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Pointer Telocation Reports Record Revenues for the First Quarter of 2018
[May 15, 2018]

Pointer Telocation Reports Record Revenues for the First Quarter of 2018


ROSH HAAYIN, Israel, May 15, 2018 /PRNewswire/ --

Financial Highlights of the Quarter

  • Record revenue of $20.9 million, up 10% year-over-year;
  • Record service revenues of $13.8 million, up 12% year-over-year;
  • Net income of $1.8 million, up 13% year-over-year;
  • Non-GAAP net income of $2.5 million, an increase of 7% year-over-year;
  • EBITDA of $3.3 million, up 5% year-over-year;
  • Total subscribers reached 265,000, an increase of 15% year-over-year;

Pointer Telocation Ltd. (Nasdaq CM: 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 ended March 31, 2018.

Pointer Telocation Ltd Logo

Management Comment

David Mahlab, Pointer's Chief Executive Officer, commented: "We are very pleased with our results, particularly with our strong revenue growth in which we demonstrated improved product revenue and record service revenues. We are increasingly investing in our next generation solutions, especially in asset-management, in order to address the increase in opportunities in our end markets, particularly targeting the market in North America. We continue to pursue our strategy of growing our business on an organic basis as well as looking to complement that growth with acquisitions."

Financial summary for the first quarter of 2018

Revenues for the first quarter of 2018 increased 10% to a record $20.9 million as compared to $19.0 million in the first quarter of 2017.

Revenues from products in the first quarter of 2018 increased 6% to $7.1 million (34% of revenues) compared to $6.7 million (35% of revenues) in the comparable period of 2017.

Revenues from services in the first quarter of 2018 increased 12% to $13.8 million (66% of revenues) compared to $12.3 million (65% of revenues), in the comparable period of 2017. The growth in service revenue was primarily due to the growth in the subscriber base which grew by 34,000 subscribers since March 31, 2017.

Gross profit was $10.9 million (52.4% of revenues) compared to $9.4 million (49.3% of revenues) in the first quarter of 2017.

Operating income on a GAAP basis was $2.6 million (12.3% of revenues), an increase of 14%, compared with $2.3 million (11.9% of revenues) in the first quarter of 2017.

Non-GAAP operating income was $3.1 million (14.8% of revenues), an increase of 19% compared to $2.6 million (13.7% of revenues) in the first quarter of 2017.

GAAP net income was $1.8 million (8.5% of revenues), compared to $1.6 million (8.2% of revenues) million reported in the first quarter of 2017.

Non-GAAP net income was $2.5 million (11.8% of revenues), an increase of 7%, compared with $2.3 million (12.0% of revenues) in the first quarter of 2017.

Fully diluted earnings per share based on a GAAP basis in the first quarter was $0.21 per share, compared to $0.19 per share in the first quarter of 2017.

Fully diluted earnings per share based on a non GAAP basis in the first quarter was $0.30 per share, compared to $0.29 per share in the first quarter of 2017.

EBITDA was $3.3 million (15.7% of revenues), an increase of 5% compared with $3.1 million (16.3% of revenues) in the first quarter of 2017.

Operating cash flow in the quarter was $2.3 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 +1-888-407-2553   ; From Israel 03-918-0610; 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.





INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands



March 31,


December 31,



2018


2018



Unaudited








ASSETS










CURRENT ASSETS:





Cash and cash equivalents


7,766


7,375

Trade and unbilled receivables


14,592


13,660

Other accounts receivable and prepaid expenses


3,129


2,865

Inventories


6,362


6,551






Total current assets


31,849


30,451











LONG-TERM ASSETS:





Long-term loan to related party


973


973

Long-term unbilled and other accounts receivable


1,539


1,116

Severance pay fund


3,533


3,546

Property and equipment, net


6,221


5,848

Other intangible assets, net


1,818


1,935

Goodwill


40,566


41,010

Deferred tax asset


9,444


9,585






Total long-term assets


64,094


64,013






Total assets


95,943


94,464







 

 

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands




March 31,


December 31,



2018


2017



Unaudited



LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





Short-term bank credit and current maturities of long-term loans


5,057


5,101

Trade payables


6,068


6,204

Deferred revenues and customer advances


869


777

Other accounts payable and accrued expenses


10,047


9,117






Total current liabilities


22,041


21,199











LONG-TERM LIABILITIES:





Long-term loans from banks


3,787


5,015

Deferred taxes and other long-term liabilities


819


838

Accrued severance pay


4,055


3,996






Total long term liabilities


8,661


9,849






COMMITMENTS AND CONTINGENT LIABILITIES










EQUITY:





Pointer Telocation Ltd's shareholders' equity:





Share capital 


5,995


5,995

Additional paid-in capital


129,221


129,076

Accumulated other comprehensive income


(2,786)


(2,340)

Accumulated deficit


(67,475)


(69,597)






Total Pointer Telocation Ltd's shareholders' equity


64,955


63,134






Non-controlling interest


286


282






Total equity


65,241


63,416






Total liabilities and equity


95,943


94,464

 

 

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands








Three months ended

March 31,


Year ended

December 31,



2018


2017


2017



Unaudited



Revenues:







Products


7,059


6,682


26,182

Services


13,824


12,349


51,973








Total revenues


20,883


19,031


78,155








Cost of revenues:







Products


4,224


4,276


16,073

Services


5,711


5,363


21,914








Total cost of revenues


9,935


9,639


37,987








Gross profit


10,948


9,392


40,168








Operating expenses:







Research and development


1,237


970


4,051

Selling and marketing


3,868


3,305


14,038

General and administrative


2,886


2,748


11,275

Amortization of intangible assets


127


113


463

One-time acquisition related costs


262


-


32








Total operating expenses


8,380


7,136


29,859








Operating income


2,568


2,256


10,309

Financial expenses, net


334


160


1,004

Other expenses


16


-


5








Income before taxes on income


2,218


2,096


9,300

Tax expenses (income)


449


529


(7,221)








Net income


1,769


1,567


16,521















Earnings per share from continuing operations attributable to Pointer Telocation Ltd's Shareholders:







Basic net earnings per share


0.22


0.20


2.07








Diluted net earnings per share


0.21


0.19


2.03








Weighted average -Basic number of shares


8,059,654


7,907,139


7,997,684








Weighted average – fully diluted number of shares


8,294,562


8,030,787


8,130,566

 

 

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands




Three months ended

March 31,


Year ended

December 31,



2018


2017


2017



Unaudited










Cash flows from operating activities:














Net income


1,769


1,567


16,521

Adjustments required to reconcile net income to net cash provided by operating activities:







Depreciation and amortization


718


850


2,924

Accrued interest and exchange rate changes of debenture and long-term loans


1


-


52

Accrued severance pay, net


78


58


93

Gain from sale of property and equipment, net


(27)


(18)


(113)

 Stock-based compensation


142


111


380

Increase in trade and unbilled receivables, net


(988)


(925)


(1,616)

increase in other accounts receivable and prepaid expenses


(620)


(611)


(206)

Decrease (increase) in inventories


210


(149)


(1,170)

Decrease (increase) in deferred income taxes


154


370


(8,018)

Decrease (increase) in long-term unbilled and other accounts receivable


157


(71)


165

Decrease in trade payables


(111)


(479)


(1,597)

Increase in other accounts payable and accrued expenses


836


802


2,285








Net cash provided by operating activities


2,319


1,505


9,700








Cash flows from investing activities:







Purchase of property and equipment


(958)


(768)


(3,033)

Purchase of other intangible assets


-


-


(233)

Proceeds from sale of property and equipment


27


18


114








Net cash used in investing activities


(931)


(750)


(3,152)

 

 

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in pounds




Three months ended

March 31,


Year ended

December 31,



2018


2017


2017



Unaudited



Cash flows from financing activities:














Repayment of long-term loans from banks


(1,351)


(950)


(4,875)

Proceeds from issuance of shares and exercise of options, net of issuance costs


4


79


395

Short-term bank credit, net


58


(281)


(231)








Net cash used in financing activities


(1,289)


(1,152)


(4,711)








Effect of exchange rate on cash and cash equivalents and other comprehensive income


292


85


(528)








Increase (decrease) in cash and cash equivalents


391


(312)


1,309

Cash and cash equivalents at the beginning of the period


7,375


6,066


6,066








Cash and cash equivalents at the end of the period


7,766


5,754


7,375

 

 

ADDITIONAL INFORMATION

U.S. dollars in thousands (except share and per share data)


The following table reconciles the GAAP to non-GAAP operating results:









Three months ended

March 31,


Year ended

December 31,




2018


2017


2017










GAAP gross profit


10,948


9,392


40,168


Stock-based compensation expenses


9


1


3


Non-GAAP gross profit


10,957


9,393


40,171


















GAAP operating income


2,568


2,256


10,309


Stock-based compensation expenses


142


111


380


Amortization of long lived assets


127


113


463


Other expenses of retirement costs


-


125


125


Acquisition related one-time costs


262


-


154


Non-GAAP operating income


3,099


2,605


11,431










GAAP net income


1,769


1,567


16,521


Stock-based compensation expenses


142


111


380


Amortization of long lived assets


127


113


463


Other expenses of retirement costs


-


125


125


Non cash tax expenses (income)


171


386


(8,213)


Acquisition related one-time costs


262


-


154


Non-GAAP net income


2,471


2,302


9,430










Non-GAAP net income per share - Diluted


0.30


0.29


1.16


 

Non-GAAP weighted average number of shares - Diluted*


 

 

8,294,562


 

8,030,787


 

 

8,130,566










* 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.

 

 

EBITDA

U.S. dollars in thousands




Three months ended


Year ended




March 31,


December 31




2018


2017


2017










GAAP Net income from continuing operations as reported:


1,769


1,567


16,521










Financial expenses, net


334


160


1,004


Tax on income


449


529


(7,221)


Depreciation and amortization of  intangible assets


718


850


2,924










EBITDA from continuing operations


3,270


3,106


13,228


 

 

Contacts:

Yaniv Dorani, CFO
Tel: +972-3-5723111
E-mail: yanivd@pointer.com

 Gavriel Frohwein/Ehud Helft, GK Investor Relations
Tel: +1-646-688-3559
E-mail: pointer@gkir.com

Cision View original content:http://www.prnewswire.com/news-releases/pointer-telocation-reports-record-revenues-for-the-first-quarter-of-2018-300648448.html

SOURCE Pointer Telocation Ltd


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