BOS Reports Second Quarter of the Year 2022 Financial Results

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


RISHON LE ZION, Israel, Aug. 23, 2022 (GLOBE NEWSWIRE) -- 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
  Three months ended
June 30,
  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, December 31,
 20222021
  (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 Three months ended
June 30,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.