EX-99.1 2 v453369_ex1.htm EXHIBIT 1

Exhibit 1

 

For Immediate Release

 

 

Pointer Telocation Reports Q3 2016 Financial Results

 

Highlights in the Third Quarter 2016

 

·Revenues of $15.9 million; up 14% YoY in local currencies (up 9% in US dollar terms);

 

·Service revenues were $10.5 million; up 18% YoY in local currency terms (up 11% in US dollars terms);

 

·Non-GAAP operating income of $1.8 million, up 10% YoY;

 

·Total MRM subscribers reached 198,000; a 14% increase of 24,000 since Q3 2015 end;

 

·Completion of Cielo Telecom acquisition in Brazil on October 7th ,2016;

 

 

Rosh HaAyin, Israel, November 17th, 2016 Pointer Telocation Ltd. (Nasdaq CM: PNTR; TASE: PNTR) - a leading developer, manufacturer and operator of Mobile Resource Management (MRM) services, today announced its financial results for the third quarter of 2016.

 

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 operations.

 

Revenues for the third quarter of 2016 increased 9.3% to $15.9 million as compared to $14.6 million in the third quarter of 2015. In local currency terms, revenues increased by 14%.

 

Revenues from products in the third quarter of 2016 increased 6% to $5.4 million (34% of revenues) compared to $5.1 million (35% of revenues) in the comparable period of 2015.

 

Revenues from services in the third quarter of 2016 increased 11% to $10.5 million (66% of revenues) compared to $9.5 million (65% of revenues), in the comparable period of 2015. In local currency terms in the territories where the subsidiaries operate, revenue from services increased by 18%.

 

 1 

 

 

Gross profit was $7.8 million (49.2% of revenues) compared to $7.1 million (49% of revenues) in the third quarter of 2015.

 

Non-GAAP operating income was $1.8 million (11% of revenues), compared to $1.6 million (11% of revenues) in the third quarter of 2015.

 

Non-GAAP net income from continuing operations was $1.4 million (9% of revenues), compared with $1.3 million (9.2% of revenues).

 

Adjusted EBITDA from continuing operations was $2.0 million, approximately the same as in the third quarter of 2015.

 

Management Comment

 

David Mahlab, Pointer's Chief Executive Officer, commented: “We are pleased with our financial results, particularly with the growth in revenue. Just as importantly, we completed the acquisition of Cielo Telecom, a fleet management company in Brazil, which will bring us an additional 16,000 subscribers. Our subscriber base, which is now in excess of 214,000, demonstrates our ability to execute on our long term strategy and will bring us incremental service revenues in the coming quarters.

 

Mr. Mahlab further noted, “With the new SAAS solutions we have recently launched, together with our enhanced product offering, we are looking at more opportunities in our end markets. In Brazil, we will focus on integrating our new acquisition into our operations, while maintaining our overall growth and profitability. We continue to look for potential acquisitions in our target markets, which will enable us to increase our customer base and further improve our financial performance”.

 

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: 03-918-0609

 

A replay will be available a few hours following the call on the company’s website.

 

 2 

 

 

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 financial expenses, taxes, depreciation, amortization and impairment of goodwill and intangible assets and the effects of non-cash stock-based compensation expenses.

 

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

 

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 Mobile Resource Management, Fleet Management and Stolen Vehicle Recovery. Pointer has a growing list of customers and products installed in 50 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.

 

 

Contact:

 

Zvi Fried, V.P. and Chief Financial Officer

Tel.: +972-3-572-3111

E-mail: zvif@pointer.com

 

Gavriel Frohwein/Ehud Helft, GK Investor Relations

Tel: +1-646-688-3559

E-mail: pointer@gkir.com

 3 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

 

 

 

   September 30,
2016		   December 31,
2015		 
   Unaudited     
         
ASSETS          
           
CURRENT ASSETS:          
Cash and cash equivalents   14,066    7,252 
Trade receivables   10,865    9,494 
Other accounts receivable and prepaid expenses   2,185    1,596 
Inventories   4,777    4,697 
Current assets of discontinued operation   -    11,616 
           
Total current assets   31,893    34,655 
           
           
LONG-TERM ASSETS:          
Long-term loans to related party   838    - 
Long-term accounts receivable   543    490 
Severance pay fund   3,127    2,740 
Property and equipment, net   3,867    3,278 
Other intangible assets, net   292    443 
Goodwill   32,820    31,388 
Deferred tax asset   1,852    3,086 
Long Term assets of discontinued operation   -    27,358 
           
Total long-term assets   43,339    68,783 
           
Total assets   75,232    103,438 

 

 4 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

 

 

   September 30,   December 31, 
   2016   2015 
   Unaudited     
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
CURRENT LIABILITIES:          
Short-term bank credit and current maturities of long-term loans   4,730    4,820 
Trade payables   6,054    4,651 
Deferred revenues and customer advances   692    671 
Other accounts payable and accrued expenses   5,275    5,168 
Current liabilities of discontinued operation   -    15,142 
           
Total current liabilities   16,751    30,452 
           
           
LONG-TERM LIABILITIES:          
Long-term loans from banks   11,563    8,385 
Deferred revenues and other long-term liabilities   336    258 
Accrued severance pay   3,478    3,345 
Long term liabilities of discontinued operation   -    5,963 
           
Total long term liabilities   15,377    17,951 
           
COMMITMENTS AND CONTINGENT LIABILITIES          
           
EQUITY:          
Pointer Telocation Ltd's shareholders' equity:          
Share capital   5,819    5,770 
Additional paid-in capital   128,313    128,410 
Accumulated other comprehensive loss   (4,588)   (6,254)
Accumulated deficit   (86,604)   (71,822)
           
Total Pointer Telocation Ltd's shareholders' equity   42,940    56,104 
           
Non-controlling interest   164    (1,069)
           
Total equity   43,104    55,035 
           
Total liabilities and equity   75,232    103,438 

 

 5 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands

 

 

   Nine months ended
September 30,		   Three months ended
September 30,		   Year ended
December 31,		 
   2016   2015   2016   2015   2015 
   Unaudited   Unaudited     
                     
Revenues:                         
Products   16,948    16,625    5,394    5,090    22,266 
Services   30,007    28,837    10,522    9,470    38,301 
                          
Total revenues   46,955    45,462    15,916    14,560    60,567 
                          
Cost of revenues:                         
Products   10,479    10,081    3,301    3,176    13,435 
Services   13,563    13,616    4,789    4,244    17,879 
                          
Total cost of revenues   24,042    23,697    8,090    7,420    31,314 
                          
Gross profit   22,913    21,765    7,826    7,140    29,253 
                          
Operating expenses:                         
Research and development   2,694    2,534    870    816    3,409 
Selling and marketing   8,714    7,480    3,099    2,401    10,468 
General and administrative   6,378    6,589    2,152    2,198    9,278 
Amortization of intangible assets   300    566    105    274    538 
Impairment of intangible and tangible assets   -    -    -    -    917 
One-time acquisition related costs   200    -    200    -    - 
                          
Total operating expenses   18,286    17,169    6,426    5,689    24,610 
                          
Operating income   4,627    4,596    1,400    1,451    4,643 
Financial expenses (income),  net   622    (64)   379    157    63 
Other expenses (income), net   5    11    8    (2)   10 
                          
Income before taxes on income   4,000    4,649    1,013    1,296    4,570 
Taxes on income   1,151    957    298    312    1,307 
                          
Income from continuing operations   2,849    3,692    715    984    3,263 
Income from discontinued operations, net   154    164    -    107    535 
Net income   3,003    3,856    715    1,091    3,798 

 

 6 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

 

 

   Nine months ended
September 30,		   Three months ended
September 30,		   Year ended
December 31,		 
   2016   2015   2016   2015   2015 
   Unaudited     
                     
Profit  (loss) from continuing operations attributable to:                         
Pointer Telocation Ltd's shareholders   2,835    3,803    712    1,007    3,338 
Non-controlling interests   14    (111)   3    (23)   (75)
                          
    2,849    3,692    715    984    3,263 
                          
Profit  (loss) from discontinued operations attributable to:                         
Pointer Telocation Ltd's shareholders   120    184    -    112    607 
Non-controlling interests   34    (20)   -    (5)   (72)
                          
    154    164    -    107    535 
                          
                          
Earnings per share from continuing operations attributable to Pointer Telocation Ltd's shareholders:                         
Basic net earnings  per share  $0.36   $0.49   $0.09   $0.13   $0.43 
                          
Diluted net earnings  per share  $0.36   $0.48   $0.09   $0.12   $0.42 
                          
Weighted average -Basic number of shares   7,799,257    7,705,355    7,825,840    7,725,653    7,725,246 
                          
Weighted average – fully diluted number of shares   7,938,800    7,957,361    7,967,559    7,950,062    7,938,489 

 

 7 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 

 

  

Nine months ended
September 30,

  

Three months ended
September 30,

  

Year ended
December 31,

 
   2016   2015   2016   2015       2015 
   Unaudited   Unaudited     
                     
Cash flows from operating activities:                         
                          
Net income  $3,003   $3,856   $715   $1,091   $3,798 
Adjustments required to reconcile net income to net cash provided by operating activities:                         
Depreciation and amortization   2,306    2,946    529    961    3,959 
Impairment of tangible and intangible assets   -    -    -    -    917 
Accrued interest and exchange rate changes of debenture and long-term loans   29    4    (45)   (6)   (888)
Accrued severance pay, net   37    (19)   (84)   19    17 
Gain from sale of property and equipment, net   (205)   (88)   (25)   (16)   (143)
Stock-based compensation   205    245    111    71    309 
Decrease  in restricted cash   -    62    -    -    62 
Decrease (increase) in trade receivables, net   (3,430)   (293)   854    220    (236)
Decrease (increase)  in other accounts receivable and prepaid expenses   (750)   (234)   156    826    (469)
Decrease (increase) in inventories   90    120    (353)   300    658 
Decrease in deferred income taxes   1,722    551    685    164    1,080 
Decrease (increase) in long-term accounts receivable   (240)   (106)   (231)   (120)   (91)
Increase (decrease) in trade payables   2,052    296    10    (604)   1,277 
Increase (decrease) in other accounts payable and accrued expenses   1,568    (1,040)   (893)   (749)   (1,448)
                          
Net cash provided by operating activities   6,387    6,300    1,429    2,157    8,802 
                          
Cash flows from investing activities:                         
Purchase of property and equipment   (3,577)   (2,511)   (716)   (1,157)   (3,616)
Purchase of other intangible assets   (115)   -    -    -    - 
Proceeds from sale of property and equipment   624    829    30    181    1,266 
                          
Net cash used in investing activities   (3,068)   (1,682)   (686)   (976)   (2,350)
                          

 

 8 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 

 

 

  

Nine months ended
September 30,

  

Three months ended
September 30,

   Year ended
December 31,		 
   2016   2015   2016   2015   2015 
   Unaudited   Unaudited     
                     
Cash flows from financing activities:                         
                          
Receipt of long-term loans from banks   6,762    15,159    6,667    56    14,934 
Repayment of long-term loans from banks   (3,575)   (18,403)   (1,325)   (674)   (19,503)
Repayment of long-term loans from shareholders   -    -    -    32    - 
Proceeds from issuance of shares and exercise of options, net of issuance costs   71    15    71    9    15 
Short-term bank credit, net   72    (222)   (56)   264    (915)
Distribution as a dividend in kind of previously consolidated subsidiary (a)   (1,870)   -    -    -    - 
                          
Net cash used in financing activities   1,460    (3,451)   5,357    (313)   (5,469)
                          
Effect of exchange rate on cash and cash equivalents   (60)   (1,544)   221    (1,135)   (193)
                          
Increase (decrease) in cash and cash equivalents   4,719    (377)   6,321    (267)   790 
Cash and cash equivalents at the beginning of the period   9,347    8,557    7,745    8,447    8,557 
                          
Cash and cash equivalents at the end of the period- Continuing operations   14,066    7,293    14,066    7,293    7,252 
Cash and cash equivalents at the end of the period- Discontinued operation   -    887    -    887    2,095 
                          
Total Cash and cash equivalents at the end of the period  $14,066   $8,180   $14,066   $8,180   $9,347 

 

 

 

(a) Distribution as a dividend in kind of previously consolidated subsidiary:                    
                       
  The subsidiaries' assets and liabilities at date of distribution:                         
                            
  Working capital (excluding cash and cash equivalents)   (5,443)   -    -    -    - 
  Property and equipment   7,048    -    -    -    - 
  Goodwill and other intangible assets   15,883    -    -    -    - 
  Other long term liabilities   (1,781)   -    -    -    - 
  Non-controlling interest   373    -    -    -    - 
  Accumulated other comprehensive loss   (213)   -    -    -    - 
  Dividend in kind   (17,737)   -    -    -    - 
                            
     $(1,870)  $-   $-   $-   $- 

 

- - - - - - -

 

 9 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

ADDITIONAL INFORMATION

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

 

 

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

 

   Nine months ended
September 30,		   Three months ended
September 30,		   Year ended
December 31,		 
   2016   2015   2016   2015   2015 
                     
GAAP gross profit   22,913    21,765    7,826    7,140    29,253 
Stock-based compensation expenses   5    8    1    2    11 
Non-GAAP gross profit   22,918    21,773    7,827    7,142    29,264 
                          
                          
GAAP operating expenses   18,286    17,169    6,426    5,689    24,610 
Stock-based compensation expenses   200    237    110    69    298 
Amortization and impairment of long lived assets   300    418    105    126    1,455 
Acquisition related one-time costs   200    -    200    -    - 
Non-GAAP operating expenses   17,586    16,514    6,011    5,494    22,857 
                          
GAAP operating income   4,627    4,596    1,400    1,451    4,643 
                          
Non-GAAP operating income   5,332    5,259    1,816    1,648    6,407 
                          
GAAP net income from continuing operations   2,849    3,692    715    984    3,263 
Stock-based compensation   205    245    111    71    309 
Amortization and impairment of long lived assets   300    418    105    126    1,455 
Non cash tax expenses   1,151    507    298    164    1,307 
Acquisition related one-time costs   200    -    200    -    - 
Non-GAAP net income from continuing operations  $4,705   $4,862   $1,429   $1,345   $6,334 
                          
Income (loss) from discontinued operation   154    164    -    107    535 
Non cash tax expenses   249    186    -    76    97 
Spin-off related expenses and losses   349    -    -    -    - 
Amortization and impairment of long lived assets   67    148    -    50    197 
Non-GAAP net income  $5,524   $5,360   $1,429   $1,578   $7,163 
                          
Non-GAAP net income per share from continuing operations - Diluted  $0.59   $0.61   $0.18   $0.17   $0.80 
Non-GAAP weighted average number of shares - Diluted*   7,938,800    7,957,361    7,967,559    7,950,062    7,938,489 

 

 

* 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.

 

 10 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

ADJUSTED EBITDA

U.S. dollars in thousands

 

  

Nine months ended
September 30,

  

Three months ended
September 30,

  

Year ended
December 31,

 
   2016   2015   2016   2015   2015 
                     
GAAP Net income from continuing operations as reported:  $2,849   $3,692   $715   $984   $3,263 
                          
Financial expenses (income), net   622    (63)   379    158    63 
Tax on income   1,151    957    298    312    1,307 
Stock based compensation expenses   205    245    111    71    309 
Depreciation, amortization and impairment of goodwill and  intangible assets   1,638    1,732    529    516    3,157 
                          
Adjusted EBITDA from continuing operations  $6,465   $6,563   $2,032   $2,041   $8,099 
                          
Income  from  discontinued operation   154    164    -    107    535 
Financial expenses, net   47    599    -    202    806 
Tax on income   249    185    -    74    97 
Depreciation, amortization and impairment of goodwill and  intangible assets   668    1,215    -    446    1,719 
                          
Adjusted EBITDA  $7,583   $8,726   $2,032   $2,870   $11,256 
                          

 

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