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B.O.S. Better Online Solutions Reports Financial Results for the Fourth Quarter and Fiscal Year Ended December 31, 2012

Tuesday, April 2, 2013 1:16 PM


Net Profit in the Fourth Quarter of 2012

RISHON LEZION, Israel, April 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 fourth quarter and fiscal year ended December 31, 2012.

Highlights for the fourth quarter of year 2012:

  • Revenues of $6.2 million, as compared to revenues of $7.7 million in the fourth quarter of 2011. However, revenues increased by 15% on a quarter to quarter basis over the $5.4 million in revenues that we generated in the third quarter of 2012.
  • Operating profit of $63,000, which represents the third consecutive quarter in 2012 in which we have generated an operating profit, as compared to operating loss of $1 million in the fourth quarter of 2011.
  • Net profit, after six consecutive quarters with net loss, of $37,000 as compared to net loss of $2.1 million in the fourth quarter of 2011.
  • Net profit on NON GAAP basis of $347,000 as compared to net loss of $156,000 in the fourth quarter of 2011
  • EBITDA of $193,000 as compared to negative EBITDA of $300,000 in the fourth quarter of 2011.

Highlights for year 2012:

  • Operating profit of $192,000 as compared to $1 million operating loss in 2011.
  • Net loss reduced to $549,000 from $3,214,000 in year 2011.
  • Net profit on NON GAAP basis of $287,000 as compared to net loss of $176,000 in 2011
  • EBITDA of $665,000 as compared to $407,000 in 2011.

Yuval Viner, BOS CEO, stated: "We are very pleased with the fourth quarter and 2012 results that reflect continuing improvement in the Company's performance. We anticipate that we will end 2013 with a net profit on a non-GAAP basis."

Eyal Cohen, BOS CFO, added: "In light of the improvement in the financial results, we were also able to reduce our loans by $1.7 million during 2012 and we expect a further reduction in the loans by at least $0.5 million during 2013."

Conference Call

BOS will host a conference call on Thursday, April 4th, 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 the next 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
         
  Year ended  Three months ended
  December 31,  December 31,
  2012 2011 2012 2011
  (Audited) (Unaudited)
         
Revenues $24,503 $33,434 $6,154 $7,698
Cost of revenues 19,050 26,481 4,751 6,199
Inventory write offs 385 443 144 310
Gross profit 5,068 6,510 1,259 1,189
         
Operating costs and expenses:        
Research and development, net  125 403 11 68
 Sales and marketing  3,058 4,273 708 1,018
 General and administrative  1,693 2,252 477 605
 Impairment of other intangible assets -- 555 -- 555
Total operating costs and expenses 4,876 7,483 1,196 2,246
         
Operating profit (loss) 192 (973) 63 (1,057)
Financial expenses, net  (781) (2,241) (182) (1,231)
Other expenses, net (147) (172) (68) --
Income (loss) before taxes on income  (736) (3,386) (187) (2,288)
Tax benefit  187 172 224 187
Net profit (loss)  $ (549)  $ (3,214)  $ 37  $ (2,101)
         
Basic and diluted net profit (loss) per share  $ (0.49)  $ (4.56)  $ 0.03  $ (2.84)
         
Weighted average number of shares used in computing basic net earnings per share 1,117,876 704,513 1,118,075 742,195
Weighted average number of shares used in computing diluted net earnings per share 1,117,876 704,513 1,118,075 742,195
 
CONSOLIDATED BALANCE SHEETS
 (U.S. dollars in thousands, except per share amounts)
     
  December
31, 2012
December
31, 2011
  (Audited) (Audited)
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents  $354 $411
Trade receivables  8,007 8,507
Other accounts receivable and prepaid expenses  616 744
Inventories  3,160 4,020
     
Total current assets 12,137 13,682
     
LONG-TERM ASSETS:    
Severance pay fund 21 41
Bank deposits 438 427
Investment in other companies -- 68
Other assets 11 23
     
Total long-term assets 470 559
     
PROPERTY, PLANT AND EQUIPMENT, NET 963 1,166
     
OTHER INTANGIBLE ASSETS, NET  357 540
     
GOODWILL  4,122 4,122
     
  $18,049 $20,069
 
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
     
  December
31, 2012
December
31, 2011
  (Audited) (Audited)
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES:    
Short-term bank loans and current maturities  $6,383 $7,496
Trade payables  4,915 4,165
Employees and payroll accruals 408 553
Deferred revenues 467 550
Current maturities of liability to Dimex Systems 136 300
Accrued expenses and other liabilities  567 967
     
Total current liabilities 12,876 14,031
     
LONG-TERM LIABILITIES:    
Long-term bank loans, net of current maturities  1,188 1,530
Accrued severance pay 119 163
Liability to Dimex Systems, net of current maturities  710 747
     
Total long-term liabilities 2,017 2,440
     
     
COMMITMENTS AND CONTINGENT LIABILITIES     
     
SHAREHOLDERS' EQUITY:    
 Share capital 23,374 23,065
Additional paid-in capital 50,891 51,093
Accumulated other comprehensive profit (243) (243)
Accumulated deficit (70,866) (70,317)
     
Total shareholders' equity  3,156 3,598
     
Total liabilities and shareholders' equity $18,049 $20,069
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
     
  Year ended
December 31,
 Year ended
December 31,
  2012 2011
  (Audited)
     
Net Cash provided by (used in) operating activities  1,709 (365)
     
 Net cash used in investing activities (311) (1,040)
     
Net cash used in (provided by) financing activities (1,455) 1,113
     
Decrease in cash and cash equivalents (57) (292)
     
Cash and equivalents at the beginning of the period 411 703
     
Cash and cash equivalents at the end of the period $354 $411
         
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
         
  Three months ended December 31,
  2012 2011
  GAAP
(as reported)

Adjustments
Non-
GAAP

Non-GAAP
         
         
         
Revenues $6,154 $ -- $6,154 $7,698
Gross profit 1,259  144a 1,403 1,499
         
Operating costs and expenses:        
Research and development, net  11  -- 11 68
Sales and marketing  708  (46)b 662 925
General and administrative  477  (53)c 424 569
  -- --    
Total operating costs and expenses 1,196 (99) 1,097 1,562
         
Operating  profit (loss) 63 243 306 (63)
Financial expenses, net  (183)  -- (183) (280)
Other expenses, net (67)  67d -- --
Income (loss) before taxes on income (187) 310 123 (343)
Tax benefit  224  -- 224 187
Net income (loss)  $ 37  $ 310  $ 347  $ (156)
         
Notes to the reconciliation:
a – Write off of slow moving inventory 
b - Amortization of intangible assets.
c - Stock based compensation.
d– Impairment in related with investment in Companies.
 
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
         
  Year ended December 31,
  2012 2011
  GAAP
(as reported)

Adjustments
Non-
GAAP

Non-GAAP
         
Revenues $24,503  -- $24,503 $33,434
Gross profit 5,068  385a 5,453 6,953
         
Operating costs and expenses:        
Research and development, net  125  -- 125 403
Sales and marketing  3,058  (183)b 2,875 3,897
General and administrative  1,693  (100)c 1,593 2,083
Impairment of other intangible assets --   -- --
Total operating costs and expenses 4,876 (283) 4,593 6,383
         
Operating profit (loss) 192 668 860 570
Financial expenses, net  (781)  (21)d (760) (934)
         
Other expenses, net (147) 80e, 67f -- 16
Income (loss) before taxes on income (736) 836 100 (348)
Tax benefit  187  -- 187 172
Net income (loss)  $ (549)  $ 836  $ 287  $ (176)
         
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.
f - Impairment in related with investment in Companies.
 
CONDENSED CONSOLIDATED EBITDA
 (U.S. dollars in thousands)
         
  Year ended Three months ended
   December 31,  December 31,
  2012 2011 2012 2011
  (Audited) (Unaudited)
         
 Operating Profit (loss)   $ 192  $ (973)  $ 63  $ (1,057)
 Add:        
Amortization of intangible assets  183 376 46 93
Stock based compensation 107 169 60 36
Depreciation 183 280 24 73
Impairment of intangible assets -- 555 -- 555
EBITDA  $ 665  $ 407  $ 193  $ (300)
                 
  RFID and
Mobile
Solutions
Supply
Chain
Solutions


Intercompany


Consolidated 
RFID and
Mobile
Solutions
Supply
Chain
Solutions


Intercompany


Consolidated 
  Year ended December 31, Three months ended December 31,
  2012 2012
                 
                 
Revenues  $ 8,894  $ 15,915  $ (306)  $ 24,503  $ 2,343  $ 3,899  $ (88)  $ 6,154
                 
Cost of Revenues   $ 6,313  $ 13,043  $ (306)  $ 19,050  $ 1,679  $ 3,160  $ (88)  $ 4,751
                 
Inventory write offs   $ 223  $ 162  $ --   $ 385  $ 97  $ 47  $ --   $ 144
                 
Gross profit  $ 2,358  $ 2,710  $ --   $ 5,068  $ 567  $ 692  $ --   $ 1,259
                 
                 
  RFID and
Mobile
Solutions
Supply
Chain
Solutions


Intercompany


Consolidated 
RFID and
Mobile
Solutions
Supply
Chain
Solutions


Intercompany


Consolidated 
  Year ended December 31, Three months ended December 31,
  2011 2011
                 
Revenues  $ 13,128  $ 21,332  $ (1,026)  $ 33,434  $ 3,261  $ 4,869  $ (432)  $ 7,698
                 
Cost of Revenues  $ 9,802  $ 17,705  $ (1,026)  $ 26,481  $ 2,358  $ 4,273  $ (432)  $ 6,199
                 
Inventory write offs  $ 221  $ 222  $ --   $ 443  $ 129  $ 181  $ --   $ 310
                 
Gross profit  $ 3,105  $ 3,405  $ --   $ 6,510  $ 774  $ 415  $ --   $ 1,189
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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