GlobeNewswire Inc | Nov 30, 2020 09:00AM EST

November 30, 2020

RISHON LEZION, Israel, Nov. 30, 2020 (GLOBE NEWSWIRE) -- BOS Better Online Solutions Ltd. ("BOS" or the "Company") (NASDAQ:BOSC), reported its financial results for the third quarter and nine months ended September 30, 2020.

Third-quarter results:Revenues grew by 3% to $8.2 million from $7.9 million in the comparable quarter last year.

Gross profit grew by 21% to $1.7 million from $1.4 million in the comparable quarter last year.

Operating profit amounted to $227,000, compared to an operating loss of $724,000 in the comparable quarter last year.

Net income amounted to $179,000, compared to a net loss of $754,000 in the comparable quarter last year.

Nine-month results:Revenue decreased by 5% to $23.1 million from $24.5 million in the comparable period last year.

Gross profit decreased by 11% to $4.2 million from $4.8 million in the comparable period last year.

Operating loss amounted to $1 million, compared to an operating loss of $400,000 in the comparable period last year.

Net loss amounted to $1.2 million compared to a net loss of $600,000 in the comparable period last year.

Eyal Cohen, BOS' CEO, stated: "In the third quarter, all of our business units presented improved results as compared to the comparable quarter last year and the first half of 2020. We are encouraged by the third-quarter results, and we anticipate that the fourth quarter will continue this trend of improvement.

"During the third quarter, we made progress in streamlining the operational, marketing, and sales platform of our Intelligent Robotic business unit. We anticipate that this process will support the unit's growth and that is will show profits in the year 2021."

OutlookMr. Cohen added: "We expect the year 2020 revenues to be between $32 and $33 million compared to revenues of $33.8 million in 2019. The decrease in revenues is primarily attributable to the effects of theCOVID-19 pandemic on sales of all of the Company's operating businesses. We further anticipate that the fourth quarter of 2020 will be profitable.

"Regarding the year 2021, we expect our revenues to exceed $33 million and a net profit of above $1 million."

BOS will host a conference call on Monday, November 30, 2020, at 10:00 a.m. EST 5:00 p.m., Israel Time. A question-and-answer session will follow management's presentation.

To access the conference call, please dial one of the following numbers:US: +1-888-281-1167, International: +972-3-9180644.

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 BOSBOS is a global provider of custom-made intelligent robots and an integrator of off-the-shelf automation systems for industrial and logistics processes. BOS also provides supply chain services, mainly for the aerospace and defense industries worldwide.

For more information, please visit www.boscom.com or contact:Eyal Cohen, CEO +972-542525925 eyalc@boscom.com

Use of Non-GAAP Financial InformationBOS 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 StatementsThe 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, failure to successfully integrate and achieve the potential benefits of the acquisition of the business operations of Imdecol Ltd. (the Robotics business line), 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 impact of the COVID-19 virus and 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 OPERATIONSU.S. dollars in thousands

Nine months ended Three months ended September 30, September 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) Revenues $ 23,125 $ 24,463 $ 8,179 $ 7,914 Cost of 18,153 19,709 6,435 6,542 revenuesInventory 752 - 81 - ImpairmentGross profit 4,220 4,754 1,663 1,372 Operatingcosts and expenses:Research and 71 - 50 - developmentSales and 2,933 2,907 978 1,008 marketingGeneral and 1,251 1,632 408 474 administrativeImpairment ofGoodwill and 988 614 - 614 intangibleassetsTotaloperating 5,243 5,153 1,436 2,096 costs andexpenses Operating (1,023 ) (399 ) 227 (724 )income (loss)Financial (235 ) (240 ) (98 ) (111 )expenses, netOther income, 50 - 50 - netIncome beforetaxes on (1,208 ) (639 ) 179 (835 )income (loss)Tax benefit - 61 - 81 Net income $ (1,208 ) $ (578 ) $ $ (754 )(loss) 179 Basic anddiluted net $ (0.28 ) $ (0.15 ) $ 0.04 $ (0.18 )income (loss)per shareWeightedaverage numberof shares used in computing 4,284 3,984 4,329 4,258 basic netincome (loss)per shareWeightedaverage numberof shares used in computing 4,284 3,989 4,339 4,260 diluted netincome (loss)per share Number ofoutstandingshares as of 4,321 4,258 4,321 4,258 September 30,2020 and 2019

* The IntelligentRobotics division has been consolidated since June 1, 2019.





CONSOLIDATED BALANCE SHEETS(U.S. dollars in thousands)

September December 30, 2020 31, 2019 (Unaudited) (Audited)ASSETS CURRENT ASSETS: Cash and cash $ $ equivalents 669 339Restricted bank 176 240depositsTrade receivables 9,626 10,063Other accountsreceivable and 1,067 1,273prepaid expensesInventories 5,315 5,407 Total current 16,853 17,322assets LONG-TERM ASSETS 140 155 PROPERTY AND 1,051 1,257EQUIPMENT, NET OPERATING LEASERIGHT-OF-USE 888 720ASSETS, NET OTHER INTANGIBLE 45 598ASSETS, NET GOODWILL 4,676 5,147 Total assets $ 23,653 $ 25,199

CONSOLIDATED BALANCE SHEETS(U.S. dollars in thousands)

September December 30, 2020 31, 2019 (Unaudited) (Audited)LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short term loans $ 250 $ -Current maturities of long term loans 667 664Operating lease liabilities, current 411 551Trade payables 6,323 6,503Employees and payroll accruals 743 1,007Deferred revenues 809 836Advances net of inventory in process 44 29Accrued expenses and other liabilities 280 419 Total current liabilities 9,527 10,009 LONG-TERM LIABILITIES: Long-term loans, net of current maturities 1,709 2,041Operating lease liabilities, non-current 572 289Accrued severance pay 312 303 Total long-term liabilities 2,593 2,633 SHAREHOLDERS' EQUITY 11,533 12,557 Total liabilities and shareholders' equity $ $ 25,199 23,653

CONDENSED CONSOLIDATED EBITDA(U.S. dollars in thousands)

Nine months ended Three months ended September 30, September 30, 2020 2019 2020 2019 Operating income $ (1,023 ) $ (399 ) $ 227 $ (724 )(loss)Add: Impairment of Goodwilland other intangible 988 614 - 614 assetsAmortization of 36 52 5 33 intangible assetsStock based 57 59 18 20 compensationDepreciation 208 205 66 71 EBITDA $ 266 $ 531 $ $ 14 316

SEGMENT INFORMATION(U.S. dollars in thousands)

Supply Intelligent Supply Intelligent Consolidated Chain RFID Robotics Consolidated Chain RFID Robotics Solutions Solutions Nine months ended September 30, 2020 Nine months ended September 30, 2019 Revenues $ 13,825 $ 8,933 $ 367* $ 23,125 $ 14,251 $ 9,626 $ 586* $ 24,463 Inventory - - (752 ) (752 ) - - - - Impairment Grossprofit 2,882 2,223 (885 ) 4,220 2,770 1,961 23 4,754 (loss) ImpairmentofGoodwill - - (988 ) (988 ) - - (614 ) (614 )and intangibleassets Operating )Income $ 996 $ 543 $ (2,562 ) $ (1,023 $ 758 $ (383 ) $ (774 ) $ (399 )(loss) Balance ofGoodwilland other 6,129intangible $ - $ 4,721 $ - $ 4,721 $ - $ 4,742 $ 1,387 $assetsrelated tosegment



Supply Intelligent Supply Intelligent Consolidated Chain RFID Robotics Consolidated Chain RFID Robotics Solutions Solutions Three months ended September 30, 2020 Three months ended September 30, 2019 Revenues $ 4,849 $ 3,264 $ 66* $ 8,179 $ 4,635 $ 2,930 $ 349* $ 7,914 Inventory - - (81 ) (81 ) - - - - Impairment Grossprofit 1,013 749 (99 ) 1,663 792 620 (40 ) 1,372 (loss) ImpairmentofGoodwill - - - - - - - - andintangibleassets OperatingIncome $ 385 $ 191 $ (349 ) $ 227 $ 190 $ (99 ) $ (815 ) $ (724 )(loss) Balance ofGoodwilland otherintangible $ - $ 4,721 $ - $ 4,721 $ - $ 4,742 $ 1,387 $ 6,129 assetsrelated tosegment

(*) As of September 30, 2020, inventory in process related to the Intelligent Robotics segment amounted to approximately $3.3 million. Revenues from these projects is expected to be recognized during the next two quarters. As of September 30, 2019, inventory in process related to the Intelligent Robotics segment amounted to approximately $0.5 million.