Q3 2024 B.O.S. Better Online Solutions Ltd Earnings Call
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Speaker Change: Ladies and gentlemen, thank you for standing by.
Speaker Change: Welcome to the B O S Conference call.
Speaker Change: All participants are at present in listen only mode.
Speaker Change: As a reminder, this conference call is being recorded and will be available on the B O S website as of Tomorrow.
Speaker Change: Before I turn the call over to Mr. Cohen, I wish 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.
Speaker Change: 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 Companys accounting policies as well as certain other risk factors, which are detailed from time to time in the companys filings with the various secured.
Speaker Change: These authorities I would now like to turn the call over to Mr. Eyal Cohen CEO. Mr. Cohen. Please go ahead.
Eyal Cohen: Thank you for joining our quarterly video cultures, it's pleasure to connect with Doj.
Eyal Cohen: Joining me today is Thursday March shows and thorough CFO blow.
Eyal Cohen: Currently our chairman Mr. Victor <unk> on oil.
Unable to participate in today's call.
Speaker Change: I will begin by presenting here, an overview or fake bus operations financial performance and growth strategy.
A following that we will open the session for Q&A discussion.
Speaker Change: Let's get started.
Speaker Change: Boss integrates cutting edge technology to optimize.
Speaker Change: A streamlined and enhanced supply chain operation across three specialized division robotic division Ultimate inventory forces by replacing 10 work with Robert RF.
Speaker Change: RFID Division Optimizes inventory management by Medicaid volume by mall came in truck came inventories through the supply chain.
Speaker Change: And the supply chain Division does integration of its franchise electromechanical components into our clients for that.
Let's dive into each division by sharing authenticate videos.
Speaker Change: The robotic divisions, streamlines, industrial and logistics inventory processes by automating routine labor activities.
The robotic division developed custom major Baltic says and integrates off the shelf store boats using its proprietary mechanical electrical and software.
Speaker Change: Our Baltic says for the Civil segment are mainly machine tending for our production lines mini robot serves a production machine instead of employee.
Speaker Change: And Pelletizing Rowboats, our logistics centers.
Speaker Change:
Speaker Change: The goal of our robotic sales is to reduce dependency on the walk first and increased capacities inaccuracy in inventory production and logistics processes.
Speaker Change: Within our wine limitation.
Speaker Change: Of note.
Speaker Change: More than three years.
Speaker Change: Nobody division of successfully transitioned to the defense sector, 90% of our project enforces serving this rapidly growing market.
The current production processing the defense industry relies heavily on labor and struggling to meet the increasing demand for larger quantities higher quality and shorter lead times.
Speaker Change: This transition is a call to action.
Speaker Change: For the industry to embrace robotics processes on opportunity for us to grow our business.
The robotic division flagship clients is L. Meet client is Elbit system, a global leader in the defense industry. Additionally reserve prominent clients from the Israeli Hi Tech sector.
Speaker Change: Showcasing our expertise in developing advanced robotic says tailored to industry niche.
Speaker Change: Yeah.
Speaker Change: RFID Division Optimizes inventory management throughout the supply chain by integrating our proprietary software and cutting edge off the shelf equipment, we integrate ruggedized the treatment for industrial and logistic processes, such as Intel computer forklift tablets industrial of scanners.
Speaker Change: Thermal printers, RFID readers and wireless access from leading manufacturers such as zebra in Hollywood.
Speaker Change: Through our proprietary interfaces each inventory transaction on site is important instantly to the client TRP or mis ensuring realtime data update.
Speaker Change: We provide our warehouse management software and as complementary service rig count our client's inventory new warehouses, Charles mostly twice a year.
Speaker Change: Our professional staff equipment and proprietary software.
Speaker Change: RFID Division measure our client a silver salary 300 stores.
Speaker Change: In the full data sector here in the nonfood retail sector on Teva in the industrial sector.
Speaker Change: Our supply chain division is dedicated to integrate our franchise electromechanical company into the products of our clients from the defensive <unk> industries.
Speaker Change: Our team of engineers collaborate closely with the customer as R&D engineers since they integrate our franchise components into their cutting edge products.
Speaker Change: Ensuring ongoing OEM revenues.
Speaker Change: Okay.
Speaker Change: Oh.
Speaker Change: Okay.
Speaker Change: Our primary.
Speaker Change: Customers.
Speaker Change: Re supply directly to them and also indirectly toward the subcontractor was worth spending.
Speaker Change: Spanning the USA in D C at several countries in Europe.
Financials.
Speaker Change: Our trends.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: I think you're on mute E L.
Thank you.
Speaker Change: You.
They're installed again into revenues.
Speaker Change: Our trailing 12 months as revenues amounted to $40 million.
While we now anticipate falling.
Speaker Change: This is an issue, but it's something.
Speaker Change: Okay.
Speaker Change: Falling short of our projected 46 million, but on the other revenues target and expect to close year 'twenty fall with approximately 40 million in revenues.
Speaker Change: This shortfall is temporary.
Speaker Change: The primary reason for this deviation.
Speaker Change: Is the delay in delivering certain customers older.
Speaker Change: By year end.
Speaker Change: Is it boosting orders began in the second half of the years of the year as was not evenly distributed throughout the year.
Speaker Change: As initially anticipated.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Just a moment.
Speaker Change: Hmm.
Speaker Change: Okay.
Speaker Change: Sorry for a moment.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: So if one area for us.
Speaker Change: The technical issue here.
Speaker Change: A.
Speaker Change: Despite this temporary decline we remain on track to achieve our net income target of $2 2 million below four year 'twenty four.
Speaker Change: Showcasing our ability to effectively manage cost and maintain profitability even in the face of fluctuating revenues.
Great.
Speaker Change: Looking ahead, we are optimistic about.
Speaker Change: Our growth prospect for year 'twenty five supported by strong indicators of future performance.
Speaker Change: Our backlog increased by 15% to 23 million dollar as of the end of September this year compared to $20 million.
Speaker Change: At the end of year 'twenty three.
Speaker Change: Additionally.
Speaker Change: The $2 7 million dollar order from defense customer announced earlier this month auto scores our growing momentum.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: A significant factor.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Okay.
Speaker Change: These are the deferred bucket it grew by an impressive 73% between the years 'twenty three and 'twenty.
Speaker Change: While there have been defense budget increased by 6% between the years granted to a intrinsic tree.
Speaker Change: This budget increase.
Speaker Change: Increases have a direct impact on our major clients such as Israelis.
Speaker Change: Okay.
Speaker Change: Aerospace industry.
Speaker Change: For N and then abate and subsequently on us.
Speaker Change: As defense spending continues to rise globally, we are well positioned to capitalize on these opportunities and drive future growth.
Speaker Change: Balance sheet of September 24 hour company balance sheet shows total assets of $32 million.
Speaker Change: Equity of $21 million, which is still higher than our current market cap in cash net of flows.
Speaker Change: Of about $1 million.
Speaker Change: Okay.
Speaker Change: Both gross strategy too.
Speaker Change: Two phoned based on expansion overseas.
Speaker Change: Stephanie our proposition.
Speaker Change: Both overseas.
Speaker Change: We aim to expand our international sales by leveraging strong relationships with Israeli defense has customers who operate globally.
Speaker Change: By aligning with their international activities and offering tailored solutions.
Speaker Change: We are well positioned to capitalize on new opportunities in the growing global defense market.
Speaker Change: This strategy has already borne fruit.
Speaker Change: We six many online overseas cells Attunity near 20 Creek.
Speaker Change: And the recent agreement finalized three subcontract goes in India in between Greece.
Speaker Change: Furthermore, our Baltic Division is sitting on a production line in Europe during the first half of year 'twenty five.
Speaker Change: Yeah.
Speaker Change: Johnson our proposition.
Speaker Change: We will continue to strengthen our relationship with our strategic defense customer by broadening our offering.
And ensuring that we meet their evolving needs.
Speaker Change: Now if a dealer vision that engage in the civil market withdrawal two acquisitions of complementary business.
Speaker Change: Our competitors as we successfully be twice before.
Speaker Change: Our team.
Speaker Change: Yeah.
Speaker Change: Bottom include fault moment board member three or four more independent and one for me.
Speaker Change: Most executive team include eight members.
With volume of chaos.
Speaker Change: An extensive occurrences says says market in technology operation and finance.
Speaker Change: Because Scott finish technologies substantial foundation and our proposition.
Speaker Change: We engage to CTO.
Speaker Change: One for <unk> Division and one for the RFID Division and supply.
Speaker Change: Most of us engage 83 employees.
Speaker Change: A full 30% of our engineers on the commissions.
Speaker Change: Valuation.
Speaker Change: There is a big gap between the valuation ratio or for us in 2000 index and Bush.
Speaker Change: Russell price to earnings ratio is 18.
Speaker Change: Versus <unk>.
Speaker Change: LIFO Bush Russ and price to book value ratio is two point farm versus listen one.
Speaker Change: For both.
Speaker Change: Recent planned for the first time was covered by the analyst support.
According to the recent research report released by took equity the targets stockpile for bullshit, $5, which is higher by more than 40% than the accounting stock price.
Speaker Change: Increasing its exposure to boss, who had a breach.
Speaker Change: With help to bridge this gap.
Speaker Change: This led me to the secondly, hyphen me the net item reaches the IRR.
Speaker Change: At Busch, creating value for our shareholders is driven by consistent improvement in our financial performance.
Speaker Change: Particularly through increasing profitability on.
Speaker Change: And effectively sharing this achievement with a broader audience of public market investors.
Speaker Change: We achieved this we plan to partner with the U S based investor relations periods to enhance our visibility in the U S capital markets.
Speaker Change: This effort are specifically aimed at attracting investors who actively trade in the public market.
Speaker Change: Thank you for your attention and I'm ready to take your questions.
Speaker Change: Hey, good morning Al <unk>, please on mute and present yourself, while all of our participants remain mute. Thank you placed.
Speaker Change: Good morning, Yale This is Tod felty, how question about backlogs you had mentioned it was 23 million as of September 30th is there any update that you can give us on that backlog.
Speaker Change: Yes, I think the momentum of the indications to indicators show a growing momentum continue.
Speaker Change: As the backlog as of September increased by 15% as compared to December.
Speaker Change: Timna is still seeing delays that the backlog continued to grow to a level of approximately $24 million, which is 20% higher than the backlog.
Of December last year and its certification.
Speaker Change: A car NK a decrease in revenues as compared to be a.
Speaker Change: So our initial forecast TSV temporarily, let's say technically let's say birth.
Speaker Change: On the related to the operation side.
Speaker Change: And according to the backlog, we we will record these gap in that year.
Okay. Thank you and then kind of a broader question I noticed a 60 day cease fire was amounts between them.
Speaker Change: Israel and Lebanon yesterday, how.
Speaker Change: How will that affect your defense business and do you.
Speaker Change: Continue to see your sense business being strong over the next few years.
Speaker Change: Yeah.
Speaker Change: First liking that Ashish fiery great.
Speaker Change: But now three a major factor that treated positively affect the Israeli defense say industry.
Speaker Change: A fair is that during the recent conflict.
Speaker Change: Israel face embargoes.
Speaker Change: Some countries.
Speaker Change: And it's highlighting the urgency of reducing dependency on the foreign suppliers and as a result.
We anticipate on the refill is that okay.
Speaker Change: A surge in demand for locally produced defense solution, a started G. III to be done we see a new facilities in may in that start to two two or two to walk a new line of product. So this is one effect.
Speaker Change: Additionally, D. A recent tour in Israel was set.
Speaker Change: Exceptionally a long.
Speaker Change: Lasting over a one year.
Speaker Change: A very their reserves rather than military houses of our initially planned for macho term conflict.
Speaker Change: Consecutively.
Speaker Change: Management of this inventories really acquire restocking to level.
Speaker Change: Significantly higher than before the war.
And it's going to.
Speaker Change: I anticipate that it really creates substantial demand for munitions.
Another time same time using with C. D. What is happening in Europe pay the ongoing <unk> conflict between the Russia and Ukraine continues.
Speaker Change: <unk> continues to have a.
Speaker Change: A profound long term impact on the defense budget in Europe as we sold the following the chalk. It's growing is it that the defense budget is going on and these are the defense industry known for its advanced technology and intervention.
Speaker Change: It played treaty can treat the cold Rolling mill, feeling a substantial portion of the repaying may a defense dimension. So.
Speaker Change: So we believe these factors with a position of being able to copy.
Speaker Change: Capitalize on the growing global defense.
Speaker Change: Market on to grow our business.
Speaker Change: In the long term.
Speaker Change: Okay. That's very helpful. Dino how many countries in Europe that you are currently shipping components too.
Speaker Change: And we are currently selling to.
Speaker Change: Okay.
Speaker Change: Again to reach due to Boston at all or to specific division.
Speaker Change: Overall.
Overall two currently.
Speaker Change: We as said in Q3 countries in Europe.
Speaker Change: About reaching the groin.
Speaker Change: The trend.
Speaker Change: And we are selling also to to the U S to India.
Speaker Change: Okay. Thank you for taking my questions. Thank you too.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Is there any other further question.
Speaker Change: Friends investors.
Speaker Change: Okay.
Speaker Change: If you have attrition please on mute and presents yourself.
Speaker Change: Okay.
Speaker Change: There are no further question at this time.
Speaker Change: Thank you all for joining us today and for your continued interest in both.
Speaker Change: We appreciate that Protiviti to share our progress financial results and growth at the JV with you.
Speaker Change: Here's a potent trusthouse critical as we work towards delivering long term value to you tube to the shareholders.
Speaker Change: If you have any further question or need additional information please feel free to reach out to me directly.
And we are looking forward to connecting with you again in our next <unk>.
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