EX-99.1 2 f6k112718ex99-1_bosbetter.htm PRESS RELEASE: B.O.S. BETTER ONLINE SOLUTIONS REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2018

Exhibit 99.1

 

B.O.S. Reports Third Quarter Revenue Growth of 6.7%; Net Income Increases by 63.6%

 

Rishon Lezion, Israel, November 26, 2018 — 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. EDT - 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 Belodeau

IMS Investor Relations 
(203) 972-9200

jnesbett@institutionalms.com

Company Contact:
Eyal Cohen, CO-CEO & CFO
B.O.S Better Online Solutions Ltd.
+972-542525925

  

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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   2,726    2,470    879    879 
General and administrative   1,301    1,242    451    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 

 

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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 

 

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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 

 

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RECONCILIATION OF NON-GAAP FINANCIAL RESULTS

(U.S. dollars in thousands)

 

   Nine months ended
September 30,
   Three months ended
 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 

 

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CONDENSED CONSOLIDATED EBITDA

(U.S. dollars in thousands)

 

   Nine months ended
 September 30,
   Three months ended
 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 

 

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SEGMENT INFORMATION

(U.S. dollars in thousands)

 

   RFID and Mobile Solutions  

Supply

Chain Solutions

   Intercompany   Consolidated    RFID and Mobile Solutions  

Supply

Chain Solutions

   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 and Mobile Solutions  

Supply

Chain Solutions

   Intercompany   Consolidated   RFID and Mobile Solutions  

Supply

Chain Solutions

   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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