Release Date: November 27, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BOS Better Online Solutions Ltd (BOSC, Financial) has successfully transitioned its Robotics division to the defense sector, with 90% of projects serving this rapidly growing market.
- The company's backlog increased by 15% to $23 million as of the end of September, indicating strong future performance.
- BOS Better Online Solutions Ltd (BOSC) remains on track to achieve its net income target of $2.2 million for the year, showcasing effective cost management.
- The company is well-positioned to capitalize on the growing global defense market, supported by increased defense budgets in Israel and Europe.
- BOS Better Online Solutions Ltd (BOSC) plans to enhance its visibility in the US capital markets by partnering with US-based investor relations firms.
Negative Points
- BOS Better Online Solutions Ltd (BOSC) anticipates falling short of its projected $46 million annual revenue target, expecting to close the year with approximately $40 million.
- The shortfall in revenue is attributed to delays in delivering certain customer orders by year-end.
- The company's current market cap is lower than its equity, indicating potential undervaluation concerns.
- BOS Better Online Solutions Ltd (BOSC) faces challenges in evenly distributing orders throughout the year, impacting revenue forecasts.
- The company is currently selling to only three countries in Europe, suggesting limited geographical diversification in its sales.
Q & A Highlights
Q: Can you provide an update on the backlog, which was $23 million as of September 30?
A: The backlog has continued to grow, reaching approximately $24 million, which is 20% higher than the backlog at the end of last year. This growth indicates that the current revenue decrease is temporary and related to operational issues. We expect to close this gap next year. - Eyal Cohen, CEO
Q: How will the recent 60-day ceasefire between Israel and Lebanon affect your defense business, and do you see continued strength in this area?
A: The ceasefire is positive, but there are three major factors positively affecting the Israeli defense industry: the need to reduce dependency on foreign suppliers, replenishment of military inventories due to the prolonged conflict, and the growing European defense budget due to the Russia-Ukraine conflict. These factors position us well for long-term growth in the global defense market. - Eyal Cohen, CEO
Q: How many countries in Europe are you currently shipping components to?
A: We are currently selling to three countries in Europe, and this is a growing trend. We also sell to the US and India. - Eyal Cohen, CEO
Q: What are the financial expectations for the year-end 2024, given the current revenue shortfall?
A: Despite the revenue shortfall, we remain on track to achieve our net income target of $2.2 million for 2024, demonstrating effective cost management and profitability maintenance. - Eyal Cohen, CEO
Q: What is the company's strategy for growth in the international market?
A: We aim to expand international sales by leveraging relationships with Israeli defense customers operating globally. This strategy has already resulted in $6 million in overseas sales in 2023, with agreements finalized with subcontractors in India and Greece. Our Robotics division will also install a production line in Europe in the first half of 2025. - Eyal Cohen, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
