管理層發言
Ladies and gentlemen, thank you for standing by. Welcome to the BOS conference call. Operator instructions were provided. As a reminder, this conference call is being recorded and will be available on the BOS website as of tomorrow. Before I turn the call over to Mr. Cohen, I would like to remind everyone that forward-looking statements regarding the company's business, financial condition and results of 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, product and technology development, 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.
Good morning, everyone, and welcome to BOS First Quarter 2025 Earnings Call. I'm joined today by our CFO, Mr. Moshe Zeltzer. We delivered exceptional results this quarter, with record revenues and record net income that underscore the strength of our defense-focused strategy. The results reflect years of deliberate investment in product diversification and operational excellence, positioning us to capitalize on the defense sector's robust growth trajectory. With our strong Q1 performance and a healthy $22 million backlog, we are raising our confidence in exceeding our full year 2025 targets of $44 million in revenues and $2.5 million in net income. Our outlook remains grounded in the organic opportunities we see today and maintaining our conservative approach. Our growth strategy rests on two foundational pillars. First, deepening client relationships. We are extending our value proposition to our defense customers through complementary offerings, exemplified by our successful launch of a new cabling line that leverages existing client relationships.
Second, international expansion. We are strategically expanding overseas by partnering with our Israeli defense clients' global subcontractors. This approach generated $4 million in overseas sales in year 2024 through our Supply Chain division. Our Robotics division will install its first European production line this year, marking a significant milestone in our international growth. BOS presents a compelling investment opportunity built on four key strengths. First, we hold a strong and expanding position in the global defense industry during a period of accelerating market growth. The defense sector fundamentals continue to strengthen globally. Israel's defense budget increased 73% year-over-year, while Europe's rose 16%. This creates a sustained demand environment that directly benefits our business. Second, we have demonstrated consistent profitability with steady net income growth year after year, with a compounded annual growth rate of 49% between the years 2021 and 2025.
Third, our balance sheet provides flexibility for strategic growth: with $23 million in equity, zero bank debt and $4 million in cash, we have the financial foundation to execute our expansion plans while maintaining operational stability. Fourth, BOS is traded at just 10x on net income and a price-to-book ratio of 1. Our valuation offers attractive upside compared to broader market multiples. Thank you for your time and attention. Moshe and I are now happy to take your questions.
分析師問答
Congratulations on a great quarter. It was nice to see the margin improvement. Can you talk about margins moving forward as the company continues to grow and expand?
Yes. First, the gross margin represents the average margin that we have had, and we don't see any change in the future. This is the market that we are in. But we're expanding our offering to our clients, and as our offering is wider, the prices that we can take are higher and the margin increases as well.
And do you see the continued growth coming from the defense sector? I know you brought on the former procurement officer from the IDF, Avi Dadon. Do you think you'll see some larger contracts come from defense? And do you see your future growth as being a mix of organic and inorganic, as in M&A activity? Or do you just see organic growth?
I think in the current market, especially in the defense market, our hands are full of work with organic growth. There are opportunities in the Israeli market and overseas as well, especially in India. We have to put all our focus and effort into capitalizing on those opportunities. In parallel, we are evaluating opportunities for the acquisition of companies that have synergy with our business, whether it's for the civil market with the RFID division or for the defense market with the Supply Chain division.
Congrats on the great quarter. Could you address the backlog, please? The backlog dropped to $22 million.
Yes. The backlog was at a record level in December last year. It was about $27 million, and this was part of the confidence that led us to provide a positive outlook for 2025 with 10% growth. We are in a very, very hot market, and demand is strong. Sometimes there are peaks like we had in this quarter.
Okay. Also, last question. Can you share with us if there was any specific defense program that drove the defense side of the business? Or was it broad-based?
Sorry, can you repeat the question? I'm not sure I understood it.
Was there a specific defense program that drove that side of the business in this quarter? Or was it broader based?
Yes. A component for one of Israel's leading munitions programs. Our components are embedded inside.
I have another question, Eyal. Are you going to be in the United States anytime soon to do investor relations conferences, anything like that?
Yes. First, we plan to participate in a virtual conference in the coming months. Matt, our IR firm contact, arranged it. And of course, we plan to visit the U.S. this year.
Okay. And your $4 million in cash, any plans for that?
Yes. Transactions in the defense market are relatively large, and we need working capital to execute them. We will use this cash for working capital needs and also for M&A.
I want to ask about the backlog. The backlog is for 9 months, 6 months, 12 months — for how long is the backlog booked? How do you see the second quarter; what can you say, since we are two-thirds finished? So you have kind of the ability to replace some more than expected because it seems like your prospect for the year is a bit conservative, and I want to raise some comments about that if you can. But first of all, the backlog.
Yes. The backlog will be spread along 2025, and the $22 million covers about 50% of our annual revenues, so it's relatively high. I recall our call last year when some of the deals moved into 2025, and you can see that effect in this quarter. The Supply Chain business has timing around the purchase of orders, which affects delivery, billing and revenue recognition. But we feel confident with this level of backlog that we will exceed our outlook for 2025 of $44 million in revenues and $2.5 million of net income; that outlook already reflects 10% growth.
Okay. But you said that it's too early to predict now. So you prefer to wait maybe one or two more quarters?
Yes, yes. I think that when the second quarter results are released in August, we will have much more information to give a more detailed operating outlook.
Okay. Can you say any comment about the second quarter, or do you prefer just to talk after the results?
Yes. Usually we give an outlook for the year, not for a quarter. But you can try — you ask every quarter. Try again next quarter to ask.
Okay. Great results. I hope you will continue the same way because it is a magnificent quarter. You have to repeat it.
We will try. There are peaks; it's a very hot market, and we are trying to do our best to capitalize on all the opportunities that we have on the table with our different clients with whom we have great relationships. Any further questions? Okay. So to conclude, BOS is strategically positioned for continued success. Our focused approach, strong execution and solid financial foundation create a platform for delivering sustained shareholder value in the years ahead. Thank you for joining us today. Please do not hesitate to reach out if you need additional information or would like to schedule a follow-up discussion. Have a great day. Thank you. Bye-bye.