B.O.S. Better Online Solutions

Ladies and gentlemen, thank you for standing by. Welcome to the BOS Year 2021 Results Conference Call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded and will be available on the BOS website as of tomorrow. With us on the line today are Mr. Eyal Cohen, CEO, and Mr. Moshe Zeltser, CFO. Before I turn the call over to Mr. Cohen, I would like to remind everyone that forward-looking statements for the respected company's business, financial condition, and results of its operations are subject to risk and uncertainties, which could cause actual results to differ materially from those contemplated. Such forward-looking statements include, but are not limited to, product demand, pricing, market acceptance, changing economic conditions, risk in product and technology development, and the effect of the company's accounting policies as well as certain 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. Eyal Cohen, CEO. Mr. Cohen, please go ahead.

Thank you. Hello, and thank you for joining our quarterly call. The wide product offering of BOSS with 2,000 active clients are an excellent platform for business development that will result in long-term organic and external growth. Regarding both supply chain division, I believe that the anticipated increase in the defense budget in Europe will positively impact the division's revenues in year 22, because most of its sales are associated with the Israeli defense industry. Regarding both RFID division, I expect that the acquisition of the Degesh business that we recently announced will positively impact the revenues of this division in year 22. Regarding the robotic division, the continuing workforce shortage in factories and logistics centers is a great growth opportunity for this division. To conclude, we anticipate that our revenues for year 22 will exceed $35 million compared to $33.6 million in year 21. On the cost aspect, we have dealt with micro events that have increased our cost, such as longer lead time of products and commodities, which have reduced our operation efficiency and deferred revenue. Inflation in salaries, commodities, and devaluation of the US dollar against the NIS that increased our operational costs. We are doing extensive actions to enroll those costs to our client customers. At the micro level, the recovery of the robotic division has been significantly slower than we anticipated, and it negatively affected the year 21 financial results we continue our effort to bring the robotic division to a breaking point in year 22. to conclude we expect year 22 net income to exceed 1 million dollar as compared to 450 000 in year 21. let's complete my review and I will now take your question, please.

Thank you. Ladies and gentlemen, at this time, we'll begin the question and answer session. If you have a question, please press star 1. If you wish to decline from the polling process, please press star 2. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. The first question is from Todd Felt of Aegis Financial Services. Please go ahead.

Oh, thanks for taking my questions. Good morning, Yael and Avi. I was wondering if the supply chain crunch or the war in Ukraine, has it created any problems or opportunities for the company? And can you add some color to that?

Thank you, Todd. I believe that the anticipated increase in the defense budget in Europe, because of the current military tension there, will positively impact the division's revenues in year 22 because most of the sales of the supply chain divisions are to the Israeli defense industry, and they assume that this industry will take a significant portion on this military budget.

Okay, and we also had some questions on the expanding business in the UAE. I know that's a new avenue for business that we didn't expect was going to happen a couple years ago. Is that continuing to expand, and do you have any other countries in the region that are starting to give you orders that you weren't expecting?

Currently, the client that we start to do business with them, a year ago, we got a ongoing orders from this client, so the business is going very well. I think it's a matter of time that we will, as the Israeli defense industry will go into this market, we will increase our revenues in this market as well.

Okay, thanks for taking my questions and congratulations on a good quarter.

Thank you very much.

If there are any additional questions, please press star 1. If you wish to decline from the polling process, please press star two. If you are using speaker equipment, kindly lift a handset before pressing the numbers. Your questions will be pulled in the order they are received. Please stand by while we pull for your questions. There are no further 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.bosscom.com by tomorrow. Mr. Cohen, would you like to make your concluding statement?

Thank you for joining our call today and I look forward to meeting you on our next call or before. You can contact me anytime by phone or by email. Thank you.

This concludes our BOS year 2021 results conference call. Thank you for your participation. You may go ahead and disconnect.