Pointer Telocation Reports Results for the Full Year and the Fourth Quarter of 2017

ROSH HAAYIN, Israel, Feb. 27, 2018 /PRNewswire/ --

Financial Highlights of 2017

• Revenues of $78.2  million, up 21% year-over-year;
• Recurring service revenues of $52.0 million, up 25% year-over-year;
• Net income from continuing operations of $16.5 million, which includes $9.2 million of income resulting from the realization of a deferred tax asset;
• Non-GAAP net income from continuing operations of $9.4 million, an increase of 47% year-over-year;
• EBITDA from continuing operations of $13.2 million, up 50% year-over-year;
• Total subscribers reached 258,000, an increase of 16% year-over-year;

Financial Highlights of the Quarter

• Revenues of $18.9 million, up 8% year-over-year;
• Recurring service revenues of $13.4  million, up 16% year-over-year;
• Net income of $11.1 million: which includes the above-mentioned realization of a deferred tax asset;
• Non-GAAP net income of $2.2 million, an increase of 26% year-over-year;
• EBITDA of $3.1 million, up 40% year-over-year;

Pointer Telocation Ltd. (NasdaqCM: PNTR) (TASE: PNTR) - a leading provider of telematic services and technology solutions for Fleet Management, Mobile Asset Management and Internet of Vehicles, announced its financial results for the three months period and fiscal year ended December 31,  2017.[1]

[1] On June 8, 2016 Pointer spun off its Israeli subsidiary, Shagrir Group Vehicle Services Ltd., through which Pointer carried out its road side assistance (RSA) activities and listed Shagrir's shares for trade on the Tel Aviv Stock Exchange. The results of Shagrir until that date are included in Pointer's results as discontinued operation.

Management Comment

David Mahlab, Pointer's Chief Executive Officer, commented: "We are very proud with our Q4 and full year 2017 results, built on our ability to execute our strategy successfully.  To reiterate, our overall strategic goals are to (i) continue to develop cutting edge technologies to provide actionable business intelligence with strong ROI to our Fleet Management, Mobile Asset Management and Internet of Vehicles customers, (ii) pursue selective M&A opportunities to expand our market share and capabilities, and (iii) continue to grow revenues organically while improving our profitability margins. Our record full year financial results reflect successful execution on this strategy, and demonstrate strong revenue growth and profitability, improved margins and cash generation.

"The integration of Cielo in Brazil progresses according to plan and we look forward to the increasing its contribution to our results in 2018. We have also successfully completed the integration of our recent acquisition in South Africa and are already starting to enjoy the synergies from this acquisition.  Our investments in technology as well as in sales and marketing are enabling us to maintain our growth and momentum in the market."

Mr. Mahlab continued, "During 2017, our technology was instrumental in winning new customers, increasing our revenues from recurring services and broadening our customer base for fleet management solutions and mobile asset tracking.

"During the year, we announced several wins, including two for connected car projects, one with Nissan India and the other with Peugeot-Citroen's importer in Israel, Lubinski. The successful integration of Cielo's technology enabled us to win an important contract in Brazil, with Fibria. Our mobile asset management technology, Cellocator's Nano CelloTrack, lead to a key win in North America.  Earlier in the year, we announced that Femsa chose our most advanced fleet management solution which was successfully implemented during 2017. Looking ahead, we are confident of our ability to continue growing our business successfully for the foreseeable future."

Financial Summary for the Full Year of 2017

Revenues for 2017 were $78.2 million compared to $64.4 million in 2016, an increase of 21%. Revenues from products were $26.2 million (34% of revenues) compared to $22.8 million (35% of revenues) in 2016, an increase of 15%.

Revenues from recurring services were $52.0 million (66% of revenues) compared to $41.6 million (65% of revenues) in 2016, an increase of 25%.

Gross profit was $40.2 million (51.4% of revenues) in 2017, an increase of 26% compared to $31.8 million (49.4% of revenues) in 2016.

GAAP operating income was $10.3 million compared with $6.2 million in 2016.

Non-GAAP operating income was $11.4 million (15% of revenues), an increase of 49% compared to $7.7 million (11.9% of revenues) in 2016.

GAAP net income from continuing operations was $16.5 million compared with a net income of $3.3 million in 2016. This amount includes the one-time realization of a deferred tax asset of $9.2 million, which was recorded following management determination that it is more likely than not that the deferred tax assets will be realized in future periods.

Non-GAAP net income from continuing operations was $9.4 million (12% of revenues), an increase of 46%, compared with $6.5 million (10.1% of revenues) in 2016.

Fully diluted earnings per share based on GAAP net income from continuing operations in 2017 was $2.03 per share, compared to $0.42 per share in 2016.

Fully diluted earnings per share based on non GAAP net income from continuing operations in 2017 was $1.16 per share, compared to $0.82 per share in 2016.

EBITDA from continuing operations in 2017 was $13.2 million (16.9% of revenues), an increase of 50%, compared with $8.8 million (13.7% of revenues) in 2016.

Operating cash flow for 2017 was $9.7 million. Cash and cash equivalents at year-end totaled $7.4 million and total debt was $10.1 million.

Financial summary for the fourth quarter of 2017

Revenues for the fourth quarter of 2017 increased 8% to $18.9 million as compared to $17.4 million in the fourth quarter of 2016.

Revenues from products in the fourth quarter of 2017 decreased 6% to $5.5 million (29% of revenues) compared to $5.8 million (34 % of revenues) in the comparable period of 2016.

Revenues from recurring services in the fourth quarter of 2017 increased 16% to $13.4 million (71% of revenues) compared to $11.6 million (66% of revenues), in the comparable period of 2016. The growth in service revenue was primarily due to the growth in the subscriber base which grew by 36,000 subscribers since December 31, 2016 and 9,000 subscribers since September 30, 2017.

Gross profit was $10.0 million (53.0% of revenues) compared to $8.9 million (50.9% of revenues) in the fourth quarter of 2016.

Operating income on a GAAP basis was $2.3 million (12.3% of revenues), an increase of 43%, compared with $1.6 million (9.3% of revenues) in the fourth quarter of 2016.

Non-GAAP operating income was $2.7 million (14.2% of revenues), an increase of 15% compared to $2.3 million (13.3% of revenues) in the fourth quarter of 2016.

GAAP net income was $11.1 million (59% of revenues), compared to $0.5 million (2.9% of revenues) million reported in the fourth quarter of 2016. That includes the one-time realization in the current quarter of a tax asset of $9.2 million, as mentioned above.

Non-GAAP net income was $2.2 million (11.8% of revenues), an increase of 26%, compared with $1.8 million (10.1% of revenues) in the fourth quarter of 2016.

Fully diluted earnings per share based on a GAAP basis in the fourth quarter was $1.35 per share, compared to $0.06 per share in the fourth quarter of 2016.

Fully diluted earnings per share based on a non GAAP basis in the fourth quarter was $0.27 per share, compared to $0.22 per share in the fourth quarter of 2016.

EBITDA was $3.1 million (16.4% of revenues), an increase of 40% compared with $2.2 million (12.6% of revenues) in the fourth quarter of 2016.

Operating cash flow in the quarter was $3.7 million.

Conference Call Information Pointer Telocation's management will host a conference call today, at 7:00am Pacific Time, 10:00 Eastern Time, 17:00 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 the USA +1-888-281-1167; From Israel 03-918-0685; From the UK 0-800-917-5108

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 EBITDA and Non-GAAP operating income and net income as Non-GAAP financial performance measurements.

Pointer calculates EBITDA by adding back to net income financial expenses, taxes and depreciation and amortization of intangible assets.

Pointer calculates Non-GAAP operating  income by adding back to operating income the effects of non-cash stock based compensation expenses, amortization of long lived assets, other expenses of retirement costs and losses and acquisition related one-time costs.

 Pointer calculates Non-GAAP net income by adding back to net income the effects of non-cash stock based compensation expenses, amortization of long lived assets, non-cash tax expenses, other expenses of retirement costs, spin-off related expenses and losses and acquisition related one-time costs.

The purpose of such adjustments is to give an indication of the Company's performance exclusive of Non-GAAP charges that are considered by management to be outside of the Company's core operating results.

EBITDA and non-GAAP operating and  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. Management believes that these non-GAAP measures help investors to understand the Company's current and future operating cash flow and performance, especially as the Company's acquisitions have resulted in amortization and non-cash items that have had a material impact on the Company's GAAP profits. EBITDA and non GAAP operating and net income should not be considered in isolation or as a substitute for comparable measures calculated and should be read in conjunction with the Company's 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

For over 20 years, Pointer has rewritten the rules for the Mobile Resource Management (MRM) market and is a pioneer in the Connected Car segment. Pointer has in-depth knowledge of the needs of this market and has developed a full suite of tools, technology and services to respond to them. The vehicles of the future will be intimately networked with the outside world, enhancing and optimizing the in-car experience.

Pointer's innovative and reliable cloud-based software-as-a-service (SAAS) platform extracts and captures an organization's critical mobility data points – from office, drivers, routes, points-of-interest, logistic-network, vehicles, trailers, containers and cargo. The SAAS platform analyzes the raw data converting it into valuable information for Pointer's customers providing them with actionable insights and thus enabling the customers to improve their bottom line and increase their profitably.

For more information, please visit 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.

Contacts:
Yaniv Dorani, CFO
Tel: +972-3-5723111
E-mail: [email protected]

Gavriel Frohwein/Ehud Helft, GK Investor Relations 
Tel: +1-646-688-3559
E-mail: [email protected]  

* 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.

SOURCE Pointer Telocation Ltd

Related Links

http://www.pointer.com