B.O.S. Better On-line Solutions Ltd. Announces Closing of a Previously Announced Placement of $9.275 Million.Business Editors and Technology Writers TERADYON, Israel--(BUSINESS WIRE)--May 24, 2000 Record Revenues and Operating Results for the First Quarter of 2000 B.O.S. Better On-line Solutions Ltd. (the "Company" or "BOS") (Nasdaq:BOSC) announced today the closing of the previously announced agreement for the shares placement, signed on May 4, 2000, and its unaudited consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: results of operations for the first quarter of 2000 (ended March 31, 2000). The definitive agreement with the group of investors led by Dovrat & Co., Wertheim Wertheim may refer to:
adj. 1. Almost exact or correct: the approximate time of the accident. 2. 8.2% of the outstanding share capital of the Company after the completion of the investment) has been completed and closed. "We are most satisfied with the closing of the private placement and the confidence expressed by the investors in BOS' future," said 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. Gal, Chairman, 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. of BOS. "We look forward to benefiting from the management expertise and business acumen acumen Astuteness, perception, perspicacity they bring with them," he added. Revenues for the first quarter of 2000 totaled $21.5 million compared to $10.9 million in the corresponding period in 1999. The increase in revenue is attributed to Pacific Information Systems, Inc. ("Pacific"), acquired by BOS in June June: see month. 1998. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the first quarter of 2000 totaled $609,000, compared to an operating loss of $375,000 in the corresponding period in 1999. The increase in the operating loss resulted primarily from one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. write off of inventories and bad debts. Net pro-forma loss for the first quarter of 2000 totaled $1,156,000 ($0.08 per share) compared to a net pro-forma loss of $620,000 ($0.07 per share) in the corresponding quarter of 1999. The net loss was adversely affected by the large losses of the Company's affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. , Surf Communication Solutions Surf Communication Solutions develops a suite of hardware and software products that drives a wide variety of applications whose common goal is high-capacity distribution of voice and video. Ltd. As of March 31, 2000 the public exercised 224,550 Ordinary Share Purchase Warrants ("Warrants") and the underwriters exercised 129,375 Underwriters Purchase Units, including the Warrants underlying these Units, for a total consideration of $3,598,000. Subsequent to March 31, 2000 the public exercised an additional 1,330,707 Warrants for an additional consideration of $ 9,515,000. "I am pleased that revenues for the first quarter of 2000 continued their growth pattern, and reached a new record of $21.5 million," said Israel Gal. "We invested, as planned, significant amounts in the expanding sales and marketing organization, and we intend to expend ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. additional efforts in the sales and marketing activity of our new product, the Lynk-n-Talk(TM) Web to Phone service," continued Mr. Gal. "We have more than $20 million in cash and we intend to invest this amount in ways that will maximize the long term profits of our shareholders," concluded Mr. Gal. About BOS Better On-Line Solutions BOS specializes in VoIP, telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. access solutions, and remote 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 A generic term for connecting devices to each other in order to transfer data back and forth. It often refers to network connections, which embraces bridges, routers, switches and gateways as well as backbone networks. . The Company also develops, produces and markets 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) mid-range-to-PC and LAN connectivity, including Internet/intranet, 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. gateways, 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. , as well as printing solutions that are operating-system independent. Pacific, a fully owned subsidiary, is an award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" commercial VAR and e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. system solutions provider selling a wide range of network related products, and specializing in enterprise IT solutions. Surf Communication Solutions, an affiliated company, develops and supplies software-based access solutions that are integrated into manufacturers' original equipment in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. , telephony and consumer electronics industries. For more information, please contact Mr. Zvi Brandstein, VP Finance and CFO See Chief Financial Officer. , at Tel. +972-4-9907-505, zvikab@boscom.com or Ms. Yael Gasko, Investor Relations Investor relations The process by which the corporation communicates with its investors. & Human Resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. Manager, at Tel. +972-4-9907-588, ygasko@boscom.com. BOS Website: http://www.bosweb.com. 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.
Condensed Unaudited Pro - Forma Statements of Operations (a) (In
thousands of US $, except earnings per share amount)
Three months ended
March 31,
----------------------
2000 1999
---------- ----------
Sales 21,473 10,914
Cost of sales 18,181 8,314
---------- ----------
Gross profit 3,292 2,600
---------- ----------
Research and development costs 640 595
Selling, general and
administrative expenses, net 3,261 2,380
---------- ----------
Operating (loss) income (609) (375)
Financial (expenses) , net (185) (72)
Other income (loss) , net 1 (17)
---------- ----------
(Loss) income before taxes on
income (793) (464)
Taxes on income (146) (116)
---------- ----------
(Loss) income before the
Company's share in loss of an
affiliated company (939) (580)
Company's share in loss of
an affiliated company (217) (40)
---------- ----------
Net (loss) income (1,156) (620)
---------- ----------
(Loss) income per ordinary share (0.08) (0.07)
Weighted average number of ordinary
shares and Ordinary share equivalents
outstanding -- in thousands 11,846 8,713
(a) The pro-forma results are net of:
One) Amortization of goodwill related to the acquisition of Pacific
Information systems in June 1998, of $ 730 and $ 420 for the
first quarters of 2000 and 1999, respectively.
Two) Gain of $ 1,381, in the first quarter of 1999, resulted from
the investment of a group of investors in the Company's
affiliated company -- Surf Communication Solutions Ltd.
Condensed Unaudited Statements of Operations
(In thousands of US $, except earnings per share amount)
Three months ended
March 31,
----------------------
2000 1999
---------- ----------
Sales 21,473 10,914
Cost of sales 18,181 8,314
---------- ----------
Gross profit 3,292 2,600
---------- ----------
Research and development costs 640 595
Selling, general and administrative
expenses, net 3,261 2,380
---------- ----------
Operating (loss) income (609) (375)
Financial (expenses) , net (185) (72)
Other income , net 1 1364
Amortization of goodwill (730) (420)
---------- ----------
(Loss) income before taxes on
income (1,523) 497
Taxes on income (146) (116)
---------- ----------
(Loss) income before the Company's
share in loss of an
affiliated company (1,669) 381
Company's share in loss of
an affiliated company (217) (40)
---------- ----------
Net (loss) income (1,886) 341
---------- ----------
(Loss) income per ordinary share (0.14) 0.04
Weighted average number of ordinary
shares and Ordinary share equivalents
outstanding -- in thousands 11,846 8,713
Condensed Balance Sheets
(In thousands of US $)
March 31, December 31,
2000 1999
(Unaudited) (Audited)
------------------------------
ASSETS
Current assets
Cash and cash equivalents 4,414 1,041
Accounts receivable -- trade 18,352 16,543
Other accounts receivable
and prepaid expenses 597 599
Inventories 1,307 2,010
-------- --------
24,670 20,193
-------- --------
Long-term prepaid expenses 66 73
-------- --------
Investment in an affiliated
company 1,066 1,283
-------- --------
Property and equipment, net 1,638 1,629
-------- --------
Other assets 9,261 9,973
-------- --------
36,701 33,151
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term credits and current
maturities of long-term debt 6,486 6,626
Accounts payable - trade 9,244 7,850
Accrued and other liabilities 3,862 3,798
-------- --------
19,592 18,274
-------- --------
Long-term liabilities 1,088 1,202
-------- --------
Shareholders' equity 16,021 13,675
-------- --------
36,701 33,151
======== ========
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