BOS Reports Financial Results for the Fourth Quarter and Full Year 2024

Rhea-AI Summary

BOS Better Online Solutions (NASDAQ: BOSC) reported its financial results for Q4 and full year 2024, showing mixed performance. While annual revenues declined 9.7% to $39.9 million from $44.2 million in 2023, net income increased 14.7% to $2.3 million ($0.40 per basic share). The company achieved improved profitability with gross margin rising to 23.3% from 20.8%.

Key highlights include:

• Q4 2024 revenues declined 4.6% to $10.4 million
• EBITDA increased to $3.25 million for full year 2024
• Operating profit decreased to $1.4 million due to $1.2 million non-cash impairment
• Backlog increased 35% to $27 million as of December 31, 2024

The company provided a positive 2025 outlook, projecting 10% growth in both sales ($44 million) and net income ($2.5 million). BOS also announced board updates, including the appointment of Osnat Gur as Board Chair and Avi Dadon as a new independent director.

Positive

• Net income increased 14.7% to $2.3 million ($0.40 per basic share)
• Gross profit margin improved to 23.3% from 20.8%
• EBITDA increased to $3.25 million from $3.06 million
• Backlog grew 35% to $27 million
• Financial expenses decreased significantly to $139,000 from $441,000

Negative

• Annual revenues declined 9.7% to $39.9 million
• Q4 revenues decreased 4.6% to $10.4 million
• Operating profit declined to $1.4 million from $2.5 million
• $1.2 million non-cash impairment of goodwill and intangible assets

Insights

Financial Analyst

BOS's 2024 financial results present a mixed picture that requires careful analysis. While revenues declined 9.7% to $39.9 million, the company managed to increase net income by 14.7% to $2.3 million ($0.40 per share) through several factors:

• Gross margin expansion to 23.3% from 20.8%, indicating improved operational efficiency
• Reduced financial expenses ($139,000 vs $441,000 in 2023)
• A significant $1 million non-cash tax benefit

The $1.2 million non-cash impairment charge significantly impacted operating profit, which declined to $1.4 million from $2.5 million. However, EBITDA still improved modestly to $3.25 million.

Forward indicators are more promising, with backlog increasing 35% to $27 million as of December 31, 2024. Management's guidance for 10% growth in both sales and net income for 2025 appears supported by this growing backlog and new defense orders already secured in Q1.

The strategic focus on defense sector penetration aligns with the company's capabilities and recent board appointments, particularly the addition of Avi Dadon, who brings valuable defense procurement expertise. The revenue decline appears largely attributable to normalization following post-COVID restocking rather than fundamental business weakness.

Net Income Rises 14.7% Year-Over-Year on Increased Gross Margin, Efficient Operations

Provides Initial 2025 Outlook for Further 10% Growth in Sales and Net Income

RISHON LE ZION, Israel, March 31, 2025 (GLOBE NEWSWIRE) -- BOS Better Online Solutions Ltd. ("BOS" or the "Company") (NASDAQ: BOSC) reported its financial results for the fourth quarter and full year 2024.

Year 2024 Financial Highlights:

• Revenues declined by 9.7% to $39.9 million from $44.2 million in 2023. Revenue results in 2023 benefitted from one-time post-COVID restocking activities at multiple customers.
• Gross profit margin increased to 23.3% compared to 20.8% in the preceding year, demonstrating improved operating efficiency.
• Operating profit decreased to $1.4 million from $2.5 million in 2023, due to $1.2 million non-cash impairment of goodwill and other intangible assets in 2024.
• EBITDA increased to $3.25 million compared to $3.06 million in 2023.
• Financial expenses decreased to $139,000 from $441,000 in the prior year.
• Non cash income from taxes amounted to $1 million in year 2024.
• Net income increased by 14.7% to $2.3 million, or $0.40 per basic share, compared to $2.0 million, or $0.35 per basic share, in the year 2023.

Fourth Quarter 2024 Financial Highlights:

• Revenues declined by 4.6% to $10.4 million from $10.9 million in the fourth quarter of 2023.
• Gross profit margin increased to 22.9% compared to 19.2% in the comparable quarter last year.
• Operating loss amounted to $616,000 compared to an operating income of $400,000 in the fourth quarter of 2023, due to a $1.2 million non-cash impairment of goodwill and other intangible assets included in the results of the fourth quarter of 2024.
• EBITDA amounted to $715,000 compared to $562,000 in the fourth quarter of 2023.
• Financial income amounted to $99,000 compared to financial expenses of $31,000 in the fourth quarter of 2023.
• Non cash income from taxes in the amount of $1 million in the fourth quarter of 2024.
• Net income amounted to $485,000 or $0.08 per basic share compared to $427,000 or $0.07 per basic share in the fourth quarter of 2023.

Eyal Cohen, BOS’ CEO, stated: “BOS improved profitability on an operating basis across all of our business units in 2024, leveraging our favorable sales mix and lean cost structure to increase gross margin to 23.3% and net income to $2.3 million. That momentum has carried into 2025 as we continue to scale the business, manage costs effectively and drive operating leverage. We are starting the year with a 35% increase in backlog, at $27 million as of December 31, 2024, compared to $20 million as of December 31, 2023, plus significant new defense customer orders announced in the first quarter to date. As a result, our 2025 outlook calls for a 10% year-over-year increase in both sales and net income to $44 million of revenues and $2.5 million of net income.

“BOS’ growth strategy remains focused on deepening our penetration in the defense sector, where we have strong customer relationships at both the primary and subcontractor levels. We expect robust ordering patterns across the strategic defense industry to continue in 2025, and we are progressing our sales strategy to enter new overseas markets by leveraging our relationships with Israeli defense customers that operate globally. We also continue to seek accretive strategic opportunities where we can deploy our strong balance sheet to expand BOS’ capabilities and reach in the growing global defense market.”

Board Updates
On March 19, 2025, BOS announced the appointment of Osnat Gur, an independent director since 2021, as Board Chair and the appointment of Avi Dadon as a new independent director.

Ms. Gur brings extensive management and leadership experience to BOS, having served as CEO of a global B2B marketing agency, an RFID technology company, and a dietary supplements manufacturer over the course of her career. She also serves as a board director in multiple Israeli companies.

Mr. Dadon brings decades of experience in military leadership, defense procurement, supply chain management and logistics to BOS. He served as Head of Procurement for the Israeli Ministry of Defense from 2017 to 2023 and is a retired Colonel in the Israeli Defense Forces (IDF), with 28 years of military service.

“We are excited to congratulate Osnat in her new role as Board Chair, and look forward to working with her to plan BOS’s next chapter of growth and earnings as we continue to execute our growth strategy,” said Cohen. “We also welcome Avi to the board and look forward to leveraging his decades of experience with the IDF and Ministry of Defense procurement to support BOS’s continued success.” 

About BOS Better Online Solutions Ltd.
BOS integrates cutting-edge technologies to streamline and enhance supply chain operations across three specialized divisions:

• Intelligent Robotics Division: Automates industrial and logistics inventory processes through advanced robotics technologies, improving efficiency and precision.
• RFID Division: Optimizes inventory management with state-of-the-art solutions for marking and tracking, ensuring real-time visibility and control.
• Supply Chain Division: Integrates franchised components directly into customer products, meeting their evolving needs for developing cutting-edge products.

For additional information, contact:
Matt Kreps, Managing Director
Darrow Associates
+1-214-597-8200
mkreps@darrowir.com

Eyal Cohen, CEO
+972-542525925
eyalc@boscom.com

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 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, including risks related to Israel’s conflicts with Hamas and other parties in the region.
BOS undertakes no obligation to publicly update or revise any 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
	Year ended December 31,									Three months ended December 31,
	2024					2023				2024				2023
	(Unaudited)			(Audited)						(Unaudited)				(Audited)
Revenues	$	39,949				$	44,179			$	10,388						$	10,886
Cost of revenues	30,655					34,970				8,007							8,796
Gross profit	9,294					9,209				2,381							2,090
Operating costs and expenses:
Research and development	175					158				50							44
Sales and marketing	4,394					4,891				1,118							1,278
General and administrative	2,113					1,762				656							420
Other income, net	-					(52)				-							(52)
Impairment of intangible assets and Goodwill	1,173					-				1,173							-
Total operating costs and expenses	7,855					6,759				2,997							1,690
Operating income (loss)	1,439					2,450				(616)							400
Financial income (expenses), net	(139)					(441)				99							31
Income before taxes on income	1,300					2,009				(517)							431
Income taxes benefits (expenses)	1,000					(4)				1,002							(4)
Net income	$	2,300				$	2,005			$	485						$	427
Basic net income per share	$	0.40				$	0.35			$	0.08						$	0.07
Diluted net income per share	$	0.39				$	0.34			$	0.08						$	0.07
Weighted average number of shares used in computing basic net income per share	5,756					5,727				5,776					5,748
Weighted average number of shares used in computing diluted net income per share	5,887					5,905				5,975					5,856
Number of outstanding shares as of December 31, 2024 and 2023	5,793					5,748				5,793					5,748

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
	December 31, 2024				December 31, 2023
	(Unaudited)				(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,368			$	2,344
Restricted bank deposits	185				217
Trade receivables	11,787				12,424
Other accounts receivable and prepaid expenses	1,150				963
Inventories	7,870				6,070
Total current assets	24,360				22,018
LONG-TERM ASSETS	177				196
PROPERTY AND EQUIPMENT, NET	3,417				3,268
OPERATING LEASE RIGHT-OF-USE ASSETS, NET	779				1,026
DEFERRED TAX ASSETS	1,000				-
OTHER INTANGIBLE ASSETS, NET	422				1,078
GOODWILL	4,188				4,895
Total assets	$	34,343			$	32,481

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
	December 31, 2024				December 31, 2023
	(Unaudited)				(Audited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term loans	$	439			$	170
Operating lease liabilities, current		176				235
Trade payables		6,362				7,710
Employees and payroll accruals		1,087				980
Deferred revenues		2,003				600
Advances net of inventory in progress		-				137
Accrued expenses and other liabilities		598				1,072
Total current liabilities		10,665				10,904
LONG-TERM LIABILITIES:
Long-term loans, net of current maturities		980				1,150
Operating lease liabilities, non-current		576				759
Long-term deferred revenues		293				339
Accrued severance pay		498				490
Total long-term liabilities		2,347				2,738
TOTAL SHAREHOLDERS' EQUITY		21,331				18,839
Total liabilities and shareholders' equity	$	34,343			$	32,481

CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)
	Year ended December 31,								Three months ended December 31,
	2024				2023				2024				2023
Operating income (loss)	$	1,439			$	2,450			$	(616	)			$	400
Add:
Impairment of Goodwill and other intangible assets		1,173				-				1,173					-
Amortization of intangible assets		190				168				47					48
Stock-based compensation		74				98				11					24
Depreciation		370				342				100					90
EBITDA	$	3,246			$	3,058			$	715				$	562

SEGMENT INFORMATION
(U.S. dollars in thousands)
	RFID			Supply Chain Solutions			Intelligent  Robotics			Intercompany		Consolidated
	Year ended December 31,
	2024
Revenues	$	12,877		$	25,829			1,410		(167)		$	39,949
Cost of revenues		9,344			19,763			1,079		(167)			30,019
Allowance for slow inventory		-			636			-		-			636
Gross profit		3,533			5,430			331					9,294
Allocated operating expenses		2,273			3,338			274					5,885
Impairment of goodwill and intangible assets		984			189			-					1,173
Unallocated operating expenses*					-			-					797
Operating income	$	276		$	1,903		$	57					1,439
Financial expenses and income tax benefits													861
Net income												$	2,300

	RFID			Supply Chain Solutions			Intelligent Robotics			Intercompany		Consolidated
	Year ended December 31,
	2023
Revenues	$	13,713		$	28,845			1,742		(121)		$	44,179
Cost of revenues	10,534			22,830				1,557		(121)		34,800
Allowance for slow inventory	-			170			-			-		170
Gross profit	3,179			5,845				185				9,209
Allocated operating expenses	2,150			3,675				258				6,083
Unallocated operating expenses*				-			-					676
Operating income (loss)	$	1,029		$	2,170		$	(73)				2,450
Financial expenses and tax on income												(445)
Net income												$	2,005

*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 December 31, 2024
Revenues	$	3,445			$	6,806		$	171		(34)			$	10,388
Cost of revenues	2,294				5,170			127			(34)			7,557
Allowance for slow inventory	-				450			-			-			450
Gross profit	1,151				1,186			44			-			2,381
Allocated operating expenses	605				883			84			-			1,572
Impairment of goodwill and intangible assets	984				189			-						1,173
Unallocated operating expenses*														252
Operating income (loss)	$	(438)			$	114		$	(40)					(616)
Financial income and income tax benefits														1,101
Net income														$	485

	RFID				Supply Chain Solutions			Intelligent Robotics			Intercompany				Consolidated
	Three months ended December 31, 2023
Revenues	$	3,622			$	7,017		$	279		(32)					$	10,886
Cost of revenues	2,897				5,797			171			(32)					8,833
Allowance for slow inventory	-				(37)			-			-					(37)
Gross profit	725				1,257			108			-					2,090
Allocated operating expenses	513				974			72			-					1,559
Unallocated operating expenses*																131
Operating income	$	212			$	283		$	36							400
Financial income and tax on income																27
Net income																	$	427

*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 caused BOSC's revenue decline in 2024?

BOSC's 9.7% revenue decline was due to one-time post-COVID restocking activities at multiple customers in 2023, making the year-over-year comparison challenging.

How much did BOSC's backlog increase in 2024?

BOSC's backlog increased 35% to $27 million as of December 31, 2024, compared to $20 million at the end of 2023.

What is BOSC's revenue and net income guidance for 2025?

BOSC projects 10% growth in both sales and net income for 2025, targeting $44 million in revenues and $2.5 million in net income.

How did BOSC's gross profit margin perform in 2024?

BOSC's gross profit margin improved to 23.3% in 2024 from 20.8% in 2023, demonstrating enhanced operating efficiency.

What strategic focus is BOSC pursuing for growth?

BOSC is focusing on deepening penetration in the defense sector and expanding into new overseas markets by leveraging relationships with Israeli defense customers.