B.O.S. Better Online Solutions Q4 2023 Earnings Call Transcript

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Provided by Quartr
March 28, 2024

There are 4 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the BOS conference call. All participants are at present in listen only mode. As a reminder, this conference call is being recorded and will be available on the BOS Web site as of tomorrow. Before I turn the call over to Mr.

Operator

Cohen, I would like to remind everyone that forward looking statements for the respective company's business, financial condition and results of its operations are subject to risks and uncertainties, which could cause actual results to differ materially from those contemplated. Such forward looking statements include, but are not limited to, product demand, pricing, market acceptance, changing economic conditions, risks and product and technology development and the effect of the company's accounting policies as well as certain other risk factors, which are detailed from time to time in the company's filings with the various securities authorities. I would now like to turn the call over to Mr. Eyal Cohen, CEO. Mr.

Operator

Cohen, please go ahead.

Speaker 1

Thank you for joining our call today. Mr. Zippe Ekel, Chairman and Moshe Zeltzer, CFO, are on the call with me today. I'm excited to meet you again at our quarterly video meeting. During this meeting, we will review our financial results, business trends and growth strategy.

Speaker 1

After that, we will have a Q and A session. Year 2023 reflects record results of pause. We have achieved this goal gradually and consistently since year 21. During those years, our revenue grew from $33,600,000 in year 'twenty one to $44,200,000 in year 'twenty three. EBITDA grew from less than $1,000,000 in year 'twenty one to more than $3,000,000 in year 2023.

Speaker 1

Our net income grew from $500,000 in year 2021 to $2,000,000 in year 2023 and our EPS grew from $0.08 in year 20 21 to 0 point 3 $5 in year 2023. During those years, we also strengthened our financial position. Our total assets grew from $25,000,000 in year 2021 to $32,000,000 in year 2023. Our shareholders' equity increased from $14,000,000 in year 2021 to $19,000,000 on year 2023. And our cash net of bank loans remained positive, standing at $1,200,000 at the end of year 2023.

Speaker 1

Despite all those positive trends and progresses that have been made during this period, our market cap remained roughly unchanged. It was $50,000,000 on December 21 and remains $15,000,000 $60,000,000 to date. The following slide presents Bob's current valuation ratio. The market cap ratio to net income of year 2023 is 7.7%. Market cap ratio projected net income for year 2024 is 7.1%.

Speaker 1

Market cap ratio to EBITDA of year 2023 is 5.1 percent and market cap ratio to shareholders' equity is only is less than 1 percent, it's 82%. I hope that BOSSS will have analyst coverage this year to expose our story to more investors. Business expanded the list of electronic manufacturers it represents and increased its sales force. Hence, we expect revenue growth from those products in year 2024 and forward. In addition, the current situation in Israel has increased the demand for Israeli Defense segment, and we anticipate that it will positively affect the Supply Chain division revenues in year 2024.

Speaker 1

On the other hand, during year 2023, this division benefited from high demand for electronic components because of the shortage in the market during the COVID period. We expect that in year 2024, the market will return to standard demands. The RFI Data Vision sales are mainly to logistics centers in Israel. Its revenues in year 2023 decreased by 10%, affected by the slowdown in the Israeli civilian sector. During year 'twenty three, we significantly expanded our offering portfolio, and we expect this will yield revenue growth in year 2024.

Speaker 1

The Intelligent Robotics division is successfully transitioning from the Israeli civilian sector to the Israeli defense sector, which will promote its continued growth in year 2024. According to this, those business trends, we anticipate $46,000,000 of revenues in year 2024 and net income growing by 10% to $2,200,000 I want to turn the call over to Mr. Zivdekal, Chairman, who will elaborate on our growth strategy.

Speaker 2

Thank you, Riyadh, and good morning and afternoon to everybody. In reference to Riyadh's points and within a broader framework, VOSA's 2023 record results are the primarily effect of a thorough comprehensive in-depth capabilities and organizational buildup and enhancement process that Eyal has been leading and conducting for the past years. Hence, reviving most of Box's core business, bringing it to a consistent course of capability based, sound organic growth of sales and profit. Combining this with favorable market dynamic trends in the Israeli Defense and High-tech segments, We plan to continue expanding to these expanding the business lines of all our divisions within these segments. These segments are the previous segments in the Israeli market.

Speaker 2

In addition, we plan to expand the RFID division footprint from the production floor and warehouse to the retail store. Also, we continue our M and A efforts focusing on local competitively and operatively synergetic companies. I trust Bose's team led by Al to win these challenging processes on the broader perspective of all over the company strategy. Thank you for your attention. I will now hand over the presentation back to Iain.

Speaker 1

Thank you, Ziv. At this time, we begin the Q and A session. If you have questions, please unmute and present yourself while all other participants remain on mute. Thank you. While all other participants remain mute.

Speaker 1

Thank you.

Speaker 3

I had a question regarding your robotics division. It looks like was the first time it was profitable. Is that correct in the Q4?

Speaker 1

Yes. Hi, Thug. How are you?

Speaker 3

I'm pretty good. Thank you.

Speaker 1

So in the Q2 of this year, in FY23, it was breakeven. Also in the Q3, I mean, the Q4, it's profitable.

Speaker 3

Okay. And do you expect that to be your fastest growing division in 2024?

Speaker 1

Yes. It will increase its revenue significantly in percentage, yes, in year 'twenty four according to year 'twenty three.

Speaker 3

Okay. And finally, the 4th quarter revenues were a little bit weaker due to the war that began in October. Do you expect a lot of that business Was it pushed to the Q1 or will we see that just come in throughout the year?

Speaker 1

I believe that it was pushed in the first and then the second quarter. And it gave us comfort to provide the outlook for year 2024 for growth.

Speaker 3

Okay. And you had a really nice slide there kind of showing your market cap and some of your valuations, maybe in the future or if you could add to that, maybe you could include some other companies in a similar industry as yours for a competitive standpoint? Obviously, just from straight valuations, you look extremely undervalued. Is there any other Israeli companies in your industry or any other companies that maybe you could compare those numbers to?

Speaker 1

Yes. It's good. I hope there will be an analyst coverage during this year. I hope that by the first half of the year. And I'm sure that in that report, we will see this comparison analysis.

Speaker 3

Okay. Thank you for taking my questions. Congratulations on a really strong year. And I look forward to 2024.

Speaker 2

Thank you, Tod.

Speaker 1

Any further questions? Okay. There are no further questions at this time. So thank you for joining our call today. We look forward to meeting you again on BOS' first quarter call, which will be in May 24.

Speaker 1

Thank you all. Thank you all. Thank you.

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Key Takeaways

  • Record 2023 results: Revenue reached $44.2 M, EBITDA exceeded $3 M and net income rose to $2 M with EPS of $0.35, all marking substantial growth since 2021.
  • Strengthened balance sheet: Total assets grew to $32 M, shareholders’ equity to $19 M and net cash stood at $1.2 M, yet market cap remained near $60 M, implying undemanding valuation multiples.
  • 2024 outlook: Management projects revenue of $46 M and a 10% net income increase to $2.2 M, backed by expanded electronics representation, a larger sales force and higher defense segment demand.
  • Division highlights: RFI Data Vision saw a 10% sales decline in 2023 but expects a rebound from a broader portfolio, while the Intelligent Robotics division turned profitable in Q4 and is shifting towards defense for rapid growth.
  • Growth strategy: Plans include deeper penetration in Israeli defense and high-tech markets, extending RFID solutions into retail, targeted M&A for synergies and securing analyst coverage to raise investor awareness.
AI Generated. May Contain Errors.
Earnings Conference Call
B.O.S. Better Online Solutions Q4 2023
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