B.O.S. Better On-line Solutions Ltd. Announces Financial Results of Operations for the Fourth Quarter and 2003.Business Editors/High-Tech Writers TERADYON, Israel--(BUSINESS WIRE)--March 23, 2004 Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. from continuing segment in the fourth quarter of 2003 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) :BOS) announced today its financial results for the fourth quarter and the year 2003. Revenues for 2003 were $5.7 million compared to $9.4 million in 2002 a decrease of 39% mainly due to the fact that in 2003 the Company began marketing through a master distributor and not through its subsidiaries. The Company's research and development plan for 2003 was approved by the Office of the Chief Scientist Office of the Chief Scientist may refer to:
Net loss for the 2003 from the continuing segment was 2.4 million (or -$0.66 per share), compared to a net loss of $243,000 (or -$0.08 per share) for 2002. The net loss of year 2003 includes expenses of $678,000 due to 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 and $840,000 due to impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of investment in a company. Total cash and investments were $6.7 million as of December December: see month. 31, 2003. Fourth Quarter 2003 - Consolidated Statement of Operation (continuing segment): Net loss for the fourth quarter of 2003 from the continuing segment was $680,000 (or -$0.17 per share), compared to a net profit of $122,000 (or $0.04 per share) for the fourth quarter of 2002. The Company reported cost of $840,000 derived from an impairment of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investment in a company. Revenues for the fourth quarter of 2003 were $1.5 million, lower than the fourth quarter of 2002 by 47%, the reduction in comparison to 2002 mainly due to the fact that in 2003 the Company began marketing through a master distributor and not through its subsidiaries. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for the fourth quarter of 2003 was 74% compared to 76% for the fourth quarter of 2002. Operation income for the fourth quarter of 2003, excluding restructuring cost totaled $229,000 compared to $142,000 for the fourth quarter of 2002. Net income from the continuing segment for the fourth quarter of 2003, excluding impairment of investment and restructuring totaled $246,000, compared to net income of $122,000 for the fourth quarter of 2002. As of January January: see month. 1, 2003 the Company has been preparing consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge 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 United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). Adiv Baruch Baruch, in the Bible Baruch (bər  k`, bā`rk), in the Bible. , B.O.S.' 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:
"Year 2003 took in consideration the slow down that impacted the IT industry and the Telecom sector in particular, We have been able to monitor the expenses of the Company and generate positive cash flow in the fourth quarter, while continuing to support the extensive development of our 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 products." Edouard Cukierman the Chairman of the Board stated: "We are continuing to progress 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. our restructuring plan, while the Company generates cash from its operation. We will be able to drive the Company forward with greater focus on marketing and business development." Fourth Quarter and the year 2003 - 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 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. ". The net loss from the discontinued segment for the fourth quarter of 2003 was $78,000 (or -$0.02 per share) compared to a net loss of $1.35 million for the fourth quarter of 2002 (or -$0.43 per share), and a net earning of $2.0 million (or $0.55 per share) for the year 2003, compared to a net loss of $7.7 million (or -$2.46 per share) for 2002. Net loss from continuing and discontinued segment for the fourth quarter of 2003 was $758,000 (or -$0.19 per share) compared to net loss a net loss of $1.2 million (or -$0.39 per share) for the fourth quarter of 2002), and a net loss of $396,000 (or -$0.11 per share) for the year 2003, compared to a net loss of $7.9 million (or -$2.54 per share) for 2002. 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 IP Telephony The two-way transmission of voice over a packet-switched IP network, which is part of the TCP/IP protocol suite. The terms "IP telephony" and "voice over IP" (VoIP) are synonymous. line (www.boscom.com) offers innovative convergence migration solutions that leverage a corporation's existing equipment infrastructure. The legacy 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. 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:BOS). 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.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, December 31,
2003 2002
-----------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $3,872 $5,246
Restricted cash - 700
Short-term marketable securities 1,014 768
Trade receivables 1,075 1,523
Other accounts receivable and
prepaid expenses 317 433
Inventories 961 855
-------- --------
Total current assets 7,239 9,525
-------- --------
LONG-TERM INVESTMENTS:
Long term marketable securities 1,862 2,226
Long term prepaid expenses - 15
Severance pay funds 684 563
Investment in a company 3,112 2,042
-------- --------
Total long-term investments 5,658 4,846
-------- --------
PROPERTY AND EQUIPMENT, NET 598 965
-------- --------
GOODWILL 741 741
-------- --------
ASSETS RELATED TO DISCONTINUED SEGMENTS 119 1,115
-------- --------
Total assets $14,355 $17,192
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $464 $1,044
Employee and payroll accruals 404 717
Deferred revenues 378 491
Accrued and other liabilities 911 1,293
-------- --------
Total current liabilities 2,157 3,545
-------- --------
ACCRUED SEVERANCE PAY 951 794
-------- --------
LIABILITIES RELATED TO DISCONTINUED
SEGMENTS 374 4,131
-------- --------
SHAREHOLDERS' EQUITY:
Share capital 4,309 3,690
Additional paid-in capital 43,097 41,169
Accumulated deficit (36,533) (36,137)
-------- --------
Total shareholders' equity 10,873 8,722
-------- --------
Total liabilities and shareholders'
equity $14,355 $17,192
======== ========
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Year ended
December 31, December 31,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenues $1,526 $2,891 $5,728 $9,441
Cost of revenues 394 700 1,794 2,300
Non recurring royalty
reversal - - (339) -
---------- ---------- ---------- ----------
Gross profit 1,132 2,191 4,273 7,141
---------- ---------- ---------- ----------
Operating expenses:
Research and
development 442 626 2,129 2,182
Less - grants and
participation (80) - (283) -
Selling and marketing 244 947 2,178 3,705
General and
administrative 297 476 1,317 1,697
Restructuring and
related costs 86 - 678 -
---------- ---------- ---------- ----------
Total operating
expenses 989 2,049 6,019 7,584
---------- ---------- ---------- ----------
Operating income (loss) 143 142 (1,746) (443)
Financial income, net 27 17 109 295
Other expenses, net (850) (37) (795) (95)
---------- ---------- ---------- ----------
Net earning (loss) from
continuing segment (680) 122 (2,432) (243)
---------- ---------- ---------- ----------
Net earning (loss)
related to
discontinued segments (78) (1,350) 2,036 (7,674)
---------- ---------- ---------- ----------
Net loss (758) (1,228) (396) (7,917)
========== ========== ========== ==========
Basic and diluted net
earning (loss) per
share from continuing
segment $(0.17) $0.04 $(0.66) $(0.08)
========== ========== ========== ==========
Basic net earning
(loss) per share from
discontinued segments $(0.02) $(0.43) $0.55 $(2.46)
========== ========== ========== ==========
Diluted net earning
(loss) per share from
discontinued segments $(0.02) $(0.43) $0.55 $(2.46)
========== ========== ========== ==========
Basic and diluted net
loss per share $(0.19) $(0.39) $(0.11) $(2.54)
========== ========== ========== ==========
Weighted average number
of shares used in
computing basic net
earning (loss) per
share 3,926,268 3,158,661 3,683,058 3,115,236
========== ========== ========== ==========
Weighted average number
of shares used in
computing diluted net
earning (loss) per
share 3,926,268 3,158,661 3,718,477 3,115,236
========== ========== ========== ==========
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