B.O.S. Better Online Solutions .(BOSC) - 2025 Q1 - Quarterly Report

Q1 2025 Financial Highlights and Management Commentary BOS achieved record Q1 2025 revenues and net income, driven by defense sector focus and efficiency, with management optimistic about exceeding full-year outlook First Quarter 2025 Financial Highlights BOS achieved record Q1 2025 revenues of $15 million and net income, driven by defense sector focus and efficiency, and expects to surpass its full-year outlook - BOS achieved record revenues and net income in Q1 2025, attributing success to its strategic focus on the defense sector and diligent operating efficiency[4] - Management anticipates surpassing the full-year 2025 outlook of $44 million in revenues and $2.5 million in net income, supported by Q1 performance and backlog[4] - Backlog decreased to $22 million as of March 31, 2025, from $27 million as of December 31, 2024[6] Q1 2025 Financial Performance | Metric | Q1 2025 (USD) | Q1 2024 (USD) | Change (%) | | :----- | :------------ | :------------ | :--------- | | Revenues | $15.0 million | $11.3 million | +33.1% | | Gross profit margin | 23.9% | 22.7% | +1.2 pp | | EBITDA | $1.9 million | $1.0 million | +86.2% | | Operating expenses increase | 7.7% | N/A | N/A | | Net income | $1.35 million | $741,000 | +82.3% | | Basic net income per share | $0.23 | $0.13 | +76.9% | About BOS Better Online Solutions Ltd. BOS integrates advanced technologies to enhance supply chain operations for global clients in aerospace, defense, industrial, and retail Company Overview BOS integrates advanced technologies to enhance supply chain operations for global clients in aerospace, defense, industrial, and retail sectors - BOS integrates advanced technologies to streamline supply chain operations for global clients in aerospace, defense, industrial, and retail sectors[7] Business Segments BOS operates three divisions: Intelligent Robotics, RFID, and Supply Chain, automating inventory, optimizing management, and integrating components - Intelligent Robotics Division: Automates industrial and logistics inventory processes through advanced robotics technologies, improving efficiency and precision[10] - RFID Division: Optimizes inventory management with state-of-the-art solutions for marking and tracking, ensuring real-time visibility and control[10] - Supply Chain Division: Integrates franchised components directly into customer products, meeting their evolving needs for developing innovative solutions[10] Consolidated Financial Statements BOS reported significant Q1 2025 growth in revenues and net income, demonstrating improved profitability and operational leverage Consolidated Statements of Operations BOS reported significant Q1 2025 revenue and net income growth compared to Q1 2024, demonstrating improved profitability and operational leverage Consolidated Statements of Operations (U.S. dollars in thousands) | Metric (U.S. dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Year ended December 31, 2024 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :--------------------------- | | Revenues | $15,026 | $11,287 | $39,949 | | Cost of revenues | $11,437 | $8,727 | $30,655 | | Gross profit | $3,589 | $2,560 | $9,294 | | Operating income | $1,743 | $846 | $1,439 | | Net income | $1,351 | $741 | $2,300 | | Basic net income per share | $0.23 | $0.13 | $0.40 | | Diluted net income per share | $0.22 | $0.13 | $0.39 | Consolidated Balance Sheets As of March 31, 2025, BOS's total assets increased due to higher trade receivables and cash, with liabilities rising from trade payables and deferred revenues Consolidated Balance Sheets (U.S. dollars in thousands) | Metric (U.S. dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :------------- | :---------------- | | ASSETS | | | | Cash and cash equivalents | $3,844 | $3,368 | | Trade receivables, net | $15,839 | $11,787 | | Inventories | $7,505 | $7,870 | | Total current assets | $28,489 | $24,360 | | Total assets | $38,321 | $34,343 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Trade payables | $7,769 | $6,362 | | Deferred revenues (current) | $2,543 | $2,003 | | Total current liabilities | $13,034 | $10,665 | | Total liabilities and shareholders' equity | $38,321 | $34,343 | | Total shareholders' equity | $23,049 | $21,331 | Condensed Consolidated EBITDA BOS's EBITDA significantly increased in Q1 2025 compared to Q1 2024, reflecting improved operating income and lower non-cash adjustments Condensed Consolidated EBITDA (U.S. dollars in thousands) | Metric (U.S. dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Year ended December 31, 2024 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :--------------------------- | | Operating income | $1,743 | $846 | $1,439 | | Impairment of Goodwill and other intangible assets | - | - | $1,173 | | Amortization of intangible assets | 15 | 47 | 190 | | Stock-based compensation | 9 | 21 | 74 | | Depreciation | 101 | 89 | 370 | | EBITDA | $1,868 | $1,003 | $3,246 | Segment Information In Q1 2025, Supply Chain Solutions was the largest contributor to revenues and operating income, followed by RFID and Intelligent Robotics Three Months Ended March 31, 2025 In Q1 2025, Supply Chain Solutions was the largest contributor to revenues and operating income, followed by RFID and Intelligent Robotics Segment Performance Q1 2025 (U.S. dollars in thousands) | Segment (U.S. dollars in thousands) | Revenues | Gross profit | Income from operations | | :---------------------------------- | :------- | :----------- | :--------------------- | | RFID | $3,259 | $707 | $178 | | Supply Chain Solutions | $11,390 | $2,756 | $1,708 | | Intelligent Robotics | $496 | $126 | $58 | | Consolidated | $15,026 | $3,589 | $1,743 | Three Months Ended March 31, 2024 In Q1 2024, Supply Chain Solutions led in revenues and operating income, with RFID and Intelligent Robotics showing smaller but positive operational results Segment Performance Q1 2024 (U.S. dollars in thousands) | Segment (U.S. dollars in thousands) | Revenues | Gross profit | Income from operations | | :---------------------------------- | :------- | :----------- | :--------------------- | | RFID | $3,683 | $992 | $427 | | Supply Chain Solutions | $7,356 | $1,484 | $575 | | Intelligent Robotics | $250 | $84 | $22 | | Consolidated | $11,287 | $2,560 | $846 | Year Ended December 31, 2024 For FY2024, Supply Chain Solutions was the dominant segment in revenues and operating income, with impairment charges mainly in RFID and Supply Chain Segment Performance FY 2024 (U.S. dollars in thousands) | Segment (U.S. dollars in thousands) | Revenues | Gross profit | Income from operations | Impairment of goodwill and intangible assets | | :---------------------------------- | :------- | :----------- | :--------------------- | :------------------------------------------- | | RFID | $12,877 | $3,533 | $276 | $984 | | Supply Chain Solutions | $25,829 | $5,430 | $1,903 | $189 | | Intelligent Robotics | $1,410 | $331 | $57 | - | | Consolidated | $39,949 | $9,294 | $1,439 | $1,173 | - Unallocated operating expenses include costs not specific to a particular segment but general to the entire group, such as expenses incurred for insurance of directors and officers, public company fees, and legal fees[22] Non-GAAP Financial Measures BOS provides non-GAAP financial measures to supplement GAAP results, assisting investors and internal operational evaluation Non-GAAP Financial Measures Overview BOS provides non-GAAP measures to supplement GAAP results, assisting investors in financial analysis and internal operational evaluation - BOS uses non-GAAP measures to supplement GAAP results, evaluate internal operations, and assist investors with financial analysis consistent with research analyst models[8] - Non-GAAP measures are not a substitute for GAAP and are reconciled with comparable GAAP measures in accordance with Regulation G[8] Safe Harbor Regarding Forward-Looking Statements Forward-looking statements are subject to risks and uncertainties, including customer dependency, gross profit, competition, market expansion, legal, and geopolitical risks Forward-Looking Statements Risks Forward-looking statements are subject to risks and uncertainties, including customer dependency, gross profit, competition, market expansion, legal, and geopolitical risks - Forward-looking statements reflect management's current views but are subject to risks and uncertainties that could cause actual results to differ materially[9] - Key risk factors include dependency on major customers, uncertainty of maintaining gross profit margins, inability to keep up with technology, intense competition, challenges in market expansion, legal claims, exchange rate fluctuations, general economic conditions, and geopolitical events (e.g., war against Hamas)[9] - BOS undertakes no obligation to publicly update or revise any forward-looking statements[9] Contact Information Provides contact details for investor relations and the company's CEO for additional information Investor and Company Contacts Provides contact details for investor relations and the company's CEO for additional information - Investor Relations Contact: Matt Kreps, Managing Director, Darrow Associates (+1-214-597-8200, mkreps@darrowir.com)[8] - Company CEO Contact: Eyal Cohen (+972-542525925, eyalc@boscom.com)[8]