B.O.S. Better Online Solutions Ltd. (BOSC) Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. Welcome to the BOS Year 2021 Results Conference Call. [Operator Instructions] As a reminder, this conference 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 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 policy 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 everyone, thank you for joining our quarterly call. The wide product offering of BOS with 2,000 active clients are an excellent platform for business development that will result in long-term organic and external goals. Regarding BOS Supply Chain division, I believe that the anticipated increase in the defense budget in Europe will positively impact the division's revenues in year '22 because most of its sales are associated with the Israeli defense industries. Regarding BOS RFID division, I expect that the acquisition of the Dagesh business that we recently announced will positively impact the revenues of this division in year '22. Regarding the robotics division, the continuing workforce shortage in factory and logistics centers is a great growth opportunity for sales decision. To conclude, we anticipate that our revenues for year '22 will yield $35 million compared to $33.6 million in year '21. On the cost aspect, we have built with micro events that have increased our cost, such as longer lead time products and commodities, which have reduced our operational efficiency and deferred revenues. Inflation in salaries, commodities and the devaluation of the dollar, U.S. dollar against the NIS has increased our operational cost. We are doing extensive actions to involve those costs for our client customers. At the [indiscernible] level, the recovery of the Robotics division has been significantly slower than we anticipated and it negatively affected the year '21 financial results. We continue our effort to bring the Robotics division [indiscernible] in the year '22. To conclude, we expect year '22 net income to exceed $1 million as compared to $450,000 in year '21. That concludes my review, and I will now take your questions, please.

[Operator Instructions] The first question is from Todd Felte of [indiscernible] Financial Services.

Eyal, I was wondering if the supply chain crunch for the war in Ukraine has created any problems or opportunities for the company? Can you add some color to that?

Todd, I believe that the anticipated increase in the business budget in Europe, because of the tension in the current military retention work will positively impact the division's revenues in year '22 because most of the sales of the Supply Chain division are to be really different that this industry will take a significant portion on this military budget.

Okay. And I also had some questions on the expanding business in the UAE. I know that's a new avenue for business that we didn't expect is going to happen a couple of years ago. Is that continuing to expand? And do you have any other countries in the region that are starting to give you orders that you weren't expecting?