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

RISHON LEZION, Israel, Aug. 28, 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 June 30, 2013.

Revenues for the second quarter of fiscal 2013 amounted to $6.7 million, compared to $5.9 million in the previous quarter of this year and the comparable quarter last year.

On a non-GAAP basis, the net profit for the second quarter of 2013 was $76,000, compared to a net loss of $90,000 in the previous quarter of this year and a net profit of $10,000 in the comparable quarter of last year.

Net loss for the second quarter of fiscal 2013 amounted to $59,000, compared to net loss of $203,000 in the previous quarter of this year and a net loss of $214,000 in the comparable quarter last year.

Avidan Zelicovsky, BOS President, stated: "We are pleased with the improvement in our financial results as compared to the comparable quarter last year and the first quarter this year. In the first half of the year we faced a reduction in the gross margin of the Supply Chain Division. The reduction is attributed to the expansion of our business in India which carries lower gross margins. We anticipate improvement in the gross margin of the Supply Chain Division in the second half of year 2013."

Eyal Cohen, BOS CFO, stated: "Our cash and cash equivalents and long term bank deposit amounted to $856,000 as of June 30, 2013 and $792,000 as of December 31, 2012.

Our bank loans as of June 30, 2013 were reduced to $8.1 million from $8.4 million as of December 31, 2012. We expect a further reduction of loans during year 2013."

Conference Call

BOS will host a conference call on Thursday, August 29, 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 + 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 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.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 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,
2013 2012 2013 2012
(Unaudited) (Unaudited)
Revenues $12,585 $12,963 $6,655 $5,915
Cost of revenues 10,326 10,215 5,446 4,537
Inventory write offs 52 135 36 64
Gross profit 2,207 2,613 1,173 1,314
Operating costs and expenses:
Research and development -- 86 -- 36
Sales and marketing 1,401 1,629 724 752
General and administrative 778 840 359 394
Total operating costs and expenses 2,179 2,555 1,083 1,182
Operating profit (loss) 28 58 90 132
Financial expenses, net (286) (478) (145) (239)
Other income (expenses), net -- (80) -- (90)
Loss before taxes on income (258) (500) (55) (197)
Taxes on income 4 20 4 17
Net Loss $ (262) $ (520) $ (59) $ (214)
Basic net loss per share $ (0.23) $ (0.48) $ (0.05) $ (0.20)
Basic and diluted net loss per share $ (0.23) $ (0.48) $ (0.05) $ (0.20)
Weighted average number of shares used in computing basic net earnings per share 1,154,954 1,117,751 1,156,983 1,117,909
Weighted average number of shares used in computing diluted net earnings per share 1,154,954 1,117,751 1,156,983 1,117,909
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except per share amounts)
June 30, 2013 December 31, 2012
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $390 $354
Trade receivables 8,091 8,007
Other accounts receivable and prepaid expenses 575 616
Inventories 3,261 3,160
Total current assets 12,317 12,137
LONG-TERM ASSETS:
Severance pay fund 23 21
Bank deposit 466 438
Other assets 14 11
Total long-term assets 503 470
PROPERTY, PLANT AND EQUIPMENT, NET 925 963
OTHER INTANGIBLE ASSETS, NET 267 357
GOODWILL 4,122 4,122
$18,134 $18,049
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
June 30, 2013 December 31, 2012
(Unaudited) (Audited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank loans and current maturities $6,350 $6,383
Trade payables 5,396 4,915
Employees and payroll accruals 478 408
Deferred revenues 604 467
Current maturities of liability to Dimex Systems 132 136
Accrued expenses and other liabilities 415 567
Total current liabilities 13,375 12,876
LONG-TERM LIABILITIES:
Long-term bank loans, net of current maturities 988 1,188
Accrued severance pay 112 119
Liability to Dimex Systems 678 710
Total long-term liabilities 1,778 2,017
COMMITMENTS AND CONTINGENT LIABILITIES
SHARE HOLDERS' EQUITY 2,981 3,156
Total liabilities and shareholders' equity $18,134 $18,049
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months ended
June 30,
Three months ended
June 30,
2013 2012 2013 2012
Net Cash used in (provided by) operating activities $313 $1,140 $ (165) 1,016
Net Cash provided by (used in) investing activities (87) (87) (32) (38)
Net Cash used in financing activities (190) (1,063) (184) (1,051)
Increase (decrease) in cash and cash equivalents 36 (10) (381) (73)
Cash and cash equivalents at the beginning of the period 354 411 771 474
Cash and cash equivalents at the end of the period $390 $401 $390 $401
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,
2013 2012
GAAP
(as reported)

Adjustments
Non-
GAAP
Non-
GAAP
Revenues $6,655 $ -- $6,655 $5,915
Gross profit 1,173 36a 1,209 1,378
Operating costs and expenses:
Research and development -- -- -- 36
Sales and marketing 724 (45)b 679 707
General and administrative 359 (54)c 305 390
Total operating costs and expenses 1,083 (99) 984 1,133
Operating profit 90 135 225 245
Financial expenses, net (145) -- (145) (218)
Income (loss) before taxes on income (55) 135 80 27
Taxes on income 4 -- 4 17
Net Income (loss) $ (59) $135 $76 $10
Notes to the reconciliation:
a - Inventory write off.
b - Amortization of intangible assets.
c - Stock based compensation.
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,
2013 2012
GAAP
(as reported)

Adjustments
Non-
GAAP
Non-
GAAP
Revenues $12,585 $ -- $12,585 $12,963
Gross profit 2,207 52a 2,259 2,748
Operating costs and expenses:
Research and development -- -- -- 86
Sales and marketing 1,401 (90)b 1,311 1,538
General and administrative 778 (106)c 672 831
Total operating costs and expenses 2,179 (196) 1,983 2,455
Operating profit 28 248 276 293
Financial expenses, net (286) -- (286) (457)
Other expenses, net -- -- -- 10
Loss before taxes on income (258) 248 (10) (154)
Taxes on income 4 -- 4 20
Net Loss $ (262) $248 $ (14) $ (174)
Notes to the reconciliation:
a - Inventory write off.
b - Amortization of intangible assets.
c - Stock based compensation.
CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)
Six months ended
June 30,
Three months ended
June 30,
2013 2012 2013 2012
(Unaudited) (Unaudited)
Operating Profit $28 $58 90 $132
Add:
Amortization of intangible assets 90 91 45 45
Stock based compensation 106 9 54 4
Depreciation 88 140 43 70
EBITDA $312 $298 $232 $251
RFID and
Mobile
Solutions
Supply
Chain
Solutions


Intercompany


Consolidated
RFID and
Mobile
Solutions
Supply
Chain
Solutions


Intercompany


Consolidated
Six months ended June 30,
2013
Three months ended June 30,
2013
Revenues $4,847 $7,764 $ (26) $12,585 $2,566 $4,097 $ (8) $6,655
Cost of Revenues $3,522 $6,830 $ (26) $10,326 $1,868 $3,586 $ (8) $5,446
Inventory write offs $45 $7 $ -- $52 $25 $11 $ -- $36
Gross profit $1,280 $927 $ -- $2,207 $673 $500 $ -- $1,173
RFID and
Mobile
Solutions
Supply
Chain
Solutions


Intercompany


Consolidated
RFID and
Mobile
Solutions
Supply
Chain
Solutions


Intercompany


Consolidated
Six months ended June 30,
2012
Three months ended June 30,
2012
Revenues $4,504 $8,472 $ (13) $12,963 $2,144 $3,704 $67 $5,915
Cost of Revenues $3,238 $6,990 $ (13) $10,215 $1,496 $2,974 $67 $4,537
Inventory write offs $60 $75 $ -- $135 $25 $39 $ -- $64
Gross profit $1,206 $1,407 $ -- $2,613 $623 $691 $ -- $1,314

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.