RFID solutions developer BOS Better Online Solutions Ltd. (Nasdaq: BOSC) is closing Summit Radio, five years after acquiring the US company for $5.5 million. Rishon LeZion-based BOS said its two US subsidiaries - BOS Supply Chain Solutions (Summit) Inc. and its holding company, BOS Supply Chain Solutions (Lynk) Inc. - filed a Chapter 7 petition with the US Bankruptcy Court.
A few weeks ago, BOS reported a drop in orders by a large customer of BOS Supply Chain Solutions. At an investors conference, BOS president Avidan Zelicovski said, "Summit operated in the executive jet market, and 2009 was a turbulent year for this market. Even now, the market is very complicated. One of our customers has slashed its orders in the past three months, although we're not talking about an end of relations with this customer. There is a decline, and we're examining its effects."
That review was completed yesterday. As a result of the closing of Summit, BOS will report a $660,000 non-cash write-off in the fourth quarter of 2010, but does not expect any adverse financial impact on its continuing operations. Zelicovski said yesterday, "Summit ended 2009 with a net loss of $3 million, and recorded a net loss of $70,000 in the first nine months of 2010." Summit also has a $3.5 million bank debt.
Zelicovski summed up, "We concluded that closing Summit would best serve our existing profitable and growing Israeli based activities in both the RFID and mobile division and the supply chain division, which had generated in the first nine months of 2010 revenues of $9.2 million and $12.5 million, respectively."
BOS's share price rose 1.2% at the opening in New York today to $1.64, giving a market cap of $4.35 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 24, 2010
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