Pointer Telocation Reports Q1 2015 Financial Results
ROSH HAAYIN, Israel, May 12, 2015 /PRNewswire/ --
Highlights of the first quarter 2015
- Revenue at $25 million
- Adjusted EBITDA of $3.2 million
- GAAP net income of $1.9 million; non-GAAP net income of $2.4 million
Pointer Telocation Ltd. (Nasdaq CM: PNTR) - a leading developer, manufacturer and operator of Mobile Resource Management (MRM) services, announced today its financial results for the first quarter of 2015.
Financial Highlights
Revenues: Pointer's revenues for the first quarter of 2015 decreased 7.5% to $25 million as compared to $27 million in the first quarter of 2014.
International activities for the first quarter of 2015 were 38% of total revenues compared to 31% in the same period in 2014. Revenues from products in the first quarter of 2015 decreased 22% to $7.1 million (28% of revenues) compared to $9.1 million (34% of revenues) in the comparable period of 2014.
Pointer's revenues from services in the first quarter of 2015 remained flat at $17.9 million (72% of revenues) compared to $17.9 million (66% of revenues), in the comparable period of 2014. In local currency terms in the territories where our subsidiaries operate, revenue from services increased by 13%.
Gross profit: In the first quarter of 2015, gross profit was $8.6 million (34.5% of revenues) a decrease of 8.5% compared to $9.4 million (34.8% of revenues) in the first quarter of 2014.
Operating income: Operating profit was $2.1 million (8.3% of revenues) a decrease of 24% compared to $2.6 million (9.5% of revenues) in the first quarter of 2014.
Net income: Pointer recorded net income of $1.9 million or $0.23 per share in the first quarter of 2015 an increase of 28% as compared to $1.5 million, or $0.22 per share, in the first quarter of 2014.
Non-GAAP net income: Pointer recorded non-GAAP net income of $2.4 million in the first quarter of 2015, an increase of 9% as compared to non-GAAP net income of $2.2 million in the first quarter of 2014.
Adjusted EBITDA: Pointer's adjusted EBITDA for the first quarter of 2015 was $3.2 million, a decrease of 19% compared to $3.9 million in the first quarter of 2014.
In connection with Pointer's plan to spin-off its Shagrir business to shareholders, pro-forma information providing certain details of the financial performance of the Shagrir RSA business and MRM business are provided separately in Exhibit A and are for informational purposes only.
Management Comment
David Mahlab, Pointer's Chief Executive Officer, commented: "While we faced some currency headwinds in the quarter, we are pleased with the growth in our services revenues in local currency terms in the territories where our subsidiaries operate. We saw some weakness in our Brazilian operations due to an economic slowdown there. However, in most of the regions in which we operate, we grew our MRM service business and we are particularly pleased with the performance of our recently acquired operations in South Africa. We continue to look for additional acquisition opportunities, and our improving cash position is further enabling us to capitalize on this strategy."
Continued Mr. Mahlab, "Within our MRM technology division, we see many opportunities for future growth. We are focusing on developing new products geared towards the 'Internet of Things' and Asset Tracking markets, which we believe will drive long-term growth in our MRM revenues and expect to see the impact of these developments beginning in 2016. We are also investing internally in our own cloud-computing and back-office infrastructure, in order to improve our ability to assimilate potential future acquisition targets."
Conference Call Information:
Pointer Telocation's management will host a conference call today, at 6:30am Pacific Time, 9:30 Eastern Time, 16:30 Israel time. On the call, management will review and discuss the results. To listen to the call, please dial in to one of the following teleconferencing numbers. Please begin placing your call a few minutes before the conference call commences.
Dial in numbers are as follows:
From USA: + 1-888-407-2553
From Israel and International: +972 3-918-0610
A replay will be available a few hours following the call on the company's website.
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 non-GAAP financial performance measurements.
We calculate adjusted EBITDA by adding back to net income, net loss from discontinued operations, financial expenses, taxes, depreciation, amortization and impairment of goodwill and intangible assets, the effects of non-cash stock-based compensation expense, profit raise from gaining control in subsidiary previously treated by the equity method and related goodwill adjustment.
We calculate non-GAAP net income by adding back to net income, net loss from discontinued operations, the effects of non-cash stock based compensation expenses, amortization and impairment of long lived assets , non-cash tax expenses resulting from timing differences relating to the amortization of acquisition-related intangible assets and goodwill, profit raise from gaining control in subsidiary previously treated by the equity method, acquisition related goodwill adjustment, onetime 'other expense' related to the termination cost of a former general manger of a Pointer subsidiary and restructuring in a subsidiary, loss from sale of subsidiary, one time financial expenses resulting from the devaluation of Israeli Shekel denominated bank deposits and non-cash tax income from raised tax asset.
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 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 |
||||
| March 31, |
December 31, |
|||
| Unaudited |
||||
| ASSETS |
||||
| CURRENT ASSETS: |
||||
| Cash and cash equivalents |
$ 8,254 |
$ 8,557 |
||
| Restricted cash |
- |
62 |
||
| Trade receivables |
18,882 |
19,032 |
||
| Other accounts receivable and prepaid expenses |
2,060 |
1,853 |
||
| Inventories |
6,099 |
6,133 |
||
| Deferred tax asset |
706 |
901 |
||
| Property and equipment held for sale |
847 |
1,034 |
||
| Total current assets |
36,848 |
37,572 |
||
| LONG-TERM ASSETS: |
||||
| Long-term accounts receivable |
419 |
408 |
||
| Severance pay fund |
8,160 |
8,609 |
||
| Property and equipment, net |
9,100 |
10,075 |
||
| Other intangible assets, net |
1,612 |
1,950 |
||
| Goodwill |
47,278 |
48,941 |
||
| Deferred tax asset |
3,499 |
3,449 |
||
| Total long-term assets |
70,068 |
73,432 |
||
| Total assets |
$ 106,916 |
$ 111,004 |
||
| INTERIM CONSOLIDATED BALANCE SHEETS |
||||
| U.S. dollars in thousands (except share and per share data) |
||||
| March 31, |
December 31, |
|||
| 2015 |
2014 |
|||
| Unaudited |
||||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
| CURRENT LIABILITIES: |
||||
| Short-term bank credit and current maturities of long-term loans |
$ 5,331 |
$ 7,478 |
||
| Trade payables |
10,813 |
11,460 |
||
| Deferred revenues and customer advances |
7,348 |
6,420 |
||
| Other accounts payable and accrued expenses |
8,054 |
8,972 |
||
| Total current liabilities |
31,546 |
34,330 |
||
| LONG-TERM LIABILITIES: |
||||
| Long-term loans from banks |
11,906 |
12,046 |
||
| Long-term loans from shareholders and others |
977 |
997 |
||
| Deferred taxes and other long-term liabilities |
302 |
298 |
||
| Accrued severance pay |
9,038 |
9,537 |
||
| Total long term liabilities |
22,223 |
22,878 |
||
| COMMITMENTS AND CONTINGENT LIABILITIES |
||||
| EQUITY: |
||||
| Pointer Telocation Ltd's shareholders' equity: |
||||
| Share capital |
5,705 |
5,705 |
||
| Additional paid-in capital |
129,715 |
129,618 |
||
| Accumulated other comprehensive income |
(5,498) |
(2,909) |
||
| Accumulated deficit |
(73,904) |
(75,767) |
||
| Total Pointer Telocation Ltd's shareholders' equity |
56,018 |
56,647 |
||
| Non-controlling interest |
(2,871) |
(2,851) |
||
| Total equity |
53,147 |
53,796 |
||
| Total liabilities and equity |
$ 106,916 |
$ 111,004 |
||
| INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||
| U.S. dollars in thousands |
||||||
| Three months ended March 31, |
Year ended |
|||||
| 2015 |
2014 |
2014 |
||||
| Unaudited |
||||||
| Revenues: |
||||||
| Products |
$ 7,083 |
$ 9,116 |
$ 33,099 |
|||
| Services |
17,894 |
17,899 |
72,191 |
|||
| Total revenues |
24,977 |
27,015 |
105,290 |
|||
| Cost of revenues: |
||||||
| Products |
4,083 |
5,396 |
19,279 |
|||
| Services |
12,288 |
12,209 |
50,461 |
|||
| Total cost of revenues |
16,371 |
17,605 |
69,740 |
|||
| Gross profit |
8,606 |
9,410 |
35,550 |
|||
| Operating expenses: |
||||||
| Research and development |
894 |
858 |
3,390 |
|||
| Selling and marketing |
2,806 |
2,691 |
11,219 |
|||
| General and administrative |
2,636 |
2,957 |
11,883 |
|||
| Other general and administrative expenses |
- |
- |
683 |
|||
| Other income |
- |
- |
(288) |
|||
| Amortization of intangible assets |
200 |
337 |
994 |
|||
| Impairment of intangible and tangible assets |
- |
- |
1,122 |
|||
| Total operating expenses |
6,536 |
6,843 |
29,003 |
|||
| Operating income |
2,070 |
2,567 |
6,547 |
|||
| Financial expenses (income), net |
(194) |
504 |
2,424 |
|||
| Other income, net |
- |
3 |
232 |
|||
| Income before taxes on income |
2,264 |
2,060 |
3,891 |
|||
| Taxes on income |
400 |
600 |
(8,849) |
|||
| Net income |
$ 1,864 |
$ 1,460 |
$ 12,740 |
|||
| INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||
| U.S. dollars in thousands |
||||||
| Three months ended March 31, |
Year ended |
|||||
| 2015 |
2014 |
2014 |
||||
| Unaudited |
||||||
| Profit (loss) from continuing operations attributable to: |
||||||
| Equity holders of the parent |
1,865 |
1,466 |
13,453 |
|||
| Non-controlling interests |
(1) |
(6) |
(713) |
|||
| $ 1,864 |
$ 1,460 |
$ 12,740 |
||||
| Earnings per share from continuing operations |
||||||
| Basic net earnings per share |
$ 0.24 |
$ 0.22 |
$ 1.81 |
|||
| Diluted net earnings per share |
$ 0.23 |
$ 0.21 |
$ 1.74 |
|||
| Weighted average -Basic number of shares |
7,688,564 |
6,707,702 |
7,446,707 |
|||
| Weighted average – fully diluted number of shares |
7,964,798 |
7,054,677 |
7,726,653 |
|||
| INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||
| U.S. dollars in thousands |
||||||
| Three months ended March 31, |
Year ended |
|||||
| 2015 |
2014 |
2014 |
||||
| Unaudited |
||||||
| Cash flows from operating activities: |
||||||
| Net income |
$ 1,864 |
$ 1,460 |
$ 12,740 |
|||
| Adjustments required to reconcile net income to net |
||||||
| Depreciation and amortization |
1,006 |
1,280 |
4,767 |
|||
| Impairment of tangible and intangible assets |
- |
- |
1,122 |
|||
| Gain from a bargain purchase |
- |
- |
(288) |
|||
| Accrued interest and exchange rate changes of |
(366) |
5 |
17 |
|||
| Accrued severance pay, net |
(32) |
(13) |
56 |
|||
| Gain from sale of property and equipment, net |
(34) |
(66) |
(95) |
|||
| Stock-based compensation |
91 |
48 |
375 |
|||
| Decrease in restricted cash |
62 |
15 |
19 |
|||
| Increase in trade receivables, net |
(503) |
(2,083) |
(1,141) |
|||
| Decrease (increase) in other accounts receivable and |
46 |
(561) |
(21) |
|||
| Decrease (increase) in inventories |
(9) |
264 |
(462) |
|||
| Decrease (increase) Deferred income taxes |
189 |
485 |
(9,120) |
|||
| Decrease (increase) in long-term accounts receivable |
2 |
41 |
126 |
|||
| Increase (decrease) in trade payables |
62 |
(624) |
(654) |
|||
| Increase (decrease) in other accounts payable and |
410 |
(354) |
(1,845) |
|||
| Net cash provided by operating activities |
2,788 |
(103) |
5,596 |
|||
| Cash flows from investing activities: |
||||||
| Purchase of property and equipment |
(584) |
(1,154) |
(4,458) |
|||
| Proceeds from sale of property and equipment |
312 |
707 |
1,529 |
|||
| Investment and loans/ Repayments in affiliate |
- |
(7,740) |
- |
|||
| Acquisition of subsidiary (a) |
- |
- |
(688) |
|||
| Proceeds from sale of investments in previously |
- |
- |
(41) |
|||
| Net cash used in investing activities |
(272) |
(8,187) |
(3,658) |
|||
| INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
| U.S. dollars in thousands |
|||||||
| Three months ended March 31, |
Year ended |
||||||
| 2015 |
2014 |
2014 |
|||||
| Unaudited |
|||||||
| Cash flows from financing activities: |
|||||||
| Receipt of long-term loans from banks |
10,557 |
11,437 |
12,577 |
||||
| Repayment of long-term loans from banks |
(11,393) |
(2,206) |
(8,986) |
||||
| Repayment of long-term loans from shareholders |
(13) |
(115) |
(301) |
||||
| Repurchase of shares from non-controlling interests |
- |
- |
(7,740) |
||||
| Proceeds from issuance of shares and exercise of options, |
6 |
10,059 |
10,074 |
||||
| Short-term bank credit, net |
(468) |
(1,201) |
(1,640) |
||||
| Net cash provided (used) in financing activities |
(1,311) |
17,974 |
3,984 |
||||
| Effect of exchange rate on cash and cash equivalents |
(1,508) |
37 |
(714) |
||||
| Increase (decrease) in cash and cash equivalents |
(303) |
9,721 |
5,208 |
||||
| Cash and cash equivalents at the beginning of the period |
8,557 |
3,349 |
3,349 |
||||
| Cash and cash equivalents at the end of the period |
$ 8,254 |
$ 13,070 |
$ 8,557 |
||||
| (a) Acquisition of subsidiary: |
|||||||
| Working capital (Cash and cash equivalent excluded) |
$ - |
$ - |
$ 221 |
||||
| Property and equipment |
- |
- |
565 |
||||
| Other intangible assets |
- |
- |
190 |
||||
| Goodwill |
- |
- |
(288) |
||||
| $ - |
$ - |
$ 688 |
|||||
| INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||
| U.S. dollars in thousands |
|||||||||
| Three months ended March 31, |
Year ended |
||||||||
| 2015 |
2014 |
2014 |
|||||||
| Unaudited |
|||||||||
| (b) |
Proceeds from sale of investments in previously |
||||||||
| The subsidiaries' assets and liabilities at date of sale: |
|||||||||
| Working capital (excluding cash and cash equivalents) |
$ - |
$ - |
$ (18) |
||||||
| Property and equipment |
- |
- |
(30) |
||||||
| Long term loans from banks and others |
- |
- |
5 |
||||||
| Non-controlling interests |
- |
- |
(125) |
||||||
| Loss from sale of subsidiaries |
209 |
||||||||
| $ - |
$ - |
$ 41 |
|||||||
| (c) |
Non-cash investing activity: |
||||||||
| Purchase of property and equipment |
$ 56 |
$ - |
$ 45 |
||||||
| Issuance of shares in respect of acquisition of non- |
$ - |
$ 11,385 |
$ 11,368 |
||||||
| ADDITIONAL INFORMATION |
||||||
| U.S. dollars in thousands |
||||||
| The following table reconciles the GAAP to non-GAAP operating results: |
||||||
| Three months ended March 31, |
Year ended December 31, |
|||||
| 2015 |
2014 |
2014 |
||||
| GAAP gross profit |
$ 8,606 |
$ 9,410 |
$ 35,550 |
|||
| Stock-based compensation expenses |
3 |
1 |
10 |
|||
| Non-GAAP gross profit |
$ 8,609 |
$ 9,411 |
$ 35,560 |
|||
| GAAP operating expenses |
$ 6,536 |
$ 6,843 |
$ 29,003 |
|||
| Stock-based compensation expenses |
88 |
48 |
380 |
|||
| Amortization and impairment of long lived assets |
200 |
337 |
2,116 |
|||
| Other expenses of termination costs and restructuring |
- |
- |
683 |
|||
| Acquisition related goodwill adjustment |
- |
- |
(288) |
|||
| Non-GAAP operating expenses |
$ 6,248 |
$ 6,458 |
$ 26,112 |
|||
| GAAP operating income |
$ 2,070 |
$ 2,567 |
$ 6,547 |
|||
| Non-GAAP operating income |
$ 2,361 |
$ 2,953 |
$ 9,448 |
|||
| GAAP net income |
$ 1,864 |
$ 1,460 |
$ 12,740 |
|||
| Stock-based compensation |
91 |
49 |
390 |
|||
| Amortization and impairment of long lived assets |
200 |
337 |
2,116 |
|||
| Acquisition related goodwill adjustment |
- |
- |
(288) |
|||
| Profit raise from gaining control in subsidiary |
- |
- |
- |
|||
| Other expenses of termination costs and restructuring |
- |
- |
683 |
|||
| Loss from sale of subsidiary |
- |
- |
209 |
|||
| Financial expenses resulting from the devaluation of |
- |
- |
498 |
|||
| Non-cash tax expenses resulting from timing |
242 |
353 |
1,379 |
|||
| Non cash tax income from raised tax asset |
- |
- |
(9,799) |
|||
| Non-GAAP net income |
$ 2,397 |
$ 2,199 |
$ 7,928 |
|||
| Non-GAAP net income per share - Diluted |
$ 0.30 |
$ 0.31 |
$ 1.02 |
|||
| Non-GAAP weighted average number of shares - Diluted* |
7,964,798 |
7,054,677 |
7,726,653 |
|||
| * In calculating diluted non-GAAP net income per share, the diluted weighted average number of shares outstanding excludes the effects of stock-based compensation expenses in accordance with FASB ASC 718. |
||||||
| Adjusted EBITDA |
|||||||
| Three months ended |
Year ended |
||||||
| 2015 |
2014 |
2014 |
|||||
| GAAP Net income as reported: |
$ 1,864 |
$ 1,460 |
$ 12,740 |
||||
| Financial expenses (income), net |
(194) |
504 |
2,424 |
||||
| Tax on income |
400 |
600 |
(8,849) |
||||
| Profit raise from gaining control in subsidiary |
- |
- |
(288) |
||||
| Stock based compensation expenses |
91 |
49 |
390 |
||||
| Loss from sale of subsidiary |
- |
- |
209 |
||||
| Depreciation, amortization and impairment of |
1,005 |
1,280 |
5,889 |
||||
| Adjusted EBITDA |
$ 3,166 |
$ 3,893 |
$ 12,515 |
||||
| Exhibit A (*) |
|||||||||||
| U.S Dollars in Thousands |
|||||||||||
| Three months ended |
Three months ended |
Year ended |
|||||||||
| Unaudited |
Unaudited |
Unaudited |
|||||||||
| MRM |
RSA |
Total |
MRM |
RSA |
Total |
MRM |
RSA |
Total |
|||
| Revenues: |
|||||||||||
| Products |
5,782 |
1,301 |
7,083 |
7,978 |
1,138 |
9,116 |
27,855 |
5,244 |
33,099 |
||
| Services |
10,452 |
7,442 |
17,894 |
10,118 |
7,781 |
17,899 |
41,267 |
30,925 |
72,191 |
||
| Total Revenues |
16,234 |
8,743 |
24,977 |
18,096 |
8,919 |
27,015 |
69,122 |
36,168 |
105,290 |
||
| Non-GAAP Cost of Revenues |
8,679 |
7,689 |
16,368 |
10,039 |
7,565 |
17,604 |
37,653 |
32,078 |
69,730 |
||
| Non-GAAP Gross Profit |
7,555 |
1,054 |
8,609 |
8,057 |
1,354 |
9,411 |
31,469 |
4,091 |
35,560 |
||
| 46.5% |
12.1% |
34.5% |
44.5% |
15.2% |
34.8% |
45.5% |
11.3% |
33.8% |
|||
| Non-GAAP Operating Expenses |
5,591 |
657 |
6,248 |
5,609 |
849 |
6,458 |
22,711 |
3,401 |
26,112 |
||
| Non-GAAP Operating Income |
1,964 |
398 |
2,361 |
2,448 |
505 |
2,953 |
8,758 |
690 |
9,448 |
||
| (*) See reconciliation information on p. 12 herein |
|||||||||||
| (**) Note that certain figures for the year ended December 31, 2014 have been slightly revised from the previously reported figures as a result of allocation between segments |
|||||||||||
| Contact: |
|
| Zvi Fried, V.P. and Chief Financial Officer |
Ehud Helft, GK Investor & Public Relations |
| Tel.; 972-3-572 3111 |
Tel: +1 646 201 9246 |
| E-mail: [email protected] |
E-mail: [email protected] |
SOURCE Pointer Telocation Ltd.
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