B.O.S. Better Online Solutions

Ladies and gentlemen, thank you for standing by. Welcome to the BOS conference call. All participants are at present in listen-only mode. As a reminder, this conference call is being recorded and will be available on the BOS website as of tomorrow. Before I turn the call over to Mr. Cohen, I would like to remind everyone that forward-looking statements for the respective company's business, financial condition, and results of its operations are are subject to risks 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, risks and 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 for joining our call today. Mr. Zeb Dekel, Chairman and Moshe Zeltzer, CFO, on the call with me today. I am excited to meet you again at our quarterly video meeting. During this meeting, we'll review our financial results, business trends, and growth strategy. After that, we'll have a Q&A session. Year 23 reflects record results of both. We have achieved this goal gradually and consistently since year 21. During those years, our revenue grew from $33.6 million in year 21 to $44.2 million in year 23. EBITDA grew from less than $1 million in year 21 to more than $3 million in year 23. Our net income grew from half a million dollars in year 21 to $2 million in year 23. And our EPS grew from $0.08 in year 21 to $0.35 in year 23. During those years, we also strengthened our financial position. Our total assets grew from $25 million in year 21 to $32 million in year 23. Our shareholders' equity increased from $40 million in year 21 to $90 million in year 23, and our cash net of bank loans remained positive, standing at $1.2 million at the end of year 23. Despite all those positive trends and progresses that have been made during this period, our market cap remained roughly unchanged. It was $15 million on December 21 and remains $15 million, $60 million today. The following slide present both current valuation ratio. The market cap ratio to net income of year 23 is 7.7. Market cap ratio to projected net income for year 24 is 7.1. Market cap ratio to EBITDA of year 23 is 5.1. And market cap ratio to shareholders' equity is less than one, it's 82%. I hope that both will have analyst coverage this year to expose our story to more investors. Business traits. In year 23, the supply chain division expanded the list of electronic manufacturers it represents and increased its sales force. products in year 24 and four. In addition, the current situation in Israel has increased the demand for Israeli defense segment and we anticipate that it will positively affect the supply chain division revenues in year 24. On the other hand, during year 23, this division benefited from high demand for electronic components because of the shortage in the market during the COVID period. We expect that in year 24, the market will return to standard demands. The RFID division sales are mainly to logistics centers in Israel. Its revenues in year 23 decreased by 10% affected by the slowdown in the Israeli civilian sector. During year 23, we significantly expanded our offering portfolio and we expect this will yield revenue growth in year 24. The Intelligent Robotics Division is successfully transitioning from the Israeli civilian sector to the Israeli defense sector, which will promote its continued growth in year 24. According to this, those business trends, we anticipate $46 million revenues in year 24, a net income growing by 10% to $2.2 million. I want to turn the call over to Mr. Ziv Dekel, Chairman. We will elaborate on our growth strategy.

ZIV DEKEL, Thank you, Riyad. And good morning and afternoon to everybody. In reference to Eyal's points and within a broader framework, Bosch's 2023 record results are the primary effect of a thorough, comprehensive, in-depth capabilities and organizational build-up and enhancement process that Eyal has been leading and conducting for the past years. Hence, reviving most of Bosch's core business of capability-based, sound organic growth of sales and profit. Combining this with favorable market dynamic trends in the Israeli defense and high-tech segments, we plan to continue expanding the business lines of all our divisions within these segments. These segments are the premium segments in the Israeli market. In addition, we plan to expand the RFID division footprint from the production floor and warehouse to the retail store. Also, we continue our M&A efforts focusing on local competitively and operatively synergetic companies. I trust Bosch's team, led by Eyal, to win these challenging processes on the broader perspective of all over the company strategy. Thank you for your attention. I will now hand over the presentation back to Eyal.

Thank you, Sif. At this time, we begin the Q&A session. If you have questions, please unmute and present yourself, while all other participants remain mute. Thank you. Again, if you have questions, please unmute and present yourself while all other participants remain mute. Thank you. All right.

I had a question regarding your robotics division. It looks like it was the first time it was profitable. Is that correct, in the fourth quarter?

Yeah. Hi, Todd. How are you? I'm pretty good. Thank you. So in the second quarter of this year, of year 23, it was breakeven. Also in the third quarter and in the fourth quarter, it's profitable.

Okay. And do you expect that to be your fastest growing division in 2024?

Yeah, it will increase its revenue significantly in percentage, yeah, in year 24, according to year 23, yes.

Okay, and finally, the fourth quarter revenues, you know, were a little bit weaker due to the war that began in October. Do you expect a lot of that business, was it pushed to the first quarter, or will we see that just come in throughout the year?

Yeah, I believe that it was pushed to the first and then the second quarter and it gave us comfort to provide the outlook for year 24 for growth.

Okay, and you had a really nice slide there kind of showing your market cap and some of your valuations maybe in the future or if you could add To that, maybe you could include some other companies in a similar industry as yours for a competitive standpoint. Obviously, just from straight valuations, you look extremely undervalued. Is there any other Israeli companies in your industry or any other companies that maybe you could compare those numbers to?

Yeah, it's good. I hope there will be an analysis coverage during this year. I hope that by the first half of the year. And I'm sure that in that report, we will see this comparison analysis.

Okay, thank you for taking my questions. Congratulations on a really strong year, and I look forward to 2024. Thank you.

Thank you, Todd.

Any further question? OK. There are no further questions at this time. So thank you for joining our call today. We look forward to meeting you again on both first quarter call, which will be in May 24.