Pointer Telocation Reports Q3 2011 Financial Results
Record Revenues of $65.5M in first nine months of 2011, increase of 22% over 2010; Non-GAAP net income for Q3 2011 $1.1M
ROSH HAAYIN, Israel, November 30, 2011 /PRNewswire/ --
Pointer Telocation Ltd. (Nasdaq CM: PNTR, TASE: PNTR) - a leading developer, manufacturer and operator of Mobile Resource Management (MRM) and roadside assistance services for the automotive industry, announced today its financial results for the third quarter of 2011.
David Mahlab, Chief Executive Officer of Pointer, commented on the results: "We are pleased to report continuous growth in revenues and services in the third quarter, resulting from the increase in our business in Latin America and Israel. Our business in Brazil serves as a growth engine and we expect this momentum to continue in the coming quarters. We also expect an additional increase in our revenues from services in Israel. Nevertheless, the uncertainties in Europe and the global market, the high US Dollar exchange rate vs. the Israeli Shekel, and the tax increases expected in Israel tax rates in 2012, are all likely to affect the company's future financial results, and will require us to make adjustments to meet the challenging market conditions in the fourth quarter and in 2012. During 2011, Pointer continued to develop new products and penetrated new markets to reinforce and expand its customer base, consequently, we are confident that in the long run, this strategy will bear fruit, including improvements in our bottom line".
Financial Highlights
Revenues: Pointer's revenues for the third quarter of 2011 increased 21% to $22.3 million, as compared to $18.5 million in the third quarter of 2010. In the first nine months of 2011, revenues increased 22% to $65.5 million, as compared to $53.5 million in the first nine months of 2010.
International activities for the third quarter and for the first nine months of 2011 were 28% of total revenues, as compared to 26% of total revenues in the first nine months of 2010.
Revenues from products in the third quarter of 2011 increased 29% to $8.3 million (37% of revenues), as compared to $6.4 million (35% of revenues) in the third quarter of 2010. Revenues from products in the first nine months of 2011 increased 38% to $24.1 million (37% of revenues), as compared to $17.5 million (33% of revenues) in the first nine months of 2010.
Pointer's revenues from services in the third quarter of 2011 increased 16% to $14 million (63% of revenues), up from $12.1 million (65% of revenues), in the comparable period of 2010. Revenues from services in the first nine months of 2011 increased 15% to $41.4 million (63% of revenues), compared to $36.1 million (67% of revenues) in the first nine months of 2010.
Gross Profit: In the third quarter of 2011, gross profit increased 12% to $7.6 million from $6.8 million in the third quarter of 2010. In the first nine months of 2011 gross profit was $23.1 million, an increase of 15% as compared to gross profit of $20.1 million in the first nine months of 2010.
Operating Income: In the third quarter of 2011, operating income was $1.2 million, compared to $1.7 million in the third quarter of 2010. Operating income in the first nine months of 2011 was $4 million compared to operating income of $5.3 million in the first nine months of 2010.
Net Income: Pointer recorded net loss for the third quarter of 2011 of $188 thousand or $0.04 diluted net loss per share, compared to a net income of $438 thousand or $0.09 diluted net income per share in the third quarter of 2010.
Non-GAAP net income for the third quarter of 2011 was $1.1 million, compared to $ 1.4 million in the third quarter of 2010. Non-GAAP net income for the first nine months of 2011 was $3.5 million, compared to $4.2 million in the first nine months of 2010.
Adjusted EBITDA: Pointer's adjusted EBITDA for the third quarter of 2011 was $2.4 million, as compared to $2.8 million in the comparable period in 2010. Pointer's adjusted EBITDA for the first nine months of 2011 was $8 million, as compared to $8.6 million in the first nine months of 2010.
Conference Call Information:
Pointer Telocation's management will host today, Wednesday, November 30, 2011 a conference call with the investment community to review and discuss the financial results, and will also be available to answer questions.
The conference call will commence at 09:30 AM EST, 4:30 PM Israel time.
To participate in the call, please dial in to one of the teleconference numbers below. Please place your call at least 5 minutes before the time set for the commencement of the conference call.
From USA 1-888-668-9141; From Israel: 03-918-0609
A replay will be available from December 1st, 2011 on the Company's 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 adjusted EBITDA and non-GAAP net income as a non-GAAP financial performance measurement.
We calculate adjusted EBITDA by adding back to net income, financial expenses, taxes, depreciation, a non-recurring expense of $0.5 million, attributable to the Company's efforts to expand various services to Israeli insurance companies, and amortization including the effect of non-cash impairment charge related to the fair market value of Cellocator.
We calculate non-GAAP net income by adding back to net income, non-cash equity based compensation, amortization of intangibles related to acquisitions and non-cash tax expenses resulting from timing differences relating to the amortization of acquisition-related intangible assets and goodwill.
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.
Adjusted EBITDA and non-GAAP net income are 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. Adjusted EBITDA and non GAAP net income 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.
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 list of customers and products installed in more than 45 countries. 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. The Company's top management and the development center are located in the Afek Industrial Area of Rosh Ha'ayin, Israel.
For more information: http://www.pointer.com
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.
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31,
2011 2010
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,156 $ 2,233
Restricted cash 126 133
Trade receivables 16,560 13,914
Other accounts receivable and prepaid
expenses 2,355 2,982
Inventories 4,924 3,739
Total current assets 25,121 23,001
LONG-TERM ASSETS:
Long-term accounts receivable 709 832
Severance pay fund 7,475 7,624
Property and equipment, net 11,484 11,255
Investment in affiliate 515 295
Other intangible assets, net 4,287 6,497
Goodwill 51,942 53,926
Total long-term assets 76,412 80,429
Total assets $ 101,533 $ 103,430
The accompanying notes are an integral part of the interim consolidated financial statements.
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
September 30, December 31,
2011 2010
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities
of long-term loans $ 12,846 $ 13,170
Trade payables 11,233 10,064
Deferred revenues and customer advances 8,257 7,806
Other accounts payable and accrued expenses 7,360 7,054
Total current liabilities 39,696 38,094
LONG-TERM LIABILITIES:
Long-term loans from banks 8,582 11,526
Long-term loans from shareholders and others 952 957
Other long-term liabilities 1,598 842
Accrued severance pay 8,713 8,365
19,845 21,690
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY:
Pointer Telocation Ltd's shareholders'
equity:
Share capital -
Ordinary shares of NIS 3 par value -
Authorized: 8,000,000 shares at September 30,
2011 and December 31, 2010; Issued and
outstanding: 4,785,848 and 4,771,181 shares
at September 30, 2011 and December 31, 2010,
respectively 3,293 3,280
Additional paid-in capital 118,811 118,512
Accumulated other comprehensive income 1,577 3,292
Accumulated deficit (87,978) (88,216)
Total Pointer Telocation Ltd's shareholders'
equity 35,703 36,868
Non-controlling interest 6,289 6,778
Total equity 41,992 43,646
Total liabilities and shareholders' equity $ 101,533 $ 103,430
The accompanying notes are an integral part of the interim consolidated financial statements.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
Nine months Three months Year
ended ended ended
September 30, September 30, December 31,
2011 2010 2011 2010 2010
Unaudited
Revenues:
Products $ 24,084 $ 17,464 $ 8,287 $ 6,423 $ 25,415
Services 41,429 36,114 14,046 12,104 48,448
Total revenues 65,513 53,578 22,333 18,527 73,863
Cost of revenues:
Products 13,784 9,578 4,894 3,358 14,175
Services 27,858 23,125 9,610 8,166 31,264
Amortization of
intangible assets 733 738 244 246 978
Total cost of revenues 42,375 33,441 14,748 11,770 46,417
Gross profit 23,138 20,137 7,585 6,757 27,446
Operating expenses:
Research and development 2,290 1,779 783 613 2,532
Selling and marketing 6,839 5,420 2,493 1,795 7,441
General and
administrative 8,579 6,295 2,612 2,231 9,062
Amortization of
intangible assets 1,383 1,319 459 430 1,774
Total operating expenses 19,091 14,813 6,347 5,069 20,809
Operating income 4,047 5,324 1,238 1,688 6,637
Financial expenses, net 1,370 1,516 520 522 1,976
Other expenses, net 92 23 101 - 21
Income before taxes on
income 2,585 3,785 617 1,166 4,640
Taxes on income 950 1,323 257 331 1,524
Income after taxes on
income 1,635 2,462 360 835 3,116
Equity in losses of
affiliate 1,069 836 271 295 1,158
Net income 566 1,626 89 540 1,958
Less - net income
attributable to
non-controlling interest 328 836 277 102 828
Net income (loss)
attributable to Pointer
Telocation Ltd.
shareholders $ 238 $ 790 $ (188) $ 438 $ 1,130
Earnings per share
attributable to Pointer
Telocation Ltd's
shareholders:
Basic net earnings
(loss) per share $ 0.05 $ 0.17 $ (0.04) $ 0.09 $ 0.24
Diluted net earnings
(loss) per share $ 0.04 $ 0.15 $ (0.04) $ 0.09 $ 0.22
The accompanying notes are an integral part of the interim consolidated financial statements.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Nine months ended Three months ended Year ended
December
September 30, September 30, 31,
2011 2010 2011 2010 2010
Unaudited
Cash flows from
operating
activities:
Consolidated
net income $ 566 $ 1,626 $ 89 $ 540 $ 1,958
Adjustments
required to
reconcile
consolidated
net income to
net cash
provided by
operating
activities:
Depreciation,
amortization
and impairment 4,646 4,160 1,578 1,419 5,568
Accrued
interest and
exchange rate
changes of
debenture and
long-term loans 100 95 6 34 178
Accrued
severance pay,
net 552 (187) 202 (132) (364)
Gain from sale
of property and
equipment, net (138) (68) (85) (30) (93)
Equity in
losses of
affiliate 1,069 836 271 295 1,158
Stock-based
compensation
expenses 352 94 122 22 121
Increase in
restricted cash 7 - 3 - (133)
Increase in
trade
receivables,
net (3,170) (3,090) 510 (708) (1,618)
Decrease
(increase) in
other accounts
receivable and
prepaid
expenses 287 (990) 406 322 (436)
Increase in
inventories (1,244) (2,107) (756) (587) (1,964)
Write-off of
inventories 66 - 28 - (212)
Deferred income
taxes 58 1,241 90 334 185
Increase in
long-term
accounts
receivable 271 (479) (68) (68) 1,322
Increase in
trade payables 1,719 2,040 963 1,190 981
Increase
(decrease) in
other accounts
payable and
accrued
expenses 2,217 374 (423) (514) (127)
Net cash
provided by
operating
activities 7,358 3,545 2,936 2,117 6,524
Cash flows from
investing
activities:
Purchase of
property and
equipment (3,931) (2,931) (1,322) (993) (4,481)
Proceeds from
sale of
property and
equipment 676 440 405 84 641
Proceeds from
sale of
investments in
previously
consolidated
subsidiaries
(a) 40 - 40 - -
Investments in
affiliate (1,496) (900) (390) (420) (1,490)
Net cash used
in investing
activities (4,711) (3,391) (1,267) (1,329) (5,330)
Cash flows from
financing
activities:
Receipt of
long-term loans
from banks 6,232 3,180 (16) 1,851 57
Repayment of
long-term loans
from banks (6,096) (4,202) (1,607) (919) (7,016)
Repayment of
long-term loans
from
shareholders
and others (1,061) (1,134) (1,039) (1,115) (1,122)
Receipt of
long-term loans
from
shareholders
and others - 43 - - 5,090
Proceeds from
issuance of
shares and
exercise of
options, net 48 57 15 - -
Dividend paid
to the
non-controlling
interest (896) (1,170) - - (2,250)
Short-term bank
credit, net (1,631) 1,257 259 (2,257) 2,656
Net cash used
in financing
activities (3,404) (1,969) (2,388) (2,440) (2,585)
Effect of
exchange rate
changes on cash
and cash
equivalents (320) 293 (388) 141 415
Decrease in
cash and cash
equivalents (1,077) (1,522) (1,107) (1,511) (976)
Cash and cash
equivalents at
the beginning
of the period 2,233 3,209 2,263 3,198 3,209
Cash and cash
equivalents at
the end of the
period $ 1,156 $ 1,687 $ 1,156 $ 1,687 $ 2,233
The accompanying notes are an integral part of the interim consolidated financial statements.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Nine months Three months Year
ended ended ended
December
September 30, September 30, 31,
2011 2010 2011 2010 2010
Unaudited
Proceeds from sale of
investments in
previously consolidated
(a) subsidiaries:
The subsidiaries' assets
and liabilities at date
of sale:
Working capital
(excluding cash and cash
equivalents) $ 281 $ - $ 281 $ - $ -
Non-controlling
interests (432) - (432) - -
Gain from sale of
subsidiaries Receivables
for sale of investments
in subsidiaries 111 111
$ 40 $ - $ 40 $ - $ -
ADDITIONAL INFORMATION
U.S. dollars in thousands
The following table reconciles the GAAP to non-GAAP operating results:
Non GAAP Net income
Nine months Three months Year
ended ended ended
September 30 September 30 December 31
2011 2010 2011 2010 2010
Unaudited
GAAP Net income as
reported: $ 566 $ 1,626 $ 89 $ 540 $ 1,958
Amortization of
intangible assets 2,116 2,057 703 676 2,752
Stock based
compensation
expenses 352 94 122 22 121
non-cash tax
expenses resulting
from timing
differences
relating to the
amortization of
acquisition-related
intangible assets
and goodwill 479 451 163 150 604
Non-GAAP Net
income $ 3,513 $ 4,228 $ 1,077 $ 1,388 $ 5,435
Adjusted EBITDA
Nine months Three months Year
ended ended ended
September 30 September 30 December 31
2011 2010 2011 2010 2010
Unaudited
GAAP Net income as
reported: $ 566 $ 1,626 $ 89 $ 540 $ 1,958
One time charge
attributable to
efforts to expand
services to Israeli
insurance companies 486 - - - -
Financial expenses,
net 1,370 1,516 520 522 1,976
Tax on income 950 1,323 257 331 1,524
Depreciation and
amortization 4,646 4,160 1,578 1,419 5,568
Non-GAAP Adjusted
EBITDA $ 8,018 $ 8,625 $ 2,444 $ 2,812 $ 11,026
- - - - - - - - - - - -
Contact: Zvi Fried, V.P. and Chief Financial Officer Chen Livne,Gelbart-Kahana Tel.; +972-3-572-3111 Investor relations E-mail: [email protected] Tel: +972-54-302-2983 E-mail: [email protected]
SOURCE Pointer Telocation Ltd
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