Pointer Telocation Reports Results for the First Quarter of 2019
ROSH HAAYIN, Israel, May 23, 2019 /PRNewswire/ -- Pointer Telocation Ltd. (Nasdaq: 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 first quarter of 2019.
Financial Highlights for the First Quarter of 2019 Compared to the First Quarter of 2018
-- Total revenues of $18.3 million, down 13% as reported due an exceptional
volume of product sales in the same period a year ago and continued
foreign currency exchange devaluation. Total revenues were down 3% on a
constant currency basis
-- Service revenues of $12.4 million, down 11% as reported, up 2% on a
constant currency basis
-- Operating income of $1.2 million (7% of revenue), down from $2.6 million
from the same period a year ago
-- Net income of $0.6 million, down from $1.8 million from the same period
a year ago
-- Non-GAAP net income of $1.7 million, down from $2.5 million from the
same period a year ago
-- EBITDA of $1.9 million, down from $3.3 million from the same period a
year ago
-- Adjusted EBITDA of $2.2 million down from $3.4 million from the same
period a year ago
-- Cash, net of debt, totaled $2.5 million
-- Total subscribers reached 272,000, an increase of 3% year over year
Management Commentary
David Mahlab, Pointer's Chief Executive Officer, commented:
"Despite continued currency headwinds and difficult comparability due to an exceptional volume of product sales a year ago, we continued to deliver positive earnings on both a GAAP and non-GAAP basis and reduced our long-term debt in the first quarter. Also, we delivered positive EBITDA and Adjusted EBITDA while maintaining elevated spending in R&D and Sales and Marketing to support our North America market expansion."
"Our Q1 2019 results also include approximately $0.5 million of cost associated with the acquisition of Pointer by ID Systems, which we expect to close during the third quarter 2019. During Q1 2019, we have significantly reduced services to low margin customers, leading to an increase in our Average Revenue Per Unit in constant currency, and accelerating our operating efficiency."
"For the remainder of 2019, we continue to expect double-digit growth in our overall business. We expect to see significant revenues in the second quarter from product sales in North America, fulfilling our largest product order ever, as announced earlier this year, and stable growth in our service business supported by the recently announced service orders in Brazil. These should accelerate growth on our top and bottom lines in the second half of the year."
Yaniv Dorani, Pointer's Chief Financial Officer, commented:
"In the first quarter, we generated $1.9 million in EBITDA and ended the quarter with $2.5 million in net cash. We reduced our debt by $0.7 million, and we remain on track for continued positive EBITDA and long-term debt reduction throughout the remainder of 2019."
First Quarter of 2019 Financial Summary
Compared to First Quarter of 2018
(in
millions,
except
per
share
amounts) 2019 2018
--- ---
Total
Revenues $18.3 $20.9
--- ---
Service
Revenues $12.4 $13.8
--- ---
Operating
Income
(%
of
Revenue)
$1.2 (7%)
$2.6 (12%)
--- ---
Net
Income $0.6 $1.8
--- ---
Diluted
EPS $0.07 $0.21
--- ---
Non-
GAAP
Diluted
EPS $0.20 $0.30
--- ---
EBITDA $1.9 $3.3
--- ---
Adjusted
EBITDA $2.2 $3.4
--- ---
In Q1 2019, revenues from services decreased 11% as reported to $12.4 million as compared to $13.8 million in Q1 2018. In local currency terms, revenues from services increased by 2%. Revenues from products decreased 17% as reported in Q1 2019 to $5.9 million from $7.1 million in Q1 2018. In local currency terms, revenues from products decreased by 14%. The currency exchange rate impact on total revenues for the first quarter of 2019 compared to the first quarter of 2018 was approximately $1.9 million. The currency exchange rate impact on operating income for the first quarter of 2019 compared to the first quarter of 2018 was approximately $0.1 million.
Conference Call Information
As previously announced, Pointer Telocation's management will host a conference call today, at 9:00 a.m. Eastern Time, 2:00 p.m. UK time, 4:00 p.m. 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 +1-877-407-0789 or 1-201-689-8562
From Israel 1-809-406-247
From the UK 0-800-756-3429
A replay will be available a few hours following the call on the company's website for one year.
The call will also be accompanied by a live webcast over the Internet and accessible at http://public.viavid.com/index.php?id=133125.
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, adjusted EBITDA, Non-GAAP operating income, Non-GAAP net income and presentation of results in a constant currency based on the local currencies in which operations are conducted prior to giving effect to exchange rates into U.S. dollars 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 adjusted EBITDA by adding back to EBITDA Stock-based compensation expenses. 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 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 and acquisition related one-time costs.
Pointer calculates results on a constant currency based on the local currencies on a nominal value, without giving effect to conversion into U.S. dollar.
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 and to neutralize fluctuations in local currencies against the dollar.
EBITDA, Adjusted EBITDA, Non-GAAP operating and net income and presentation of results on a constant currency basis are provided to investors to complement the results provided in accordance with GAAP, as management believes these measures help to illustrate underlying operating trends in the Company's business and uses these measures 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, adjusted EBITDA, Non-GAAP operating and net income and presentation of results on a constant currency basis 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 profitability.
For more information, please visit http://www.pointer.com, the content of which does not form a part of this press release.
Risks Regarding Forward Looking Statements
Certain statements made herein that use words such as "estimate", "project", "intend", "expect", "believe", "may", "might", "predict", "potential", "anticipate", "plan" or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. For example, when the Company discusses its expectations for growth and levels of revenues in the remainder of 2019, and, in particular, in North America and Brazil, the Company's overall growth in terms of revenues and profits in the second half of 2019, and the expected closing of the merger with I.D. Systems it is using forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties that could cause the actual results, performance or achievements of the Company to be materially different from those that may be expressed or implied by such statements, including, among others, changes in general economic and business conditions. For additional information regarding these and other risks and uncertainties associated with the Company's business, reference is made to the Company's reports filed from time to time with the U.S. Securities and Exchange Commission. The Company does not undertake to revise or update any forward-looking statements for any reason.
INTERIM CONSOLIDATED BALANCE SHEETS
---
U.S. dollars in thousands
March 31, December 31,
2019 2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 6,875 8,528
Trade and unbilled receivables 14,954 13,902
Other accounts receivable and
prepaid expenses 3,966 3,362
Inventories 7,141 6,432
Total current assets 32,936 32,224
LONG-TERM ASSETS:
Long-term loan to related party 991 948
Long-term unbilled and other
accounts receivable 1,257 1,258
Severance pay fund 3,250 3,038
Property and equipment, net 6,417 5,915
Other intangible assets, net 1,130 1,229
Goodwill 38,404 37,538
Deferred tax asset 7,987 7,934
Operating lease right-of-use
asset 3,702
Total long-term assets 63,138 57,860
Total assets 96,074 90,084
INTERIM COLSOLIDATED BALANCE SHEETS
---
U.S. dollars in thousands
March 31, December 31,
2019 2018
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current
maturities of 2,022
long-term loans
2,354
Trade payables 5,497 5,743
Deferred revenues and customer advances 1,097 785
Other accounts payable and accrued expenses 9,015 8,490
Total current liabilities 17,631 17,372
---
LONG-TERM LIABILITIES:
Long-term loans from banks 2,308 2,685
Deferred taxes and other long-term
liabilities 434 360
Accrued severance pay 3,640 3,531
Operating lease liability 3,714
Total long term liabilities 10,096 6,576
---
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY:
Pointer Telocation Ltd.'s shareholders'
equity:
Share capital 6,050 6,050
Additional paid-in capital 130,659 130,309
Accumulated other comprehensive income (6,842) (8,151)
Accumulated deficit (61,650) (62,278)
Total Pointer Telocation Ltd.'s
shareholders' equity 68,217 65,930
Non-controlling interest 130 206
Total equity 68,347 66,136
Total liabilities and equity 96,074 90,084
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
---
U.S. dollars in thousands, except for share and per share information
Three Months ended Year ended
March 31, December 31,
2019 2018 2018
Revenues:
Products 5,892 7,059 25,243
Services 12,366 13,824 52,543
Total revenues 18,258 20,883 77,786
---
Cost of revenues:
Products 3,783 4,224 15,104
Services 5,216 5,711 21,674
Total cost of revenues 8,999 9,935 36,778
Gross profit 9,259 10,948 41,008
Operating expenses:
Research and development 1,271 1,237 4,707
Selling and marketing 3,658 3,868 14,560
General and administrative 2,586 2,886 11,169
Amortization of intangible
assets 95 127 456
One-time acquisition related
costs 451 262 300
Total operating expenses 8,061 8,380 31,192
Operating income 1,198 2,568 9,816
Financial expenses, net 221 334 1,133
Other expenses 16 3
Income before taxes on income 977 2,218 8,680
Taxes on income 376 449 1,753
Net income 601 1,769 6,927
Earnings per share from
continuing
operations attributable to
Pointer
Telocation Ltd.'s shareholders:
Basic net earnings per share 0.07 0.22 0.85
Diluted net earnings per share 0.07 0.21 0.84
Weighted average -Basic number
of shares 8,139,584 8,059,654 8,099,952
Weighted average - fully
diluted number of shares 8,326,391 8,294,562 8,279,562
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
---
U.S. dollars in thousands
Three Months ended Year ended
March 31, December 31,
2019 2018 2018
Cash flows from operating activities:
---
Net income 601 1,769 6,927
Adjustments required to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 679 718 2,571
Accrued interest and exchange rate (62) 1 (20)
changes of debenture and long-term
loans
Accrued severance pay, net (115) 78 71
Gain from sale of property and
equipment, net (16) (27) (101)
Stock-based compensation 349 142 1,198
Increase in trade and unbilled
receivables, net (793) (988) (1,121)
Increase in other accounts receivable (853) (620) (855)
and prepaid expenses
Decrease (increase) in inventories (802) 210 (56)
Decrease (increase) in deferred
income 120 154 779
taxes
Decrease in long-term unbilled and 555 157 220
other accounts receivable
Decrease (increase) in trade
payables (796) (111) 48
Increase (decrease) in other accounts 867 836 (1,064)
payable and accrued expenses
Net cash provided by operating
activities (266) 2,319 8,597
Cash flows from investing activities:
---
Purchase of property and equipment (530) (958) (2,721)
Proceeds from sale of property and
equipment 16 27 101
Net cash used in investing activities (514) (931) (2,620)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
---
U.S. dollars in thousands
Three months ended Year ended
March 31, December 31,
2019 2018 2018
Cash flows from financing
activities:
---
Repayment of long-term
loans from banks (1,218) (1,351) (5,078)
Proceeds from issuance of
shares and exercise of 4 89
options, net of issuance
costs
Short-term bank credit,
net 514 58 32
Net cash used in financing
activities (704) (1,289) (4,957)
Effect of exchange rate on
cash and cash equivalents (169) 292 133
Increase in cash and cash
equivalents (1,653) 391 1,153
Cash and cash equivalents
at the beginning of the 8,528 7,375 7,375
period
Cash and cash equivalents
at the end of the period 6,875 7,766 8,528
Supplemental disclosure for
non-cash activities:
---
Operating lease right-of-
use asset 4,096
ADDITIONAL INFORMATION
---
U.S. dollars in thousands, except share and per share data
The following table reconciles GAAP to non-GAAP operating results:
Three months ended Year ended
March 31, December 31,
2019 2018 2018
GAAP gross profit 9,259 10,948 41,008
Stock-based compensation expenses 34 9 104
Non-GAAP gross profit 9,293 10,957 41,112
GAAP operating income 1,198 2,568 9,816
Stock-based compensation expenses 349 142 1,198
Amortization and impairment of long lived
assets 95 127 456
Acquisition related one-time costs 451 262 300
Non-GAAP operating income 2,093 3,099 11,770
GAAP net income 601 1,769 6,927
Stock-based compensation expenses 349 142 1,198
Amortization and impairment of long lived
assets 95 127 456
Non cash tax expenses 166 171 759
Acquisition related one-time costs 451 262 300
Non-GAAP net income 1,662 2,471 9,640
Non-GAAP net income per share from continuing 0.20 1.16
operations - Diluted
0.30
Non-GAAP weighted average number of shares - 8,326,391 8,294,562 8,279,562
Diluted*
* 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 and Adjusted EBITDA
---
U.S. dollars in thousands
Three months
ended Year ended
March 31, December 31,
2019 2018 2018
GAAP Net income as reported: 601 1,769 6,927
Financial expenses, net 221 334 1,133
Tax on income 376 449 1,753
Depreciation and amortization of goodwill and 679 718 2,571
intangible assets
EBITDA 1,877 3,270 12,384
Stock-based compensation expenses 349 142 1,198
Adjusted EBITDA 2,226 3,412 13,582
Company contact:
Yaniv Dorani, CFO
Tel: +972-3-5723111
E-mail: yanivd@pointer.com
Investor Relations Contact at Hayden IR, LLC:
Brett Maas
Tel: +1-646-536-7331
E-mail: brett@haydenir.com
Dave Fore
Tel: +1-206-395-2711
E-mail: dave@haydenir.com
View original content to download multimedia:http://www.prnewswire.com/news-releases/pointer-telocation-reports-results-for-the-first-quarter-of-2019-300855868.html
SOURCE Pointer Telocation Ltd
