B.O.S. (ticker not provided) has announced record financial results in its recent earnings call, citing consistent growth since 2021. Eyal Cohen, CEO, along with Chairman Ziv Dekel (LON:DKLD) and CFO Moshe Zelter, discussed the company's financial milestones, including a revenue increase from $33.6 million in 2021 to $44.2 million in 2023.
Despite these achievements, B.O.S.’s market capitalization has remained roughly unchanged, prompting the company to seek analyst coverage to improve investor exposure. Looking ahead, B.O.S. expects continued growth in 2024, with projected revenues of $46 million and a 10% increase in net income to $2.2 million.
Key Takeaways
- B.O.S. reported significant growth in revenue, EBITDA, net income, and EPS from 2021 to 2023.
- The company’s financial position strengthened, with total assets and shareholders' equity witnessing substantial increases.
- Despite positive financial trends, market capitalization has not reflected this growth.
- B.O.S. aims to gain analyst coverage to attract more investors.
- The Supply Chain division is expected to grow due to an expanded product list and sales force.
- The Intelligent Robotics division is transitioning to the Israeli Defense sector, promising further growth.
- B.O.S. projects $46 million in revenues for 2024, with net income increasing by 10%.
Company Outlook
- Anticipated revenue for 2024: $46 million.
- Projected 10% growth in net income for 2024, reaching $2.2 million.
- Supply Chain division to contribute to revenue growth through new electronic manufacturers and an expanded sales force.
- Increased demand in the Israeli Defense segment expected to positively influence revenues.
Bearish Highlights
- Market capitalization remains stagnant despite financial growth.
- Data RFID vision sales decreased by 10% in 2023 due to a slowdown in the Israeli civilian sector.
Bullish Highlights
- The Intelligent Robotics division has become profitable and is expected to be the fastest-growing division in 2024.
- Expansion into the Israeli Defense sector to drive growth for the Intelligent Robotics division.
Misses
- Fourth-quarter revenues for 2023 were impacted by the war that began in October, but this is expected to be recovered in the first half of 2024.
Q&A Highlights
- The Intelligent Robotics division turned profitable in the fourth quarter of 2023.
- The division is projected to significantly increase its revenue percentage in 2024.
- Delayed business from the fourth quarter of 2023 due to the war is expected to be recovered in the first and second quarters of 2024.
- B.O.S. is considering adding comparative valuation metrics with similar companies in future presentations.
B.O.S. aims to continue its growth trajectory by expanding into premium market segments and exploring mergers and acquisitions that are synergistic with its operations. The company's expansion plans include extending the RFID division's footprint beyond production floors and warehouses to retail stores. With a strategic focus on favorable market dynamics and organizational enhancement, B.O.S. is poised for a promising 2024, as it seeks to capitalize on its record results and robust growth strategy.
InvestingPro Insights
B.O.S. has indeed shown remarkable growth, and the data from InvestingPro further emphasizes the company's financial achievements and potential investment opportunities. With a P/E ratio of 8.97 and an adjusted P/E ratio for the last twelve months as of Q4 2023 at 8.74, B.O.S. is trading at a low price-to-earnings ratio relative to its near-term earnings growth. This indicates that the stock may be undervalued given its earnings potential, which aligns with the company's own projections for continued growth.
InvestingPro Tips suggest that B.O.S. has experienced a significant return over the last week, with an 11.31% price total return, and a strong return over the last three months, boasting a 15.53% price total return. These returns reflect the market's positive reaction to the company's financial results and may serve as a signal to investors about the stock's momentum.
Despite challenges, B.O.S. maintains a solid financial position with liquid assets exceeding short-term obligations, which is a reassuring sign for investors concerned about the company's liquidity and short-term financial health.
Investors interested in deeper analysis might consider the additional 9 InvestingPro Tips available for B.O.S., which offer a comprehensive look at the company's financial health, stock performance, and market valuation. For those looking to take advantage of these insights, use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - B.O.S. Better Onl (BOSC) Q4 2023:
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the B.O.S Conference Call. A participants are at present in listen-only mode. As a reminder, this conference call is being recorded and will be available on the B.O.S website as of tomorrow. Before I turn the call over to Mr. 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. Cohen, please go ahead.
Eyal Cohen: Thank you for joining our call today. Mr. Ziv Dekel, Chairman; Moshe Zelter, CFO, are on the call with me today. I am excited to meet here again at our quarterly video meeting. During this meeting, we will review our financial results and business trends and growth strategy. After that, we'll have a Q&A session. Year '23 reflects record result of B.O.S. We have achieved this goal gradually and consistently since year '21. During those years, our revenue grew from $33.6 million in year '21 to $44.2 million in year '23. EBITDA grew from a less than $1 million in year '21 to more than $3 million in year '23. Our net income grew from $0.5 million in year '21 to $2 million in year '23 and our EPS grew from $0.08 in year '21 to $0.35 in year '23. During those years, we also strengthened our financial position. Our total assets grew from $25 million in year '21 to $32 million in year ‘23. Our shareholders' equity increased from $40 million in year '21 to $90 million in year '23, and our cash net of bank loans remained positive, standing at $1.2 million at the end of year '23. Despite all those positive trends and progresses that we have been made during this period, our market cap remained roughly unchanged. It was $50 million on December '21 and remains $50 million, $60 million today. The following slide presents B.O.S. current valuation ratio. The market cap ratio to net income of year '23 is 7.7. Market cap ratio projected net income for year '24 is 7.1. Market cap ratio to EBITDA of year '23 is 5.4 and market cap ratio to shareholders' equity is only -- is less than 1 -- I think it's 82%. I hope that B.O.S. we've had analyst coverage this year to expose our story to more investors. Business trends. In year '23, the Supply Chain division expanded the list of electronic manufacturers it represents and increased its sales force. Hence, we expect revenue growth from those products in year '24 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 '24. On the other hand, during year '23, 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 '24, the market will return to standard demands. Data RFID vision sales are mainly to logistics centers in Israel. Its revenues in year '23 decreased by 10%, affected by the slowdown in the Israeli civilian sector. During year '23, we significantly expanded our offering portfolio, and we expect this will yield revenue growth in '24. 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 '24. According to those business trends, we anticipate $46 million of revenues in year '24 and net income growing by 10% to $2.2 million. I want to turn the call over to Mr. Ziv Dekel, Chairman, who will elaborate on our growth strategy.
Ziv Dekel: Thank you, Eyal, and good morning and afternoon to everybody. In reference to Eyal's point and within a broader framework versus 2023 record result, 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, revamping most of B.O.S.'s core business, bringing it to a consistent course of capability base, 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 premium segments in the Israeli market. 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&A effort focusing on local competitively and operatively synergetic companies. I trust B.O.S.’s team led by Eyal to win these challenging processes on the broader perspective of all over the company's strategy. Thank you for your attention. I will now hand over the presentation back to Eyal.
A - Eyal Cohen: Thank you, Ziv. At this time, we begin the Q&A session. [Operator Instructions] Thank you.
Todd Felte: Hi. I had a question regarding your Robotics division. It looks like it was the first time it was profitable? Is that correct in the fourth quarter?
Eyal Cohen: Yeah. Hi, Todd. How are you?
Todd Felte: I’m pretty good. Thank you.
Eyal Cohen: So in the second quarter of this year, year '23, it was breakeven also in the third quarter. And in the fourth quarter, it's profitable.
Todd Felte: Okay. And do you expect that to be your fastest-growing division in 2024?
Eyal Cohen: Yeah, it will increase its revenue significantly in percentage in year '24, according to ‘23, yes.
Todd Felte: Okay. And finally, the fourth quarter revenues were a little bit weaker due to the war that begin in October. Do you expect a lot of that business, was it pushed to the first quarter? Or will we see that just come in throughout the year?
Eyal Cohen: Yeah, I believe that it was posted the first and the second quarter. And it gave us comfort to provide the outlook for year '24 for growth.
Todd Felte: 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 could -- maybe you could include some other companies in similar industries 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?
Eyal Cohen: Yeah, it's good. I hope there will be an analyst coverage during this year, I hope then by the first half of the year. And I'm sure that in that got we will see this comparison analysis.
Todd Felte: Okay, thank you for taking my questions. Congratulations on a really strong year. And I look forward to 2024.
Eyal Cohen: Thank you, Todd.
Ziv Dekel: Thank you, Todd.
Eyal Cohen: Any further question? Okay. There are no further other questions at this time. So thank you for joining our call today. We look forward to meeting you again on B.O.S. first quarter call, which will be in May ‘24. Thank you all.
Ziv Dekel: Thank you, all.
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