B.O.S. Better Online Solutions (NASDAQ:BOSC) Q1 2020 Earnings Call

0:00 Ladies and gentlemen, thank you for standing by. Welcome to the BOSS first quarter 2020 results conference call. All participants are present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference call is being recorded and will be available on the BOSS website as of tomorrow. With us online today is Mr. Eyal Cohen, CEO. 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, change in economic conditions, risks in product and technology development, and the effect of the company's accounting policies.

0:54 as well as certain of the 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. Mr. Cohen, please go ahead.

1:05 Thank you. Dear shareholders, our RFID and supply chain businesses did very well in the first quarter of the year. The backlog of our supply chain continued to grow in the first quarter of the year. The growth attributed mainly to the expansion of our supply chain businesses Our RFID business performance in the first quarter of the year was outstanding and above expectations. It is mainly attributed to the cost reduction we started to implement in the first quarter this year, and it will be fully reflected in the second quarter. Our primary and most crucial challenge for the year 20 is to make significant penetration of our robotic business to the U.S.

1:56 market, our strategic market, with the highest potential for our robotic business. To achieve that target, me and the robotic team invest enormous efforts to support our US Health Office. It is not an easy task, especially with the current situation of the corona in the U.S., but we need to complete this mission by the end of this year. Let's complete my financial review, business review, and now I will take your question. Thank you. Thank you, ladies and gentlemen. At this time, we'll begin the question and answer session. If you have a question, please press star 1. If you wish to cancel your question, please press star 2.

2:43 If you're using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be pulled in the order they are received. Please stand by while we pull for your questions. The first question is from Igor Vasserman of SIG.

3:04 Please go ahead. Igor Vasserman Hello? Hello? Igor Vasserman Yes. Hi. It's a question about backlog. How the current backlog is compared to the backlog at the year end, 2019? Igor Vasserman Okay.

3:25 The backlog that I mentioned in the press release actually reflect the The backlog for delivery of the year-end 20. So the total backlog, as of March 20, amounted to $16 million, which, as I said, $12 million expected to be delivered during this year. And comparing to total backlog as of December, 19, which was $13 million. So we have a growth of $3 million in the backlog during the first quarter of year 20 from $13 million to $16 million.

4:14 Okay, thank you. And another question. What industries do you target with your robotics products?

4:24 Okay. We are targeting the the Plastic Manufacture Industry for the Food in the U.S. This is the target market, this is the target client, and this is the target territory. In that territory, we have about 100 target clients that meet our criteria, that need our robot, that use the robot of our competitors, which are European competitors. And we believe we have place and we can take a market share in the U.S.

5:15 market, which is relatively the biggest market in the world.

5:22 Okay, thank you. Thank you very much.

5:24 Thank you, Igor. The next question is from Tom Selby of RHK Capital. Please go ahead.

5:32 Congratulations first on your return to profitability. It was also nice to see the outlook given in the press release forecasting sales growth from 2019, which should make 2020 revenues another all-time record for the company. My question is that in the United States, there have been many food processing plants shutting down due to the spread of COVID-19 among the workers in these facilities. Can you talk about the opportunity and growth potential that B.O.S. has in the sector?

6:05 Yes. So in general, robots can replace workforce, human workforce. And the current period proved the necessity of using robots. Especially if it increases efficiency as well. Both robots enable plastic manufacturers to produce food packing by in-mouth label technology. And by that technology, the label is an integral part of the plastic package and not attached to it. And I think we are in the right time in the U.S. because the U.S.

6:50 government supports the local industry. and the food industry is relatively stable market with the stable demands for food. And adding to that the trading war with China, so we have the ideal condition for penetrating to the U.S. market.

7:14 Great. Thank you very much.

7:15 Thank you, Claude. If there are any additional questions, please press Star 1. If you wish to cancel your request, please press Star 2. Please stand by while we pull for more questions. There are no further questions at this time. Before I ask Mr. Cohen to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available on the company's website www.BOScorporate.com by tomorrow. Mr. Cohen, would you like to make your concluding statement?

7:49 Yes, thank you. Thank you for joining our call today. We have two months for our next call, which will be in August, and I hope we will have significant progress in our plans for the robotic business, and I will keep you posted. Thank you very much. This concludes BOSS first quarter 2020 results conference call. Thank you for your participation. You may go ahead and disconnect.