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B.O.S. Better Online Solutions Announces Net Profit for the Second Quarter of 2010
Revised Outlook for 2010: Net Profit

RISHON LEZION, Israel, August 11, 2010 (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 second quarter, which ended June 30, 2010.

Revenues for the second quarter of 2010 amounted to $10.4 million, which reflects 10% growth over the previous quarter, and 30% growth compared to the second quarter last year.

Backlog as of June 30, 2010, continued to remain at the relatively high level of $12.3 million.

Operating profit for the second quarter amounted to $563,000 compared to an operating loss of $2.1 million in the comparable quarter last year. Operating profit for the first six months of 2010 amounted to $778,000 compared to an operating loss of $2.4 million in the comparable six-month period last year.

Financial expenses for the first six months of 2010 increased to $671,000 from $262,000 in the comparable six month period last year. The increase was attributed mainly to (a) stock based compensation of $139,000, and $100,000 of interest expenses related to the convertible debt raised in July 2009 and (b) expenses related to currency differences in the amount of $71,000 in the first six months of 2010, compared to income related to currency differences of $70,000 in the comparable six month period last year.

Net profit for the second quarter amounted to $115,000 compared to a net loss of $2.4 million dollar in the comparable quarter last year. Net profit for the first six months of 2010 amounted to $15,000 compared to a net loss of $3.1 million in the comparable six month period last year.

Excluding the amortization of intangible assets and stock based compensation, BOS’ net profit was $362,000 in the second quarter of 2010, and $488,000 for the first half of 2010, compared to a net loss of $857,000 and of $1.45 million in the comparable periods last year.

Edouard Cukierman, Chairman of the Board, stated, “We are very pleased with these results, which prove that the company has turned itself around. These results reflect the successful execution of our cost-reduction plan. In parallel, we are continuing to expand our RFID activities, and we expect these positive trends to continue in the future.”

Yuval Viner, BOS CEO, stated, “For the first time in many years, we are pleased to report a net profit, as well as two consecutive quarters of operating profit. We are revising our original outlook for 2010: we reiterate our target of $35 million in revenues, and now believe we will end the year with a net profit, not only an operating profit. We expect to make several new customer-related announcements in the near future.”

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.

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