EX-99.1 3 c27563_ex99-1.txt EXHIBIT 99.1 B.O.S. - BETTER ON-LINE SOLUTIONS LTD. B.O.S. BETTER ON-LINE SOLUTIONS LTD. ANNOUNCES FINANCIAL RESULTS OF OPERATIONS FOR THE FOURTH QUARTER AND 2002 2002 REVENUES FROM CONTINUING SEGMENT GREW BY 56% COMPARED TO 2001, WITH NET PROFIT OF $72,000 ACHIEVED FOR FOURTH QUARTER OF 2002. TERADYON, ISRAEL -- March 25, 2003 -- B.O.S. Better On-line Solutions Ltd. (the "Company" or "BOS") (NASDAQ: BOSC, TASE:BOSC) announced today its financial results for the year ended December 31, 2002. Revenues for the fourth quarter of 2002 were significantly higher than the parallel quarter in 2001, totaling $2.89 million compared to $1.06 million for the fourth quarter of 2001. Total revenues for 2002 were $9.44 million compared to $6.04 million in 2001, a 56% increase. Net profit for the fourth quarter of 2002 from continuing segments was $72,000 (or $0.01 per share), compared to a net loss of $1.12 million (or $0.09 per share) for the fourth quarter of 2001.Net loss for 2002 from continuing segments was $433,000 (or $0.03 per share), compared to a net loss of $4.66 million (or $0.38 per share) for 2001. Total cash and investments were $9 million as of December 31, 2002. Focusing on its core business, the Company improved its operational structure and expanded its customer base. Consequently, revenues increased by $3.4 million and the Company saved in excess of $1 million in operating expenses. FOURTH QUARTER 2002 - CONSOLIDATED STATEMENT OF OPERATION (CONTINUING OPERATIONS): Revenues for the fourth quarter of 2002 were $2.89 million, generated mainly from BOScom core product sales of IBM midrange-to-PC and LAN connectivity solutions and IP Telephony equipment. This represents a 34% growth compared to $2.15 million for the third quarter of 2002, and a growth of 172% compared to the fourth quarter of 2001. Gross profit for the fourth quarter of 2002 was $2.19 million. This represents a 40% growth compared to $1.56 million for the third quarter of 2002. Gross profit for 2002 was $7.14 million compared to $3.34 million in 2001, representing growth of 114%. Selling, marketing, general and administrative expenses for the fourth quarter of 2002 totaled $2.04 million, compared to $1.96 million during the third quarter of 2002, and $1.44 million for the fourth quarter of 2001. Net profit for the fourth quarter of 2002 totaled $72,000, compared to net loss of $351,000 for the third quarter of 2002, and $1.12 million loss for the fourth quarter of 2001. Israel (Izzy) Gal, B.O.S.' CEO stated: "Our decision to focus on our core business results a steady increase in sales. The Company's core business sales grew by 56% compared to 2001 sales.. Most of the revenues were contributed by the Company's computer communications activity, and we've experienced good acceptance and growth with our IP telephony products as well." FOURTH QUARTER 2002 - PRO FORMA: The Pro forma Statement of Operation results are net of goodwill amortization, restructuring costs, expenses related to previous years, and other expenses (see section (a) on the Pro-Forma Statement of Operation). The net profit from continuing segments for the fourth quarter of 2002 totaled $122,000, compared to a net loss of $301,000 for the third quarter of 2002, and a $625,000 loss for the fourth quarter of 2001. The net loss from continuing segments in 2002 totaled $243,000 compared to a net loss of $3.02 million in 2001. The pro forma net loss related to the discontinued segment for the fourth quarter of 2002 amounted to $13,000, compared to a loss of $827,000 for the third quarter of 2002 and $1.62 million for the fourth quarter of 2001. Net pro forma profit for the fourth quarter of 2002 totaled $109,000 (or $0.01 per share), compared to a net pro forma loss of $1.13 million (or $0.09 per share) for the third quarter of 2002 and $2.25 million (or $0.18 per share) for the fourth quarter of 2001. B.O.S. - BETTER ON-LINE SOLUTIONS LTD. FOURTH QUARTER 2002 - DISCONTINUED SEGMENT In 2002, the Board of Directors of the Company decided to sell its wholly owned U.S. subsidiary, Pacific Information Systems, Inc. ("Pacinfo"), a commercial VAR and e-commerce system solutions provider. Due to this decision, the financial statements of the Company disclose the financial information related to the Pacinfo VAR segment, in accordance with accounting standards for "discontinued operations". During the fourth quarter of 2002, based on the poor economic climate and based upon its severe financial situation, the Company initiated a plan to cease operations of Pacinfo and is trying to reach an arrangement with Pacinfo's creditors. The net loss from discontinued segment for the fourth quarter of 2002 was $1.35 million (or $0.11 per share) and $7.67 million (or $0.62 per share) for the entire year. Net loss for the fourth quarter of 2002 , including the discontinued segment , totaled $1.28 million (or $0.11 per share), compared to a net loss of $1.99 million (or $0.16 per share) for the third quarter of 2002, and a $5.81 million loss for the fourth quarter of 2001 (or $0.47 per share). Net loss for 2002 , including the discontinued segment , totaled $8.10 million (or $0.65 per share), compared to a net loss of $12.97 million (or $1.05 per share) for 2001. ABOUT B.O.S. Through its wholly owned subsidiary, BOScom, the Company develops, produces and markets technologically complex, multi-functional, cross-enterprise communication and networking products. Marketed under the BOSaNOVA brand, these products are renowned for their simplicity of use, quality, and reliability. The IP Telephony line offers innovative convergence migration solutions that leverage a corporation's existing equipment infrastructure. The legacy line provides solutions for IBM midrange-to-PC and LAN connectivity and GUI emulation, and printing solutions that are operating system-independent. B.O.S. was established in 1990 and became a public company traded on the NASDAQ National Market in 1996 (Nasdaq:BOSC), and on the Tel Aviv Stock Market in 2002 (TASE:BOSC). For further information, please contact Mr. Noam Yellin, at Tel. +972-3-527-4949 nyellin@netvision.net.il. Please visit our website, http://www.boscorporate.com. THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN REFLECT MANAGEMENT'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE THE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS, ALL OF WHICH ARE DIFFICULT TO PREDICT AND MANY OF WHICH ARE BEYOND THE CONTROL OF BOS, INCLUDING, BUT NOT LIMITED TO, THOSE RISKS AND UNCERTAINTIES DETAILED IN BOS' PERIODIC REPORTS AND REGISTRATION STATEMENTS FILED WITH THE U.S. SECURITIES EXCHANGE COMMISSION. B.O.S. - BETTER ON-LINE SOLUTIONS LTD. - - CONSOLIDATED BALANCE SHEETS ================================================================================ U.S. DOLLARS IN THOUSANDS DECEMBER 31, ---------------------- 2002 2001 -------- -------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 5,246 $ 8,325 Restricted cash 700 -- Short-term marketable securities 819 -- Trade receivables 1,523 1,495 Other accounts receivable and prepaid expenses 382 550 Inventories 855 307 -------- -------- TOTAL CURRENT ASSETS 9,525 10,677 -------- -------- LONG-TERM INVESTMENTS: Long term marketable securities 2,226 2,884 Long term prepaid expenses 15 87 Other investment 2,042 2,042 -------- -------- TOTAL LONG-TERM INVESTMENTS 4,283 5,013 -------- -------- PROPERTY AND EQUIPMENT, NET 965 1,296 -------- -------- OTHER ASSETS, NET 551 711 -------- -------- ASSETS RELATED TO DISCONTINUING SEGMENT 1,115 13,070 -------- -------- TOTAL ASSETS $ 16,439 $ 30,767 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term credit and current maturities of long term loan $ -- $ 286 Trade payables 1,044 448 Accrued and other liabilities 2,501 2,935 -------- -------- TOTAL CURRENT LIABILITIES 3,545 3,669 -------- -------- ACCRUED SEVERANCE PAY 231 280 -------- -------- LIABILITIES RELATED TO DISCONTINUING SEGMENT 4,131 10,340 -------- -------- SHAREHOLDERS' EQUITY: Share capital 3,690 3,628 Additional paid-in capital 41,103 41,011 Deferred stock compensation 66 59 Accumulated deficit (36,327) (28,220) -------- -------- TOTAL SHAREHOLDERS' EQUITY 8,532 16,478 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 16,439 $ 30,767 ======== ======== B.O.S. - BETTER ON-LINE SOLUTIONS LTD. CONSOLIDATED STATEMENTS OF OPERATIONS ================================================================================ U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, --------------------------- --------------------------- 2002 2001 2002 2001 ----------- ----------- ----------- ----------- UNAUDITED ----------------------------------------------------------- Revenues $ 2,891 $ 1,062 $ 9,441 $ 6,042 Cost of revenues 700 1,291 2,300 2,703 ----------- ----------- ----------- ----------- Gross profit (loss) 2,191 (229) 7,141 3,339 ----------- ----------- ----------- ----------- Operating expenses: Research and development, net 627 556 2,182 1,757 Selling and marketing 897 716 3,005 4,215 General and administrative 525 163 2,397 1,839 ----------- ----------- ----------- ----------- Total operating expenses 2,049 1,435 7,584 7,811 ----------- ----------- ----------- ----------- Operating income (loss) 142 (1,664) (443) (4,472) Financial income (expenses), net 17 (11) 295 427 Restructuring costs -- (132) -- (132) Amortization of goodwill (50) (45) (190) (208) Other expenses (37) (280) (95) (272) ----------- ----------- ----------- ----------- Earning (loss) before minority interest in losses of an affiliated company 72 (2,132) (433) (4,657) Minority interest in losses of an affiliated company -- 1,016 -- -- ----------- ----------- ----------- ----------- Net loss from continuing segments 72 (1,116) (433) (4,657) Basic and diluted net earning (loss) per share from continuing segment $ 0.01 $ (0.09) $ (0.03) $ (0.38) =========== =========== =========== =========== Net earning (loss) related to discontinuing segment (1,350) (4,696) (7,674) (8,313) ----------- ----------- ----------- ----------- Net loss $ (1,278) $ (5,812) $ (8,107) $ (12,970) Basic and diluted net loss per share from discontinuing segment $ (0.11) $ (0.38) $ (0.62) $ (0.67) =========== =========== =========== =========== Basic and diluted net loss per share $ (0.10) $ (0.47) $ (0.65) $ (1.05) =========== =========== =========== =========== Weighted average number of shares used in computing basic and diluted loss per share 12,639,454 12,387,524 12,460,945 12,387,524 =========== =========== =========== ===========
B.O.S. - BETTER ON-LINE SOLUTIONS LTD. PRO-FORMA CONSOLIDATED STATEMENTS OF OPERATIONS ================================================================================ U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, --------------------------- --------------------------- 2002 2001 2002 2001 ----------- ----------- ----------- ----------- UNAUDITED ----------------------------------------------------------- Revenues $ 2,891 $ 1,062 $ 9,441 $ 6,042 Cost of revenues 700 200 2,300 1,612 ----------- ----------- ----------- ----------- Gross profit 2,191 862 7,141 4,430 ----------- ----------- ----------- ----------- Operating expenses: Research and development, net 627 556 2,182 1,757 Selling and marketing 897 716 3,005 4,215 General and administrative 525 163 2,397 1,839 ----------- ----------- ----------- ----------- Total operating expenses 2,049 1,435 7,584 7,811 ----------- ----------- ----------- ----------- Operating income (loss) 142 (573) (443) (3,381) Financial income (expenses), net 17 (11) 295 427 Other expenses (37) (41) (95) (61) ----------- ----------- ----------- ----------- Net earning (loss) from continuing segments 122 (625) (243) (3,015) ----------- ----------- ----------- ----------- Basic and diluted net earning (loss) per share from continuing segment $ 0.01 $ (0.05) $ (0.02) $ (0.24) =========== =========== =========== =========== Net loss related to discontinuing segment (13) (1,622) (1,750) (3,058) ----------- ----------- ----------- ----------- Net earning (loss) 109 (2,247) (1,993) (6,073) =========== =========== =========== =========== Basic and diluted net loss per share from discontinuing segment $ (0.00) $ (0.13) $ (0.14) $ (0.35) =========== =========== =========== =========== Basic and diluted net profit (loss) per share $ 0.01 $ (0.18) $ (0.16) $ (0.49) =========== =========== =========== =========== Weighted average number of shares used in computing basic and diluted net loss per share 12,639,454 12,387,524 12,460,945 12,387,524 =========== =========== =========== =========== (a) The pro forma results are net of the following: Amortization of goodwill (59) (750) (4,957) (2,993) Restructuring costs (1,328) (1,772) (1,157) (1,772) Inventory write off -- (664) -- (664) Other expenses -- (11) -- (84) Expenses related to previous years -- (1,273) -- (1,273) Minority interest in loss of an affiliated company -- 1,016 -- -- Litigation and disputes -- (111) -- (111)