Pointer Telocation Reports 2009 Results with $65.3 Million of Total Revenues
ROSH HAAYIN, Israel, February 24, 2010 /PRNewswire-FirstCall/ --
- $11.7 Million EBITDA in 2009 ; $7 Million Reduction in Total Loans
(Nasdaq Capital Market: PNTR, Tel-Aviv Stock Exchange: PNTR), - a leading developer, manufacturer and operator of advanced command and control technologies and roadside assistance services for the automotive industry, announced today its financial results for the fiscal year ended December 31, 2009.
Financial Highlights
Revenues:
Pointer's total revenues for 2009 decreased 14.8% to $65.3 million compared to $76.6 million in 2008. While revenues generated from services continued to demonstrate resilience even during a downtrend, the reduction in total revenues was impacted by the global and car industry slowdown and is primarily attributable to the reduction in revenues from sales of products which in 2009 accounted for 31% of revenues as compared with 40% in 2008.
Gross Profit:
In 2009, gross profit decreased 8.4% to $26.9 million as compared to $29.4 million in 2008. As a percentage of revenues, gross margin was 41.2% in 2009, compared to 38.4% in 2008. The improvement in gross margin is primarily attributable to efficiency measures implemented by the Company and that partially offset the impact on profitability from revenue reduction.
Operating Income:
In 2009, Pointer recorded $4.2 million in operating income, compared to $9.3 million for 2008. The reduction in operating income relates to the decrease in revenues and to the one time impairment of $3 million in connection with the decrease in activity of one of former-Cellocator customers that necessitated impairing intangible assets.
Net Income: Pointer recorded a net loss attributable to Pointer's shareholders for the year ended December 31, 2009 of $2.1 million, or ($0.47) per share, as compared to net income of $2.4 million, or $0.5 per share, in 2008. Net income attributable to a non-controlling interest in affiliates in 2009 was $2.6 million compared to $2.2 million in 2008. For 2009, net income, before giving effect to the exclusion of those earnings relating to non-controlling interests in accordance with SFAS 160, was $0.5 million.
EBITDA: Pointer's EBITDA in 2009 $11.7 million as compared to $15.4 million in 2008
Total Liabilities to banks and others decreased by $7 million to $24.6 million at December 31, 2009 compared to $31.7 million at December 31, 2008.
Danny Stern, Pointer CEO, said: "Pointer's 2009 financial results were significantly impacted by the major global slowdown and its impact on the automotive and car related industries. While our services continued to demonstrate resilience even during a downtrend, revenues generated by our sales of products and technology suffered from the declining car market. The decrease in revenues necessitated impairing intangible assets in the amount of $3 million.
Despite the unfavorable conditions, we maintained our investments in R&D, firm in our belief that introducing innovative and broader product lines will enable us to strengthen ties with customers and generate enhanced revenues commensurate with improvements in the global economy and automotive industry.
Looking forward - for the Products and Technology division, we began 2010 with an increase in the number of our customers. We believe that our improved gross margins and new generation products that were introduced in 2009 together with new products to be introduced in the second half 2010, will help support growth with improved profitability," concluded Mr. Stern
Conference Call Information:
Pointer's management will host today, February 24th, 2010 a conference call with the investment community to review and discuss the financial results:
Conference call will take place on 9:30 AM EST, 16:30 Israel time.
To listen to the call, please dial in to one of the following teleconferencing numbers. Please begin placing your call at least 5 minutes before the conference call commences.
From USA: +1-888-668-9141
From Israel: 03-918-0610
A replay will be available from Feb 25th, 2010 at the company website: http://www.pointer.com.
Reconciliation between results on a GAAP and Non-GAAP basis.
Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Condensed Interim Consolidated Statements of Cash Flows. Pointer uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income interest, taxes, depreciation and amortization including in respect of our non-cash impairment charge related to the fair market value of the business with certain customers from our acquisition of Cellocator. The purpose of such adjustments is to give an indication of our performance exclusive of non-GAAP charges that are considered by management to be outside of our core operating results.
EBITDA is provided to investors to complement results provided in accordance with GAAP, as management believes the measure helps illustrate underlying operating trends in the Company's business and uses the measure to establish internal budgets and goals, manage the business and evaluate performance. We believe that these non-GAAP measures help investors to understand our current and future operating cash flow and performance, especially as our three most recent acquisitions have resulted in amortization and non-cash items that have had a material impact on our GAAP profits. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.
Forward Looking Statements
This press release contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of the Company. The words "believe," "expect," "anticipate," "intend," "seems," "plan," "aim," "should" and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of the Company with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in the markets in which the Company operates and in general economic and business conditions, loss or gain of key customers and unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this press release. Various risks and uncertainties may affect the Company and its results of operations, as described in reports filed by the Company with the Securities and Exchange Commission from time to time. The Company does not assume any obligation to update these forward-looking statements.
About Pointer Telocation:
Pointer Telocation is a leading provider of technology and services to the automotive and insurance industries, offering a set of services including Road Side Assistance, Stolen Vehicle Recovery and Fleet Management. Pointer has a growing client list with products installed in over 400,000 vehicles across the globe: the UK, Greece, Mexico, Argentina, Brazil, Russia, Croatia, Germany, Czech Republic, Latvia, Turkey, Hong Kong, Singapore, India, Costa Rica, Norway, Venezuela, Hungary, Israel and more. Cellocator, a Pointer Products Division, is a leading AVL (Automatic Vehicle Location) solutions provider for stolen vehicle retrieval, fleet management, car & driver safety, public safety, vehicle security and more. In 2004, Cellocator was selected as the official security and location equipment supplier for the Olympic Games in Athens. For more information: http://www.pointer.com.
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31,
------------------------
2009 2008
---------- ----------
Unaudited
----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,209 $ 2,708
Trade receivables, net 11,619 13,509
Other accounts receivable
and prepaid expenses 3,033 2,774
Inventories 2,219 3,999
---------- ----------
Total current assets 20,080 22,990
---------- ----------
LONG-TERM ASSETS:
Long-term accounts receivable 673 339
Severance pay fund 6,070 4,925
Property and equipment, net 9,401 7,998
Deferred income taxes 507 1,037
Other intangible assets, net 9,022 14,894
Goodwill 51,220 50,416
---------- ----------
Total long-term assets 76,893 79,609
---------- ----------
Total assets $ 96,973 $ 102,599
========== ==========
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31,
-----------------------
2009 2008
--------- ---------
Unaudited
---------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current
maturities of long-term loans $ 9,146 $ 7,849
Trade payables 8,639 8,613
Deferred revenues and customer
advances 8,253 8,701
Other accounts payable and
accrued expenses 6,211 5,694
--------- ---------
Total current liabilities 32,249 30,857
--------- ---------
LONG-TERM LIABILITIES:
Long-term loans from banks 14,493 20,520
Long-term loans from
shareholders and others 963 3,305
Other long-term liabilities 658 355
Accrued severance pay 7,131 6,375
--------- ---------
Total long term liabilities 23,245 30,555
--------- ---------
SHAREHOLDERS' EQUITY *) 41,479 41,187
--------- ---------
Total liabilities and
shareholders' equity $ 96,973 $ 102,599
========= =========
*) Reclassification due to the adoption of SFAS 160.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
Year ended December 31,
----------------------------------
2009 2008 2007
--------- --------- --------
Unaudited
---------
Revenues:
Products $ 20,038 $ 30,645 $ 15,821
Services 45,287 46,010 35,806
--------- --------- --------
Total revenues 65,325 76,655 51,627
--------- --------- --------
Cost of revenues:
Products 10,774 16,392 9,414
Services 26,645 29,869 23,034
Amortization of intangible assets 976 980 277
--------- --------- --------
Total cost of revenues 38,395 47,241 32,725
--------- --------- --------
Gross profit 26,930 29,414 18,902
--------- --------- --------
Operating expenses:
Research and development, net 2,817 2,511 1,675
Selling and marketing 6,249 6,934 4,934
General and administrative 8,788 8,311 6,209
Amortization of intangible assets 1,942 2,365 1,877
Impairment of intangible asset 2,959 - -
--------- --------- --------
Total operating expenses 22,755 20,121 14,695
--------- --------- --------
Operating income 4,175 9,293 4,207
Financial expenses, net 2,074 4,054 2,814
Other expenses (income), net 16 (22) 12
--------- --------- --------
Income (loss) before taxes
on income 2,085 5,261 1,381
Taxes on income 887 640 353
--------- --------- --------
Income after Income taxes 1,198 4,621 1,028
Equity in losses of affiliate 677 - -
--------- --------- --------
Net income *) 521 4,621 1,028
--------- --------- --------
Less: net income attributable to
the noncontrolling interest 2,632 2,248 1,366
--------- --------- --------
Net income (loss) attributable
to Pointer's shareholders $ (2,111) $ 2,373 $ (338)
========== ========== ==========
Basic net earnings (loss)
per share $ (0.44) $ 0.51 $ (0.08)
========== ========== ==========
Diluted net earnings
(loss) per share $ (0.47) $ 0.50 $ (0.08)
========== ========== ==========
*) Reclassification due to the adoption of SFAS 160.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year ended December 31,
---------------------------------
2009 2008 2007
--------- --------- ---------
Unaudited
---------
Cash flows from
operating activities:
Net income *) $ 521 $ 4,621 $ 1,028
Adjustments required to reconcile
net income to net cash provided
by operating activities:
Depreciation, amortization and
impairment 8,256 6,918 5,273
Accrued interest and exchange
rate changes of convertible
debenture and long-term loans (85) 1,187 750
Accrued severance pay, net (400) 619 (70)
Gain from sale of property and
equipment, net (377) (36) (182)
Equity in losses of affiliate 677 - -
Amortization of deferred
stock-based compensation 367 350 783
Decrease (increase) in trade
receivables, net 1,995 (1,773) (1,172)
Increase in other accounts
receivable and prepaid expenses (308) (6) (421)
Decrease (increase)
in inventories 128 (2,088) (395)
Write-off of inventories 124 112 150
Deferred income taxes 773 (178) (174)
Decrease (increase) in long-term
accounts receivable (493) 23 (141)
Decrease (increase) in
trade payables (413) 888 730
Increase (decrease) in other
accounts payable and
accrued expenses 461 379 1,855
--------- --------- ---------
Net cash provided by
operating activities 11,226 11,016 8,014
--------- --------- ---------
Cash flows from investing
activities:
Decrease (increase) in other
account receivables 279 (357) -
Purchase of property and equipment (3,442) (3,476) (2,638)
Proceeds from sale of
property and equipment 1,215 605 860
Investments in affiliate (640) - -
Acquisition of Cellocator (a) - - (16,571)
Acquisition of subsidiary (b) (38) - -
Acquisition of other
intangible assets - - (117)
--------- --------- ---------
Net cash used in
investing activities (2,626) (3,228) (18,466)
--------- --------- ---------
Cash flows from
financing activities:
Receipt of long-term loans
from banks - 9,064 5,000
Repayment of loans from banks (6,027) (4,930) (4,347)
Repayment of long-term loans
from others (32) (10,201) (2,767)
Dividend paid to the
noncontrolling interest (871) - -
Proceeds from issuance of shares
and exercise of warrants, net - 1,000 9,588
Short-term bank credit, net (983) (970) (1,752)
--------- --------- ---------
Net cash provided by (used in)
financing activities (7,913) (6,037) 5,722
--------- --------- ---------
Effect of exchange rate changes
on cash and cash equivalents (186) (243) 80
--------- --------- ---------
Increase (decrease) in cash and
cash equivalents 501 1,508 (4,650)
Cash and cash equivalents at
the beginning of the year 2,708 1,200 5,850
--------- --------- ---------
Cash and cash equivalents at
the end of the year $ 3,209 $ 2,708 $ 1,200
========= ========= =========
*) Reclassification due to the adoption of SFAS 160.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year ended December 31,
-----------------------------------
2009 2008 2007
--------- -------- --------
Unaudited
---------
(a) Acquisition of Cellocator
and Matan activities:
Fair value of assets acquired and
liabilities assumed at date of
acquisition:
Working capital $ - $ - $ (1,323)
Property and equipment - - (151)
Customer related intangibles - - (3,943)
Brand name - - (1,775)
Developed technology - - (4,890)
Goodwill - - (8,750)
Accrued severance pay, net - - 20
--------- -------- --------
- - (20,812)
--------- -------- --------
Fair value of shares issued - - 1,430
Fair value of convertible
debentures - - 1,951
Accrued expenses - - 860
--------- -------- --------
- - 4,241
--------- -------- --------
$ - $ - $ (16,571)
========= ======== ========
(b) Acquisition of subsidiary:
Fair value of assets acquired and
liabilities assumed at date of
acquisition:
Working capital (112) $ - $ -
Property and equipment 60 - -
Customer list 24 - -
Goodwill 456 - -
Accrued severance pay, net (12) - -
Shareholders loan (122) - -
Minority interest (256) - -
--------- -------- --------
$ 38 $ - $ -
--------- -------- --------
Reconciliation of GAAP net income to EBITDA
CONDENSED EBITDA
US dollars in thousands
Year ended December 31,
2009 2008 2007
-------- -------- --------
Net income as reported $ 521 $ 4,621 $ 1,028
Non GAAP adjustment:
Financial expenses, net 2,074 4,054 2,814
Taxes on income 887 640 353
Depreciation, amortization
and impairment 8,254 6,116 4,787
-------- -------- --------
EBITDA $ 11,736 $ 15,431 $ 8,982
-------- -------- --------
Contact:
Zvi Fried, V.P. and Chief Financial Officer
Tel.; +972-3-572-3111
E-mail: [email protected]
Yael Nevat,
Commitment-IR.com
Tel: +972-9-741-8866, +972-50-7626215
E-mail: [email protected]
SOURCE Pointer Telocation Ltd
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