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B.O.S. Better Online Solutions .(BOSC) - 2024 Q4 - Earnings Call Transcript
BOSCB.O.S. Better Online Solutions .(BOSC)2025-03-31 12:30
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Financial Data and Key Metrics Changes - The company reported revenues of 40millionforyear′24,adecreasefromtherecord40 million for year '24, a decrease from the record 44 million in year '23, reflecting a return to normalized purchasing after post-COVID restocking [15] - For year '25, the company projects revenues of 44millionandnetincomeof44 million and net income of 2.5 million, indicating a 10% year-over-year increase [16][23] - The backlog increased by 35% to 27millionattheendofyear′24,drivenbyexposuretotheboomingdefensesector[16]BusinessLineDataandKeyMetricsChanges−Thesupplychaindivisionhasdoubleditsengineeringteamandtripledthenumberofmanufacturersrepresented,enhancingmarketpositionandgrowthtrajectory[7]−TheRFIDdivisionisexpandingitssalesforcetocapturethereboundintheIsraelicivilmarketandwilladdoff−the−shelfpackingmachinesforlogisticscenters[18]−TheroboticdivisionispreparingforitsfirstinstallationofaroboticproductionlineinEuropeinthefirsthalfofyear′25[19]MarketDataandKeyMetricsChanges−TheIsraelidefensebudgetroseby7327 million at the end of year '24, driven by exposure to the booming defense sector [16] Business Line Data and Key Metrics Changes - The supply chain division has doubled its engineering team and tripled the number of manufacturers represented, enhancing market position and growth trajectory [7] - The RFID division is expanding its salesforce to capture the rebound in the Israeli civil market and will add off-the-shelf packing machines for logistics centers [18] - The robotic division is preparing for its first installation of a robotic production line in Europe in the first half of year '25 [19] Market Data and Key Metrics Changes - The Israeli defense budget rose by 73% year-over-year, while Europe's defense budget increased by 16% year-over-year, positively impacting key clients [17] - The company has achieved 4 million in overseas sales in year '24 from its supply chain division, indicating successful international expansion [19] Company Strategy and Development Direction - The growth strategy focuses on strengthening relationships with defense clients and expanding internationally [17] - The company aims to deepen its offerings to defense clients, including the recent addition of cable in line [18] - The company is leveraging its Israeli defense client base to align with their global subcontractors for international growth [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for year '25, citing a growing backlog and favorable trends in the defense sector [16][23] - The company is in excellent financial shape with 21millioninequityandzerobankdebt,providingflexibilityforstrategicgrowth[23][24]−Managementhighlightedthesignificantdiscountatwhichthecompanyistradingcomparedtobroadermarketbenchmarks,indicatingacompellinginvestmentopportunity[20][21]OtherImportantInformation−ThecompanyhaspartneredwithaUS−basedinvestorrelationsfirmtoenhanceitspresenceintheUScapitalmarket,resultinginincreasedtradingvolumefrom4,000sharesto58,000shares[21][22]−Thecompanyrecordedanimpairmentchargeof21 million in equity and zero bank debt, providing flexibility for strategic growth [23][24] - Management highlighted the significant discount at which the company is trading compared to broader market benchmarks, indicating a compelling investment opportunity [20][21] Other Important Information - The company has partnered with a US-based investor relations firm to enhance its presence in the US capital market, resulting in increased trading volume from 4,000 shares to 58,000 shares [21][22] - The company recorded an impairment charge of 1.2 million related to goodwill, impacting net income for year '24 [32] Q&A Session Summary Question: Guidance on the new robotics line in Europe and its impact from the war in Ukraine - Management clarified that they do not have direct sales in Europe but align with major Israeli clients who export and require local production [28][29] Question: Clarification on tax loss carry forward - Management confirmed approximately 30millionincarryforwardtaxlosses,whichcouldprovideupto30 million in carry forward tax losses, which could provide up to 6 million in future tax savings, with only $1 million recognized as an asset [31] Question: Impact of new head of procurement on defense contracts - Management expressed confidence that the new hire will help capitalize on opportunities in the defense market and indicated updates will be provided if significant developments occur [35]