EX-99.1 2 exhibit_99-1.htm exhibit_99-1.htm
Exhibit 99.1
 
B.O.S. Announces  Financial Results for the First Quarter
of 2012
 
RISHON LEZION, Israel, May 24, 2012 (GLOBE NEWSWIRE) - B.O.S. Better Online Solutions Ltd. (the "Company", "BOS") (Nasdaq: BOSC), a leading Israeli provider of RFID and supply chain solutions to global enterprises, today reported its financial results for the three months ended March 31, 2012 which is the first quarter of BOS' fiscal year ended December 31, 2012.
 
Revenues for the first quarter of fiscal 2012 amounted to $7 million, compared to $9.1 million in the comparable quarter last year. Gross margin decreased to 18.4% from 23.4% in the comparable quarter last year. The decrease in revenues and gross margin was primarily due to the slow-down in the markets. BOS’ backlog as of the end of the fiscal 2012 first quarter was relatively high and amounted to $9.6 million, which we anticipate will have a positive effect on revenues in the second half of 2012.

Net loss for the first quarter of fiscal 2012 amounted to $306,000 compared to a net profit of $34,000 in the comparable period of last year. On a non-GAAP basis, the net loss for the first quarter of 2012 was $185,000 compared to net profit of $334,000 in the comparable period of last year.

Cash flow from operating activities for the first quarter of fiscal 2012 was break even compared to cash used in operating activities in the comparable period of last year in the amount of $947,000. Our cash and cash equivalents and long term bank deposit increased to $913,000 as of March 31, 2012 from $838,000 as of December 31, 2011.

Yuval Viner, BOS CEO, stated: "We expect to improve our performance by further reducing our expenses and expanding our product offerings to our customer base. Our outlook continues to be that we will achieve a net profit on a non-GAAP basis for fiscal 2012."
 
Conference Call
 
BOS will host a conference call on Tuesday, May 29, 2012 at 10:00 a.m. Eastern Standard Time / 5:00 p.m. Israel Time. A question-and-answer session will follow management's presentation. Interested parties may participate in the conference call by dialing the following numbers approximately five to ten minutes before the call start time:
 
North America + 1-888-668-9141
Israel + 03-9180685
International + 972-3-9180685
 
For those unable to listen to the live call, a replay of the call will be available from the day after the call on BOS's website, at: http://www.boscorporate.com.
 
Contact:
B.O.S. Better Online Solutions Ltd.
Mr. Eyal Cohen, CFO
+972-54-2525925
eyalc@boscom.com

 
 
 

About BOS
B.O.S. Better Online Solutions Ltd. (Nasdaq:BOSC - News) is a leading provider of RFID and Supply Chain solutions to global 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, automotive and telecommunications industries as well as to enterprise customers worldwide.
 
For more information, please visit: www.boscom.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, except per share data

   
Three months ended
 March 31,
    
Year ended
 December 31,
  
   
2012
    
2011
    
2011
  
   
(Unaudited)
    
(Audited)
  
                   
Revenues
   $ 7,048     $ 9,143     $ 33,434  
Cost of revenues
     5,678       7,006       26,481  
Inventory write offs
     71       -       443  
Gross profit
     1,299       2,137       6,510  
                         
Operating costs and expenses:
                        
Research and development
     50       104       403  
Sales and marketing
     877       1,096       4,273  
    General and administrative
     446       561       2,252  
Impairment of other intangible assets
     -       -       555  
Total operating costs and expenses
     1,373       1,761       7,483  
                         
Operating profit (loss)
     (74 )     376       (973 )
Financial expenses, net
     (239 )     (224 )     (2,241 )
Other expenses, net
     10       (58 )     (172 )
Income (loss) before taxes on income
     (303 )     94       (3,386 )
Taxes on income (tax benefit )
     3       60       (172 )
Net  income (loss)
   $ (306 )   $ 34     $ (3,214 )
                         
Basic and diluted net earnings (loss) per share from continuing operations
   $ (0.07 )   $ 0.01     $ (1.14 )
Basic and diluted net earnings (loss) per share from discontinued operations
   $ -     $ 0.01     $ -  
Basic and diluted net earnings (loss) per share
   $ (0.07 )   $ 0.01     $ (1.14 )
                         
Weighted average number of shares used in computing basic net earnings per share
     4,470,369       2,759,254       2,818,052  
Weighted average number of shares used in computing diluted net earnings per share
     4,470,369       2,841,970       2,818,052  

 
 
 

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except per share amounts)

   
March 31, 2012
    
December 31, 2011
  
   
(Unaudited)
    
(Audited)
  
ASSETS
            
             
CURRENT ASSETS:
            
Cash and cash equivalents
   $ 474     $ 411  
Trade receivables
     8,539       8,507  
Other accounts receivable and prepaid expenses
     837       744  
Inventories
     4,032       4,020  
                 
Total current assets
     13,882       13,682  
                 
LONG-TERM ASSETS:
                
Severance pay fund
     30       41  
Bank deposit
     439       427  
Investment in other companies
     68       68  
Other assets
     25       23  
                 
Total long-term assets
     562       559  
                 
PROPERTY, PLANT AND EQUIPMENT, NET
     1,092       1,166  
                 
OTHER INTANGIBLE ASSETS, NET
     495       540  
                 
GOODWILL
     4,122       4,122  
                 
    $ 20,153     $ 20,069  

 
 
 

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share data)
 
   
March 31, 2012
    
December 31, 2011
  
   
(Unaudited)
    
(Audited)
  
             
LIABILITIES AND SHAREHOLDERS' EQUITY
            
             
CURRENT LIABILITIES:
            
Short-term bank loans and current maturities
   $ 7,525     $ 7,496  
Trade payables
     4,581       4,165  
Employees and payroll accruals
     552       553  
Deferred revenues
     582       550  
Accrued expenses and other liabilities
     899       994  
                 
Total current liabilities
     14,139       13,758  
                 
LONG-TERM LIABILITIES:
                
Long-term bank loans, net of current maturities
     1,599       1,530  
Income tax accruals
     277       273  
Accrued severance pay
     142       163  
Liability to Dimex Systems
     699       747  
                 
Total long-term liabilities
     2,717       2,713  
                 
COMMITMENTS AND CONTINGENT LIABILITIES
                
                 
SHAREHOLDERS' EQUITY:
                
    Share capital
     23,065       23,065  
Additional paid-in capital
     51,098       51,093  
Accumulated other comprehensive profit
     (243 )     (243 )
Accumulated deficit
     (70,623 )     (70,317 )
                 
Total shareholders' equity
     3,297       3,598  
                 
Total liabilities and shareholders' equity
   $ 20,153     $ 20,069  

 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

   
Three months ended
March 31,
    
Year ended
December 31,
   
2012
    
2011
    
2011
           
                   
Net Cash used in operating activities
   $ -     $ (947 )   $ (365 )
Net Cash used in investing activities
     (49 )     (156 )     (1,040 )
Net Cash provided by financing activities
     112       585       1,113  
Increase (decrease) in cash and cash equivalents
     63       (518 )     (292 )
Cash and cash equivalents at the beginning of the period
     411       703       703  
Cash and cash equivalents at the end of the period
   $ 474     $ 185     $ 411  
 
 
 
 
 
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
 
   
Three months ended March 31,
  
   
2012
    
2011
  
   
GAAP
(as reported)
    
Adjustments
    
Non-GAAP
    
Non-GAAP
  
             
                         
Revenues
   $ 7,048     $ -     $ 7,048     $ 9,143  
Gross profit
     1,299       71a       1,370       2,137  
                                 
Operating costs and expenses:
                                
Research and development, net
     50       -       50       104  
Sales and marketing
     877       (45)b       832       1,004  
General and administrative
     446       (5)c       441       525  
Total operating costs and expenses
     1,373       (50 )     1,323       1,633  
                                 
Operating profit (loss)
     (74 )     121       47       504  
Financial expenses, net
     (239 )     -       (239 )     (110)d,e  
Other expenses, net
     10       -       10       -  
Income (loss) before taxes on income
     (303 )     121       (182 )     394  
Taxes on income
     3       -       3       60  
Net income (loss)
   $ (306 )   $ 121     $ (185 )   $ 334  

Notes to the reconciliation:
a – Write off of slow moving inventory
b - Amortization of intangible assets.
c - Stock based compensation.
d – Exclude depreciation of prepaid expenses and value of warrants attached to Convertible note.
e– Exclude interest related to 83.4% of Convertible note which was converted to shares on December 21, 2011.

 
 
 

RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
 
      Year ended December 31,   2011  
    GAAP
(as reported)
      
Adjustments
      
Non-GAAP
  
Revenues
   $ 33,434       -     $ 33,434  
Gross profit
     6,510       443a       6,953  
                         
Operating costs and expenses:
                        
Research and development, net
     403       -       403  
Sales and marketing
     4,273       (376)b , (3)c       3,897  
General and administrative
     2,252       (166)c       2,083  
Impairment of other intangible assets
     555       (555)d       -  
Total operating costs and expenses
     7,483       (1,100 )     6,383  
                         
Operating profit (loss)
     (973 )     1,543       570  
Financial expenses, net
     (2,241 )     192f , 255e, 860g       (934 )
Other income (expenses), net
     (172 )     188h       16  
Income (loss) before taxes on income
     (3,386 )     3,038       (348 )
Tax benefit
     172       -       172  
Income (loss) from continuing operations
   $ (3,214 )   $ 3,038     $ (176 )
Loss from discontinued operations
     -       -       -  
Net income (loss)
   $ (3,214 )   $ 3,038     $ (176 )

Notes to the reconciliation:
a – Write off of slow moving inventory
b - Amortization of intangible assets.
c - Stock based compensation.
d - Impairment of intangible assets.
e- Depreciation of prepaid expenses and value of warrants attached to Convertible note.
f – Interest related to 83.4% of Convertible note which was converted to shares on December 21, 2011.
g – Costs related to conversion of Convertible note.
h - Impairment in related with investment in Companies.

 
 
 

CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)
 
   
Three months ended
March 31,
    
Year ended
December 31,
   
2012
    
2011
    
2011
                   
 Operating Profit (loss)  from continuing operations
   $ (74 )   $ 376     $ (973 )
  Add:
                    
Amortization of intangible assets
     45       93       376  
Stock based compensation
     5       37       169  
Depreciation
     70       64       280  
Impairment of intangible assets
     -       -       555  
EBITDA
   $ 46     $ 570     $ 407  
 
   
RFID and Mobile Solutions
    
Supply
Chain Solutions
    
Intercompany
    
Consolidated
    
RFID and Mobile Solutions
    
Supply
Chain Solutions
    
Intercompany
    
Consolidated
  
   
Three months ended March 31,
 2012
    
Three months ended March 31,
 2011
  
                                                 
Revenues
   $ 2,360     $ 4,768     $ (80 )   $ 7,048     $ 3,492     $ 5,869     $ (218 )   $ 9,143  
                                                                 
Cost of Revenues
   $ 1,742     $ 4,016     $ (80 )   $ 5,678     $ 2,557     $ 4,667     $ (218 )   $ 7,006  
                                                                 
Inventory write offs
   $ 35     $ 36     $ -     $ 71     $ -     $ -     $ -     $ -  
                                                                 
Gross profit
   $ 583     $ 716     $ -     $ 1,299     $ 935     $ 1,202     $ -     $ 2,137