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Growth of 12% in Revenues as compared to Second Quarter of 2021

RISHON LE ZION, Israel, August 23, 2022 – BOS Better Online Solutions Ltd. (“BOS” or the “Company”) (NASDAQ: BOSC) reported its financial results for the second quarter of the year 2022. 

Revenues for the second quarter of 2022 grew by 12% to $10.3 million from $9.2 million in the comparable quarter last year.

Gross profit margin for the second quarter of 2022 improved to 21.4%, compared to 17.3% in the comparable quarter last year.  

Operating profit for the second quarter grew by 315% to $537,000 compared to an operating profit of $129,000 in the comparable quarter last year. 

EBITDA for the second quarter increased to $652,000 from $207,000 in the comparable quarter last year. 

Financial expenses for the second quarter of 2022 increased to $378,000 compared to a financial income of $13,000 in the comparable quarter last year. This increase in expenses is attributed to foreign exchange differences between the Israeli NIS and the US dollar. 

 As of June 30, 2022, we had $3.2 million of net assets linked to the Israeli NIS. The devaluation of the Israeli NIS against the US dollar by 10.2% during the second quarter of 2022 caused expenses in the amount of $320,000. Conversely, this devaluation reduced our operating expenses by approximately $40,000. The devaluation of the US dollar against the Israeli NIS commencing July 1, 2022, is expected to generate income from foreign exchange differences in the third quarter of 2022. 

As a result of the above, net income for the second quarter of 2022 was $159,000 or $0.03 per basic share compared to a net income of $141,000 or $0.03 per basic share in the comparable quarter last year.

Eyal Cohen, BOS’s CEO stated: “I am encouraged by the growth of 27.6% in revenues and of 175% in operating profit in the first six months of the year 2022 as compared to the corresponding period last year. We have a relatively strong backlog that is expected to support this trend in the second half of 2022. This advances us towards meeting our financial targets for the year 2022, which are revenues of over $35 million (compared to $33.6 million in the year 2021) and net income in excess of $1 million (compared to a net income of $451,000 in the year 2021.)”  

Ziv Dekel, BOS’s Chairman stated: “During the first half of 2022, the Company continued the execution of its turnaround process, which has led to encouraging financial results. Led by Eyal, BOS’ management is focused on growth initiatives, and is working diligently towards realizing its potential.”

BOS will host a conference call on Tuesday, August 23, 2022, at 9:00 a.m. EDT – 4:00 p.m., Israel Time. A question-and-answer session will follow management’s presentation. 

To access the conference call, please dial one of the following numbers:

US: +1-888-281-1167, International: +972-3-9180644.

For those unable to listen to the live call, a replay of the call will be available the next day on the BOS website: www.boscom.com

About BOS

BOS provides services and systems for inventory production and management in three channels:

  •     Services – The Supply Chain division provides inventory procurement and kitting.
  •     Integration – the RFID division provides off-the-shelf software and equipment to track and manage inventory in the production floor and warehouse.
  •     Development – the Intelligent Robotics division develops and builds custom-made robotic cells for industrial and logistic processes.

Contact:
Eyal Cohen, CEO
+972-542525925 | eyalc@boscom.com

Use of Non-GAAP Financial Information
BOS reports financial results in accordance with US 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 BOS being able to maintain current gross profit margins, inability to keep up or ahead of technology and to succeed in a highly competitive industry, failure to successfully integrate and achieve the potential benefits of the acquisition of the business operations of Imdecol Ltd. (the Robotics business line) and of Dagesh Inventory Counting and Maintenance Ltd., 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, general worldwide economic conditions, the impact of the COVID-19 virus and continued availability of financing for working capital purposes and to refinance outstanding indebtedness; and additional risks and uncertainties detailed in BOS’ periodic reports and registration statements filed with the US Securities and 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.

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands

 

  

Six months ended
June 30,

 

Three months ended
June 30,

  

2022

 

2021

 

2022

 

2021

  

(Unaudited)

 

(Unaudited)

     

Revenues

 

$       21,138

 

$       16,557

 

$      10,350

 

$      9,229

Cost of revenues

 

16,667

 

13,274

 

8,130

 

7,626

Gross profit

 

4,471

 

3,283

 

2,220

 

1,603

         

Operating costs and expenses:

        

    Research and development

 

87

 

114

 

36

 

54

    Sales and marketing 

 

2,340

 

1,929

 

1,176

 

977

    General and administrative 

 

999

 

877

 

471

 

443

     Acquisition expenses

 

44

 

 

 

Total operating costs and expenses

 

3,470

 

2,920

 

1,683

 

1,474

         

Operating income 

 

1,001

 

363

 

537

 

129

Financial income (expenses), net 

 

(529)

 

(98)

 

(378)

 

13

Income before taxes on income 

 

472

 

265

 

159

 

142

Taxes on income 

 

 

(1)

  

 

(1)

Net income 

 

$            472

 

$            264

 

$            159

 

$            141

Basic and diluted net income per share 

 

    $           0.09  

 

    $           0.05  

 

$       0.03

 

$       0.03

Weighted average number of shares used in computing basic net income per share

 

                5,395

 

                5,188

 

            5,538

 

            5,219

Weighted average number of shares used in computing diluted net income per share

 

                5,438

 

                5,216

 

            5,570

 

            5,252

         

Number of outstanding shares as of June 30, 2022 and  2021

 

  5,702

 

  5,224

 

  5,702

 

  5,224

CONSOLIDATED BALANCE SHEETS

 (U.S. dollars in thousands)

  

  June 30, 2022

 

December 31, 2021

  

(Unaudited)

 

     (Audited)

ASSETS

    
     

CURRENT ASSETS:

    

Cash and cash equivalents 

 

$ 1,120

 

$    1,875

Restricted bank deposits 

 

130

 

                242

Trade receivables 

 

10,039

 

9,209

Other accounts receivable and prepaid expenses 

 

1,324

 

977

Inventories 

 

5,618

 

5,567

     

Total current assets

 

18,231

 

17,870

     

LONG-TERM ASSETS

 

160

 

150

     

PROPERTY AND EQUIPMENT, NET

 

1,373

 

1,097

     

OPERATING LEASE RIGHT-OF-USE ASSETS, NET

 

721

 

944

     

OTHER INTANGIBLE ASSETS, NET 

 

548

 

20

     

GOODWILL 

 

4,895

 

4,676

     

Total assets

 

      $ 25,928

 

$      24,757

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

  

June 30, 

2022

 

December 31, 2021

  

(Unaudited)

 

(Audited)

     

LIABILITIES AND SHAREHOLDERS’ EQUITY

    
     

CURRENT LIABILITIES:

    

Current maturities of long term loans

 

$ 573

 

$        740

Operating lease liabilities, current

 

352

 

538

Trade payables 

 

6,031

 

5,200

Employees and payroll accruals

 

992

 

996

Deferred revenues

 

422

 

917

Advances net of inventory in process

 

144

 

249

Accrued expenses and other liabilities 

 

335

 

112

     

Total current liabilities

 

8,849

 

8,752

     

LONG-TERM LIABILITIES:

    

Long-term loans, net of current maturities 

 

317

 

681

Operating lease liabilities, non-current

 

403

 

565

Long term deferred revenues

 

327

 

132

Accrued severance pay

 

249

 

280

     

Total long-term liabilities

 

1,296

 

1,658

     
     

TOTAL SHAREHOLDERS’ EQUITY

 

15,783

 

14,347

     
     

Total liabilities and shareholders’ equity

 

$   25, 928

 

$ 24,757

CONDENSED CONSOLIDATED EBITDA

 (U.S. dollars in thousands)

  

Six months ended
June 30,

 

Three months ended
June 30,

  

2022

 

2021

 

2022

 

2021

         

Operating income 

 

$      1,001

 

$      363

 

$     537

 

$     129

  Add:

        

Amortization of intangible assets 

 

45

 

10

 

31

 

5

Stock-based compensation

 

50

 

31

 

25

 

16

Depreciation

 

118

 

111

 

60

 

57

EBITDA

 

$            1,214

 

$            515

 

  $              653

 

  $             207

 

SEGMENT INFORMATION

(U.S. dollars in thousands)

  

RFID

 

Supply

Chain Solutions

 

Intelligent Robotics

 

Intercompany

 

Consolidated

 
    

Six months ended June 30,

2022

 
            
            

Revenues 

 

$ 7,693

 

$ 12,873

 

$         572

 

$

 

$ 21,138

 
            
            

Gross profit (loss)

 

1,915

 

2,575

 

        (19)

 

            –     

 

4,471

 
            

Allocated operating expenses

 

1,209

 

1,585

 

        271

 

            –     

 

3,065

 
            

Acquisition expenses

 

44

 

 

 

 

44

 
            

Unallocated operating expenses*

 

 

 

   

361

 
            

Income (loss) from operations

 

$ 662

 

$ 990

 

$ (290)

 

            –     

 

1,001

 
            

Financial expenses and tax on income 

(529)

 

Net income

         

$ 472

 
  

RFID

 

Supply

Chain Solutions

 

Intelligent Robotics

 

Intercompany

 

Consolidated

 
    

Six months ended June 30,

2021

 

Revenues 

 

$ 6,322

 

$ 9,249

 

$         1,036

 

$           (50)

 

$ 16,557

 

Gross profit

 

1,553

 

1,699

 

        31

 

            –     

 

3,283

 

Allocated operating expenses

 

1,112

 

1,148

 

        336

 

            –     

 

2,596

 

Unallocated operating expenses*

         

324

 

Income (loss) from operations

 

$ 441

 

$ 551

 

$ (305)

   

363

 

Financial expenses and tax on income 

         

(99)

 

Net income

         

$ 264

 

 

* Unallocated operating expenses include costs not specific to a particular segment but are general to the group, such as expenses incurred for insurance of directors and officers, public company fees, legal fees, and other similar corporate costs. 

SEGMENT INFORMATION

(U.S. dollars in thousands)

   

RFID 

 

Supply

Chain Solutions

 

Intelligent Robotics

 

Intercompany

 

Consolidated 

     

Three months ended  June 30,

 2022

            
            

Revenues 

  

$ 3,590

 

$ 6,366

 

$ 394

 

$           –

 

$ 10,350

            
            

Gross profit 

  

885

 

1,332

 

3

 

            –     

 

2,220

            

Allocated operating expenses

  

566

 

809

 

    129

 

            –     

 

1,504

Unallocated operating expenses*

        

 

179

            

Income (loss) from operations

  

$ 319

 

$ 523

 

$ (126)

 

            –     

 

537

            

Financial expenses and tax on income

          

378

            

Net income

          

$ 159

 

   

RFID 

 

Supply

Chain Solutions

 

Intelligent Robotics

 

Intercompany

 

Consolidated 

     

Three months ended  June 30,

 2021

            
            

Revenues 

  

$ 3,374

 

$ 5,295

 

$ 582

 

$           (22)

 

$ 9,229

            
            

Gross profit (loss)

  

706

 

1,050

 

      (153)     

 

            –     

 

1,603

            

Allocated operating expenses

  

567

 

612

 

    138

 

            –     

 

1,319

            

Unallocated operating expenses*

          

155

   

 

 

    

Income (loss) from operations

  

$ 139

 

$ 438

 

$ (291)

 

            –     

 

129

            

Financial income and tax on income

          

12

Net income

          

$ 141

 

* Unallocated operating expenses include costs not specific to a particular segment but are general to the group, such as expenses incurred for insurance of directors and officers, public company fees, legal fees, and other similar corporate costs. 

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