B.O.S. Better Online Solutions Announces Financial Results for the Third Quarter of 2009
- Press Release
- Source: B.O.S. Better Online Solutions Ltd.
- On 9:22 am EST, Tuesday November 10, 2009
RISHON LEZION, Israel, Nov. 10, 2009 (GLOBE NEWSWIRE) -- B.O.S. Better Online Solutions Ltd. ("BOS" or the "Company") (Nasdaq:BOSC - News), a leading provider of comprehensive RFID, mobile and supply chain solutions, with operations in Israel and the United States, today reported its results for the third quarter ended September 30, 2009.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| BOSC | 0.32 | -0.01 |
Financial highlights for the third quarter and first nine months ended September 30, 2009 (NON-GAAP):
* Revenues for the third quarter and first nine months of 2009 amounted to $8.0 million and $25.1 million respectively, compared to $13.4 million and $41.4 million in the comparable periods in 2008. * EBITDA for the third quarter and first nine months of 2009 amounted to ($928,000) and ($1.6) million respectively, compared to ($110,000) and $468,000 in the comparable periods in 2008. * The Company's backlog is showing signs of recovery and amounted to $9.9 million in the third quarter of 2009, compared to $8.9 million in the second quarter. * The Company is implementing cost reduction measures in the fourth quarter of 2009.
Revenues for the third quarter and first nine months of 2009 amounted to $8.0 million and $25.1 million respectively, compared to $13.4 million and $41.4 million respectively, in the comparable periods in 2008. The significant reduction in revenues is mainly attributed to the global economic crises.
Revenues for the third quarter of 2009 remain at a similar level to those of the second quarter of 2009, which is a sign of stability after revenues fell consecutively in the first two quarters of 2009.
The Company's management said that it is encouraged by the growth of its backlog during the third quarter of 2009. The Company's backlog dropped from a level of $12.1 million as of September 30, 2008 to $8.9 million as of June 30, 2009, but as of September 30, 2009, backlog increased to $9.9 million, and the trend continued in October 2009.
In the first quarter of 2009, the Company implemented cost reduction measures, which included a reduction of 19% (29 employees) of the workforce. The drop in revenues in the first nine months of 2009 was stronger than the Company anticipated. BOS is now in the process of implementing additional cost-cutting measures, including an additional reduction of 14% (17 employees) of its workforce.
"We believe that the recent sign of recovery in our backlog and the cost reduction program we are putting into place will improve our financial results going forward," said acting CEO Yuval Viner.
Review of results on a GAAP basis:
Gross profit for the third quarter of 2009 includes an inventory write-off in the amount of $1.3 million resulting from the overall global economic conditions and its impact on the Company's business operations. As a result, gross margin as a percentage of revenues was reduced to 5.1% in the third quarter, down from 22% in the same period last year.
Operating loss for the third quarter and for the first nine months of 2009 amounted to $2.5 million and $4.9 million respectively, compared to operating losses of $409,000 and $576,000 for the same periods in 2008, respectively. The Company's operating loss for the first nine months of year 2009 includes an impairment of goodwill in the amount of $1.2 million.
Other expenses for the third quarter and first nine months of 2009 amounted to $59,000 and $304,000 respectively, which consisted primarily of a further impairment of the Company's investment in New World Brands Inc. (OTCBB:NWBD - News) in which BOS holds less than 20%.
Net loss for the third quarter and first nine months of 2009 amounted to $2.7 million and $5.8 million respectively, compared to net loss of $830,000 and $909,000 in the comparable periods in 2008, respectively.
As of September 30, 2009, cash and cash equivalents were $1.7 million and short term bank loans amounted to $12.9 million.
Following the financial results of the third quarter, the Company is not in line with its financial covenants with its banks, and is currently discussing with the banks waivers and a redefinition of new financial covenants. As a result, long term bank loans in the amount of $1 million as of September 30, 2009, are presented under short term bank loans.
On August 20, 2009 we announced that we closed a $2.4 million convertible loan financing with several lenders including Catalyst Private Equity Partners (Israel) II L.P., Telegraph Hill Capital Fund I, LLC, certain existing shareholders and members of its management.
"Our performance in the third quarter and first nine months of 2009 was adversely affected by the global economic slowdown. Therefore, we have accelerated the implementation of a cost reduction program, which is already resulting in improved operating efficiency," said acting CEO Yuval Viner.
"Equally important, we are putting in place an integration plan between the supply chain and RFID & mobile divisions in order to optimize the allocation of our resources amongst our divisions. We expect this will lead to better performance for the BOS group. We are also optimistic that the growth in backlog, compared to the first two quarters of 2009 is a sign that recovery is starting," said Avidan Zelicovsky, acting President.
Edouard Cukierman, Chairman, added: "In addition to these measures, due to our growing product portfolio and expertise in the RFID market, we are well positioned to increase revenues and improve our operating results."
About BOS
B.O.S. Better Online Solutions Ltd. (Nasdaq:BOSC - News) is a leading provider of RFID, mobile and supply chain solutions to global enterprises. BOS' proprietary BOServer, BOSaNova, RFID, mobile and supply chain offerings are being used to improve the efficiency of enterprise logistics and organizational monitoring and control systems of over 2,000 customers worldwide. With BOS solutions, companies are enhancing the automation of various aspects of their supply chain, improving asset tracking, and managing real-time business data, all crucial to improving margins in today's competitive marketplace.
For more information, please visit: 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)
Nine months ended Three months ended
September 30, September 30,
------------------------ ------------------------
2009 2008 2009 2008
------------------------ ------------------------
(Unaudited) (Unaudited)
Revenues $ 25,096 $ 39,347 $ 8,043 $ 13,433
Cost of revenues 20,563 30,645 7,630 10,461
----------- ----------- ----------- -----------
Gross profit 4,533 8,702 413 2,972
----------- ----------- ----------- -----------
Operating costs
and expenses:
Research and
development 497 781 136 257
Sales and
marketing 6,476 7,124 2,260 2,569
General and
administrative 1,284 1,373 526 555
Impairment of
goodwill 1,218 -- -- --
----------- ----------- ----------- -----------
Total operating
costs and
expenses 9,475 9,278 2,922 3,381
----------- ----------- ----------- -----------
Operating loss (4,942) (576) (2,509) (409)
Financial
expenses, net (524) (539) (262) (250)
Other expenses net (304) (245) (59) (245)
----------- ----------- ----------- -----------
Loss before taxes
on income (5,770) (1,360) (2,830) (904)
(Taxes on income)
tax benefit (67) 451 125 74
----------- ----------- ----------- -----------
Net income (loss)$ (5,837) $ (909) $ (2,705) $ (830)
=========== =========== =========== ===========
Basic net income
(loss) per share $ (0.45) $ (0.08) $ (0.21) $ (0.07)
=========== =========== =========== ===========
Diluted net income
(loss) per share $ (0.45) $ (0.08) $ (0.21) $ (0.07)
=========== =========== =========== ===========
Weighted average
number of shares
used in computing
basic net
earnings
per share 13,027,514 11,627,232 13,027,514 12,379,656
=========== =========== =========== ===========
Weighted average
number of shares
used in computing
diluted net
earnings per
share 13,027,514 11,627,232 13,027,514 12,379,656
=========== =========== =========== ===========
CONDENSED CONSOLIDATED BALANCE SHEET
(U.S. dollars in thousands)
Sept. 30, Dec. 31,
2009 2008
------- -------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,708 $ 1,637
Trade receivables, net 8,356 13,314
Other accounts receivable and prepaid expenses 1,123 1,155
Inventories 10,689 10,346
------- -------
Total current assets 21,876 26,452
------- -------
LONG-TERM ASSETS:
Severance pay fund 657 652
Investment in other companies 579 882
Deferred charges 160 --
Deferred tax 264 452
------- -------
Total long-term assets 1,660 1,986
------- -------
PROPERTY, PLANT AND EQUIPMENT, NET 1,235 1,128
OTHER INTANGIBLE ASSETS, NET 2,136 2,418
GOODWILL 4,191 5,361
------- -------
Total assets $31,098 $37,345
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank loans and current maturities $12,969 $10,299
Trade payables 5,090 6,458
Employees and payroll accruals 647 843
Deferred revenues 468 826
Accrued expenses and other liabilities 2,142 3,111
------- -------
Total Current Liabilities 21,316 21,537
------- -------
LONG-TERM LIABILITIES:
Long-term bank loans, net of current maturities -- 2,256
Deferred taxes 450 541
Accrued severance pay 814 929
Convertible notes, net of current maturities 1,834 --
Other long-term liabilities -- 838
------- -------
Total long-term liabilities 3,098 4,564
------- -------
SHAREHOLDERS' EQUITY 6,684 11,244
------- -------
Total liabilities and shareholder's equity $31,098 $37,345
======= =======
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,
----------------------------------------------------
2009 2008
-------------------------------------- ------------
GAAP Adjustments Non-GAAP Non-GAAP
(as reported)
----------------------------------------------------
(Unaudited)
Revenues $ 8,043 $ -- $ 8,043 $ 13,433
Gross profit 413 (2)a,1,258d 1,669 2,977
Operating costs
and expenses:
Research and
development 136 -- 136 257
Sales and
marketing 2,260 (97)a,(119)b 2,044 2,428
General and
admini-
strative 526 (54)b 472 455
-------------------------------------- -----------
Total operating
costs and
expenses 2,922 (270) 2,652 3,140
-------------------------------------- -----------
Operating
income
(loss) (2,509) 1,526 (983) (163)
Financial
expenses, net (262) 57e (205) (250)
Other income (59) 59c -- --
-------------------------------------- -----------
Income (loss)
before taxes
on income (2,830) 1,642 (1,188) (413)
(Taxes on
income)
tax benefit 125 (13)a 112 45
-------------------------------------- -----------
Net income
(loss) $ (2,705) $ 1,629 $ (1,076) $ (368)
====================================== ===========
Basic net
income per
share $ (0.21) $ (0.08) $ (0.03)
=========== =========== ===========
Diluted net
income per
share $ (0.21) $ (0.08) $ (0.03)
=========== =========== ===========
Weighted
average
number of
shares
used in
computing
basic net
income per
share 13,027,514 13,027,514 12,379,656
=========== =========== ==========
Weighted
average
number of
shares used in
computing
diluted net
income per
share 13,027,514 13,027,514 12,379,656
=========== =========== ==========
Notes to the reconciliation:
a - Amortization of intangible assets and its related tax benefit.
b - Stock based compensation.
c - Impairment related to investment in Companies.
d - Inventory write-off.
e - Amortization expenses related to convertible note.
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,
---------------------------------------------------
2009 2008
-------------------------------------- -----------
GAAP Adjustments Non-GAAP Non-GAAP
(as reported)
---------------------------------------------------
(Unaudited)
Revenues $ 25,096 $ -- $ 25,096 $ 41,422
Gross profit 4,533 (5)a,1,202d 5,730 9,273
Operating costs
and expenses:
Research and
development 497 -- 497 781
Sales and
marketing 6,476 (291)a,(335)b 5,850 7,137
General and
admini-
strative 1,284 (115)b 1,169 1,065
Impairment
of goodwill 1,218 (1,218) -- --
-------------------------------------- -----------
Total
operating
costs and
expenses 9,475 (1,959) 7,516 8,983
-------------------------------------- -----------
Operating
income (loss) (4,942) 3,156 (1,786) 290
Financial
expenses, net (524) 57e (467) (524)
Other income (304) 304 -- --
-------------------------------------- -----------
Income (loss)
before taxes
on income (5,770) 3,517 (2,253) (234)
(Taxes on
income) tax
benefit (67) (20)a (87) 356
-------------------------------------- -----------
Net income
(loss) $ (5,837) $ 3,497 $ (2,340) $ 122
====================================== ===========
Basic net
income (loss)
per share $ (0.45) $ (0.18) $ 0.01
=========== =========== ==========
Diluted net
income (loss)
per share $ (0.45) $ (0.18) $ 0.01
=========== =========== ==========
Weighted
average
number of
shares used in
computing basic
net income
(loss) per
share 13,027,514 13,027,514 11,627,232
=========== =========== ==========
Weighted
average
number of
shares used
in computing
diluted net
income (loss)
per share 13,027,514 13,027,514 11,703,529
=========== =========== ==========
Notes to the reconciliation:
a - Amortization of intangible assets and its related tax benefit.
b - Stock based compensation.
c - Impairment related to investment in Companies.
d - Inventory write-off.
e - Amortization expenses related to convertible note.
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED EBITDA FROM CONTINUING OPERATIONS
(U.S. dollars in thousands, except per share amounts)
Nine months ended Three months ended
September 30, September 30,
------------------ ------------------
2009 2008 2009 2008
------------------ ------------------
(Unaudited) (Unaudited)
Net loss Non-GAAP from
continuing operations $(2,340) $ 122 $(1,076) $ (368)
Non GAAP adjustment:
Financial expenses, net 467 524 205 250
Depreciation 156 178 55 53
Tax on income 87 (356) (112) (45)
------- ------- ------- -------
EBITDA $(1,630) $ 468 $ (928) $ (110)
======= ======= ======= =======
Contact:
B.O.S. Better Online Solutions Ltd.
Mr. Eyal Cohen, CFO
+972-3-954-1000
eyalc@boscom.com
Related Headlines
- B.O.S. Better Online Solutions Announces Financial Results for the Third Quarter of 2009 - GlobeNewswire
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- BOS BETTER ONLINE SOLUTIONS LTD Financials - EDGAR Online Financials
- B.O.S. Transfers to the Nasdaq Capital Market - GlobeNewswire
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