Ladies and gentlemen, thank you for standing by. Welcome to the BOS Q1 2023 results conference call. All participants are at present in 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 BOS website as of tomorrow. With us on the line today are Mr. Ziv Dekel, Chairman, Mr. Eyal Cohen, CEO, and Mr. Moshe Zeltzer, CFO. 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, changing economic conditions, risks in product and technology development, and 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 over the call to Mr. Eyal Cohen, the CEO. Mr. Cohen, please go ahead.
Hello, thank you for joining our call today. BOS empowers technologies for inventory efficiency through its three business divisions. The Robotic division develops custom-made robotic cells and integrates off-the-shelf robots that automate routine human activities in the production, assembly, packing, and sorting of inventory. The RFID division integrates software and hardware for marking, tracking, and managing inventory through the supply chain. Our Supply Chain division distributes electronic components. BOS's competitive advantage is built on 20 years in the business of inventory efficiency, built on client trust of more than 2,000 active clients, quality service, comprehensive and innovative offering. Those points are critical criteria for keeping our clients. Some recent developments. Our Supply Chain division distributes electronic components. Historically, our focus has been on the defense and aerospace sector.
Due to extensive business development that has been made in the recent year, we expect that in year 2024, the portion of civil sector, mainly high-tech, will increase significantly. RFID division, we have invested extensive managerial resources to expand our product offering organically by adding complementary technologies to increase the revenue per client. We have added alternative brands for each product to increase the closing rate of deals. I believe that those developments will yield in the year 2024. The Robotic division is transitioning to sell and integrate off-the-shelf robots rather than building custom-made machines. It will significantly reduce the risk of loss associated with it and shorten the sales cycle. We significantly reduced the operating cost of this division. I want to turn the call over to Mr. Ziv Dekel, our Chairman. Please, Ziv.
Thank you Eyal. Our growth strategy is comprising of two reinforcing dimensions. Based on our core expertise on highly advanced proficiency and powering technologies for inventory efficiency, as Eyal has just mentioned and described, we have a two-fold actually growth strategy. First dimension is to continue developing our core activities, of which it is focused on automated inventory, tracking inventory, and managing inventory. The purpose of it will be, the strategic purpose will be enhancement of our core capabilities, developing our expertise, know-how, and skills. Achievements to be achieved are steady, gradual strengthening of our market competitive position, client base, thus, revenues and cash growth. In this speech, Eyal described the key activities that he leads with his management to execute these courses.
It is not self-evident, yet, I can see abilities that BOS is holding and constantly developing, I can see it realizing in the short and medium term. The second dimension of our growth strategy is do a step up and boosting of our M&A activities. Again, focus on inventory, technology management, domain expertise of ours. The purpose, the strategic purpose will be significantly expanding our M&A growth opportunities, becoming specialized domain expertise company, achieving results, achieving in last goal in our revenues and profits, and significant enhancement in our competitive position. This course embodies a great potential for BOS. We are taking an extensive and comprehensive course of action, implementing it, implementing this endeavor. Thank you. Eyal?
Yes, we are ready for questions. Please.
Please.
Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star one. If you wish to decline from the polling process, please press star two. If you are 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 Todd Felte of Advisory Group Equity Services. Please go ahead.
Congratulations on a fabulous quarter there. It's very impressive to see the growth in both the revenue and net income. Thank you for taking my questions. My first question is regarding M&A activity. Do you expect any potential M&A activity to be in Israel, or are you looking at other countries?
Thank you for the question. Ziv, would you like to answer that question?
Yes, please. Our spectrum of opportunities is in Israel, but also in Europe and in the U.S. I think that when we are speaking about our spectrum of opportunities in Israel, in terms of it is quite wide in terms of all of our activities. We, whereas in the U.S. and in Europe, where we need a much stronger competitive advantage, will be more sharp in the opportunities that we are looking for and contemplating.
Okay. I may have missed it. Did you give an update on your order backlogs?
No, we didn't. We didn't publish it, but we opened the year with a very strong backlog, and it give us confidence to support our outlook for this year. The backlog remained high, and we are working that it will remain high in the continuance of the year.
Okay, that's great to hear. Regarding just the current market environment, you know, we've been in a high inflation environment. There's the war in Ukraine, and there's been a supply chain crunch. I know all those factors have affected your business, a lot of it positively to where your margins and it seems like you've had some pricing power. Do you expect, you know, the current market environment where you're able to grow revenues and earnings at such a high rate and have such higher margins than in previous years, do you expect that to continue? I know a lot of that is due to your hard work and, you know, improvement and efficiencies.
Yeah. I think, the war in Ukraine, support the growth of our Supply Chain division, which has a high population to the Israeli defense industry. Regarding and as long as, the demands are growing to those kind of, products of the Israeli defense industry, we're involved in a lot of projects, so it will, impact our growth. We provided an outlook to the market of $45 million, and, which is reflect the growth over last year revenues and reflect the growth over year before, which was like, $25 million. It is a significant, step. We are working on year 2024, that, will go over the $45 million.
Okay. I know I read an article that said that Israeli military orders are up over 900%. I guess people can't buy arms from Russia or defense systems, and the American defense systems are too expensive, and you had recently landed. You're both doing supply chain work and robotic systems now to the Israeli military. Are most of those orders, when you receive them, are they for the current year, or are these, do you expect this business to, you know, continue into 2024 and 2025 and going forward?
Yeah. We have ongoing orders from the defense, from the Israeli defense industry, mainly from the Israel Aerospace Industries. We are in the middle of delivery of a relatively big order of more than $3 million that we announced before. As long as we are working on a specific project and which are very, which have a high demand in the market. As long as it continue, we will continue to grow, we are shaking hand with this industry. In the Robotic division, we did a transition to the defense sector in Israel, most of the projects that on the line today, on the floor, are for the defense sector.
Okay. That's great to hear. Thank you again for taking my questions, and congratulations on an outstanding quarter.
Thank you. Thank you, Todd.
If there are any additional questions, please press star one. If you wish to decline from the polling process, please press star two. If you are 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. There are no further questions at this time. I would like to turn the call over to Mr. Eyal Cohen, CEO, to make a concluding statement. Mr. Cohen, please go ahead.
Thank you. I'm pleased with the turnaround that has started in the second half of the year 2020. We had a strong quarter. We will probably meet our targets for year 2023. However, our chairman leads us to work on the, on year 2024 results. Thank you for joining our call today. I'm looking to meet you on our next annual call, scheduled for August. Till then, you are invited to contact me for any matter. Thank you. Have a great trading day. Thank you.
Thank you. I would like to remind participants that a replay of this call will be available on the company's website, www.boscom.com, by tomorrow. This concludes the BOS Q1 2023 results conference call. Thank you for your participation. You may go ahead .