B.O.S. Announces The Closing Down Of Its Two U.S. Subsidiaries, Comprising Part Of Its Supply Chain Division
RISHON LETZION, Israel, Nov. 23, 2010 (GLOBE NEWSWIRE) -- B.O.S. Better Online Solutions Ltd. ("BOS") (Nasdaq:BOSC) today announced that its two U.S. subsidiaries that are part of its Supply Chain division: BOS Supply Chain Solutions (Summit) Inc. and its holding company, BOS Supply Chain Solutions(Lynk) Inc. (together, "Summit") have filed with the US Bankruptcy Court a Chapter 7 petition. As a result, BOS will record an approximate $660,000 non-cash write-off in the fourth quarter of 2010, but does not expect any adverse financial impact on its continuing operations.
Avidan Zelicovski, BOS' president commented: "Summit's operations and financial condition were adversely affected by the global economic crisis in the civil aerospace industry, which began in early 2009, and is still felt today. Summit ended 2009 with a net loss of $3 million, and recorded a net loss of $70,000 in the first nine months of 2010. Last month, we reported on a significant reduction of orders from one of Summit's major customers. This has led us to examine various alternatives for Summit in light of a further substantial reduction of Summit's revenues expected in 2011 and its $3.5 million bank debt. We concluded that closing Summit would best serve our existing profitable and growing Israeli based activities in both the RFID and Mobile division and the Supply Chain division, which had generated in the first nine months of 2010 revenues of $9.2 million and $12.5 million, respectively."
Yuval Viner, BOS CEO added: "This act will end the uncertainty that has surrounded our U.S. Supply Chain operation since our last announcement. We are continuing to expand the sales of our RFID and Mobile solutions, in which our software platform (BOS ID) is a key element, both in Israel and abroad. We are in the process of commercializing BOS ID as an essential tool for system integrators deploying RFID and other data capture solutions. In our Supply Chain division, we plan to work through our Israeli subsidiary to expand our penetration of international markets, and we continue to enlist new manufacturer representations. We anticipate that we will end the fourth quarter of 2010 and the full year of 2010 with a net profit, excluding the Summit write-off discussed above."
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