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 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.

Good morning everyone and welcome to BOSS first quarter 2025 earning call. I am joined today by our CFO, Mr. Roshan Zeltser. We delivered exceptional results this quarter, with record revenues and record net income that underscored the strength of our defense-focused strategy. The results reflect years of deliberate investment in product diversification and operational excellence, positioning us to capitalize on the defense sector's robust growth trajectory. With our strong Q1 performance and a healthy $22 million backlog, we are raising our confidence in exceeding our full year 2025 targets of $44 million in revenues and $2.5 million in net income. Our outlook remains grounded in the organic opportunities we see today and maintaining our conservative approach. Our growth strategy rests on two foundational pillars. First, dipping client relationships. We are expanding our value proposition to our defense customer through complimentary offering, exemplified by our successful launch of a new cabling line that leverages existing client relationships. Second, international expansion. We are strategically expanding overseas by partnering with our Israeli defense clients' global subcontractors. This approach generated $4 million in overseas sales in year 2024 to our supply chain division. Our robotic division will install its first European production line this year, marking a significant milestone in our international growth. Both present a compelling investment opportunity built on four key strengths. First, we hold a strong and expanding position in the global defense industry during a period of accelerating market growth. The defense sector fundamentals continue to strengthen globally. Israel defense budget increased 73% year over year, while Europe's rose 16%. This creates a sustained demand environment that directly benefits on our business. Second, we have demonstrated consistent profitability with steady net income growth year after year with a compounded annual growth of 49% through the years between the years 21 and 25. Third, Our balance sheet provides flexibility for strategic growth. With 23 million in equity, zero bank debt, and $4 million in cash, we have the financial foundation to execute our expansion plans while maintaining operational stability. Fourth, BOSS is traded just 10 times on net income and price-to-book value ratio of 1. Our valuation offer attractive upside compared to broader market multiples. Thank you for your time and attention. Moshe and I are now happy to take your questions.

Hey guys, congratulations on a great quarter. It was nice to see the margin improvement. Can you talk about margins moving forward as the company continues to grow and expand?