B.O.S. Better On-line Solutions Ltd. Announces Record Revenues and Financial Results of Operations for the Second Quarter and the First Half of 2000.Business Editors TERADYON, Israel--(BUSINESS WIRE)--Aug. 15, 2000 B.O.S. Better On-line Solutions Ltd. (the "Company" or "BOS") (Nasdaq:BOSC) announced today 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 second quarter and the six months ended ended June June: see month. 30, 2000. Revenues for the second quarter were $19.4 million, 30% increase over the $15.0 million revenues in the corresponding period in 1999. Revenues for the first half of 2000 were $40.9 million, 58% increase over the $25.9 million revenues in the first half of 1999. The increase in revenue is attributed primarily to Pacific Information Systems, Inc. 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 second quarter of 2000 totaled $102,000, compared to an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $44,000 in the corresponding period in 1999. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma operating loss for the first half year of 2000 totaled $531,000 compared to an operating loss of $330,000 in the first half of 1999. Net pro forma loss for the second quarter of 2000 totaled $281,000 ($0.02 per share) compared to a net loss of $247,000 ($0.03 per share) in the corresponding period in 1999. Net pro-forma loss for the first half year of 2000 totaled $1,041,000 ($0.06 per share) compared to a net pro-forma loss of $810,000 ($0.09 per share) in first half year of 1999. "We are encouraged by the continuous growth in our sales," said Aharon Dovrat, Chairman of BOS. "We are taking necessary measures to improve the profitability of our revenues and increasing our marketing activities in our Voice Over IP products which have been favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. accepted by the market," continued Mr. Dovrat. "We are quite confidence that our efforts will bring long term positive results," concluded Mr. Dovrat. 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 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. , an affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: 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.
B.O.S. - Better On-line Solutions Ltd.
Condensed Unaudited Pro - Forma Statements of Operations (a)
(In thousands of US $, except earnings per share amount)
Three months ended Six months ended
June 30, June 30,
------------------ -------------------
2000 1999 2000 1999
------- ------- ------- -------
(Unaudited) (Unaudited)
Sales 19,443 15,010 40,915 25,924
Cost of sales 16,002 12,107 34,002 20,421
------- ------- ------- -------
Gross profit 3,441 2,903 6,913 5,503
------- ------- ------- -------
Research and development costs:
Costs incurred 549 504 1,189 1,099
Less: grants received -- -- -- --
------- ------- ------- -------
Net research and
development costs 549 504 1,289 1,099
Selling, marketing,
general and
administrative
expenses, net 2,994 2,355 6,255 4,734
------- ------- ------- -------
Operating (loss) income (102) 44 (531) (330)
Financial income
(expenses), net 39 (100) (146) (173)
Other loss , net (8) -- (8) --
------- ------- ------- -------
Loss before taxes
on income (71) (56) (685) (503)
Taxes on income (210) (191) (356) (307)
------- ------- ------- -------
Net loss (281) (247) (1,041) (810)
------- ------- ------- -------
------- ------- ------- -------
Loss per ordinary share (0.02) (0.03) (0.06) (0.09)
Weighted average
number of ordinary
shares and ordinary
share equivalents
outstanding -
in thousands 12,429 8,635 12,163 8,635
(a) The pro-forma
results are net
of the following:
Amortization of
goodwill (731) (420) (1,459) (840)
Gain resulting from
an investment of
a group of investors
in the Company's
affiliated company -- (7) -- 1,357
Inventory write off -- -- (180) --
Loss on early
termination of
line of credit,
net of income
tax benefit (115) -- (115) --
Company's share in
loss of an
affiliated company (687) (198) (905) (238)
B.O.S. Better On-line Solutions Ltd.
Condensed Unaudited Statements of Operations
(In thousands of US $, except earnings per share amount)
Three months ended Six months ended
June 30, June 30,
------------------- ------------------
2000 1999 2000 1999
------- ------- ------- -------
(Unaudited) (Unaudited)
Sales 19,443 15,010 40,915 25,924
Cost of sales 16,002 12,107 34,182 20,421
------- ------- ------- -------
Gross profit 3,441 2,903 6,733 5,503
------- ------- ------- -------
Research and
development costs:
Costs incurred 549 504 1,189 1,099
Less: grants received -- -- -- --
------- ------- ------- -------
Net research and
development costs 549 504 1,189 1,099
Selling, marketing,
general and
administrative
expenses, net 2,994 2,355 6,255 4,734
------- ------- ------- -------
Operating (loss)
income (102) 44 (711) (330)
Financial income
(expenses), net 39 (100) (146) (173)
Other (loss)
income , net (197) (7) (197) 1,357
Amortization of
goodwill (731) (420) (1,459) (840)
------- ------- ------- -------
(Loss) income before
taxes on income (991) (483) (2,513) 14
Taxes on income (136) (191) (282) (307)
------- ------- ------- -------
Loss before the
Company's share
in equity in loss
of an affiliated
company (1,127) (674) (2,795) (293)
Company's share
in equity in loss
of an affiliated
company (687) (198) (905) (238)
------- ------- ------- -------
Net loss (1,814) (872) (3,700) (531)
------- ------- ------- -------
------- ------- ------- -------
Loss per ordinary share (0.14) (0.10) (0.28) (0.06)
Weighted average number
of ordinary shares
and ordinary share
equivalents outstanding
- in thousands 12,429 8,635 12,163 8,635
B.O.S. Better On-line Solutions Ltd.
Condensed Unaudited Balance Sheets
(In thousands of US $)
June 30,
--------------------
2000 1999
------ ------
ASSETS
Current assets
Cash and cash equivalents 20,371 1,719
Accounts receivable - trade 15,728 10,216
Other accounts receivable
and current assets 789 419
Inventories 2,302 2,574
------ ------
39,190 14,928
------ ------
Long-term prepaid expenses 31 54
------ ------
Investment in an affiliated company 378 935
------ ------
Property and equipment, net 1,568 1,593
------ ------
Other assets 8,531 6,581
------ ------
49,698 24,091
------ ------
------ ------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term credits and current
maturities of long-term debt 6,257 2,840
Accounts payable - trade 6,456 7,499
Accrued and other liabilities 3,052 1,724
------ ------
15,765 12,063
------ ------
Long-term liabilities 940 1,216
------ ------
Shareholders' equity 32,993 10,812
------ ------
49,698 24,091
------ ------
------ ------
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