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Revenues Increase by 142% over Second Quarter 2007

RISHON LEZION, Israel–(BUSINESS WIRE)–B.O.S. Better Online Solutions Ltd. (“BOS” or the
“Company”) (NASDAQ: BOSC ;TASE:BOSC), a leading provider of comprehensive Mobile and RFID
Solutions and Supply Chain Solutions, today reported its results for the second quarter and first six
months ended June 30th, 2008.
Financial Highlights for the second quarter and first six months of 2008 (NON-GAAP Pro-forma):
• Revenues for the three months ended June 30, 2008 increased 142% to $13.8 million compared
to the same period in 2007;
• EBITDA for the three months ended June 30, 2008 increased 50% to $248,000 compared to the
same period in 2007;
• Revenue for the first six months was $28 million vs. $11 million in first half of 2007; EPS was
$0.04 vs. loss of $0.02 in prior year
• Backlog increased to $13.3 million on June 30th, 2008 from $7.8 million on June 30, 2007.


“The Company continues to experience strong momentum, demonstrated by our significant growth in
top-line and bottom-line results,” said Shmuel Koren, BOS’ President & CEO. “With our established
customer base and higher profit margins generated by our recent acquisitions, we anticipate a
continuing trend of significant revenue growth throughout the remainder of 2008.”
BOS operates in two business segments, Mobile and RFID Solutions and Supply Chain Solutions.
Combined, they have generated $13.8 million of revenue in the second quarter of 2008 compared to
$5.7 million in the second quarter of 2007. Revenue for the first six months of 2008 was $28 million
compared with $11 million in the first half of 2007. Total revenue is projected to exceed $55 million in 2008.

BOS is located in Israel and the US and employs approximately 150 employees worldwide. The
Company also owns and operates two distribution channels in Israel and the United States which
mainly provide supply chain solutions for the aerospace industry. International sales accounted for
42% of revenue in second quarter 2008 compared to 33% in the second quarter 2007. For the second
quarter of 2008, international sales amounted to $5.8 million, a 204% increase compared with the year
ago period due to the acquisition of Summit and internal growth. Backlog increased to $13.3 million
as of June 30th, 2008 from $7.8 million as of June 30th, 2007.
For the second quarter and first six months of 2008, BOS generated record EBITDA of $248,000 and
$576,000 compared to $165,000 and $212,000 in the comparable period of 2007. The devaluation of the
US dollar against the NIS (Israeli New Shekel) in the second quarter of 2008 and in the six months 2 ended June 30,
2008 adversely affected our operating results. The Company expects to generate annua lEBITDA in 2008 of approximately $2 million.

As of June 30, 2008, cash and cash equivalents were $1.9 million, short term bank loans amounted to
$6.3 million and long term bank loans were $2.8 million. In July we announced the raising of $1 million through equity.

Shmuel Koren BOS’ President & CEO said, “The good results we saw this quarter reflect BOS’
increased ability to provide our customers with fully integrated and comprehensive solutions. Our
recent acquisitions have provided the Company with a unified platform which businesses need in
order to be effective. We are pleased to be taking advantage of technology advances and offering
these services on a global basis.”


In May 2008 the Company finalized a Frame Agreement with potential for orders of up to $ 25 million
with a Strategic Customer of our Supply Chain division in the Aircraft Industry. BOS has already
begun to receive orders under the terms of this Frame Agreement.
Edouard Cukierman BOS’ Chairman of the Board added: “These improved financial results indicate a positive outlook
for BOS in 2008. We are focused on continuing to grow on a global basis.”

Review of results on GAAP basis:

Revenue for the second quarter and first six months of 2008 amounted to $13.8 million and $25.9
million respectively, a 142% and 134% increase over revenues in the comparable periods in 2007. This
increase in revenues in the second 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 second quarter and first six months of 2008 amounted to $3.0 million and $5.7
million respectively, a 140% and 138% increase over the comparable 2007 period. Gross margin in the
second quarter of 2008 was 22%, which is the same as the second quarter of 2007.
Operating loss in the second quarter and first six months of 2008 was $78,000 and $170,000
respectively, compared to an operating loss of $90,000 and $259,000 in the same period of 2007.


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; and
(b) Middleware – A variety of proprietary Servers intended to receive data from Hardware,
process it and transfer it to the Software Applications; and
3
(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 Gl

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; and
(b) Middleware – A variety of proprietary Servers intended to receive data from Hardware,
process it and transfer it to the Software Applications; and
3
(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
www.boscorporate.com.

Conference Call and Webcast information:

BOS will host a conference call, to be simultaneously Webcast, on Thursday, August 14, 2008 at 10:00
a.m. Eastern Daylight 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: + 1- 877-407-8033
(North America), + 1- 201-689-8033 (International). A live Webcast of the conference call will be
available on the BOS web site at www.boscorporate.com. A replay of the call will be available starting
on August 14, 2008, at 1:00 p.m. Eastern Daylight Time / 8:00 p.m. Israel Time through August 21,
2008 at 11:59 p.m. Eastern Daylight Time /6:59 a.m. Israel Time. An archived Webcast of the
conference call will be available on the BOS Web site at www.boscorporate.com. Interested parties
may access the replay by dialing the following numbers and entering the account number and
conference ID number below: +1- 877-660-6853 (North America), +1- 201-612-7415 (International),
Account Number: 286, Conference ID Number: 291891.

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 nonGAAP 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; 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)
Six months ended
June 30,
Three months ended
June 30,
2008 2007 2008 2007
(Unaudited) (Unaudited)
Revenues:
Mobile and RFID solutions $ 5,422 $ 1,450 $ 3,631 $ 668
Supply Chain Solutions 20,492 9,622 10,132 5,021
Total Revenues 25,914 11,072 13,763 5,689

Cost of revenues:
Mobile and RFID solutions 3,280 682 2,315 284
Supply Chain Solutions 16,907 7,984 8,400 4,133
Total cost of revenues 20,187 8,666 10,715 4,417

Gross profit:
Mobile and RFID solutions 2,142 768 1,316 384
Supply Chain Solutions 3,585 1,638 1,732 888
Total gross profit 5,727 2,406 3,048 1,272

Operating costs and expenses:
Research and development 524 222 253 95
Sales and marketing 4,555 1,470 2,488 881
General and administrative 818 973 385 386
Total operating costs and expenses 5,897 2,665 3,126 1,362

Operating loss (170) (259) (78) (90)
Financial expenses, net (289) (354) (75) (159)
Other income (expenses), net – (580) – (591)
Loss before taxes on income (459) (1,193) (153) (840)
Taxes on income 377 43 160 16
Net income (loss) $ (82) $ (1,150) $ 7 $ (824)

Basic net income (loss) per share $ (0.01) $ (0.15) $ 0.00 $ (0.10)
Diluted net income (loss) per share $ (0.01) $ (0.15) $ 0.00

$ (0.10)

Weighted average number of shares used in
computing basic net earnings per share 11,207,205 7,511,797 11,391,947 8,266,745
Weighted average number of shares used in
computing diluted net earnings per share 11,207,205 7,511,797 11,461,811 8,266,745

CONDENSED CONSOLIDATED BALANCE SHEET
(U.S. dollars in thousands)

(Unaudited) (Audited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 1,935 $ 4,271
Trade receivables, net 14,148 9,114
Other accounts receivable and prepaid expenses 1,472 945
Inventories 11,450 8,321
Total current assets 29,005 22,651

LONG-TERM ASSETS:
Severance pay fund 748 687
Investment in other companies 2,329 2,494
Other assets 265 42
Total long-term assets 3,342 3,223

PROPERTY AND EQUIPMENT, NET 1,189 719
GOODWILL 8,070 2,861
OTHER INTANGIBLE ASSETS, NET 2,779 1,678
Total assets $ 44,385 $ 31,132
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term bank loans and current maturities $ 6,345 $ 5,028
Trade payables 7,623 5,258
Employees and payroll accruals 912 552
Deferred revenues 615 116
Accrued expenses and other liabilities 6,748 1,290
Total Current Liabilities 22,243 12,244

LONG-TERM LIABILITIES: Long-term bank loans, net of current maturities 2,795 3,286
Deferred taxes 596 366
Accrued severance pay 946 798
Other long-term liabilities 1,994 –
Total long-term liabilities 6,331 4,450

SHAREHOLDERS’ EQUITY 15,811 14,438
Total liabilities and shareholder’s equity $ 44,385 $ 31,132

RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)

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