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B.O.S Announces Financial Results for Third Quarter of 2012

Thursday, November 29, 2012 10:22 AM


RISHON LEZION, Israel, Nov. 29, 2012 (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 and nine months ended September 30, 2012.

On a GAAP basis, the Company had a net loss of $66,000, for the three months ended September 30, 2012 as compared to a net loss of $826,000 in the three months ended September 30, 2011. The Company had a net loss of $586,000 in the nine months ended September 30, 2012, as compared to a net loss of $1,113,000 in the nine months ended September 30, 2011.

On a non GAAP basis, the Company had a net profit of $124,000 for the three months ended September 30, 2012, as compared to a net loss of $381,000 for the three months ended September 30, 2011. The Company had a net loss of $60,000 for the nine months ended September 30, 2012, as compared to a net loss of $20,000 in the nine months ended September 30, 2011.

EBITDA for the three months ended September 30, 2012, amounted to $175,000 as compared to breakeven for the three months ended September 30, 2011. EBITDA for the nine months ended September 30, 2012, amounted to $472,000 as compared to $705,000 for the nine months ended September 30, 2011.

Yuval Viner, BOS CEO, stated: "We are very pleased with the third quarter results that reflect continuing improvement in the Company's performance. The first quarter of year 2012 ended with a non GAAP loss of $185,000, the second quarter of year 2012 ended with a non GAAP profit of $10,000 and the third quarter of year 2012 ended with an increase in non GAAP profit, to $124,000."

Eyal Cohen, BOS CFO, added: "In light of the improvement in the financial results, we were also able to reduce our bank loans by $1.6 million during the first nine months of year 2012 and we expect a further reduction in the bank loans by approximately $0.5 million in the next 12 months."

Conference Call

BOS will host a conference call on Monday, December 3, 2012 at 10:00 a.m. EDT, 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:
International + 972-3-9180650

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.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,
  2012  2011  2012 2011
  (Unaudited) (Unaudited)
         
Revenues $18,349 $25,735 $5,386 $8,199
Cost of revenues 14,299 20,282 4,084 6,649
Inventory Write offs  241 134 106 87
Gross profit 3,809 5,319 1,196 1,463
         
Operating costs and expenses:        
Research and development  114 335 28 115
Sales and marketing  2,350 3,259 721 997
General and administrative  1,216 1,643 376 554
Total operating costs and expenses 3,680 5,237 1,125 1,666
         
Operating profit (loss) 129 82 71 (203)
Financial expenses, net  (598) (1,008) (120) (512)
Other expenses, net (80) (172) -- (76)
Loss before taxes on income  (549) (1,098) (49) (791)
taxes on income (37) (15) (17) (35)
Net Loss ($586) ($1,113) ($66) ($826)
         
Basic and diluted net loss per share  ($0.13) ($0.40) ($0.01) ($0.30)
         
Weighted average number of shares used in computing basic net earnings per share 4,471,241 2,767,809 4,471,716 2,785,959
Weighted average number of shares used in computing diluted net earnings per share 4,471,241 2,767,809 4,471,716 2,785,959
     
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except per share amounts)
     
  September 30, 2012 December 31, 2011
  (Unaudited) (Audited)
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents  $161 $411
Trade receivables  7,533 8,507
Other accounts receivable and prepaid expenses  448 744
Inventories  3,435 4,020
     
Total current assets 11,577 13,682
     
LONG-TERM ASSETS:    
Severance pay fund 20 41
Investment in other companies 68 68
Other assets 26 23
     
Total long-term assets 114 132
     
PROPERTY, PLANT AND EQUIPMENT, NET 982 1,166
     
OTHER INTANGIBLE ASSETS, NET  404 540
     
GOODWILL  4,122 4,122
     
  $17,199 $19,642
     
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
     
  September 30, 2012 December 31, 2011
  (Unaudited) (Audited)
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES:    
Short-term bank loans  $6,201 $6,836
Current maturities of long term bank loans 440 660
Trade payables  4,257 4,165
Employees and payroll accruals 468 553
Deferred revenues 440 550
Liability to Dimex Systems  307 300
Accrued expenses and other liabilities  564 694
     
Total current liabilities 12,677 13,758
     
LONG-TERM LIABILITIES:    
Long-term bank loans, net of current maturities  512 1,103
Income tax accruals  310 273
Accrued severance pay 115 163
Liability to Dimex Systems  559 747
     
Total long-term liabilities 1,496 2,286
     
     
COMMITMENTS AND CONTINGENT LIABILITIES     
     
SHAREHOLDERS' EQUITY:    
Share capital 23,065 23,065
Additional paid-in capital 51,107 51,093
Accumulated other comprehensive profit (243) (243)
Accumulated deficit (70,903) (70,317)
     
Total shareholders' equity  3,026 3,598
     
     
Total liabilities and shareholders' equity $17,199 $19,642
         
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
         
  Nine months ended  Three months ended
  September 30, September 30,
  2012 2011 2012 2011
         
         
Net Cash provided by (used in) operating activities $1,351 (94) $211 (188)
         
Net Cash used in investing activities (146) (537) (59) (105)
         
Net Cash provided by (used in) financing activities (1,455) 49 (392) (569)
         
Decrease in cash and cash equivalents (250) (582) (240) (862)
         
Cash and cash equivalents at the beginning of the period 411 703 401 983
         
Cash and cash equivalents at the end of the period $161 $121 $161 $121
         
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,
  2012 2011
   GAAP (as reported) Adjustments Non-GAAP Non-GAAP
         
Revenues $5,386 $ -- $5,386 $8,199
Gross profit 1,196  106a 1,302 1,550
         
Operating costs and expenses:        
Research and development  28  -- 28 115
Sales and marketing  721  (46)b  675 902
General and administrative  376  (38)c 338 515
Total operating costs and expenses 1,125 (84) 1,041 1,532
         
Operating  profit  71 190 261 18
Financial expenses, net  (120)   (120) (380)
Other expenses, net --   -- 16
Profit (loss) before taxes on income (49) 190 141 (346)
Taxes on income  (17)  -- (17) (35)
Net profit (loss) ($66) $190 $124 ($381)
         
Notes to the reconciliation:        
a - Write off of slow moving inventory         
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)
         
  Nine months ended September 30,
  2012 2011
  GAAP (as reported) Adjustments Non-GAAP Non-GAAP
         
         
Revenues 18,349 $ -- $18,349 $25,735
Gross profit 3,809  241a 4,050 5,453
         
Operating costs and expenses:        
Research and development  114  -- 114 335
Sales and marketing  2,350  (137)b  2,213 2,973
General and administrative  1,216  (47)c 1,169 1,514
Total operating costs and expenses 3,680 (184) 3,496 4,822
         
Operating profit  129 425 554 631
Financial expenses, net  (598)  (21)d (577) (652)
Other expenses, net (80) 80e -- 16
Profit (loss) before taxes on income (549) 526 (23) (5)
Taxes on income  (37)  -- (37) (15)
Net income (loss) ($586) $526 ($60) ($20)
         
Notes to the reconciliation:        
a - Write off of slow moving inventory         
b - Amortization of intangible assets.        
c - Stock based compensation.        
D - Depreciation of prepaid expenses and value of warrants attached to Convertible note.        
e - Property write off.        
         
CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)
         
  Nine months ended Three months ended
   September 30,  September 30,
  2012 2011 2012  2011
  (Unaudited) (Unaudited)
         
         
Operating Profit (loss) from continuing operations $129 $82 71 ($203)
Add:        
Amortization of intangible assets  137 283 46 95
Stock based compensation 47 132 38 39
Depreciation 159 208 20 69
EBITDA $472 $705 $175 $0
                 
  RFID and Mobile Solutions Supply Chain Solutions Intercompany Consolidated  RFID and Mobile Solutions Supply Chain 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
                 
  RFID and Mobile Solutions Supply Chain Solutions Intercompany Consolidated  RFID and Mobile Solutions Supply Chain Solutions Intercompany Consolidated 
  Nine months ended September 30, Three months ended September 30,
  2011 2011
                 
                 
Revenues  $9,867 $16,463 ($595) $25,735 $2,771 $5,506 ($78) $8,199
                 
Cost of Revenue  $7,444 $13,433 ($595) $20,282 $2,040 $4,687 ($78) $6,649
                 
Inventory write offs  $92 $42 $ -- $134 $92 ($5) $ -- $87
                 
Gross profit $2,331 $2,988  $ -- $5,319 $639 $824  $ -- $1,463
CONTACT: B.O.S. Better Online Solutions Ltd.
         Mr. Eyal Cohen, CFO
         +972-54-2525925
         eyalc@boscom.com

(Source: PrimeZone )
(Source: Quotemedia)

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