BOS Better Online Solutions Ltd (BOSC) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the BOS Fourth Quarter and Full Year 2020 Results Conference Call.

(Operator Instructions)

As a reminder, this conference call is being recorded, and will be available on the BOS website as of tomorrow. With us on the line today are Mr. Eyal Cohen, CEO; and Mr. Moshe Zeltzer, CFO. Before I turn the call over to Mr. Cohen, I would like to remind everyone that forward-looking statements for the respected 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 in 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.

Thank you. And welcome to BOS earning call. I am pleased with the progress we made in the second half of year '20 with 2 consecutive quarters of growth in revenues and profits. We have made significant progress in building the robotic division to be the growth engine of BOS. We saw its initial yield in the fourth quarter revenues as the robotic business became the primary growth factor.

Our robotic division provides downstream automation mainly for mold producers, starting at the mold injection process, through the quality inspection, assembly, and packing of the molds. Our robotic system reduces the workforce, shortens the production cycle and improves quality controls. Those are the critical factors for proven ROI.

The robotic division mission is to be a leading provider of robotic systems for mold producers, mainly in North America. To execute this mission, we established sales and technical support in the U.S.A., and we made good progress in improving production efficiency at our development and production center in Israel. Yet, we have a lot to improve, and I am on it personally.

Supply Chain division. Its revenue is reduced by 5% in year '20, primarily related to India's market but tends to increase in North America sales and improved gross profit margins, the operating income of year '20 amounted to $1.1 million, roughly the same as it was in year '19. RFID division, its revenues for year '20 decreased by 7% due to the COVID, but thanks to cost reduction and improved gross profit margin, the operating profit of year '20 increased to approximately $1 million versus operating loss of $100,000 in year '19. That's complete my review. And now I will take your questions.

The first question is from Todd Felte of Advisory Group Equity Services.

Congratulations on a great fourth quarter and an exciting forecast ahead. I wanted to ask you about the robotics growth in the U.S. I know you had mentioned that, that would be the growth engine of the company, going forward. And I know we're hoping to see some additional contracts soon. But can you maybe give a little color around the amount of proposals you're working on this year as compared to last year in that area?

All right, thank you for the question. We did underline the U.S. sales operation, and it started to work on a new format in January '21. It works very well and meets our expectations. And as we mentioned, as I mentioned also that I hope to make the [direct research] in the coming months.

I cannot give number of proposals because it's not publicly released before, but we are a very good rate. What we achieved in 1 quarter, we didn't achieve in the 1 year with the previous structure of the sales office in the U.S.

So I hope to make that we will make the breakthrough in the coming months as in the U.S. market.

That's great. And 1 follow-up question. I know that you recently had done a financing at the end of the fourth quarter. I just wanted to clarify and see if there was going to be any need for additional financing coming up or if -- or you expect there to be no more dilution and no need for additional capital in 2021?

No. We don't expect to raise additional funds in year '21 and if there will be a need due to any target acquisition, it will be -- I will let the investors know about it before, but I don't see it happening in year '21.

The next question is from Marc Schindler of Pivot Point Advisors.

And congratulations on a fabulous quarter. Looks like company is really poised for good growth this year and next year. I wanted to ask you in particular about the robotics division. Can you elaborate a little bit on what you're seeing in that division, and the types of proposals and what your target market is and the margins, et cetera?

Thank you, Marc. The robotic division, we provide downstream automation mainly for mold producers. And we are targeting -- we are targeting our solutions, our product to -- mainly to North America. We have existing customer in South America as well. We have a small client base in the U.S., which we want to increase. The type of -- the target audience is mold producers. We are very focused on those manufacturers in which we provide them a complete set of automation, starting at the point of the injection process of the mold, through the quality inspection of the mold, assembly of several parts of the mold into 1 unit and automatic packing solution systems for the mold.

And as I mentioned, those systems reduce significantly the workforce, shorten the production cycle, improve the quality control. And it has a proven ROI for the mold producer -- manufacturers.

(Operator Instructions)

There is a follow-up from Marc Schindler of Pivot Point Advisors.

Yes. Can you tell us the savings that the companies derive from your robotics machines? And what type of orders you're seeing, going forward, on the robotics division, please?

The saving, as I mentioned, it's mainly in the workforce, where the mold producers engage a lot of the workers to pack in the molds after the injection process to stack it, to pack it, to check it, put it into boxes. And we provide automation for all of it.

And in those ways, we completed the installation of one of our clients in the U.S., which we implement full automation in line. And in this line, you won't see workers, meaning there are -- starting at the taking out the molds from the injection machine, doing addition, assembly, and then stack it into sleeves, then put it into box.

Even there are no employees to open the box. We have the automatic machine that open the box, create it and opening it. Then we put -- robotic system put the sleeves into boxes and automatic machine close the boxes. So you won't see employees on the floor. And -- but each manufacturer can use certain models of the system. Certain manufacturers take it to the end and other take certain models, it depends on their budget.

There are no further questions at this time. Before I ask Mr. Cohen to go ahead with his closing statements, I would like to remind participants that a replay of this call will be available on the company website, www.boscom.com, by tomorrow. Mr. Cohen, would you like to make your concluding statement?

Yes. Thank you for joining our call today, and I am, and we are, looking forward to our next earnings call in May. Thank you. Have a great day.

This concludes BOS Fourth quarter and Full Year 2020 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.