B.O.S. Better Online Solutions Ltd. (NASDAQ:BOSC) Q4 2021 Earnings Conference Call March 30, 2022 9:00 AM ET
Company Participants
Eyal Cohen – CEO
Moshe Zeltzer – CFO
Conference Call Participants
Unidentified Analyst –
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the BOS Year 2021 Results Conference Call. All participants are at present in listen-only mode. Following management’s formal presentation instructions will be given for the question-and-answer session. [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 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. Hello and 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 2022 because most of its sales are associated with the Israeli defense industry. 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 2022. Regarding the robotics division, the continuing workforce shortage in factories and logistics centers is a great growth opportunity for this division.
To conclude, we anticipate that our revenues for year 2022 will exceed $35 million compared to $33.6 million in year 2021. 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 that increased our operational cost. We are doing extensive actions to renew those costs to our client, customers.
At the macro level, the recovery of the robotics division has been significantly slower than we anticipated and it has negatively affected the year 2021 financial results. We continue our effort to bring the robotics division to a bracket in point in year 2022. To conclude, we expect year 2022 net income to exceed $1 million as compared to $450,000 in year 2021. That completes my review, and I will now take your questions, please.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions]. The first question is from Todd Felte of [indiscernible] Financial Services.
Unidentified Analyst
Hello, thank you for taking my questions. Good morning Eyal and Avi. I was wondering if the supply chain crunch or the war in Ukraine has created any problems or opportunities for the company, can you add some color to that?
Eyal Cohen
Thank you Todd. I believe that the anticipated increase in the defense budget in Europe, because of the tension — the current military tension there will positively impact the division’s revenues in year 2022 because most of the sales of the supply chain division are to the Israeli defense industry and I assume that this industry will take a significant portion on this military budget.
Unidentified Analyst
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 was 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?
Eyal Cohen
Currently, the client that we are doing — that we started doing business with them a year ago, we got ongoing orders from this client. So the businesses are going very well I think. It’s a matter of time that we will — as the Israeli defense industry will go into this market, we will increase our revenues in this market as well.
Unidentified Analyst
Okay, thanks for taking my questions and congratulations on a good quarter.
Eyal Cohen
Thank you very much.
Operator
[Operator Instructions]. There are no further questions at this time. Before I ask Mr. Cohen to go ahead with his closing statement, I’d like to remind participants that a replay of this call will be available on the company’s website, www.boscom.com by tomorrow. Mr. Cohen, would you like to make your concluding statement?
Eyal Cohen
Thank you for joining our call today, and I look forward to meeting you on our next call or before you can contact me any time by phone or by email. Thank you.
Operator
This concludes BOS year 2021 results conference call. Thank you for your participation. You may go ahead and disconnect.
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