |
|
RFID andMobileSolutions |
|
SupplyChainSolutions |
|
Intercompany |
|
Consolidated |
|
|
Nine months ended September
30, 2015 |
|
Three months ended September
30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
6,513 |
|
|
$ |
11,716 |
|
|
$ |
(6 |
) |
|
$ |
18,223 |
|
|
$ |
2,251 |
|
|
$ |
4,045 |
|
|
$ |
(1 |
) |
|
$ |
6,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
$ |
1,775 |
|
|
$ |
1,831 |
|
|
$ |
- |
|
|
$ |
3,606 |
|
|
$ |
649 |
|
|
$ |
597 |
|
|
$ |
- |
|
|
$ |
1,246 |
|
For more information:
Eyal Cohen
CFO
+972-542525925
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