News Column

B.O.S. Announces Financial Results for the Second Quarter of 2014

August 21, 2014

RISHON LEZION, Israel, Aug. 21, 2014 (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 enterprises, today reported its financial results for the three months ended June 30, 2014.

Revenues for the second quarter of fiscal 2014 grew to $6.9 million as compared to $6.7 million in the comparable quarter last year.

Gross profit margin for the second quarter of fiscal 2014 improved to 18.5% as compared to 17.6% in the comparable quarter last year.

Net loss for the second quarter of fiscal 2014 amounted to $85,000 as compared to a net loss of $59,000 in the comparable quarter last year.

On a non-GAAP basis, the net profit for the second quarter of 2014 was $17,000 as compared to a net profit of $40,000 in the comparable quarter of last year.

Yuval Viner, BOS CEO, stated: "The results of the second quarter reflect an improvement in our gross profit margin as compared to the comparable period last year. We are continuing our efforts to streamline our operations and expand our solution offerings. We anticipate that we will end year 2014 with a net profit on a non-GAAP basis."

Eyal Cohen, BOS CFO, stated: "BOS' financial position continues to strengthen. Loans were reduced by an additional $1 million during the first half of year 2014, resulting in a clear decrease in our financial expenses. We expect this trend to continue going forward. The devaluation of the dollar against the Israeli Shekel in the second quarter and first half of year 2014 as compared to comparable periods last year was the main reason for the increase in our operating expenses."

Conference Call

BOS will host a conference call on Monday, August 25, 2014 at 10a.m. EDT - 5:00p.m. Israel Time. A question-and-answer session will follow management's presentation. Interested parties may participate in the conference call by dialing + 972-3-9180644, approximately five to ten minutes before the call start time.

For those unable to listen to the live call, a script 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. (BOSC) is an Israeli leading provider of RFID and Supply Chain solutions to 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.boscorporate.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
         
 Six months ended

June 30,
Three months ended

June 30,
 2014201320142013
 (Unaudited)(Unaudited)
         
Revenues$ 14,132$ 12,585$ 6,891$ 6,655
Cost of revenues 11,445 10,378 5,616 5,482
Gross profit 2,687 2,207 1,275 1,173
         
Operating costs and expenses:        
Sales and marketing  1,602 1,401 795 724
General and administrative  886 778 461 359
Total operating costs and expenses 2,488 2,179 1,256 1,083
         
Operating profit  199 28 19 90
Financial expenses, net  (260) (286) (107) (145)
Other expenses, net (1) -- (1) --
Loss before taxes on income (62) (258) (89) (55)
Tax benefit (Taxes on income)  (6) (4) 4 (4)
Net Loss$ (68)$ (262)$ (85)$ (59)
         
Basic and diluted net loss per share $ (0.05)$ (0.23)$ (0.06)$ (0.05)
         
Weighted average number of shares used in computing basic net loss per share 1,306,189 1,154,954 1,320,945 1,156,983
Weighted average number of shares used in computing diluted net loss per share 1,306,189 1,154,954 1,320,945 1,156,983
 
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except per share amounts)
     
 June 30, 2014December 31,

2013
 (Unaudited)(Audited)
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents $ 643$ 1,005
Trade receivables  7,717 8,137
Other accounts receivable and prepaid expenses  879 819
Inventories  3,987 3,718
     
Total current assets 13,226 13,679
     
LONG-TERM ASSETS:    
Severance pay fund 3 26
Bank deposit 308 486
Other assets 41 9
     
Total long-term assets 352 521
     
PROPERTY, PLANT AND EQUIPMENT, NET 595 689
     
OTHER INTANGIBLE ASSETS, NET  123 176
     
GOODWILL  4,122 4,122
     
 $ 18,418$ 19,187
 
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
     
 June 30, 2013December

31, 2013
 (Unaudited)(Audited)
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES:    
Short-term loans $ 5,228$ 5,426
Current maturities of long term loans 708 926
Trade payables  5,444 6,232
Employees and payroll accruals 525 433
Deferred revenues 1,026 639
Accrued expenses and other liabilities  489 523
     
Total current liabilities 13,420 14,179
     
LONG-TERM LIABILITIES:    
Long-term loans, net of current maturities  497 1,146
Accrued severance pay 121 159
     
Total long-term liabilities 618 1,305
     
SHARE HOLDERS' EQUITY  4,380 3,703
     
Total liabilities and shareholders' equity$ 18,418$ 19,187
 
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
         
  Three months ended June 30,
  2014 2013
  GAAP

(as reported) 
Adjustments Non-

GAAP
Non-GAAP
         
Revenues$ 6,891  $ -- $ 6,891$ 6,655
Gross profit 1,275   1,275 1,173
         
Operating costs and expenses:        
Sales and marketing  795  (26)a 769 679
General and administrative  461  (76)b 385 305
Total operating costs and expenses 1,256 (102) 1,154 984
         
Operating profit  19 102 121 189
Financial expenses, net  (107)  --  (107) (145)
Other expenses, net (1)   (1)  
Income (loss) before taxes on income (89) 102 13 44
Tax benefit (Taxes on income)  4  -- 4 (4)
Net Income (loss)$ (85)$ 102$ 17$ 40
         
Notes to the reconciliation:        
a -Amortization of intangible assets.        
b - Stock based compensation.        
 
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
         
  Six months ended June 30,
  2014 2013
  GAAP

(as reported) 
Adjustments Non-

GAAP
Non-GAAP
         
Revenues$ 14,132 $ --$ 14,132$ 12,585
Gross profit 2,687   2,687 2,207
         
Operating costs and expenses:        
Sales and marketing  1,602  (53)a 1,549 1,311
General and administrative  886  (147)b 739 672
Total operating costs and expenses 2,488 (200) 2,288 1,983
         
Operating  profit  199 200 399 224
Financial expenses, net  (260)  --  (260) (286)
Other expenses, net (1)  --  (1) --
Loss before taxes on income (62) 200 138 (62)
Taxes on income  (6)  -- (6) (4)
Net Loss$ (68)$ 200$ 132$ (66)
         
Notes to the reconciliation:        
a - Amortization of intangible assets.        
b - Stock based compensation.        
CONDENSED CONSOLIDATED EBITDA
 (U.S. dollars in thousands)
                 
        Six months ended

June 30,
Three months ended

June 30,
         2014201320142013
        (Unaudited)(Unaudited)
                 
                 
Operating Profit         $ 199$ 28$ 19$ 90
Add:                
Amortization of intangible assets          53 90 26 45
Stock based compensation         147 106 76 54
Depreciation         91 88 42 43
EBITDA        $ 490$ 312$ 163$ 232
                 
 RFID and

Mobile

Solutions
Supply

Chain

Solutions
IntercompanyConsolidated RFID and

Mobile

Solutions
Supply

Chain

Solutions
IntercompanyConsolidated 
 Six months ended June 30,

2014
Three months ended June 30,

2014
                
Revenues $ 5,510$ 8,640$ (18)$ 14,132$ 2,855$ 4,039$ (3)$ 6,891
                 
Gross profit$ 1,442$ 1,245  $ -- $ 2,687$ 658$ 617  $ -- $ 1,275
                 
                 
 RFID and

Mobile

Solutions
Supply

Chain

Solutions
IntercompanyConsolidated RFID and

Mobile

Solutions
Supply

Chain

Solutions
IntercompanyConsolidated 
 Six months ended June 30,

2013
Three months ended June 30,

2013
                
Revenues $ 4,847$ 7,764$ (26)$ 12,585$ 2,566$ 4,097$ (8)$ 6,655
                 
Gross profit$ 1,280$ 927  $ -- $ 2,207$ 673$ 500  $ -- $ 1,173

CONTACT: B.O.S. Better Online Solutions Ltd. Mr. Eyal Cohen, CFO +972-54-2525925 eyalc@boscom.com

Source: B.O.S. Better Online Solutions Ltd.


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