6-K

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549

FORM 6-K 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 
under the Securities Exchange Act of 1934

For the month of September 2018 (Report No. 2)

Commission File Number: 001-13138

Pointer Telocation Ltd.
(Translation of registrant’s name into English)

14 Hamelacha Street, Rosh Ha’ayin, Israel 4809133 
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒  Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

THIS FORM 6-K OF THE REGISTRANT IS HEREBY INCORPORATED BY REFERENCE INTO THE REGISTRANT’S REGISTRATION STATEMENTS ON FORM S-8 (REGISTRATION STATEMENT NOS. 333-113420, 333-118897, 333-139717, 333-141306, 333-173155, 333-214775 AND 333-217655) AND FORM F-3 (REGISTRATION STATEMENT NOS. 333-111019, 333-119998, 333-126257, 333-143399, 333-194483, 333-199535 AND 333-212326) AND SHALL BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FILED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

CONTENTS

This report on Form 6-K of the registrant consists of the following document, which is attached hereto and incorporated by reference herein:

Exhibit 99.1	Interim Condensed Consolidated Financial Statements, as of June 30, 2018.
Exhibit 99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2018.

- 1 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

POINTER TELOCATION LTD.

(Registrant)

/s/ Yossi Ben Shalom

By: Yossi Ben Shalom

Title: Chairman of the Board of Directors

Date: September 17, 2018 

- 2 -

EX-99.1

Exhibit 99.1

POINTER TELOCATION LTD. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2018

IN U.S. DOLLARS

UNAUDITED

INDEX

	Page
Interim Condensed Consolidated Balance Sheets	2 - 3
Interim Condensed Consolidated Statements of Income and Comprehensive income	4 - 5
Interim Statements of Changes in Shareholders’ Equity	6 - 7
Interim Condensed Consolidated Statements of Cash Flows	8 - 9
Notes to Interim Condensed Consolidated Financial Statements	10 - 21

- - - - - - - - - - - -

POINTER TELOCATION LTD. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

	June 30,		December 31,
	2018		2017
	Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7,168	$	7,375
Trade receivables (net of allowance for doubtful accounts of $1,337 and $1,127 as of June 30, 2018 and December 31, 2017, respectively)		13,657		13,660
Other accounts receivable and prepaid expenses		3,692		2,865
Inventories		5,621		6,551
Total current assets		30,138		30,451
LONG-TERM ASSETS:
Long term loans to related party		949		973
Long-term unbilled and other accounts receivable		1,303		1,116
Severance pay fund		3,094		3,546
Property and equipment, net		5,670		5,848
Other intangible assets, net		1,458		1,935
Goodwill		38,324		41,010
Deferred tax asset		8,515		9,585
Total long-term assets		59,313		64,013
Total assets		89,451		94,464

The accompanying notes are an integral part of the interim consolidated financial statements.

2

POINTER TELOCATION LTD. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

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

	June 30,			December 31,
	2018			2017
	Unaudited
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities of long-term loans	$	4,154		$	5,101
Trade payables		5,609			6,204
Deferred revenues		761			777
Other accounts payable and accrued expenses		8,248			9,117
Total current liabilities		18,772			21,199
LONG-TERM LIABILITIES:
Long-term loans from banks		3,421			5,015
Deferred revenues and other long-term liabilities		355			838
Accrued severance pay		3,572			3,996
Total long term liabilities		7,348			9,849
EQUITY:
Pointer Telocation Ltd.’s shareholders’ equity:
Share capital
Ordinary shares of NIS 3 par value -
Authorized: 16,000,000 shares at June 30, 2018 and December 31, 2017; Issued and outstanding: 8,131,988 and 8,059,094 shares at June 30, 2018 and December 31, 2017, respectively		6,049			5,995
Additional paid-in capital		129,489			129,076
Accumulated other comprehensive loss		(6,907	)		(2,340	)
Accumulated deficit		(65,544	)		(69,597	)
Total Pointer Telocation Ltd.’s shareholders’ equity		63,087			63,134
Non-controlling interest		244			282
Total equity		63,331			63,416
Total liabilities and equity		89,451			94,464

The accompanying notes are an integral part of the interim consolidated financial statements.

3

POINTER TELOCATION LTD. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE LOSS

U.S. dollars in thousands

	Six months ended June 30,					Three months ended June 30,					Year ended December 31,
	2018			2017		2018			2017		2017
	Unaudited					Unaudited
Revenues:
Products	$	13,637		$	13,829	$	6,578		$	7,147	$	26,182
Services		26,986			25,243		13,162			12,894		51,973
Total revenues		40,623			39,072		19,740			20,041		78,155
Cost of revenues:
Products		8,188			8,753		3,963			4,477		16,073
Services		11,148			10,621		5,438			5,258		21,914
Total cost of revenues		19,336			19,374		9,401			9,735		37,987
Gross profit		21,287			19,698		10,339			10,306		40,168
Operating expenses:
Research and development		2,359			1,987		1,122			1,017		4,051
Selling and marketing		7,545			6,761		3,677			3,456		14,038
General and administrative		5,548			5,634		2,661			2,886		11,275
Amortization of intangible assets		248			226		121			113		463
One time acquisition related costs		262			-		-			-		32
Total operating expenses		15,962			14,608		7,581			7,472		29,859
Operating income		5,325			5,090		2,758			2,834		10,309
Financial expenses,  net		666			419		332			259		1,004
Other expenses, net		15			-		-			-		5
Income before taxes on income		4,644			4,671		2,426			2,575		9,300
Taxes on income		950			1,138		501			609		(7,221	)
Net income		3,694			3,533		1,925			1,966		16,521
Other comprehensive income (loss):
Currency translation adjustments of foreign operations		(4,602	)		3,156		(4,222	)		708		3,293
Total comprehensive income (loss)		(908	)		6,689		(2,297	)		2,674		19,814

The accompanying notes are an integral part of the interim consolidated financial statements.

4

POINTER TELOCATION LTD. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE LOSS

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

	Six months ended June 30,					Three months ended June 30,					Year ended December 31,
	2018			2017		2018		2017			2017
	Unaudited
Profit (loss) attributable to:
Pointer Telocation Ltd.’s shareholders	$	3,697		$	3,527	$	1,925	$	1,969		$	16,518
Non-controlling interests		(3	)		6		-		(3	)		3
		3,694			3,533		1,925		1,966			16,521
Earnings per share attributable to Pointer Telocation Ltd.’s shareholders:
Basic net earnings per share	$	0.46		$	0.44	$	0.24	$	0.24		$	2.07
Diluted net earnings per share		0.44			0.44		0.23		0.24			2.03
Weighted average - Basic number of shares		8,066,698			7,942,957		8,073,665		7,978,102			7,997,684
Weighted average – fully diluted number of shares		8,257,968			8,070,953		8,294,562		8,111,119			8,130,566

The accompanying notes are an integral part of the interim consolidated financial statements.

5

POINTER TELOCATION LTD. AND SUBSIDIARIES

INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

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

			Pointer Telocation Ltd.’s Shareholders
	Number of shares		Share capital		Additional paid-in capital		Accumulated other comprehensive income (loss)			Accumulated deficit			Non- controlling interest			Total equity
Balance as of January 1, 2017		7,873,919	$	5,837	$	128,438	$	(5,633	)	$	(86,115	)	$	162		$	42,689
Exercise of share options		185,175		158		237		-			-			-			395
Stock-based compensation expenses		-		-		401		-			-			117			518
Other comprehensive income		-		-		-		3,293			-			-			3,293
Net income attributable to Non-controlling interest		-		-		-		-			-			3			3
Net income attributable to Pointer Telocation Ltd.’s shareholders		-		-		-		-			16,518			-			16,518
Balance as of December 31, 2017		8,059,094		5,995		129,076		(2,340	)		(69,597	)		282			63,416
Exercise of share options		72,894		54		27		-			-			-			81
Stock-based compensation expenses		-		-		386		-			-			-			386
Effect of adoption of ASC Topic 606		-		-		-		-			356			-			356
Other comprehensive loss		-		-		-		(4,567	)		-			(35	)		(4,602	)
Net loss attributable to Non-controlling interest		-		-		-		-			-			(3	)		(3	)
Net income attributable to Pointer Telocation Ltd.’s shareholders		-		-		-		-			3,697			-			3,697
Balance as of June 30, 2018 (unaudited)		8,131,988		6,049		129,489		(6,907	)		(65,544	)		244			63,331

The accompanying notes are an integral part of the interim consolidated financial statements.

6

POINTER TELOCATION LTD. AND SUBSIDIARIES

INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

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

			Pointer Telocation Ltd.’s Shareholders
	Number of		Share		Additional paid-in		Accumulated other comprehensive			Accumulated			Non- controlling		Total
	shares		capital		capital		income (loss)			deficit			interest		equity
Balance as of January 1, 2017		7,873,919	$	5,837	$	128,438	$	(5,633	)	$	(86,115	)	$	162	$	42,689
Exercise of share options		159,875		133		143		-			-			-		276
Stock-based compensation expenses		-		-		217		-			-			-		217
Other comprehensive income		-		-		-		3,156			-			-		3,156
Net income attributable to Non-controlling interest		-		-		-		-			-			6		6
Net income attributable to Pointer Telocation Ltd.’s shareholders		-		-		-		-			3,527			-		3,527
Balance as of June 30, 2017 (unaudited)		8,033,794		5,970		128,798		(2,477	)		(82,588	)		168		49,871

The accompanying notes are an integral part of the interim consolidated financial statements.

7

POINTER TELOCATION LTD. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Six months ended June 30,						Three months ended June 30,						Year ended December 31,
	2018			2017			2018			2017			2017
	Unaudited						Unaudited
Cash flows from operating activities:
Net income	$	3,694		$	3,533		$	1,925		$	1,966		$	16,521
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,345			1,451			627			601			2,924
Accrued interest and exchange rate changes of debenture and long-term loans		25			-			24			-			52
Accrued severance pay, net		46			112			(32	)		54			93
Gain from sale of property and equipment, net		(49	)		(67	)		(22	)		(49	)		(113	)
Stock-based compensation expenses		386			217			244			106			380
Decrease (increase) in trade and unbilled receivables, net		(788	)		(2,127	)		200			(1,202	)		(1,616	)
Decrease (increase)  in other accounts receivable and prepaid expenses		(1,370	)		(480	)		(749	)		131			(206	)
Decrease (increase) in inventories		751			(567	)		541			(418	)		(1,170	)
Decrease (increase) in deferred tax asset		341			822			186			452			(8,018	)
Decrease (increase) in long-term unbilled and other accounts receivable		(202	)		52			(360	)		123			165
Increase (decrease) in trade payables		247			(1,211	)		358			(732	)		(1,597	)
Increase (decrease) in other accounts payable and accrued expenses		(382	)		994			(1,214	)		192			2,285
Net cash provided by operating activities		4,044			2,729			1,728			1,224			9,700
Cash flows from investing activities:
Purchase of property and equipment		(1,633	)		(1,112	)		(674	)		(344	)		(3,033	)
Purchase of other intangible assets		-			-			-			-			(233	)
Proceeds from sale of property and equipment		49			55			22			37			114
Net cash used in investing activities		(1,584	)		(1,057	)		(652	)		(307	)		(3,152	)

The accompanying notes are an integral part of the interim consolidated financial statements.

8

POINTER TELOCATION LTD. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Six months ended June 30,						Three months ended June 30,						Year ended December 31,
	2018			2017			2018			2017			2017
	Unaudited						Unaudited
Cash flows from financing activities:
Repayment of long-term loans from banks	$	(2,645	)	$	(2,013	)	$	(1,294	)	$	(1,063	)	$	(4,875	)
Proceeds from issuance of shares in respect of stock-based compensation		81			276			76			197			395
Short-term bank credit, net		79			(302	)		21			(21	)		(231	)
Net cash used in financing activities		(2,485	)		(2,039	)		(1,197	)		(887	)		(4,711	)
Effect of exchange rate on cash and cash equivalents		(182	)		1			(477	)		(84	)		(528	)
Decrease in cash and cash equivalents		(207	)		(366	)		(598	)		(54	)		1,309
Cash and cash equivalents at the beginning of the period		7,375			6,066			7,766			5,754			6,066
Cash and cash equivalents at the end of the period		7,168			5,700			7,168			5,700			7,375
(a)   Non-cash activity:
Purchase  of property and equipment	$	66		$	156		$	35		$	54		$	61
(b)   Supplemental disclosure of cash flow activity:
Cash paid during the year for:
Interest	$	305		$	380		$	141		$	176		$	224
Income taxes	$	246		$	291		$	58		$	144		$	540

The accompanying notes are an integral part of the interim consolidated financial statements.

9

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1:- GENERAL

a. Pointer Telocation Ltd. (the “Company”) was incorporated in Israel and commenced operations in July 1991. The Company conducts its operations through two main segments. Through its Cellocator segment, the Company designs, develops and produces leading mobile resource management products, including asset management, fleet management, and security products, for sale to third party operators providing mobile resource management services and to our Mobile Resource Management (“MRM”) segment. Through its MRM segment, the Company acts as an operator by bundling its products together with a range of services, including fleet management services, asset management services and stolen vehicle retrieval services.

b. The Company provides services, for the most part, in Israel, Argentina, Mexico, South Africa and Brazil, through its local subsidiaries and affiliates. The Company sells its products worldwide through direct sell, its local subsidiaries and affiliates to independent operators provide similar services in Latin America, Europe, India and other countries utilizing the Company's technology and operational know-how. The Company's shares are traded on the Nasdaq Capital Market.

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

a. Unaudited interim financial statements:

The accompanying consolidated balance sheet as of June 30, 2018, consolidated statements of income and comprehensive income (loss) for the three and six months ended June 30, 2018 and 2017 and the consolidated statements of cash flows for the three and six months ended June 30, 2018 and 2017 are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. In the preparation of the consolidated financial statements, the Company applied the significant accounting policies, on a consistent basis to the audited consolidated annual financial statements of the Company as of December 31, 2017 except as detailed in note 2e (Recently adopted accounting pronouncements).

In the opinion of management, the unaudited interim condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s consolidated financial position as of June 30, 2018,  and the Company’s consolidated cash flows and financial performance for the three and six months ended June 30, 2018 and 2017.

The balance sheet as of December 31, 2017 has been derived from the audited consolidated financial statements as of such date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for a complete set of financial statements.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2017 included in the Company's Annual Report on Form 20-F/A filed with the U.S. Securities and Exchange Commission (“SEC”) on April 30, 2018.

Results for the three and six months ended June 30, 2018 are not necessarily indicative of results that may be expected for the year ending December 31, 2018.

10

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

b. Use of estimates:

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

c. Principles of consolidation:

Our consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries.

Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.

d. Recently issued accounting pronouncements not yet adopted:

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 (“ASU 2016-02”), which amends the FASB Accounting Standards Codification and created Topic 842, “Leases”. Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption by public entities is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.

In January 2017, the FASB has issued Accounting Standards Update No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.

An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for public business entities that are SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.

11

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

e. Recently adopted accounting pronouncements:

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers”. Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method. See Note 3 for further details.

NOTE 3:- REVENUES

a. Adoption of ASC Topic 606, “Revenue from Contracts with Customers”:

On January 1, 2018, the Company adopted the new guidance on Revenue from Contracts with Customers under Topic 606 using the modified retrospective transition method.

Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting treatment under Topic 605. The core principle of the standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the Company expects to be entitled in exchange for those goods or services.

The most significant impacts of the standard to the Company relate to the timing of revenue recognition for arrangements involving leasing and sales commissions.

The results for the reporting period beginning after January 1, 2018, are presented in accordance with the new standard, although historical information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods. The cumulative effect of accounting change recognized was $356 recorded as a decrease to beginning balance of accumulated deficit, and a corresponding increase to prepaid and other current assets and a decrease in other assets.

12

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 3:- REVENUES (Cont.)

Refer to the following table for the detailed effect to our consolidated balance sheet upon adoption:

	Balance at December 31, 2017			New Revenue Standard Adjustment			Balance at January 1, 2018
Assets
Prepaid and other current assets	$	2,865		$	555		$	3,420
Other assets		1,116			(199	)		917
Shareholders’ Equity
Accumulated Deficit		(69,597	)		356			(69,241	)

The following tables summarize the impacts of adopting Topic 606 on the Company’s consolidated financial statements for the period ended June 30, 2018:

	Impact of changes in accounting policies Six months ended June 30, 2018
	As reported		Adj.			Balances without adoption of Topic 606
Service revenue	$	13,637	$	293		$	13,930
Product revenue		26,986		(162	)		26,824
Total revenues		40,623		131			40,754
Cost of revenues		19,336		-			19,336
Research and development expenses		2,359		-			2,359
Selling and marketing expenses		7,545		21			7,566
General and administrative expenses		5,548		-			5,548
Amortization of intangible assets		248		-			248
One time acquisition related costs		262		-			262
Financial expenses		666		-			666
Income tax expense		950		15			965
Others		15		-			15
Net income		3,694		95			3,789

13

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 3:- REVENUES (Cont.)

b. Revenue Recognition:

The Company and its subsidiaries generate revenue from  subscriber fees for the provision of services and sales of systems and products, mainly in respect of asset management services, fleet management services, stolen vehicle recovery services and other value added services. To a lesser extent, revenues are also derived from technical support services. The Company and its subsidiaries sell the systems primarily through their direct sales force and indirectly through resellers.

Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives.

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

Products and services may be sold separately or in bundled packages. The typical length of a contract for service is 36 months.

c. Performance Obligations:

The Company accounts for revenue in accordance with Topic 606. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in Topic 606.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company does not have any significant extended payments terms.

Some of the contracts have multiple performance obligations, including contracts that combine product with installation and customer support. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using its best estimate of the relative standalone selling price of each distinct good or service in the contract. The primary method used to estimate the relative standalone selling price is expected costs of satisfying a performance obligation and an appropriate margin for that distinct good or service. In assessing whether to allocate variable consideration to a specific part of the contract, the Company considers the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract.

Devices/products revenue is recognized at a point of time when the devices/products have been delivered. The Company recognizes revenue from devices/products when a customer takes possession of the device/product.

The Company recognizes revenues from services on a straight line over the service contractual period, starting at commencement of the services. Renewals of service contracts create new performance obligations that are satisfied over the term with the revenues recognized ratably over the term.

Services including leased devices and installation recognized on a straight line over the service contractual period, starting at commencement of services.

For products sold separately, customers pay in full at a point of sale. For devices sold in bundled packages, customers usually pay monthly in equal installments over the period of 36 months.

14

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 3:- REVENUES (Cont.)

For bundled packages that include software, the Company recognizes the usage based on royalty at the point of time of the actual usage. Set-up fees are recognized at a point of time upon completion and professional services are recognized over the time on a straight line over the services contractual period. Software as a Service (“SAAS”) revenues are recognized over the time on a straight line over the services’ contractual period. Non-Recurring Engineering (“NRE”) services are recognized over the time based on costs incurred.

d. Contract costs:

The Company pays commissions to sales and marketing and certain management personnel based on their attainment of certain predetermined sales goals. Sales commissions are considered incremental costs of obtaining a contract with a customer and are deferred and amortized.

The Company is required to capitalize and amortize incremental costs of obtaining a contract, such as certain sales commission costs, over the remaining contractual term or over an expected period of benefit, which the Company has determined to be approximately three years. Previously, the Company did not capitalize sales commission costs but rather recognized these costs when they were incurred.

e. Disaggregation of revenue:

The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, see Note 9.

In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments:

	Reportable segments results of operations for the six months ended June 30, 2018
	Cellocator segment		MRM segment		Elimination			Total
Revenue recognized:
At a point of time	$	12,367	$	5,634	$	(4,364	)	$	13,637
Over a period of time		362		26,670		(46	)		26,986
		12,729		32,304		(4,410	)		40,623

	Reportable segments about geographical areas
	For the six months ended June 30, 2018		For the year ended December 31, 2017
Revenues
Israel	$	19,293	$	35,230
Latin America (mainly Mexico)		5,936		9,603
Brazil		6,876		14,248
Argentina		2,067		4,607
Europe		2,265		4,413
Other		4,186		10,054
		40,623		78,155

15

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 3:- REVENUES (Cont.)

f. Contract balances:

The following table provides information about contract assets:

	Balance at June 30, 2018		Balance at December 31, 2018
Contract assets	$	486	$	398

The contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to the receivables when the rights become unconditional.

NOTE 4:- INVENTORIES

	June 30,		December 31,
	2018		2017
	Unaudited
Raw materials	$	3,026	$	3,621
Work in process		212		149
Finished goods		2,383		2,781
		5,621		6,551

NOTE 5:- COMMITMENTS AND CONTINGENT LIABILITIES

a. Charges:

As collateral for its liabilities, the Company has recorded floating charges on all of its assets, including the intellectual property and equipment, in favor of banks.

b. Collateral:

The Company provided bank guarantees in the amount of $370 in favor of its lessor customs and customers.

c. Royalties:

The Company has undertaken to pay royalties to the BIRD Foundation (“BIRD”), at the rate of 5% on sales proceeds of products developed with the participation of BIRD up to the amount received, linked to the U.S. dollar. The contingent obligation as of June 30, 2018 is $2,444. No royalties were accrued or paid during 2018 and 2017.

16

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

d. Litigation:

1. As of June 30, 2018, several claims were filed against the Company, mainly by customers. The claims are in an amount aggregating to approximately $18. The substance of the claims is the malfunction of the Company’s products, which occurred during the ordinary course of business. The Company is defending this litigation in court and has recorded a provision of $6.

2. In August 2014, the Company’s subsidiary, Pointer Do Brasil Comercial Ltda. (“Pointer Brazil”) received a notification of lack of payments of $274 of value added tax (“VAT”) (Brazilian ICMS tax) plus $1,150 of interest and penalty totaling $1,424 of infraction. The Company is defending this litigation in court and recorded a provision of $78; the total timeframe of litigation is up to 14 years.

3. In July 2015, the Company received a tax deficiency notice against Pointer Brazil, pursuant to which the Company or Pointer Brazil is required to pay an aggregate amount of approximately $13,978, as of June 30, 2018. The claim is based on the argument that the services provided by Pointer Brazil should be classified as “Telecommunication Services”, and therefore subject to the state VAT. On August 14, 2018 it was rendered a decision at the administrative level that was favorable  to Pointer Brazil in relation to the ICMS demanded, but adverse as regards the clerical obligation of keeping in good order a set of ICMS books and their respective tax receipts. The remaining claim after this administrative decision amounts to $158. Since the decision was supported by a legal quorum rather than unanimously decision, the state shall have the opportunity to appeal within 60 days from a court notification which is expected to be provided per the practical procedure. The Company, based on the opinion of its legal counsel, is of the opinion that no material costs will arise in respect to these claims and has not made any provision in light of rulings of competent courts in Brazil which have rejected similar claims.

e. Commitments:

The Company and DBSI Investment Ltd. (“DBSI”), an equity owner in the Company (see Note 8), have a management services agreement pursuant to which DBSI shall provide management services in consideration of annual management fees of $180. The agreement was renewed for a period of three additional years commencing on August 1, 2017.

f. Covenants:

a. In respect of the bank loans provided to the Company for the purpose of funding the acquisition of Pointer Brazil and Cielo Brazil and in connection with the utilization of its credit facilities, the Company is required to meet certain financial covenants as follows:

1. The ratio of the shareholders’ equity to the total consolidated assets will not be less than 20% and the shareholders equity will not be less than $20,000, starting December 31, 2007.

2. The ratio of the Company and its subsidiaries’ debt (debt to banks, convertible debentures and loans from others that are not subordinated to the bank less cash) to the annual EBITDA will not exceed 4 in 2010 and thereafter.

3. The ratio of the Company’s debt (debt to banks, convertible debentures and loans from others that are not subordinated to the bank less cash) to the annual EBITDA will not exceed 4.2 in 2013-2014, 3.5 in 2015, 3 in 2016 and 2.5 in 2017 and thereafter.

As of June 30, 2018, the Company is in compliance, and expects to remain in compliance for the remainder of 2018, with the financial covenants of its credit facilities.

17

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 6:- NET EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted net earnings per share from continuing operations:

	Six months ended June 30,				Three months ended June 30,				Year ended December 31,
	2018		2017		2018		2017		2017
	Unaudited
Numerator:
Numerator for basic net earnings per share - Net income attributable to Pointer Telocation Ltd.’s shareholders	$	3,697	$	3,527	$	1,925	$	1,969	$	16,518
Numerator for diluted net earnings per share - Net income attributable to Pointer Telocation Ltd.’s shareholders		3,697		3,527		1,925		1,969		16,528
Denominator:
Denominator for basic net earnings per share - weighted-average number of shares outstanding (in thousands)		8,067		7,943		8,074		7,978		7,998
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands)		8,258		8,071		8,295		8,111		8,131
Basic net earnings per share from continuing operations	$	0.46	$	0.44	$	0.24	$	0.24	$	2.07
Diluted net earnings per share from continuing operations		0.44		0.44		0.23		0.24		2.03

NOTE 7:- INCOME TAXES

The effective tax rate for the six months ended June 30, 2018 was 20.5%, compared to 24.4% for the six months ended June 30, 2017.

18

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES

a. Balances with related parties:

	June 30,			December 31,
	2018			2017
	Unaudited
Trade receivables:
Taldor	$	21		$	23
Trade payables:
Shagrir	$	(209	)	$	(193	)
Taldor	$	(20	)	$	(21	)
Other accounts payable and accrued expenses:
DBSI (see note 5e)	$	(53	)	$	(53	)

b. Transactions with related parties:

	Six months ended June 30,				Three months ended June 30,				Year ended December 31,
	2018		2017		2018		2017		2017
	Unaudited
Management fees to DBSI (see Note 5e)	$	90	$	90	$	45	$	45	$	180
Sales to related parties		45		39		23		13		254
Purchases from related parties		441		504		212		247		682

c. Long term loan related parties:

The Company has granted a long term loan to its related party Shagrir Systems Vehicle Services Ltd. The loan bears no interest and will not be paid before December 31, 2020. As of June 30, 2018 the loan balance is $949.

NOTE 9:- SEGMENT INFORMATION

a. The Company conducts its operations through two reporting segments. The following segment identification is identical to the segment identification used in the Company’s latest annual audited consolidated financial report.

b. The following presents segment results of operations for the six months ended June 30, 2018 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	12,729	$	32,304	$	(4,410	)	$	40,623
Segments operating profit		1,201		4,405		(281	)		5,325
Segments tangible and intangible assets		8,751		35,144		1,557			45,452
Depreciation and amortization		86		1,259		-			1,345
Expenditures for assets		82		1,551		-			1,633

19

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 9:- SEGMENT INFORMATION (Cont.)

c. The following presents segment results of operations for the six months ended June 30, 2017 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	12,535	$	30,502	$	(3,965	)	$	39,072
Segments operating profit		1,150		3,471		469			5,090
Segments tangible and intangible assets		8,943		37,403		2,104			48,450
Depreciation and amortization		67		1,384		-			1,451
Expenditures for assets		102		1,010		-			1,112

d. The following presents segment results of operations for the three months ended June 30, 2018 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	6,159	$	15,593	$	(2,012	)	$	19,740
Segments operating profit		492		2,380		(114	)		2,758
Segments tangible and intangible assets		8,751		35,144		1,557			45,452
Depreciation and amortization		43		584		-			627
Expenditures for assets		39		635		-			674

e. The following presents segment results of operations for the three months ended June 30, 2017 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	6,383	$	15,576	$	(1,918	)	$	20,041
Segments operating profit		699		1,798		337			2,834
Segments tangible and intangible assets		8,943		37,403		2,104			48,450
Depreciation and amortization		34		567		-			601
Expenditures for assets		44		300		-			344

20

POINTER TELOCATION LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 9:- SEGMENT INFORMATION (Cont.)

f. The following presents segment results of operations for the year ended December 31, 2017:

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	24,364	$	62,208	$	(8,417	)	$	78,155
Segments operating profit		2,742		7,569		(2	)		10,309
Segments tangible and intangible assets		9,026		37,799		1,968			48,793
Depreciation, amortization and impairment expenses		144		2,780		-			2,924
Expenditures for assets		197		3,069		-			3,266

- - - - - - - - - - - - - - - - - - -

21

EX-99.2

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this section should be read in conjunction with (1) our unaudited condensed interim consolidated financial statements as of June 30, 2018 and for the six months then ended and related notes included elsewhere in this report and (2) our consolidated financial statements and related notes included in our Annual Report on Form 20-F for the year ended December 31, 2017 and the other information contained in such Annual Report, particularly the information in Item 5 – “Operating and Financial Review and Prospects.” Our financial statements have been prepared in accordance with generally accepted accounting principles in United States (“US GAAP”).

As used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, the terms “we,” “us,” “our” and the “Company” mean Pointer Telocation Ltd. and its subsidiaries, unless otherwise indicated.

Cautionary Statement Regarding Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains express or implied “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other U.S. Federal securities laws. In some cases, forward-looking statements are identified by terminology such as “may,” “will,” “could,” “should,” “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. For example, when the Company discusses its expected research and development expenditures and future capital requirements, it is using forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. These statements are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. The forward-looking statements contained below are subject to risks and uncertainties, including those discussed under Item 3.D “Risk Factors” in our Annual Report on From 20-F for the year ended December 31, 2017, filed with the Securities and Exchange Commission (“SEC”) on March 27, 2018, as amended on April 30, 2018, and in our other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we are under no duty to (and expressly disclaim any such obligation to) update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

We believe we are a leading provider of advanced mobile resource management (“MRM”) products and services for the automotive and insurance industries. We conduct our operations through two main segments: (i) Cellocator segment and (ii) MRM segment. Through our Cellocator segment, we design, develop and produce leading MRM products, including asset management, fleet management and security products for sale to third party operators providing MRM services worldwide, as well as to our MRM segment. Through our MRM segment, we act as an operator primarily in Israel, Brazil, Argentina, Mexico, and South Africa by bundling our products together with a range of MRM services, including stolen vehicle retrieval services and fleet management services.

Our revenues are principally derived from (i) rendering services through our MRM segment and (ii) sales of our systems and products through our Cellocator segment, as well as through our MRM segment which bundles our products in the services it offers.

A. RESULTS OF OPERATIONS

Six Months Ended June 30,

(in thousands of U.S. Dollars – except weighted average number of shares

and basic and diluted income per share)

Statement of Income Data:	2018			2017
Revenues:
Products		13,637			13,829
Services		26,986			25,243
Total Revenues		40,623			39,072
Cost of Revenues:
Products		8,188			8,753
Services		11,148			10,621
Total Cost of Revenues		19,336			19,374
Gross Profit		21,287			19,698
Operating Expenses:
Research and development		2,359			1,987
Selling and marketing		7,545			6,761
General and administrative		5,548			5,634
Amortization of intangible assets		248			226
One time acquisition related costs		262			-
Total Operating Expenses		15,962			14,608
Total Operating Income		5,325			5,090
Financial expenses, net		666			419
Other expenses, net		15			-
Income Before Tax on Income		4,644			4,671
Taxes on income		950			1,138
Net Income		3,694			3,533
Net income attributable to Pointer Telocation Ltd. shareholders		3,697			3,527
Net income attributable to Non-controlling interests		(3	)		6
Basic net earnings per share attributable to Pointer Telocation Ltd. shareholders	$	0.46		$	0.44
Diluted net earnings per share attributable to Pointer Telocation Ltd. shareholders	$	0.44		$	0.44
Basic weighted average number of shares outstanding (in thousands)		8,067			7,943
Fully diluted weighted average number of shares outstanding (in thousands)		8,258			8,071

2

Reportable segments about geographical areas	Six Months Ended June 30, 2018		Six Months Ended June 30, 2017
Revenues per territories:
Israel		19,293		17,271
Latin America (mainly Mexico)		5,936		4,767
Brazil		6,876		7,216
Argentina		2,067		2,370
Europe		2,265		2,038
Other		4,186		5,410
		40,623		39,072

Six Months Ended June 30, 2018 Compared with Six Months Ended June 30, 2017

Revenues. Revenues increased by $1.5 million, or 4.0%, from $39.1 million in the six months ended June 30, 2017 to $40.6 million in the six months ended June 30, 2018.

Revenues from the sale of our products decreased by $0.2 million, or 1.4%, from $13.8 million in the six months ended June 30, 2017 to $13.6 million in the six months ended June 30, 2018.

Revenues from our services increased by $1.8 million, or 6.9%, from $25.2 million in the six months ended June 30, 2017 to $27.0 million in the six months ended June 30, 2018.

The increase is primarily attributable to an increase in our recurring revenues from services associated with an increase in our subscriber base, offset by the negative effect of changes in currency rates.

Revenues from our services in the six months ended June 30, 2018 accounted for 66.4% of our total revenues as compared with 64.6% in the six months ended June 30, 2017.

Cost of Revenues. Our cost of revenues decreased by $0.1 million to $19.3 million for the six months ended June 30, 2018, compared to $19.4 million for the same period in 2017.

Gross Profit. Our gross profit increased to $21.3 million in the six months ended June 30, 2018, as compared to $19.7 million for the same period in 2017. The increase is primarily attributable to the increase in our revenues as well as to an increase in our operational efficiencies and scalable economic model which leverages each additional customer. As a percentage of total revenues, gross profit accounted for 52.4% in the six months ended June 30, 2018, compared to 50.4% in the six months ended June 30, 2017.

Our gross margin on products sales in the six months ended June 30, 2018 was 40.0%, compared to 36.7% in the six months ended June 30, 2017.

Gross margin for services was 58.7% in the six months ended June 30, 2018, compared to 57.9% in the six months ended June 30, 2017.

3

Research and Development Expenses. Research and development (“R&D”) expenses were $2.4 million in the six months ended June 30, 2018, compared to $2.0 million in the six months ended June 30, 2017. The increase is primarily attributable to the increase in our in-house as well as in our outsourcing R&D efforts in relation to our Cellocator segment. We intend to continue to increase our level of R&D expenditures in order to bring new technologies to the market.

Selling and Marketing Expenses. Selling and marketing expenses increased by $0.7 million to $7.5 million in the six months ended June 30, 2018 from $6.8 million in the six months ended June 30, 2017. The increase is primarily attributable to the increase in selling and marketing efforts in relation to our worldwide Cellocator segment and in the MRM segment. We intend to continue to increase our sales efforts during the next twelve months.

General and Administrative Expenses. General and administrative expenses decreased by $0.1 million to $5.5 million in the six months ended June 30, 2018, from $5.6 million in the six months ended June 30, 2017.

Amortization of Intangible Assets and Impairment of Long Lived Assets. Amortization of intangible assets and impairment of long lived assets in the six months ended June 30, 2018 remained unchanged compared to the six months ended June 30, 2017, and was equal to $0.2 million.

Operating Profit. As a result of the increase in our revenues and our gross margin, partially offset by the increase in our operating expenses, we recorded a $5.3 million operating profit in the six months ended June 30, 2018, compared to an operating profit of $5.1 million in the six months ended June 30, 2017.

Financial Expenses (net). Financial expenses increased by $0.3 million from $0.4 million financial expenses in the six months ended June 30, 2017 to $0.7 million financial expenses in the six months ended June 30, 2018. The increase is primarily attributable to the negative effect of change rates of currencies against the U.S. dollar.

Taxes on income.  Taxes on income were $1.0 million in the six months ended June 30, 2018, compared to $1.1 million in the six months ended June 30, 2017. The effective tax rate for the six months ended June 30, 2018 was 20.4%, compared to 24.4% for the six months ended June 30, 2017. The decrease is primarily attributable to optimization of our tax structure.

Net income. In the six months ended June 30, 2018, we recorded net income of $3.7 million, compared to $3.5 million in the six months ended June 30, 2017.

Impact of Exchange Rate Fluctuations on Results of Operations, Liabilities and Assets

Our results of operations, liabilities and assets are impacted by the fluctuations of exchange rates between the U.S. Dollar and the New Israeli Shekel (“NIS”), Brazilian Real, Argentinean Peso, Mexican Peso, the South African Rand and the Euro.

During the six months ended June 30, 2018, the exchange rate of the U.S. Dollar in relation to the NIS decreased by 5.3%, while the Israeli Consumer Price Index (“CPI”) increased by 0.9%.

4

We believe that the rate of inflation in Israel has not had a material effect on our business to date. However, our U.S. Dollar costs will increase if inflation in Israel exceeds the revaluation of the NIS against the U.S. Dollar.

Regarding our operations of our subsidiaries in Brazil, Pointer Do Brasil Comercial Ltda. and Cielo Telecom Ltda. (collectively, “Pointer Brazil”), and the fact that most of Pointer Brazil’s revenues are denominated in the Brazilian Real, while our consolidated financial statements are expressed in U.S. dollars, we believe that inflation in Brazil and fluctuations in the exchange rate between the U.S. Dollar and Brazil Real may have a significant effect on the business and overall profitability of Pointer Brazil and, as a consequence, on the results of our operations. From January 1, 2018 to June 30, 2018, the value of the Brazil Real decreased by approximately 16.6% against the U.S. Dollar. From January 1, 2018 until June 30, 2018, the U.S. Dollar – Brazil Real exchange rate fluctuated between 3.14 and 3.90 Real to the Dollar.

Regarding our operations in Argentina and the fact that most of the revenues of our subsidiary, Pointer Argentina S.A. (“Pointer Argentina”), are denominated in the Argentinean Peso, while our consolidated financial statements are expressed in U.S. dollars, we believe that inflation in Argentina and fluctuations in the exchange rate between the U.S. Dollar and Argentinean Peso may have a significant effect on the business and overall profitability of Pointer Argentina and as a consequence, on the results of our operations. From January 1, 2018 to June 30, 2018, the value of the Argentinean Peso decreased by approximately 54.7% against the U.S. Dollar. From January 1, 2018 until June 30, 2018 the U.S. Dollar – Argentinean Peso exchange rate fluctuated between 18.41 and 28.85 Pesos to the Dollar.

Regarding our operations of our subsidiary, Pointer Recuperation de Mexico S.A. (“Pointer Mexico”), and the fact that most of Pointer Mexico’s revenues are denominated in the Mexican Peso, while our consolidated financial statements are expressed in U.S. dollars, we believe that inflation in Mexico and fluctuations in the exchange rate between the U.S. Dollar and Mexican Peso may have a significant effect on the business and overall profitability of Pointer Mexico and as a consequence, on the results of our operations. From January 1, 2018 to June 30, 2018, the value of the Mexican Peso increased by approximately 0.6% against the U.S. dollar. From January 1, 2018 until June 30, 2018, the U.S. Dollar – Mexican Peso exchange rate fluctuated between 17.98 and 20.72 Pesos to the Dollar.

Regarding our operations of our subsidiary, Pointer SA (PTY) Ltd. (“Pointer South Africa”), and the fact that most of Pointer South Africa’s revenues are denominated in the South African Rand, while our consolidated financial statements are expressed in U.S. dollars, we believe that inflation in South Africa and fluctuations in the exchange rate between the U.S. Dollar and South African Rand may have a significant effect on the business and overall profitability of Pointer South Africa and as a consequence, on the results of our operations. From January 1, 2018 to June 30, 2018, the value of the South African Rand increased by approximately 10.9% against the U.S. Dollar. From January 1, 2018 until June 30, 2018, the U.S. Dollar – South African Rand exchange rate fluctuated between 12.36 and 13.70 Rand to the Dollar.

The currency exchange rate impact on total revenue for the six months ended June 30, 2018 was a decrease of approximately $0.9 million. The currency exchange rate impact on operating income was immaterial.

B. LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2018, we had a working capital of $11.4 million, our current assets to current liabilities ratio was 161%, we had cash and cash equivalents of $7.2 million and an unused credit facility of $6.0 million. We believe that we have access to sufficient capital to meet our requirements for at least the next twelve months.

As of June 30, 2018, we had a total debt of $7.6 million, including $4.2 short term bank credit and current maturities of long-term loans, comparing to total debt of $10.1 million, including $5.1 million short term bank credit and current maturities of long-term loans as of December 31, 2017. The vast majority of our loans bear interest of 3.71%-4.87%.

Our credit facilities and loans contain a number of restrictive covenants that limit the operating and financial flexibility of the Company. As of June 30, 2018, we are in compliance with the financial covenants of our credit facilities.

In the six months ended June 30, 2018, net cash provided by our operating activities amounted to $4.0 million, compared to $2.7 million in the six months ended June 30, 2017. The increase is primarily attributable to the changes in our working capital in the six months ended June 30, 2018 vs. the six months ended June 30, 2017.

In the six months ended June 30, 2018, net cash used in our investment activities was $1.6 million, compared to $1.1 million in the six months ended June 30, 2017. The increase is primarily attributable to the increase in the purchase of property and equipment.

In the six months ended June 30, 2018, net cash used in our financing activities was $2.5 million, compared to $2.0 million in the six months ended June 30, 2017. The increase is primarily attributable to the repayment of long-term bank loans.

5

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2018 shares
Document and Entity Information [Abstract]
Entity Registrant Name	Pointer Telocation Ltd
Entity Central Index Key	0000920532
Trading Symbol	PNTR
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	6-K
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	0

XML

Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 7,168	$ 7,375
Trade receivables (net of allowance for doubtful accounts of $1,337 and $1,127 as of June 30, 2018 and December 31, 2017, respectively)	13,657	13,660
Other accounts receivable and prepaid expenses	3,692	2,865
Inventories	5,621	6,551
Total current assets	30,138	30,451
LONG-TERM ASSETS:
Long term loans to related party	949	973
Long-term unbilled and other accounts receivable	1,303	1,116
Severance pay fund	3,094	3,546
Property and equipment, net	5,670	5,848
Other intangible assets, net	1,458	1,935
Goodwill	38,324	41,010
Deferred tax asset	8,515	9,585
Total long-term assets	59,313	64,013
Total assets	89,451	94,464
CURRENT LIABILITIES:
Short-term bank credit and current maturities of long-term loans	4,154	5,101
Trade payables	5,609	6,204
Deferred revenues	761	777
Other accounts payable and accrued expenses	8,248	9,117
Total current liabilities	18,772	21,199
LONG-TERM LIABILITIES:
Long-term loans from banks	3,421	5,015
Deferred revenues and other long-term liabilities	355	838
Accrued severance pay	3,572	3,996
Total long term liabilities	7,348	9,849
Pointer Telocation Ltd.'s shareholders' equity:
Share capital Ordinary shares of NIS 3 par value - Authorized: 16,000,000 shares at June 30, 2018 and December 31, 2017; Issued and outstanding: 8,131,988 and 8,059,094 shares at June 30, 2018 and December 31, 2017, respectively	6,049	5,995
Additional paid-in capital	129,489	129,076
Accumulated other comprehensive loss	(6,907)	(2,340)
Accumulated deficit	(65,544)	(69,597)
Total Pointer Telocation Ltd.'s shareholders' equity	63,087	63,134
Non-controlling interest	244	282
Total equity	63,331	63,416
Total liabilities and equity	$ 89,451	$ 94,464

XML

Interim Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands	Jun. 30, 2018 USD ($) shares	Jun. 30, 2018 ₪ / shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2017 ₪ / shares
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable | $	$ 1,337		$ 1,127
Ordinary shares, par value | ₪ / shares		₪ 3		₪ 3
Ordinary shares, authorized	16,000,000		16,000,000
Ordinary shares, issued	8,131,988		8,059,094
Ordinary shares, outstanding	8,131,988		8,059,094

XML

Interim Condensed Consolidated Statements of Income and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Revenues:
Products	$ 6,578	$ 7,147	$ 13,637	$ 13,829	$ 26,182
Services	13,162	12,894	26,986	25,243	51,973
Total revenues	19,740	20,041	40,623	39,072	78,155
Cost of revenues:
Products	3,963	4,477	8,188	8,753	16,073
Services	5,438	5,258	11,148	10,621	21,914
Total cost of revenues	9,401	9,735	19,336	19,374	37,987
Gross profit	10,339	10,306	21,287	19,698	40,168
Operating expenses:
Research and development	1,122	1,017	2,359	1,987	4,051
Selling and marketing	3,677	3,456	7,545	6,761	14,038
General and administrative	2,661	2,886	5,548	5,634	11,275
Amortization of intangible assets	121	113	248	226	463
One time acquisition related costs			262		32
Total operating expenses	7,581	7,472	15,962	14,608	29,859
Operating income	2,758	2,834	5,325	5,090	10,309
Financial expenses, net	332	259	666	419	1,004
Other expenses, net			15		5
Income before taxes on income	2,426	2,575	4,644	4,671	9,300
Taxes on income	501	609	950	1,138	(7,221)
Net income	1,925	1,966	3,694	3,533	16,521
Other comprehensive income (loss):
Currency translation adjustments of foreign operations	(4,222)	708	(4,602)	3,156	3,293
Total comprehensive income (loss)	(2,297)	2,674	(908)	6,689	19,814
Profit (loss) attributable to:
Pointer Telocation Ltd.'s shareholders	1,925	1,969	3,697	3,527	16,518
Non-controlling interests		(3)	(3)	6	3
Net income	$ 1,925	$ 1,966	$ 3,694	$ 3,533	$ 16,521
Earnings per share attributable to Pointer Telocation Ltd.'s shareholders:
Basic net earnings per share	$ 0.24	$ 0.24	$ 0.46	$ 0.44	$ 2.07
Diluted net earnings per share	$ 0.23	$ 0.24	$ 0.44	$ 0.44	$ 2.03
Weighted average - Basic number of shares	8,073,665	7,978,102	8,066,698	7,942,957	7,997,684
Weighted average - fully diluted number of shares	8,294,562	8,111,119	8,257,968	8,070,953	8,130,566

XML

Interim Statements of Changes In Shareholders' Equity - USD ($) $ in Thousands	Pointer Telocation Ltd.'s Shareholders Share capital	Pointer Telocation Ltd.'s Shareholders Additional paid-in capital	Pointer Telocation Ltd.'s Shareholders Accumulated other comprehensive income (loss)	Pointer Telocation Ltd.'s Shareholders Accumulated deficit	Non-controlling interest	Total
Balance at Dec. 31, 2016	$ 5,837	$ 128,438	$ (5,633)	$ (86,115)	$ 162	$ 42,689
Balance, shares at Dec. 31, 2016	7,873,919
Exercise of share options	$ 133	143				276
Exercise of share options	159,875
Stock-based compensation expenses		217				217
Other comprehensive income (loss)			3,156			3,156
Net loss attributable to Non-controlling interest					6	6
Net income attributable to Pointer Telocation Ltd.’s shareholders				3,527		3,527
Balance at Jun. 30, 2017	$ 5,970	128,798	(2,477)	(82,588)	168	49,871
Balance, shares at Jun. 30, 2017	8,033,794
Balance at Dec. 31, 2016	$ 5,837	128,438	(5,633)	(86,115)	162	42,689
Balance, shares at Dec. 31, 2016	7,873,919
Exercise of share options	$ 158	237				395
Exercise of share options	185,175
Stock-based compensation expenses		401			117	518
Other comprehensive income (loss)			3,293			3,293
Net loss attributable to Non-controlling interest					3	3
Net income attributable to Pointer Telocation Ltd.’s shareholders				16,518		16,518
Balance at Dec. 31, 2017	$ 5,995	129,076	(2,340)	(69,597)	282	63,416
Balance, shares at Dec. 31, 2017	8,059,094
Exercise of share options	$ 54	27				81
Exercise of share options	72,894
Stock-based compensation expenses		386				386
Effect of adoption of ASC Topic 606				356		356
Other comprehensive income (loss)			(4,567)		(35)	(4,602)
Net loss attributable to Non-controlling interest					(3)	(3)
Net income attributable to Pointer Telocation Ltd.’s shareholders				3,697		3,697
Balance at Jun. 30, 2018	$ 6,049	$ 129,489	$ (6,907)	$ (65,544)	$ 244	$ 63,331
Balance, shares at Jun. 30, 2018	8,131,988

XML

Interim Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Cash flows from operating activities:
Net income	$ 1,925	$ 1,966	$ 3,694	$ 3,533	$ 16,521
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	627	601	1,345	1,451	2,924
Accrued interest and exchange rate changes of debenture and long-term loans	24		25		52
Accrued severance pay, net	(32)	54	46	112	93
Gain from sale of property and equipment, net	(22)	(49)	(49)	(67)	(113)
Stock-based compensation expenses	244	106	386	217	380
Decrease (increase) in trade and unbilled receivables, net	200	(1,202)	(788)	(2,127)	(1,616)
Decrease (increase) in other accounts receivable and prepaid expenses	(749)	131	(1,370)	(480)	(206)
Decrease (increase) in inventories	541	(418)	751	(567)	(1,170)
Decrease (increase) in deferred tax asset	186	452	341	822	(8,018)
Decrease (increase) in long-term unbilled and other accounts receivable	(360)	123	(202)	52	165
Increase (decrease) in trade payables	358	(732)	247	(1,211)	(1,597)
Increase (decrease) in other accounts payable and accrued expenses	(1,214)	192	(382)	994	2,285
Net cash provided by operating activities	1,728	1,224	4,044	2,729	9,700
Cash flows from investing activities:
Purchase of property and equipment	(674)	(344)	(1,633)	(1,112)	(3,033)
Purchase of other intangible assets					(233)
Proceeds from sale of property and equipment	22	37	49	55	114
Net cash used in investing activities	(652)	(307)	(1,584)	(1,057)	(3,152)
Cash flows from financing activities:
Repayment of long-term loans from banks	(1,294)	(1,063)	(2,645)	(2,013)	(4,875)
Proceeds from issuance of shares in respect of stock-based compensation	76	197	81	276	395
Short-term bank credit, net	21	(21)	79	(302)	(231)
Net cash used in financing activities	(1,197)	(887)	(2,485)	(2,039)	(4,711)
Effect of exchange rate on cash and cash equivalents	(477)	(84)	(182)	1	(528)
Decrease in cash and cash equivalents	(598)	(54)	(207)	(366)	1,309
Cash and cash equivalents at the beginning of the period	7,766	5,754	7,375	6,066	6,066
Cash and cash equivalents at the end of the period	7,168	5,700	7,168	5,700	7,375
(a) Non-cash activity:
Purchase of property and equipment	35	54	66	156	61
Cash paid during the year for:
Interest	141	176	305	380	224
Income taxes	$ 58	$ 144	$ 246	$ 291	$ 540

XML

General

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

NOTE 1:- GENERAL

a. Pointer Telocation Ltd. (the “Company”) was incorporated in Israel and commenced operations in July 1991. The Company conducts its operations through two main segments. Through its Cellocator segment, the Company designs, develops and produces leading mobile resource management products, including asset management, fleet management, and security products, for sale to third party operators providing mobile resource management services and to our Mobile Resource Management (“MRM”) segment. Through its MRM segment, the Company acts as an operator by bundling its products together with a range of services, including fleet management services, asset management services and stolen vehicle retrieval services.

b. The Company provides services, for the most part, in Israel, Argentina, Mexico, South Africa and Brazil, through its local subsidiaries and affiliates. The Company sells its products worldwide through direct sell, its local subsidiaries and affiliates to independent operators provide similar services in Latin America, Europe, India and other countries utilizing the Company's technology and operational know-how. The Company's shares are traded on the Nasdaq Capital Market.

XML

Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

a. Unaudited interim financial statements:

The accompanying consolidated balance sheet as of June 30, 2018, consolidated statements of income and comprehensive income (loss) for the three and six months ended June 30, 2018 and 2017 and the consolidated statements of cash flows for the three and six months ended June 30, 2018 and 2017 are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. In the preparation of the consolidated financial statements, the Company applied the significant accounting policies, on a consistent basis to the audited consolidated annual financial statements of the Company as of December 31, 2017 except as detailed in note 2e (Recently adopted accounting pronouncements).

In the opinion of management, the unaudited interim condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s consolidated financial position as of June 30, 2018,  and the Company’s consolidated cash flows and financial performance for the three and six months ended June 30, 2018 and 2017.

The balance sheet as of December 31, 2017 has been derived from the audited consolidated financial statements as of such date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for a complete set of financial statements.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2017 included in the Company's Annual Report on Form 20-F/A filed with the U.S. Securities and Exchange Commission (“SEC”) on April 30, 2018.

Results for the three and six months ended June 30, 2018 are not necessarily indicative of results that may be expected for the year ending December 31, 2018.

b. Use of estimates:

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

c. Principles of consolidation:

Our consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries.

Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.

d. Recently issued accounting pronouncements not yet adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 (“ASU 2016-02”), which amends the FASB Accounting Standards Codification and created Topic 842, “Leases”. Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption by public entities is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.

In January 2017, the FASB has issued Accounting Standards Update No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.

e. Recently adopted accounting pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers”. Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method. See Note 3 for further details.

XML

Revenues

6 Months Ended

Jun. 30, 2018

Revenues

REVENUES

NOTE 3:- REVENUES

a. Adoption of ASC Topic 606, “Revenue from Contracts with Customers”

On January 1, 2018, the Company adopted the new guidance on Revenue from Contracts with Customers under Topic 606 using the modified retrospective transition method.

Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting treatment under Topic 605. The core principle of the standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the Company expects to be entitled in exchange for those goods or services.

The most significant impacts of the standard to the Company relate to the timing of revenue recognition for arrangements involving leasing and sales commissions.

The results for the reporting period beginning after January 1, 2018, are presented in accordance with the new standard, although historical information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods. The cumulative effect of accounting change recognized was $356 recorded as a decrease to beginning balance of accumulated deficit, and a corresponding increase to prepaid and other current assets and a decrease in other assets.

Refer to the following table for the detailed effect to our consolidated balance sheet upon adoption:

	Balance at December 31, 2017			New Revenue Standard Adjustment			Balance at January 1, 2018
Assets
Prepaid and other current assets	$	2,865		$	555		$	3,420
Other assets		1,116			(199	)		917
Shareholders’ Equity
Accumulated Deficit		(69,597	)		356			(69,241	)

The following tables summarize the impacts of adopting Topic 606 on the Company’s consolidated financial statements for the period ended June 30, 2018:

	Impact of changes in accounting policies Six months ended June 30, 2018
	As reported		Adj.			Balances without adoption of Topic 606
Service revenue	$	13,637	$	293		$	13,930
Product revenue		26,986		(162	)		26,824
Total revenues		40,623		131			40,754
Cost of revenues		19,336		-			19,336
Research and development expenses		2,359		-			2,359
Selling and marketing expenses		7,545		21			7,566
General and administrative expenses		5,548		-			5,548
Amortization of intangible assets		248		-			248
One time acquisition related costs		262		-			262
Financial expenses		666		-			666
Income tax expense		950		15			965
Others		15		-			15
Net income		3,694		95			3,789

b. Revenue Recognition

The Company and its subsidiaries generate revenue from  subscriber fees for the provision of services and sales of systems and products, mainly in respect of asset management services, fleet management services, stolen vehicle recovery services and other value added services. To a lesser extent, revenues are also derived from technical support services. The Company and its subsidiaries sell the systems primarily through their direct sales force and indirectly through resellers.

Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives.

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

Products and services may be sold separately or in bundled packages. The typical length of a contract for service is 36 months.

c. Performance Obligations

The Company accounts for revenue in accordance with Topic 606. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in Topic 606.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company does not have any significant extended payments terms.

Some of the contracts have multiple performance obligations, including contracts that combine product with installation and customer support. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using its best estimate of the relative standalone selling price of each distinct good or service in the contract. The primary method used to estimate the relative standalone selling price is expected costs of satisfying a performance obligation and an appropriate margin for that distinct good or service. In assessing whether to allocate variable consideration to a specific part of the contract, the Company considers the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract.

Devices/products revenue is recognized at a point of time when the devices/products have been delivered. The Company recognizes revenue from devices/products when a customer takes possession of the device/product.

The Company recognizes revenues from services on a straight line over the service contractual period, starting at commencement of the services. Renewals of service contracts create new performance obligations that are satisfied over the term with the revenues recognized ratably over the term.

Services including leased devices and installation recognized on a straight line over the service contractual period, starting at commencement of services.

For products sold separately, customers pay in full at a point of sale. For devices sold in bundled packages, customers usually pay monthly in equal installments over the period of 36 months.

For bundled packages that include software, the Company recognizes the usage based on royalty at the point of time of the actual usage. Set-up fees are recognized at a point of time upon completion and professional services are recognized over the time on a straight line over the services contractual period. Software as a Service (“SAAS”) revenues are recognized over the time on a straight line over the services’ contractual period. Non-Recurring Engineering (“NRE”) services are recognized over the time based on costs incurred.

d. Contract costs

The Company pays commissions to sales and marketing and certain management personnel based on their attainment of certain predetermined sales goals. Sales commissions are considered incremental costs of obtaining a contract with a customer and are deferred and amortized.

The Company is required to capitalize and amortize incremental costs of obtaining a contract, such as certain sales commission costs, over the remaining contractual term or over an expected period of benefit, which the Company has determined to be approximately three years. Previously, the Company did not capitalize sales commission costs but rather recognized these costs when they were incurred.

e. Disaggregation of revenue

The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments, see Note 9.

In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments:

	Reportable segments results of operations for the six months ended June 30, 2018
	Cellocator segment		MRM segment		Elimination			Total
Revenue recognized:
At a point of time	$	12,367	$	5,634	$	(4,364	)	$	13,637
Over a period of time		362		26,670		(46	)		26,986
		12,729		32,304		(4,410	)		40,623

	Reportable segments about geographical areas
	For the six months ended June 30, 2018		For the year ended December 31, 2017
Revenues
Israel	$	19,293	$	35,230
Latin America (mainly Mexico)		5,936		9,603
Brazil		6,876		14,248
Argentina		2,067		4,607
Europe		2,265		4,413
Other		4,186		10,054
		40,623		78,155

f. Contract balances

The following table provides information about contract assets:

	Balance at June 30, 2018		Balance at December 31, 2018
Contract assets	$	486	$	398

The contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to the receivables when the rights become unconditional.

XML

Inventories

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 4:- INVENTORIES

	June 30,		December 31,
	2018		2017
	Unaudited
Raw materials	$	3,026	$	3,621
Work in process		212		149
Finished goods		2,383		2,781
		5,621		6,551

XML

Commitments and Contingent Liabilities

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 5:- COMMITMENTS AND CONTINGENT LIABILITIES

a. Charges:

As collateral for its liabilities, the Company has recorded floating charges on all of its assets, including the intellectual property and equipment, in favor of banks.

b. Collateral:

The Company provided bank guarantees in the amount of $370 in favor of its lessor customs and customers.

c. Royalties:

The Company has undertaken to pay royalties to the BIRD Foundation (“BIRD”), at the rate of 5% on sales proceeds of products developed with the participation of BIRD up to the amount received, linked to the U.S. dollar. The contingent obligation as of June 30, 2018 is $2,444. No royalties were accrued or paid during 2018 and 2017.

d. Litigation:

1. As of June 30, 2018, several claims were filed against the Company, mainly by customers. The claims are in an amount aggregating to approximately $18. The substance of the claims is the malfunction of the Company’s products, which occurred during the ordinary course of business. The Company is defending this litigation in court and has recorded a provision of $6.

2. In August 2014, the Company’s subsidiary, Pointer Do Brasil Comercial Ltda. (“Pointer Brazil”) received a notification of lack of payments of $274 of value added tax (“VAT”) (Brazilian ICMS tax) plus $1,150 of interest and penalty totaling $1,424 of infraction. The Company is defending this litigation in court and recorded a provision of $78; the total timeframe of litigation is up to 14 years.

3. In July 2015, the Company received a tax deficiency notice against Pointer Brazil, pursuant to which the Company or Pointer Brazil is required to pay an aggregate amount of approximately $13,978, as of June 30, 2018. The claim is based on the argument that the services provided by Pointer Brazil should be classified as “Telecommunication Services”, and therefore subject to the state VAT. On August 14, 2018 it was rendered a decision at the administrative level that was favorable  to Pointer Brazil in relation to the ICMS demanded, but adverse as regards the clerical obligation of keeping in good order a set of ICMS books and their respective tax receipts. The remaining claim after this administrative decision amounts to $158. Since the decision was supported by a legal quorum rather than unanimously decision, the state shall have the opportunity to appeal within 60 days from a court notification which is expected to be provided per the practical procedure. The Company, based on the opinion of its legal counsel, is of the opinion that no material costs will arise in respect to these claims and has not made any provision in light of rulings of competent courts in Brazil which have rejected similar claims.

e. Commitments:

The Company and DBSI Investment Ltd. (“DBSI”), an equity owner in the Company (see Note 8), have a management services agreement pursuant to which DBSI shall provide management services in consideration of annual management fees of $180. The agreement was renewed for a period of three additional years commencing on August 1, 2017.

f. Covenants:

a. In respect of the bank loans provided to the Company for the purpose of funding the acquisition of Pointer Brazil and Cielo Brazil and in connection with the utilization of its credit facilities, the Company is required to meet certain financial covenants as follows:

1. The ratio of the shareholders’ equity to the total consolidated assets will not be less than 20% and the shareholders equity will not be less than $20,000, starting December 31, 2007.

2. The ratio of the Company and its subsidiaries’ debt (debt to banks, convertible debentures and loans from others that are not subordinated to the bank less cash) to the annual EBITDA will not exceed 4 in 2010 and thereafter.

3. The ratio of the Company’s debt (debt to banks, convertible debentures and loans from others that are not subordinated to the bank less cash) to the annual EBITDA will not exceed 4.2 in 2013-2014, 3.5 in 2015, 3 in 2016 and 2.5 in 2017 and thereafter.

As of June 30, 2018, the Company is in compliance, and expects to remain in compliance for the remainder of 2018, with the financial covenants of its credit facilities.

XML

Net Earnings Per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

NET EARNINGS PER SHARE

NOTE 6:- NET EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted net earnings per share from continuing operations:

	Six months ended June 30,				Three months ended June 30,				Year ended December 31,
	2018		2017		2018		2017		2017
	Unaudited
Numerator:
Numerator for basic net earnings per share - Net income attributable to Pointer Telocation Ltd.’s shareholders	$	3,697	$	3,527	$	1,925	$	1,969	$	16,518
Numerator for diluted net earnings per share - Net income attributable to Pointer Telocation Ltd.’s shareholders		3,697		3,527		1,925		1,969		16,528
Denominator:
Denominator for basic net earnings per share - weighted-average number of shares outstanding (in thousands)		8,067		7,943		8,074		7,978		7,998
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands)		8,258		8,071		8,295		8,111		8,131
Basic net earnings per share from continuing operations	$	0.46	$	0.44	$	0.24	$	0.24	$	2.07
Diluted net earnings per share from continuing operations		0.44		0.44		0.23		0.24		2.03

XML

Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 7:- INCOME TAXES

The effective tax rate for the six months ended June 30, 2018 was 20.5%, compared to 24.4% for the six months ended June 30, 2017.

XML

Balances and Transactions with Related Parties

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

BALANCES AND TRANSACTIONS WITH RELATED PARTIES

NOTE 8:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES

a. Balances with related parties:

	June 30,			December 31,
	2018			2017
	Unaudited
Trade receivables:
Taldor	$	21		$	23
Trade payables:
Shagrir	$	(209	)	$	(193	)
Taldor	$	(20	)	$	(21	)
Other accounts payable and accrued expenses:
DBSI (see note 5e)	$	(53	)	$	(53	)

b. Transactions with related parties:

	Six months ended June 30,				Three months ended June 30,				Year ended December 31,
	2018		2017		2018		2017		2017
	Unaudited
Management fees to DBSI (see Note 5e)	$	90	$	90	$	45	$	45	$	180
Sales to related parties		45		39		23		13		254
Purchases from related parties		441		504		212		247		682

c. Long term loan related parties:

The Company has granted a long term loan to its related party Shagrir Systems Vehicle Services Ltd. The loan bears no interest and will not be paid before December 31, 2020. As of June 30, 2018 the loan balance is $949.

XML

Segment Information

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 9:- SEGMENT INFORMATION

a. The Company conducts its operations through two reporting segments. The following segment identification is identical to the segment identification used in the Company’s latest annual audited consolidated financial report.

b. The following presents segment results of operations for the six months ended June 30, 2018 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	12,729	$	32,304	$	(4,410	)	$	40,623
Segments operating profit		1,201		4,405		(281	)		5,325
Segments tangible and intangible assets		8,751		35,144		1,557			45,452
Depreciation and amortization		86		1,259		-			1,345
Expenditures for assets		82		1,551		-			1,633

c. The following presents segment results of operations for the six months ended June 30, 2017 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	12,535	$	30,502	$	(3,965	)	$	39,072
Segments operating profit		1,150		3,471		469			5,090
Segments tangible and intangible assets		8,943		37,403		2,104			48,450
Depreciation and amortization		67		1,384		-			1,451
Expenditures for assets		102		1,010		-			1,112

d. The following presents segment results of operations for the three months ended June 30, 2018 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	6,159	$	15,593	$	(2,012	)	$	19,740
Segments operating profit		492		2,380		(114	)		2,758
Segments tangible and intangible assets		8,751		35,144		1,557			45,452
Depreciation and amortization		43		584		-			627
Expenditures for assets		39		635		-			674

e. The following presents segment results of operations for the three months ended June 30, 2017 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	6,383	$	15,576	$	(1,918	)	$	20,041
Segments operating profit		699		1,798		337			2,834
Segments tangible and intangible assets		8,943		37,403		2,104			48,450
Depreciation and amortization		34		567		-			601
Expenditures for assets		44		300		-			344

f. The following presents segment results of operations for the year ended December 31, 2017:

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	24,364	$	62,208	$	(8,417	)	$	78,155
Segments operating profit		2,742		7,569		(2	)		10,309
Segments tangible and intangible assets		9,026		37,799		1,968			48,793
Depreciation, amortization and impairment expenses		144		2,780		-			2,924
Expenditures for assets		197		3,069		-			3,266

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Unaudited interim financial statements

a. Unaudited interim financial statements:

The accompanying consolidated balance sheet as of June 30, 2018, consolidated statements of income and comprehensive income (loss) for the three and six months ended June 30, 2018 and 2017 and the consolidated statements of cash flows for the three and six months ended June 30, 2018 and 2017 are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. In the preparation of the consolidated financial statements, the Company applied the significant accounting policies, on a consistent basis to the audited consolidated annual financial statements of the Company as of December 31, 2017 except as detailed in note 2e (Recently adopted accounting pronouncements).

In the opinion of management, the unaudited interim condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s consolidated financial position as of June 30, 2018,  and the Company’s consolidated cash flows and financial performance for the three and six months ended June 30, 2018 and 2017.

The balance sheet as of December 31, 2017 has been derived from the audited consolidated financial statements as of such date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for a complete set of financial statements.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2017 included in the Company's Annual Report on Form 20-F/A filed with the U.S. Securities and Exchange Commission (“SEC”) on April 30, 2018.

Results for the three and six months ended June 30, 2018 are not necessarily indicative of results that may be expected for the year ending December 31, 2018.

Use of estimates

b. Use of estimates:

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of consolidation

c. Principles of consolidation:

Our consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries.

Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.

Recently issued accounting pronouncements not yet adopted

d. Recently issued accounting pronouncements not yet adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 (“ASU 2016-02”), which amends the FASB Accounting Standards Codification and created Topic 842, “Leases”. Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption by public entities is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements.

In January 2017, the FASB has issued Accounting Standards Update No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.

Recently adopted accounting pronouncements

e. Recently adopted accounting pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers”. Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605), and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method. See Note 3 for further details.

XML

Revenues (Tables)

6 Months Ended

Jun. 30, 2018

Revenues

Schedule of topic 606 on the Company's consolidated financial statements

	Balance at December 31, 2017			New Revenue Standard Adjustment			Balance at January 1, 2018
Assets
Prepaid and other current assets	$	2,865		$	555		$	3,420
Other assets		1,116			(199	)		917
Shareholders’ Equity
Accumulated Deficit		(69,597	)		356			(69,241	)

	Impact of changes in accounting policies Six months ended June 30, 2018
	As reported		Adj.			Balances without adoption of Topic 606
Service revenue	$	13,637	$	293		$	13,930
Product revenue		26,986		(162	)		26,824
Total revenues		40,623		131			40,754
Cost of revenues		19,336		-			19,336
Research and development expenses		2,359		-			2,359
Selling and marketing expenses		7,545		21			7,566
General and administrative expenses		5,548		-			5,548
Amortization of intangible assets		248		-			248
One time acquisition related costs		262		-			262
Financial expenses		666		-			666
Income tax expense		950		15			965
Others		15		-			15
Net income		3,694		95			3,789

Schedule of disaggregation of revenue

	Reportable segments results of operations for the six months ended June 30, 2018
	Cellocator segment		MRM segment		Elimination			Total
Revenue recognized:
At a point of time	$	12,367	$	5,634	$	(4,364	)	$	13,637
Over a period of time		362		26,670		(46	)		26,986
		12,729		32,304		(4,410	)		40,623

	Reportable segments about geographical areas
	For the six months ended June 30, 2018		For the year ended December 31, 2017
Revenues
Israel	$	19,293	$	35,230
Latin America (mainly Mexico)		5,936		9,603
Brazil		6,876		14,248
Argentina		2,067		4,607
Europe		2,265		4,413
Other		4,186		10,054
		40,623		78,155

Schedule of receivables, contracts assets, and contract liabilities from contracts with customers

	Balance at June 30, 2018		Balance at December 31, 2018
Contract assets	$	486	$	398

XML

Inventories (Tables)

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Schedule of inventories

	June 30,		December 31,
	2018		2017
	Unaudited
Raw materials	$	3,026	$	3,621
Work in process		212		149
Finished goods		2,383		2,781
		5,621		6,551

XML

Net Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Schedule of basic and diluted net earnings per share

	Six months ended June 30,				Three months ended June 30,				Year ended December 31,
	2018		2017		2018		2017		2017
	Unaudited
Numerator:
Numerator for basic net earnings per share - Net income attributable to Pointer Telocation Ltd.’s shareholders	$	3,697	$	3,527	$	1,925	$	1,969	$	16,518
Numerator for diluted net earnings per share - Net income attributable to Pointer Telocation Ltd.’s shareholders		3,697		3,527		1,925		1,969		16,528
Denominator:
Denominator for basic net earnings per share - weighted-average number of shares outstanding (in thousands)		8,067		7,943		8,074		7,978		7,998
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands)		8,258		8,071		8,295		8,111		8,131
Basic net earnings per share from continuing operations	$	0.46	$	0.44	$	0.24	$	0.24	$	2.07
Diluted net earnings per share from continuing operations		0.44		0.44		0.23		0.24		2.03

XML

Balances and Transactions with Related Parties (Tables)

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Schedule of balances with related parties

	June 30,			December 31,
	2018			2017
	Unaudited
Trade receivables:
Taldor	$	21		$	23
Trade payables:
Shagrir	$	(209	)	$	(193	)
Taldor	$	(20	)	$	(21	)
Other accounts payable and accrued expenses:
DBSI (see note 5e)	$	(53	)	$	(53	)

Schedule of transactions with related parties

	Six months ended June 30,				Three months ended June 30,				Year ended December 31,
	2018		2017		2018		2017		2017
	Unaudited
Management fees to DBSI (see Note 5e)	$	90	$	90	$	45	$	45	$	180
Sales to related parties		45		39		23		13		254
Purchases from related parties		441		504		212		247		682

XML

Segment Information (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Schedule of segment results of operations

b. The following presents segment results of operations for the six months ended June 30, 2018 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	12,729	$	32,304	$	(4,410	)	$	40,623
Segments operating profit		1,201		4,405		(281	)		5,325
Segments tangible and intangible assets		8,751		35,144		1,557			45,452
Depreciation and amortization		86		1,259		-			1,345
Expenditures for assets		82		1,551		-			1,633

c. The following presents segment results of operations for the six months ended June 30, 2017 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	12,535	$	30,502	$	(3,965	)	$	39,072
Segments operating profit		1,150		3,471		469			5,090
Segments tangible and intangible assets		8,943		37,403		2,104			48,450
Depreciation and amortization		67		1,384		-			1,451
Expenditures for assets		102		1,010		-			1,112

d. The following presents segment results of operations for the three months ended June 30, 2018 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	6,159	$	15,593	$	(2,012	)	$	19,740
Segments operating profit		492		2,380		(114	)		2,758
Segments tangible and intangible assets		8,751		35,144		1,557			45,452
Depreciation and amortization		43		584		-			627
Expenditures for assets		39		635		-			674

e. The following presents segment results of operations for the three months ended June 30, 2017 (unaudited):

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	6,383	$	15,576	$	(1,918	)	$	20,041
Segments operating profit		699		1,798		337			2,834
Segments tangible and intangible assets		8,943		37,403		2,104			48,450
Depreciation and amortization		34		567		-			601
Expenditures for assets		44		300		-			344

f. The following presents segment results of operations for the year ended December 31, 2017:

	Cellocator segment		MRM segment		Elimination			Total
Segments revenues	$	24,364	$	62,208	$	(8,417	)	$	78,155
Segments operating profit		2,742		7,569		(2	)		10,309
Segments tangible and intangible assets		9,026		37,799		1,968			48,793
Depreciation, amortization and impairment expenses		144		2,780		-			2,924
Expenditures for assets		197		3,069		-			3,266

XML

Revenues (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Assets
Prepaid and other current assets	$ 3,692	$ 2,865
Other assets		1,116
Shareholders' Equity
Accumulated Deficit	(65,544)	$ (69,597)
Balance at January 1, 2018 [Member]
Assets
Prepaid and other current assets	3,420
Other assets	917
Shareholders' Equity
Accumulated Deficit	(69,241)
New Revenue Standard Adjustment [Member]
Assets
Prepaid and other current assets	555
Other assets	(199)
Shareholders' Equity
Accumulated Deficit	$ 356

XML

Revenues (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Service revenue	$ 13,162	$ 12,894	$ 26,986	$ 25,243	$ 51,973
Product revenue	6,578	7,147	13,637	13,829	26,182
Total revenues	19,740	20,041	40,623	39,072	78,155
Cost of revenues	9,401	9,735	19,336	19,374	37,987
Research and development expenses	1,122	1,017	2,359	1,987	4,051
Selling and marketing expenses	3,677	3,456	7,545	6,761	14,038
General and administrative expenses	2,661	2,886	5,548	5,634	11,275
Amortization of intangible assets	121	113	248	226	463
One time acquisition related costs			262		32
Financial expenses	332	259	666	419	1,004
Income tax expense	501	609	950	1,138	(7,221)
Others			15		5
Net income	$ 1,925	$ 1,966	3,694	$ 3,533	$ 16,521
Balances without adoption of Topic 606 [Member]
Service revenue			13,930
Product revenue			26,824
Total revenues			40,754
Cost of revenues			19,336
Research and development expenses			2,359
Selling and marketing expenses			7,566
General and administrative expenses			5,548
Amortization of intangible assets			248
One time acquisition related costs			262
Financial expenses			666
Income tax expense			965
Others			15
Net income			3,789
Adj. [Member]
Service revenue			293
Product revenue			(162)
Total revenues			131
Cost of revenues
Selling and marketing expenses			21
Financial expenses
Income tax expense			15
Others
Net income			$ 95

XML

Revenues (Details 2) $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Revenue recognized:	$ 40,623
At a point of time [Member]
Revenue recognized:	13,637
Over a period of time [Member]
Revenue recognized:	26,986
Cellocator segment [Member]
Revenue recognized:	12,729
Cellocator segment [Member] | At a point of time [Member]
Revenue recognized:	12,367
Cellocator segment [Member] | Over a period of time [Member]
Revenue recognized:	362
MRM segment [Member]
Revenue recognized:	32,304
MRM segment [Member] | At a point of time [Member]
Revenue recognized:	5,634
MRM segment [Member] | Over a period of time [Member]
Revenue recognized:	26,670
Elimination [Member]
Revenue recognized:	(4,410)
Elimination [Member] | At a point of time [Member]
Revenue recognized:	(4,364)
Elimination [Member] | Over a period of time [Member]
Revenue recognized:	$ (46)

XML

Revenues (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Revenues	$ 19,740	$ 20,041	$ 40,623	$ 39,072	$ 78,155
Israel [Member]
Revenues			19,293		35,230
Latin America (mainly Mexico) [Member]
Revenues			5,936		9,603
Brazil [Member]
Revenues			6,876		14,248
Argentina [Member]
Revenues			2,067		4,607
Europe [Member]
Revenues			2,265		4,413
Other [Member]
Revenues			$ 4,186		$ 10,054

XML

Revenues (Details 4) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Revenues
Contract assets	$ 398	$ 486

XML

Revenues (Details Textual) $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Revenues (Textual)
Cumulative effect of accounting change recognized	$ 356
Typical length of contract for service, description	The typical length of a contract for service is 36 months.
Monthly in equal installments, description	For devices sold in bundled packages, customers usually pay monthly in equal installments over the period of 36 months.

XML

Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 3,026	$ 3,621
Work in process	212	149
Finished goods	2,383	2,781
Total inventory	$ 5,621	$ 6,551

XML

Commitments and Contingent Liabilities (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Aug. 31, 2014	Jun. 30, 2018	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Bank guarantees amount		$ 370
Royalty percentage		5.00%
Contingent obligation amout		$ 2,444
Claim amount of litigation		18
Provision amount	$ 78	6
Payments for VAT tax	274
Payments of interest	1,150
Penalty totaling of infraction	$ 1,424
Litigation, terms	14 years
Payments of an aggregate amount		13,978
Annual management fees		$ 180
Percentage of shareholders equity to consolidated assets			20.00%
Minimum shareholders equity			$ 20,000
Subsidiaries debt ratio, description		The annual EBITDA will not exceed 4 in 2010 and thereafter.
Debt ratio, description		The annual EBITDA will not exceed 4.2 in 2013-2014, 3.5 in 2015, 3 in 2016 and 2.5 in 2017 and thereafter.
Administrative decision amounts		$ 158

XML

Net Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Numerator:
Numerator for basic net earnings per share - Net income attributable to Pointer Telocation Ltd.'s shareholders	$ 1,925	$ 1,969	$ 3,697	$ 3,527	$ 16,518
Numerator for diluted net earnings per share - Net income attributable to Pointer Telocation Ltd.'s shareholders	$ 1,925	$ 1,969	$ 3,697	$ 3,527	$ 16,528
Denominator:
Denominator for basic net earnings per share - weighted-average number of shares outstanding (in thousands)	8,073,665	7,978,102	8,066,698	7,942,957	7,997,684
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands)	8,294,562	8,111,119	8,257,968	8,070,953	8,130,566
Basic net earnings per share from continuing operations	$ 0.24	$ 0.24	$ 0.46	$ 0.44	$ 2.07
Diluted net earnings per share from continuing operations	$ 0.23	$ 0.24	$ 0.44	$ 0.44	$ 2.03

XML

Income Taxes (Details)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Income Taxes (Textual)
Effective income tax rate, percentage	20.50%	24.40%

XML

Balances and Transactions with Related Parties (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Other accounts payable and accrued expenses:
DBSI (see note 5e)	$ (53)	$ (53)
Taldor [Member]
Trade receivables
Trade receivables	21		$ 23
Trade payables:
Trade payables	(20)		(21)
Shagrir [Member]
Trade payables:
Trade payables	$ (209)		$ (193)

XML

Balances and Transactions with Related Parties (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Transactions with related parties:
Management fees to DBSI (see Note 5e)	$ 45	$ 45	$ 90	$ 90	$ 180
Sales to related parties	23	13	45	39	254
Purchases from related parties	$ 212	$ 247	$ 441	$ 504	$ 682

XML

Balances and Transactions with Related Parties (Details Textual) $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Balances and Transactions with Related Parties (Textual)
Long term loans to related party	$ 949
Long term loan maturity date	Dec. 31, 2020

XML

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Segment Reporting Information [Line Items]
Segments revenues	$ 19,740	$ 20,041	$ 40,623	$ 39,072	$ 78,155
Segments operating profit	2,758	2,834	5,325	5,090	10,309
Depreciation and amortization	627	601	1,345	1,451	2,924
Operating Segments [Member]
Segment Reporting Information [Line Items]
Segments revenues	19,740	20,041	40,623	39,072	78,155
Segments operating profit	2,758	2,834	5,325	5,090	10,309
Segments tangible and intangible assets	45,452	48,450	45,452	48,450	48,793
Depreciation and amortization	627	601	1,345	1,451	2,924
Expenditures for assets	674	344	1,633	1,112	3,266
Operating Segments [Member] | Cellocator segment [Member]
Segment Reporting Information [Line Items]
Segments revenues	6,159	6,383	12,729	12,535	24,364
Segments operating profit	492	699	1,201	1,150	2,742
Segments tangible and intangible assets	8,751	8,943	8,751	8,943	9,026
Depreciation and amortization	43	34	86	67	144
Expenditures for assets	39	44	82	102	197
Operating Segments [Member] | MRM segment [Member]
Segment Reporting Information [Line Items]
Segments revenues	15,593	15,576	32,304	30,502	62,208
Segments operating profit	2,380	1,798	4,405	3,471	7,569
Segments tangible and intangible assets	35,144	37,403	35,144	37,403	37,799
Depreciation and amortization	584	567	1,259	1,384	2,780
Expenditures for assets	635	300	1,551	1,010	3,069
Operating Segments [Member] | Elimination [Member]
Segment Reporting Information [Line Items]
Segments revenues	(2,012)	(1,918)	(4,410)	(3,965)	(8,417)
Segments operating profit	(114)	337	(281)	469	(2)
Segments tangible and intangible assets	1,557	2,104	1,557	2,104	1,968
Depreciation and amortization
Expenditures for assets