B.O.S. Better Online Solutions Ltd. (BOSC) on Q1 2022 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the BOS First Quarter 2022 Results Conference Call. All participants are at present in listen-only mode. Following management’s formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference call is being recorded and will be available on the BOS website as of tomorrow. With us on the line today are Ziv Dekel, Chairman; Mr. Eyal Cohen, CEO; and Mr. Moshe Zeltzer, CFO. Before I turn the call over to Mr. Dekel, I would like to remind everyone that forward-looking statements for the respective company's business, financial condition, and results of its operations are subject to risks and uncertainties, which could cause actual results to differ materially from those contemplated. Such forward-looking statements included, but are not limited to, product demand, pricing, market acceptance, changing economic conditions, risks and product and technology development and the effect of the company's accounting policies as well as other risk factors, which are detailed from time to time in the company's filings with the various securities authorities. I would now like to turn the call over to Mr. Ziv Dekel, Chairman. Mr. Dekel, please go ahead.
Ziv Dekel: Thank you for joining our earning call. I'm encouraged by the strong opening of the first quarter of the year in 2022. This result represents both a comprehensive enhancement process of the company's core capabilities, improvement of the market competitive position, all led by Eyal and the management team, as well as the favorable market trends like the global shortage of electronic components and the conflict in Europe, which catalyzed the Supply Chain division and the return of the Israeli economy to its full growth path positively affecting the RFID division. Looking forward, we can expect continuous improvement due to three aspects. The first aspect is the continuation of enhancement of the company core capabilities processes, its market competitive position, wider product and service offering. Two, the fruition of the acquisition of the Dagesh in the RFID division. And three, the positive effect of the favorable global trends of which specifically the Industry 4.0 and the shortage of workforce to catalyze the Robotic division. I trust the management team led by Eyal's quality, powerful and dedicated leadership to successfully carry the strategic and operative BOS challenges. I would like to turn the call over to Eyal Cohen, CEO.
Eyal Cohen: Thank you. It was a quarter with a significant development. We received orders for $13.8 million, which reflects an increase of 60% over the comparable quarter last year. Most of the orders are for delivery this year. Among this -- among the significant orders were $2.4 million from an existing Israeli customer of the Supply Chain division belongs to the aviation industry, $600,000 order from a client -- a current U.S. client of the Supply Chain division belongs to the defense industry. That order demonstrates the clear added value for our Supply Chain services to manufacturers worldwide. Our Intelligent Robotic division received a $600,000 recurring order for an industrial robotics line. This order further support our focus on sales to customers with ongoing extensive automation needs. On the M&A side, our RFID division acquired one of its competitors, which expect to create operational synergy, increase our market share and strengthen our market position. On the operational side, we made a significant step to reduce our operating expenses as we acquired part of the facilities BOS has been listening. In conclusion, this development advances towards our financial targets year 2022, which our revenues over $35 million and net income to exceed $1 million compared to a net income of $450,000 in year 2021. That's complete my review. Thank you.
Operator: Thank you. Ladies and gentlemen, at this time we will begin the question-and-answer session. The first question is from Todd Felte of Advisory Group Equity Services. Please go ahead.
Todd Felte: Congratulations on a great quarter as Ziv and Eyal, I know shareholders must be very happy with it. I had one question. Since March, you've announced two or three contracts with the defense industry customers and you spoke of the recent surge of orders from the military contract in Europe. And I've also been reading how Germany and other countries are spending billions on missile defense systems from Israel. Have you been given any forecast or estimates for many of your defense industry customers on the upcoming pipeline of orders? And do you expect that pipeline to continue beyond 2022 into 2023 and further?
Eyal Cohen: Hi, Todd. Thank you for your question. We are getting positive indication from our clients for growing demand for our components. And there are more orders on the pipe as we have in every year. But this year, it is in a greater amount. And I believe that this trend will continue this year and hopefully next year as well.
Todd Felte: Okay. And you're still -- it sounds like you're still sticking with your estimates for 2022 of over $35 million in revenue and $1 million plus in net income. And do you feel that there's a chance you could beat these numbers if the orders continue to come through?
Eyal Cohen: Yes. There is a chance. As you see, the rate, the progress in the first quarter, we made revenues of more than $10 million, which is a rate -- annual rate of $40 million. And the net income is about $300,000, which exceeds the $1 million forecast. But let's see the second quarter results, and then maybe we will update our forecast.
Todd Felte: Okay. That's great to hear. I know that the first quarter is usually a little softer for you. I think the previous high that I had ever seen was only around $8 million in revenues. So, the $10.8 million is extremely encouraging and keep up the good work. Thank you.
Eyal Cohen: Thank you, Todd.
Operator: There are no more questions at this time. Before I ask Mr. Cohen to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available on the company's website www.boscom.com by tomorrow. Mr. Cohen, would you like to make your concluding statement?
Eyal Cohen: Yes. Thank you. Thank you for joining our call today, and looking forward to meet you on our next call. You are welcome to contact me anytime by phone or email. Thank you.
Operator: This concludes the BOS first quarter 2022 results conference call. Thank you for your participation. You may go ahead and disconnect.
