Ladies and gentlemen, thank you for standing by. Welcome to the BOS Third Quarter 2018 Results Conference Call. All participants are at present in a 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 call is being recorded, and will be available on the BOS website as of tomorrow. I would now like to turn over the call to Miss Jen Belodeau of IMS. Please go ahead..

Good morning and thank you for calling in to review BOS’s third quarter 2018 results. Management will provide an overview of the results, followed by a question-and-answer session. I will now take a brief moment to read the Safe Harbor statement.

The forward-looking statements contained herein reflect management’s current views with respect to future events and financial performance.

These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of BOS.

Factors and uncertainties include amongst others, the dependency of sales being generated from one or a few major customers, the uncertainty of BOS being able to maintain current gross profit margins, inability to keep up or ahead of technology and to succeed in a highly competitive industry; inability to maintain marketing and distribution arrangements and to expand our overseas markets, uncertainty with respect to the prospect of legal claims against BOS.

The effect of exchange rate fluctuations, general worldwide economic conditions, and continued availability of financing for working capital purposes and to refinance outstanding indebtedness, and the additional risk and uncertainties detailed in BOS’s periodic reports and registration statements filed with the U.S.

Securities and Exchange Commission.

BOS undertakes no obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions or circumstances on which any such statements may be based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

On the call this morning, we have Yuval Viner, Co-CEO; and Eyal Cohen, Co-CEO and CFO. I will now turn the call over to Eyal. Please go ahead, Eyal..

Thank you. We are pleased to present a consecutive growth in revenues and net income. In 2016, our revenues grew by 7% and net income by 8%. In 2017, our revenues grew by 5% and net income by 114%. In the first nine months of 2018, our revenues grew by 12% and net income by 38%.

We continue to drive improvement to our balance sheet as well, with low net of cash in the amount of $800,000 or NIS [ph]. Last 12 months EBITDA of $1.5 million and our share holder equity improving to $11.2 million or approximately $3.2 per share, well above our current market capitalization.

Both management and board of directors remained focus on growing BOSC two divisions, both organically and through acquisitions. On the RFID and Mobile division, we are targeting acquisitions that will significantly expand our products and solution offerings to our existing customers in the industry, logistic and the retail.

In the supply chain, we are targeting acquisitions that will significantly increase the number for electronic manufacturers that we represent. The acquisition which we consumed in 2016 has been a success.

We have successfully grown its revenue by 75% in two years, from $2 million a year before the acquisition to $3.5 million in year 2017 and it continues to grow. I can share with you that we were very close to signing an acquisition this year, but unfortunately and surprisingly, another project [Indiscernible] and stopped the process.

Nonetheless, we are confident that both have an excellent platform to acquire strategic business that can significantly increase both product offering and solutions and drive growth above and beyond our consistent organic growth. I will now turn the call over to Yuval..

Thank you, Eyal. We are pleased with our financial results for the third quarter and first nine months of 2018. Through both, our RFID and Mobile division and our supply chain division we have a solid customer base in place. We are focused on increasing that [ph] base by the growing demand we are seeing in the marketplace for IoT solution.

We are encouraged by the interest we are seeing for our unique technology solution and services, and believe, our growing reputation as a solution provider, who meets and often exceed customer expectation will create continued opportunities for the growth of our business.

We have long standing customer base of industry leaders representing diverse variety of industry including, avionic, retail manufacture, defense and government entities.

We remain focused on leveraging our expertise and capability to win new opportunities from existing customer and to position BOSC to compete effectively for opportunities with new customers and contracts.

We believe, we are well-positioned to drive continued growth and profitability as we close out fiscal year 2018, and with our visibility today we expect to meet our forecasted $29 million in fiscal 2018 revenues and anticipate to exceed $800,000 in net income for this year. We will now take questions..

Thank you. [Operator Instructions] The first question is from Bryce Thomas of North Grove Asset Management. Please go ahead..

Hi, Eyal and Yuval. It looks like your supply chain division has been receiving more international orders.

What percentage of that business was international for the quarter? And how does that compare with a few years ago?.

Thank you for the questions, Bryce. International sales are the major growth engine of our supply chain division. And the portion of its international sales, have grown gradually from about 22% in the year 2012 up to 52% in the first nine months of 2018, and it continues to grow..

And how should we think about visibility in your business? What percentage of the business is backlog driven?.

First, we are meeting our outlook year by year since the year 2010, so the meaning is that we have visibility from our business. But in deterrent [ph] both backlog usually covers about a third of our annual revenues, meaning approximately $10 million.

And in addition, we have a high visibility for additional $7 million revenues that attribute to ongoing revenues, like a service contract, ongoing inventory count income consumables. So to recap, we have high visibility for approximately $15 million annual -- $15 million annual revenues, which is approximately 50% of our total annual revenue..

Okay, great. Thank you..

[Operator Instructions] There are no further questions at this time. Before I ask Mr. Viner 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 tomorrow at www.boscom.com. Mr.

Viner, would you like to me make your concluding statement?.

Thank you for joining today. We are looking forward to our next call for Q4 and the end of the year. Thank you all..

This concludes BOS third quarter 2018 results conference call. Thank you for your participation. You may go ahead and disconnect..