Better Online Solutions Reports Mixed Results in Q2

Published: September 11, 2006

by Timothy Prickett Morgan

Midrange connectivity solution provider Better Online Solutions continues to try to balance its revenues and costs after it divested itself recently of several business units, and in the second quarter of 2006 it reported a decline in sales, in part related to those divestitures.

For the quarter ended June 30, BOS said sales were $4.5 million, down 39 percent from the $7.3 million it booked in the same quarter a year ago. However, by divesting of those businesses--relating to thin client and various software utilities--BOS was able to substantially drop its costs of sales and research and development, and managed to bring $37,000 to the bottom line. A year ago, BOS had much larger revenues, but it lost $940,000, too.

For the six months ended June 30, BOS had sales of $9.6 million, down 34 percent, but it booked a net profit of $174,000, which is a much better than the $1.9 million loss it had in the first six months of 2005.

After the divestitures, BOS has two major business lines. The first one is its connectivity business, which makes connectivity products that are sold under the BOSaNOVA brand name to link thin clients, PCs, and other devices to OS/400 and i5/OS platforms. The other is its Odem Electronics unit, which makes various semiconductor products used in the RFID, imaging, networking, and telecom areas. The connectivity business had sales of $451,000 in the quarter and an operating loss of $118,000. The vast majority of sales at BOS are coming from its electronics components business, which was just barely profitable in the quarter. For the first six months, BOS posted sales in the connectivity products business of $1.1 million, and an operating loss of only $66,000.

BOS ended the June quarter with $2.5 million in cash, a slight increase from the December 2005 quarter.