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B.O.S. Announces Financial Results For Second Quarter Of 2012

Stocks in this article: BOSC

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,
         
  2012 2011 2012 2011
  (Unaudited) (Unaudited)
         
Revenues $ 12,963 $ 17,536 $ 5,915 $ 8,393
Cost of revenues 10,215 13,631 4,537 6,625
Inventory write offs 135 47 64 47
Gross profit 2,613 3,858 1,314 1,721
         
Operating costs and expenses:        
Research and development 86 220 36 116
Sales and marketing 1,629 2,262 752 1,166
General and administrative 840 1,089 394 528
Total operating costs and expenses 2,555 3,571 1,182 1,810
         
Operating profit (loss) 58 287 132 (89)
Financial expenses, net (478) (499) (239) (275)
Other expenses, net (80) (97) (90) (39)
Loss before taxes on income (500) (309) (197) (403)
Taxes on income (tax benefit) 20 19 17 79
Net income (loss) $ (520) $ (290) $ (214) $ (324)
         
Basic and diluted net loss per share $ (0.12)  $ (0.11)  $ (0.05) $ (0.12)
Basic and diluted net loss per share  $ (0.12)   $ (0.11)  $ (0.05)  $ (0.12)
         
Weighted average number of shares used in computing basic net earnings per share  4,471,003 2,758,734  4,471,637  2,762,590
Weighted average number of shares used in computing diluted net earnings per share  4,471,003 2,758,734  4,471,637  2,762,590
 
 
                    CONSOLIDATED BALANCE SHEETS                   
(U.S. dollars in thousands, except per share amounts)
 
  June 30, 2012 December 31, 2011
  (Unaudited) (Audited)
ASSETS    
     
CURRENT ASSETS:    
Cash and cash equivalents $ 401 $ 411
Trade receivables 7,266 8,507
Other accounts receivable and prepaid expenses 706 744
Inventories 3,685 4,020
     
Total current assets 12,058 13,682
     
LONG-TERM ASSETS:    
Severance pay fund 19 41
Investment in other companies 68 68
Other assets 26 23
     
Total long-term assets 113 132
     
PROPERTY, PLANT AND EQUIPMENT, NET 999 1,166
     
OTHER INTANGIBLE ASSETS, NET 450 540
     
GOODWILL 4,122 4,122
     
  $17,742 $19,642
 
 
                    CONSOLIDATED BALANCE SHEETS                   
U.S. dollars in thousands, except share and per share data
     
  June 30, 2012 December 31, 2011
  (Unaudited) (Audited)
     
 LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES:    
Short-term bank loans and current maturities $ 6,970 $ 7,496
Trade payables 4,010 4,165
Employees and payroll accruals 495 553
Deferred revenues 596 550
Accrued expenses and other liabilities 975 994
     
Total current liabilities 13,046 13,758
     
LONG-TERM LIABILITIES:    
Long-term bank loans, net of current maturities 572 1,103
Income tax accruals 293 273
Accrued severance pay 120 163
Liability to Dimex Systems  624 747
     
Total long-term liabilities 1,609 2,286
     
     
COMMITMENTS AND CONTINGENT LIABILITIES    
     
SHAREHOLDERS' EQUITY:    
Share capital 23,065 23,065
Additional paid-in capital 51,102 51,093
Accumulated other comprehensive profit (243) (243)
Accumulated deficit (70,837) (70,317)
     
Total shareholders' equity 3,087 3,598
     
     
Total liabilities and shareholders' equity $ 17,742 $ 19,642
 
 
                    CONSOLIDATED STATEMENTS OF CASH FLOWS                   
U.S. dollars in thousands
         
  Six months ended June 30, Three months ended June 30,
  2012 2011 2012 2011
         
Net Cash provided by (used in) operating activities   $ 1,140  $ 93   $ 1,016 1,040
Net Cash used in investing activities  (87)  (432)  (38)  (276)
Net Cash  provided by (used in) financing activities (1,063) 619 (1,051) 34
Increase (decrease) in cash and cash equivalents (10) 280 (73) 798
Cash and cash equivalents at the beginning of the period 411 703 474 185
Cash and cash equivalents at the end of the period $ 401  $ 983 $ 401 $  983
 
 
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,
  2012 2011
  GAAP (as reported) Adjustments Non-GAAP Non-GAAP
         
Revenues $    5,915   $  --  $   5,915    $ 8,393
Gross profit     1,314     64a  1,378    1,768
         
Operating costs and expenses:        
Research and development 36    --  36 116
Sales and marketing 752  (45)b 707 1,070
General and administrative 394  (4)c 390 472
Total operating costs and expenses 1,182  (49) 1,133 1,658
         
Operating profit (loss) 132  113 245 110
Financial expenses, net (239)    (21)d (218) (206)
Other expenses, net (90)      90e  -- --
Profit (loss) before taxes on income (197)    224 27 (96)
Taxes on income (tax benefit) 17  -- 17 (79)
Net Profit (loss) $ (214) $  224  $ 10  $ (17)
         
         
Notes to the reconciliation:
a - Inventory write off.
b - Amortization of intangible assets.
c - Stock based compensation.
d - Depreciation of prepaid expenses and value of warrants attached to Convertible note.
e - Property write off.
 
 
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,
  2012 2011
  GAAP (as reported) Adjustments Non-GAAP Non-GAAP
         
Revenues $    12,963   $  --  $   12,963    $ 17,536
Gross profit     2,613     135a  2,748    3,905
         
Operating costs and expenses:        
Research and development 86    --  86 220
Sales and marketing 1,629  (91)b 1,538 2,071
General and administrative 840  (9)c 831 999
Total operating costs and expenses 2,555  (100) 2,455 3,290
         
Operating profit (loss) 58  235 293 615
Financial expenses, net (478)    (21)d (457) (360)
Other expenses, net (80)      90e  10 --
Profit (loss) before taxes on income (500)    346 (154) 255
Taxes on income (tax benefit) 20  -- 20 (19)
Net Profit (loss) $ (520) $  346  $ (174)  $ 274
         
         
Notes to the reconciliation:
a - Inventory write off.
b - Amortization of intangible assets.
c - Stock based compensation.
d - Depreciation of prepaid expenses and value of warrants attached to Convertible note.
e - Property write off.
 
 
CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)
     
  Six months ended June 30, Three months ended June 30,
         
  2012 2011 2012 2011
  (Unaudited) (Unaudited)
         
Operating Profit $ 58 $ 287 132 $ (89)
 Add:        
Amortization of intangible assets 91 189 45 96
Stock based compensation 9 94 4 57
Depreciation 140 139 70 75
EBITDA $ 298 $ 709  $ 251  $ 139
         
         
  RFID and Mobile Solutions Supply Chain Solutions Intercompany Consolidated  RFID and Mobile Solutions Supply Chain Solutions Intercompany Consolidated 
  Six months ended June 30, Three months ended June 30,
  2012 2012
                 
Revenues   $ 4,504  $ 8,472  $ (13)  $ 12,963  $ 2,144  $ 3,704  $ 67  $ 5,915
                 
Cost of Revenues   $ 3,238  $ 6,990  $ (13)  $ 10,215  $ 1,496  $ 2,974  $ 67  $ 4,537
                 
Inventory write offs   $ 60  $ 75  $ --   $ 135  $ 25  $ 39  $ --   $ 64
                 
Gross profit  $ 1,206  $ 1,407  $ --   $ 2,613  $ 623  $ 691  $ --   $ 1,314
                 
                 
  RFID and Mobile Solutions Supply Chain Solutions Intercompany Consolidated  RFID and Mobile Solutions Supply Chain Solutions Intercompany Consolidated 
  Six months ended June 30, Three months ended June 30,
  2011 2011
                 
Revenues   $ 7,096  $ 10,957  $ (517)  $ 17,536  $ 3,604  $ 5,088  $ (299)  $ 8,393
                 
Cost of Revenues   $ 5,404  $ 8,744  $ (517)  $ 13,631  $ 2,847  $ 4,077  $ (299)  $ 6,625
                 
Inventory write offs   $ --   $ 47  $ --   $ 47  $ --   $ 47  $ --   $ 47
                 
Gross profit  $ 1,692  $ 2,166  $ --   $ 3,858  $ 757  $ 964  $ --   $ 1,721
CONTACT: B.O.S. Better Online Solutions Ltd.
         Mr. Eyal Cohen, CFO
         +972-54-2525925
         eyalc@boscom.com

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