B.O.S. Better Online Solutions

So good morning and thank you for making the time to join our full year 2025 results call. Joining me is Mr. Moshe Zaltzer, our chief financial officer. And I'm pleased to report that 2025 was an outstanding year for BOSS on multiple metrics. And I am grateful to our team for the hard work and commitment in achieving these results. We delivered strong revenue growth throughout the year, setting multiple record quarters and increasing our outlook three times. Ultimately, we completed the year 25, growing 27% year-over-year to record $51 million in revenues, And our net income grew year over year by 57% to a record $3.6 million, demonstrating our ability to drive a profitable growth leverage in our model. Even with this growth, we exited the year with a substantial contracted backlog of $24 million, giving us good visibility into the year ahead. Looking forward, I want to share the key term that will shape our trajectory in 2026. Demand in the defense sector remains robust and is expected to continue driving growth in our supply chain and robotic division throughout the year. We maintain strong backlog visibility and healthy customer relationships across this segment. Alongside that, we are taking steps to extend our geographic reach. In March 2026, we appointed an Indian company to represent Boston in the Indian market. As India is emerging as a growing subcontracting hub for global defense programs. This is a meaningful step in our global extension strategy. On the product side, Our organic growth model is built around continuously broadening the portfolio of manufacturers we represent and embracing the new technologies they develop. Because our manufacturing partners invest heavily in next-generation solutions, we benefit from self-replenishing flow of innovative products to bring our clients. Turning to our RFID division. The ongoing geopolitical tension in Israel since October 23 have continued to weigh on the Israeli commercial market, which represents the primary revenue base for this division. Therefore, we recorded goodwill impairment charges of $700,000 in 2024 and an additional $1.2 million in year 25. To reduce our exposure to geopolitically sensitive Israeli civil market, our 2026 strategic plan focuses on growing our business, the RFID business, by entering the hospital segment, more stable and higher growth vertical within Israel. Successful penetration of this segment will require broadening our product offering, hiring personnel with relevant domain expertise, and establishing new customer relationships. We expect to make this investment true throughout 2026, with revenue contribution expected to begin in 2027.

On the currency front, the USD to ISD exchange rate opened 2026 at 3.18 ISD per dollar, reflecting an approximately 13% devaluation of the dollar against the ISD compared to the start of 2025. As a result, we expect our Israeli shekel denominated operating expenses to increase by approximately $600,000 in 2026 compared to 2025. Another effect of the dollar's weakness in 2025 was $800,000 in non-recurring currency exchange income, we recognize that year, which arose from the revaluation of the Israeli shekel denominated balance sheet items, following the sharp dollar decline. The gain is not expected to repeat in 2026, assuming the rate remains at approximately 3.18 Israeli shekel per dollar. Combined, these two currency-related items represent approximately $1.4 million in headwinds going into 2026. Separately, the $1.2 million good-winning permit charged taken in 2025 is not expected to recur in 2026, which partially offset the boom, leaving a net year-over-year drag of approximately $200,000. Our financial foundation has never been stronger. Cash and equivalents have grown to $11.8 billion, up from $3.6 million at year-end 2024. Share orders equity amount to almost $29 million, up from $21 million at year-end 2024. We have positive working capital of more than $22 million, and bank debt amounted to only $1.7 million.

This strong balance sheet gives us the flexibility to capitalize on opportunities as they arise, supporting both organic growth and strategic acquisitions. We are actively evaluating a range of acquisition opportunities, each of which must meet our strict criteria, including a proven track record of profitability and high revenue visibility. Turning to our outlook, consistent with our established policy of issuing conservative initial guidance, with updates provided as the year progresses, We are projecting revenues of approximately $51 million and net income of approximately $3.6 million for 2026. We look forward to updating you as the year progresses and our momentum becomes clearer. On the investor relations front, in 2025, I conducted a non-deal roadshow comprising 44 one-on-one meetings with potential investors and presented at two investor summits. Our stock appreciated 42% during that year, year 2025. Yet, a significant valuation gap remains relative to our benchmark index, Russell 2000. Over the past four years, both delivered compounded annual earnings per share growth of 60%, compared to 12% of the Russell 2000, five times the rate of the index. Despite this performance, we trade near book value, while Russell 2000 trade at roughly 2.4 times book value. And our price to earn in Gratia stand at approximately 9 times compared to 20 times for the index. We attribute much of this discount to limited market awareness. To address this, we will shift our higher strategy toward digital marketing starting this April, engaging a lay communication and investor relation firm specializing in digital investor outreach. We believe this approach will meaningfully expand our investor reach and visibility in a significantly shorter time frame rather than the traditional IR method. With that, we are happy to take your questions, and if you have any questions, please unmute yourself.