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B.O.S. Announces Financial Results for Third Quarter of 2013

RISHON LEZION, Israel, Dec. 2, 2013 (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 three months ended September 30, 2013.

Highlights - on a GAAP basis:

  • Revenues for the third quarter of 2013 grew by 16% as compared to the comparable quarter last year. Revenues for the first nine months of 2013 grew by 3%, as compared to the comparable period last year.
  • Net profit for the third quarter of 2013 amounted to $219,000, as compared to a net loss of $66,000 in the comparable period last year. Net loss for the first nine months of 2013 amounted to $43,000 as compared to a net loss of $586,000 in the comparable period last year.

Highlights - on a NON GAAP basis:

  • Net profit for the third quarter of 2013 amounted to $415,000, as compared to a net profit of $124,000 in the comparable period last year. Net profit for the first nine months of 2013 amounted to $401,000, as compared to a net loss of $60,000 in the comparable period last year.
  • EBITDA for the third quarter of 2013 amounted to $495,000, as compared to $175,000 in the comparable period last year. EBITDA for the first nine months of 2013 amounted to $807,000 as compared to $472,000 in the comparable period last year.

Cash and cash equivalents and long term bank deposit amounted to $931,000 as of September 30, 2013, compared to $792,000 as of December 31, 2012. The trend of reduction in loans has continued and by September 30, 2013 our bank loans were reduced to $7 million from $7.6 million as of December 31, 2012, and $9 million as of December 31, 2011. We expect a further reduction in our loans in the next 12 months.

Edouard Cukierman, Chairman of the Board, stated, "We are very pleased with these results, which reflect a continuing improvement in the Company's performance and financial position. We expect these positive trends to continue in the future."

Yuval Viner, BOS CEO, added "We are continuing our efforts to streamline our operations, improve our products and strengthen our financial position. We are confident that we will meet our challenges and expect to end 2013 with a net profit on a non-GAAP basis."

Conference Call

BOS will host a conference call on Monday, December 2, 2013 at 10:00 a.m. ET 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 to + 972-3-9180644 approximately five to ten minutes before the call start time:

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: http://www.boscorporate.com

About BOS

B.O.S. Better Online Solutions Ltd. (Nasdaq:BOSC) is a leading provider of Mobile and Supply Chain solutions to global enterprises. BOS' 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

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
Nine months ended Three months ended
September 30, September 30,
2013 2012 2013 2012
(Unaudited) (Unaudited)
Revenues $18,847 $18,349 $6,262 $5,386
Cost of revenues 15,151 14,299 4,825 4,084
Inventory Write offs 138 241 86 106
Gross profit 3,558 3,809 1,351 1,196
Operating costs and expenses:
Research and development -- 114 -- 28
Sales and marketing 2,131 2,350 730 721
General and administrative 1,035 1,216 257 376
Total operating costs and expenses 3,166 3,680 987 1,125
Operating profit 392 129 364 71
Financial expenses, net (415) (598) (129) (120)
Other expenses, net (22) (80) (22) --
Income (loss) before taxes on income (45) (549) 213 (49)
Tax benefit (taxes on income) 2 (37) 6 (17)
Net Income (loss) $(43) $(586) $219 $(66)
Basic and diluted net income (loss) per share $(0.04) $(0.52) $0.19 $(0.04)
Weighted average number of shares used in computing basic net earnings per share 1,161,927 1,117,810 1,175,871 1,117,929
Weighted average number of shares used in computing diluted net earnings per share 1,162,626 1,117,810 1,177,970 1,117,929
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except per share amounts)
September 30, December 31,
2013 2012
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $454 $354
Trade receivables 7,665 8,007
Other accounts receivable and prepaid expenses 530 616
Inventories 3,020 3,160
Total current assets 11,669 12,137
LONG-TERM ASSETS:
Severance pay fund 24 21
Bank deposit 477 438
Other assets 14 11
Total long-term assets 515 470
PROPERTY, PLANT AND EQUIPMENT, NET 724 963
OTHER INTANGIBLE ASSETS, NET 222 357
GOODWILL 4,122 4,122
$17,252 $18,049
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
September 30, December 31,
2013 2012
(Unaudited) (Audited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank loans and current maturities $6,089 $6,383
Trade payables 4,459 4,915
Employees and payroll accruals 432 408
Deferred revenues 613 467
Current maturities of liability to Dimex Systems 297 136
Accrued expenses and other liabilities 667 567
Total current liabilities 12,557 12,876
LONG-TERM LIABILITIES:
Long-term bank loans, net of current maturities 877 1,188
Accrued severance pay 110 119
Liability to Dimex Systems 508 710
Total long-term liabilities 1,495 2,017
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY 3,200 3,156
Total liabilities and shareholders' equity $17,252 $18,049
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Nine months ended Three months ended
September 30, September 30,
2013 2012 2013 2012
Net Cash provided by (used in) operating activities $477 $1,351 $191 $211
Net Cash provided by (used in) investing activities 185 (146) 245 (59)
Net Cash used in financing activities (562) (1,455) (372) (392)
Increase (decrease) in cash and cash equivalents 100 (250) 64 (240)
Cash and cash equivalents at the beginning of the period 354 411 390 401
Cash and cash equivalents at the end of the period $454 $161 $454 $161
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
Three months ended September 30,
2013 2012
GAAP
(as reported) Adjustments Non-GAAP Non-GAAP
Revenues $6,262 $ -- $6,262 $5,386
Gross profit 1,351 86a 1,437 1,302
Operating costs and expenses:
Research and development -- -- -- 28
Sales and marketing 730 (46)b 684 675
General and administrative 257 (42)c 215 338
Total operating costs and expenses 987 (88) 899 1,041
Operating profit 364 174 538 261
Financial expenses, net (129) -- (129) (120)
Other expenses, net (22) 22d -- --
Income before taxes on income 213 196 409 141
Tax benefit (taxes on income) 6 -- 6 (17)
Net income $219 $196 $415 $124
Notes to the reconciliation:
a - Write off of slow moving inventory
b - Amortization of intangible assets
c - Stock based compensation
d - Property write off
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
Nine months ended September 30,
2013 2012
GAAP
(as reported) Adjustments Non-GAAP Non-GAAP
Revenues $18,847 $ -- $18,847 $18,349
Gross profit 3,558 138a 3,696 4,050
Operating costs and expenses:
Research and development -- -- -- 114
Sales and marketing 2,131 (136)b 1,995 2,213
General and administrative 1,035 (148)c 887 1,169
Total operating costs and expenses 3,166 (284) 2,882 3,496
Operating profit 392 422 814 554
Financial expenses, net (415) -- (415) (577)
Other expenses, net (22) 22d -- --
Income (loss) before taxes on income (45) 444 399 (23)
Tax benefit (taxes on income) 2 -- 2 (37)
Net income (loss) $(43) $444 $401 $(60)
Notes to the reconciliation:
a - Write off of slow moving inventory
b - Amortization of intangible assets.
c - Stock based compensation.
d - Property write off.
CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)
Nine months ended Three months ended
September 30, September 30,
2013 2012 2013 2012
(Unaudited) (Unaudited)
Operating Profit $392 $129 364 $71
Add:
Amortization of intangible assets 136 137 46 46
Stock based compensation 148 47 42 38
Depreciation 131 159 43 20
EBITDA $807 $472 $495 $175
RFID and Supply RFID and Supply
Mobile Chain Mobile Chain
Solutions Solutions Intercompany Consolidated Solutions Solutions Intercompany Consolidated
Nine months ended September 30, Three months ended September 30,
2013 2013
Revenues $7,179 $11,711 $(43) $18,847 $2,332 $3,947 $(17) $6,262
Cost of Revenues $5,095 $10,099 $(43) $15,151 $1,573 $3,269 $(17) $4,825
Inventory write offs $91 $47 $ -- $138 $46 $40 $ -- $86
Gross profit $1,993 $1,565 $ -- $3,558 $713 $638 $ -- $1,351
RFID and Supply RFID and Supply
Mobile Chain Mobile Chain
Solutions Solutions Intercompany Consolidated Solutions Solutions Intercompany Consolidated
Nine months ended September 30, Three months ended September 30,
2012 2012
Revenues $6,551 $12,016 $(218) $18,349 $2,047 $3,544 $(205) $5,386
Cost of Revenues $4,634 $9,883 $(218) $14,299 $1,396 $2,893 $(205) $4,084
Inventory write offs $126 $115 $ -- $241 $66 $40 $ -- $106
Gross profit $1,791 $2,018 $ -- $3,809 $585 $611 $ -- $1,196

CONTACT: B.O.S. Better Online Solutions Ltd. Mr. Eyal Cohen, CFO +972-54-2525925 eyalc@boscom.comSource:B.O.S. Better Online Solutions Ltd.