BOS Reports Financial Results for the Second Quarter of the Year 2023

Rhea-AI Summary

BOS Better Online Solutions Ltd. reports Q2 2023 financial results. Revenues grew by 9.5% to $11.3 million. Operating profit increased by 32% to $707,000. EBITDA increased by 32% to $863,000. Financial expenses decreased to $98,000. Net income increased by 283% to $609,000. CEO expects to meet or exceed financial targets for 2023.

Positive

• Revenues grew by 9.5% to $11.3 million
• Operating profit increased by 32% to $707,000
• EBITDA increased by 32% to $863,000
• Net income increased by 283% to $609,000
• CEO expects to meet or exceed financial targets for 2023

Negative

• None.

RISHON LE ZION, Israel, Aug. 22, 2023 (GLOBE NEWSWIRE) -- BOS Better Online Solutions Ltd. ("BOS" or the "Company") (NASDAQ: BOSC) reported its financial results for the second quarter of the year 2023.

Second Quarter 2023 Financial Highlights:

• Revenues for the second quarter of 2023 grew by 9.5% to $11.3 million from $10.3 million in the comparable quarter last year.
• Operating profit for the second quarter of 2023 increased by 32% to $707,000 compared to $537,000 in the comparable quarter last year.
• EBITDA for the second quarter of 2023 increased by 32% to $863,000 from $653,000 in the comparable quarter last year.
• Financial expenses for the second quarter of 2023 decreased to $98,000 compared to $378,000 in the comparable quarter last year. The decrease is attributed to the depreciation of the Israeli NIS as compared to the US dollar by 10.2% in the second quarter of the year 2022 as compared to a depreciation of 2.3% in the second quarter of the year 2023. 
• Net income for the second quarter of 2023 increased by 283% to $609,000 or $0.11 per basic share compared to $159,000 or $0.03 per basic share in the second quarter of the year 2022.
  

Ziv Dekel, BOS' Chairman, stated: "BOS' management has invested extensive resources to strengthen BOS' market position and penetrate new business segments. I am pleased to see the positive results consistently yielded by these efforts since 2021. In addition, we are looking for an M&A opportunity for further expansion."

Eyal Cohen, BOS' CEO, stated: "The relatively strong results in the first half of the year and our backlog for the remainder of the year 2023 advance us towards meeting and possibly exceeding our financial targets for 2023, which are revenues of over $45 million and net income above $1.5 million."

BOS will host a conference call on August 22, 2023 at 9:00 a.m. EDT – 4:00 p.m., Israel Time. A question-and-answer session will follow management's presentation.
To access the conference call, please click on the following link:
https://us06web.zoom.us/j/87034095301?pwd=ZGo3bGRuTTRCZEpYOHF1OW1RWml6Zz09
or dial to: +1 646 876 9923, meeting ID – 870 3409 530, passcode – 455932

For those unable to listen to the live call, a replay of the call will be available the next day on the BOS website: www.boscom.com

About BOS

BOS empowers inventory processes through its three business divisions:

• The Intelligent Robotics division automates industrial and logistic inventory processes;
• The RFID division marks and tracks inventory; and
• The Supply Chain division manages inventory.
  

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. 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								Three months ended
		June 30,								June 30,
		2023				2022				2023							2022
		(Unaudited)								(Unaudited)
Revenues		$	23,478			$	21,138			$	11,336						$	10,350
Cost of revenues			18,409				16,667				8,931							8,130
Gross profit			5,069				4,471				2,405							2,220
Operating costs and expenses:
Research and development			78				87				37							36
Sales and marketing			2,470				2,340				1,224							1,176
General and administrative			912				999				437							471
Acquisition expenses			-				44				-							-
Total operating costs and expenses			3,460				3,470				1,698							1,683
Operating income			1,609				1,001				707							537
Financial expenses, net			(343	)			(529	)			(98				)			(378	)
Income before taxes on income			1,266				472				609							159
Taxes on income			-				-				-							-
Net income		$	1,266			$	472			$	609						$	159
Basic and diluted net income per share		$	0.22			$	0.09			$	0.11						$	0.03
Weighted average number of shares used in computing basic net income per share			5,707				5,395				5,712							5,538
Weighted average number of shares used in computing diluted net income per share			5,767				5,438				5,847							5,570
Number of outstanding shares as of June 30, 2023 and 2022			5,741				5,702				5,741							5,702

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
		June 30,						December 31,
		2023						2022
		(Unaudited)						(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	1,931					$	1,763
Restricted bank deposits			144						130
Trade receivables			11,011						10,834
Other accounts receivable and prepaid expenses			1,167						1,414
Inventories			7,667						6,433
Total current assets			21,920						20,574
LONG-TERM ASSETS			244						260
PROPERTY AND EQUIPMENT, NET			3,341						3,270
OPERATING LEASE RIGHT-OF-USE ASSETS, NET			955						1,110
OTHER INTANGIBLE ASSETS, NET			1,174						486
GOODWILL			4,895						4,895
Total assets		$	32,529					$	30,595

CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
		June 30,			December 31,
		2023			2022
		(Unaudited)			(Audited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long term loans		$	391		$	586
Operating lease liabilities, current			235			301
Trade payables			7,801			7,984
Employees and payroll accruals			980			1,016
Deferred revenues			1,550			542
Advances net of inventory in process			79			47
Accrued expenses and other liabilities			812			719
Total current liabilities			11,848			11,195
LONG-TERM LIABILITIES:
Long-term loans, net of current maturities			1,209			1,294
Operating lease liabilities, non-current			674			827
Long term deferred revenues			401			241
Accrued severance pay			363			404
Total long-term liabilities			2,647			2,766
TOTAL SHAREHOLDERS' EQUITY			18,034			16,634
Total liabilities and shareholders' equity		$	32,529		$	30,595

CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)
		Six months ended						Three months ended
		June 30,						June 30,
		2023			2022			2023				2022
Operating income		$	1,609		$	1,001		$	707			$	537
Add:
Amortization of intangible assets			73			45			47				31
Stock-based compensation			49			50			24				25
Depreciation			165			118			85				60
EBITDA		$	1,896		$	1,214		$	863			$	653

SEGMENT INFORMATION
(U.S. dollars in thousands)
		RFID				Supply Chain Solutions				Intelligent Robotics				Intercompany					Consolidated
		Six months ended June 30,
		2023
Revenues		$	6,948			$	15,351			$	1,257			$	77				$	23,633
Gross profit			1,796				3,253				20				-					5,069
Allocated operating expenses			1,097				1,859				130				-					3,086
Acquisition expenses			-				-				-				-					-
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
		RFID				Supply Chain Solutions				Intelligent Robotics				Intercompany					Consolidated
		Six months ended June 30,
		2022
Revenues		$	7,693			$	12,873			$	572			$	-				$	21,138
Gross profit (loss)			1,915				2,575				(19	)			-					4,471
Allocated operating expenses			1,209				1,585				271				-					3,065
Acquisition expenses			44				-				-				-					44
Unallocated operating expenses*			-				-				-									361
Income (loss) from operations		$	662			$	990			$	(290	)			-					1,001
Financial expenses and tax on income																				(529	)
Net income																			$	472

*        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,
		2023
Revenues		$	2,931				$	7,863		$	557					$	14					$	11,365
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
		RFID					Supply Chain Solutions			Intelligent Robotics						Intercompany						Consolidated
		Three months ended June 30,
		2022
Revenues		$	3,590				$	6,366		$	394					$	-					$	10,350
Gross profit			885					1,332			3						-						2,220
Allocated operating expenses			566					809			129						-						1,504
Unallocated operating expenses*																	-						179
Income (loss) from operations		$	319				$	523		$	(126		)				-						537
Financial expenses and tax on income																							(378			)
Net income																						$	159

*        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.