B.O.S. Better Online Solutions Reports Financial Results for the fourth quarter and fiscal year ended December 31, 2011
Forecasts Net Profit on a non-GAAP basis for fiscal 2012
RISHON LEZION, Israel, March 28, 2012 (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 global enterprises, today reported its financial results for the fourth quarter and fiscal year ended December 31, 2011.
Revenues grew by 10%, from $30 million in the fiscal year ended December 31, 2010 to $33 million in fiscal 2011, which was in line with the Company's forecast.
On a GAAP basis, the Company had a net loss of $2.1 million and $3.2 million, respectively, in the fourth quarter and fiscal year ended December 31, 2011.
Losses in the fourth quarter and fiscal year ended December 31, 2011, resulted mainly from the following non-cash items:
1. Financial expenses related to the Company’s convertible loan (that was converted in December 2011) of $951,000 and $1.3 million, respectively, in fourth quarter and fiscal year ended December 31, 2011;
2. Impairment of intangible assets in the amount of $555,000 which was recorded in the fourth quarter of fiscal 2011;
3. Amortization of intangible assets and stock based compensation in the amount of $129,000 and $545,000, respectively, in the fourth quarter and fiscal year ended December 31, 2011.
4. Inventory write-offs in the amount of $443,000 for the year ended December 31, 2011, of which $310,000 were recorded in the fourth quarter of fiscal 2011;
5. Costs due to impairment of related investments in companies amounting to $188,000 for the fiscal year ended December 31, 2011.
On a non-GAAP basis, the Company had a net loss of $156,000 and $176,000, respectively, in the fourth quarter and fiscal year ended December 31, 2011.
Gross margin for fiscal 2011 decreased to 19.5% of revenues, from 24.8% in fiscal 2010, mainly due to: (a) an inventory write-off in the amount of $443,000, as compared to a write-off of $36,000 in fiscal 2010, and (b) a gross loss in the software product line (related to the RFID division) in the amount of $37,000, as compared to a gross profit of $470,000 in fiscal 2010. We expect a lower inventory write-off and a higher gross profit in the software product line in fiscal 2012.
EBITDA amounted to $407,000 for fiscal 2011, as compared to $800,000 in our latest forecast. The difference was attributed primarily to the aforementioned inventory write-off that was recorded mostly in the fourth quarter of 2011.
Yuval Viner, BOS CEO, stated: "Non cash expenses had an adverse effect on year 2011 results as well as the losses on our software product line. During the fourth quarter of 2011, we have successfully completed a restructuring of our software activity (related to the RFID division) which yielded a positive gross profit in the fourth quarter of 2011, and we anticipate it will continue to improve in 2012. Recently, we announced the successful completion of our first RFID traceability project in Spain. We hope that this development will result in additional opportunities in Europe throughout year 2012. We anticipate that we will end year 2012 with a net profit on a non-GAAP basis".
BOS will host a conference call on Thursday, March 29, 2012 at 10:00 a.m. Eastern Daylight Time / 4:00 p.m. Israel Time. A question-and-answer session will follow management's presentation. Interested parties may participate in the conference call by dialing the following numbers approximately five to ten minutes before the call start time:
North America + 1-888-407-2553
Israel + 03-9180644
International + 972-3-9180644
For those unable to listen to the live call, a replay of the call will be available from the day after the call on BOS's website, at: http://www.boscorporate.com
B.O.S. Better Online Solutions Ltd.
Mr. Eyal Cohen, CFO
B.O.S. Better Online Solutions Ltd. (Nasdaq:BOSC - News) is a leading provider of RFID and Supply Chain solutions to global 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.boscom.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.
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