BOS Better Online Solutions Ltd. ("BOS" or the "Company") (NASDAQ: BOSC) reported financial results for the third quarter and first nine months of the year 2021.

Eyal Cohen, BOS's CEO, stated: "We have made progress in the first nine months of the year 2021 as compared to the comparable period last year:

  • Revenues grew by 6%
  • Gross profit increased by 15%
  • Net income of $351,000 in the first nine months of the year 2021 as compared to a $1.2 million net loss in the comparable period last year
  • A fifth consecutive profitable quarter.

The Robotics division’s operating loss has decreased significantly, to $489,000 in the first nine months of 2021 from $2.4 million in the comparable period last year. However, the Robotics division did not yet reach the breakeven point as previously projected. We expect the Robotics division to breakeven in the year 2022. We believe in the long-term growth potential of our Robotics division because of the increasing shortage in manpower for industrial and logistic processes. 

The devaluation of the US dollar against the NIS in the first nine months of 2021 yielded an increase in our operating expenses by approximately $170,000 as compared to the comparable period last year."

Avidan Zelicovsky, BOS's President, stated: "The global shortage in commodities has presented an opportunity for our Supply Chain division. We have launched a new service for our electronic industry clients that significantly shortens the lead time for the electronic components. This service has been a growth engine of this division in the first nine months of 2021". 

Eyal Cohen, BOS's CEO, added:" In view of the third quarter results, we have revised our outlook for the year 2021 in respect of our net income, to be between $400,000 and $600,000 instead of $1,000,000. Our outlook for the year 2021 revenues has not been changed and remains $33 million. We will announce our outlook for the year 2022 during the first quarter of the year 2022". 

BOS will host a conference call on Tuesday, November 30, 2021, at 9:00 a.m. EST, 4:00 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 replay of the call will be available the next day on the BOS website: www.boscom.com

About BOS

BOS provides services and systems for inventory production and management in three channels:

  • Services – The Supply Chain division provides inventory procurement and kitting.
  • Integration – the RFID division provides off-the-shelf software and equipment to track and manage inventory in the production floor and warehouse.
  • Development – the Intelligent Robotics division develops and builds custom-made robotic cells for the industrial and logistic processes.

Contact:Eyal Cohen, CEO+972-542525925 | eyalc@boscom.com

Use of Non-GAAP Financial InformationBOS reports financial results in accordance with US 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 StatementsThe 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, failure to successfully integrate and achieve the potential benefits of the acquisition of the business operations of Imdecol Ltd. (the Robotics business line), 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, the impact of the COVID-19 virus 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 US 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   Three months ended
September 30, September 30,
     2021     2020    2021   2020
    (Unaudited)   (Unaudited)
         
Revenues   $ 24,555     $ 23,125     $ 7,998     $ 8,179  
Cost of revenues     19,697       18,153       6,423       6,435  
Inventory Impairment     -       752       -       81  
Gross profit     4,858       4,220       1,575       1,663  
                             
Operating costs and expenses:                            
    Research and development     154       71       40       50  
    Sales and marketing     2,902       2,933       973       978  
    General and administrative     1,343       1,251       466       408  
    Impairment of Goodwill and intangible assets     -       988       -       -  
Total operating costs and expenses     4,399       5,243       1,479       1,436  
                             
Operating income (loss)     459       (1,023 )     96       227  
Financial income (expenses), net     (107 )     (235 )     (9 )     (98 )
Other income, net     -       50       -       50  
                                 
Income before taxes on income (loss)     352       (1,208 )     87       179  
Taxes on income     (1 )     -       -       -  
Net income (loss)   $ 351     $ (1,208 )   $ 87     $ 179  
                             
Basic and diluted net income (loss) per share   $ 0.07     $ (0.28   $ 0.02     $ 0.04  
Weighted average number of shares used in computing basic net income per share     5,201       4,284       5,223       4,329  
Weighted average number of shares used in computing diluted net income per share     5,421       4,284       5,613       4,339  
                         
Number of outstanding shares as of September 30, 2021 and 2020     5,237       4,321       5,237       4,321  
                           

 

 
 CONSOLIDATED BALANCE SHEETS 

 (U.S. dollars in thousands)

        September30, 2021     December31, 2020
      (Unaudited)     (Audited)
ASSETS            
             
CURRENT ASSETS:            
Cash and cash equivalents   $ 2,002   $ 1,036
Restricted bank deposits     236     140
Trade receivables     8,846     9,172
Other accounts receivable and prepaid expenses     1,226     1,311
Inventories     5,149     4,871
         
Total current assets     17,459     16,530
         
LONG-TERM ASSETS     44     59
         
PROPERTY AND EQUIPMENT, NET     1,139     956
         
OPERATING LEASE RIGHT-OF-USE ASSETS, NET     992     767
         
OTHER INTANGIBLE ASSETS, NET     25     40
         
GOODWILL     4,676     4,676
         
Total assets   $ 24,335   $ 23,028
             

 

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

       
  September 30,   December 31, 2020
 2021    
  (Unaudited)   (Audited)
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
       
CURRENT LIABILITIES:      
Current maturities of long term loans $ 825   $ 815
Operating lease liabilities, current   495     557
Trade payables   5,060     5,492
Employees and payroll accruals   769     985
Deferred revenues   742     601
Advances net of inventory in process   106     68
Accrued expenses and other liabilities   231     391
       
Total current liabilities   8,228     8,909
       
LONG-TERM LIABILITIES:      
Long-term loans, net of current maturities   756     1,216
Operating lease liabilities, non-current   628     367
Long term deferred revenues   190     303
Accrued severance pay   336     364
       
Total long-term liabilities   1,910     2,250
       
       
TOTAL SHAREHOLDERS' EQUITY   14,197     11,869
       
       
Total liabilities and shareholders' equity $ 24, 335   $ 23,028
       

 

CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)
 
    Nine months ended   Three months ended
September 30, September 30,
     2021    2020    2021   2020
                 
 Operating income (loss)   $ 459   $ (1,023 )   $ 96   $ 227
  Add:                
Impairment of Goodwill and other intangible assets     -     988       -     -
Amortization of intangible assets     15     36       5     5
Stock-based compensation     44     57       13     18
Depreciation     175     208       64     66
EBITDA   $ 693   $ 266     $ 178   $ 316
                 

 

SEGMENT INFORMATION
(U.S. dollars in thousands)
 
  RFID       IntelligentRobotics   Intercompany     Consolidated
SupplyChainSolutions  
        Nine months ended September 30,
    2021
                       
                       
Revenues $ 9,193   $ 14,168     1,340     $ (146 )   $ 24,555  
                       
                       
Gross profit   2,212     2,683     (37 )                  -       4,858  
                       
Allocated operating expenses   1,641     1,788     452                    -       3,881  
                       
Unallocated operating expenses*   -     -     -             518  
                       
Income (loss) from operations $ 571   $ 895   $ (489 )                  -       459  
                       
Financial expenses and tax on income                     (108
                       
                       
Net income                   $ 351  
                   

 

  RFID     SupplyChainSolutions   IntelligentRobotics   Intercompany     Consolidated  
          Nine months ended September 30,
          2020
                         
                         
Revenues $ 8,976     $ 13,825   $ 367     $ (43 )   $ 23,125  
                         
                         
Gross profit (loss)   2,223       2,882     (885 )     -       4,220  
                         
                         
Allocated operating expenses   1,524       1,730     534       -       3,788  
                         
Impairment of goodwill and intangible assets   -       -     988       -       988  
    -       -     -              
Unallocated operating expenses*                       467  
                         
Income (loss) from operations $ 699     $ 1,152   $ (2,407 )     -       (1,023 )
                         
Financial expenses and tax on income                       (185 )
                         
Net loss                     $ (1,208 )
                         

 

SEGMENT INFORMATION
(U.S. dollars in thousands)
                             
  RFID      SupplyChainSolutions    IntelligentRobotics       Intercompany      Consolidated  
          Three months ended September 30,
          2021
                             
                             
Revenues $ 2,871     $ 4,919   $ 304       $ (96 )   $ 7,998  
                             
                             
Gross profit (loss)   660       984     (69 )                    -       1,575  
                             
Allocated operating expenses   529       640     116                      -       1,285  
                             
Unallocated operating expenses*                           194  
    -       -     -                
Income (loss) from operations $ 131     $ 344   $ (185 )                    -       96  
                             
Financial income and tax on income                           (9 )
                             
Net income                         $ 87  
                             

 

                                 
    RFID      SupplyChainSolutions     IntelligentRobotics       Intercompany      Consolidated  
            Three months ended September 30,
            2020
                                 
                                 
Revenues $ 3,264   $ 4,849   $ 66     $ -   $ 8,179  
                                 
                                 
Gross profit (loss)   749     1,013     (99 )                  -     1,663  
                                 
Allocated operating expenses   518     586     205                    -     1,309  
                                 
Impairment of goodwill and intangible assets   -     -         -                    -     -  
                                 
Unallocated operating expenses*                             127  
    -     -     -                
Income (loss) from operations $ 238   $ 427   $ (311 )                  -     227  
                                 
Financial expenses and tax on income                             (48 )
Net loss                           $ 179  
                                 

* Unallocated operating expenses include costs not specific to a particular segment but are general to the group, such as expenses incurred for insurance of directors and officers,public company fees, legal fees, and other similar corporate costs.

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