B.O.S. Announces Financial Results for Second Quarter of 2013

B.O.S. Announces Financial Results for Second Quarter of 2013

Growth in Revenues and NON GAAP Profits of Second Quarter of 2013

RISHON LEZION, Israel, Aug. 28, 2013 (GLOBE NEWSWIRE) -- B.O.S. Better Online
Solutions Ltd. (the "Company," "BOS") (Nasdaq:BOSC), a leading Israeli
provider of RFID and supply chain solutions to global enterprises, today
reported its financial results for the three months ended June 30, 2013.

Revenues for the second quarter of fiscal 2013 amounted to $6.7 million,
compared to $5.9 million in the previous quarter of this year and the
comparable quarter last year.

On a non-GAAP basis, the net profit for the second quarter of 2013 was
$76,000, compared to a net loss of $90,000 in the previous quarter of this
year and a net profit of $10,000 in the comparable quarter of last year.

Net loss for the second quarter of fiscal 2013 amounted to $59,000, compared
to net loss of $203,000 in the previous quarter of this year and a net loss of
$214,000 in the comparable quarter last year.

Avidan Zelicovsky, BOS President, stated: "We are pleased with the improvement
in our financial results as compared to the comparable quarter last year and
the first quarter this year. In the first half of the year we faced a
reduction in the gross margin of the Supply Chain Division. The reduction is
attributed to the expansion of our business in India which carries lower gross
margins. We anticipate improvement in the gross margin of the Supply Chain
Division in the second half of year 2013."

Eyal Cohen, BOS CFO, stated: "Our cash and cash equivalents and long term bank
deposit amounted to $856,000 as of June 30, 2013 and $792,000 as of December
31, 2012.

Our bank loans as of June 30, 2013 were reduced to $8.1 million from $8.4
million as of December 31, 2012. We expect a further reduction of loans during
year 2013."

Conference Call

BOS will host a conference call on Thursday, August 29, 2013 at 10:00 a.m. ET
5:00 p.m. Israel time. A question-and-answer session will follow management's
presentation. Interested parties may participate in the conference call by
dialing + 972-3-9180644 approximately five to ten minutes before the call
start time.

For those unable to listen to the live call, a replay of the call will be
available from the day after the call on BOS's website, at:
http://www.boscorporate.com.

About BOS

B.O.S. Better Online Solutions Ltd. (Nasdaq:BOSC) is a leading provider of
RFID and Supply Chain solutions to global enterprises. BOS' RFID and mobile
division offers both turnkey integration services as well as stand-alone
products, including best-of-breed RFID and AIDC hardware and communications
equipment, BOS middleware and industry-specific software applications. The
Company's supply chain division provides electronic components consolidation
services to the aerospace, defense, medical and telecommunications industries
as well as to enterprise customers worldwide. For more information, please
visit: www.boscorporate.com.

Use of Non-GAAP Financial Information

BOS reports financial results in accordance with U.S. GAAP and herein provides
some non-GAAP measures. These non-GAAP measures are not in accordance with,
nor are they a substitute for, GAAP measures. These non-GAAP measures are
intended to supplement the Company's presentation of its financial results
that are prepared in accordance with GAAP. The Company uses the non-GAAP
measures presented to evaluate and manage the Company's operations internally.
The Company is also providing this information to assist investors in
performing additional financial analysis that is consistent with financial
models developed by research analysts who follow the Company. The
reconciliation set forth below is provided in accordance with Regulation G and
reconciles the non-GAAP financial measures with the most directly comparable
GAAP financial measures.

Safe Harbor Regarding Forward-Looking Statements

The forward-looking statements 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. These risk factors and uncertainties
include, amongst others, the dependency of sales being generated from one or
few major customers, the uncertainty of BOS being able to maintain current
gross profit margins, inability to keep up or ahead of technology and to
succeed in a highly competitive industry, inability to maintain marketing and
distribution arrangements and to expand our overseas markets, uncertainty with
respect to the prospects of legal claims against BOS, the effect of exchange
rate fluctuations, general worldwide economic conditions and continued
availability of financing for working capital purposes and to refinance
outstanding indebtedness; and additional risks and uncertainties detailed in
BOS's periodic reports and registration statements filed with the U.S.
Securities Exchange Commission. BOS undertakes no obligation to publicly
update or revise any such forward-looking statements to reflect any change in
its expectations or in events, conditions or circumstances on which any such
statements may be based, or that may affect the likelihood that actual results
will differ from those set forth in the forward-looking statements.

                                                                 
                                                                 
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
                                                                 
                                      Six months ended    Three months ended
                                       June 30,            June 30,
                                      2013      2012      2013      2012
                                      (Unaudited)         (Unaudited)
                                                                 
Revenues                               $12,585   $12,963   $6,655    $5,915
Cost of revenues                       10,326    10,215    5,446     4,537
Inventory write offs                   52        135       36        64
Gross profit                           2,207     2,613     1,173     1,314
                                                                 
Operating costs and expenses:                                     
Research and development              --        86        --        36
Sales and marketing                   1,401     1,629     724       752
General and administrative            778       840       359       394
Total operating costs and expenses     2,179     2,555     1,083     1,182
                                                                 
Operating profit (loss)                28        58        90        132
Financial expenses, net               (286)     (478)     (145)     (239)
Other income (expenses), net           --        (80)      --        (90)
Loss before taxeson income            (258)     (500)     (55)      (197)
Taxes on income                       4         20        4         17
Net Loss                               $(262)  $(520)  $(59)   $(214)
                                                                 
Basic net loss per share              $(0.23) $(0.48) $(0.05) $(0.20)
Basic and diluted net loss per share   $(0.23) $(0.48) $(0.05) $(0.20)
                                                                 
Weighted average number of shares used
in computing basic net earnings per    1,154,954 1,117,751 1,156,983 1,117,909
share
Weighted average number of shares used
in computing diluted net earnings per  1,154,954 1,117,751 1,156,983 1,117,909
share

                                                           
                                                           
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except per share amounts)
                                                           
                                              June 30, 2013 December 31, 2012
                                              (Unaudited)   (Audited)
ASSETS                                                      
                                                           
CURRENT ASSETS:                                             
Cash and cash equivalents                     $390          $354
Trade receivables                             8,091         8,007
Other accounts receivable and prepaid          575           616
expenses
Inventories                                   3,261         3,160
                                                           
Total current assets                           12,317        12,137
                                                           
LONG-TERM ASSETS:                                           
Severance pay fund                             23            21
Bank deposit                                   466           438
Other assets                                   14            11
                                                           
Total long-term assets                         503           470
                                                           
PROPERTY, PLANT AND EQUIPMENT, NET             925           963
                                                           
OTHER INTANGIBLE ASSETS, NET                  267           357
                                                           
GOODWILL                                      4,122         4,122
                                                           
                                              $18,134       $18,049

                                                           
                                                           
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
                                                           
                                                           
                                              June 30, 2013 December 31, 2012
                                              (Unaudited)   (Audited)
                                                           
LIABILITIES AND SHAREHOLDERS' EQUITY                        
                                                           
CURRENT LIABILITIES:                                        
Short-term bank loans and current maturities  $6,350        $6,383
Trade payables                                5,396         4,915
Employees and payroll accruals                 478           408
Deferred revenues                              604           467
Current maturities of liability to Dimex       132           136
Systems
Accrued expenses and other liabilities        415           567
                                                           
Total current liabilities                      13,375        12,876
                                                           
LONG-TERM LIABILITIES:                                      
Long-term bank loans, net of current           988           1,188
maturities
Accrued severance pay                          112           119
Liability to Dimex Systems                    678           710
                                                           
Total long-term liabilities                    1,778         2,017
                                                           
                                                           
COMMITMENTS AND CONTINGENT LIABILITIES                     
                                                           
SHARE HOLDERS' EQUITY                         2,981         3,156
                                                           
                                                           
Total liabilities and shareholders' equity     $18,134       $18,049

                                                                  
                                                                  
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
                                                                  
                                          Six months ended Three months ended
                                           June 30,         June 30,
                                          2013    2012     2013      2012
                                                                  
                                                                  
Net Cash used in (provided by) operating   $313    $1,140   $(165)  1,016
activities
                                                                  
Net Cash provided by (used in) investing   (87)    (87)     (32)      (38)
activities
                                                                  
Net Cash used in financing activities      (190)   (1,063)  (184)     (1,051)
                                                                  
Increase (decrease) in cash and cash       36      (10)     (381)     (73)
equivalents
                                                                  
Cash and cash equivalents at the beginning 354     411      771       474
of the period
                                                                  
Cash and cash equivalents at the end of    $390    $401     $390      $401
the period

                                                                    
                                                                    
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
                                                                    
                                     Three months ended June 30,
                                     2013                              2012
                                     GAAP           Adjustments Non-   Non-
                                      (as reported)             GAAP   GAAP
                                                                    
                                                                    
Revenues                              $6,655         $--      $6,655 $5,915
Gross profit                          1,173          36a        1,209  1,378
                                                                    
Operating costs and expenses:                                        
Research and development             --             --        --     36
Sales and marketing                  724            (45)b     679    707
General and administrative           359            (54)c      305    390
Total operating costs and expenses    1,083          (99)        984    1,133
                                                                    
Operating profit                    90             135         225    245
Financial expenses, net              (145)          --        (145)  (218)
Income (loss) before taxes on income  (55)           135         80     27
Taxes on income                      4              --         4      17
Net Income (loss)                     $(59)        $135        $76    $10
                                                                    
                                                                    
Notes to the reconciliation:                                         
a - Inventory write off.                                             
b - Amortization of intangible                                       
assets.
c - Stock based compensation.                                        

                                                                  
                                                                  
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(U.S. dollars in thousands, except per share amounts)
                                                                  
                                   Six months ended June 30,
                                   2013                              2012
                                   GAAP         Adjustments Non-    Non-
                                    (as reported)             GAAP    GAAP
                                                                  
Revenues                            $12,585       $--        $12,585 $12,963
Gross profit                        2,207         52a        2,259   2,748
                                                                  
Operating costs and expenses:                                      
Research and development           --            --        --      86
Sales and marketing                1,401         (90)b     1,311   1,538
General and administrative         778           (106)c     672     831
Total operating costs and expenses  2,179         (196)       1,983   2,455
                                                                  
Operating profit                  28            248         276     293
Financial expenses, net            (286)         --        (286)   (457)
Other expenses, net                 --            --        --      10
Loss before taxes on income         (258)         248         (10)    (154)
Taxes on income                    4             --         4       20
Net Loss                            $(262)      $248        $(14) $(174)
                                                                  
Notes to the reconciliation:                                       
a - Inventory write off.                                           
b - Amortization of intangible                                     
assets.
c - Stock based compensation.                                      

                                                          
                                                          
CONDENSED CONSOLIDATED EBITDA
(U.S. dollars in thousands)                                              
                                                          
                                  Six months ended Three months ended
                                   June 30,         June 30,
                                  2013     2012    2013      2012
                                  (Unaudited)      (Unaudited)
                                                          
                                                          
Operating Profit                  $28      $58     90        $132
Add:                                                      
Amortization of intangible assets 90       91      45        45
Stock based compensation           106      9       54        4
Depreciation                       88       140     43        70
EBITDA                             $312     $298    $232      $251

                                                                                  
                                                                                  
          RFID and  Supply                               RFID and  Supply
         Mobile    Chain     Intercompany Consolidated Mobile    Chain     Intercompany Consolidated
          Solutions Solutions                            Solutions Solutions
         Six months ended June 30,                      Three months endedJune 30,
          2013                                           2013
                                                                                  
Revenues $4,847    $7,764    $(26)      $12,585       $2,566    $4,097    $(8)       $6,655
                                                                                  
Cost of   $3,522    $6,830    $(26)      $10,326       $1,868    $3,586    $(8)       $5,446
Revenues
                                                                                  
Inventory
write     $45       $7        $--         $52           $25       $11       $--         $36
offs
                                                                                  
Gross     $1,280    $927      $--        $2,207        $673      $500      $--        $1,173
profit
                                                                                  
                                                                                  
          RFID and  Supply                               RFID and  Supply
         Mobile    Chain     Intercompany Consolidated Mobile    Chain     Intercompany Consolidated
          Solutions Solutions                            Solutions Solutions
         Six months ended June 30,                      Three months endedJune 30,
          2012                                           2012
                                                                                  
Revenues $4,504    $8,472    $(13)      $12,963       $2,144    $3,704    $67          $5,915
                                                                                  
Cost of   $3,238    $6,990    $(13)      $10,215       $1,496    $2,974    $67          $4,537
Revenues
                                                                                  
Inventory
write     $60       $75       $--         $135          $25       $39       $--         $64
offs
                                                                                  
Gross     $1,206    $1,407    $--        $2,613        $623      $691      $--        $1,314
profit

CONTACT: B.O.S. Better Online Solutions Ltd.
         Mr. Eyal Cohen, CFO
         +972-54-2525925
         eyalc@boscom.com
 
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