B.O.S. Better On-Line Solutions Ltd. Announces Financial Results for the Third Quarter of 2004.TERADYON, Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. -- B.O.S. Better On-Line Solutions Ltd. (the "Company" or "BOS") (Nasdaq:BOSC) (TASE TASE Tel Aviv Stock Exchange TASE The All Seeing Eye TASE Tactical Air Support Element TASE Thrust Assessment Support Environment TASE Telecontrol Application Service Elements (IEC communications protocol) :BOSC) announced today its financial results for the quarter ended September September: see month. 30, 2004. Financial results of Continuing Segments Revenues for the third quarter of 2004 were $1,457 thousands, compared to $1,397 thousands recorded in the second quarter of 2004 and an increase of 11.6% over revenues of $1,305 thousands for the third quarter of 2003. Net loss for the third quarter of 2004 was $385 thousands (or -$0.09 per share), compared to net loss of $387 thousands (or -$0.10 per share) in the second quarter of 2004, and net earning of $166 thousands (or $0.04 per share) in the third quarter of 2003. Gross profit for the quarter was $766 thousands, or 52.6% of revenues, compared to $680 thousands, or 48.6% of revenues, for the second quarter of 2004, and $1,162 thousands or 88.9% of revenues for the third quarter of 2003 (or $823 thousands and 63% of revenues, when excluding income of $339 thousands in the third quarter of 2003 due to a reversal of a non-recurring royalty for the Office of the Chief Scientist Office of the Chief Scientist may refer to:
Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the third quarter of 2004 were $1.1 million, similar to the expenses for the second quarter of 2004 and compared to $745 thousands (after excluding restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). cost in the amount of $325 thousands) for the third quarter of 2003. Net loss for the nine months ended September 30, 2004 was reduced by 31% to $1,209 thousands from $1,752 thousands for the nine months ended September 30, 2003. As of September 30, 2004, the Company's balance sheet shows liquid financial resources (cash and equivalents, deposits and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has ) of $7.6 million and a convertible liability note (long and short term) of $1.9 million. In September 2004, we purchased the majority of Quasar Communication Systems Ltd. ("Quasar") assets relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Quasar's business, including its fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , product lines, intellectual property rights and industrial rights, know-how, technology, licenses, assignable existing distribution channels and markets, and goodwill. In consideration for the acquired assets, the Company has issued Quasar 285,000 Ordinary Shares valued at $539 thousands. Since the purchase of Quasar assets was on September 29, it only affected the balance sheet as of September 30, 2004. Adiv Baruch, B.O.S.' President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. stated: "During the third quarter the Company continued to work according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. its plan. The VOIP (Voice Over IP) A digital telephone service that uses the public Internet as well as private backbones instead of the traditional telephone network. Many companies, including Vonage, 8x8 and AT&T (CallVantage), typically offer calling within the country for a sales have continued to increase while we continue to invest in R&D. During this quarter the Company also finalized See finalization. the asset acquisition of Quasar and examined the Odem deal that was finalized during Q4. The results of these acquisitions will take partial effect in Q4 and be fully integrated in Q1 2005." Financial results of Discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: Segment The Company discloses the financial information related to its US subsidiary, Pacific Information Systems, Inc. ("Pacinfo") in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting standards for "discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. ." There was no significant operation in the discontinued segment in the nine months ended September 30, 2004. About B.O.S. Through its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , BOScom, the Company develops, produces and markets 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 Communication line (www.boscom.com) offers VOIP innovative convergence migration solutions that leverage a corporation's existing equipment infrastructure. The Connectivity line (www.bosweb.com) provides solutions for IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) midrange-to-PC and LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. connectivity and GUI (Graphical User Interface) A graphics-based user interface that incorporates movable windows, icons and a mouse. The ability to resize application windows and change style and size of fonts are the significant advantages of a GUI vs. a character-based interface. emulation (architecture) emulation - When one system performs in exactly the same way as another, though perhaps not at the same speed. A typical example would be emulation of one computer by (a program running on) another. , and printing solutions that are operating system-independent. The Software Utilities line (www.printbos.com) provides solutions for document design, distribution and management for a wide range of operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. , including mainframe and UNIX UNIX Operating system for digital computers, developed by Ken Thompson of Bell Laboratories in 1969. It was initially designed for a single user (the name was a pun on the earlier operating system Multics). . Quasar Telecom (2004) Ltd., BOS' wholly owned subsidiary holds the assets of Quasar Communication Systems ("Quasar") purchased by the Company. Quasar, a leading developer and manufacturer of advanced cellular gateways that eliminate interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. charges between cellular and landline Land based. Refers to standard telephone and data communications systems that use in-ground and telephone pole cables in contrast to wireless cellular and satellite services. networks, was established in 1993, operating from the headquarter head·quar·ter v. head·quar·tered, head·quar·ter·ing, head·quar·ters Usage Problem v.tr. To provide with headquarters: in Israel. B.O.S. (www.boscorporate.com) was established in 1990 and became a public company traded on the Nasdaq National Market in 1996 (Nasdaq:BOSC), and on the Tel Aviv Tel Aviv (tĕl əvēv`), city (1994 pop. 355,200), W central Israel, on the Mediterranean Sea. Oficially named Tel Aviv–Jaffa, it is Israel's commercial, financial, communications, and cultural center and the core of its largest Stock Market in 2002 (TASE:BOSC). The forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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. BOS undertakes no obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
B.O.S - CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31,
2004 2003
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $5,098 $3,872
Short-term marketable securities 1,936 1,014
Trade receivables, net 953 1,075
Other accounts receivable and prepaid
expenses 560 317
Inventories 873 961
------------- -------------
Total current assets 9,420 7,239
------------- -------------
LONG-TERM INVESTMENTS:
Long term marketable securities 554 1,862
Severance pay funds 729 684
Investment in a company 3,112 3,112
------------- -------------
Total long-term investments 4,395 5,658
------------- -------------
PROPERTY AND EQUIPMENT, NET 615 598
------------- -------------
INTANGIBLE ASSETS
Goodwill 903 741
Other intangible assets 505 -
------------- -------------
Total intangible assets 1,408 741
------------- -------------
ASSETS RELATED TO DISCONTINUING SEGMENT 3 119
------------- -------------
Total assets $15,841 $14,355
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long term
convertible note $508 $-
Trade payables 608 464
Employee and payroll accruals 433 404
Deferred revenues 281 378
Accrued and other liabilities 981 911
------------- -------------
Total current liabilities 2,811 2,157
------------- -------------
LONG TERM LIABILITIES:
Long term Convertible note 1,383 -
Accrued severance pay 1,015 951
------------- -------------
Total long term liabilities 2,398 951
------------- -------------
LIABILITIES RELATED TO DISCONTINUING
SEGMENT 254 374
------------- -------------
SHAREHOLDERS' EQUITY:
Share capital 4,559 4,309
Additional paid-in capital 43,715 43,247
Accumulated other comprehensive income 4 -
Treasury shares - (150)
Accumulated deficit (37,900) (36,533)
------------- -------------
Total shareholders' equity 10,378 10,873
------------- -------------
Total liabilities and shareholders'
equity $15,841 $14,355
============= =============
B.O.S. - CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands
Nine months ended Three months ended Year ended
September 30, September 30, December 31,
2004 2003 2004 2003 2003
------------------------------------------------------
Revenues $4,043 $4,202 $1,457 $1,305 $5,728
Cost of
revenues 1,927 1,400 691 482 1,794
Non
recurring
royalty
reversal - (339) - (339) (339)
---------- ---------- ---------- ---------- ----------
Gross profit 2,116 3,141 766 1,162 4,273
---------- ---------- ---------- ---------- ----------
Operating
expenses:
Research and
development 1,559 1,686 618 423 2,129
Less -
grants and
participation (370) (202) (159) (202) (283)
Selling and
marketing 933 1,934 296 209 2,178
General and
adminis-
trative 1,152 1,020 337 315 1,317
Restructuring
and related
costs - 592 - 325 678
---------- ---------- ---------- ---------- ----------
Total
operating
expenses 3,274 5,030 1,092 1,070 6,019
---------- ---------- ---------- ---------- ----------
Operating
profit
(loss) (1,158) (1,889) (326) 92 (1,746)
Financial
income
(expenses),
net (51) 82 (59) 69 109
Other income
(expenses),
net - 55 - 5 (795)
---------- ---------- ---------- ---------- ----------
Net earning
(loss) from
continuing
segments (1,209) (1,752) (385) 166 (2,432)
---------- ---------- ---------- ---------- ----------
Net earning
(loss)
related to
dis-
continuing
segment (18) 2,114 - 442 2,036
---------- ---------- ---------- ---------- ----------
Net loss $(1,227) $362 (385) 608 (396)
========== ========== ========== ========== ==========
Basic and
diluted net
earning
(loss) per
share from
continuing
segment $(0.29) $(0.49) $(0.09) $0.04 $(0.66)
========== ========== ========== ========== ==========
Basic and
diluted net
earning per
share from
discontinuing
segment $- $0.59 $- $0.12 $0.55
========== ========== ========== ========== ==========
Basic and
diluted net
loss per
share $(0.29) $0.10 $(0.09) $0.16 $(0.11)
========== ========== ========== ========== ==========
Weighted
average
number of
shares used
in computing
basic and
diluted net
earning
(loss) per
share 4,163,166 3,593,398 4,165,224 3,804,156 3,683,058
========== ========== ========== ========== ==========
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