B.O.S. Better Online Solutions Reports Third Quarter and First Nine Months of 2008 Financial Results
Revenues Increase by 144% Year-over-Year
- Press Release
- Source: B.O.S. Better Online Solutions Ltd.
- On 6:17 am EST, Thursday November 20, 2008
RISHON LEZION, Israel, Nov. 20, 2008 (GLOBE NEWSWIRE) -- B.O.S. Better Online Solutions Ltd. (``BOS'' or the ``Company'') (NasdaqGM:BOSC - News) (TASE:BOSC), a leading provider of comprehensive Mobile and RFID Solutions and Supply Chain Solutions, today reported its results for the third quarter and first nine months ended September 30th, 2008.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| BOSC | 0.39 | 0.00 |
Financial Highlights for the third quarter and first nine months of 2008 (NON-GAAP Pro-forma):
-- Revenue for the three months ended September 30, 2008 increased
144% to $13.4 million compared to the same period in 2007;
-- Revenue for the first nine months was $41.4 million vs. $16.6
million in first nine months of 2007; EPS was $0.01 vs. loss of
$0.05 in prior year
-- EBITDA for the nine months ended September 30, 2008 amounted to
$468,000 compared to $6,000 in the comparable period in 2007;
-- Backlog increased to $12.2 million on September 30th, 2008 from
$7.9 million on September 30, 2007
The Company recently announced the resignation of Shmuel Koren, President and CEO, and the appointment of Shalom Daskal, as his replacement. Mr. Cukierman, Chairman of the Board expressed his appreciation of Mr. Koren's tenure at BOS, during which time the Company grew significantly.
Edouard Cukierman, Chairman said, ``We are pleased with BOS' quarterly results. Our customer-oriented approach, and the growing relevance and importance of our solutions to business processes continue to fuel demand among our customers. I want to again express my appreciation of Mr. Koren's leadership during his two years at BOS during which time the Company expanded its product offerings and experienced tremendous growth.''
BOS is located in Israel and the US and employs approximately 150 employees worldwide. In addition to the Company's Mobile and RFID solutions business, the Company also provides Supply Chain Solutions mainly for the aerospace industry through two distribution channels in Israel and the United States. International sales accounted for 43% of revenue in third quarter 2008 compared to 29% in the third quarter 2007. Backlog increased to $12.2 million as of September 30th, 2008 from $7.9 million in the period a year ago.
For the third quarter and first nine months of 2008, BOS generated EBITDA of ($110,000) and $468,000 compared to ($206,000) and $6,000 in the comparable period of 2007. The devaluation of the US dollar against the NIS (Israeli New Shekel) in the third quarter of 2008 and in the nine months ended September 30, 2008 adversely affected the Company's operating results, as compared to year 2007.
As of September 30, 2008, cash and cash equivalents were $1.6 million, short term bank loans amounted to $10.2 million and long term bank loans were $2.6 million. During the third quarter, BOS raised $2 million through equity.
Edouard Cukierman explained, ``In recent weeks, BOS has announced the launching of OptimizeIT, a family of revolutionary software products which will position it very well in the global marketplace. We also announced the launching of PointACT, which is a family of MicroSoft Sharepoint Software applications for RFID solutions. We also received notice of a $10 million increase to a framework agreement from an existing customer in the aircraft industry sector. BOS is committed to growing the company and this will include expanding our international sales efforts with new distributors, system integrators, sales representatives, and direct salespersons specializing in mobile and RFID solutions.''
Shalom Daskal, incoming CEO, said, ``It is a pleasure to join BOS at this exciting period in the Company's growth cycle. The Company is well positioned with the right vision and solutions for its customers. BOS has assembled a comprehensive suite of applications and is ahead of the curve in its technological approach. While these are challenging times in the world economy, we believe that BOS offers solutions which enable its customers to save money and optimize their systems and operations.''
Review of results on GAAP basis:
Revenue for the third quarter and first nine months of 2008 was $13.4 million and $39.3 million respectively, a 144% and 137% increase over revenues in the comparable periods in 2007. This increase in revenues in the third quarter of 2008 resulted from the acquisition of Summit in November 2007 and Dimex Systems in March 2008, as well as from organic growth.
Gross profit for the third quarter and first nine months of 2008 was $3.0 million and $8.7 million respectively, a 158% and 145% increase over the comparable 2007 period. Gross margins in the third quarter of 2008 was 22%, compared to 21% in the third quarter of 2007.
Operating loss in the third quarter and first nine months of 2008 was $409,000 and $576,000 respectively, compared to an operating loss of $390,000 and $649,000 in the same period of 2007.
Edouard Cukierman, concluded, ``In order to take advantage of our unique opportunity, we are working on the synergy and integration among companies that we have acquired. The tremendous value and potential in what we offer is relevant in many areas ranging from government services to private businesses, from aerospace to livestock, from large enterprises to growing companies. We are at the forefront of the next generation of operations and business processes and BOS has the makings of what we can call the backbone of tomorrow's industry. We are committed to achieving the full potential of the Company.''
About BOS
B.O.S. Better Online Solutions Ltd. (``BOS'') was established in 1990.
BOS's operations consist of:
(i) Fully integrated Mobile and RFID Solutions that are offered
either as stand alone products or as full Solutions combined of.
(a) Hardware Devices - A Mobile and RFID Infrastructure with an
automatic identification and data collection equipment based
on RFID and barcode technology;
(b) Middleware - A variety of proprietary Servers intended to
receive data from Hardware, process it and transfer it to the
Software Applications; and
(c) Software Applications - PointAct application platform for
implementation of various business organizational processes;
(ii) Supply Chain Solutions- reselling electronic systems and
components for security, and aerospace manufacturers
BOS is traded on NASDAQ Global Market and on the Tel-Aviv Stock Exchange. Their website is http://www.boscorporate.com.
Conference Call and Webcast information:
BOS will host a conference call, to be simultaneously Webcast, on Thursday, November 20, 2008 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.
The call is being simultaneously Web cast and can be accessed on the BOS Web site at http://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 our 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 and general worldwide economic conditions; 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.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
Revenues:
Mobile and RFID
solutions $ 3,694 $ 417 $ 9,115 $ 1,241
Supply Chain
Solutions 9,739 5,093 30,232 15,341
---------- ---------- ---------- ----------
Total Revenues 13,433 5,510 39,347 16,582
---------- ---------- ---------- ----------
Cost of revenues:
Mobile and RFID
solutions 2,540 86 5,839 263
Supply Chain
Solutions 7,921 4,272 24,806 12,761
---------- ---------- ---------- ----------
Total cost
of revenues 10,461 4,358 30,645 13,024
---------- ---------- ---------- ----------
Gross profit:
Mobile and RFID
solutions 1,154 331 3,276 978
Supply Chain
Solutions 1,818 821 5,426 2,580
---------- ---------- ---------- ----------
Total gross profit 2,972 1,152 8,702 3,558
---------- ---------- ---------- ----------
Operating costs
and expenses:
Research and
development 257 141 781 363
Sales and
marketing 2,569 997 7,124 2,470
General and
administrative 555 404 1,373 1,374
---------- ---------- ---------- ----------
Total operating
costs and expenses 3,381 1,542 9,278 4,207
---------- ---------- ---------- ----------
Operating loss (409) (390) (576) (649)
Financial expenses,
net (250) (67) (539) (421)
Other expenses, net (245) (57) (245) (637)
---------- ---------- ---------- ----------
Loss before taxes
on income (904) (514) (1,360) (1,707)
Taxes on income 74 (122) 451 (79)
---------- ---------- ---------- ----------
Net loss from
continuing
operations $ (830) $ (636) $ (909) $ (1,786)
Income related to
discontinued
operations -- 237 -- 237
---------- ---------- ---------- ----------
Net loss $ (830) $ (399) $ (909) $ (1,549)
========== ========== ========== ==========
Basic net loss
per share $ (0.07) $ (0.04) $ (0.08) $ (0.19)
========== ========== ========== ==========
Diluted net earnings
per share from
discontinued
operations $ -- $ 0.03 $ -- $ 0.03
========== ========== ========== ==========
Diluted net loss
per share $ (0.07) $ (0.04) $ (0.08) $ (0.19)
========== ========== ========== ==========
Weighted average
number of shares
used in computing
basic net earnings
per share 12,379,656 9,606,780 11,627,232 8,217,799
========== ========== ========== ==========
Weighted average
number of shares
used in computing
diluted net earnings
per share 12,379,656 9,606,780 11,627,232 8,217,799
========== ========== ========== ==========
CONDENSED CONSOLIDATED BALANCE SHEET
(U.S. dollars in thousands)
Sept. 30, Dec. 31,
2008 2007
------- -------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,598 $ 4,271
Trade receivables, net 14,073 9,114
Other accounts receivable and prepaid expenses 1,819 945
Inventories 11,391 8,321
------- -------
Total current assets 28,881 22,651
------- -------
LONG-TERM ASSETS:
Severance pay fund 758 687
Investment in other companies 2,123 2,494
Other assets 245 42
------- -------
Total long-term assets 3,126 3,223
------- -------
PROPERTY AND EQUIPMENT, NET 1,166 719
GOODWILL 7,967 2,861
OTHER INTANGIBLE ASSETS, NET 2,646 1,678
------- -------
Total assets $43,786 $31,132
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank loans and current maturities $10,241 $ 5,028
Trade payables 6,857 5,258
Employees and payroll accruals 802 552
Deferred revenues 564 116
Accrued expenses and other liabilities 3,203 1,290
------- -------
Total Current Liabilities 21,667 12,244
------- -------
LONG-TERM LIABILITIES:
Long-term bank loans, net of current maturities 2,579 3,286
Deferred taxes 579 366
Accrued severance pay 951 798
Other long-term liabilities 931 --
------- -------
Total long-term liabilities 5,040 4,450
------- -------
SHAREHOLDERS' EQUITY 17,079 14,438
------- -------
Total liabilities and shareholder's equity $43,786 $31,132
======= =======
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
Three months ended September 30,
----------------------------------------------
2008 2007
---------------------------------- ----------
GAAP
(as reported) Adjustments Non-GAAP Non-GAAP
----------------------------------------------
(Unaudited)
Revenues:
Mobile and RFID
solutions $ 3,694 -- $ 3,694 $ 417
Supply Chain
Solutions 9,739 -- 9,739 5,093
---------------------------------- ----------
Total revenues 13,433 -- 13,433 5,510
---------------------------------- ----------
Gross profit:
Mobile and RFID
solutions 1,154 5a 1,159 331
Supply Chain
Solutions 1,818 -- 1,818 821
---------------------------------- ----------
Total gross profit 2,972 5 2,977 1,152
---------------------------------- ----------
Operating costs
and expenses:
Research and
development 257 -- 257 141
Sales and marketing 2,569 (103)a,(38)b 2,428 856
General and
administrative 555 (100)b 455 334
---------------------------------- ----------
Total operating
costs and expenses 3,381 (241) 3,140 1,331
---------------------------------- ----------
Operating loss (409) (246) (163) (179)
Financial
expenses, net (250) -- (250) (67)
Other expenses, net (245) 245 -- (57)
---------------------------------- ----------
Loss before taxes
on income (904) (491) (413) (303)
Taxes on income 74 (29)a 45 (122)
---------------------------------- ----------
Net loss from
continuing
operations $ (830) $ (462) $ (368) $ (425)
Income related to
discontinued
operations -- -- -- 237
---------------------------------- ----------
Net loss $ (830) $ (462) $ (368) $ (188)
================================== ==========
Basic net income
per share $ (0.07) $ (0.03) $ (0.02)
========== ========== ==========
Diluted net
earnings per share
from discontinued
operations $ -- $ -- $ 0.03
========== ========== ==========
Diluted net income
per share $ (0.07) $ (0.03) $ (0.02)
========== ========== ==========
Weighted average
number of shares
used in computing
basic net income
per share 12,379,656 12,379,656 9,606,780
========== ========== ==========
Weighted average
number of shares
used in computing
diluted net income
per share 12,379,656 12,379,656 9,606,780
========== ========== ==========
Notes to the reconciliation:
a) Amortization of intangible assets and its related tax benefit.
b) Stock based compensation.
c) Capital loss in related with investment in New World Brands Inc.
(OTC BB:NWBD.OB - News).
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
Nine months ended September 30,
----------------------------------------------
2008 2007
----------------------------------------------
GAAP
(as reported) Adjustments Non-GAAP Non-GAAP
---------------------------------- ----------
(Unaudited)
Revenues:
Mobile and RFID
solutions $ 9,115 $ 2,075c $ 11,190 $ 1,241
Supply Chain
Solutions 30,232 -- 30,232 15,341
---------------------------------- ----------
Total revenues 39,347 2,075c 41,422 16,582
---------------------------------- ----------
Gross profit:
Mobile and RFID
solutions 3,276 15a,521c 3,812 978
Supply Chain
Solutions 5,426 35a 5,461 2,580
---------------------------------- ----------
Total gross profit 8,702 571 9,273 3,558
---------------------------------- ----------
Operating costs and
expenses:
Research and
development 781 -- 781 363
(287)a,(130)b,
Sales and marketing 7,124 430c 7,137 2,140
General and
administrative 1,373 (308)b 1,065 1,103
---------------------------------- ----------
Total operating
costs and expenses 9,278 (295) 8,983 3,606
---------------------------------- ----------
Operating income
(loss) (576) (866) 290 (48)
Financial expenses,
net (539) (15)c (524) (421)
Other expenses, net (245) 245 -- (26)
---------------------------------- ----------
Loss before taxes
on income (1,360) (1,126) (234) (495)
Taxes on income 451 (95)a 356 (79)
---------------------------------- ----------
Net income (loss)
from continuing
operations $ (909) $ (1,031) $ 122 $ (574)
Income related to
discontinued
operations -- -- -- 237
---------------------------------- ----------
Net income (loss) $ (909) $ (1,031) $ 122 $ (377)
================================== ==========
Basic net income
(loss) per share $ (0.08) $ 0.01 $ (0.05)
========== ========== ==========
Diluted net
earnings per share
from discontinued
operations $ -- $ -- $ 0.03
========== ========== ==========
Diluted net income
(loss) per share $ (0.08) $ 0.01 $ (0.05)
========== ========== ==========
Weighted average
number of shares
used in computing
basic net income
(loss) per share 11,627,232 11,627,232 8,217,799
========== ========== ==========
Weighted average
number of shares
used in computing
diluted net income
(loss) per share 11,627,232 11,703,529 8,217,799
========== ========== ==========
Notes to the reconciliation:
a) Amortization of intangible assets and its related tax benefit.
b) Stock based compensation.
c) Gives effect to the acquisition by BOS of the assets of Dimex
System Ltd ("Dimex"), which closed in March 2008, as if it had
occurred, on January 1, 2008.
d) Capital loss in related with investment in New World Brands Inc.
(OTC BB:NWBD.OB - News).
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED EBITDA FROM CONTINUING OPERATIONS
(U.S. dollars in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
Net income (loss)
Non-GAAP from
continuing
operations $ (368) $ (425) $ 122 $ (574)
Non GAAP adjustment:
Financial
expenses, net 250 67 524 421
Depreciation 53 30 178 80
Tax on income (45) 122 (356) 79
---------- ---------- ---------- ----------
EBITDA $ (110) $ (206) $ 468 $ 6
========== ========== ========== ==========
Contact:
B.O.S. Better Online Solutions Ltd.
Mr. Eyal Cohen, CFO
+972-3-954-1000
eyalc@boscom.com
Kwan Communications
Israeli Investor Relations
Mr. Zvi Rabin
+972 50-560-0140
zvi@kwan.co.il
Grayling Global
U.S. Investor Relations
Ms. Leslie Wolf-Creutzfeldt
+ 1 646-284-9472
lwolf-creutzfeldt@hfgcg.com
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