EX-99.1 2 exhibit_99-1.htm FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2013 exhibit_99-1.htm


Exhibit 99.1
B.O.S. Announces Financial Results for the First Quarter of 2013
 
RISHON LEZION, Israel, May 23, 2013 (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, 2013, which is the first quarter of BOS' fiscal year ended December 31, 2013.
 
The net loss for the first quarter of fiscal 2013 amounted to $203,000 which reflected an improvement from the net loss of $306,000 in the comparable period of last year.

On a non-GAAP basis, the net loss for the first quarter of 2013 was $90,000 compared to net loss of $185,000 in the comparable period of last year.

Avidan Zelicovski, BOS President, stated: "The results for the first quarter of fiscal 2013 reflect a bottom line improvement over the comparable period of last year, primarily as a result of an increase in the RFID and mobile division’s gross profit and a decrease in financial expenses. However, the revenues and gross margin of the supply chain division were lower than the comparable period of last year which adversely affected the results for the first quarter of fiscal 2013. On the positive side, the supply chain division backlog is relatively high and amounted to $8 million. In addition, the supply chain division has recently entered into an agreement with a leading aircraft manufacturer. I am confident that the upcoming quarters of the supply chain division will generate higher revenues and an improved gross profit, which would positively impact  the financial results of BOS ".

"We reiterate our outlook of net profit on a non-GAAP basis in fiscal year 2013", Zelicovski added.

Eyal Cohen, BOS CFO, stated: "Cash flows from operating activities for the first quarter of fiscal 2013 increased to $478,000 compared to no cash in the comparable period last year. Our cash and cash equivalents grew to $771,000 as of March 31, 2013 compared to $354,000 in December 31, 2012. In addition, as of March 31, 2013 we hold a long term bank deposit of $449,000 ".

"During 2013, we expect to continue to improve our financial position by an additional reduction of our loans ", Cohen added.

Conference Call
 
BOS will host a conference call on Tuesday, May 28, 2013 at 10:00 a.m. Eastern Standard Time / 5:00 p.m. Israel Time. A question-and-answer session will follow management's presentation. A question-and-answer session will follow management's presentation. Interested parties may participate in the conference call by dialing to + 972-3-9180644 approximately five to ten minutes before the call start time. 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,
 
   
2013
 
2012
   
2012
 
   
(Unaudited)
   
(Audited)
 
                   
Revenues
  $ 5,930     $ 7,048     $ 24,503  
Cost of revenues
    4,880       5,678       19,050  
Inventory write offs
    16       71       385  
Gross profit
    1,034       1,299       5,068  
                         
Operating costs and expenses:
                       
Research and development
    -       50       125  
    Sales and marketing
    677       877       3,058  
    General and administrative
    419       446       1,693  
Total operating costs and expenses
    1,096       1,373       4,876  
                         
Operating profit (loss)
    (62 )     (74 )     192  
Financial expenses, net
    (141 )     (239 )     (781 )
Other expenses, net
    -       10       (147 )
Loss before taxes on income
    (203 )     (303 )     (736 )
Tax benefit (taxes on income )
    -       (3 )     187  
Net  loss
  $ (203 )   $ (306 )   $ (549 )
                         
Basic and diluted net loss per share from continuing operations
  $ (0.18 )   $ (0.28 )   $ (0.49 )
                         
Weighted average number of shares used in computing basic net earnings per share
    1,152,926       1,117,592       1,117,876  
Weighted average number of shares used in computing diluted net earnings per share
    1,152,926       1,117,592       1,117,876  
 
 
 

 
 
CONSOLIDATED BALANCE SHEETS

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

   
March 31, 2013
   
December 31, 2012
 
   
(Unaudited)
   
(Audited)
 
ASSETS
           
             
CURRENT ASSETS:
           
Cash and cash equivalents
  $ 771     $ 354  
Trade receivables
    7,641       8,007  
Other accounts receivable and prepaid expenses
    574       616  
Inventories
    3,223       3,160  
                 
Total current assets
    12,209       12,137  
                 
LONG-TERM ASSETS:
               
Severance pay fund
    23       21  
Bank deposit
    449       438  
Other assets
    11       11  
                 
Total long-term assets
    483       470  
                 
PROPERTY, PLANT AND EQUIPMENT, NET
    963       963  
                 
OTHER INTANGIBLE ASSETS, NET
    313       357  
                 
GOODWILL
    4,122       4,122  
                 
    $ 18,090     $ 18,049  

 
 

 
 
CONSOLIDATED BALANCE SHEETS

 (U.S. dollars in thousands, except share and per share data)
 
   
March 31, 2013
   
December 31, 2012
 
   
(Unaudited)
   
(Audited)
 
             
LIABILITIES AND SHAREHOLDERS' EQUITY
           
             
CURRENT LIABILITIES:
           
Short-term bank loans and current maturities
  $ 6,423     $ 6,383  
Trade payables
    5,081       4,915  
Employees and payroll accruals
    503       408  
Deferred revenues
    350       467  
Current maturities of liability to Dimex Systems
    134       136  
Accrued expenses and other liabilities
    685       567  
                 
Total current liabilities
    13,176       12,876  
                 
LONG-TERM LIABILITIES:
               
Long-term bank loans, net of current maturities
    1,100       1,188  
Accrued severance pay
    114       119  
Liability to Dimex Systems, net of current maturities
    700       710  
                 
Total long-term liabilities
    1,914       2,017  
                 
COMMITMENTS AND CONTINGENT LIABILITIES
               
                 
SHAREHOLDERS' EQUITY:
               
     Share capital
    23,829       23,374  
Additional paid-in capital
    50,483       50,891  
Accumulated other comprehensive profit
    (243 )     (243 )
Accumulated deficit
    (71,069 )     (70,866 )
                 
Total shareholders' equity
    3,000       3,156  
                 
Total liabilities and shareholders' equity
  $ 18,090     $ 18,049  

 
 

 

 
CONSOLIDATED STATEMENTS OF CASH FLOWS

 U.S. dollars in thousands

    Three months ended
March 31,
     
Year ended December 31,
 
   
2013
   
2012
   
2012
 
           
                   
Net Cash used in (provided by) operating activities
  $ 478     $ -     $ 1,709  
Net Cash used in investing activities
    (55 )     (49 )     (311 )
Net Cash provided by financing activities
    (6 )     112       (1,455 )
Increase (decrease) in cash and cash equivalents
    417       63       (57 )
Cash and cash equivalents at the beginning of the period
    354       411       411  
Cash and cash equivalents at the end of the period
  $ 771     $ 474     $ 354  
 
 
 

 
 
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,
 
   
2013
   
2012
 
   
GAAP
(as reported)
   
Adjustments
   
Non-GAAP
   
Non-GAAP
 
             
                         
Revenues
  $ 5,930     $ -     $ 5,930     $ 7,048  
Gross profit
    1,034       16 a     1,050       1,370  
                                 
Operating costs and expenses:
                               
Research and development, net
    -       -       -       50  
Sales and marketing
    677       (45 )b     626       832  
General and administrative
    419       (52 )c     373       441  
Total operating costs and expenses
    1,096       (97 )     999       1,323  
                                 
Operating profit (loss)
    (62 )     113       51       47  
Financial expenses, net
    (141 )     -       (141 )     (239 )
Other expenses, net
    -       -       -       10  
Income (loss) before taxes on income
    (203 )     113       (90 )     (182 )
Taxes on income
    -       -       -       3  
Net income (loss)
  $ (203 )   $ 113     $ (90 )   $ (185 )

Notes to the reconciliation:
a – Write off of slow moving inventory
b - Amortization of intangible assets.
c - Stock based compensation.
 
 
 

 

CONDENSED CONSOLIDATED EBITDA

  (U.S. dollars in thousands)
 
    Three months ended
March 31,
   
Year ended
December 31,
 
   
2013
   
2012
   
2012
 
                   
 Operating Profit (loss)
  $ (62 )   $ (74 )   $ 192  
  Add:
                   
Amortization of intangible assets
    45       45       183  
Stock based compensation
    52       5       107  
Depreciation
    46       70       183  
EBITDA
  $ 81     $ 46     $ 665  
 
   
RFID and Mobile Solutions
   
Supply
Chain Solutions
   
Intercompany
   
Consolidated
   
RFID and Mobile Solutions
   
Supply
Chain Solutions
   
Intercompany
   
Consolidated
 
   
Three months ended March 31,
 2013
   
Three months ended March 31,
 2012
 
                                                 
                                                 
Revenues
  $ 2,281     $ 3,667     $ (18 )   $ 5,930     $ 2,360     $ 4,768     $ (80 )   $ 7,048  
                                                                 
Cost of Revenues
  $ 1,654     $ 3,244     $ (18 )   $ 4,880     $ 1,742     $ 4,016     $ (80 )   $ 5,678  
                                                                 
Inventory write offs
  $ 20     $ (4 )   $ -     $ 16     $ 35     $ 36     $ -     $ 71  
                                                                 
Gross profit
  $ 607     $ 427     $ -     $ 1,034     $ 583     $ 716     $ -     $ 1,299