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B.O.S. Better Online Solutions Reports Third Quarter and First Nine Months of 2008 Financial Results
Revenues Increase by 144% year-over-year

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 third quarter and first nin months ended September 30th, 2008.

Financial Highlights for the third quarter and first nine months of 2008 (NON-GAAP Pro-forma):

Revenue for the three months ended September 30, 2008 increased 144% to $13.4 million compared to the same period in 2007;
• Revenue for the first nine months was $41.4 million vs. $16.6 million in first nine months of 2007; EPS was $0.01 vs. loss of $0.05 in prior year
• EBITDA for the nine months ended September 30, 2008 amounted to $468,000 compared to $6,000 in the comparable period in 2007;
• Backlog increased to $12.2 million on September 30th, 2008 from $7.9 million on September 30, 2007

The Company recently announced the resignation of Shmuel Koren, President and CEO, and the appointment of Shalom Daskal, as his replacement. Mr. Cukierman, Chairman of the Board expressed his appreciation of Mr. Koren’s tenure at BOS, during which time the Company grew significantly.

Edouard Cukierman, Chairman said, “We are pleased with BOS’ quarterly results. Our customeroriented approach, and the growing relevance and importance of our solutions to business processes
continue to fuel demand among our customers. I want to again express my appreciation of Mr. Koren’s leadership during his two years at BOS during which time the Company expanded its product offerings and experienced tremendous growth.”

BOS is located in Israel and the US and employs approximately 150 employees worldwide. In addition to the Company’s Mobile and RFID solutions business, the Company also provides Supply Chain Solutions mainly for the aerospace industry through two distribution channels in Israel and the United States. International sales accounted for 43% of revenue in third quarter 2008 compared to 29% in the third quarter 2007. Backlog increased to $12.2 million as of September 30th, 2008 from $7.9 million in the period a year ago.

For the third quarter and first nine months of 2008, BOS generated EBITDA of ($110,000) and $468,000 compared to ($206,000) and $6,000 in the comparable period of 2007. The devaluation of the

US dollar against the NIS (Israeli New Shekel) in the third quarter of 2008 and in the nine months
ended September 30, 2008 adversely affected the Company’s operating results, as compared to year
2007.

As of September 30, 2008, cash and cash equivalents were $1.6 million, short term bank loans amounted to $10.2 million and long term bank loans were $2.6 million. During the third quarter, BOS
raised $2 million through equity.

Edouard Cukierman explained, “In recent weeks, BOS has announced the launching of OptimizeIT, a family of revolutionary software products which will position it very well in the global marketplace.

We also announced the launching of PointACT, which is a family of MicroSoft Sharepoint Software applications for RFID solutions. We also received notice of a $10 million increase to a framework
agreement from an existing customer in the aircraft industry sector. BOS is committed to growing the company and this will include expanding our international sales efforts with new distributors, system integrators, sales representatives, and direct salespersons specializing in mobile and RFID solutions.”

Shalom Daskal, incoming CEO, said, “It is a pleasure to join BOS at this exciting period in the Company’s growth cycle. The Company is well positioned with the right vision and solutions for its customers. BOS has assembled a comprehensive suite of applications and is ahead of the curve in its technological approach. While these are challenging times in the world economy, we believe that BOS offers solutions which enable its customers to save money and optimize their systems and operations.”

Review of results on GAAP basis:

Revenue for the third quarter and first nine months of 2008 was $13.4 million and $39.3 million respectively, a 144% and 137% increase over revenues in the comparable periods in 2007. This increase in revenues in the third 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 third quarter and first nine months of 2008 was $3.0 million and $8.7 million respectively, a 158% and 145% increase over the comparable 2007 period. Gross margins in the third quarter of 2008 was 22%, compared to 21% in the third quarter of 2007.

Operating loss in the third quarter and first nine months of 2008 was $409,000 and $576,000 respectively, compared to an operating loss of $390,000 and $649,000 in the same period of 2007.

Edouard Cukierman, concluded, “In order to take advantage of our unique opportunity, we are working on the synergy and integration among companies that we have acquired. The tremendous
value and potential in what we offer is relevant in many areas ranging from government services to private businesses, from aerospace to livestock, from large enterprises to growing companies. We are at the forefront of the next generation of operations and business processes and BOS has the makings
of what we can call the backbone of tomorrow’s industry. We are committed to achieving the full potential of the Company.”

About BOS

B.O.S. Better Online Solutions Ltd. (“BOS”) was established in 1990.BOS’s operations consist of:

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;
(b) Middleware – A variety of proprietary Servers intended to receive data from Hardware, process it and transfer it to the Software Applications; and
(c) Software Applications – PointAct application platform for implementation of various business organizational processes; 3
(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, November 20, 2008 at 10:00 a.m. Eastern Standard 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: North America + 1-888-668-9141, Israel + 03-9180685, International + 972-3-9180685.

The call is being simultaneously Web cast and can be accessed on the BOS Web site at
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 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, 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 forwardlooking 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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