GlobeNewswire Inc | Nov 30, 2021 08:00AM EST

November 30, 2021

RISHON LE ZION, Israel, Nov. 30, 2021 (GLOBE NEWSWIRE) -- BOS Better Online Solutions Ltd. ("BOS" or the "Company") (NASDAQ: BOSC) reported financial results for the third quarter and first nine months of the year 2021.

Eyal Cohen, BOS's CEO, stated: "We have made progress in the first nine months of the year 2021 as compared to the comparable period last year:

-- Revenues grew by 6% -- Gross profit increased by 15% -- Net income of $351,000 in the first nine months of the year 2021 as compared to a $1.2 million net loss in the comparable period last year -- A fifth consecutive profitable quarter.

The Robotics divisions operating loss has decreased significantly, to $489,000 in the first nine months of 2021 from $2.4 million in the comparable period last year. However, the Robotics division did not yet reach the breakeven point as previously projected. We expect the Robotics division to breakeven in the year 2022. We believe in the long-term growth potential of our Robotics division because of the increasing shortage in manpower for industrial and logistic processes.

The devaluation of the US dollar against the NIS in the first nine months of 2021 yielded an increase in our operating expenses by approximately $170,000 as compared to the comparable period last year."

Avidan Zelicovsky, BOS's President, stated: "The global shortage in commodities has presented an opportunity for our Supply Chain division. We have launched a new service for our electronic industry clients that significantly shortens the lead time for the electronic components. This service has been a growth engine of this division in the first nine months of 2021".

Eyal Cohen, BOS's CEO, added:" In view of the third quarter results, we have revised our outlook for the year 2021 in respect of our net income, to be between $400,000 and $600,000 instead of $1,000,000. Our outlook for the year 2021 revenues has not been changed and remains $33 million. We will announce our outlook for the year 2022 during the first quarter of the year 2022".

BOS will host a conference call on Tuesday, November 30, 2021, at 9:00 a.m. EST, 4:00 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:









-- Services The Supply Chain division provides inventory procurement and kitting. -- Integration the RFID division provides off-the-shelf software and equipment to track and manage inventory in the production floor and warehouse. -- Development the Intelligent Robotics division develops and builds custom-made robotic cells for the industrial and logistic processes.



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, 2021 2020 2021 2020 (Unaudited) (Unaudited) Revenues $ 24,555 $ 23,125 $ 7,998 $ 8,179 Cost of revenues 19,697 18,153 6,423 6,435 Inventory - 752 - 81 ImpairmentGross profit 4,858 4,220 1,575 1,663 Operating costs and expenses:Research 154 71 40 50 and developmentSales and 2,902 2,933 973 978 marketingGeneral 1,343 1,251 466 408 and administrativeImpairmentof Goodwill and - 988 - - intangible assetsTotal operating 4,399 5,243 1,479 1,436 costs and expenses Operating income 459 (1,023 ) 96 227 (loss)Financial income (107 ) (235 ) (9 ) (98 )(expenses), netOther income, net - 50 - 50 Income beforetaxes on income 352 (1,208 ) 87 179 (loss)Taxes on income (1 ) - - - Net income (loss) $ 351 $ (1,208 ) $ 87 $ 179 Basic and diluted )net income (loss) $ 0.07 $ (0.28 $ 0.02 $ 0.04 per shareWeighted averagenumber of sharesused in computing 5,201 4,284 5,223 4,329 basic net incomeper shareWeighted averagenumber of sharesused in computing 5,421 4,284 5,613 4,339 diluted net incomeper share Number ofoutstanding shares 5,237 4,321 5,237 4,321 as of September30, 2021 and 2020



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

December September 31, 2020 30, 2021 (Unaudited) (Audited)ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,002 $ 1,036Restricted bank deposits 236 140Trade receivables 8,846 9,172Other accounts receivable and prepaid 1,226 1,311expensesInventories 5,149 4,871 Total current assets 17,459 16,530 LONG-TERM ASSETS 44 59 PROPERTY AND EQUIPMENT, NET 1,139 956 OPERATING LEASE RIGHT-OF-USE ASSETS, NET 992 767 OTHER INTANGIBLE ASSETS, NET 25 40 GOODWILL 4,676 4,676 Total assets $ 24,335 $ 23,028



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

September 30, December 31, 2020 2021 (Unaudited) (Audited) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long term loans $ 825 $ 815Operating lease liabilities, current 495 557Trade payables 5,060 5,492Employees and payroll accruals 769 985Deferred revenues 742 601Advances net of inventory in process 106 68Accrued expenses and other liabilities 231 391 Total current liabilities 8,228 8,909 LONG-TERM LIABILITIES: Long-term loans, net of current maturities 756 1,216Operating lease liabilities, non-current 628 367Long term deferred revenues 190 303Accrued severance pay 336 364 Total long-term liabilities 1,910 2,250 TOTAL SHAREHOLDERS' EQUITY 14,197 11,869 Total liabilities and shareholders' equity $ 24, 335 $ 23,028



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

Nine months ended Three months ended September 30, September 30, 2021 2020 2021 2020 Operating income (loss) $ 459 $ (1,023 ) $ 96 $ 227Add: Impairment of Goodwill and other - 988 - -intangible assetsAmortization of intangible assets 15 36 5 5Stock-based compensation 44 57 13 18Depreciation 175 208 64 66EBITDA $ 693 $ 266 $ 178 $ 316



SEGMENT INFORMATION(U.S. dollars in thousands)

RFID Supply Intelligent Intercompany Consolidated Chain Robotics Solutions Nine months ended September 30, 2021 Revenues $ 9,193 $ 14,168 1,340 $ (146 ) $ 24,555 Gross profit 2,212 2,683 (37 ) - 4,858 Allocated 1,641 1,788 452 - 3,881 operating expenses Unallocatedoperating - - - 518 expenses* Income (loss) from $ 571 $ 895 $ (489 ) - 459 operations Financial expenses (108 )and tax on income Net income $ 351



Supply Intelligent RFID Chain Robotics Intercompany Consolidated Solutions Nine months ended September 30, 2020 Revenues $ 8,976 $ 13,825 $ 367 $ (43 ) $ 23,125 Grossprofit 2,223 2,882 (885 ) - 4,220 (loss) Allocatedoperating 1,524 1,730 534 - 3,788 expenses Impairmentof goodwilland - - 988 - 988 intangibleassets - - - Unallocatedoperating 467 expenses* Income(loss) from $ 699 $ 1,152 $ (2,407 ) - (1,023 )operations Financialexpenses (185 )and tax onincome Net loss $ (1,208 )



SEGMENT INFORMATION(U.S. dollars in thousands) Supply Intelligent RFID Chain Robotics Intercompany Consolidated Solutions Three months ended September 30, 2021 Revenues $ 2,871 $ 4,919 $ 304 $ (96 ) $ 7,998 Grossprofit 660 984 (69 ) - 1,575 (loss) Allocatedoperating 529 640 116 - 1,285 expenses Unallocatedoperating 194 expenses* - - - Income(loss) from $ 131 $ 344 $ (185 ) - 96 operations Financialincome and (9 )tax onincome Net income $ 87



Supply Intelligent RFID Chain Robotics Intercompany Consolidated Solutions Three months ended September 30, 2020 Revenues $ 3,264 $ 4,849 $ 66 $ - $ 8,179 Grossprofit 749 1,013 (99 ) - 1,663 (loss) Allocatedoperating 518 586 205 - 1,309 expenses Impairmentof goodwilland - - - - - intangibleassets Unallocatedoperating 127 expenses* - - - Income(loss) from $ 238 $ 427 $ (311 ) - 227 operations Financialexpenses (48 )and tax onincomeNet loss $ 179

* 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.