BOS Reports Financial Results for the First Half and the Second Quarter of the Year 2024

Rhea-AI Summary

BOS Better Online Solutions (NASDAQ: BOSC) reported financial results for the first half and second quarter of 2024. Key highlights include:

- Net income of $1.2 million for H1 2024, unchanged from H1 2023
- Q2 2024 net income of $500,000
- H1 2024 revenues down 16% year-over-year
- Gross profit margin increased to 24.1% in H1 2024 from 21.5% in H1 2023
- Operating and financial expenses decreased by $300,000 to $3.5 million in H1 2024

The company maintains its 2024 outlook with projected revenues of $46 million (up from $44.2 million in 2023) and net income of $2.2 million (up from $2 million in 2023). The Supply Chain division has received $5.4 million in orders since the start of Q3 2024, showing a resurgence in demand from defense customers.

Positive

• Net income remained steady at $1.2 million for H1 2024 despite lower revenues
• Gross profit margin increased to 24.1% in H1 2024 from 21.5% in H1 2023
• Operating and financial expenses decreased by $300,000 to $3.5 million in H1 2024
• Supply Chain division received $5.4 million in orders since the start of Q3 2024, indicating resurgence in demand
• Company maintains positive outlook for 2024 with projected revenue growth to $46 million and net income increase to $2.2 million

Negative

• Revenues for H1 2024 were 16% lower than H1 2023 due to defense customers reducing inventory

Insights

Financial Analyst

BOS's financial results for H1 2024 reveal a mixed performance. While revenues declined 16% year-over-year, net income remained steady at $1.2 million. This resilience is attributed to improved gross margins (up to 24.1% from 21.5%) and reduced operating expenses.

The supply chain division faced challenges due to inventory adjustments in the defense sector. However, Q3 2024 shows promising signs with $5.4 million in new orders, indicating a potential rebound. Management's maintained outlook of $46 million revenue and $2.2 million net income for 2024 suggests confidence in H2 performance.

Investors should monitor the company's ability to capitalize on the resurgent demand and maintain cost efficiencies to achieve its full-year targets.

Supply Chain Expert

The fluctuation in BOS's supply chain division highlights the volatility in the defense electronics market. The initial surge in orders due to component shortages, followed by a subsequent decline, demonstrates the cyclical nature of inventory management in this sector.

The recent uptick in Q3 2024 orders ($5.4 million) suggests a normalization of inventory levels and a potential return to steady demand. This could indicate a more stable revenue stream for BOS in the coming quarters, provided the trend continues.

The company's ability to navigate these supply chain challenges while maintaining profitability is commendable. However, long-term success will depend on BOS's capacity to adapt to rapid market changes and optimize its inventory management strategies.

Net income of $1.2 million and $500,000 in the first half and 2nd quarter of 2024, respectively

RISHON LE ZION, Israel, Aug. 22, 2024 (GLOBE NEWSWIRE) -- BOS Better Online Solutions Ltd. ("BOS" or the "Company") (NASDAQ: BOSC) reported its financial results for the second quarter of the year 2024.

Eyal Cohen, BOS' CEO, stated: "Revenues for the first half of year 2024 were lower by 16% than revenues in the comparable period last year.

The shortage of electronic components in 2022 prompted the defense sector customers of the Supply Chain division to increase their inventory, which contributed significantly to our revenue growth in 2023. As the component shortage eased in 2023, our defense customers began to reduce their inventory, leading to a dip in our revenues in the first half of 2024.

However, the third quarter of 2024 shows a resurgence in demand for electronic components by our defense customers. From the beginning of the third quarter through August 15, our Supply Chain division has received orders amounting to $5.4 million, a promising sign compared to the total orders of $14 million in the entire first half of 2024.

Our gross profit margin increased to 24.1% in the first half of 2024 from 21.5% in the same period last year.

Furthermore, our operating and financial expenses decreased by $300,000 to $3.5 million, compared to $3.8 million in the same period last year. As a result, our net income for the first half of 2024 remained steady at $1.2 million, the same as in 2023.

We, therefore, maintain our outlook for 2024, with projected revenues of $46 million, up from $44.2 million in 2023, and a net income increase to $2.2 million from $2 million in 2023."

Ziv Dekel, BOS Chairman, added, "The resiliency shown in our financial performance in the first half of the year, is primarily the result of our continued implementation of significant steps to strengthen capabilities, improve activity and tighten the organizational structure.

The diligent and persistent continuation of our improvement processes, are the basis for our optimistic outlook for the second half of 2024.”

BOS will host a video conference call on August 22, 2024 at 9:00 a.m. EDT. A question-and-answer session will follow management’s presentation.

To access the video conference call, please click on the following link:

https://us06web.zoom.us/j/86985163157?pwd=b0Ba9kojV0wOiMYotRDSE7MralyKjI.1

Meeting ID: 869 8516 3157

Passcode: 810414

About BOS

BOS leverages cutting-edge technologies to optimize supply chain operations across three key divisions. The Intelligent Robotics division streamlines industrial and logistics inventory processes. The RFID division efficiently marks and tracks inventory and the Supply Chain division effectively manages inventory supply.

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, 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 effect of the war against Hamas, Hezbollah and other terrorist organizations and the conflict with Iran, the 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 June 30,								Three months ended June 30,
		2024				2023				2024				2023
		(Unaudited)								(Unaudited)
Revenues		$	19,734			$	23,478			$	8,447			$	11,336
Cost of revenues			14,976				18,409				6,249				8,931
Gross profit			4,758				5,069				2,198				2,405
Operating costs and expenses:
Research and development			84				78				40				37
Sales and marketing			2,213				2,470				1,051				1,224
General and administrative			956				912				448				437
Total operating costs and expenses			3,253				3,460				1,539				1,698
Operating income			1,505				1,609				659				707
Financial expenses, net			(262	)			(343	)			(157	)			(98	)
Income before taxes on income			1,243				1,266				502				609
Taxes on income			1				-				1				-
Net income		$	1,242			$	1,266			$	501			$	609
Basic and diluted net income per share		$	0.22			$	0.22			$	0.09			$	0.11
Weighted average number of shares used in computing basic net income per share			5,748				5,707				5,748				5,712
Weighted average number of shares used in computing diluted net income per share			5,833				5,767				5,837				5,847
Number of outstanding shares as of June 30, 2024 and 2023			5,748				5,741				5,748				5,741

 

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
		June 30, 2024				December 31, 2023
		(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	2,358		$	2,344
Restricted bank deposits			193			217
Trade receivables			10,710			12,424
Other accounts receivable and prepaid expenses			1,405			963
Inventories			6,847			6,070
Total current assets			21,513			22,018
LONG-TERM ASSETS			204			196
PROPERTY AND EQUIPMENT, NET			3,334			3,268
OPERATING LEASE RIGHT-OF-USE ASSETS, NET			885			1,026
OTHER INTANGIBLE ASSETS, NET			983			1,078
GOODWILL			4,895			4,895
Total assets		$	31,814		$	32,481

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
		June 30, 2024			December 31, 2023
		(Unaudited)			(Audited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long term loans		$	160		$	170
Operating lease liabilities, current			191			235
Trade payables			6,203			7,710
Employees and payroll accruals			1,083			980
Deferred revenues			565			600
Advances net of inventory in process			394			137
Accrued expenses and other liabilities			656			1,072
Total current liabilities			9,252			10,904
LONG-TERM LIABILITIES:
Long-term loans, net of current maturities			1,030			1,150
Operating lease liabilities, non-current			639			759
Long term deferred revenues			295			339
Accrued severance pay			474			490
Total long-term liabilities			2,438			2,738
TOTAL SHAREHOLDERS' EQUITY			20,124			18,839
Total liabilities and shareholders' equity		$	31,814		$	32,481

CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)
		Six months ended June 30,						Three months ended June 30,
		2024			2023			2024			2023
Operating income		$	1,505		$	1,609		$	659			$	707
Add:
Amortization of intangible assets			95			73			47				47
Stock-based compensation			42			49			21				24
Depreciation			179			165			90				85
EBITDA		$	1,821		$	1,896		$	817			$	863

SEGMENT INFORMATION
(U.S. dollars in thousands)
		RFID				Supply Chain Solutions				Intelligent Robotics				Intercompany				Consolidated
								Six months ended June 30, 2024
Revenues		$	6,662			$	12,687			$	401			$	(16	)		$	19,734
Gross profit			1,620				2,988				150				-				4,758
Allocated operating expenses			1,103				1,683				122				-				2,908
Unallocated operating expenses*			-				-				-								345
Income from operations		$	517			$	1,305			$	28				-				1,505
Financial expenses and tax on income																			(263			)
Net income																		$	1,242
		RFID				Supply Chain Solutions				Intelligent Robotics				Intercompany				Consolidated
								Six months ended June 30, 2023
Revenues		$	6,948			$	15,351			$	1,257			$	(78	)		$	23,478
Gross profit			1,796				3,253				20				-				5,069
Allocated operating expenses			1,097				1,859				130				-				3,086
Unallocated operating expenses*			-				-				-								374
Income (loss) from operations		$	699			$	1,394			$	(110	)			-				1,609
Financial expenses and tax on income																			(343			)
Net income																		$	1,266

* 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, 2024
Revenues		$	2,979				$	5,330		$	152					$	(14	)			$	8,447
Gross profit			629					1,503			66						-					2,198
Allocated operating expenses			538					774			60						-					1,372
Unallocated operating expenses*																	-					167
Income from operations		$	91				$	729		$	6						-					659
Financial expenses and tax on income																						(158			)
Net income																					$	501
		RFID					Supply Chain Solutions			Intelligent Robotics						Intercompany				Consolidated
						Three months ended June 30, 2023
Revenues		$	2,931				$	7,863		$	557					$	(15	)			$	11,336
Gross profit			689					1,668			48						-					2,405
Allocated operating expenses			524					931			55						-					1,510
Unallocated operating expenses*																	-					188
Income (loss) from operations		$	165				$	737		$	(7		)				-					707
Financial expenses and tax on income																						(98			)
Net income																					$	609

* 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.

FAQ

What was BOS's (BOSC) net income for the first half of 2024?

BOS reported a net income of $1.2 million for the first half of 2024, which remained unchanged from the same period in 2023.

How did BOS's (BOSC) gross profit margin change in H1 2024 compared to H1 2023?

BOS's gross profit margin increased to 24.1% in the first half of 2024, up from 21.5% in the same period last year.

What is BOS's (BOSC) revenue projection for the full year 2024?

BOS maintains its outlook for 2024 with projected revenues of $46 million, up from $44.2 million in 2023.

How much in new orders did BOS's (BOSC) Supply Chain division receive at the start of Q3 2024?

From the beginning of the third quarter through August 15, 2024, BOS's Supply Chain division received orders amounting to $5.4 million.