RISHON LEZION, Israel, Aug. 29, 2011 (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 of 2011.
Highlights of second quarter 2011 results from continuing operation:
1. Revenues grew by 7.6% to $8.4 million, up from $7.8 million in the same quarter last year.
2. Operating loss amounted to $89,000 compared to operating income of $376,000 in the same quarter last year.
3. EBITDA amounted to $139,000 compared to $588,000 in the same quarter last year.
4. Net loss amounted to $324,000 compared to a net loss of $37,000 in the same quarter last year.
5. Net loss on a non-GAAP basis amounted to $17,000 compared to net income amounted to $235,000 in the same quarter last year.
6. Backlog and deferred revenues grew by 14% to $10.3 million, compared to $9 million in June 30, 2010. The majority of the backlog relates to the Supply Chain division.
Yuval Viner, BOS CEO, stated: "We are continuing to invest in our BOS ID software platform, which, from a strategic point of view, is the growth engine of the RFID & Mobile division for the coming years, in the Israeli market and abroad. Our extensive investment in the BOS ID development was the main factor leading to a net loss on non-GAAP basis of $17,000 for the second quarter. We are currently working to enhance the performance of the BOS ID platform and to shorten the delivery time of software projects. In parallel, we are continuing to invest in development of the international market and have recently retained an international sales manager for this purpose. In August, we won our first RFID pilot project in Spain.
As a result, we are updating our forecast for 2011, as follows:
- Revenue forecast remains unchanged: we expect revenues to exceed $33 million, compared to $30.2 million in 2010.
- EBITDA forecast will be reduced to $1.4 million from our initial forecast of $2.3 million, compared to $2.1 million in 2010.
- Net profit forecast: we will be profitable on non GAAP basis but not on a GAAP basis, as initially forecasted."
Eyal Cohen, BOS CFO, stated: "In the second quarter we provided $1 million cash from operating activities and our cash increased to $983,000, from $185,000 in March 31, 2011. We have started initial negotiations for an extension or a conversion of our convertible notes, which amounted to $2.7 million in June 30, 2011, which most of it, is due on July 2012. All the holders of the convertible notes are shareholders of BOS. We recently received an approval for a five-year loan from Bank HaPoalim Ltd., which results in a $0.5 million increase to our aggregate credit lines available from Bank Hapoalim and Bank Leumi. This milestone will improve the Company's working capital, decrease our dependence on one bank and is also expected to reduce our financial costs going forward."
Conference Call
BOS will host a conference call on Tuesday, August 30, 2011 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:
| North America | + 1-888-668-9141 |
| Israel | + 03-9180685 |
| International | + 972-3-9180685 |
For those unable to listen to the live call, a replay of the call will be available from the day after the call on BOS's website, at: www.globenewswire.com/newsroom/ctr%3Fd=229829%26l=3%26u=http%253A%252F%252Fwww.boscorporate.com" target="_top" rel="nofollow">http://www.boscorporate.com
About BOS
B.O.S. Better Online Solutions Ltd. (Nasdaq:BOSC) is a leading provider of RFID and Supply Chain solutions to global enterprises. BOS' RFID and mobile division offers both turnkey integration services as well as stand-alone products, including best-of-breed RFID and AIDC hardware and communications equipment, BOS middleware and industry-specific software applications. The Company's supply chain division provides electronic components consolidation services to the aerospace, defense, medical and telecommunications industries as well as to enterprise customers worldwide.
For more information, please visit: www.boscom.com/" target="_top" rel="nofollow">www.boscom.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 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, 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 and continued availability of financing for working capital purposes and to refinance outstanding indebtedness; 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.
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| U.S. dollars in thousands, except per share data | ||||
|
Six months ended June 30, |
Three months ended June 30, |
|||
| 2011 | 2010 | 2011 | 2010 | |
| (Unaudited) | (Unaudited) | |||
| Revenues | $ 17,536 | $ 15,208 | $ 8,393 | $ 7,801 |
| Write off (reversal) of slow moving inventory | 47 | (92) | 47 | (49) |
| Cost of revenues | 13,631 | 11,570 | 6,625 | 5,898 |
| Gross profit | 3,858 | 3,730 | 1,721 | 1,952 |
| Operating costs and expenses: | ||||
| Research and development | 220 | 182 | 116 | 62 |
| Sales and marketing | 2,262 | 2,049 | 1,166 | 992 |
| General and administrative | 1,089 | 976 | 528 | 522 |
| Total operating costs and expenses | 3,571 | 3,207 | 1,810 | 1,576 |
| Operating profit (loss) | 287 | 523 | (89) | 376 |
| Financial expenses, net | (499) | (549) | (275) | (310) |
| Other expenses, net | (97) | (108) | (39) | (101) |
| Loss before taxes benefit | (309) | (134) | (403) | (35) |
| Taxes benefit (taxes on income) | 19 | (4) | 79 | (2) |
| Loss from continuing operations | (290) | (138) | (324) | (37) |
| Profit related to discontinued operations | -- | 153 | -- | 152 |
| Net income (loss) | $ (290) | $ 15 | $ (324) | $ 115 |
| Basic and diluted net loss per share from continuing operations | $ (0.11) | $ (0.05) | $ (0.12) | $ (0.02) |
| Basic and diluted net profit per share from discontinued operations | $ -- | $ 0.06 | $ -- | $ 0.06 |
| Basic and diluted net profit (loss) per share | $ (0.11) | $ 0.01 | $ (0.12) | $ 0.04 |
| Weighted average number of shares used in computing basic net earnings per share | 2,758,734 | 2,627,055 | 2,762,590 | 2,626,760 |
| Weighted average number of shares used in computing diluted net earnings per share | 2,758,734 | 2,753,356 | 2,762,590 | 2,753,036 |
| CONSOLIDATED BALANCE SHEETS | |||
| (U.S. dollars in thousands, except per share amounts) | |||
| June 30, 2011 | December 31, 2010 | ||
| (Unaudited) | (Audited) | ||
| ASSETS | |||
| CURRENT ASSETS: | |||
| Cash and cash equivalents | $ 983 | $ 703 | |
| Trade receivables | 8,783 | 7,719 | |
| Other accounts receivable and prepaid expenses | 929 | 1,183 | |
| Inventories | 5,608 | 5,125 | |
| Total current assets | 16,303 | 14,730 | |
| LONG-TERM ASSETS: | |||
| Severance pay fund | 49 | 47 | |
| Investment in other companies | 167 | 107 | |
| Other assets | 97 | 161 | |
| Total long-term assets | 313 | 315 | |
| PROPERTY, PLANT AND EQUIPMENT, NET | 1,316 | 1,135 | |
| OTHER INTANGIBLE ASSETS, NET | 1,349 | 1,512 | |
| GOODWILL | 4,612 | 4,438 | |
| $ 23,893 | $ 22,130 | ||
| CONSOLIDATED BALANCE SHEETS | ||
| U.S. dollars in thousands, except share and per share data | ||
| June 30, 2011 | December 31, 2010 | |
| (Unaudited) | (Audited) | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| CURRENT LIABILITIES: | ||
| Short-term bank loans and current maturities | $ 8,677 | $ 7,778 |
| Trade payables | 4,942 | 4,317 |
| Employees and payroll accruals | 838 | 735 |
| Deferred revenues | 738 | 474 |
| Accrued expenses and other liabilities | 970 | 1,040 |
| Total current liabilities | 16,165 | 14,344 |
| LONG-TERM LIABILITIES: | ||
| Long-term bank loans, net of current maturities | 262 | 394 |
| Income tax accruals | 459 | 488 |
| Accrued severance pay | 199 | 167 |
| Convertible note | 2,671 | 2,460 |
| Other long-term liabilities | 456 | 564 |
| Total long-term liabilities | 4,047 | 4,073 |
| COMMITMENTS AND CONTINGENT LIABILITIES | ||
| SHAREHOLDERS' EQUITY: | ||
| Share capital | 14,154 | 13,959 |
| Additional paid-in capital | 56,704 | 56,805 |
| Accumulated other comprehensive profit | 216 | 52 |
| Accumulated deficit | 67,393 | (67,103) |
| Total shareholders' equity | 3,681 | 3,713 |
| Total liabilities and shareholders' equity | $ 23,893 | $ 22,130 |
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| U.S. dollars in thousands | ||
|
Six months ended June 30, |
Three months ended June 30, |
|
| 2011 | 2011 | |
| (Unaudited) | ||
| Cash flows provided by operating activities | 93 | 1,040 |
| Net cash used in investing activities | (432) | (276) |
| Net cash provided by financing activities | 619 | 34 |
| Increase in cash and cash equivalents | 280 | 798 |
| Cash and equivalents at the beginning of the period | 703 | 185 |
| Cash and cash equivalents at the end of the period | $ 983 | $ 983 |
| RECONCILIATION OF NON-GAAP FINANCIAL RESULTS | ||||
| CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||
| (U.S. dollars in thousands, except per share amounts) | ||||
| Three months ended June 30, | ||||
| 2011 | 2010 | |||
|
GAAP (as reported) |
Adjustments | Non-GAAP | Non-GAAP | |
| Revenues | $ 8,393 | $ -- | $ 8,519 | $ 7,801 |
| Gross profit | 1,721 | 47a | 1,768 | 1,903 |
| Operating costs and expenses: | ||||
| Research and development | 116 | -- | 116 | 62 |
| Sales and marketing | 1,166 | (96)b | 1,070 | 890 |
| General and administrative | 528 | (56)c | 472 | 473 |
| Total operating costs and expenses | 1,810 | (152) | 1,658 | 1,425 |
| Operating profit (loss) | (89) | 199 | 110 | 478 |
| Financial expenses, net | (275) | 69e | (206) | (241) |
| Other expenses, net | (39) | 39d | -- | -- |
| Profit (loss) before taxes on income | (403) | 307 | (96) | 237 |
| Taxes on income (tax benefit) | 79 | -- | 79 | (2) |
| Profit (loss) from continuing operations | $ (324) | $ 307 | $ (17) | $ 235 |
| Profit related to discontinued operations | -- | -- | -- | 203 |
| Net income (loss) | $ (324) | $ 307 | $ (17) | $ 438 |
| Notes to the reconciliation: | ||||
| a - Inventory write off. | ||||
| b - Amortization of intangible assets. | ||||
| c - Stock based compensation. | ||||
| d - Impairment in related with investment in Companies. | ||||
| e - Depreciation of prepaid expenses and value of warrants attached to Convertible note. | ||||
| RECONCILIATION OF NON-GAAP FINANCIAL RESULTS | ||||
| CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||
| (U.S. dollars in thousands, except per share amounts) | ||||
| Six months ended June 30, | ||||
| 2011 | 2010 | |||
|
GAAP (as reported) |
Adjustments | Non-GAAP | Non-GAAP | |
| Revenues | $ 17,536 | $ -- | $ 17,662 | $ 15,208 |
| Gross profit | 3,858 | 47a | 3,905 | 3,638 |
| Operating costs and expenses: | ||||
| Research and development | 220 | -- | 220 | 182 |
| Sales and marketing | 2,262 | (188)b , (3)c | 2,071 | 1,844 |
| General and administrative | 1,089 | (90)c | 999 | 878 |
| Total operating costs and expenses | 3,571 | (281) | 3,290 | 2,904 |
| Operating profit (loss) | 287 | 328 | 615 | 734 |
| Financial expenses, net | (499) | 139e | (360) | (411) |
| Other expenses, net | (97) | 97d | -- | -- |
| Profit (loss) before taxes on income | (309) | 564 | 255 | 323 |
| Taxes on income (tax benefit) | 19 | -- | 19 | -- |
| Profit (loss) from continuing operations | $ (290) | $ 564 | $ 274 | $ 323 |
| Profit loss related to discontinued operations | -- | -- | -- | 250 |
| Net income (loss) | $ (290) | $ 564 | $ 274 | $ 573 |
| Notes to the reconciliation: | ||||
| a - Inventory write off. | ||||
| b - Amortization of intangible assets. | ||||
| c - Stock based compensation. | ||||
| d - Impairment in related with investment in Companies. | ||||
| e - Depreciation of prepaid expenses and value of warrants attached to Convertible note. | ||||
| CONDENSED CONSOLIDATED EBITDA | ||||||||
| (U.S. dollars in thousands) | ||||||||
| Six months ended | Three months ended | |||||||
| June 30, | June 30, | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| (Unaudited) | (Unaudited) | |||||||
| Operating Profit (loss) from continuing operations | $ 287 | $ 523 | $ (89) | $ 376 | ||||
| Add: | ||||||||
| Amortization of intangible assets | 189 | 182 | 96 | 91 | ||||
| Stock based compensation | 94 | 120 | 57 | 61 | ||||
| Depreciation | 139 | 121 | 75 | 60 | ||||
| EBITDA | $ 709 | $ 946 | $ 139 | $ 588 | ||||
| RFID and Mobile Solutions | Supply Chain Solutions | Intercompany | Consolidated | RFID and Mobile Solutions | Supply Chain Solutions | Intercompany | Consolidated | |
| Six months ended June 30, 2011 | Three months ended June 30, 2011 | |||||||
| Revenues | $ 7,097 | $ 10,957 | $ (518) | $17,536 | $ 3,605 | $ 5,088 | $ (300) | $ 8,393 |
| Gross profit | $ 1,693 | $ 2,165 | $ -- | $3,858 | $ 757 | $ 964 | $ -- | $ 1,721 |
| RFID and Mobile Solutions | Supply Chain Solutions | Intercompany | Consolidated | RFID and Mobile Solutions | Supply Chain Solutions | Intercompany | Consolidated | |
| Six months ended June 30, 2010 | Three months ended June 30, 2010 | |||||||
| Revenues | $ 5,959 | $ 9,509 | $ (260) | $ 15,208 | $ 3,059 | $ 4,983 | $ (241) | $ 7,801 |
| Gross profit | $ 2,008 | $ 1,722 | $ -- | $ 3,730 | $ 987 | $ 965 | $ -- | $ 1,952 |