Pointer Telocation Q2 2010 Revenues Increased 17.5% Year-Over-Year to $18.3 Million
EBITDA of $3.1 Million, Compared to $2.5 Million YoY; $286 Thousand in Net Income, up From $2.9 Million Net Loss in Q2 2009
ROSH HAAYIN, Israel, August 19, 2010 /PRNewswire-FirstCall/ -- Pointer Telocation Ltd. (NasdaqCM: 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 second quarter of 2010.
Financial Highlights
Revenues: Pointer's revenues for the second quarter of 2010 increased 17.5% to $18.3 million as compared to $15.6 million for the comparable period in 2009. In the first six months of 2010, revenues were $35.1 million, as compared to $31.6 million in the first half of 2009.
International activities for the second quarter and first six months of 2010 were 29% and 26% of total revenues compared to 23% and 24% in the comparable periods of 2009.
Revenues from products in Q2 2010 were $6.2 million, constituting 34% of total revenues, as compared to $5.0 million constituting 32% of revenues in the second quarter of 2009. Pointer's revenues from services in the first six months of 2010 were $12.1 million, 66% of total revenues, up from $10.6 million, 68% of total revenues in the comparable period 2009.
Gross Profit: For the second quarter of 2010 gross profit increased 4.8% to $6.9 million from $6.6 million in the second quarter of 2009. As a percentage of revenues, gross margin was approximately 38% in the second quarter of 2010, as compared to 42.5% for the same period in 2009. In the first six months of 2010, gross profit was $13.4 million approximately the same as in the first six months of 2009. Gross margin for the first six months of 2010 was 38.2%, compared to 42.9% for the first six months of 2009. Gross margin decreased mainly as a result of the price erosion in the roadside assistance services.
Operating Income: Pointer reported operating income of $2.0 million for the second quarter of 2010, compared to an operating loss of $1.5 million for the second quarter of 2009. In the first six months of 2010, operating income was $3.6 million, compared to $226 thousand for the same period in 2009.
In Q2 2009, Pointer recorded a non-cash impairment of $3.0 million. Excluding this non-cash impairment, operating income in the second quarter of 2009 was $1.4 million. In the first six months of 2009, operating income, excluding the said non-cash impairment, was $3.2 million.
Net Income: Pointer recorded net income attributable to Pointer's shareholders for the second quarter of 2010 of $0.29 million, or $0.06 per share, as compared to a net loss of $2.9 million for the second quarter of 2009. For the first six months of 2010, Pointer recorded net income of $0.35 million or $0.07 per share, compared to a net loss of $2.9 million in the same period of 2009.
Net income attributable to a non-controlling interest in affiliates in the second quarter of 2010 was $0.26 million, as compared to net income of $0.67 million in the second quarter of 2009. Net income attributable to a non-controlling interest in affiliates in the first six months of 2010 was $0.73 million compared to $1.7 million for the comparable period in 2009. Net income, before giving effect to the exclusion of those earnings relating to non-controlling interests in accordance with SFAS 160, in the second quarter and first six months of 2010 was $0.55 million and $1.1 million, respectively, compared to a loss of $2.2 million and a loss of $1.1 million in the same periods in 2009
EBITDA:
Pointer's EBITDA for the second quarter and for the first six months of 2010 increased to $3.1 million and $5.8 million, respectively, as compared to $2.5 million and $5.7 million in the comparable periods in 2009.
Danny Stern, Pointer's CEO, said: "The results for Q2 2010 demonstrate a positive trend in almost all our markets and activities. Demand for products from our broad customer base in over 30 countries has been strong. Our subsidiaries report that demand for services is gradually increasing, as the markets learn of our extensive solutions, something which can be credited to our continual investment and increasing market presence. Additionally, increasing numbers of fleet operators as well as insurance companies are recognizing Pointer's unique solutions, innovation and customer support. EBITDA continues to be strong, enabling us to continue investing in R&D and in expanding into new businesses," concluded Mr. Stern.
Conference Call Information:
Pointer Telocation's management will host today, Thursday August 19th a conference call with the investment community to review and discuss the financial results:
The conference call will commence at 9:30 AM EST, 16:30 Israel time.
To participate in the call, please dial in to one of the teleconferencing numbers below. Please begin placing 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 Aug 20th, 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 financial expenses, 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.
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 30countires. Cellocator, a Pointer Products Division, is a leading MRM (Mobile Resource Management) technology developer and manufacturer.
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 (except share and per share data)
June 30, December 31,
2010 2009
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,198 $ 3,209
Trade receivables 13,685 11,619
Other accounts receivable and prepaid
expenses 3,842 3,033
Inventories 3,343 2,219
Total current assets 24,068 20,080
LONG-TERM ASSETS:
Long-term accounts receivable 1,039 673
Severance pay fund 6,281 6,070
Property and equipment, net 9,933 9,401
Deferred income taxes - 507
Other intangible assets, net 7,538 9,022
Goodwill 50,125 51,220
Total long-term assets 74,916 76,893
Total assets $ 98,984 $ 96,973
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
June 30, December 31,
2010 2009
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current
maturities of long-term loans $ 12,713 $ 9,146
Trade payables 9,571 8,639
Deferred revenues and customer advances 9,157 8,253
Other accounts payable and accrued
expenses 5,809 6,248
Total current liabilities 37,250 32,286
LONG-TERM LIABILITIES:
Long-term loans from banks and others 12,991 15,456
Other long-term liabilities 810 621
Accrued severance pay 7,264 7,131
21,065 23,208
SHAREHOLDERS' EQUITY:
Pointer Telocation Ltd. shareholders'
equity 33,555 33,809
Non-controlling interest 7,114 7,670
Total shareholders' equity 40,669 41,479
Total liabilities and shareholders'
equity $ 98,984 $ 96,973
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Six months Three months Year
ended ended ended
December
June 30, June 30, 31,
2010 2009 2010 2009 2009
Unaudited
Revenues:
Products $ 11,041 $ 10,145 $ 6,230 $ 4,962 $ 20,038
Services 24,010 21,414 12,070 10,612 45,287
Total revenues 35,051 31,559 18,300 15,574 65,325
Cost of revenues:
Products 6,221 5,418 3,446 2,457 10,774
Services 14,959 12,105 7,667 6,247 26,645
Amortization of
intangible assets 492 492 246 246 976
Total cost of revenues 21,672 18,015 11,359 8,950 38,395
Gross profit 13,379 13,544 6,941 6,624 26,930
Operating expenses:
Research and
development, net 1,166 1,460 623 707 2,817
Selling and marketing 3,625 2,978 1,758 1,494 6,249
General and
administrative 4,065 4,874 2,114 2,488 8,788
Amortization of
intangible assets 889 1,047 437 523 1,942
Impairment of
intangible assets - 2,959 - 2,959 2,959
Total operating
expenses 9,745 13,318 4,932 8,171 22,755
Operating income (loss) 3,634 226 2,009 (1,547) 4,175
Financial expenses, net 994 1,096 679 422 2,070
Other expenses, net 23 12 20 - 16
Income (loss) before
taxes on income 2,617 (882) 1,310 (1,969) 2,089
Taxes on income 992 42 485 22 887
Income (loss) after
Income taxes 1,625 (924) 825 (1,991) 1,202
Equity in
losses of
affiliate 541 191 277 191 677
Net income(loss) $1,084 $(1,115) $ 548 $(2,182) $ 525
Less: net income
(loss)attributable to
the noncontrolling
interest $ 734 $ 1,737 $ 262 $ 673 (2,632)
Net income (loss)
attributable to
Pointer's shareholders $ 350 $(2,852) $ 286 (2,855) (2,107)
Basic net earnings
(loss) per share $ 0.074 $ (0.60) $ 0.060 $ (0.60) $ (0.44)
Diluted net earnings
(loss) per share $ 0.064 $ (0.61) $ 0.056 $ (0.61) $ (0.47)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three months Year
Six months ended ended ended
December
June 30, June 30, 31,
2010 2009 2010 2009 2009
Unaudited
Cash flows from
operating activities:
Net income (loss) $ 1,084 $ (1,115) $ 548 (2,182) $ 525
Adjustments required
to reconcile net
income (loss) to net
cash provided by
operating activities:
Depreciation
,amortization and
impairment 2,741 5,653 1,347 4,272 8,252
Accrued interest and
exchange rate changes
of convertible
debenture and
long-term loans 61 (129) 54 (104) (85)
Accrued severance pay,
net (55) (255) - (143) (400)
Gain from sale of
property and
equipment, net (38) (138) (63) (377)
Equity in losses of
affiliate 541 191 277 191 677
Amortization of
deferred stock-based
compensation 72 270 24 126 367
Decrease (increase) in
trade receivables, net (2,382) (659) (905) 283 1,995
Decrease (increase) in
other accounts
receivable and prepaid
expenses (1,312) (155) (687) 524 (308)
Decrease (increase) in
inventories (1,520) 345 (881) 24 128
Increase in long-term
accounts receivable
and deferred expenses (411) (163) (368) (49) (493)
Write-off of
inventories - - - - 124
Increase in deferred
income taxes 907 - 429 - 773
Increase (decrease) in
trade payables 850 (686) 25 837 (413)
Increase (decrease) in
other accounts payable
and accrued expenses 888 1,892 (1,570) 100 461
Net cash provided by
(used in) operating
activities 1,426 5,051 (1,707) 3,816 11,226
Cash flows from
investing activities:
Purchase of property
and equipment (1,938) (1,337) (801) (868) (3,442)
Proceeds from sale of
property and equipment 356 559 136 337 1,215
Investments in
affiliate (480) (200) (270) (200) (640)
Acquisition of
subsidiary (a) - (38) - (38) (38)
Increase in long-term
accounts receivable - - - - 279
Net cash used in
investing activities (2,062) (1,016) (935) (769) (2,626)
Cash flows from
financing activities:
Receipt of long-term
loans from banks 1,329 - 1,329 - -
Repayment of long-term
loans from banks (3,283) (2,870) (1,647) (1,446) (6,027)
Repayment of long-term
loans from
shareholders and
others (19) (15) (9) (8) (32)
Receipt of long-term
loans from
shareholders and
others 43 - 43 - -
Proceeds from issuance
of shares and exercise
of warrants, net 57 - 9 - -
Dividend paid to the
noncontrolling
interest (1,170) (586) (1,170) (586) (871)
Short-term bank
credit, net 3,514 (434) 3,965 513 (983)
Net cash provided by
(used in) financing
activities 471 (3,905) 2,520 (1,527) (7,913)
Effect of exchange
rate on cash and cash
equivalents 154 (10) 605 (31) (186)
Increase (decrease) in
cash and cash
equivalents (11) 120 483 1,489 501
Cash and cash
equivalents at the
beginning of the
period 3,209 2,708 2,715 1,339 2,708
Cash and cash
equivalents at the end
of the period $ 3,198 $ 2,828 $ 3,198 $ 2,828 $ 3,209
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months Three months Year
ended ended ended
December
June 30, June 30, 31,
2010 2009 2010 2009 2009
Unaudited
Acquisition of
(a) subsidiary
Fair value of assets
acquired and
liabilities assumed at
date of acquisition:
Working capital - (40) - (40) $ (112)
Property and equipment - 60 - 60 60
Customer list - 24 - 24 24
Goodwill - 384 - 384 456
Accrued severance pay,
net - (12) - (12) (12)
Shareholders loan - (122) - (122) (122)
Minority interest - (256) - (256) (256)
- $ 38 - $ 38 $ 38
Reconciliation of GAAP net income to EBITDA
Reconciliation of GAAP to NON-GAAP Operating Results
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income financial expenses, taxes, depreciation, and amortization. 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. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. Reconciliation the GAAP to non-GAAP operating results:
CONDENSED EBITDA
US dollars in thousands
Year
Three months ended
Six months ended ended
December
June 30 June 30 31
2010 2009 2010 2009 2009
Unaudited
Net income (loss) as
reported: $ 1,084 $ (1,115) $ 548 $ (2,182) $ 525
Financial expenses,
net 994 1,096 679 422 2,070
Tax on income 992 42 485 22 887
Depreciation
,amortization and
impairment 2,739 5,654 1,346 4,275 8,254
Non-GAAP EBITDA $ 5,809 $ 5,677 $ 3,058 $ 2,537 $ 11,736
Contact: Zvi Fried, V.P. and Chief Financial Officer Yael Nevat, Commitment-IR.com, Tel.; +972-3-572-3111 Tel: +972-9-741-8866, +972-50-762-6215, E-mail: [email protected] E-mail: [email protected]
SOURCE Pointer Telocation Ltd
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