B.O.S. Better Online Solutions

Q1 2024 Earnings Conference Call

5/30/2024

spk03: Thank you for joining our call. We are excited to meet you again at our quarterly video meeting. Today, we have a comprehensive agenda. We will start today by reviewing our financial results, business trends, and growth strategies. Let's begin with the looking forward statement.
spk01: 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 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.
spk03: Thank you. The first water reflects the recorded income of $740,000. We have achieved this goal gradually and consistently as a team, reflecting our collective effort and dedication. Our 12-month revenue amounted to $43 million, every day $3 million, net income of $2.1 million and EPS in the trailing 12 months of 36 cents. This results put us on track toward achieving our financial targets for 2024, which are revenues of $46 million and net income of $2.2 million. have a relatively strong balance sheet with 34 million dollar assets 20 million dollar shareholders equity which count to 60 percent of the assets a surplus of cash at the floors of 1.7 million our business performance combined with our healthy balance sheet provide us with the right ecosystem for thinking exploring The following slide presents post-salary valuation ratios based on the trading travel months. The market cap ratio to net income is 7.7. The market cap ratio to projected net income for year 24 is 7.3. is only 82%. Despite our positive trends, our market cap remains roughly unchanged. It was $15 million on December 21 when we earned only half a million dollars a year and remain $50 million today when we earn more than $2 million to also 365%. I hope both will have finalist coverage this year to explore both value of utility to more investors. This is great. The supply chain division has expanded the list of electronic manufacturers and increased its sales force. Hence, we expect revenue growth from those programs in 2024 and beyond. In addition, we are facing increased demand from the Israeli defense segment and may anticipate The Intelligent Robotic Division is successfully transitioning from the Israeli civilian sector to the Israeli defense sector and can promote its continuing growth in 2024. This division revenues in the first quarter of the year do not reflect its potential revenues for year 2024 because a significant portion of the orders you receive are in the production. in this way. We have significantly expanded our offering for new students and expect this will yield revenue flows in the year 2026. I want to turn the call to Mr. Zink and Mr. Chairman. Please. Thank you, Eyal. Good morning and afternoon, everybody. In reference to Eyal's review and within the broader framework, Boston's first ordering record had income are the primary effect of the comprehensive competencies build-up process that Eyal has been leading for the past years. When in effect, the meaning of it is rejuvenation of most of us core business, while bringing it to a consistent course of sound organic sales and profit growth as we see. Specifically, freshwater was characterized by the continued implementation and expand organic source of income, as well as strengthening the organizational structure and the basic process in the activity. Looking ahead to the rest of the year and next year, combining our strong competencies with favorable market dynamics in the Israeli defense and high-tech segments, we're optimistic about the future. which should lead to a further growth. In addition, we plan to expand the RFAA division footprint to the production floor and warehouse to the retail stores. I trust both Steve led by Ari to achieve these challenging goals. Our team's dedication, expertise, and hard work have been instrumental in our success so far, and I am confident that they will continue to drive I will grow and achieve our goals. Thank you for your attention. I will now hand over back presentation to Eyal. Thank you. Thank you, Ziv. At this time, we begin the Q&A session. If you have questions, please unmute or present yourself while the other participants remain mute. Thank you.
spk02: Thank you. And I would like to know why the revenue of the 1st quarter of this year. Was the less than last year. And is there any impact of the wall that influence this quarter? And what do you think about the gross margin? Do you think these levels. are going to stay do you think they can improve and do you think that the second quarter could be better because of the war or there's no impact that's all for now okay the increasing revenues compared to the first apartment quarter it's not a sign to any effect
spk03: And because of that, we keep on our outlook for the year. We keep it at the level of $46 million. And regardless of the costs, by the way, part of the decrease is related to deferred revenues of the robotic division, which had very low revenues in this quarter because recognize the revenues upon the leader and regarding the war regarding the situation in israel and about 75 percent of our business is linked to the israeli defense segment and we try we are trying to increase this portion and absolutely it supports our It will support our continuing growth during this year and I believe beyond.
spk02: Okay, so you'll see another space of improvement for the gross margin?
spk03: I'm not sure regarding the gross margin, gross profit margin, but regarding the revenues, we will bring the $46 million this year and we believe we will continue the growth of revenues next year as well okay thank you thank you
spk00: Hey, congratulations on the great quarter and the record earnings. It's nice to see that. I know you just mentioned that about 75% of your revenue is defense related. What was this a year ago? How much has the defense business grown?
spk03: I guess it was about 60%. And it will continue to grow because as long as the robotic division grows, I think that 90% of its revenue is going to be given to the defense segment. And regarding the supply chain division, we are seeking for more opportunities in the defense segment to extend our offering So we will gain more bids. For example, we, in the recent advances, we integrated a new line of products to the defense segment, which are wires. And those wires, in these wires, we represent an American company, which is Wiremaster. And we believe this
spk00: Okay, that's great to hear. I know the last caller had talked about the first quarter revenue being a little lower. During the last conference call, you had said that there was some business in Q4. that was being pushed back to Q1 and Q2. With everything that's happened and given your projection of $46 million in revenue, can we expect a stronger Q2 and Q3 than last year?
spk03: I think we don't provide the outlook based on factors, but in general, Year 24 would be better than year 23 by revenues and by leverage.
spk00: Okay. And then finally, it was nice to see the profitability in the robotics line. If you had to estimate which one of your segments would have the greatest revenue growth, do you think the robotics is finally poised to have a
spk03: significant revenue this year and and and maintain the profitability that you've now achieved yeah i think in the the robotic division has passed the process from from gross losses the worst okay then after from operating loans to avoiding profit and then after from breaking into from break-even to profit. So it's a process, it's a natural process. And we see that in the recent three or four quarters, it is break-even, and then in fourth quarter last year became profitable. And we are working very hard to continue this trend this year. And absolutely, I think that this year, the robotic division will have the highest growth rate. G.L.A. But we have to work very hard to deliver. G.L.A. To produce on the border to solve all the other project that we are committed to the defense and then that's another aspect of that is that I think that in the robotic division, we have successfully. G.L.A. built a relatively strong competitive position in the market need the segments which we are focusing on. Meaning that you can, and everybody, you know, can trust that if we keep the total work that we're doing there, then revenues and profits will follow. Okay, because the competitiveness is there, and the segments are poised to grow during market trends.
spk00: Okay? Okay. And then one quick follow-up. I really appreciated the slides showing how undervalued the company is. By my math, I now have your book value per share of over $3.40 a share based on this quarter. Is there any... you know, M&A activity, whether you acquiring some other companies or has there been interest in possibly, you know, you being acquired? I just, I don't, I can't understand why your stock is so undervalued. And, you know, at this time, is there any M&A updates you can give us?
spk03: Yeah, you're right. As reflected in my slide, the price is undervalued, the company is undervalued, the market is undervalued. The step that I believe we need to do beyond the M&A, which is not to increase the share price, but for the long term to grow the company. So what I think most of my efforts are to impact on our valuation. The process takes too long. I hope that today we have on the net a report. But I will try to complete the rule during the second quarter. Regarding the MLA, we are seeking the opportunities for MLA. And for all the divisions, we have several processes that we are checking. And this is established for now.
spk00: Thank you for taking my questions.
spk03: Thank you. Any further questions? OK. So we appreciate your active participation and the valuable insight of Shuki and Tor. If you have any further questions or concerns, please feel free to reach out to us.
Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

-

-