Pointer Telocation Reports Record Revenues for the First Quarter of 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.
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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 Year ended
March 31, 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 Year ended
March 31, 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 Year ended
March 31, 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 Year ended
March 31, 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* 8,030,787
8,294,562 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
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SOURCE Pointer Telocation Ltd
