B.O.S. Better On-line Solutions Ltd. (the “Company” or “BOS”) (NASDAQ: BOSC) announces:
- Financial Results of Operations for the Third Quarter of 2003 – First profitable quarter from continuing segment since 2002
- Regained compliance with Nasdaq continued listing requirements as PPS nearly doubled over past weeks
- Fund raising process approved by the Board
- Nomination of a new board member – Andrea Mandel-Mantello
Financial Results of Operations for the Third Quarter of 2003
TERADYON , ISRAEL – November 20, 2003 – B.O.S. Better On-line Solutions Ltd. (the “Company” or “BOS”) (NASDAQ: BOSC) announced today its financial results for the quarter ended September 30, 2003.
Net profit for the third quarter of 2003 from continuing segments was $166,000 (or $0.04 per share), compared to a net loss of $441,000 (or -$0.14 per share) for the third quarter of 2002.
Total cash and investments were $5.3 million as of September 30, 2003. The Company reported a $325,000 in restructuring costs, derived from closing non profitable sales offices as per its cost reduction plan. Revenues for the third quarter of 2003 were $1.31 million, lower by 12% than the second quarter of 2003 and lower than the third quarter of 2002 by 39%, mainly due to the fact that in 2003 the Company began marketing through a master distributor and not through its US division.
Gross profit margin for the third quarter of 2003 was 63%, compared to 69% for the second quarter of 2003 and 73% for the third quarter of 2002. The software vs. hardware sales breakdown within the Company’s Legacy products line was distributed differently this year, with more of the sales being generated from the lower-profit margin hardware products than in previous years. As a result, there was a decrease in the gross margin percentage, compared to 2002.
The Company’s research and development plan for 2003 was approved a grant by the Office of the Chief Scientist. The Company recognized $202,000 of it as a reduction of its R&D costs.
Operating expenses net for the third quarter of 2003, excluding restructuring costs, totaled $745,000, compared to $1.79 million during the second quarter of 2003. Additionally, the Company recognized $325,000 in closure costs derived from closing non profitable sales offices around the world according to its cost reduction plan, so that total operating expenses net for the third quarter of 2003 totaled $1.07million compared to $2.06 million during the second quarter of 2003 and 1.96 million for the third quarter of 2002.
Net profit from continuing operations for the third quarter of 2003 totaled $166,000, compared to net loss of $969,000 for the second quarter of 2003 and a net loss of $441,000 for the third quarter of 2002. As of January 1, 2003 the Company has been preparing consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”).
Israel (Izzy) Gal, B.O.S.’ CEO stated:
“The Company succeeded to return to profit and our next mission is to leverage our superior IP Telephony technology to increase sales and show results in the near future.”
Third Quarter 2003 – Discontinuing Segment
The Company discloses the financial information related to its US subsidiary, Pacific Information Systems, Inc. (“Pacinfo”) in accordance with accounting standards for “discontinued operations”.
The net income from the discontinuing segment for the third quarter of 2003 was $442,000 (or $0.12 per share) compared to net income of $165,000 in the second quarter of 2003 (or $0.04 per share), and a net loss of $1.64 million for the third quarter of 2002 (or $0.53 per share).
Net income from continuing and discontinuing operations for the third quarter of 2003 was $608,000 (or $0.16 per share) compared to net loss of $804,000 in the second quarter of 2003 (or $0.21 per share) and a net loss of 2,079 million (or $0.67 per share) for the third quarter of 2002.
Regained compliance with Nasdaq continued listing requirements as PPS nearly doubled over past weeks
Additionally, the Company announced that it has received notice from the Nasdaq Stock Market certifying that it has regained compliance with the continued inclusion requirement of minimum market value of publicly held shares of $5,000,000. Thus, the Company’s shares are no longer subject at this time to delisting from the Nasdaq National Market.
Fund raising process approved by the Board; Nomination of a new board member – Andrea Mandel-Mantello
Furthermore, at the Board of Directors’ meeting held yesterday, guidelines were approved for a private placement currently being negotiated with a group of European investors, including, inter alia, the allotment of up to 18% of the Company’s currently outstanding share capital in consideration of an investment of up to $2 million. The Board also appointed Mr. Andrea Mandel Mantello to join the Board.
Mr. Andrea Mandel Mantello is Founder and Partner of Advicorp PLC, a UK Investment Bank regulated by the Financial Services Authority. He is an advisor on first high yield corporate bond issue in Italy. From 2000 to 2001 he was an advisor to a US based private equity group on business development in Israel. Prior to his work at Advicorp, Mr. Mandel Mantello spent 9 years at SBC Warburg (now known as UBS) in London in various senior management positions including Executive Directors of SBC Warburg, member of the Board of SBC Warburg Italia SIM S.p.A, and Country Head for Israel. Prior to working at SBCW Mr. Mandel-Mantello spent 2 years at Chemical Bank International Ltd. in London and 3 years at Banca Nazionale dell’Agricoltura in Rome. He holds a Bachelors degree in Economics and Political Science from Yale University.
Through its wholly owned subsidiary, BOScom, the Company develops, produces and markets multi-functional, cross-enterprise communication and networking products. Marketed under the BOS?NOVA brand, these products are renowned for their simplicity of use, quality, and reliability.
The IP Telephony line offers innovative convergence migration solutions that leverage a corporation’s existing equipment infrastructure.
The legacy line provides solutions for IBM midrange-to-PC and LAN connectivity and GUI emulation, and printing solutions that are operating system-independent.
B.O.S. was established in 1990 and became a public company traded on the Nasdaq National Market in 1996 (Nasdaq:BOSC), and on the Tel Aviv Stock Market in 2002 (TASE:BOS).
For further information, please contact:
Mr. Nehemia Kaufman
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, including, but not limited to, those risks and uncertainties detailed in BOS’ periodic reports and registration statements filed with the U.S. Securities Exchange Commission.