0001144204-18-023647.txt : 20180430 0001144204-18-023647.hdr.sgml : 20180430 20180430125422 ACCESSION NUMBER: 0001144204-18-023647 CONFORMED SUBMISSION TYPE: 20-F/A PUBLIC DOCUMENT COUNT: 117 CONFORMED PERIOD OF REPORT: 20171231 FILED AS OF DATE: 20180430 DATE AS OF CHANGE: 20180430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Pointer Telocation Ltd CENTRAL INDEX KEY: 0000920532 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 000000000 STATE OF INCORPORATION: L3 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 20-F/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-13138 FILM NUMBER: 18788091 BUSINESS ADDRESS: STREET 1: 14 HAMELACHA STREET CITY: ROSH HA'AYIN STATE: L3 ZIP: 48091 BUSINESS PHONE: 97235723111 MAIL ADDRESS: STREET 1: 14 HAMELACHA STREET CITY: ROSH HA'AYIN STATE: L3 ZIP: 48091 FORMER COMPANY: FORMER CONFORMED NAME: NEXUS TELOCATION SYSTEMS LTD DATE OF NAME CHANGE: 19980623 FORMER COMPANY: FORMER CONFORMED NAME: NEXUS TELECOMMUNICATIONS SYSTEMS LTD DATE OF NAME CHANGE: 19980112 20-F/A 1 tv489749_20fa.htm FORM 20-F/A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 20-F/A

Amendment No. 1

 

 

 

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

Or

 

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

Or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Or

 

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

 

For the transition period from                  to                

Commission File number: 001-13128

 

 

 

POINTER TELOCATION LTD.

(Exact name of Registrant as specified in its charter)

 

 

 

N/A   ISRAEL

(Translation of Registrant’s

name into English)

 

 

(Jurisdiction of incorporation

or organization)

 

 

14 Hamelacha Street,

Rosh Haayin 4809133, Israel

(Address of principal executive offices)

  

 

Yaniv Dorani, CFO

Telephone: + 972-3-572-3111, Facsimile: + 972-3-572-3100

14 Hamelacha Street, Rosh Haayin 4809133, Israel

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

 

 

 

Securities registered or to be registered pursuant to Section 12(b) of the Act:

 

Title of each class  Name of each exchange on which registered

Ordinary Shares, NIS 3.00 nominal value per share

  NASDAQ Capital Market

 

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

 

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

 

 

 

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

 

8,059,094 Ordinary Shares, NIS 3.00 nominal value per share

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ¨    No   x

 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes ¨    No x

 

Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x   No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x    No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ¨   Accelerated filer  ¨   Non-accelerated filer  x
         
        Emerging growth company  ¨

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

U.S. GAAP x  

International Financial Reporting Standards as issued by
the International Accounting Standards Board  ¨

  Other ¨

 

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    Item 17  ¨    Item 18  ¨

 

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ¨    No  x

 

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

 

¨ Yes   ¨ No  x N/A

 

 

 

 

 

   

 

 

EXPLANATORY NOTE

 

This Amendment No. 1 on Form 20-F/A (this "Amendment") to the annual report on Form 20-F for the fiscal year ended December 31, 2017, as filed by Pointer Telocation Ltd.  (the "Company" or "we") with the Securities and Exchange Commission (the "Commission") on March 27, 2018 (the "Form 20-F"), is being filed solely to correct an inadvertent omission of the audit report of Mazars Certified Public Accountants, the auditor of our POINTER SA (PTY) LTD. subsidiary, in the electronic version of the Form 20-F.

 

Therefore, we are filing this Amendment to our Form 20-F to include the audit report of Mazars Certified Public Accountants together with the consolidated financial statements included in Item 18 of our Form 20-F. In addition, we are (i) filing the amended consents of our auditors as Exhibits 14.1, 14.2, 14.3 and 14.4 and (ii) filing or furnishing, as indicated herein, as Exhibits 12.1, 12.2, 13.1 and 13.2, currently dated certifications.

 

 

This Amendment speaks as of the date of the initial filing of the Form 20-F and, other than as described above, this Amendment does not, and does not purport to, amend, update or restate any other information or disclosure included in the Form 20-F, and does not purport to, reflect any events that have occurred after the date of the initial filing of the Form 20-F.

 

 2 

 

 

ITEM 18.FINANCIAL STATEMENTS

 

The Financial Statements required by this item are found at the end of this Annual Report on Form 20-F/A, beginning on page F-1.

 

 

ITEM 19.EXHIBITS

 

12.1Certification by Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002. *

 

12.2Certification by Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002. *

 

13.1Certification by Chief Executive Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. *

 

13.2Certification by the Chief Financial Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. *

 

14.1Consent of Kost, Forer, Gabbay & Kasierer Certified Public Accountants (Israel). *

 

14.2Consent of Grant Thornton Argentina S.C. Certified Public Accountants (Pointer Argentina S.A.). *

 

14.3Consent of Baker Tilly Brasil Norte SS Auditores Independentes (Pointer do Brasil Comercial Ltda.). *

 

14.4Consent of Mazars Certified Public Accountants (Pointer SA (PTY) Ltd). *`

 

101.INS* XBRL Instance Document
   
101.SCH* XBRL Taxonomy Extension Schema Document
   
101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
   
101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
   
101.LAB* XBRL Taxonomy Extension Label Linkbase Document
   
101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

 

 * Filed herein

 

 3 

 

 

SIGNATURE

 

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized the undersigned to sign this Amendment No. 1 on its behalf.

 

POINTER TELOCATION LIMITED  
     
  By: /s/ Yossi Ben Shalom  
    Yossi Ben Shalom  
    Chairman of the Board of Directors  

 

April 30, 2018

 

 4 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

CONSOLIDATED FINANCIAL STATEMENTS

 

AS OF DECEMBER 31, 2017

 

IN U.S. DOLLARS

 

INDEX

 

  Page
   
Reports of Independent Registered Public Accounting Firms F-2 - F-6
   
Consolidated Balance Sheets F-7 - F-8
   
Consolidated Statements of Comprehensive Income F-9 - F-10
   
Consolidated Statements of Changes in Equity F-11
   
Consolidated Statements of Cash Flows F-12 - F-14
   
Notes to Consolidated Financial Statements F-15 - F-53

 

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

 

 F-1 

 

 

Kost Forer Gabbay & Kasierer

144 Menachem Begin Road, Building A

Tel-Aviv 6492102, Israel

 

Tel: +972-3-6232525

Fax: +972-3-5622555

ey.com

 

Report of Independent Registered Public Accounting Firm

 

To the Shareholders and Board of Directors of

 

POINTER TELOCATION LTD.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Pointer Telocation Ltd. and subsidiaries (“the Company”) as of December 31, 2017 and 2016, the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, based on our audits and the reports of other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

 

We did not audit the financial statements of Pointer Argentina S.A, Pointer Do Brasil Comercial Ltda. and Pointer SA (PTY) Ltd., (the “Subsidiaries”), whose financial statements reflect total assets constituting 18% and 22.4% as of December 31, 2017 and 2016, respectively, and total revenues constituting 29.5%, 27% and 15.2% of the related consolidated revenues for the years ended December 31, 2017, 2016 and 2015, respectively. The financial statements of the Subsidiaries were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to amounts included for the Subsidiaries, is based solely on the reports of the other auditors.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

F-2 

 

 

Kost Forer Gabbay & Kasierer

144 Menachem Begin Road, Building A

Tel-Aviv 6492102, Israel

 

Tel: +972-3-6232525

Fax: +972-3-5622555

ey.com

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion.

 

/s/ KOST FORER GABBAY & KASIERER

A Member of Ernst & Young Global

 

We have served as the Company’s auditor since 1995.

Tel-Aviv, Israel

March 27, 2018

 

F-3 

 

 

AUDITOR’S REPORT

 

To the Shareholders and Board of Directors of Pointer do Brasil Comercial S.A.

 

Opinion on the Financial Statements

We have audited the consolidated balance sheets of Pointer do Brasil Comercial S.A. as of December 31, 2017 and 2016, the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes, collectively referred to as the consolidated financial statements. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Entity at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

 

Basis for Opinion

These financial statements are the responsibility of the Entity’s management. Our responsibility is to express an opinion on the Entity’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Baker Tilly Brasil Norte SS Auditores Independentes – EPP

Baker Tilly Brasil Norte SS Auditores Independentes – EPP

We have served as the Company’s auditor since 2016.

Barueri, São Paulo, Brazil

February 09, 2018

 

F-4 

 

 

 

    Grant Thornton Argentina
    Av. Corrientes 327 Piso 3°
  Report of Independent Registered Public Accounting Firm C1043AAD – Buenos Aires
    Argentina
Board of Directors and Shareholders  
Pointer Argentina S.A. T +54 11 4105 0000
    F +54 11 4105 0100
    E post@ar.gt.com
    www.grantthornton.com.ar

 

Opinion on the financial statements

We have audited the accompanying balance sheets of Pointer Argentina S.A. (the “Company”) as of December 31, 2017 and 2016, the related statements of comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 
Adler, Hasenclever & Asociados Sociedad de Responsabilidad Limitada
 
We have served as the Company’s auditor since 2009.
 
Buenos Aires, Argentina
February 8, 2018

 

F-5 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  

To the shareholders and the board of directors of Pointer SA Proprietary Limited

  

Opinion on the Financial Statements 

We have audited the accompanying balance sheets of Pointer SA Proprietary Limited (the “Company”) as of December 31, 2017 and 2016, the related statements of comprehensive income, changes in equity, and cash flows, for each of the years ended December 31, 2017 and 2016, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

We have served as the Company’s auditor since 2007.

  

 

Mazars

Partner: Andries Batt

Registered Auditor

26 March 2018

Cape Town

 

F-6 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

 

   December 31, 
   2017   2016 
         
ASSETS          
           
CURRENT ASSETS:          
Cash and cash equivalents   7,375    6,066 
Trade receivables (net of allowance for doubtful accounts of $ 1,127  and $ 1,281 at December 31, 2017 and 2016, respectively)   13,660    11,464 
Other accounts receivable and prepaid expenses (Note 3)   2,865    2,504 
Inventories (Note 4)   6,551    5,242 
           
Total current assets   30,451    25,276 
           
LONG-TERM ASSETS:          
Long-term loan to related party   973    831 
Long-term accounts receivable   1,116    564 
Severance pay fund (Note 2r)   3,546    2,878 
Property and equipment, net (Note 5)   5,848    5,614 
Other intangible assets, net (Note 6)   1,935    2,178 
Goodwill (Note 7)   41,010    38,107 
Deferred tax asset (Note 15)   9,585    1,433 
           
Total long-term assets   64,013    51,605 
           
Total assets   94,464    76,881 

 

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

 

F-7 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

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

 

   December 31, 
   2017   2016 
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
CURRENT LIABILITIES:          
Short-term bank credit and current maturities of long-term loans
(Note 8)
   5,101    4,836 
Trade payables   6,204    7,116 
Deferred revenues and customer advances   777    1,037 
Other accounts payable and accrued expenses (Note 9)   9,117    6,839 
           
Total current liabilities   21,199    19,828 
           
           
LONG-TERM LIABILITIES:          
Long-term loans from banks (Note 10)   5,015    10,182 
Deferred taxes and other long-term liabilities (Note 11)   838    976 
Accrued severance pay (Note 2r)   3,996    3,206 
           
Total long term liabilities   9,849    14,364 
           
COMMITMENTS AND CONTINGENT LIABILITIES (Note 12)          
           
EQUITY:          
Pointer Telocation Ltd’s shareholders’ equity:          
Share capital (Note 13)
Ordinary shares of NIS 3 par value -
Authorized: 16,000,000 shares at December 31, 2017 and 2016; Issued and outstanding: 8,059,094 and 7,873,919 shares at December 31, 2017 and 2016, respectively
   5,995    5,837 
Additional paid-in capital   129,076    128,438 
Accumulated other comprehensive loss   (2,340)   (5,633)
Accumulated deficit   (69,597)   (86,115)
           
Total Pointer Telocation Ltd’s shareholders’ equity   63,134    42,527 
           
Non-controlling interest   282    162 
           
Total equity   63,416    42,689 
           
Total liabilities and equity   94,464    76,881 

 

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

 

F-8 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

 

  

Year ended

December 31,

 
   2017   2016   2015 
Revenues (Note 17c):               
Products   26,182    22,784    22,266 
Services   51,973    41,569    38,301 
                
Total revenues   78,155    64,353    60,567 
                
Cost of revenues:               
Products   16,073    13,904    13,435 
Services   21,914    18,672    17,879 
                
Total cost of revenues   37,987    32,576    31,314 
                
Gross profit   40,168    31,777    29,253 
                
Operating expenses:               
Research and development   4,051    3,669    3,409 
Selling and marketing   14,038    11,774    10,468 
General and administrative   11,275    9,004    8,580 
Amortization of intangible assets   463    473    538 
Acquisition related costs   32    609    - 
Impairment of intangible and tangible assets   -    -    917 
                
Total operating expenses   29,859    25,529    23,912 
                
Operating income   10,309    6,248    5,341 
Financial expenses, net (Note 19)   1,004    1,046    729 
Other expenses, net   5    9    10 
                
Income before taxes on income   9,300    5,193    4,602 
Tax expenses (income), (Note 15)   (7,221)   1,845    1,131 
                
Income from continuing operations   16,521    3,348    3,471 

Income from discontinued operation, net (Note 18)

   -    154    327 
Net income   16,521    3,502    3,798 
                
Other comprehensive income:               
Currency translation adjustments of foreign operations   3,293    1,311    (3,423)
Total comprehensive income   19,814    4,813    375 
                
Profit (loss) from continuing operations attributable to:               
Pointer Telocation Ltd’s shareholders   16,518    3,324    3,546 
Non-controlling interests   3    24    (75)
    16,521    3,348    3,471 

 

F-9 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

 

  

Year ended
December 31,

 
   2017   2016   2015 
             
Profit (loss) from discontinued operations attributable to:               
Pointer Telocation Ltd’s shareholders   -    120    399 
Non-controlling interests   -    34    (72)
    -    154    327 
                
                
Earnings per share attributable to Pointer Telocation Ltd’s Shareholders (Note 14):               
                
Basic net earnings:               
Earnings from continuing operations   2.07    0.43    0.46 
Earnings  from discontinued operations   -    0.02    0.05 
    2.07    0.45    0.51 
                
Diluted net earnings:               
Earnings from continuing operations   2.03    0.43    0.44 
Earnings from discontinued operations   -    0.02    0.06 
    2.03    0.45    0.50 

 

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

 

F-10 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

CONSOLOIDATED STATEMENTS OF CHANGES IN EQUITY

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

 

       Pointer Telocation Ltd’s Shareholders         
               Accumulated             
  

Number

of

   Share   Additional
paid-in
   Other
comprehensive
   Accumulated  

Non-

controlling

   Total 
   shares   capital   capital   income   deficit   interest   equity 
                             
Balance as of January 1, 2015   7,688,564    5,705    129,618    (2,909)   (75,767)   (2,851)   53,796 
Issuance of shares in respect of Stock-based compensation   14,999    3    11    -    -    -    14 
Stock-based compensation expenses   -    -    309    -    -    -    309 
Acquisition of non-controlling interests   81,081    62    (1,528)   -    -    2,007    541 
Other comprehensive income   -    -    -    (3,345)   -    (78)   (3,423)
Net loss attributable to Non -controlling interest   -    -    -    -    -    (147)   (147)
Net income attributable to Pointer shareholders   -              -    3,945    -    3,945 
                                    
Balance as of December 31, 2015   7,784,644    5,770    128,410    (6,254)   (71,822)   (1,069)   55,035 
Issuance of shares in respect of Stock-based compensation   89,275    67    31    -    -    -    98 
Stock-based compensation expenses   -    -    320    -    -    -    320 
Exercise of options in subsidiary   -    -    (323)   323    -    -    - 
Distribution of a subsidiary as a divided in kind   -    -    -    (213)   (17,737)   373    (17,577)
Other comprehensive income   -    -    -    511    -    800    1,311 
Net income attributable to Non -controlling interest   -    -    -    -    -    58    58 
Net income attributable to Pointer shareholders   -    -    -    -    3,444    -    3,444 
                                    
Balance as of December 31, 2016   7,873,919    5,837    128,438    (5,633)   (86,115)   162    42,689 
Issuance of shares in respect of Stock-based compensation   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 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 

 

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

 

F-11 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 

 

  

Year ended

December 31,

 
   2017   2016   2015 
             
Cash flows from operating activities:               
Net income   16,521    3,502    3,798 
Adjustments required to reconcile net income to net cash provided by operating activities:               
Depreciation and amortization   2,924    3,258    3,959 
Impairment of tangible and intangible assets   -    -    917 
Accrued interest and exchange rate changes of debenture and long-term loans   52    29    (888)
Accrued severance pay, net   93    20    17 
Gain from sale of property and equipment, net   (113)   (232)   (143)
Stock-based compensation   380    320    309 
Decrease in restricted cash   -    -    62 
Increase in trade receivables, net   (1,616)   (3,489)   (236)
Increase in other accounts receivable and prepaid expenses   (206)   (942)   (469)
Decrease (increase) in inventories   (1,170)   (1,063)   658 
Decrease (increase) deferred income taxes   (8,018)   1,774    1,080 
Decrease (increase) in long-term accounts receivable   165    99    (91)
Increase (decrease) in trade payables   (1,597)   3,346    1,277 
Increase (decrease) in other accounts payable and accrued expenses   2,285    2,455    (1,448)
                
Net cash provided by operating activities   9,700    9,077    8,802 
                
Cash flows from investing activities:               
Purchase of property and equipment   (3,033)   (4,129)   (3,616)
Purchase of other intangible assets   (233)   (115)   - 
Proceeds from sale of property and equipment   114    648    1,266 
Acquisition of subsidiary (a)   -    (8,531)   - 
                
Net cash used in investing activities   (3,152)   (12,127)   (2,350)

 

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

 

F-12 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 

  

Year ended

December 31,

 
   2017   2016   2015 
             
Cash flows from financing activities:               
                
Receipt of long-term loans from banks   -    6,263    14,934 
Repayment of long-term loans from banks   (4,875)   (4,976)   (19,503)
Proceeds from issuance of shares and exercise of options, net of issuance costs   395    98    15 
Distribution as a dividend in kind of previously
consolidated subsidiary (b)
   -    (1,870)   - 
Short-term bank credit, net   (231)   716    (915)
                
Net cash provided (used) in financing activities   (4,711)   231    (5,469)
                
Effect of exchange rate on cash and cash equivalents   (528)   (462)   (193)
                
Increase (decrease) in cash and cash equivalents   1,309    (3,281)   790 
Cash and cash equivalents at the beginning of the year   6,066    9,347    8,557 
                
Cash and cash equivalents at the end of the period- continuing operations   7,375    6,066    7,252 
Cash and cash equivalents at the end of the period- discontinued operation   -    -    2,095 
                
Cash and cash equivalents at the end of the year   7,375    6,066    9,347 
                
(a)       Acquisition of subsidiary:               
Working capital (Cash and cash equivalent excluded)   -    (334)   - 
Property and equipment   -    (1,239)   - 
Intangible assets   -    (2,098)   - 
Goodwill   -    (6,070)   - 
Deferred taxes   -    714    - 
Payables for acquisition of investments in subsidiaries   -    496    - 
                
    -    (8,531)   - 

 

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

 

F-13 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 

  

Year ended

December 31,

 
   2017   2016   2015 

(b)       Distribution as a dividend in kind of previously consolidated subsidiary:

               
The subsidiaries’ assets and liabilities at date of distribution:               
Working capital (excluding cash and cash equivalents)   -    (5,443)   - 
Property and equipment   -    7,048    - 
Goodwill and other intangible assets   -    15,883    - 
Other long term liabilities   -    (1,781)   - 
Non-controlling interest   -    373    - 
Accumulated other comprehensive loss   -    (213)   - 
Dividend in kind   -    (17,737)   - 
                
    -    (1,870)   - 
                
(c)       Non-cash investing activity:               
                
Purchase of property and equipment   61    48    378 
                
(d)       Supplemental disclosure of cash flow activity:               
                
Cash paid during the year for:               
Interest   224    567    640 
                
Income taxes   540    20    27 

 

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

 

F-14 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO 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 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.

 

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.

 

The company recorded tax income in the amount of $9.2 million due to decrease in valuation allowance related to carry forward losses of the company and other temporary differences that are more likely than not to be offset against future income.

 

b.On June 8, 2016 Pointer spun off its Israeli subsidiary, Shagrir Group Vehicle Services Ltd., through which Pointer carried out its road side assistance (RSA) activities and listed Shagrir’s shares for trade on the Tel Aviv Stock Exchange. The results of Shagrir until that date are included in Pointer’s results as discontinued operations. See also Note 18.

 

c.The Company holds 93% of the share capital of Argentina SA’s (formerly: Tracsat S.A.) (“Pointer Argentina”). Pointer Argentina is the operator of the Company’s systems and products that provides fleet management and stolen vehicle recovery services in Buenos Aires, Argentina.

 

d.The Company holds 100% of the share capital of Pointer Recuperation de Mexico S.A. de C.V. (“Pointer Mexico”). After the company completed in 2015 the acquisition of Pointer Mexico by acquiring the 26% of the issued share capital of Pointer Mexico that the company did not previously own, from Pointer Recuperacion de Mexico, S. de R.L. de C.V. (the “Pointer Mexico Sellers”), in consideration for the issuance of 81,081 of the company ordinary shares to the Pointer Mexico Sellers.

 

Pointer Mexico provides fleet management and stolen vehicle recovery services to its customers in Mexico as well as distributing the Company’s products.

 

e.In August 2008 the Company incorporated a company in Brazil by the name of Pointer do Brasil Comercial S.A. (“Pointer Brazil”). Pointer Brazil provides location, tracking and fleet management vehicles services to its customers in Brazil. As of October 13, 2013 Company held 48.8% of the share capital in Pointer Brazil.

 

In March 2014, Pointer Brazil changed its legal form from corporation to Limited Liability Company (LLC), and its trading name from Pointer do Brasil Comercial S.A. to Pointer do Brasil Comercial Ltda., according to its article of association duly registered and properly approved by its shareholders.

 

F-15 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 1:-GENERAL (Cont.)

 

In July 2013, the Company incorporated a wholly-owned subsidiary in Brazil at the name of Pointer do Brasil Participações Ltda. (“Pointer Brazil Holdings”).

 

On October 14, 2013, the Company acquired the remaining 51.2% of the issued share capital of Pointer Brazil from Bracco do Brasil Empreendimentos e Participações Ltda. (“Bracco”) through Pointer Brazil Holdings. Following the completion of the transaction, the Company holds 100% of the issued share capital of Pointer Brazil.

 

In May 2014, Pointer Brazil was merged with Pointer Brazil Holdings . As a result of this merger, The Company holds directly 100% of the issued share capital of Pointer Brazil.

 

f.In October 2008, the Company established a wholly-owned subsidiary in the United States, Pointer Telocation Inc.

 

g.On September 9, 2014, the Company acquired 100% interest in Global Telematics S.A. Proprietary Limited (“Global Telematics”), a provider of commercial fleet management and vehicle tracking solutions in South Africa.

 

On October 2, 2017, the Company sold 2,519,544 ordinary shares of Pointer South Africa, representing approximately 12% of Pointer South Africa’s issued and outstanding share capital as of the date thereof, to Ms. Preshnee Moodley, who serves on Pointer South Africa’s Board of Directors, in exchange for her services. Following the consummation of the transaction, we now hold 88% of the issued share capital of Pointer South Africa.

 

h.In May 2012, the Company established a wholly-owned subsidiary in India, Pointer Telocation India Private Limited.

 

i.On October 6, 2016, a shareholders meeting of the Company approved a compensation Policy for the Company’s directors and officers. The Compensation Policy includes, among other issues prescribed by the Israeli Companies Law, a framework for establishing the terms of office and employment of the office holders, and guidelines with respect to the structure of the variable pay of office holders. The Compensation Policy includes a compensation, bonus and benefits strategy for office holders which is designed in order to reward performance, maintain a reasonable wage structure throughout the organization and to reinforce a culture in order to promote the long-term success of the Company. 

 

j.On October 7, 2016, the Brazilian subsidiary acquired 100% interest in Cielo Telecom Ltd. (“Cielo”), a fleet management services company based in South Brazil.

 

The acquisition-date fair value of the consideration transferred totaled to $ 8.5 million in cash.

 

The acquisition was accounted for under the purchase method of accounting as determined by ASC Topic 805, “Business Combinations”. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition.

 

F-16 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 1:-GENERAL (Cont.)

 

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:

 

Working capital, net   334 
Property and equipment   1,239 
Other intangible assets   2,100 
Goodwill   6,068 
Deferred taxes   (714)
Payables for acquisition of investments in subsidiaries   (496)
      
   $8,531 

 

Unaudited pro forma condensed results of operations:

 

The following represents the unaudited pro forma condensed results of operations for the years ended December 31, 2015 and 2016, assuming that the acquisitions of Cielo occurred on January 1, 2015. The pro forma information is not necessarily indicative of the results of operations that would have actually occurred had the acquisitions been consummated on those dates, nor does it purport to represent the results of operations for future periods.

 

  

Year ended

December 31,

 
   2016   2015 
   Unaudited 
         
Revenues  $67,468   $64,516 
           
Net income attributable to Pointer shareholders’ from continuing operations  $3,820   $4,206 
           
Basic income per share  $0.49   $0.55 
           
Diluted income per share  $0.48   $0.53 

 

F-17 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES

 

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).

 

a.Use of estimates:

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant assumptions are employed in estimates used in determining values of intangible assets, tax assets and tax liabilities, warranty costs and stock-based compensation costs. Actual results could differ from those estimates.

 

b.Financial statements in U.S. dollars:

 

The Company’s reporting currency is the US dollar.

 

The majority of the revenues of the Company’s Cellocator business are generated in U.S. dollars (“dollar”) or linked to the dollar. In addition, a substantial portion of the Company’s Cellocator business’ costs are incurred in dollars. The Company’s management believes that the dollar is the primary currency of the economic environment of the Cellocator business and thus its functional currency.

 

The majority of the revenues of the Company’s MRM business are generated in Israeli NIS (“NIS”) or linked to the NIS. In addition, a substantial portion of the Company’s MRM business’ costs are incurred in NIS. The Company’s management believes that the NIS is the primary currency of the economic environment of the MRM business and thus its functional currency.

 

For those subsidiaries whose functional currency has been determined to be their local currency (For Pointer Argentina- the Argentinean peso; for Pointer Mexico- the Mexican peso; for Pointer Inc. the dollar; for Pointer do Brazil Comercial Ltda., for Pointer Brazil Holdings and Cielo Telecom Ltda. the Brazilian Real), assets and liabilities are translated at year-end exchange rates and statement of operations items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component, other comprehensive income (loss), in shareholders’ equity (deficiency).

 

Transactions and balances of the Company and certain subsidiaries, which are denominated in other currencies, have been remeasured into dollars in accordance with principles set forth in ASC 830, “Foreign Currency Matters”. Foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are remeasured at historical exchange rates. Expenses are remeasured at the exchange rate in effect on the day the transaction occurred, except for those expenses related to non-monetary assets and liabilities, which are remeasured at historical exchange rates. All exchange gains and losses from the remeasurements mentioned above, are reflected in the statement of operations as financial expenses or income, as appropriate.

 

F-18 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

c.Principles of consolidation:

 

The consolidated financial statements include the accounts of the Company and its subsidiaries.

 

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

 

Changes in the parent’s ownership interest in a subsidiary with no change of control are treated as equity transactions, rather than step acquisitions or dilution gains or losses. Losses of partially owned consolidated subsidiaries shall be continued to be allocated to the non-controlling interests even when their investment was already reduced to zero.

 

d.Cash equivalents:

 

Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired.

 

e.Inventories:

 

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the “moving average” cost method. Inventory consists of raw materials, work in process and finished products. Inventory write-offs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, and for market prices lower than cost. In 2017, 2016 and 2015, the Company and its subsidiaries wrote-off approximately net amount of $129, $147 and $113, respectively. The net write-offs are included in cost of revenues.

 

f.Property and equipment:

 

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates:

 

   %
    
Installed products  20-33
Computers and electronic equipment  10 - 33 (mainly 33)
Office furniture and equipment  6 - 15
Motor vehicles  15 - 20 (mainly 20)
Network installation  10 - 33
Buildings  6.67
Leasehold improvements  Over the term of the lease, including the option term or the useful lives of the assets, whichever is shorter

 

F-19 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

g.Goodwill:

 

Goodwill reflects the excess of the purchase price of the acquired activities over the fair value of net assets acquired. Pursuant to ASC 350, “Intangibles - Goodwill and Other”, goodwill is not amortized but rather tested for impairment at least annually, at the reporting unit level.

 

The Company identified several reporting units based on the guidance of ASC 350. ASC 350 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for impairment, while the second phase (if necessary) measures impairment.

 

Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. In such case, the second phase is then performed, and the Company measures impairment by comparing the carrying amount of the reporting unit’s goodwill to the implied fair value of that goodwill. An impairment loss is recognized in an amount equal to the excess.

 

In September 2011, the FASB amended the guidance on the annual testing of goodwill for impairment. The amended guidance will allow companies to assess qualitative factors to determine if it is more likely than not that goodwill might be impaired and whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards. The company didn’t apply the qualitative option.

 

In 2015, following the annual goodwill impairment test in accordance with ASC 350 “Intangibles - Goodwill and Others”, the Company impaired the goodwill attributed to Brazil at the amount of $ 758. These amounts were recorded in the 2015 Consolidated Statement of Operation under the captions “Impairment of intangible and tangible assets”. The material assumptions used for the income approach for 2015 were 5 years of projected net cash flows, a discount rate of 25% and a long-term growth rate of 7.1%. During 2017 and 2016 there was no impairment.

 

h.Identifiable intangible assets:

 

Intangible assets consist of the following: a brand name, customers’ related intangibles, developed technology and acquired patents. Intangible assets are amortized over their useful life using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up. Intangible assets are stated at amortized cost.

 

The customers’ related intangibles are amortized over a five- to nine-year period.

 

Backlog is amortized over a three-year period.

 

Non-competition agreement is amortized over a three-year period.

 

Brand name is amortized over a ten-year period.

 

Customer related intangibles are amortized based on the accelerated method. For customer related intangibles in respect with the Brazil transaction during 2013 and the transaction during 2016, the Company used the straight line method, the differences from the accelerated method were immaterial.

 

F-20 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

The other intangibles are amortized based on straight line method over the periods above mentioned.

 

In 2015, following the annual goodwill impairment test in accordance with ASC 350 “Intangibles - Goodwill and Others”, the Company impaired intangible assets attributed to Brazil at the amount of $ 159. These amounts were recorded in the 2015 Consolidated Statement of Operation under the captions “Impairment of intangible and tangible assets”. The material assumptions used for the income approach for 2015 were 5 years of projected net cash flows, a discount rate of 25% and a long-term growth rate of 7.1%. During 2017 and 2016 there was no impairment.

 

i.Impairment of long-lived assets:

 

The Company’s long lived assets are reviewed for impairment in accordance with ASC 360-10-35, “Property, Plant, and Equipment- Subsequent Measurement” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

 

No impairment losses were identified in 2017, 2016 and 2015.

 

j.Provision for warranty:

 

The Company and its subsidiaries generally grant a one-year to three-year warranty for their products. The Company and its subsidiaries estimate the costs that may be incurred under its basic limited warranty and records a liability in the amount of such costs at the time which product revenue is recognized. Factors that affect the warranty liability include the number of installed units, historical and anticipated rates of warranty claims and cost per claim. The Company and its subsidiaries periodically assess the adequacy of its recorded warranty liabilities and adjust the amounts as necessary. Changes in the Company’s and its subsidiaries’ product liabilities (which are included in other accounts payable and accrued expenses and other long term liabilities’ captions in the Balance Sheet) during 2017 and 2016 are as follows:

 

  

Year ended

December 31,

 
   2017   2016 
         
Balance, beginning of the year   604    544 
Warranties issued during the year   468    422 
Settlements made during the year   (145)   (182)
Expirations   (360)   (180)
           
Balance end of year   567    604 

 

F-21 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

k.Revenue recognition:

 

The Company and its subsidiaries generate revenues from the provision of services, subscriber fees 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. Sales consummated by the Company’s sales forces and sales to resellers are considered sales to end-users. Revenues from the sale of systems and products are recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition” (“SAB No. 104”), when delivery has occurred, persuasive evidence of an agreement exists, the vendor’s fee is fixed or determinable, no further obligation exists and collectability is reasonably assured. Service revenues including subscriber fees are recognized as services are performed, over the term of the agreement.

 

Revenues from the sale of systems and products are recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition” (“SAB No. 104”), when delivery has occurred, persuasive evidence of an agreement exists, the vendor’s fee is fixed or determinable, no further obligation exists and collectability is reasonably assured. Service revenues including subscriber fees are recognized as services are performed, over the term of the agreement.

 

Deferred revenue includes amounts received under maintenance and support contracts, and amounts received from customers but not yet recognized as revenues.

 

In accordance with ASC 605-25, “Multiple-Element Arrangements”, revenue from certain arrangements may include multiple elements within a single contract. The Company’s accounting policy complies with the requirements set forth in ASC 605-25, relating to the separation of multiple deliverables into individual accounting units with determinable fair values. The Company considers the sale of products and subscriber fees to be separate units of accounting.

 

When a sales arrangement contains multiple elements, such as hardware and services, the Company allocates revenue to each element based on a selling price hierarchy. The selling price for each deliverable is based on its vendor specific objective evidence (“VSOE”), if available, third party evidence (“TPE”) if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE nor TPE is available.

 

The company uses ESP to allocate the elements.

 

Revenues generated from technical support services, installation and de-installation are recognized when such services are rendered.

 

Generally, the Company does not grant rights of return. The Company follows ASC 605-15-25 “sales of product when right of return exists”. Based on the Company’s experience, no provision for returns was recorded.

 

l.Research and development costs:

 

Research and development costs are charged to expenses as incurred.

 

F-22 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

m.Advertising expenses:

 

Advertising expenses are charged to the statement of operations as incurred. Advertising expenses for the years ended December 31, 2017, 2016 and 2015 were $1,459, $1,337 and $1,214, respectively.

 

n.Income taxes:

 

The Company accounts for income taxes in accordance with ASC 740, “Income Taxes.” This ASC prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.

 

The Company adopted an amendment to ASC 740, “Income Taxes”. The amendment clarifies the accounting for uncertainties in income taxes by establishing minimum standards for the recognition and measurement of tax positions taken or expected to be taken in a tax return. Under the requirements of ASC 740, the Company must review all of its tax positions and make a determination as to whether its position is more-likely-than-not to be sustained upon examination by regulatory authorities. If a tax position meets the more-likely-than-not standard, then the related tax benefit is measured based on a cumulative probability analysis of the amount that is more-likely-than-not to be realized upon ultimate settlement or disposition of the underlying issue.

 

In the years ended December 31, 2017, 2016 and 2015, the Company recorded tax expenses (income) in connection to uncertainties in income taxes of $ 127, $ 0 and $ 0 respectively.

 

In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. The Company had early adopted this standard in the fourth quarter of 2015 on a retrospective basis. Prior years have been retrospectively adjusted.

 

o.Basic and diluted net earnings per share:

 

Basic and diluted net earnings per share are computed based on the weighted average number of ordinary shares outstanding during the year. Diluted net earnings (loss) per share further include the dilutive effect of stock options outstanding during the year, in accordance with ASC 260, “Earnings Per Share”. Part of the Company’s outstanding stock options and warrants has been excluded from the calculation of the diluted earnings (loss) per share because such securities are anti-dilutive. The total weighted average number of pointer shares related to the outstanding options and warrants excluded from the calculations of diluted earnings (loss) per share was 20,125, 202,000 and 64,000 for the years ended December 31, 2017, 2016 and 2015, respectively.

 

F-23 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

p.Accounting for stock-based compensation:

 

The Company applies ASC 718, “Compensation - Stock Compensation”. In accordance with ASC 718, all grants of employee equity based stock options are recognized in the financial statements based on their grant date fair values. The fair value of graded vesting options, as measured at the date of grant, is charged to expenses, based on the accelerated attribution method over the requisite service period of each of the awards, net of estimated forfeitures.

 

Effective as of January 1, 2017, the Company adopted Accounting Standards Update 2016-09, “Compensation-Stock Compensation (Topic 718)” (“ASU2016-09”) on a modified, retrospective basis. ASU 2016-09 permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for stock - based compensation: to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. Upon adoption of ASU 2016-09, the Company elected to change its accounting policy to account for forfeitures as they occur. Upon the adoption in the first quarter of 2017, the effect of the adoption on the Company’s retained earnings was immaterial.

 

During the years ended December 31, 2017, 2016 and 2015, the Company recognized stock-based compensation expenses related to employee stock options in the amounts of $380, $320 and $309, respectively.

 

According to ASC 718, a change in any of the terms or conditions of the Company’s stock options is accounted for as a modification. Therefore, if the terms of an award are modified, the Company calculates incremental compensation costs as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors existing at the modification date. For vested options, the Company recognizes any incremental compensation cost immediately in the period the modification occurs, whereas for unvested options, the Company recognizes, over the new requisite service period, any incremental compensation cost due to the modification and any remaining unrecognized compensation cost for the original award over its term.

 

F-24 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

q.Data related to options to purchase the Company shares:

 

1.The fair value of the Company’s stock options granted to employees and directors for the years ended December 31, 2017, 2016 and 2015 was estimated using the Black-Scholes-Merton option-pricing model, with the following weighted average assumptions:

 

  

Year ended

December 31,

   2017  2016  2015
          
Risk free interest rate  0.86%-1.39%  0.8%-1.00%  1.29%-1.62%
Dividend yield  0%  0%  0%
Expected volatility  52.25%-57.73%  55.81%-60.84%  51.47%-49.78%
Expected term (in years)  4.00-5.50  4.00-5.50  4.00-5.50
Forfeiture rate  -  2%  2%

 

The Black-Scholes-Merton option-pricing model requires a number of assumptions, of which the most significant are expected stock price volatility and the expected option term. Expected volatility was calculated based upon actual historical stock price movements. The expected option term represents the period that the Company’s stock options are expected to be outstanding and was determined for plain vanilla options, based on the simplified method permitted by SAB 107 and extended by SAB 110 as the average of the vesting period and the contractual term.

 

The Company adopted SAB 110 and continues to apply the simplified method until enough historical experience is available to provide a reasonable estimate of the expected term for stock option grants. In a few limited cases the Company did not use the simplified method in measuring the fair value of modified awards, either when the options were deeply out of the money immediately before the modification or when the Company accelerated the vesting and extended the exercise period after an employee’s resignation. Since in both instances the entire remaining contractual term of the options was relatively short, we assumed that the expected life to be the entire remaining contractual term.

 

The risk-free interest rate is based on the yield from U.S. Treasury bill with accordance to the expected term of the options.

 

The Company has historically not paid dividends and has no foreseeable plans to pay dividends and therefore uses an expected dividend yield of zero in the option pricing model. The Company is required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest.

 

F-25 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

On October 2, 2017, the Company sold 2,519,544 ordinary shares of Pointer South Africa, representing approximately 12% of Pointer South Africa’s issued and outstanding share capital as of the date thereof, to Ms. Preshnee Moodley, who serves on Pointer South Africa’s Board of Directors, in exchange to its services.

 

r.Severance pay:

 

The liability of the Company and its subsidiaries in Israel for severance pay is calculated pursuant to Israel’s Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of balance sheet date and are presented on an undiscounted basis (the “Shut Down Method”). Employees are entitled to one month’s salary for each year of employment, or a portion thereof. The liability for the Company and its subsidiaries in Israel is fully provided by monthly deposits with insurance policies and by accrual. The value of these policies is recorded as an asset in the Company’s balance sheet.

 

The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel’s Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrendered value of these policies, and includes profits or losses accumulated to balance sheet date.

 

Some of the company’s employees are subject to Section 14 of the Severance Pay Law and the General Approval of the Labor Minister dated June 30, 1998, issued in accordance to the said Section 14, mandating that upon termination of such employees’ employment, all the amounts accrued in their insurance policies shall be released to them. The severance pay liabilities and deposits covered by these plans are not reflected in the balance sheet as the severance pay risks have been irrevocably transferred to the severance funds.

 

Severance pay expenses for the years ended December 31, 2017, 2016 and 2015 were $399, $303 and $292, respectively.

 

s.Concentrations of credit risk:

 

Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents, trade receivables, trade payables and derivatives.

 

The Company’s cash and cash equivalents are invested primarily in deposits with major banks worldwide, mainly in Israel. Generally, these deposits may be redeemed upon demand and, therefore, bear low risk. Management believes that the financial institutions that hold the Company’s investments have a high credit rating.

 

The Company’s trade receivables include amounts billed to clients located mainly in Israel, Latin America and Europe. Management periodically evaluates the collectability of its trade receivables to reflect the amounts estimated to be collectible. An allowance is determined in respect of specific debts whose collection, in management’s opinion, is doubtful. In 2017, 2016 and 2015, the Company recorded expenses in respect of such debts in the amount of $802, $511 and $98, respectively. As for major customers, see Note 17d.

 

F-26 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

Changes in the allowance for doubtful accounts during 2017 and 2016 are as follows:

 

  

Year ended

December 31,

 
   2017   2016 
         
Balance at beginning of the year   1,281    1,053 
           
Deductions during the year   (992)   (339)
Charged to expenses   802    511 
Foreign currency translation adjustment   36    56 
           
Balance at end of year   1,127    1,281 

 

 

F-27 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

t.Fair value measurements:

 

The following methods and assumptions were used by the Company and its subsidiaries in estimating fair value disclosures for financial instruments:

 

The carrying amounts reported in the balance sheet for cash and cash equivalents, trade receivables, other accounts receivable, short-term bank credit, trade payables and other accounts payable approximate their fair values due to the short-term maturities of such instruments.

 

Amounts recorded for long-term loans approximate fair values. The fair value was estimated using discounted cash flow analysis, based on the Company’s incremental borrowing rates for similar type of borrowing arrangements.

 

The Company accounts for certain assets and liabilities at fair value under ASC 820, “Fair Value Measurements and Disclosures”. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

 

Level 1 -Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;

 

Level 2 -Significant other observable inputs based on market data obtained from sources independent of the reporting entity;

 

Level 3 -Unobservable inputs which are supported by little or no market activity (for example cash flow modeling inputs based on assumptions).

 

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy.

 

Assets and Liabilities that are measured at Fair Value on a Nonrecurring Basis subsequent to their initial recognition.

 

F-28 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

During 2015, such measurements of fair value related solely to an impairment loss of goodwill reducing its carrying amount in $758. The Company used an income approach for measuring the fair value of the goodwill. See Note 2g and 2i for significant assumptions. As the fair value was measured using significant unobservable assumptions, the goodwill was classified as level 3 in ASC 820 fair value hierarchy.

 

During 2017 and 2016, there were no impairment losses regarding goodwill.

 

u.Derivatives and hedging activities:

 

ASC 815, “Derivatives and Hedging” requires the Company to recognize all of its derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.

 

For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income and reclassified into earnings in the line item associated with the hedged transaction in the period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized immediately in financial income/expense in the statement of operations.

 

v.Equity affiliates

 

The Company recognizes investment in equity affiliates under ASC 323, “Investments – Equity Method and Joint Ventures”. The Company recognizes its proportionate share of the income of equity affiliates. Losses of equity affiliates are recognized to the extent of our investment, advances, financial guarantees and other commitments to provide financial support to the investee. Any losses in excess of this amount are deferred and reduce the amount of future earnings of the equity investee recognized by the Company.

 

w.Discontinued operations

 

Under ASC 205, “Presentation of Financial Statements - Discontinued Operation” when a component of an entity, as defined in ASC 205, has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on its disposal are classified as discontinued operations and the assets and liabilities of such component are classified as assets and liabilities attributed to discontinued operations; that is, provided that the operations, assets and liabilities and cash flows of the component have been eliminated from the Company’s consolidated operations and the Company will no longer have any significant continuing involvement in the operations of the component.

 

F-29 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

x.Accounting Standards still not effective:

 

In May 2014, the FASB issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU is effective for the Company in 2018 using either of two methods: (i) retrospective application of ASU 2014-09 to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective application of ASU 2014-09 with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09 (“Modified Retrospective Adoption Transition Method”).

 

The Company has established an implementation team to analyze the potential impact the standard will have on its consolidated financial statements and related disclosures as well as its business processes, systems and controls. This includes reviewing revenue contracts across all revenue streams and evaluating potential differences that would result from applying the requirements under the standard. The Company will adopt the new standard on January 1, 2018 using the Modified Retrospective Adoption Transition Method.

 

The Company has completed its evaluation of the Standard and expects a change relating to the application of the legacy contingent revenue “cash cap” guidance in ASC 605-25, Revenue Recognition – Multiple-Element Arrangements, that limited the amount of revenue recognized at contract inception. In addition, the Standard requires the deferral and amortization of “incremental” costs incurred to obtain a contract. The primary contract acquisition cost for the Company are sales commissions. Under current GAAP, the Company expenses sales commissions as incurred while under the Standard such costs will be classified as a contract asset and amortized over a period that approximates the timing of revenue recognition on the underlying contracts.

 

Upon initial application the company will record deferred revenues, assets and a cumulative effect to retained earnings in an immaterial amounts on the opening balance sheet at January 1, 2018.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 including interim periods within those fiscal years, but early adoption is permitted. The ASU requires a modified retrospective transition approach and provides certain optional transition relief. The Company is currently evaluating when it will adopt this new standard and the expected impact on its consolidated financial statements and related disclosures.

 

F-30 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). This new standard clarifies certain aspects of the statement of cash flows, including the classification of debt prepayment or debt extinguishment costs or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees and beneficial interests in securitization transactions. This new standard also clarifies that an entity should determine each separately identifiable source of use within the cash receipts and payments on the basis of the nature of the underlying cash flows. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use, the appropriate classification should depend on the activity that is likely to be the predominant source or use of cash flows for the item. ASU 2016-15 will generally be applied retrospectively and is effective for annual periods beginning after December 15, 2017. The Company does not expect that this new guidance will have a material impact on its consolidated financial statements.

 

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 will be effective for the Company in the first quarter of 2018 and early adoption is permitted. The Company does not expect that this new guidance will have a material impact on its consolidated financial statements.

 

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 of the goodwill impairment test, which requires the calculation of the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently evaluating the expected impact of the standard on its consolidated financial statements.

 

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which expands the activities that qualify for hedge accounting and simplifies the rules for reporting hedging transactions. The standard is effective for the Company beginning January 1, 2019. Early adoption is permitted. The Company does not expect that this new guidance will have a material impact on its consolidated financial statements.

 

F-31 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 3:-OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES

 

   December 31, 
   2017   2016 
         
Government authorities   517    583 
Employees   30    35 
Prepaid expenses   1,715    1,677 
Others   603    209 
           
    2,865    2,504 

 

NOTE 4:-INVENTORIES

 

   December 31, 
   2017   2016 
         
Raw materials   3,621    2,510 
Work in process   149    89 
Finished goods   2,781    2,643 
           
    6,551    5,242 

 

F-32 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 5:-PROPERTY AND EQUIPMENT

 

a.Composition:

 

   December 31, 
   2017   2016 
Cost:          
           
Installed products   9,771    9,323 
Computers and electronic equipment   7,353    5,550 
Office furniture and equipment   1,397    1,205 
Motor vehicles   349    339 
Network installation   4,211    3,839 
Leasehold improvements   778    670 
           
    23,859    20,926 
           
Accumulated depreciation:          
           
Installed products   7,061    5,912 
Computers and electronic equipment   4,768    3,981 
Office furniture and equipment   1,290    994 
Motor vehicles   237    175 
Network installation   4,193    3,826 
Leasehold improvements   462    424 
           
    18,011    15,312 
           
Depreciated cost   5,848    5,614 

 

b.Depreciation expenses for the years ended December 31, 2017, 2016 and 2015 were $2,461, $2,133 and $1,674, respectively.

 

c.No Impairment losses recorded for the years ended December 31, 2017, 2016 and 2015.

 

F-33 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 6:-OTHER INTANGIBLE ASSETS, NET

 

a.Other intangible assets, net:

 

   December 31, 
   2017   2016 
Cost:          
Patents   639    639 
Developed technology   4,978    4,978 
Customer related intangible   8,114    7,891 
Others   874    874 
Brand name   2,816    2,793 
           
    17,421    17,175 
Accumulated amortization:          
Patents   639    639 
Developed technology (see note 2h)   4,945    4,901 
Customer related intangible   6,853    6,534 
Others   696    650 
Brand name   2,353    2,273 
           
    15,486    14,997 
           
Amortized cost   1,935    2,178 

 

b.Amortization expenses for the years ended December 31, 2017, 2016 and 2015 were $463, $473 and $538, respectively.

 

c.Estimated amortization expenses for the years ending:

 

December 31,    
     
2018   487 
2019   399 
2020   368 
2021   343 
2022 and after   338 
      
    1,935 

 

F-34 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 7:-GOODWILL

 

The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 are as follows:

 

   December 31, 
   2017   2016 
         
Goodwill, beginning of the year   38,107    31,388 
Additions in respect of acquisitions   -    6,070 
Foreign currency translation adjustments   2,903    649 
           
Goodwill, end of year   41,010    38,107 

 

 

The carrying value of goodwill by reporting unit as of 31 December, 2017 is as follows:

 

Reporting unit  2017 
     
Cellocator   2,534 
SVR (*)   30,245 
Pointer brazil   2,338 
Cielo brazil   5,893 
      
    41,010 

 

The carrying value of goodwill by reporting unit as of 31 December 2016 is as follows:

 

Reporting unit  2016 
     
Cellocator   2,534 
SVR (*)   27,219 
Pointer brazil   2,373 
Cielo brazil   5,981 
      
    38,107 

 

(*) SVR in Israel.

 

The material assumptions used for the income approach for 2017 were:

 

   Cellocator   SVR   Pointer brazil   Cielo 
                 
Discount rate   16%   15%   21%   21%
Growth rate   3%   2%   6%   6%
Years of projected cash flows   5    5    5    5 

 

F-35 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 8:-SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOANS FROM BANKS, SHAREHOLDERS AND OTHERS

 

Classified by currency, linkage terms and annual interest rates, the credit and loans are as follows:

 

   Interest rate  December 31, 
   2017  2016  2017   2016 
   %        
Current maturities of long-term loans from banks, shareholders and others:                
In, or linked to Dollars  Libor+2%  Libor+2%   4,856    4,497 
In other currencies  10%-17%  10%-17%   245    339 
                 
          5,101    4,836 
                 
Unutilized credit lines         10,954    8,714 

 

NOTE 9:-OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

   December 31, 
   2017   2016 
         
Employees and payroll accruals   4,260    3,477 
Government authorities   1,858    817 
Provision for warranty   369    391 
Accrued expenses   2,561    2,100 
Related party   53    53 
Others   16    1 
           
    9,117    6,839 

 

F-36 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 10:-LONG-TERM LOANS FROM BANKS

 

a.Composition:

 

   Interest rate  December 31, 
   2017  2016  2017   2016 
   %        
               
In, or linked to Dollars (see c below )  3.71%  3.71%   9,871    14,356 
In other currencies  10%-17%  10%-17%   245    662 
          10,116    15,018 
                 
Less - current maturities         5,101    4,836 
                 
          5,015    10,182 

 

b.As of December 31, 2017, the aggregate annual maturities of the long-term loans are as follows:

 

2018 (current maturities)   5,101 
2019   2,341 
2020   1,506 
2021 and thereafter   1,168 
      
    10,116 

 

c.In respect of the bank loans provided to the Company for the purpose of funding the the acquisition of Pointer Brazil (see note 1e), the acquisition of Cielo Telecom Ltda. and utilize of 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 debenture 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.

 

F-37 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 10:-LONG-TERM LOANS FROM BANKS (Cont.)

 

3.The ratio of Pointer Telocation Ltd.’s debt (debt to banks, convertible debenture and loans from others was 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 December 31, 2017 the Company is in compliance with the financial covenants of its bank loans.

 

NOTE 11:-DEFERRED TAXES AND OTHER LONG-TERM LIABILITIES

 

   December 31, 
   2017   2016 
         
Provision for warranty   199    213 
Deferred tax   540    666 
Deferred revenues   99    97 
           
    838    976 

 

NOTE 12:-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 obtained bank guarantees in the amount of $407 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 December 31, 2017 is $ 2,444. No royalties were accrued or paid during 2017, 2016 and 2015.

 

F-38 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 12:-COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

 

d.Lease commitments:

 

The Company and its subsidiaries have leased offices, motor vehicles and locations for periods through 2020. Minimum annual rental payments under non-cancelable operating leases are as follows:

 

2018   2,367 
2019   1,848 
2020   504 
2021   271 
      
    4,990 

 

Rent expenses for the years ended December 31, 2017, 2016 and 2015, were $2,325, $2,327 and $2,380, respectively.

 

e.Litigation:

 

1.As of December 31, 2017, several claims were filed against the Company, mainly by customers. The claims are in an amount aggregating to approximately $46. 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 at court and has recorded a provision of $20.

 

2.In August 2014, Pointer Brazil received a notification of lack of payments of $515 of VAT tax (Brazilian ICMS tax) plus $2,161 of interest and penalty totaling $2,676 of infraction, as of December 31, 2017. Company is defending this litigation at court and made a provision of $79; 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 Pointer or Pointer Brazil is required to pay an aggregate amount of approximately US$12.8 million. 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 Value Added Tax. The Company based on the opinion of its legal counsel, in the opinion that no material costs will arise in respect to these claims and did not make any provision once this issue has two precedents that won the same type of litigation.

 

f.Commitments:

 

1.The Company and DBSI Investment Ltd. (“DBSI”), an equity owner in the Company (see Note 16), have entered into a management services agreement pursuant to which DBSI shall provide management services in consideration of annual management fees of $180 for a period of three years commencing on August 1, 2017.

 

F-39 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 12:-COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

 

2.Under the credit facility from the Bank, the Company are required to meet financial covenants (see Note 10c).

 

NOTE 13:-EQUITY

 

a.Ordinary shares:

 

Ordinary shares confer upon their holders voting rights, the right to receive cash dividends and the right to participate in the distribution of excess assets upon liquidation of the Company.

 

b.Issued and outstanding share capital:

 

On March 9 2014, the Company completed a round of financing for the aggregate amount of $ 10.44 million, in consideration for 1.13 million of the Company’s ordinary shares at a price per share of $ 9.25.

 

c.Options:

 

1.In November 2003 the Company adopted an Employee Share Option Plan (2003) (the “2003 Plan”).  The Board of Directors of the Company approves, from time to time, increases to the number of shares reserved under the 2003 Plan. To date, the options under the 2003 Plan are and have been granted in accordance with Section 102 to the Israeli Income Tax Ordinance in the Capital Gains Track, all subject to the provisions of the Israeli Income Tax Ordinance. The grant of options is subject to the approval of the Board of Directors of the Company. The exercise price of the options shall be determined by the Board of Directors in its discretion, provided that the price per share is not less than the nominal value of each share. The options usually vest over a period of four years and are valid for a period of five years from the date of grant. The 2003 Plan terminated at the end of November 2013.

 

2.On November 30, 2011, the Board of Directors approved an amendment to the 2003 Plan whereby in the event a cash dividend is paid out to the Company’s shareholders, the Board of Directors may adjust the exercise price of any options granted prior to the record date of the dividend distribution but not exercised as of such date.

 

F-40 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 13:-EQUITY (Cont.)

 

3.In December 2013 the Company adopted an Employee Share Option Plan (2013) (the “2013 Plan”).  The Board of Directors of the Company approved 376,712 of shares reserved under the 2013 Plan. To date, the options under the 2013 Plan are granted in accordance with Section 102 to the Israeli Income Tax Ordinance in the Capital Gains Track, all subject to the provisions of the Israeli Income Tax Ordinance. The grant of options is subject to the approval of the Board of Directors of the Company. The exercise price of the options shall be determined by the Board of Directors in its discretion, provided that the price per share is not less than the nominal value of each share, or to the extent required pursuant to applicable law or to qualify for favorable tax treatment, not less than 100% of the closing price of the share on the market on the date of grant or average of the closing price within a specific time frame prior to the grant as determined by the Board of Directors or a committee of the Board of Directors. Generally, options vest over a period of four years are valid for a period of seven years from the date of grant.

 

4.A summary of employee option activity under the Company’s Stock Option Plans and RSU’s as of December 31, 2017 and changes during the year ended December 31, 2017 are as follows:

 

   Number of
options
   Weighted-
average
exercise
price
  

Weighted-
average
remaining
contractual
term

(in years)

   Aggregate
intrinsic
value (in
thousands)
 
                 
Outstanding at  January 1, 2017   556,134   $5.15           
Granted   21,500   $0.87           
Exercised   (185,675)  $2.10           
Forfeited   (52,500)  $5.79           
Outstanding at December 31, 2017   339,459   $4.61           
                     
Exercisable at December 31, 2017   131,509   $3.49    2.79   $1,987 
                     
Vested and expected to vest at December 31, 2017   335,300   $4.67    4.44   $1,566 

 

The weighted-average grant-date fair value of options granted during the years ended December 31, 2017 and 2016 was $ 7.8 and $ 5.9, respectively. The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price on the last trading day of the fourth quarter of fiscal 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2017. This amount changes based on the fair market value of the Company’s stock.

 

F-41 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 13:-EQUITY (Cont.)

 

As of December 31, 2017, there was approximately $358 of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company’s stock option plans.

 

That cost is expected to be recognized over a weighted-average period of 1.8 years. Total grant-date fair value of options that vested during the year ended December 31, 2017 was approximately $ 278.

 

5.The following table summarizes information relating to employees’ stock options and RSU’s outstanding as of December 31, 2017, according to exercise prices:

 

Options outstanding   Options exercisable 

Number
outstanding at

December 31,
2017

   Weighted
average
remaining
contractual life
   Weighted
average
exercise
price
  

Number
exercisable at

December 31,
2017

   Weighted
average
exercise
price
 
    Years             
 62,384    0.7   $1.17    62,384   $1.17 
 10,000    0.52   $3.38    10,000   $3.38 
 4,575    3.31   $0.87    -   $0.87 
 28,500    4.16   $6.14    6,000   $6.14 
 212,500    5.52   $5.94    53,125   $5.94 
 21,500    6.32   $0.87    -    - 
                       
 339,459    4.39   $4.61    131,509   $3.49 

 

6.In January 2011, the Board of Directors appointed the Company’s new Chief Executive Officer (CEO) effective as of February 1, 2011. Under the terms of his employment, the new CEO was granted 246,984 options at an exercise price of $7.00, in accordance with 2003 option plan, which will vest over a three year period, according to the vesting dates as stipulated in the employment agreement, commencing upon the effective date of his employment. The new CEO will also be entitled to an annual performance bonus of up to one year’s salary which will be calculated in accordance with certain fixed criteria relating to the company’s growth and profitability in the year preceding payment of the bonus.

 

In lieu of the above-mentioned options, on September 12, 2013 the Shareholders resolved to grant to the Company’s Chief Executive Officer options to purchase 246,984 Ordinary Shares of the Company with an exercise price per share of $3.38, reflecting the average closing price of the share during a 90 day period preceding the date on which the Board of Directors approved the Compensation Policy of the Company, July 8, 2013. The options shall vest over a period of two years, such that at the end of each three month period from the date of the Shareholders resolution, the Chief Executive Officer shall be entitled to one eighth of the options. The exercise price of the options shall be adjusted for stock dividend. The fair value of the new options measured at $599 as of the grant day.

 

7.On August 31, 2011, the Board of Directors resolved to issue to the Company’s Chief Financial Officer, options exercisable to 10,000 of the company’s ordinary shares, pursuant to the plan, which will vest in four equal annual installments over a period of four years, commencing as of date of the grant, at an exercise price of $ 4.80 per share.

 

F-42 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 13:-EQUITY (Cont.)

 

In lieu of the above-mentioned options, on July 8, 2013 the Board of Directors resolved to grant to the Company’s Chief Finance Officer options to purchase 20,000 Ordinary Shares of the Company with an exercise price per share of $3.38, reflecting the average closing price of the share during a 90 day period preceding the date on which the Board of Directors approved the Compensation Policy of the Company, July 8, 2013. The options shall vest over a period of two years, such that at the end of each three month period from the date of the Board of Directors resolution, the Chief Finance Officer shall be entitled to one eighth of the options. The fair value of the new options measured at $31 as of the grant day.

 

8.On July 8, 2013, the Board of Directors resolved to issue to the Company’s employees, options exercisable to 41,000 of the company’s ordinary shares, pursuant to the plan, which will vest in four equal annual installments over a period of four years, commencing as of date of the grant, at an exercise price of $ 3.38 per share.

 

9.In 2014, the Board of directors resolved to issue to the Company’s employees and directors Restricted Stock Units exercisable to 46,300 of the Company’s ordinary shares, pursuant to the 2013 plan, which will vest in four equal installments over a period of four years, commencing as of March 27, 2014, at an exercise price of 3 NIS per share.

 

10.On February 26, 2015, the Board of Directors resolved to issue to certain of the Company’s employees options exercisable for 77,000 of the Company’s ordinary shares pursuant to the 2013 Plan. These options vest in four equal annual installments over a period of four years, commencing as of the date of the grant, at an exercise price of $8.35 per share.

 

11.On July 06, 2016, the Board of Directors resolved to issue to certain of the Company’s employees options exercisable for 250,000 of the Company’s ordinary shares pursuant to the 2013 Plan. These options vest in four equal annual installments over a period of four years, commencing as of the date of the grant, at an exercise price of $5.94 per share.

 

12.In April 2017, the Board of directors resolved to issue to the Company’s directors Restricted Stock Units exercisable to 4,500 of the Company’s ordinary shares, pursuant to the 2013 plan, which will vest in three equal installments over a period of three years, at an exercise price of 3 NIS per share, commencing June 2017. In April 2017, the Board of directors resolved to issue to the Company’s employees Restricted Stock Units exercisable to 17,000 of the Company’s ordinary shares, pursuant to the 2013 plan, which will vest in four equal installments over a period of four years, at an exercise price of 3 NIS per share, commencing April 2017.

 

13.As of December 31, 2017, 346,662 options are available for future grant under the 2013 Plan.

 

F-43 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 13:-EQUITY (Cont.)

 

d.Dividends:

 

Any dividend distributed by the Company will be declared and paid in dollars, subject to statutory limitations. The Company’s policy is not to declare dividends out of tax exempt earnings.

 

NOTE 14:-NET EARNINGS PER SHARE

 

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

 

  

Year ended

December 31,

 
   2017   2016   2015 
Numerator:            
             
Numerator for basic net earnings per share - Net income  $16,518   $3,444   $3,945 
                
Numerator for diluted net earnings per share - Net income  $16,518   $3,444   $3,945 
                
Denominator:               
                
Denominator for basic net earnings per share - weighted-average number of shares outstanding (in thousands)   7,998    7,820    7,725 
                
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands)   8,131    7,938    7,938 
                
Basic net earnings per share  $2.07   $0.45   $0.51 
                
Diluted net earnings per share  $2.03   $0.45   $0.50 

 

NOTE 15:-INCOME TAXES

 

a.Israeli taxation:

 

1.Corporate tax rate:

 

Taxable income of the Israeli companies is subject to the Israeli corporate tax at the rate as follows: 2015 - 26.5%, 2016 - 25% and 2017 – 24%.

 

F-44 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 15:-INCOME TAXES (Cont.)

 

The deferred tax balances included as of December 31, 2015 were calculated according to a tax rate of 26.5%. Following the change in the tax rate in early 2016, the Company recorded a decrease of NIS 1,265 thousand in the balance of deferred tax liabilities and a decrease of NIS 729 thousand in the balance of deferred tax assets. In addition, expenses of NIS 536 thousand (138$) was recorded in profit or loss, in taxes on income.

 

In December 2016, the Israeli Parliament approved the Economic Efficiency Law (Legislative Amendments for Achieving the Budget Targets for the 2017 and 2018 Budget Years), 2016 which reduces the corporate tax rate to 24% (instead of 25%) effective from January 1, 2017 and to 23% effective from January 1, 2018.

 

The deferred tax balances included as of December 31, 2016 are calculated according to the updated tax rate. Following the change in the tax rate, the Company recorded an additional decrease of NIS 1,687 thousand in the balance of deferred tax liabilities and an additional decrease of NIS 1,046 thousand in the balance of deferred tax assets. Furthermore, additional expanses of NIS 640 thousand (166 $) was recorded in profit or loss, in taxes on income.

 

2.Measurement of taxable income:

 

On February 26, 2008, the Israeli Parliament enacted the Income Tax Law (Inflationary Adjustments) (Amendment 20) (Restriction of Effective Period), 2008 (Inflationary Adjustments Amendment). In accordance with the Inflationary Adjustments Amendment, the effective period of the Inflationary Adjustments Law will cease at the end of the 2007 tax year, and as of the 2008 tax year, the provisions of the Law shall no longer apply, other than the transitional provisions intended at preventing distortions in the tax calculations. In accordance with the Inflationary Adjustments Amendment, commencing with the 2008 tax year, income for tax purposes will no longer be adjusted to a real (net of inflation) measurement basis. Furthermore, the depreciation of inflation immune assets and carried forward tax losses will no longer be linked to the Israeli Consumer Price Index.

 

In accordance with ASC 740, the Company has not provided deferred income taxes on the above difference between the reporting currency and the tax basis of assets and liabilities.

 

b.Tax benefits under the Law for the Encouragement of Industry (Taxation), 1969:

 

The Company has the status of an “industrial company”, as defined by this law. According to this status and by virtue of regulations published thereunder, the Company is entitled to claim a deduction of accelerated depreciation on equipment used in industrial activities, as determined in the regulations issued under the Inflationary Law. The Company is also entitled to amortize a patent or rights to use a patent or intellectual property that are used in the enterprise’s development or advancement, to deduct issuance expenses for shares listed for trading, and to file consolidated financial statements under certain conditions.

 

F-45 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 15:-INCOME TAXES (Cont.)

 

c.The Law for the Encouragement of Capital Investments, 1959 (“the Law”):

 

On August 5, 2013, the “Knesset” issued the Law for Changing National Priorities (Legislative Amendments for Achieving Budget Targets for 2013 and 2014), 2013 which consists of Amendment 71 to the Law for the Encouragement of Capital Investments (“The Amendment”). According to the Amendment, the tax rate on preferred income form a preferred enterprise in 2014 and thereafter will be 16% (in development area A - 9%). The Amendment also prescribes that any dividends distributed to individuals or foreign residents from the preferred enterprise’s earnings as above will be subject to tax at a rate of 20%.

 

In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law for the Encouragement of Capital Investments (“the Amendment”) was published. According to the Amendment, a preferred enterprise located in development area A will be subject to a tax rate of 7.5% instead of 9% effective from January 1, 2017 and thereafter (the tax rate applicable to preferred enterprises located in other areas remains at 16%).

 

Income not eligible for Approved Enterprise benefits or Benefited Enterprise benefits is taxed at a regular rate, which was 24% in 2017, 25% in 2016 and 26.5% in 2015.

 

d.Non-Israeli subsidiaries:

 

Non-Israeli subsidiaries are taxed based on tax laws in their respective jurisdictions. The Corporate income tax rate of significant jurisdictions are as follows:

 

   Tax rate 
Mexico   30%
Brazil   34%
Argentina   35%
United States (*)   35%
(*)Federal.

 

e.Income (loss) before taxes on income:

 

  

Year ended

December 31,

 
   2017   2016   2015 
             
Domestic   8,813    5,936    4,189 
Foreign   487    (743)   413 
                
    9,300    5,193    4,602 

 

F-46 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 15:-INCOME TAXES (Cont.)

 

f.Deferred taxes:

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes, and amounts used for income tax purposes. Significant components of the deferred tax liabilities and assets of the Company and its subsidiaries are as follows:

 

   December 31, 
   2017   2016 
         
Reserves and accruals   392    985 
Carryforward tax losses   23,950    23,271 
Other temporary differences   666    423 
           
Total deferred tax assets before valuation allowance   25,008    24,679 
           
Valuation allowance (2)   (9,229)   (17,621)
           
Net deferred tax assets   15,779    7,058 
           
Goodwill and other intangible assets   (6,696)   (5,482)
Other temporary differences   (38)   (809)
           
Total deferred tax liabilities   (6,734)   (6,291)
           
Total deferred tax Assets , net of deferred tax liabilities   9,045    767 

 

2.The Company and its subsidiaries have provided valuation allowances in respect of deferred tax assets resulting from tax losses carryforward and other temporary differences for amounts that are more likely than not be realized in the foreseeable future.

 

F-47 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 15:-INCOME TAXES (Cont.)

 

3.Reconciling items between the statutory tax rate of the Company and the effective tax rate:

 

  

Year ended

December 31,

 
   2017   2016   2015 
Income before taxes, as reported in the consolidated statements of operations   9,300    5,193    4,602 
                
Statutory tax rate   24%   25%   26.5%
                
Theoretical tax expenses  on the above amount at the Israeli statutory tax rate   2,232    1,298    1,219 
Tax adjustment in respect of different tax rates in subsidiaries and changes in tax rates   31    118    21 
Change in valuation allowance in respect of deferred taxes   (8,950)   -    - 
Operating carryforward losses for which a valuation allowance was provided   3    197    17 
Tax adjustment in respect of different tax rates due to approved enterprise   (567)   -    - 
Realization of carryforward tax losses for which a valuation allowance was provided   (404)   40    (191)
Provision for uncertain tax position   127    -    - 
Nondeductible expenses and other permanent differences   307    192    65 
                
    (7,221)   1,845    1,131 

 

g.Carryforward tax losses and deductions:

 

Carryforward tax losses of the Company totaled approximately $90,813 (including a capital loss in the amount of approximately $44,625) as of December 31, 2017. The carryforward tax losses have no expiration date.

 

Carryforward tax losses of Pointer Argentina are approximately $67 as of December 31, 2017. The carryforward tax losses will expire in 2020.

 

Carryforward tax losses of Pointer Mexico totaled approximately $1,813 as of December 31, 2017. The carryforward tax losses will expire from 2018 to 2027.

 

Carryforward tax losses of Pointer Brazil totaled approximately $3,249 as of December 31, 2017. The carryforward tax losses have no expiration date.

 

Carryforward tax losses of Pointer South Africa totaled approximately $7,304 as of December 31, 2017. The carryforward tax losses have no expiration date.

 

F-48 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 15:-INCOME TAXES (Cont.)

 

j.Final tax assessments:

 

Tax assessments for the Company are considered final as of the 2012 tax year.

 

Tax assessments for Pointer Mexico are considered final as of the 2008 tax year.

 

Tax assessments for Pointer Argentina are considered final as of the 2012 tax year.

 

h.Taxes on income (tax benefit) included in the consolidated statements of operations:

 

  

Year ended

December 31,

 
   2017   2016   2015 
             
Current   927    501    348 
Deferred   (8,148)   1,344    783 
                
    (7,221)   1,845    1,131 
                
Domestic   (7,674)   1,768    1,256 
Foreign   453    77    (125)
                
    (7,221)   1,845    1,131 

 

i.Uncertain tax position:

 

As of December 31, 2017 and 2016 balances in respect to ASC 740, “Income Taxes” amounted to $ 127 and $ 0, respectively.

 

A reconciliation of the beginning and ending amount of unrecognized tax positions is as follows:

 

   December 31, 
   2017   2016 
         
Balance at the beginning of the year  $-   $- 
           
Additions based on tax positions taken related to the current year   127    - 
Reductions related to settlement of tax matters and limitation   -    - 
           
Balance at the end of the year  $127   $- 

 

Substantially all the balance of unrecognized tax benefits, if recognized, would reduce the Company’s annual effective tax rate

 

F-49 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 16:-BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

a.Balances with related parties:

 

   December 31, 
   2017   2016 
         
Long Term Loan (*)   973    831 
DBSI (see Note 12f(1))   (53)   (53)

 

(*) On March 29, 2016 the board of directors approved to repay the Capital Note issued by Shagrir Group to the Company on December 2015, in the amount of NIS 8,000. In addition, the board of directors approved to convert NIS 4,100 to Shagrir Group equity and NIS 3,100 Shagrir group will issue as Capital Note for 5 years without any interest.

 

b.Transactions with related parties:

 

  

Year ended

December 31,

 
   2017   2016   2015 
             
Management fees to DBSI (see Note 12f(1))   180    180    180 
Sales to related parties   254    106    52 
Purchase from related parties   682    847    145 

 

NOTE 17:-SEGMENT, CUSTOMER AND GEOGRAPHIC INFORMATION

 

a.General:

 

Until December 31, 2015 the Company had three segments: Cellocator, MRM and RSA.

 

During 2016 Pointer spun off its Israeli subsidiary, Shagrir Group Vehicle Services Ltd, therefore Segments reporting was retroactively adjusted to reflect those adjustments. As of December 31, 2016 The Company has two reportable segments: the Cellocator segment and the MRM segment

 

The Company applies ASC 280, “Segment Reporting Disclosures”. The Company evaluates performance and allocates resources based on operating profit or loss.

 

F-50 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 17:-SEGMENT, CUSTOMER AND GEOGRAPHIC INFORMATION (Cont.)

 

b.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 
                     
Expenditure for assets   197    3,069    -    3,266 

 

The following presents segment results of operations for the year ended December 31, 2016:

 

  

Cellocator

segment

  

MRM

segment

  

 

Elimination

   Total 
                 
Segments revenues   22,707    49,620    (7,974)   64,353 
                     
Segments operating profit   1,660    4,708    (120)   6,248 
                     
Segments tangible and intangible assets   8,359    35,392    2,148    45,899 
                     
Depreciation, amortization and impairment expenses   321    2,295    -    2,616 
                     
Expenditure for assets   135    2,264    -    2,399 

 

The following presents segment results of operations for the year ended December 31, 2015:

 

  

Cellocator

segment

   MRM segment  

 

Elimination

   Total 
                 
Segments revenues   19,489    47,938    (6,860)   60,567 
                     
Segments operating profit   1,000    3,848    493    5,341 
                     
Segments tangible and intangible assets   8,469    24,836    1,804    35,109 
                     
Depreciation, amortization and impairment expenses   338    3,067    -    3,405 
                     
Expenditure for assets   149    1,647    -    1,796 

 

F-51 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 17:-SEGMENT, CUSTOMER AND GEOGRAPHIC INFORMATION (Cont.)

 

c.Summary information about geographical areas:

 

     

Year ended

December 31,

 
      2017   2016   2015 
1.  Revenues *):            
  Israel   35,230    29,438    26,487 
  Latin America (mainly Mexico)   9,603    7,009    7,601 
   Brazil   14,248    9,142    7,173 
   Argentina   4,607    3,995    4,616 
   Europe   4,413    4,501    5,271 
   Other   10,054    10,268    9,419 
                   
       78,155    64,353    60,567 

 

*) Revenues are attributed to geographic areas based on the location of the end customers.

 

      Year ended
December 31,
 
      2017   2016   2015 
2.  Long-lived assets:               
  Israel   1,999    1,248    978 
  Argentina   614    627    539 
   Mexico   358    298    229 
  Brazil   2,398    2,949    1,090 
   South Africa   463    489    436 
   Other   16    3    6 
                   
       5,848    5,614    3,278 

 

d.In 2017, 2016 and 2015, none of our customer accounted above 10% of the Company’s revenues.

 

NOTE 18:-DISCONTINUED OPERATION

 

a.Below is data of the operating results attributed to the discontinued operation:

 

b.

   Year ended December 31, 
   2016   2015 
         
Revenue from sales   18,248    40,498 
Cost of sales   15,260    35,427 
Gross profit   2,988    5,071 
           
Selling, general and administrative expenses   2,531    4,345 
Operating income   457    726 
           
Financial expenses,  net   54    139 
Other income, net   -    (13)
Taxes on income   249    273 
Income from discontinued operation   154    327 

 

F-52 

 

 

POINTER TELOCATION LTD. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

 

NOTE 18:-DISCONTINUED OPERATION (Cont.)

 

c.Below is data of the net cash flows provided by (used in) the discontinued operation:

 

   Year ended December 31, 
   2016   2015 
         
Operating activities   116    (2,111)
           
Investing activities   (1,187)   746 
           
Financing activities   251    (41)

 

NOTE 19:-SELECTED STATEMENTS OF OPERATIONS DATA

 

     

Year ended

December 31,

 
      2017   2016   2015 
a.  Financial expenses, net:               
                   
  Income:               
  Interest on short-term bank deposits   8    1    78 
  Interest on long-term loans to affiliate   51    56    267 
   Foreign currency transaction adjustments   205    130    374 
   Other   47    37    9 
       311    224    728 
   Expenses:               
   Bank charges and interest expenses   1,223    985    942 
   Foreign currency transaction adjustments   -    194    166 
   Interest on long-term loans to others   92    70    318 
   Other   -    21    31 
       1,315    1,270    1,457 
                   
       1,004    1,046    729 

 

NOTE 20:-SUBSEQUENT EVENTS

 

a.On February 27, 2018, the Board of Directors resolved to issue to certain of the Company’s employees RSU’s exercisable to 89,000 of the Company’s ordinary shares, pursuant to the plan. The RSU’s will vest in four equal annual installments over a period of four years, commencing as of date of the grant, at an exercise price of NIS 3.0 per share.

 

b.On March 27, 2018, the Board of Directors resolved to issue to the Company’s CEO RSU’s exercisable to 120,000 of the Company’s ordinary shares, pursuant to the plan. The RSU’s will vest in four equal annual installments over a period of four years, commencing as of date of the grant, at an exercise price of NIS 3.0 per share. The grant is subject to the approval of the general shareholders meeting.

 

  - - - - - - - - - - - - - - - - - -

 

F-53 

EX-12.1 2 tv489749_ex12-1.htm EXHIBIT 12.1

 

EXHIBIT 12.1

 

CERTIFICATIONS

I, David Mahlab, certify that:

 

1.    I have reviewed this annual report on Form 20-F/A of Pointer Telocation Ltd.;

 

2.    Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

 

3.    Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this annual report;

 

4.    The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

 

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;  

 

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)  Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting.

 

5.    The company's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of company's board of directors (or persons performing the equivalent functions):

 

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

 

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

 

April 30, 2018

 
  /s/ David Mahlab
  David Mahlab
  Chief Executive Officer

 

 

EX-12.2 3 tv489749_ex12-2.htm EXHIBIT 12.2

 

EXHIBIT 12.2

 

CERTIFICATIONS

I, Yaniv Dorani, certify that:

 

1.    I have reviewed this annual report on Form 20-F/A of Pointer Telocation Ltd.;

 

2.    Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

 

3.    Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this annual report;

 

4.    The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

 

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;  

 

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)  Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting.

 

5.    The company's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of company's board of directors (or persons performing the equivalent functions):

 

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

 

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

 

April 30, 2018

 
  /s/ Yaniv Dorani
  Yaniv Dorani
  Chief Financial Officer

 

 

EX-13.1 4 tv489749_ex13-1.htm EXHIBIT 13.1

 

EXHIBIT 13.1

 

CERTIFICATION PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of Pointer Telocation Ltd. (the "Company") on Form 20-F/A for the year ended December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, David Mahlab, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

1.the Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

 

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

  

April 30, 2018

/s/ David Mahlab
  David Mahlab
  Chief Executive Officer

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

EX-13.2 5 tv489749_ex13-2.htm EXHIBIT 13.2

 

EXHIBIT 13.2

 

CERTIFICATION PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of Pointer Telocation, Ltd. (the "Company") on Form 20-F/A for the year ended December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Yaniv Dorani, CFO of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

1.the Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

 

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

April 30, 2018

/s/ Yaniv Dorani
  Yaniv Dorani
 

Chief Financial Officer 

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

EX-14.1 6 tv489749_ex14-1.htm EXHIBIT 14.1

EXHIBIT 14.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the reference to our firm under the caption "Experts" in the Registration Statements on Form F-3 (No. 333-111019, No. 333-119998, No. 333-126257, No. 333-143399, No. 333-167144, No. 333-187384, No. 333-194483, No. 333-199535 and No. 333-212326) and in the related Prospectuses and on Form S-8 (No. 333-113420, No. 333-118897, No. 333-139717, No. 333-141306, No. 333-173155, No. 333-214775 and No. 333-217655) pertaining to the Employees' Share Option Plan of Pointer Telocation Ltd. and to the incorporation by reference therein of our report dated March 27, 2018, with respect to the consolidated financial statements of Pointer Telocation Ltd. included in its amended Annual Report on Form 20-F/A for the year ended December 31, 2017, filed with the Securities and Exchange Commission.

 

 

 

/s/ Kost, Forer, Gabbay & Kasierer

Kost, Forer, Gabbay & Kasierer

A Member of Ernst & Young Global

Tel-Aviv, Israel

April 30, 2018  

 


EX-14.2 7 tv489749_ex14-2.htm EXHIBIT 14.2

EXHIBIT 14.2

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We have issued our report dated February 8, 2018, with respect to the financial statements of Pointer Argentina S.A. for the years ended December 31, 2017, 2016 and 2015; such report has been referenced in the amended Annual Report of Pointer Telocation Ltd., on Form 20-F/A for the year ended December 31, 2017. We hereby consent to the incorporation by reference of said report in the Registration Statements of Pointer Telocation Ltd., on Forms F-3 (No. 333-111019, No. 333-119998, No. 333-126257, No. 333-143399, No. 333-167144, No. 333-187384, No. 333-194483, No. 333-199535 and No. 333-212326) and on Forms S-8 (No. 333-113420, No. 333-118897, No. 333-139717, No. 333-141306, No. 333-173155, No. 333-214775 and No. 333-217655) filed with the Securities and Exchange Commission.

 

 

 

/s/ GRANT THORNTON ARGENTINA S.C.

GRANT THORNTON ARGENTINA S.C. 

Buenos Aires, Argentina

April 30, 2018 

 

EX-14.3 8 tv489749_ex14-3.htm EXHIBIT 14.3

EXHIBIT 14.3

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We have issued our report dated February 9, 2018, with respect to the financial statements of Pointer Do Brasil Comercial LTDA., for the years ended December 31, 2017, 2016 and 2015; such report has been referenced in the amended Annual Report of Pointer Telocation Ltd., on Form 20-F/A for the year ended December 31, 2017. We hereby consent to the incorporation by reference of said report in the Registration Statements of Pointer Telocation Ltd., on Forms F-3 (No. 333-111019, No. 333-119998, No. 333-126257, No. 333-143399, No. 333-167144, No. 333-187384, No. 333-194483, No. 333-199535 and No. 333-212326) and on Forms S-8 (No. 333-113420, No. 333-118897, No. 333-139717, No. 333-141306, No. 333-173155, No. 333-214775 and No. 333-217655) filed with the Securities and Exchange Commission

 

 

 

/s/ Baker Tilly Brasil Norte SS Auditors Independentes - EPP

Baker Tilly Brasil Norte SS Auditors Independentes - EPP

Vicente Luis Reis Lauria

 

São Paulo, Brazil, April 30, 2018

 

 

EX-14.4 9 tv489749_ex14-4.htm EXHIBIT 14.4

EXHIBIT 14.4

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We have issued our report dated March 26, 2018, with respect to the financial statements of POINTER SA (PTY) LTD. for the years ended December 31, 2017, 2016 and 2015; such report has been referenced in the amended Annual Report of Pointer Telocation Ltd., on Form 20-F/A for the year ended December 31, 2017. We hereby consent to the incorporation by reference of said report in the Registration Statements of Pointer Telocation Ltd., on Forms F-3 (No. 333-111019, No. 333-119998, No. 333-126257, No. 333-143399, No. 333-167144, No. 333-187384, No. 333-194483, No. 333-199535 and No. 333-212326)) and on Forms S-8 (No. 333-113420, No. 333-118897, No. 333-139717, No. 333-141306, No. 333-173155, No. 333-214775 and No. 333-217655) filed with the Securities and Exchange Commission.

 

 

 

/s/ Mazars Certified Public Accountants

Mazars Certified Public Accountants

 

Cape Town, South Africa, April 30, 2018

 

 

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ASU 2016-09 permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for stock - based compensation: to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. Upon adoption of ASU 2016-09, the Company elected to change its accounting policy to account for forfeitures as they occur. 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The most significant assumptions are employed in estimates used in determining values of intangible assets, tax assets and tax liabilities, warranty costs and stock-based compensation costs. 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TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">(180</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">)</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; 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COLOR: black"> <div>603</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>209</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>2,865</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>2,504</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; 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COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 64%; COLOR: black"> <div>Government authorities</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black"> <div>517</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black"> <div>583</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Employees</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>30</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>35</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Prepaid expenses</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>1,715</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>1,677</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>Others</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>603</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>209</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>2,865</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>2,504</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: -0.75in; MARGIN: 0px 0px 0px 0.75in; FONT: bold 10pt Times New Roman, Times, Serif; font-size-adjust: none; 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TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); 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COLOR: black"> <div>149</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>89</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; COLOR: black"> <div>Finished goods</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>2,781</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>2,643</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>6,551</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>5,242</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0pt; 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COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="6"> <div>December 31,</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 64%; COLOR: black"> <div>Raw materials</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black"> <div>3,621</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black"> <div>2,510</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; COLOR: black"> <div>Work in process</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>149</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>89</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; COLOR: black"> <div>Finished goods</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>2,781</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>2,643</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>6,551</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>5,242</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 0.75in"> <div><font style="COLOR: black">NOTE 5:-</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="COLOR: black">PR<font style="FONT-WEIGHT: normal">O</font>PERTY AND EQUIPMENT</font></div> </td> </tr> </table> <div style="CLEAR:both; 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TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="6"> <div>December 31,</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0in; COLOR: black"> <div>Cost:</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 8.8pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 8.8pt; WIDTH: 64%; COLOR: black"> <div>Installed products</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black"> <div>9,771</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black"> <div>9,323</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 8.8pt; COLOR: black"> <div>Computers and electronic equipment</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>7,353</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>5,550</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -5.95pt; PADDING-LEFT: 14.75pt; COLOR: black"> <div>Office furniture and equipment</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>1,397</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>1,205</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 8.8pt; COLOR: black"> <div>Motor vehicles</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>349</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; 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COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 8.8pt; WIDTH: 64%; COLOR: black"> <div>Installed products</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black"> <div>9,771</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; 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COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>23,859</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>20,926</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; 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COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 8.8pt; COLOR: black"> <div>Installed products</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>7,061</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>5,912</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); 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COLOR: black"> <div>1,290</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>994</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 8.8pt; COLOR: black"> <div>Motor vehicles</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>237</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>175</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; 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TEXT-ALIGN: right; COLOR: black"> <div>462</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>424</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>18,011</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>15,312</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 0in; COLOR: black"> <div>Depreciated cost</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>5,848</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>5,614</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; 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COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.125in; WIDTH: 64%; COLOR: black"> <div>Patents</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black"> <div>639</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black"> <div>639</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; 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TEXT-ALIGN: right; COLOR: black"> <div>1,935</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 0.75in"> <div><font style="COLOR: black">NOTE 7:-</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="COLOR: black">GOODWILL</font></div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0px; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <div style="CLEAR:both; 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WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black"> <div>31,388</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Additions in respect of acquisitions</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>-</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>6,070</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; 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COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Goodwill, end of year</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>41,010</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; 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COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Goodwill, end of year</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>41,010</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>38,107</div> </td> <td style="TEXT-ALIGN: left; 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font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <table style="WIDTH: 88%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.75in; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="3"> <div>Interest rate</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="6"> <div>December 31,</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="3"> <div>%</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.125in; PADDING-LEFT: 0.125in; COLOR: black"> <div>Current maturities of long-term loans from banks, shareholders and others:</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.125in; WIDTH: 40%; COLOR: black"> <div>In, or linked to Dollars</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; WIDTH: 14%; COLOR: black"> <div>Libor+2%</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; WIDTH: 14%; COLOR: black"> <div>Libor+2%</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>4,856</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>4,497</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>In other currencies</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>10%-17%</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>10%-17%</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>245</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>339</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>5,101</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>4,836</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Unutilized credit lines</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>10,954</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>8,714</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 0.75in"> <div><font style="COLOR: black">NOTE 8:-</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="COLOR: black">SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOANS FROM BANKS, SHAREHOLDERS AND OTHERS</font></div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0px; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0px 0px 0px 0.75in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">Classified by currency, linkage terms and annual interest rates, the credit and loans are as follows:</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0px 0px 0px 0.75in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <table style="WIDTH: 88%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.75in; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="3"> <div>Interest rate</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="6"> <div>December 31,</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="3"> <div>%</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.125in; PADDING-LEFT: 0.125in; COLOR: black"> <div>Current maturities of long-term loans from banks, shareholders and others:</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.125in; WIDTH: 40%; COLOR: black"> <div>In, or linked to Dollars</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; WIDTH: 14%; COLOR: black"> <div>Libor+2%</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; WIDTH: 14%; COLOR: black"> <div>Libor+2%</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>4,856</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>4,497</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>In other currencies</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>10%-17%</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>10%-17%</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>245</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>339</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>5,101</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>4,836</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Unutilized credit lines</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 2.85pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>10,954</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>8,714</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 0.75in"> <div><font style="COLOR: black">NOTE 9:-</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="COLOR: black">OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES</font></div> </td> </tr> </table> <div style="CLEAR:both; 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TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 70%; COLOR: black"> <div>Employees and payroll accruals</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>4,260</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>3,477</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Government authorities</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>1,858</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>817</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Provision for warranty</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>369</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>391</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Accrued expenses</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>2,561</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>2,100</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Related party</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>53</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>53</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>Others</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>16</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>1</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>9,117</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>6,839</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: -0.75in; MARGIN: 0px 0px 0px 0.75in; FONT: bold 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <table style="WIDTH: 88%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.75in; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="6"> <div>December 31,</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 70%; COLOR: black"> <div>Employees and payroll accruals</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>4,260</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>3,477</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Government authorities</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; 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COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -8.5pt; PADDING-LEFT: 8.5pt; COLOR: black"> <div>Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands)</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>8,131</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; 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COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 1.4pt; COLOR: black"> <div>Basic net earnings per share</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>2.07</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>0.45</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>0.51</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 1.4pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -8.5pt; PADDING-LEFT: 8.5pt; COLOR: black"> <div>Diluted net earnings per share</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>2.03</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>0.45</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>0.50</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 0.75in"> <div><font style="COLOR: black">NOTE 14:-</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="COLOR: black">NET EARNINGS PER SHARE</font></div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0px; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0in; MARGIN: 0px 0px 0px 0.75in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">The following table sets forth the computation of basic and diluted net earnings per share:</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0in; MARGIN: 0px 0px 0px 0.75in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <table style="WIDTH: 90%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.5in; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black" colspan="10"> <div style="CLEAR:both;MARGIN: 0px 0px 0px 2.85pt; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="center"><font style="COLOR: black"><b>Year ended</b></font></div> <div style="CLEAR:both;MARGIN: 0px 0px 0px 2.85pt; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="center"><font style="COLOR: black"><b>December 31,</b></font></div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2015</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>Numerator:</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; TEXT-INDENT: -8.5pt; PADDING-LEFT: 8.5pt; WIDTH: 55%; COLOR: black"> <div>Numerator for basic net earnings per share - Net income</div> </td> <td style="PADDING-BOTTOM: 1pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>16,518</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>3,444</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>3,945</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 1.4pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -8.5pt; PADDING-LEFT: 8.5pt; COLOR: black"> <div>Numerator for diluted net earnings per share - Net income</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>16,518</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>3,444</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>3,945</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 1.4pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -8.5pt; PADDING-LEFT: 8.5pt; COLOR: black"> <div>Denominator:</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 1.4pt; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); 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Following the change in the tax rate in early 2016, the Company recorded a decrease of NIS&#160;1,265 thousand in the balance of deferred tax liabilities and a decrease of NIS&#160;729 thousand in the balance of deferred tax assets. 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Following the change in the tax rate, the Company recorded an additional decrease of NIS&#160;1,687 thousand in the balance of deferred tax liabilities and an additional decrease of NIS&#160;1,046 thousand in the balance of deferred tax assets. Furthermore, additional expanses of NIS&#160;640 thousand (166 $) was recorded in profit or loss, in taxes on income.</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: -28.35pt; MARGIN: 0px 0px 0px 1.75in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1.25in"></td> <td style="WIDTH: 0.5in"> <div><font style="COLOR: black">2.</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="COLOR: black">Measurement of taxable income:</font></div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0in; MARGIN: 0px 0px 0px 1.75in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0in; MARGIN: 0px 0px 0px 1.75in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">On February 26, 2008, the Israeli Parliament enacted the Income Tax Law (Inflationary Adjustments) (Amendment 20) (Restriction of Effective Period), 2008 (Inflationary Adjustments Amendment). In accordance with the Inflationary Adjustments Amendment, the effective period of the Inflationary Adjustments Law will cease at the end of the 2007 tax year, and as of the 2008 tax year, the provisions of the Law shall no longer apply, other than the transitional provisions intended at preventing distortions in the tax calculations. In accordance with the Inflationary Adjustments Amendment, commencing with the 2008 tax year, income for tax purposes will no longer be adjusted to a real (net of inflation) measurement basis. 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According to this status and by virtue of regulations published thereunder, the Company is entitled to claim a deduction of accelerated depreciation on equipment used in industrial activities, as determined in the regulations issued under the Inflationary Law. 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According to the Amendment, the tax rate on preferred income form a preferred enterprise in 2014 and thereafter will be 16% (in development area A - 9%). 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COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Total deferred tax assets before valuation allowance</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>25,008</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>24,679</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>Valuation allowance (2)</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>(9,229</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>)</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>(17,621</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>)</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Net deferred tax assets</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>15,779</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>7,058</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Goodwill and other intangible assets</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; 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COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>(809</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>)</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Total deferred tax liabilities</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>(6,734</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>)</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>(6,291</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>)</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Total deferred tax Assets , net of deferred tax liabilities</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>9,045</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>767</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: -28.35pt; MARGIN: 0px 0px 0px 1.75in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1.25in"></td> <td style="WIDTH: 0.5in"> <div><font style="COLOR: black">2.</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="COLOR: black">The Company and its subsidiaries have provided valuation allowances in respect of deferred tax assets resulting from tax losses carryforward and other temporary differences for amounts that are more likely than not be realized in the foreseeable future.</font></div> </td> </tr> </table> &#160; 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TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black" colspan="10"> <div style="CLEAR:both;MARGIN: 0px 0px 0px 2.85pt; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="center"><font style="COLOR: black"><b>Year ended</b></font></div> <div style="CLEAR:both;MARGIN: 0px 0px 0px 2.85pt; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="center"><font style="COLOR: black"><b>December 31,</b></font></div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; 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WIDTH: 55%; COLOR: black"> <div>Income before taxes, as reported in the consolidated statements of operations</div> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>9,300</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>5,193</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>4,602</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.125in; PADDING-LEFT: 0.125in; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; 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COLOR: black"> <div>23,950</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>23,271</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>Other temporary differences</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>666</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>423</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Total deferred tax assets before valuation allowance</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>25,008</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>24,679</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>Valuation allowance (2)</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>(9,229</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>)</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>(17,621</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>)</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Net deferred tax assets</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>15,779</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>7,058</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Goodwill and other intangible assets</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>(6,696</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>)</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>(5,482</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>)</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>Other temporary differences</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>(38</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>)</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>(809</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>)</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Total deferred tax liabilities</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>(6,734</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>)</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>(6,291</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>)</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Total deferred tax Assets , net of deferred tax liabilities</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>9,045</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>767</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> Reconciling items between the statutory tax rate of the Company and the effective tax rate: <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"> &#160;</div> <table style="WIDTH: 77%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1.5in; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black" colspan="10"> <div style="CLEAR:both;MARGIN: 0px 0px 0px 2.85pt; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="center"><font style="COLOR: black"><b>Year ended</b></font></div> <div style="CLEAR:both;MARGIN: 0px 0px 0px 2.85pt; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="center"><font style="COLOR: black"><b>December 31,</b></font></div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2015</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.125in; PADDING-LEFT: 0.125in; WIDTH: 55%; COLOR: black"> <div>Income before taxes, as reported in the consolidated statements of operations</div> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>9,300</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>5,193</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>4,602</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.125in; PADDING-LEFT: 0.125in; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.125in; PADDING-LEFT: 0.125in; COLOR: black"> <div>Statutory tax rate</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>24</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>%</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>25</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>%</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>26.5</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>%</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.125in; PADDING-LEFT: 0.125in; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.125in; PADDING-LEFT: 0.125in; COLOR: black"> <div>Theoretical tax expenses&#160;&#160;on the above amount at the Israeli statutory tax rate</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>2,232</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>1,298</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>1,219</div> </td> <td style="TEXT-ALIGN: left; 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TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 55%; COLOR: black"> <div>Current</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; 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TEXT-ALIGN: right; COLOR: black"> <div>(8,148</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>)</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>1,344</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>783</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>(7,221</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>)</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>1,845</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>1,131</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Domestic</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>(7,674</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>)</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>1,768</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>1,256</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>Foreign</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>453</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>77</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>(125</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>)</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>(7,221</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>)</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>1,845</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>1,131</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0in; MARGIN: 0px 0px 0px 1.25in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0in; MARGIN: 0px 0px 0px 1.25in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0in; MARGIN: 0px 0px 0px 1.25in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">A reconciliation of the beginning and ending amount of unrecognized tax positions is as follows:</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0in; MARGIN: 0px 0px 0px 1.25in; 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BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: right; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>Balance at the beginning of the year</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>-</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>-</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 70%; COLOR: black"> <div>Additions based on tax positions taken related to the current year</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>127</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>-</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>Reductions related to settlement of tax matters and limitation</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>-</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black"> <div>-</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Balance at the end of the year</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>127</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>-</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> </table> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt; font-size-adjust: none; font-stretch: normal" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 0.75in"> <div><font style="COLOR: black">NOTE 16:-</font></div> </td> <td style="TEXT-ALIGN: justify"> <div><font style="COLOR: black">BALANCES AND TRANSACTIONS WITH RELATED PARTIES</font></div> </td> </tr> </table> <div style="CLEAR:both; 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TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="6"> <div>December 31,</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 70%; COLOR: black"> <div>Long Term Loan (*)</div> </td> <td style="WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right; 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TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>(53</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>)</div> </td> </tr> </table> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 1.25in; MARGIN: 0px; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">&#160;</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0px 0px 0px 1.25in; FONT: 10pt Times New Roman, Times, Serif; font-size-adjust: none; font-stretch: normal" align="justify"><font style="COLOR: black">(*) On March 29, 2016 the board of directors approved to repay the Capital Note issued by Shagrir Group to the Company on December 2015, in the amount of NIS 8,000. 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TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2017</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2016</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2"> <div>2015</div> </td> <td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: left; COLOR: black" colspan="2"> <div>&#160;</div> </td> <td style="COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 55%; COLOR: black"> <div>Management fees to DBSI (see Note&#160;12f(1))</div> </td> <td style="PADDING-BOTTOM: 2.5pt; 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TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div>180</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Sales to related parties</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>254</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>106</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>52</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>Purchase from related parties</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div>682</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; 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TEXT-ALIGN: right; COLOR: black" colspan="2"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; WIDTH: 40%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">Segments revenues</div> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">24,364</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">62,208</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 12%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">(8,417</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">)</div> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; 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COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">Segments operating profit</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">2,742</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">7,569</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">(2</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">)</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">10,309</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; 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TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">9,026</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">37,799</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; 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COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; 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COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">2,780</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">-</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">2,924</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: right; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> <td style="TEXT-ALIGN: left; COLOR: black"> <div style="CLEAR:both;CLEAR: both">&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,238,255); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; 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(the &#34;Company&#34; or &#34;we&#34;) with the Securities and Exchange Commission (the &#34;Commission&#34;) on March 27, 2018 (the &#34;Form 20-F&#34;), is being filed solely to correct an inadvertent omission of the audit report of Mazars Certified Public Accountants, the auditor of our POINTER SA (PTY) LTD. subsidiary, in the electronic version of the Form 20-F. Therefore, we are filing this Amendment to our Form 20-F to include the audit report of Mazars Certified Public Accountants together with the consolidated financial statements included in Item 18 of our Form 20-F. In addition, we are (i) filing the amended consents of our auditors as Exhibits 14.1, 14.2, 14.3 and 14.4 and (ii) filing or furnishing, as indicated herein, as Exhibits 12.1, 12.2, 13.1 and 13.2, currently dated certifications. This Amendment speaks as of the date of the initial filing of the Form 20-F and, other than as described above, this Amendment does not, and does not purport to, amend, update or restate any other information or disclosure included in the Form 20-F, and does not purport to, reflect any events that have occurred after the date of the initial filing of the Form 20-F. SVR in Israel. On March 29, 2016 the board of directors approved to repay the Capital Note issued By Shagrir Group to the Company on December 2015, in the amount of NIS 8,000. In addition, the board of directors approved to convert NIS 4,100 to Shagrir Group equity and NIS 3,100 Shagrir group will issue as Capital Note for 5 years without any interest. Federal. The Company and its subsidiaries have provided valuation allowances in respect of deferred tax assets resulting from tax losses carryforward and other temporary differences for amounts that are more likely than not be realized in the foreseeable future. Revenues are attributed to geographic areas based on the location of the end customers. 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Document And Entity Information
12 Months Ended
Dec. 31, 2017
shares
Document Information [Line Items]  
Document Type 20-F/A
Amendment Flag true
Document Period End Date Dec. 31, 2017
Document Fiscal Year Focus 2017
Document Fiscal Period Focus FY
Entity Registrant Name Pointer Telocation Ltd
Entity Central Index Key 0000920532
Current Fiscal Year End Date --12-31
Entity Well-known Seasoned Issuer No
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Filer Category Non-accelerated Filer
Trading Symbol PNTR
Entity Common Stock, Shares Outstanding 8,059,094
Amendment Description This Amendment No. 1 on Form 20-F/A (this "Amendment") to the annual report on Form 20-F for the fiscal year ended December 31, 2017, as filed by Pointer Telocation Ltd. (the "Company" or "we") with the Securities and Exchange Commission (the "Commission") on March 27, 2018 (the "Form 20-F"), is being filed solely to correct an inadvertent omission of the audit report of Mazars Certified Public Accountants, the auditor of our POINTER SA (PTY) LTD. subsidiary, in the electronic version of the Form 20-F. Therefore, we are filing this Amendment to our Form 20-F to include the audit report of Mazars Certified Public Accountants together with the consolidated financial statements included in Item 18 of our Form 20-F. In addition, we are (i) filing the amended consents of our auditors as Exhibits 14.1, 14.2, 14.3 and 14.4 and (ii) filing or furnishing, as indicated herein, as Exhibits 12.1, 12.2, 13.1 and 13.2, currently dated certifications. This Amendment speaks as of the date of the initial filing of the Form 20-F and, other than as described above, this Amendment does not, and does not purport to, amend, update or restate any other information or disclosure included in the Form 20-F, and does not purport to, reflect any events that have occurred after the date of the initial filing of the Form 20-F.
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CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
CURRENT ASSETS:    
Cash and cash equivalents $ 7,375 $ 6,066
Trade receivables (net of allowance for doubtful accounts of $ 1,127 and $ 1,281 at December 31, 2017 and 2016, respectively) 13,660 11,464
Other accounts receivable and prepaid expenses (Note 3) 2,865 2,504
Inventories (Note 4) 6,551 5,242
Total current assets 30,451 25,276
LONG-TERM ASSETS:    
Long-term loan to related party 973 831
Long-term accounts receivable 1,116 564
Severance pay fund (Note 2r) 3,546 2,878
Property and equipment, net (Note 5) 5,848 5,614
Other intangible assets, net (Note 6) 1,935 2,178
Goodwill (Note 7) 41,010 38,107
Deferred tax asset (Note 15) 9,585 1,433
Total long-term assets 64,013 51,605
Total assets 94,464 76,881
CURRENT LIABILITIES:    
Short-term bank credit and current maturities of long-term loans (Note 8) 5,101 4,836
Trade payables 6,204 7,116
Deferred revenues and customer advances 777 1,037
Other accounts payable and accrued expenses (Note 9) 9,117 6,839
Total current liabilities 21,199 19,828
LONG-TERM LIABILITIES:    
Long-term loans from banks (Note 10) 5,015 10,182
Deferred taxes and other long-term liabilities (Note 11) 838 976
Accrued severance pay (Note 2r) 3,996 3,206
Total long term liabilities 9,849 14,364
COMMITMENTS AND CONTINGENT LIABILITIES (Note 12)
Pointer Telocation Ltd's shareholders' equity:    
Share capital (Note 13) Ordinary shares of NIS 3 par value - Authorized: 16,000,000 shares at December 31, 2017 and 2016; Issued and outstanding: 8,059,094 and 7,873,919 shares at December 31, 2017 and 2016, respectively 5,995 5,837
Additional paid-in capital 129,076 128,438
Accumulated other comprehensive loss (2,340) (5,633)
Accumulated deficit (69,597) (86,115)
Total Pointer Telocation Ltd's shareholders' equity 63,134 42,527
Non-controlling interest 282 162
Total equity 63,416 42,689
Total liabilities and equity $ 94,464 $ 76,881
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CONSOLIDATED BALANCE SHEETS (Parenthetical)
$ in Thousands
Dec. 31, 2017
USD ($)
shares
Dec. 31, 2017
₪ / shares
Dec. 31, 2016
USD ($)
shares
Dec. 31, 2016
₪ / shares
Allowance for Doubtful Accounts Receivable, Current | $ $ 1,127   $ 1,281  
Ordinary shares, Par or Stated Value Per Share (in dollars per share) | ₪ / shares   ₪ 3   ₪ 3
Ordinary shares, Shares Authorized 16,000,000   16,000,000  
Ordinary shares, Shares, Issued 8,059,094   7,873,919  
Ordinary shares, Shares, Outstanding 8,059,094   7,873,919  
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Revenues (Note 17c):      
Products $ 26,182 $ 22,784 $ 22,266
Services 51,973 41,569 38,301
Total revenues [1] 78,155 64,353 60,567
Cost of revenues:      
Products 16,073 13,904 13,435
Services 21,914 18,672 17,879
Total cost of revenues 37,987 32,576 31,314
Gross profit 40,168 31,777 29,253
Operating expenses:      
Research and development 4,051 3,669 3,409
Selling and marketing 14,038 11,774 10,468
General and administrative 11,275 9,004 8,580
Amortization of intangible assets 463 473 538
Acquisition related costs 32 609 0
Impairment of intangible and tangible assets 0 0 917
Total operating expenses 29,859 25,529 23,912
Operating income 10,309 6,248 5,341
Financial expenses, net (Note 19) 1,004 1,046 729
Other expenses, net 5 9 10
Income before taxes on income 9,300 5,193 4,602
Tax expenses (income), (Note 15) (7,221) 1,845 1,131
Income from continuing operations 16,521 3,348 3,471
Income from discontinued operation, net (Note 18) 0 154 327
Net income 16,521 3,502 3,798
Other comprehensive income:      
Currency translation adjustments of foreign operations 3,293 1,311 (3,423)
Total comprehensive income 19,814 4,813 375
Profit (loss) from continuing operations attributable to:      
Pointer Telocation Ltd's shareholders 16,518 3,324 3,546
Non-controlling interests 3 24 (75)
Total 16,521 3,348 3,471
Profit (loss) from discontinued operations attributable to:      
Pointer Telocation Ltd's shareholders 0 120 399
Non-controlling interests 0 34 (72)
Total $ 0 $ 154 $ 327
Basic net earnings:      
Earnings from continuing operations $ 2.07 $ 0.43 $ 0.46
Earnings from discontinued operations 0 0.02 0.05
Net earnings (loss) 2.07 0.45 0.51
Diluted net earnings:      
Earnings from continuing operations 2.03 0.43 0.44
Earnings from discontinued operations 0 0.02 0.06
Net earnings (loss) $ 2.03 $ 0.45 $ 0.50
[1] Revenues are attributed to geographic areas based on the location of the end customers.
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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($)
$ in Thousands
Total
Share Capital [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income [Member]
Accumulated Deficit [Member]
Noncontrolling Interest [Member]
Balance at Dec. 31, 2014 $ 53,796 $ 5,705 $ 129,618 $ (2,909) $ (75,767) $ (2,851)
Balance (in shares) at Dec. 31, 2014   7,688,564        
Issuance of shares in respect of Stock-based compensation 14 $ 3 11 0 0 0
Issuance of shares in respect of Stock-based compensation (in shares)   14,999        
Stock-based compensation expenses 309 $ 0 309 0 0 0
Acquisition of non-controlling interests 541 $ 62 (1,528) 0 0 2,007
Acquisition of non-controlling interests (in shares)   81,081        
Other comprehensive income (3,423) $ 0 0 (3,345) 0 (78)
Net income (loss) attributable to Non -controlling interest (147) 0 0 0 0 (147)
Total 3,798 0 0 0 3,945 0
Balance at Dec. 31, 2015 55,035 $ 5,770 128,410 (6,254) (71,822) (1,069)
Balance (in shares) at Dec. 31, 2015   7,784,644        
Issuance of shares in respect of Stock-based compensation 98 $ 67 31 0 0 0
Issuance of shares in respect of Stock-based compensation (in shares)   89,275        
Stock-based compensation expenses 320 $ 0 320 0 0 0
Exercise of options in subsidiary 0 0 (323) 323 0 0
Distribution of a subsidiary as a divided in kind (17,577) 0 0 (213) (17,737) 373
Other comprehensive income 1,311 0 0 511 0 800
Net income (loss) attributable to Non -controlling interest 58 0 0 0 0 58
Total 3,502 0 0 0 3,444 0
Balance at Dec. 31, 2016 42,689 $ 5,837 128,438 (5,633) (86,115) 162
Balance (in shares) at Dec. 31, 2016   7,873,919        
Issuance of shares in respect of Stock-based compensation 395 $ 158 237 0 0 0
Issuance of shares in respect of Stock-based compensation (in shares)   185,175        
Stock-based compensation expenses 518 $ 0 401 0 0 117
Other comprehensive income 3,293 0 0 3,293 0 0
Net income (loss) attributable to Non -controlling interest 3 0 0 0 0 3
Total 16,521 0 0 0 16,518 0
Balance at Dec. 31, 2017 $ 63,416 $ 5,995 $ 129,076 $ (2,340) $ (69,597) $ 282
Balance (in shares) at Dec. 31, 2017   8,059,094        
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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Cash flows from operating activities:      
Net income $ 16,521 $ 3,502 $ 3,798
Adjustments required to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 2,924 3,258 3,959
Impairment of tangible and intangible assets 0 0 917
Accrued interest and exchange rate changes of debenture and long-term loans 52 29 (888)
Accrued severance pay, net 93 20 17
Gain from sale of property and equipment, net (113) (232) (143)
Stock-based compensation 380 320 309
Decrease in restricted cash 0 0 62
Increase in trade receivables, net (1,616) (3,489) (236)
Increase in other accounts receivable and prepaid expenses (206) (942) (469)
Decrease (increase) in inventories (1,170) (1,063) 658
Decrease (increase) deferred income taxes (8,018) 1,774 1,080
Decrease (increase) in long-term accounts receivable 165 99 (91)
Increase (decrease) in trade payables (1,597) 3,346 1,277
Increase (decrease) in other accounts payable and accrued expenses 2,285 2,455 (1,448)
Net cash provided by operating activities 9,700 9,077 8,802
Cash flows from investing activities:      
Purchase of property and equipment (3,033) (4,129) (3,616)
Purchase of other intangible assets (233) (115) 0
Proceeds from sale of property and equipment 114 648 1,266
Acquisition of subsidiary (a) 0 (8,531) 0
Net cash used in investing activities (3,152) (12,127) (2,350)
Cash flows from financing activities:      
Receipt of long-term loans from banks 0 6,263 14,934
Repayment of long-term loans from banks (4,875) (4,976) (19,503)
Proceeds from issuance of shares and exercise of options, net of issuance costs 395 98 15
Distribution as a dividend in kind of previously consolidated subsidiary (b) 0 (1,870) 0
Short-term bank credit, net (231) 716 (915)
Net cash provided (used) in financing activities (4,711) 231 (5,469)
Effect of exchange rate on cash and cash equivalents (528) (462) (193)
Increase (decrease) in cash and cash equivalents 1,309 (3,281) 790
Cash and cash equivalents at the beginning of the year 6,066 9,347 8,557
Cash and cash equivalents at the end of the period- continuing operations 7,375 6,066 9,347
Cash and cash equivalents at the end of the period- discontinued operation 0 0 2,095
Cash and cash equivalents at the end of the year $ 7,375 $ 6,066 $ 9,347
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
(a) Acquisition of subsidiary:      
Working capital (Cash and cash equivalent excluded) $ 0 $ (334) $ 0
Property and equipment 0 (1,239) 0
Intangible assets 0 (2,098) 0
Goodwill 0 (6,070) 0
Deferred taxes 0 714 0
Payables for acquisition of investments in subsidiaries 0 496 0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net 0 (8,531) 0
(b) Distribution as a dividend in kind of previously consolidated subsidiary:      
Working capital (excluding cash and cash equivalents) 0 (5,443) 0
Property and equipment 0 7,048 0
Goodwill and other intangible assets 0 15,883 0
Other long term liabilities 0 (1,781) 0
Non-controlling interest 0 373 0
Accumulated other comprehensive loss 0 (213) 0
Dividend in kind 0 (17,737) 0
Distributions Paid In Kind Subsidiary 0 (1,870) 0
(c) Non-cash investing activity:      
Purchase of property and equipment 61 48 378
(d) Supplemental disclosure of cash flow activity:      
Interest 224 567 640
Income taxes $ 540 $ 20 $ 27
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GENERAL
12 Months Ended
Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
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 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.
 
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.
 
The company recorded tax income in the amount of $9.2 million due to decrease in valuation allowance related to carry forward losses of the company and other temporary differences that are more likely than not to be offset against future income.
 
b.
On June 8, 2016 Pointer spun off its Israeli subsidiary, Shagrir Group Vehicle Services Ltd., through which Pointer carried out its road side assistance (RSA) activities and listed Shagrir's shares for trade on the Tel Aviv Stock Exchange. The results of Shagrir until that date are included in Pointer’s results as discontinued operations. See also Note 18.
 
c.
The Company holds 93% of the share capital of Argentina SA's (formerly: Tracsat S.A.) ("Pointer Argentina"). Pointer Argentina is the operator of the Company's systems and products that provides fleet management and stolen vehicle recovery services in Buenos Aires, Argentina.
 
d.
The Company holds 100% of the share capital of Pointer Recuperation de Mexico S.A. de C.V. ("Pointer Mexico"). After the company completed in 2015 the acquisition of Pointer Mexico by acquiring the 26% of the issued share capital of Pointer Mexico that the company did not previously own, from Pointer Recuperacion de Mexico, S. de R.L. de C.V. (the "Pointer Mexico Sellers"), in consideration for the issuance of 81,081 of the company ordinary shares to the Pointer Mexico Sellers.
 
Pointer Mexico provides fleet management and stolen vehicle recovery services to its customers in Mexico as well as distributing the Company's products.
 
e.
In August 2008 the Company incorporated a company in Brazil by the name of Pointer do Brasil Comercial S.A. ("Pointer Brazil"). Pointer Brazil provides location, tracking and fleet management vehicles services to its customers in Brazil. As of October 13, 2013 Company held 48.8% of the share capital in Pointer Brazil.
 
In March 2014, Pointer Brazil changed its legal form from corporation to Limited Liability Company (LLC), and its trading name from Pointer do Brasil Comercial S.A. to Pointer do Brasil Comercial Ltda., according to its article of association duly registered and properly approved by its shareholders.
 
In July 2013, the Company incorporated a wholly-owned subsidiary in Brazil at the name of Pointer do Brasil Participações Ltda. ("Pointer Brazil Holdings").
 
On October 14, 2013, the Company acquired the remaining 51.2% of the issued share capital of Pointer Brazil from Bracco do Brasil Empreendimentos e Participações Ltda. ("Bracco") through Pointer Brazil Holdings. Following the completion of the transaction, the Company holds 100% of the issued share capital of Pointer Brazil.
 
In May 2014, Pointer Brazil was merged with Pointer Brazil Holdings . As a result of this merger, The Company holds directly 100% of the issued share capital of Pointer Brazil.
 
f.
In October 2008, the Company established a wholly-owned subsidiary in the United States, Pointer Telocation Inc.
 
g.
On September 9, 2014, the Company acquired 100% interest in Global Telematics S.A. Proprietary Limited ("Global Telematics"), a provider of commercial fleet management and vehicle tracking solutions in South Africa.
 
On October 2, 2017, the Company sold 2,519,544 ordinary shares of Pointer South Africa, representing approximately 12% of Pointer South Africa's issued and outstanding share capital as of the date thereof, to Ms. Preshnee Moodley, who serves on Pointer South Africa's Board of Directors, in exchange for her services. Following the consummation of the transaction, we now hold 88% of the issued share capital of Pointer South Africa.
 
h.
In May 2012, the Company established a wholly-owned subsidiary in India, Pointer Telocation India Private Limited.
 
i.
On October 6, 2016, a shareholders meeting of the Company approved a compensation Policy for the Company's directors and officers. The Compensation Policy includes, among other issues prescribed by the Israeli Companies Law, a framework for establishing the terms of office and employment of the office holders, and guidelines with respect to the structure of the variable pay of office holders. The Compensation Policy includes a compensation, bonus and benefits strategy for office holders which is designed in order to reward performance, maintain a reasonable wage structure throughout the organization and to reinforce a culture in order to promote the long-term success of the Company. 
 
j.
On October 7, 2016, the Brazilian subsidiary acquired 100% interest in Cielo Telecom Ltd. ("Cielo"), a fleet management services company based in South Brazil.
 
The acquisition-date fair value of the consideration transferred totaled to $ 8.5 million in cash.
 
The acquisition was accounted for under the purchase method of accounting as determined by ASC Topic 805, "Business Combinations". Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition.
 
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:
 
Working capital, net
 
 
334
 
Property and equipment
 
 
1,239
 
Other intangible assets
 
 
2,100
 
Goodwill
 
 
6,068
 
Deferred taxes
 
 
(714
)
Payables for acquisition of investments in subsidiaries
 
 
(496
)
 
 
 
 
 
 
 
$
8,531
 
 
Unaudited pro forma condensed results of operations:
 
The following represents the unaudited pro forma condensed results of operations for the years ended December 31, 2015 and 2016, assuming that the acquisitions of Cielo occurred on January 1, 2015. The pro forma information is not necessarily indicative of the results of operations that would have actually occurred had the acquisitions been consummated on those dates, nor does it purport to represent the results of operations for future periods.
 
 
 
Year ended
December 31,
 
 
 
2016
 
 
2015
 
 
 
Unaudited
 
 
 
 
 
 
 
 
Revenues
 
$
67,468
 
 
$
64,516
 
 
 
 
 
 
 
 
 
 
Net income attributable to Pointer shareholders' from continuing operations
 
$
3,820
 
 
$
4,206
 
 
 
 
 
 
 
 
 
 
Basic income per share
 
$
0.49
 
 
$
0.55
 
 
 
 
 
 
 
 
 
 
Diluted income per share
 
$
0.48
 
 
$
0.53
 
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SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 2017
Accounting Policies [Abstract]  
Significant Accounting Policies [Text Block]
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES
 
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP").
 
a.
Use of estimates:
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant assumptions are employed in estimates used in determining values of intangible assets, tax assets and tax liabilities, warranty costs and stock-based compensation costs. Actual results could differ from those estimates.
 
b.
Financial statements in U.S. dollars:
 
The Company's reporting currency is the US dollar.
 
The majority of the revenues of the Company's Cellocator business are generated in U.S. dollars ("dollar") or linked to the dollar. In addition, a substantial portion of the Company's Cellocator business' costs are incurred in dollars. The Company's management believes that the dollar is the primary currency of the economic environment of the Cellocator business and thus its functional currency.
 
The majority of the revenues of the Company's MRM business are generated in Israeli NIS ("NIS") or linked to the NIS. In addition, a substantial portion of the Company's MRM business' costs are incurred in NIS. The Company's management believes that the NIS is the primary currency of the economic environment of the MRM business and thus its functional currency.
 
For those subsidiaries whose functional currency has been determined to be their local currency (For Pointer Argentina- the Argentinean peso; for Pointer Mexico- the Mexican peso; for Pointer Inc. the dollar; for Pointer do Brazil Comercial Ltda., for Pointer Brazil Holdings and Cielo Telecom Ltda. the Brazilian Real), assets and liabilities are translated at year-end exchange rates and statement of operations items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component, other comprehensive income (loss), in shareholders' equity (deficiency).
 
Transactions and balances of the Company and certain subsidiaries, which are denominated in other currencies, have been remeasured into dollars in accordance with principles set forth in ASC 830, "Foreign Currency Matters". Foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are remeasured at historical exchange rates. Expenses are remeasured at the exchange rate in effect on the day the transaction occurred, except for those expenses related to non-monetary assets and liabilities, which are remeasured at historical exchange rates. All exchange gains and losses from the remeasurements mentioned above, are reflected in the statement of operations as financial expenses or income, as appropriate.
 
c.
Principles of consolidation:
 
The consolidated financial statements include the accounts of the Company and its subsidiaries.
 
Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company have been eliminated upon consolidation.
 
Changes in the parent's ownership interest in a subsidiary with no change of control are treated as equity transactions, rather than step acquisitions or dilution gains or losses. Losses of partially owned consolidated subsidiaries shall be continued to be allocated to the non-controlling interests even when their investment was already reduced to zero.
 
d.
Cash equivalents:
 
Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired.
 
e.
Inventories:
 
Inventories are stated at the lower of cost or net realizable value. Cost is determined using the "moving average" cost method. Inventory consists of raw materials, work in process and finished products. Inventory write-offs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, and for market prices lower than cost. In 2017, 2016 and 2015, the Company and its subsidiaries wrote-off approximately net amount of $129, $147 and $113, respectively. The net write-offs are included in cost of revenues.
 
f.
Property and equipment:
 
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates:
 
 
 
%
 
 
 
Installed products
 
20-33
Computers and electronic equipment
 
10 - 33 (mainly 33)
Office furniture and equipment
 
6 - 15
Motor vehicles
 
15 - 20 (mainly 20)
Network installation
 
10 - 33
Buildings
 
6.67
Leasehold improvements
 
Over the term of the lease, including the option term or the useful lives of the assets, whichever is shorter
 
g.
Goodwill:
 
Goodwill reflects the excess of the purchase price of the acquired activities over the fair value of net assets acquired. Pursuant to ASC 350, "Intangibles - Goodwill and Other", goodwill is not amortized but rather tested for impairment at least annually, at the reporting unit level.
 
The Company identified several reporting units based on the guidance of ASC 350. ASC 350 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for impairment, while the second phase (if necessary) measures impairment.
 
Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. In such case, the second phase is then performed, and the Company measures impairment by comparing the carrying amount of the reporting unit's goodwill to the implied fair value of that goodwill. An impairment loss is recognized in an amount equal to the excess.
 
In September 2011, the FASB amended the guidance on the annual testing of goodwill for impairment. The amended guidance will allow companies to assess qualitative factors to determine if it is more likely than not that goodwill might be impaired and whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards. The company didn't apply the qualitative option.
 
In 2015, following the annual goodwill impairment test in accordance with ASC 350 "Intangibles - Goodwill and Others", the Company impaired the goodwill attributed to Brazil at the amount of $ 758. These amounts were recorded in the 2015 Consolidated Statement of Operation under the captions "Impairment of intangible and tangible assets". The material assumptions used for the income approach for 2015 were 5 years of projected net cash flows, a discount rate of 25% and a long-term growth rate of 7.1%. During 2017 and 2016 there was no impairment.
 
h.
Identifiable intangible assets:
 
Intangible assets consist of the following: a brand name, customers' related intangibles, developed technology and acquired patents. Intangible assets are amortized over their useful life using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up. Intangible assets are stated at amortized cost.
 
The customers' related intangibles are amortized over a five- to nine-year period.
 
Backlog is amortized over a three-year period.
 
Non-competition agreement is amortized over a three-year period.
 
Brand name is amortized over a ten-year period.
 
Customer related intangibles are amortized based on the accelerated method. For customer related intangibles in respect with the Brazil transaction during 2013 and the transaction during 2016, the Company used the straight line method, the differences from the accelerated method were immaterial.
 
The other intangibles are amortized based on straight line method over the periods above mentioned.
 
In 2015, following the annual goodwill impairment test in accordance with ASC 350 "Intangibles - Goodwill and Others", the Company impaired intangible assets attributed to Brazil at the amount of $ 159. These amounts were recorded in the 2015 Consolidated Statement of Operation under the captions "Impairment of intangible and tangible assets". The material assumptions used for the income approach for 2015 were 5 years of projected net cash flows, a discount rate of 25% and a long-term growth rate of 7.1%. During 2017 and 2016 there was no impairment.
 
i.
Impairment of long-lived assets:
 
The Company's long lived assets are reviewed for impairment in accordance with ASC 360-10-35, "Property, Plant, and Equipment- Subsequent Measurement" whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
 
No impairment losses were identified in 2017, 2016 and 2015.
 
j.
Provision for warranty:
 
The Company and its subsidiaries generally grant a one-year to three-year warranty for their products. The Company and its subsidiaries estimate the costs that may be incurred under its basic limited warranty and records a liability in the amount of such costs at the time which product revenue is recognized. Factors that affect the warranty liability include the number of installed units, historical and anticipated rates of warranty claims and cost per claim. The Company and its subsidiaries periodically assess the adequacy of its recorded warranty liabilities and adjust the amounts as necessary. Changes in the Company's and its subsidiaries' product liabilities (which are included in other accounts payable and accrued expenses and other long term liabilities' captions in the Balance Sheet) during 2017 and 2016 are as follows:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Balance, beginning of the year
 
 
604
 
 
 
544
 
Warranties issued during the year
 
 
468
 
 
 
422
 
Settlements made during the year
 
 
(145
)
 
 
(182
)
Expirations
 
 
(360
)
 
 
(180
)
 
 
 
 
 
 
 
 
 
Balance end of year
 
 
567
 
 
 
604
 
  
k.
Revenue recognition:
 
The Company and its subsidiaries generate revenues from the provision of services, subscriber fees 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. Sales consummated by the Company's sales forces and sales to resellers are considered sales to end-users. Revenues from the sale of systems and products are recognized in accordance with Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition" ("SAB No. 104"), when delivery has occurred, persuasive evidence of an agreement exists, the vendor's fee is fixed or determinable, no further obligation exists and collectability is reasonably assured. Service revenues including subscriber fees are recognized as services are performed, over the term of the agreement.
 
Revenues from the sale of systems and products are recognized in accordance with Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition" ("SAB No. 104"), when delivery has occurred, persuasive evidence of an agreement exists, the vendor's fee is fixed or determinable, no further obligation exists and collectability is reasonably assured. Service revenues including subscriber fees are recognized as services are performed, over the term of the agreement.
 
Deferred revenue includes amounts received under maintenance and support contracts, and amounts received from customers but not yet recognized as revenues.
 
In accordance with ASC 605-25, "Multiple-Element Arrangements", revenue from certain arrangements may include multiple elements within a single contract. The Company's accounting policy complies with the requirements set forth in ASC 605-25, relating to the separation of multiple deliverables into individual accounting units with determinable fair values. The Company considers the sale of products and subscriber fees to be separate units of accounting.
 
When a sales arrangement contains multiple elements, such as hardware and services, the Company allocates revenue to each element based on a selling price hierarchy. The selling price for each deliverable is based on its vendor specific objective evidence ("VSOE"), if available, third party evidence ("TPE") if VSOE is not available, or estimated selling price ("ESP") if neither VSOE nor TPE is available.
 
The company uses ESP to allocate the elements.
 
Revenues generated from technical support services, installation and de-installation are recognized when such services are rendered.
 
Generally, the Company does not grant rights of return. The Company follows ASC 605-15-25 "sales of product when right of return exists". Based on the Company's experience, no provision for returns was recorded.
 
l.
Research and development costs:
 
Research and development costs are charged to expenses as incurred.
   
m.
Advertising expenses:
 
Advertising expenses are charged to the statement of operations as incurred. Advertising expenses for the years ended December 31, 2017, 2016 and 2015 were $1,459, $1,337 and $1,214, respectively.
 
n.
Income taxes:
 
The Company accounts for income taxes in accordance with ASC 740, "Income Taxes." This ASC prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.
 
The Company adopted an amendment to ASC 740, "Income Taxes". The amendment clarifies the accounting for uncertainties in income taxes by establishing minimum standards for the recognition and measurement of tax positions taken or expected to be taken in a tax return. Under the requirements of ASC 740, the Company must review all of its tax positions and make a determination as to whether its position is more-likely-than-not to be sustained upon examination by regulatory authorities. If a tax position meets the more-likely-than-not standard, then the related tax benefit is measured based on a cumulative probability analysis of the amount that is more-likely-than-not to be realized upon ultimate settlement or disposition of the underlying issue.
 
In the years ended December 31, 2017, 2016 and 2015, the Company recorded tax expenses (income) in connection to uncertainties in income taxes of $ 127, $ 0 and $ 0 respectively.
 
In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. The Company had early adopted this standard in the fourth quarter of 2015 on a retrospective basis. Prior years have been retrospectively adjusted.
 
o.
Basic and diluted net earnings per share:
 
Basic and diluted net earnings per share are computed based on the weighted average number of ordinary shares outstanding during the year. Diluted net earnings (loss) per share further include the dilutive effect of stock options outstanding during the year, in accordance with ASC 260, "Earnings Per Share". Part of the Company's outstanding stock options and warrants has been excluded from the calculation of the diluted earnings (loss) per share because such securities are anti-dilutive. The total weighted average number of pointer shares related to the outstanding options and warrants excluded from the calculations of diluted earnings (loss) per share was 20,125, 202,000 and 64,000 for the years ended December 31, 2017, 2016 and 2015, respectively.
 
p.
Accounting for stock-based compensation:
 
The Company applies ASC 718, "Compensation - Stock Compensation". In accordance with ASC 718, all grants of employee equity based stock options are recognized in the financial statements based on their grant date fair values. The fair value of graded vesting options, as measured at the date of grant, is charged to expenses, based on the accelerated attribution method over the requisite service period of each of the awards, net of estimated forfeitures.
 
Effective as of January 1, 2017, the Company adopted Accounting Standards Update 2016-09, "Compensation-Stock Compensation (Topic 718)" ("ASU2016-09") on a modified, retrospective basis. ASU 2016-09 permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for stock - based compensation: to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. Upon adoption of ASU 2016-09, the Company elected to change its accounting policy to account for forfeitures as they occur. Upon the adoption in the first quarter of 2017, the effect of the adoption on the Company's retained earnings was immaterial.
 
During the years ended December 31, 2017, 2016 and 2015, the Company recognized stock-based compensation expenses related to employee stock options in the amounts of $380, $320 and $309, respectively.
 
According to ASC 718, a change in any of the terms or conditions of the Company's stock options is accounted for as a modification. Therefore, if the terms of an award are modified, the Company calculates incremental compensation costs as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors existing at the modification date. For vested options, the Company recognizes any incremental compensation cost immediately in the period the modification occurs, whereas for unvested options, the Company recognizes, over the new requisite service period, any incremental compensation cost due to the modification and any remaining unrecognized compensation cost for the original award over its term.
 
q.
Data related to options to purchase the Company shares:
 
1.
The fair value of the Company's stock options granted to employees and directors for the years ended December 31, 2017, 2016 and 2015 was estimated using the Black-Scholes-Merton option-pricing model, with the following weighted average assumptions:
 
 
 
Year ended
December 31,
 
 
2017
 
2016
 
2015
 
 
 
 
 
 
 
Risk free interest rate
 
0.86%-1.39%
 
0.8%-1.00%
 
1.29%-1.62%
Dividend yield
 
0%
 
0%
 
0%
Expected volatility
 
52.25%-57.73%
 
55.81%-60.84%
 
51.47%-49.78%
Expected term (in years)
 
4.00-5.50
 
4.00-5.50
 
4.00-5.50
Forfeiture rate
 
-
 
2%
 
2%
 
The Black-Scholes-Merton option-pricing model requires a number of assumptions, of which the most significant are expected stock price volatility and the expected option term. Expected volatility was calculated based upon actual historical stock price movements. The expected option term represents the period that the Company's stock options are expected to be outstanding and was determined for plain vanilla options, based on the simplified method permitted by SAB 107 and extended by SAB 110 as the average of the vesting period and the contractual term.
 
The Company adopted SAB 110 and continues to apply the simplified method until enough historical experience is available to provide a reasonable estimate of the expected term for stock option grants. In a few limited cases the Company did not use the simplified method in measuring the fair value of modified awards, either when the options were deeply out of the money immediately before the modification or when the Company accelerated the vesting and extended the exercise period after an employee's resignation. Since in both instances the entire remaining contractual term of the options was relatively short, we assumed that the expected life to be the entire remaining contractual term.
 
The risk-free interest rate is based on the yield from U.S. Treasury bill with accordance to the expected term of the options.
 
The Company has historically not paid dividends and has no foreseeable plans to pay dividends and therefore uses an expected dividend yield of zero in the option pricing model. The Company is required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest.
 
On October 2, 2017, the Company sold 2,519,544 ordinary shares of Pointer South Africa, representing approximately 12% of Pointer South Africa's issued and outstanding share capital as of the date thereof, to Ms. Preshnee Moodley, who serves on Pointer South Africa's Board of Directors, in exchange to its services.
 
r.
Severance pay:
 
The liability of the Company and its subsidiaries in Israel for severance pay is calculated pursuant to Israel's Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of balance sheet date and are presented on an undiscounted basis (the "Shut Down Method"). Employees are entitled to one month's salary for each year of employment, or a portion thereof. The liability for the Company and its subsidiaries in Israel is fully provided by monthly deposits with insurance policies and by accrual. The value of these policies is recorded as an asset in the Company's balance sheet.
 
The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrendered value of these policies, and includes profits or losses accumulated to balance sheet date.
 
Some of the company's employees are subject to Section 14 of the Severance Pay Law and the General Approval of the Labor Minister dated June 30, 1998, issued in accordance to the said Section 14, mandating that upon termination of such employees' employment, all the amounts accrued in their insurance policies shall be released to them. The severance pay liabilities and deposits covered by these plans are not reflected in the balance sheet as the severance pay risks have been irrevocably transferred to the severance funds.
 
Severance pay expenses for the years ended December 31, 2017, 2016 and 2015 were $399, $303 and $292, respectively.
 
s.
Concentrations of credit risk:
 
Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents, trade receivables, trade payables and derivatives.
 
The Company's cash and cash equivalents are invested primarily in deposits with major banks worldwide, mainly in Israel. Generally, these deposits may be redeemed upon demand and, therefore, bear low risk. Management believes that the financial institutions that hold the Company's investments have a high credit rating.
 
The Company's trade receivables include amounts billed to clients located mainly in Israel, Latin America and Europe. Management periodically evaluates the collectability of its trade receivables to reflect the amounts estimated to be collectible. An allowance is determined in respect of specific debts whose collection, in management's opinion, is doubtful. In 2017, 2016 and 2015, the Company recorded expenses in respect of such debts in the amount of $802, $511 and $98, respectively. As for major customers, see Note 17d.
 
Changes in the allowance for doubtful accounts during 2017 and 2016 are as follows:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Balance at beginning of the year
 
 
1,281
 
 
 
1,053
 
 
 
 
 
 
 
 
 
 
Deductions during the year
 
 
(992
)
 
 
(339
)
Charged to expenses
 
 
802
 
 
 
511
 
Foreign currency translation adjustment
 
 
36
 
 
 
56
 
 
 
 
 
 
 
 
 
 
Balance at end of year
 
 
1,127
 
 
 
1,281
 
     
t.
Fair value measurements:
 
The following methods and assumptions were used by the Company and its subsidiaries in estimating fair value disclosures for financial instruments:
 
The carrying amounts reported in the balance sheet for cash and cash equivalents, trade receivables, other accounts receivable, short-term bank credit, trade payables and other accounts payable approximate their fair values due to the short-term maturities of such instruments.
 
Amounts recorded for long-term loans approximate fair values. The fair value was estimated using discounted cash flow analysis, based on the Company's incremental borrowing rates for similar type of borrowing arrangements.
 
The Company accounts for certain assets and liabilities at fair value under ASC 820, "Fair Value Measurements and Disclosures". Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
 
Level 1 -
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
 
Level 2 -
Significant other observable inputs based on market data obtained from sources independent of the reporting entity;
 
Level 3 -
Unobservable inputs which are supported by little or no market activity (for example cash flow modeling inputs based on assumptions).
 
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy.
 
Assets and Liabilities that are measured at Fair Value on a Nonrecurring Basis subsequent to their initial recognition.
 
During 2015, such measurements of fair value related solely to an impairment loss of goodwill reducing its carrying amount in $758. The Company used an income approach for measuring the fair value of the goodwill. See Note 2g and 2i for significant assumptions. As the fair value was measured using significant unobservable assumptions, the goodwill was classified as level 3 in ASC 820 fair value hierarchy.
 
During 2017 and 2016, there were no impairment losses regarding goodwill.
 
u.
Derivatives and hedging activities:
 
ASC 815, "Derivatives and Hedging" requires the Company to recognize all of its derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.
 
For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income and reclassified into earnings in the line item associated with the hedged transaction in the period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized immediately in financial income/expense in the statement of operations.
 
v.
Equity affiliates
 
The Company recognizes investment in equity affiliates under ASC 323, "Investments – Equity Method and Joint Ventures". The Company recognizes its proportionate share of the income of equity affiliates. Losses of equity affiliates are recognized to the extent of our investment, advances, financial guarantees and other commitments to provide financial support to the investee. Any losses in excess of this amount are deferred and reduce the amount of future earnings of the equity investee recognized by the Company.
 
w.
Discontinued operations
 
Under ASC 205, "Presentation of Financial Statements - Discontinued Operation" when a component of an entity, as defined in ASC 205, has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on its disposal are classified as discontinued operations and the assets and liabilities of such component are classified as assets and liabilities attributed to discontinued operations; that is, provided that the operations, assets and liabilities and cash flows of the component have been eliminated from the Company's consolidated operations and the Company will no longer have any significant continuing involvement in the operations of the component.
   
x.
Accounting Standards still not effective:
 
In May 2014, the FASB issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU is effective for the Company in 2018 using either of two methods: (i) retrospective application of ASU 2014-09 to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective application of ASU 2014-09 with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09 ("Modified Retrospective Adoption Transition Method").
 
The Company has established an implementation team to analyze the potential impact the standard will have on its consolidated financial statements and related disclosures as well as its business processes, systems and controls. This includes reviewing revenue contracts across all revenue streams and evaluating potential differences that would result from applying the requirements under the standard. The Company will adopt the new standard on January 1, 2018 using the Modified Retrospective Adoption Transition Method. 
 
The Company has completed its evaluation of the Standard and expects a change relating to the application of the legacy contingent revenue “cash cap” guidance in ASC 605-25, Revenue Recognition – Multiple-Element Arrangements, that limited the amount of revenue recognized at contract inception. In addition, the Standard requires the deferral and amortization of “incremental" costs incurred to obtain a contract. The primary contract acquisition cost for the Company are sales commissions. Under current GAAP, the Company expenses sales commissions as incurred while under the Standard such costs will be classified as a contract asset and amortized over a period that approximates the timing of revenue recognition on the underlying contracts.
 
Upon initial application the company will record deferred revenues, assets and a cumulative effect to retained earnings in an immaterial amounts on the opening balance sheet at January 1, 2018.
 
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). The new guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 including interim periods within those fiscal years, but early adoption is permitted. The ASU requires a modified retrospective transition approach and provides certain optional transition relief. The Company is currently evaluating when it will adopt this new standard and the expected impact on its consolidated financial statements and related disclosures.
 
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). This new standard clarifies certain aspects of the statement of cash flows, including the classification of debt prepayment or debt extinguishment costs or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees and beneficial interests in securitization transactions. This new standard also clarifies that an entity should determine each separately identifiable source of use within the cash receipts and payments on the basis of the nature of the underlying cash flows. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use, the appropriate classification should depend on the activity that is likely to be the predominant source or use of cash flows for the item. ASU 2016-15 will generally be applied retrospectively and is effective for annual periods beginning after December 15, 2017. The Company does not expect that this new guidance will have a material impact on its consolidated financial statements.
 
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 will be effective for the Company in the first quarter of 2018 and early adoption is permitted. The Company does not expect that this new guidance will have a material impact on its consolidated financial statements.
 
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 eliminates Step 2 of the goodwill impairment test, which requires the calculation of the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently evaluating the expected impact of the standard on its consolidated financial statements.
 
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which expands the activities that qualify for hedge accounting and simplifies the rules for reporting hedging transactions. The standard is effective for the Company beginning January 1, 2019. Early adoption is permitted. The Company does not expect that this new guidance will have a material impact on its consolidated financial statements.
XML 29 R10.htm IDEA: XBRL DOCUMENT v3.8.0.1
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
12 Months Ended
Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Other Current Assets [Text Block]
NOTE 3:-
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Government authorities
 
 
517
 
 
 
583
 
Employees
 
 
30
 
 
 
35
 
Prepaid expenses
 
 
1,715
 
 
 
1,677
 
Others
 
 
603
 
 
 
209
 
 
 
 
 
 
 
 
 
 
 
 
 
2,865
 
 
 
2,504
 
XML 30 R11.htm IDEA: XBRL DOCUMENT v3.8.0.1
INVENTORIES
12 Months Ended
Dec. 31, 2017
Inventory Disclosure [Abstract]  
Inventory Disclosure [Text Block]
NOTE 4:-
INVENTORIES
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Raw materials
 
 
3,621
 
 
 
2,510
 
Work in process
 
 
149
 
 
 
89
 
Finished goods
 
 
2,781
 
 
 
2,643
 
 
 
 
 
 
 
 
 
 
 
 
 
6,551
 
 
 
5,242
 
XML 31 R12.htm IDEA: XBRL DOCUMENT v3.8.0.1
PROPERTY AND EQUIPMENT
12 Months Ended
Dec. 31, 2017
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Disclosure [Text Block]
NOTE 5:-
PROPERTY AND EQUIPMENT
 
a.
Composition:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
Cost:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Installed products
 
 
9,771
 
 
 
9,323
 
Computers and electronic equipment
 
 
7,353
 
 
 
5,550
 
Office furniture and equipment
 
 
1,397
 
 
 
1,205
 
Motor vehicles
 
 
349
 
 
 
339
 
Network installation
 
 
4,211
 
 
 
3,839
 
Leasehold improvements
 
 
778
 
 
 
670
 
 
 
 
 
 
 
 
 
 
 
 
 
23,859
 
 
 
20,926
 
 
 
 
 
 
 
 
 
 
Accumulated depreciation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Installed products
 
 
7,061
 
 
 
5,912
 
Computers and electronic equipment
 
 
4,768
 
 
 
3,981
 
Office furniture and equipment
 
 
1,290
 
 
 
994
 
Motor vehicles
 
 
237
 
 
 
175
 
Network installation
 
 
4,193
 
 
 
3,826
 
Leasehold improvements
 
 
462
 
 
 
424
 
 
 
 
 
 
 
 
 
 
 
 
 
18,011
 
 
 
15,312
 
 
 
 
 
 
 
 
 
 
Depreciated cost
 
 
5,848
 
 
 
5,614
 
 
b.
Depreciation expenses for the years ended December 31, 2017, 2016 and 2015 were $2,461, $2,133 and $1,674, respectively.
 
c.
No Impairment losses recorded for the years ended December 31, 2017, 2016 and 2015.
XML 32 R13.htm IDEA: XBRL DOCUMENT v3.8.0.1
OTHER INTANGIBLE ASSETS, NET
12 Months Ended
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets Disclosure [Text Block]
NOTE 6:-
OTHER INTANGIBLE ASSETS, NET
 
a.
Other intangible assets, net:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
Cost:
 
 
 
 
 
 
 
 
Patents
 
 
639
 
 
 
639
 
Developed technology
 
 
4,978
 
 
 
4,978
 
Customer related intangible
 
 
8,114
 
 
 
7,891
 
Others
 
 
874
 
 
 
874
 
Brand name
 
 
2,816
 
 
 
2,793
 
 
 
 
 
 
 
 
 
 
 
 
 
17,421
 
 
 
17,175
 
Accumulated amortization:
 
 
 
 
 
 
 
 
Patents
 
 
639
 
 
 
639
 
Developed technology (see note 2h)
 
 
4,945
 
 
 
4,901
 
Customer related intangible
 
 
6,853
 
 
 
6,534
 
Others
 
 
696
 
 
 
650
 
Brand name
 
 
2,353
 
 
 
2,273
 
 
 
 
 
 
 
 
 
 
 
 
 
15,486
 
 
 
14,997
 
 
 
 
 
 
 
 
 
 
Amortized cost
 
 
1,935
 
 
 
2,178
 
 
b.
Amortization expenses for the years ended December 31, 2017, 2016 and 2015 were $463, $473 and $538, respectively.
 
c.
Estimated amortization expenses for the years ending:
 
December 31,
 
 
 
 
 
 
 
2018
 
 
487
 
2019
 
 
399
 
2020
 
 
368
 
2021
 
 
343
 
2022 and after
 
 
338
 
 
 
 
 
 
 
 
 
1,935
 
 
XML 33 R14.htm IDEA: XBRL DOCUMENT v3.8.0.1
GOODWILL
12 Months Ended
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill Disclosure [Text Block]
NOTE 7:-
GOODWILL
 
The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 are as follows:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Goodwill, beginning of the year
 
 
38,107
 
 
 
31,388
 
Additions in respect of acquisitions
 
 
-
 
 
 
6,070
 
Foreign currency translation adjustments
 
 
2,903
 
 
 
649
 
 
 
 
 
 
 
 
 
 
Goodwill, end of year
 
 
41,010
 
 
 
38,107
 
 
The carrying value of goodwill by reporting unit as of 31 December, 2017 is as follows:
 
Reporting unit
 
2017
 
 
 
 
 
Cellocator
 
 
2,534
 
SVR (*)
 
 
30,245
 
Pointer brazil
 
 
2,338
 
Cielo brazil
 
 
5,893
 
 
 
 
 
 
 
 
 
41,010
 
 
The carrying value of goodwill by reporting unit as of 31 December 2016 is as follows:
 
Reporting unit
 
2016
 
 
 
 
 
Cellocator
 
 
2,534
 
SVR (*)
 
 
27,219
 
Pointer brazil
 
 
2,373
 
Cielo brazil
 
 
5,981
 
 
 
 
 
 
 
 
 
38,107
 
 
(*) SVR in Israel.
 
The material assumptions used for the income approach for 2017 were:
 
 
 
Cellocator
 
 
SVR
 
 
Pointer brazil
 
 
Cielo
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate
 
 
16
%
 
 
15
%
 
 
21
%
 
 
21
%
Growth rate
 
 
3
%
 
 
2
%
 
 
6
%
 
 
6
%
Years of projected cash flows
 
 
5
 
 
 
5
 
 
 
5
 
 
 
5
 
XML 34 R15.htm IDEA: XBRL DOCUMENT v3.8.0.1
SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOANS FROM BANKS, SHAREHOLDERS AND OTHERS
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Short-term Bank Credit And Long-term Loans From Banks, Shareholders and Others [Text Block]
NOTE 8:-
SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOANS FROM BANKS, SHAREHOLDERS AND OTHERS
 
Classified by currency, linkage terms and annual interest rates, the credit and loans are as follows:
 
 
 
Interest rate
 
December 31,
 
 
 
2017
 
2016
 
2017
 
 
2016
 
 
 
%
 
 
 
 
 
 
Current maturities of long-term loans from banks, shareholders and others:
 
 
 
 
 
 
 
 
 
 
 
 
In, or linked to Dollars
 
Libor+2%
 
Libor+2%
 
 
4,856
 
 
 
4,497
 
In other currencies
 
10%-17%
 
10%-17%
 
 
245
 
 
 
339
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,101
 
 
 
4,836
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unutilized credit lines
 
 
 
 
 
 
10,954
 
 
 
8,714
 
XML 35 R16.htm IDEA: XBRL DOCUMENT v3.8.0.1
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
12 Months Ended
Dec. 31, 2017
Accounts Payable and Accrued Liabilities [Abstract]  
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block]
NOTE 9:-
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Employees and payroll accruals
 
 
4,260
 
 
 
3,477
 
Government authorities
 
 
1,858
 
 
 
817
 
Provision for warranty
 
 
369
 
 
 
391
 
Accrued expenses
 
 
2,561
 
 
 
2,100
 
Related party
 
 
53
 
 
 
53
 
Others
 
 
16
 
 
 
1
 
 
 
 
 
 
 
 
 
 
 
 
 
9,117
 
 
 
6,839
 
XML 36 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
LONG-TERM LOANS FROM BANKS
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Long-term Debt [Text Block]
NOTE 10:-
LONG-TERM LOANS FROM BANKS
 
a.
Composition:
 
 
 
Interest rate
 
December 31,
 
 
 
2017
 
2016
 
2017
 
 
2016
 
 
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In, or linked to Dollars (see c below )
 
3.71%
 
3.71%
 
 
9,871
 
 
 
14,356
 
In other currencies
 
10%-17%
 
10%-17%
 
 
245
 
 
 
662
 
 
 
 
 
 
 
 
10,116
 
 
 
15,018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less - current maturities
 
 
 
 
 
 
5,101
 
 
 
4,836
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,015
 
 
 
10,182
 
 
b.
As of December 31, 2017, the aggregate annual maturities of the long-term loans are as follows:
 
2018 (current maturities)
 
 
5,101
 
2019
 
 
2,341
 
2020
 
 
1,506
 
2021 and thereafter
 
 
1,168
 
 
 
 
 
 
 
 
 
10,116
 
 
c.
In respect of the bank loans provided to the Company for the purpose of funding the acquisition of Pointer Brazil (see note 1e), the acquisition of Cielo Telecom Ltda. and utilize of 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 debenture 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 Pointer Telocation Ltd.'s debt (debt to banks, convertible debenture and loans from others was 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 December 31, 2017 the Company is in compliance with the financial covenants of its bank loans.
XML 37 R18.htm IDEA: XBRL DOCUMENT v3.8.0.1
DEFERRED TAXES AND OTHER LONG-TERM LIABILITIES
12 Months Ended
Dec. 31, 2017
Deferred Revenue and Credits, Noncurrent [Abstract]  
Other Liabilities Disclosure [Text Block]
NOTE 11:-
DEFERRED TAXES AND OTHER LONG-TERM LIABILITIES
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Provision for warranty
 
 
199
 
 
 
213
 
Deferred tax
 
 
540
 
 
 
666
 
Deferred revenues
 
 
99
 
 
 
97
 
 
 
 
 
 
 
 
 
 
 
 
 
838
 
 
 
976
 
XML 38 R19.htm IDEA: XBRL DOCUMENT v3.8.0.1
COMMITMENTS AND CONTINGENT LIABILITIES
12 Months Ended
Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
NOTE 12:-
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 obtained bank guarantees in the amount of $407 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 December 31, 2017 is $ 2,444. No royalties were accrued or paid during 2017, 2016 and 2015.
   
d.
Lease commitments:
 
The Company and its subsidiaries have leased offices, motor vehicles and locations for periods through 2020. Minimum annual rental payments under non-cancelable operating leases are as follows:
 
2018
 
 
2,367
 
2019
 
 
1,848
 
2020
 
 
504
 
2021
 
 
271
 
 
 
 
 
 
 
 
 
4,990
 
 
Rent expenses for the years ended December 31, 2017, 2016 and 2015, were $2,325, $2,327 and $2,380, respectively.
 
e.
Litigation:
 
1.
As of December 31, 2017, several claims were filed against the Company, mainly by customers. The claims are in an amount aggregating to approximately $46. 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 at court and has recorded a provision of $20.
 
2.
In August 2014, Pointer Brazil received a notification of lack of payments of $515 of VAT tax (Brazilian ICMS tax) plus $2,161 of interest and penalty totaling $2,676 of infraction, as of December 31, 2017. Company is defending this litigation at court and made a provision of $79; 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 Pointer or Pointer Brazil is required to pay an aggregate amount of approximately US$12.8 million. 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 Value Added Tax. The Company based on the opinion of its legal counsel, in the opinion that no material costs will arise in respect to these claims and did not make any provision once this issue has two precedents that won the same type of litigation.
 
f.
Commitments:
 
1.
The Company and DBSI Investment Ltd. ("DBSI"), an equity owner in the Company (see Note 16), have entered into a management services agreement pursuant to which DBSI shall provide management services in consideration of annual management fees of $180 for a period of three years commencing on August 1, 2017.
  
2.
Under the credit facility from the Bank, the Company are required to meet financial covenants (see Note 10c).
XML 39 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
EQUITY
12 Months Ended
Dec. 31, 2017
Stockholders' Equity Note [Abstract]  
Shareholders' Equity and Share-based Payments [Text Block]
NOTE 13:-
EQUITY
 
a.
Ordinary shares:
 
Ordinary shares confer upon their holders voting rights, the right to receive cash dividends and the right to participate in the distribution of excess assets upon liquidation of the Company.
 
b.
Issued and outstanding share capital:
 
On March 9 2014, the Company completed a round of financing for the aggregate amount of $ 10.44 million, in consideration for 1.13 million of the Company's ordinary shares at a price per share of $ 9.25.
 
c.
Options:
 
1.
In November 2003 the Company adopted an Employee Share Option Plan (2003) (the "2003 Plan").  The Board of Directors of the Company approves, from time to time, increases to the number of shares reserved under the 2003 Plan. To date, the options under the 2003 Plan are and have been granted in accordance with Section 102 to the Israeli Income Tax Ordinance in the Capital Gains Track, all subject to the provisions of the Israeli Income Tax Ordinance. The grant of options is subject to the approval of the Board of Directors of the Company. The exercise price of the options shall be determined by the Board of Directors in its discretion, provided that the price per share is not less than the nominal value of each share. The options usually vest over a period of four years and are valid for a period of five years from the date of grant. The 2003 Plan terminated at the end of November 2013.
 
2.
On November 30, 2011, the Board of Directors approved an amendment to the 2003 Plan whereby in the event a cash dividend is paid out to the Company's shareholders, the Board of Directors may adjust the exercise price of any options granted prior to the record date of the dividend distribution but not exercised as of such date.
 
3.
In December 2013 the Company adopted an Employee Share Option Plan (2013) (the "2013 Plan").  The Board of Directors of the Company approved 376,712 of shares reserved under the 2013 Plan. To date, the options under the 2013 Plan are granted in accordance with Section 102 to the Israeli Income Tax Ordinance in the Capital Gains Track, all subject to the provisions of the Israeli Income Tax Ordinance. The grant of options is subject to the approval of the Board of Directors of the Company. The exercise price of the options shall be determined by the Board of Directors in its discretion, provided that the price per share is not less than the nominal value of each share, or to the extent required pursuant to applicable law or to qualify for favorable tax treatment, not less than 100% of the closing price of the share on the market on the date of grant or average of the closing price within a specific time frame prior to the grant as determined by the Board of Directors or a committee of the Board of Directors. Generally, options vest over a period of four years are valid for a period of seven years from the date of grant.
 
4.
A summary of employee option activity under the Company's Stock Option Plans and RSU's as of December 31, 2017 and changes during the year ended December 31, 2017 are as follows:
 
 
 
Number of
options
 
 
Weighted-
average
exercise
price
 
 
Weighted-
average
remaining
contractual
term
(in years)
 
 
Aggregate
intrinsic
value (in
thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at  January 1, 2017
 
 
556,134
 
 
$
5.15
 
 
 
 
 
 
 
 
 
Granted
 
 
21,500
 
 
$
0.87
 
 
 
 
 
 
 
 
 
Exercised
 
 
(185,675
)
 
$
2.10
 
 
 
 
 
 
 
 
 
Forfeited
 
 
(52,500
)
 
$
5.79
 
 
 
 
 
 
 
 
 
Outstanding at December 31, 2017
 
 
339,459
 
 
$
4.61
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at December 31, 2017
 
 
131,509
 
 
$
3.49
 
 
 
2.79
 
 
$
1,987
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested and expected to vest at December 31, 2017
 
 
335,300
 
 
$
4.67
 
 
 
4.44
 
 
$
1,566
 
 
The weighted-average grant-date fair value of options granted during the years ended December 31, 2017 and 2016 was $ 7.8 and $ 5.9, respectively. The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on the last trading day of the fourth quarter of fiscal 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2017. This amount changes based on the fair market value of the Company's stock.
 
As of December 31, 2017, there was approximately $358 of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company's stock option plans.
 
That cost is expected to be recognized over a weighted-average period of 1.8 years. Total grant-date fair value of options that vested during the year ended December 31, 2017 was approximately $ 278.
 
5.
The following table summarizes information relating to employees' stock options and RSU's outstanding as of December 31, 2017, according to exercise prices:
 
Options outstanding
 
 
Options exercisable
 
Number
outstanding at
December 31,
2017
 
 
Weighted
average
remaining
contractual life
 
 
Weighted
average
exercise
price
 
 
Number
exercisable at
December 31,
2017
 
 
Weighted
average
exercise
price
 
 
 
 
Years
 
 
 
 
 
 
 
 
 
 
 
62,384
 
 
 
0.7
 
 
$
1.17
 
 
 
62,384
 
 
$
1.17
 
 
10,000
 
 
 
0.52
 
 
$
3.38
 
 
 
10,000
 
 
$
3.38
 
 
4,575
 
 
 
3.31
 
 
$
0.87
 
 
 
-
 
 
$
0.87
 
 
28,500
 
 
 
4.16
 
 
$
6.14
 
 
 
6,000
 
 
$
6.14
 
 
212,500
 
 
 
5.52
 
 
$
5.94
 
 
 
53,125
 
 
$
5.94
 
 
21,500
 
 
 
6.32
 
 
$
0.87
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
339,459
 
 
 
4.39
 
 
$
4.61
 
 
 
131,509
 
 
$
3.49
 
6.
In January 2011, the Board of Directors appointed the Company's new Chief Executive Officer (CEO) effective as of February 1, 2011. Under the terms of his employment, the new CEO was granted 246,984 options at an exercise price of $7.00, in accordance with 2003 option plan, which will vest over a three year period, according to the vesting dates as stipulated in the employment agreement, commencing upon the effective date of his employment. The new CEO will also be entitled to an annual performance bonus of up to one year's salary which will be calculated in accordance with certain fixed criteria relating to the company's growth and profitability in the year preceding payment of the bonus.
 
In lieu of the above-mentioned options, on September 12, 2013 the Shareholders resolved to grant to the Company's Chief Executive Officer options to purchase 246,984 Ordinary Shares of the Company with an exercise price per share of $3.38, reflecting the average closing price of the share during a 90 day period preceding the date on which the Board of Directors approved the Compensation Policy of the Company, July 8, 2013. The options shall vest over a period of two years, such that at the end of each three month period from the date of the Shareholders resolution, the Chief Executive Officer shall be entitled to one eighth of the options. The exercise price of the options shall be adjusted for stock dividend. The fair value of the new options measured at $599 as of the grant day.
 
7.
On August 31, 2011, the Board of Directors resolved to issue to the Company's Chief Financial Officer, options exercisable to 10,000 of the company's ordinary shares, pursuant to the plan, which will vest in four equal annual installments over a period of four years, commencing as of date of the grant, at an exercise price of $ 4.80 per share.
 
In lieu of the above-mentioned options, on July 8, 2013 the Board of Directors resolved to grant to the Company's Chief Finance Officer options to purchase 20,000 Ordinary Shares of the Company with an exercise price per share of $3.38, reflecting the average closing price of the share during a 90 day period preceding the date on which the Board of Directors approved the Compensation Policy of the Company, July 8, 2013. The options shall vest over a period of two years, such that at the end of each three month period from the date of the Board of Directors resolution, the Chief Finance Officer shall be entitled to one eighth of the options. The fair value of the new options measured at $31 as of the grant day.
 
8.
On July 8, 2013, the Board of Directors resolved to issue to the Company's employees, options exercisable to 41,000 of the company's ordinary shares, pursuant to the plan, which will vest in four equal annual installments over a period of four years, commencing as of date of the grant, at an exercise price of $ 3.38 per share.
 
9.
In 2014, the Board of directors resolved to issue to the Company's employees and directors Restricted Stock Units exercisable to 46,300 of the Company's ordinary shares, pursuant to the 2013 plan, which will vest in four equal installments over a period of four years, commencing as of March 27, 2014, at an exercise price of 3 NIS per share.
 
10.
On February 26, 2015, the Board of Directors resolved to issue to certain of the Company's employees options exercisable for 77,000 of the Company's ordinary shares pursuant to the 2013 Plan. These options vest in four equal annual installments over a period of four years, commencing as of the date of the grant, at an exercise price of $8.35 per share.
 
11.
On July 06, 2016, the Board of Directors resolved to issue to certain of the Company's employees options exercisable for 250,000 of the Company's ordinary shares pursuant to the 2013 Plan. These options vest in four equal annual installments over a period of four years, commencing as of the date of the grant, at an exercise price of $5.94 per share.
 
12.
In April 2017, the Board of directors resolved to issue to the Company's directors Restricted Stock Units exercisable to 4,500 of the Company's ordinary shares, pursuant to the 2013 plan, which will vest in three equal installments over a period of three years, at an exercise price of 3 NIS per share, commencing June 2017. In April 2017, the Board of directors resolved to issue to the Company's employees Restricted Stock Units exercisable to 17,000 of the Company's ordinary shares, pursuant to the 2013 plan, which will vest in four equal installments over a period of four years, at an exercise price of 3 NIS per share, commencing April 2017.
 
13.
As of December 31, 2017, 346,662 options are available for future grant under the 2013 Plan.
 
d.
Dividends:
 
Any dividend distributed by the Company will be declared and paid in dollars, subject to statutory limitations. The Company's policy is not to declare dividends out of tax exempt earnings.
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NET EARNINGS PER SHARE
12 Months Ended
Dec. 31, 2017
Earnings Per Share [Abstract]  
NET EARNINGS (LOSS) PER SHARE[Text Block]
NOTE 14:-
NET EARNINGS PER SHARE
 
The following table sets forth the computation of basic and diluted net earnings per share:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
2015
 
Numerator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator for basic net earnings per share - Net income
 
$
16,518
 
 
$
3,444
 
 
$
3,945
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator for diluted net earnings per share - Net income
 
$
16,518
 
 
$
3,444
 
 
$
3,945
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator for basic net earnings per share - weighted-average number of shares outstanding (in thousands)
 
 
7,998
 
 
 
7,820
 
 
 
7,725
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands)
 
 
8,131
 
 
 
7,938
 
 
 
7,938
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic net earnings per share
 
$
2.07
 
 
$
0.45
 
 
$
0.51
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted net earnings per share
 
$
2.03
 
 
$
0.45
 
 
$
0.50
 
XML 41 R22.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME TAXES
12 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
NOTE 15:-
INCOME TAXES
 
a.
Israeli taxation:
 
1.
Corporate tax rate:
 
Taxable income of the Israeli companies is subject to the Israeli corporate tax at the rate as follows: 2015 - 26.5% , 2016 - 25% and 2017 – 24%.
 
The deferred tax balances included as of December 31, 2015 were calculated according to a tax rate of 26.5%. Following the change in the tax rate in early 2016, the Company recorded a decrease of NIS 1,265 thousand in the balance of deferred tax liabilities and a decrease of NIS 729 thousand in the balance of deferred tax assets. In addition, expenses of NIS 536 thousand (138$) was recorded in profit or loss, in taxes on income.
 
In December 2016, the Israeli Parliament approved the Economic Efficiency Law (Legislative Amendments for Achieving the Budget Targets for the 2017 and 2018 Budget Years), 2016 which reduces the corporate tax rate to 24% (instead of 25%) effective from January 1, 2017 and to 23% effective from January 1, 2018.
 
The deferred tax balances included as of December 31, 2016 are calculated according to the updated tax rate. Following the change in the tax rate, the Company recorded an additional decrease of NIS 1,687 thousand in the balance of deferred tax liabilities and an additional decrease of NIS 1,046 thousand in the balance of deferred tax assets. Furthermore, additional expanses of NIS 640 thousand (166 $) was recorded in profit or loss, in taxes on income.
 
2.
Measurement of taxable income:
 
On February 26, 2008, the Israeli Parliament enacted the Income Tax Law (Inflationary Adjustments) (Amendment 20) (Restriction of Effective Period), 2008 (Inflationary Adjustments Amendment). In accordance with the Inflationary Adjustments Amendment, the effective period of the Inflationary Adjustments Law will cease at the end of the 2007 tax year, and as of the 2008 tax year, the provisions of the Law shall no longer apply, other than the transitional provisions intended at preventing distortions in the tax calculations. In accordance with the Inflationary Adjustments Amendment, commencing with the 2008 tax year, income for tax purposes will no longer be adjusted to a real (net of inflation) measurement basis. Furthermore, the depreciation of inflation immune assets and carried forward tax losses will no longer be linked to the Israeli Consumer Price Index.
 
In accordance with ASC 740, the Company has not provided deferred income taxes on the above difference between the reporting currency and the tax basis of assets and liabilities.
 
b.
Tax benefits under the Law for the Encouragement of Industry (Taxation), 1969:
 
The Company has the status of an "industrial company", as defined by this law. According to this status and by virtue of regulations published thereunder, the Company is entitled to claim a deduction of accelerated depreciation on equipment used in industrial activities, as determined in the regulations issued under the Inflationary Law. The Company is also entitled to amortize a patent or rights to use a patent or intellectual property that are used in the enterprise's development or advancement, to deduct issuance expenses for shares listed for trading, and to file consolidated financial statements under certain conditions. 
 
c.
The Law for the Encouragement of Capital Investments, 1959 ("the Law"):
 
On August 5, 2013, the "Knesset" issued the Law for Changing National Priorities (Legislative Amendments for Achieving Budget Targets for 2013 and 2014), 2013 which consists of Amendment 71 to the Law for the Encouragement of Capital Investments ("The Amendment"). According to the Amendment, the tax rate on preferred income form a preferred enterprise in 2014 and thereafter will be 16% (in development area A - 9%). The Amendment also prescribes that any dividends distributed to individuals or foreign residents from the preferred enterprise's earnings as above will be subject to tax at a rate of 20%.
 
In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law for the Encouragement of Capital Investments ("the Amendment") was published. According to the Amendment, a preferred enterprise located in development area A will be subject to a tax rate of 7.5% instead of 9% effective from January 1, 2017 and thereafter (the tax rate applicable to preferred enterprises located in other areas remains at 16%).
 
Income not eligible for Approved Enterprise benefits or Benefited Enterprise benefits is taxed at a regular rate, which was 24% in 2017, 25% in 2016 and 26.5% in 2015.
 
d.
Non-Israeli subsidiaries:
 
Non-Israeli subsidiaries are taxed based on tax laws in their respective jurisdictions. The Corporate income tax rate of significant jurisdictions are as follows:
 
 
 
Tax rate
 
Mexico
 
 
30
%
Brazil
 
 
34
%
Argentina
 
 
35
%
United States (*)
 
 
35
%
(*)
Federal.
 
e.
Income (loss) before taxes on income:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
 
 
 
Domestic
 
 
8,813
 
 
 
5,936
 
 
 
4,189
 
Foreign
 
 
487
 
 
 
(743
)
 
 
413
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,300
 
 
 
5,193
 
 
 
4,602
 
 
f.
Deferred taxes:
 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes, and amounts used for income tax purposes. Significant components of the deferred tax liabilities and assets of the Company and its subsidiaries are as follows:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Reserves and accruals
 
 
392
 
 
 
985
 
Carryforward tax losses
 
 
23,950
 
 
 
23,271
 
Other temporary differences
 
 
666
 
 
 
423
 
 
 
 
 
 
 
 
 
 
Total deferred tax assets before valuation allowance
 
 
25,008
 
 
 
24,679
 
 
 
 
 
 
 
 
 
 
Valuation allowance (2)
 
 
(9,229
)
 
 
(17,621
)
 
 
 
 
 
 
 
 
 
Net deferred tax assets
 
 
15,779
 
 
 
7,058
 
 
 
 
 
 
 
 
 
 
Goodwill and other intangible assets
 
 
(6,696
)
 
 
(5,482
)
Other temporary differences
 
 
(38
)
 
 
(809
)
 
 
 
 
 
 
 
 
 
Total deferred tax liabilities
 
 
(6,734
)
 
 
(6,291
)
 
 
 
 
 
 
 
 
 
Total deferred tax Assets , net of deferred tax liabilities
 
 
9,045
 
 
 
767
 
 
2.
The Company and its subsidiaries have provided valuation allowances in respect of deferred tax assets resulting from tax losses carryforward and other temporary differences for amounts that are more likely than not be realized in the foreseeable future.
 
3.
Reconciling items between the statutory tax rate of the Company and the effective tax rate:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
2015
 
Income before taxes, as reported in the consolidated statements of operations
 
 
9,300
 
 
 
5,193
 
 
 
4,602
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statutory tax rate
 
 
24
%
 
 
25
%
 
 
26.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Theoretical tax expenses  on the above amount at the Israeli statutory tax rate
 
 
2,232
 
 
 
1,298
 
 
 
1,219
 
Tax adjustment in respect of different tax rates in subsidiaries and changes in tax rates
 
 
31
 
 
 
118
 
 
 
21
 
Change in valuation allowance in respect of deferred taxes
 
 
(8,950
)
 
 
-
 
 
 
-
 
Operating carryforward losses for which a valuation allowance was provided
 
 
3
 
 
 
197
 
 
 
17
 
Tax adjustment in respect of different tax rates due to approved enterprise
 
 
(567
)
 
 
-
 
 
 
-
 
Realization of carryforward tax losses for which a valuation allowance was provided
 
 
(404
)
 
 
40
 
 
 
(191
)
Provision for uncertain tax position
 
 
127
 
 
 
-
 
 
 
-
 
Nondeductible expenses and other permanent differences
 
 
307
 
 
 
192
 
 
 
65
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7,221
)
 
 
1,845
 
 
 
1,131
 
 
g.
Carryforward tax losses and deductions:
 
Carryforward tax losses of the Company totaled approximately $90,813 (including a capital loss in the amount of approximately $44,625) as of December 31, 2017. The carryforward tax losses have no expiration date.
 
Carryforward tax losses of Pointer Argentina are approximately $67 as of December 31, 2017. The carryforward tax losses will expire in 2020.
 
Carryforward tax losses of Pointer Mexico totaled approximately $1,813 as of December 31, 2017. The carryforward tax losses will expire from 2018 to 2027.
 
Carryforward tax losses of Pointer Brazil totaled approximately $3,249 as of December 31, 2017. The carryforward tax losses have no expiration date.
 
Carryforward tax losses of Pointer South Africa totaled approximately $7,304 as of December 31, 2017. The carryforward tax losses have no expiration date. 
 
j.
Final tax assessments:
 
Tax assessments for the Company are considered final as of the 2012 tax year.
 
Tax assessments for Pointer Mexico are considered final as of the 2008 tax year.
 
Tax assessments for Pointer Argentina are considered final as of the 2012 tax year.
 
h.
Taxes on income (tax benefit) included in the consolidated statements of operations:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
 
 
 
Current
 
 
927
 
 
 
501
 
 
 
348
 
Deferred
 
 
(8,148
)
 
 
1,344
 
 
 
783
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7,221
)
 
 
1,845
 
 
 
1,131
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Domestic
 
 
(7,674
)
 
 
1,768
 
 
 
1,256
 
Foreign
 
 
453
 
 
 
77
 
 
 
(125
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7,221
)
 
 
1,845
 
 
 
1,131
 
 
i.
Uncertain tax position:
 
As of December 31, 2017 and 2016 balances in respect to ASC 740, "Income Taxes" amounted to $ 127 and $ 0, respectively.
 
A reconciliation of the beginning and ending amount of unrecognized tax positions is as follows:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Balance at the beginning of the year
 
$
-
 
 
$
-
 
 
 
 
 
 
 
 
 
 
Additions based on tax positions taken related to the current year
 
 
127
 
 
 
-
 
Reductions related to settlement of tax matters and limitation
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
Balance at the end of the year
 
$
127
 
 
$
-
 
 
Substantially all the balance of unrecognized tax benefits, if recognized, would reduce the Company's annual effective tax rate
XML 42 R23.htm IDEA: XBRL DOCUMENT v3.8.0.1
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
12 Months Ended
Dec. 31, 2017
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]
NOTE 16:-
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
 
a.
Balances with related parties:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Long Term Loan (*)
 
 
973
 
 
 
831
 
DBSI (see Note 12f(1))
 
 
(53
)
 
 
(53
)
 
(*) On March 29, 2016 the board of directors approved to repay the Capital Note issued by Shagrir Group to the Company on December 2015, in the amount of NIS 8,000. In addition, the board of directors approved to convert NIS 4,100 to Shagrir Group equity and NIS 3,100 Shagrir group will issue as Capital Note for 5 years without any interest.
 
b.
Transactions with related parties:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
 
 
 
Management fees to DBSI (see Note 12f(1))
 
 
180
 
 
 
180
 
 
 
180
 
Sales to related parties
 
 
254
 
 
 
106
 
 
 
52
 
Purchase from related parties
 
 
682
 
 
 
847
 
 
 
145
 
XML 43 R24.htm IDEA: XBRL DOCUMENT v3.8.0.1
SEGMENT, CUSTOMER AND GEOGRAPHIC INFORMATION
12 Months Ended
Dec. 31, 2017
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
NOTE 17:-
SEGMENT, CUSTOMER AND GEOGRAPHIC INFORMATION
 
a.
General:
 
Until December 31, 2015 the Company had three segments: Cellocator, MRM and RSA.
 
During 2016 Pointer spun off its Israeli subsidiary, Shagrir Group Vehicle Services Ltd, therefore Segments reporting was retroactively adjusted to reflect those adjustments. As of December 31, 2016 The Company has two reportable segments: the Cellocator segment and the MRM segment
 
The Company applies ASC 280, "Segment Reporting Disclosures". The Company evaluates performance and allocates resources based on operating profit or loss.
 
b.
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenditure for assets
 
 
197
 
 
 
3,069
 
 
 
-
 
 
 
3,266
 
 
The following presents segment results of operations for the year ended December 31, 2016:
 
 
 
Cellocator
segment
 
 
MRM
segment
 
 
 
Elimination
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments revenues
 
 
22,707
 
 
 
49,620
 
 
 
(7,974
)
 
 
64,353
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments operating profit
 
 
1,660
 
 
 
4,708
 
 
 
(120
)
 
 
6,248
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments tangible and intangible assets
 
 
8,359
 
 
 
35,392
 
 
 
2,148
 
 
 
45,899
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation, amortization and impairment expenses
 
 
321
 
 
 
2,295
 
 
 
-
 
 
 
2,616
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenditure for assets
 
 
135
 
 
 
2,264
 
 
 
-
 
 
 
2,399
 
 
The following presents segment results of operations for the year ended December 31, 2015:
 
 
 
Cellocator
segment
 
 
MRM segment
 
 
 
Elimination
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments revenues
 
 
19,489
 
 
 
47,938
 
 
 
(6,860
)
 
 
60,567
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments operating profit
 
 
1,000
 
 
 
3,848
 
 
 
493
 
 
 
5,341
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments tangible and intangible assets
 
 
8,469
 
 
 
24,836
 
 
 
1,804
 
 
 
35,109
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation, amortization and impairment expenses
 
 
338
 
 
 
3,067
 
 
 
-
 
 
 
3,405
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenditure for assets
 
 
149
 
 
 
1,647
 
 
 
-
 
 
 
1,796
 
   
c.
Summary information about geographical areas:
 
 
 
 
 
Year ended
December 31,
 
 
 
 
 
2017
 
 
2016
 
 
2015
 
1.
 
Revenues *):
 
 
 
 
 
 
 
 
 
 
Israel
 
 
35,230
 
 
 
29,438
 
 
 
26,487
 
 
Latin America (mainly Mexico)
 
 
9,603
 
 
 
7,009
 
 
 
7,601
 
 
 
Brazil
 
 
14,248
 
 
 
9,142
 
 
 
7,173
 
 
 
Argentina
 
 
4,607
 
 
 
3,995
 
 
 
4,616
 
 
 
Europe
 
 
4,413
 
 
 
4,501
 
 
 
5,271
 
 
 
Other
 
 
10,054
 
 
 
10,268
 
 
 
9,419
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
78,155
 
 
 
64,353
 
 
 
60,567
 
 
*) Revenues are attributed to geographic areas based on the location of the end customers.
 
 
 
 
 
Year ended
December 31,
 
 
 
 
 
2017
 
 
2016
 
 
2015
 
2.
 
Long-lived assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Israel
 
 
1,999
 
 
 
1,248
 
 
 
978
 
 
Argentina
 
 
614
 
 
 
627
 
 
 
539
 
 
 
Mexico
 
 
358
 
 
 
298
 
 
 
229
 
 
Brazil
 
 
2,398
 
 
 
2,949
 
 
 
1,090
 
 
 
South Africa
 
 
463
 
 
 
489
 
 
 
436
 
 
 
Other
 
 
16
 
 
 
3
 
 
 
6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,848
 
 
 
5,614
 
 
 
3,278
 
 
d.
In 2017, 2016 and 2015, none of our customer accounted above 10% of the Company's revenues.
XML 44 R25.htm IDEA: XBRL DOCUMENT v3.8.0.1
DISCONTINUED OPERATION
12 Months Ended
Dec. 31, 2017
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
NOTE 18:-
DISCONTINUED OPERATION
 
a.
Below is data of the operating results attributed to the discontinued operation:
 
 
 
 
 
 
Year ended December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
Revenue from sales
 
 
18,248
 
 
 
40,498
 
Cost of sales
 
 
15,260
 
 
 
35,427
 
Gross profit
 
 
2,988
 
 
 
5,071
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
 
2,531
 
 
 
4,345
 
Operating income
 
 
457
 
 
 
726
 
 
 
 
 
 
 
 
 
 
Financial expenses,  net
 
 
54
 
 
 
139
 
Other income, net
 
 
-
 
 
 
(13
)
Taxes on income
 
 
249
 
 
 
273
 
Income from discontinued operation
 
 
154
 
 
 
327
 
 
c.
Below is data of the net cash flows provided by (used in) the discontinued operation:
 
 
 
Year ended December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
Operating activities
 
 
116
 
 
 
(2,111
)
 
 
 
 
 
 
 
 
 
Investing activities
 
 
(1,187
)
 
 
746
 
 
 
 
 
 
 
 
 
 
Financing activities
 
 
251
 
 
 
(41
XML 45 R26.htm IDEA: XBRL DOCUMENT v3.8.0.1
SELECTED STATEMENTS OF OPERATIONS DATA
12 Months Ended
Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Additional Financial Information Disclosure [Text Block]
NOTE 19:-
SELECTED STATEMENTS OF OPERATIONS DATA
 
 
 
 
 
Year ended
December 31,
 
 
 
 
 
2017
 
 
2016
 
 
2015
 
a.
 
Financial expenses, net:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on short-term bank deposits
 
 
8
 
 
 
1
 
 
 
78
 
 
Interest on long-term loans to affiliate
 
 
51
 
 
 
56
 
 
 
267
 
 
 
Foreign currency transaction adjustments
 
 
205
 
 
 
130
 
 
 
374
 
 
 
Other
 
 
47
 
 
 
37
 
 
 
9
 
 
 
 
 
 
311
 
 
 
224
 
 
 
728
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bank charges and interest expenses
 
 
1,223
 
 
 
985
 
 
 
942
 
 
 
Foreign currency transaction adjustments
 
 
-
 
 
 
194
 
 
 
166
 
 
 
Interest on long-term loans to others
 
 
92
 
 
 
70
 
 
 
318
 
 
 
Other
 
 
-
 
 
 
21
 
 
 
31
 
 
 
 
 
 
1,315
 
 
 
1,270
 
 
 
1,457
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,004
 
 
 
1,046
 
 
 
729
 
XML 46 R27.htm IDEA: XBRL DOCUMENT v3.8.0.1
SUBSEQUENT EVENTS
12 Months Ended
Dec. 31, 2017
Subsequent Events [Abstract]  
Subsequent Events [Text Block]
NOTE 20:-
SUBSEQUENT EVENTS
 
a.
On February 27, 2018, the Board of Directors resolved to issue to certain of the Company's employees RSU’s exercisable to 89,000 of the Company's ordinary shares, pursuant to the plan. The RSU’s will vest in four equal annual installments over a period of four years, commencing as of date of the grant, at an exercise price of NIS 3.0 per share.
 
b.
On March 27, 2018, the Board of Directors resolved to issue to the Company's CEO RSU’s exercisable to 120,000 of the Company's ordinary shares, pursuant to the plan. The RSU’s will vest in four equal annual installments over a period of four years, commencing as of date of the grant, at an exercise price of NIS 3.0 per share. The grant is subject to the approval of the general shareholders meeting.
XML 47 R28.htm IDEA: XBRL DOCUMENT v3.8.0.1
SIGNIFICANT ACCOUNTING POLICIES (Policies)
12 Months Ended
Dec. 31, 2017
Accounting Policies [Abstract]  
Use of Estimates, Policy [Policy Text Block]
a.
Use of estimates:
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant assumptions are employed in estimates used in determining values of intangible assets, tax assets and tax liabilities, warranty costs and stock-based compensation costs. Actual results could differ from those estimates.
Foreign Currency Transactions and Translations Policy [Policy Text Block]
b.
Financial statements in U.S. dollars:
 
The Company's reporting currency is the US dollar.
 
The majority of the revenues of the Company's Cellocator business are generated in U.S. dollars ("dollar") or linked to the dollar. In addition, a substantial portion of the Company's Cellocator business' costs are incurred in dollars. The Company's management believes that the dollar is the primary currency of the economic environment of the Cellocator business and thus its functional currency.
 
The majority of the revenues of the Company's MRM business are generated in Israeli NIS ("NIS") or linked to the NIS. In addition, a substantial portion of the Company's MRM business' costs are incurred in NIS. The Company's management believes that the NIS is the primary currency of the economic environment of the MRM business and thus its functional currency.
 
For those subsidiaries whose functional currency has been determined to be their local currency (For Pointer Argentina- the Argentinean peso; for Pointer Mexico- the Mexican peso; for Pointer Inc. the dollar; for Pointer do Brazil Comercial Ltda., for Pointer Brazil Holdings and Cielo Telecom Ltda. the Brazilian Real), assets and liabilities are translated at year-end exchange rates and statement of operations items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component, other comprehensive income (loss), in shareholders' equity (deficiency).
 
Transactions and balances of the Company and certain subsidiaries, which are denominated in other currencies, have been remeasured into dollars in accordance with principles set forth in ASC 830, "Foreign Currency Matters". Foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are remeasured at historical exchange rates. Expenses are remeasured at the exchange rate in effect on the day the transaction occurred, except for those expenses related to non-monetary assets and liabilities, which are remeasured at historical exchange rates. All exchange gains and losses from the remeasurements mentioned above, are reflected in the statement of operations as financial expenses or income, as appropriate.
Consolidation, Policy [Policy Text Block]
c.
Principles of consolidation:
 
The consolidated financial statements include the accounts of the Company and its subsidiaries.
 
Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company have been eliminated upon consolidation.
 
Changes in the parent's ownership interest in a subsidiary with no change of control are treated as equity transactions, rather than step acquisitions or dilution gains or losses. Losses of partially owned consolidated subsidiaries shall be continued to be allocated to the non-controlling interests even when their investment was already reduced to zero.
Cash and Cash Equivalents, Policy [Policy Text Block]
d.
Cash equivalents:
 
Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired.
Inventory, Policy [Policy Text Block]
 
e.
Inventories:
 
Inventories are stated at the lower of cost or net realizable value. Cost is determined using the "moving average" cost method. Inventory consists of raw materials, work in process and finished products. Inventory write-offs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, and for market prices lower than cost. In 2017, 2016 and 2015, the Company and its subsidiaries wrote-off approximately net amount of $129, $147 and $113, respectively. The net write-offs are included in cost of revenues.
Property, Plant and Equipment, Policy [Policy Text Block]
f.
Property and equipment:
 
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates:
 
 
 
%
 
 
 
Installed products
 
20-33
Computers and electronic equipment
 
10 - 33 (mainly 33)
Office furniture and equipment
 
6 - 15
Motor vehicles
 
15 - 20 (mainly 20)
Network installation
 
10 - 33
Buildings
 
6.67
Leasehold improvements
 
Over the term of the lease, including the option term or the useful lives of the assets, whichever is shorter
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]
 
g.
Goodwill:
 
Goodwill reflects the excess of the purchase price of the acquired activities over the fair value of net assets acquired. Pursuant to ASC 350, "Intangibles - Goodwill and Other", goodwill is not amortized but rather tested for impairment at least annually, at the reporting unit level.
 
The Company identified several reporting units based on the guidance of ASC 350. ASC 350 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for impairment, while the second phase (if necessary) measures impairment.
 
Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. In such case, the second phase is then performed, and the Company measures impairment by comparing the carrying amount of the reporting unit's goodwill to the implied fair value of that goodwill. An impairment loss is recognized in an amount equal to the excess.
 
In September 2011, the FASB amended the guidance on the annual testing of goodwill for impairment. The amended guidance will allow companies to assess qualitative factors to determine if it is more likely than not that goodwill might be impaired and whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards. The company didn't apply the qualitative option.
 
In 2015, following the annual goodwill impairment test in accordance with ASC 350 "Intangibles - Goodwill and Others", the Company impaired the goodwill attributed to Brazil at the amount of $ 758. These amounts were recorded in the 2015 Consolidated Statement of Operation under the captions "Impairment of intangible and tangible assets". The material assumptions used for the income approach for 2015 were 5 years of projected net cash flows, a discount rate of 25% and a long-term growth rate of 7.1%. During 2017 and 2016 there was no impairment.
 
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]
 
h.
Identifiable intangible assets:
 
Intangible assets consist of the following: a brand name, customers' related intangibles, developed technology and acquired patents. Intangible assets are amortized over their useful life using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up. Intangible assets are stated at amortized cost.
 
The customers' related intangibles are amortized over a five- to nine-year period.
 
Backlog is amortized over a three-year period.
 
Non-competition agreement is amortized over a three-year period.
 
Brand name is amortized over a ten-year period.
 
Customer related intangibles are amortized based on the accelerated method. For customer related intangibles in respect with the Brazil transaction during 2013 and the transaction during 2016, the Company used the straight line method, the differences from the accelerated method were immaterial.
 
The other intangibles are amortized based on straight line method over the periods above mentioned.
 
In 2015, following the annual goodwill impairment test in accordance with ASC 350 "Intangibles - Goodwill and Others", the Company impaired intangible assets attributed to Brazil at the amount of $ 159. These amounts were recorded in the 2015 Consolidated Statement of Operation under the captions "Impairment of intangible and tangible assets". The material assumptions used for the income approach for 2015 were 5 years of projected net cash flows, a discount rate of 25% and a long-term growth rate of 7.1%. During 2017 and 2016 there was no impairment.
 
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]
 
i.
Impairment of long-lived assets:
 
The Company's long lived assets are reviewed for impairment in accordance with ASC 360-10-35, "Property, Plant, and Equipment- Subsequent Measurement" whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
 
No impairment losses were identified in 2017, 2016 and 2015.
Standard Product Warranty, Policy [Policy Text Block]
 
j.
Provision for warranty:
 
The Company and its subsidiaries generally grant a one-year to three-year warranty for their products. The Company and its subsidiaries estimate the costs that may be incurred under its basic limited warranty and records a liability in the amount of such costs at the time which product revenue is recognized. Factors that affect the warranty liability include the number of installed units, historical and anticipated rates of warranty claims and cost per claim. The Company and its subsidiaries periodically assess the adequacy of its recorded warranty liabilities and adjust the amounts as necessary. Changes in the Company's and its subsidiaries' product liabilities (which are included in other accounts payable and accrued expenses and other long term liabilities' captions in the Balance Sheet) during 2017 and 2016 are as follows:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Balance, beginning of the year
 
 
604
 
 
 
544
 
Warranties issued during the year
 
 
468
 
 
 
422
 
Settlements made during the year
 
 
(145
)
 
 
(182
)
Expirations
 
 
(360
)
 
 
(180
)
 
 
 
 
 
 
 
 
 
Balance end of year
 
 
567
 
 
 
604
 
Revenue Recognition, Policy [Policy Text Block]
k.
Revenue recognition:
 
The Company and its subsidiaries generate revenues from the provision of services, subscriber fees 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. Sales consummated by the Company's sales forces and sales to resellers are considered sales to end-users. Revenues from the sale of systems and products are recognized in accordance with Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition" ("SAB No. 104"), when delivery has occurred, persuasive evidence of an agreement exists, the vendor's fee is fixed or determinable, no further obligation exists and collectability is reasonably assured. Service revenues including subscriber fees are recognized as services are performed, over the term of the agreement.
 
Revenues from the sale of systems and products are recognized in accordance with Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition" ("SAB No. 104"), when delivery has occurred, persuasive evidence of an agreement exists, the vendor's fee is fixed or determinable, no further obligation exists and collectability is reasonably assured. Service revenues including subscriber fees are recognized as services are performed, over the term of the agreement.
 
Deferred revenue includes amounts received under maintenance and support contracts, and amounts received from customers but not yet recognized as revenues.
 
In accordance with ASC 605-25, "Multiple-Element Arrangements", revenue from certain arrangements may include multiple elements within a single contract. The Company's accounting policy complies with the requirements set forth in ASC 605-25, relating to the separation of multiple deliverables into individual accounting units with determinable fair values. The Company considers the sale of products and subscriber fees to be separate units of accounting.
 
When a sales arrangement contains multiple elements, such as hardware and services, the Company allocates revenue to each element based on a selling price hierarchy. The selling price for each deliverable is based on its vendor specific objective evidence ("VSOE"), if available, third party evidence ("TPE") if VSOE is not available, or estimated selling price ("ESP") if neither VSOE nor TPE is available.
 
The company uses ESP to allocate the elements.
 
Revenues generated from technical support services, installation and de-installation are recognized when such services are rendered.
 
Generally, the Company does not grant rights of return. The Company follows ASC 605-15-25 "sales of product when right of return exists". Based on the Company's experience, no provision for returns was recorded
Research and Development Expense, Policy [Policy Text Block]
l.
Research and development costs:
 
Research and development costs are charged to expenses as incurred.
Advertising Costs, Policy [Policy Text Block]
  
m.
Advertising expenses:
 
Advertising expenses are charged to the statement of operations as incurred. Advertising expenses for the years ended December 31, 2017, 2016 and 2015 were $1,459, $1,337 and $1,214, respectively.
Income Tax, Policy [Policy Text Block]
n.
Income taxes:
 
The Company accounts for income taxes in accordance with ASC 740, "Income Taxes." This ASC prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.
 
The Company adopted an amendment to ASC 740, "Income Taxes". The amendment clarifies the accounting for uncertainties in income taxes by establishing minimum standards for the recognition and measurement of tax positions taken or expected to be taken in a tax return. Under the requirements of ASC 740, the Company must review all of its tax positions and make a determination as to whether its position is more-likely-than-not to be sustained upon examination by regulatory authorities. If a tax position meets the more-likely-than-not standard, then the related tax benefit is measured based on a cumulative probability analysis of the amount that is more-likely-than-not to be realized upon ultimate settlement or disposition of the underlying issue.
 
In the years ended December 31, 2017, 2016 and 2015, the Company recorded tax expenses (income) in connection to uncertainties in income taxes of $ 127, $ 0 and $ 0 respectively.
 
In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. The Company had early adopted this standard in the fourth quarter of 2015 on a retrospective basis. Prior years have been retrospectively adjusted.
Earnings Per Share, Policy [Policy Text Block]
 
o.
Basic and diluted net earnings per share:
 
Basic and diluted net earnings per share are computed based on the weighted average number of ordinary shares outstanding during the year. Diluted net earnings (loss) per share further include the dilutive effect of stock options outstanding during the year, in accordance with ASC 260, "Earnings Per Share". Part of the Company's outstanding stock options and warrants has been excluded from the calculation of the diluted earnings (loss) per share because such securities are anti-dilutive. The total weighted average number of pointer shares related to the outstanding options and warrants excluded from the calculations of diluted earnings (loss) per share was 20,125, 202,000 and 64,000 for the years ended December 31, 2017, 2016 and 2015, respectively.
 
Basis of Accounting, Policy [Policy Text Block]
 
p.
Accounting for stock-based compensation:
 
The Company applies ASC 718, "Compensation - Stock Compensation". In accordance with ASC 718, all grants of employee equity based stock options are recognized in the financial statements based on their grant date fair values. The fair value of graded vesting options, as measured at the date of grant, is charged to expenses, based on the accelerated attribution method over the requisite service period of each of the awards, net of estimated forfeitures.
 
Effective as of January 1, 2017, the Company adopted Accounting Standards Update 2016-09, "Compensation-Stock Compensation (Topic 718)" ("ASU2016-09") on a modified, retrospective basis. ASU 2016-09 permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for stock - based compensation: to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. Upon adoption of ASU 2016-09, the Company elected to change its accounting policy to account for forfeitures as they occur. Upon the adoption in the first quarter of 2017, the effect of the adoption on the Company's retained earnings was immaterial.
 
During the years ended December 31, 2017, 2016 and 2015, the Company recognized stock-based compensation expenses related to employee stock options in the amounts of $380, $320 and $309, respectively.
 
According to ASC 718, a change in any of the terms or conditions of the Company's stock options is accounted for as a modification. Therefore, if the terms of an award are modified, the Company calculates incremental compensation costs as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors existing at the modification date. For vested options, the Company recognizes any incremental compensation cost immediately in the period the modification occurs, whereas for unvested options, the Company recognizes, over the new requisite service period, any incremental compensation cost due to the modification and any remaining unrecognized compensation cost for the original award over its term.
Purchase Of Company Shares [Policy Text Block]
q.
Data related to options to purchase the Company shares:
 
1.
The fair value of the Company's stock options granted to employees and directors for the years ended December 31, 2017, 2016 and 2015 was estimated using the Black-Scholes-Merton option-pricing model, with the following weighted average assumptions:
 
 
 
Year ended
December 31,
 
 
2017
 
2016
 
2015
 
 
 
 
 
 
 
Risk free interest rate
 
0.86%-1.39%
 
0.8%-1.00%
 
1.29%-1.62%
Dividend yield
 
0%
 
0%
 
0%
Expected volatility
 
52.25%-57.73%
 
55.81%-60.84%
 
51.47%-49.78%
Expected term (in years)
 
4.00-5.50
 
4.00-5.50
 
4.00-5.50
Forfeiture rate
 
-
 
2%
 
2%
 
The Black-Scholes-Merton option-pricing model requires a number of assumptions, of which the most significant are expected stock price volatility and the expected option term. Expected volatility was calculated based upon actual historical stock price movements. The expected option term represents the period that the Company's stock options are expected to be outstanding and was determined for plain vanilla options, based on the simplified method permitted by SAB 107 and extended by SAB 110 as the average of the vesting period and the contractual term.
 
The Company adopted SAB 110 and continues to apply the simplified method until enough historical experience is available to provide a reasonable estimate of the expected term for stock option grants. In a few limited cases the Company did not use the simplified method in measuring the fair value of modified awards, either when the options were deeply out of the money immediately before the modification or when the Company accelerated the vesting and extended the exercise period after an employee's resignation. Since in both instances the entire remaining contractual term of the options was relatively short, we assumed that the expected life to be the entire remaining contractual term.
 
The risk-free interest rate is based on the yield from U.S. Treasury bill with accordance to the expected term of the options.
 
The Company has historically not paid dividends and has no foreseeable plans to pay dividends and therefore uses an expected dividend yield of zero in the option pricing model. The Company is required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest.
 
On October 2, 2017, the Company sold 2,519,544 ordinary shares of Pointer South Africa, representing approximately 12% of Pointer South Africa's issued and outstanding share capital as of the date thereof, to Ms. Preshnee Moodley, who serves on Pointer South Africa's Board of Directors, in exchange to its services.
Severance Pay [Policy Text Block]
 
r.
Severance pay:
 
The liability of the Company and its subsidiaries in Israel for severance pay is calculated pursuant to Israel's Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of balance sheet date and are presented on an undiscounted basis (the "Shut Down Method"). Employees are entitled to one month's salary for each year of employment, or a portion thereof. The liability for the Company and its subsidiaries in Israel is fully provided by monthly deposits with insurance policies and by accrual. The value of these policies is recorded as an asset in the Company's balance sheet.
 
The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrendered value of these policies, and includes profits or losses accumulated to balance sheet date.
 
Some of the company's employees are subject to Section 14 of the Severance Pay Law and the General Approval of the Labor Minister dated June 30, 1998, issued in accordance to the said Section 14, mandating that upon termination of such employees' employment, all the amounts accrued in their insurance policies shall be released to them. The severance pay liabilities and deposits covered by these plans are not reflected in the balance sheet as the severance pay risks have been irrevocably transferred to the severance funds.
 
Severance pay expenses for the years ended December 31, 2017, 2016 and 2015 were $399, $303 and $292, respectively.
Concentration Risk, Credit Risk, Policy [Policy Text Block]
s.
Concentrations of credit risk:
 
Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents, trade receivables, trade payables and derivatives.
 
The Company's cash and cash equivalents are invested primarily in deposits with major banks worldwide, mainly in Israel. Generally, these deposits may be redeemed upon demand and, therefore, bear low risk. Management believes that the financial institutions that hold the Company's investments have a high credit rating.
 
The Company's trade receivables include amounts billed to clients located mainly in Israel, Latin America and Europe. Management periodically evaluates the collectability of its trade receivables to reflect the amounts estimated to be collectible. An allowance is determined in respect of specific debts whose collection, in management's opinion, is doubtful. In 2017, 2016 and 2015, the Company recorded expenses in respect of such debts in the amount of $802, $511 and $98, respectively. As for major customers, see Note 17d.
 
Changes in the allowance for doubtful accounts during 2017 and 2016 are as follows:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Balance at beginning of the year
 
 
1,281
 
 
 
1,053
 
 
 
 
 
 
 
 
 
 
Deductions during the year
 
 
(992
)
 
 
(339
)
Charged to expenses
 
 
802
 
 
 
511
 
Foreign currency translation adjustment
 
 
36
 
 
 
56
 
 
 
 
 
 
 
 
 
 
Balance at end of year
 
 
1,127
 
 
 
1,281
 
Fair Value Measurement, Policy [Policy Text Block]
  
t.
Fair value measurements:
 
The following methods and assumptions were used by the Company and its subsidiaries in estimating fair value disclosures for financial instruments:
 
The carrying amounts reported in the balance sheet for cash and cash equivalents, trade receivables, other accounts receivable, short-term bank credit, trade payables and other accounts payable approximate their fair values due to the short-term maturities of such instruments.
 
Amounts recorded for long-term loans approximate fair values. The fair value was estimated using discounted cash flow analysis, based on the Company's incremental borrowing rates for similar type of borrowing arrangements.
 
The Company accounts for certain assets and liabilities at fair value under ASC 820, "Fair Value Measurements and Disclosures". Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
 
Level 1 -
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
 
Level 2 -
Significant other observable inputs based on market data obtained from sources independent of the reporting entity;
 
Level 3 -
Unobservable inputs which are supported by little or no market activity (for example cash flow modeling inputs based on assumptions).
 
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy.
 
Assets and Liabilities that are measured at Fair Value on a Nonrecurring Basis subsequent to their initial recognition.
 
During 2015, such measurements of fair value related solely to an impairment loss of goodwill reducing its carrying amount in $758. The Company used an income approach for measuring the fair value of the goodwill. See Note 2g and 2i for significant assumptions. As the fair value was measured using significant unobservable assumptions, the goodwill was classified as level 3 in ASC 820 fair value hierarchy.
 
During 2017 and 2016, there were no impairment losses regarding goodwill.
Derivatives, Policy [Policy Text Block]
 
u.
Derivatives and hedging activities:
 
ASC 815, "Derivatives and Hedging" requires the Company to recognize all of its derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.
 
For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income and reclassified into earnings in the line item associated with the hedged transaction in the period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized immediately in financial income/expense in the statement of operations.
Intercompany Profit to Regulated Affiliates, Policy [Policy Text Block]
v.
Equity affiliates
 
The Company recognizes investment in equity affiliates under ASC 323, "Investments – Equity Method and Joint Ventures". The Company recognizes its proportionate share of the income of equity affiliates. Losses of equity affiliates are recognized to the extent of our investment, advances, financial guarantees and other commitments to provide financial support to the investee. Any losses in excess of this amount are deferred and reduce the amount of future earnings of the equity investee recognized by the Company.
Discontinued Operations, Policy [Policy Text Block]
 
w.
Discontinued operations
 
Under ASC 205, "Presentation of Financial Statements - Discontinued Operation" when a component of an entity, as defined in ASC 205, has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on its disposal are classified as discontinued operations and the assets and liabilities of such component are classified as assets and liabilities attributed to discontinued operations; that is, provided that the operations, assets and liabilities and cash flows of the component have been eliminated from the Company's consolidated operations and the Company will no longer have any significant continuing involvement in the operations of the component.
New Accounting Pronouncements, Policy [Policy Text Block]
x.
Accounting Standards still not effective:
 
In May 2014, the FASB issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU is effective for the Company in 2018 using either of two methods: (i) retrospective application of ASU 2014-09 to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective application of ASU 2014-09 with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09 ("Modified Retrospective Adoption Transition Method").
 
The Company has established an implementation team to analyze the potential impact the standard will have on its consolidated financial statements and related disclosures as well as its business processes, systems and controls. This includes reviewing revenue contracts across all revenue streams and evaluating potential differences that would result from applying the requirements under the standard. The Company will adopt the new standard on January 1, 2018 using the Modified Retrospective Adoption Transition Method. 
 
The Company has completed its evaluation of the Standard and expects a change relating to the application of the legacy contingent revenue “cash cap” guidance in ASC 605-25, Revenue Recognition – Multiple-Element Arrangements, that limited the amount of revenue recognized at contract inception. In addition, the Standard requires the deferral and amortization of “incremental" costs incurred to obtain a contract. The primary contract acquisition cost for the Company are sales commissions. Under current GAAP, the Company expenses sales commissions as incurred while under the Standard such costs will be classified as a contract asset and amortized over a period that approximates the timing of revenue recognition on the underlying contracts.
 
Upon initial application the company will record deferred revenues, assets and a cumulative effect to retained earnings in an immaterial amounts on the opening balance sheet at January 1, 2018.
 
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). The new guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 including interim periods within those fiscal years, but early adoption is permitted. The ASU requires a modified retrospective transition approach and provides certain optional transition relief. The Company is currently evaluating when it will adopt this new standard and the expected impact on its consolidated financial statements and related disclosures.
 
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). This new standard clarifies certain aspects of the statement of cash flows, including the classification of debt prepayment or debt extinguishment costs or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees and beneficial interests in securitization transactions. This new standard also clarifies that an entity should determine each separately identifiable source of use within the cash receipts and payments on the basis of the nature of the underlying cash flows. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use, the appropriate classification should depend on the activity that is likely to be the predominant source or use of cash flows for the item. ASU 2016-15 will generally be applied retrospectively and is effective for annual periods beginning after December 15, 2017. The Company does not expect that this new guidance will have a material impact on its consolidated financial statements.
 
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 will be effective for the Company in the first quarter of 2018 and early adoption is permitted. The Company does not expect that this new guidance will have a material impact on its consolidated financial statements.
 
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 eliminates Step 2 of the goodwill impairment test, which requires the calculation of the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently evaluating the expected impact of the standard on its consolidated financial statements.
 
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which expands the activities that qualify for hedge accounting and simplifies the rules for reporting hedging transactions. The standard is effective for the Company beginning January 1, 2019. Early adoption is permitted. The Company does not expect that this new guidance will have a material impact on its consolidated financial statements.
XML 48 R29.htm IDEA: XBRL DOCUMENT v3.8.0.1
GENERAL (Tables)
12 Months Ended
Dec. 31, 2017
Business Acquisition [Line Items]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]
The pro forma information is not necessarily indicative of the results of operations that would have actually occurred had the acquisitions been consummated on those dates, nor does it purport to represent the results of operations for future periods.
 
 
 
Year ended
December 31,
 
 
 
2016
 
 
2015
 
 
 
Unaudited
 
 
 
 
 
 
 
 
Revenues
 
$
67,468
 
 
$
64,516
 
 
 
 
 
 
 
 
 
 
Net income attributable to Pointer shareholders' from continuing operations
 
$
3,820
 
 
$
4,206
 
 
 
 
 
 
 
 
 
 
Basic income per share
 
$
0.49
 
 
$
0.55
 
 
 
 
 
 
 
 
 
 
Diluted income per share
 
$
0.48
 
 
$
0.53
 
Global Telematics S.A. Proprietary Limited [Member] | Subsidiary [Member]  
Business Acquisition [Line Items]  
Business Acquisition, Pro Forma Information [Table Text Block]
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:
 
Working capital, net
 
 
334
 
Property and equipment
 
 
1,239
 
Other intangible assets
 
 
2,100
 
Goodwill
 
 
6,068
 
Deferred taxes
 
 
(714
)
Payables for acquisition of investments in subsidiaries
 
 
(496
)
 
 
 
 
 
 
 
$
8,531
 
XML 49 R30.htm IDEA: XBRL DOCUMENT v3.8.0.1
SIGNIFICANT ACCOUNTING POLICIES (Tables)
12 Months Ended
Dec. 31, 2017
Accounting Policies [Abstract]  
Schedule Of Annual Depreciation Rates [Table Text Block]
 
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates:
 
 
 
%
 
 
 
Installed products
 
20-33
Computers and electronic equipment
 
10 - 33 (mainly 33)
Office furniture and equipment
 
6 - 15
Motor vehicles
 
15 - 20 (mainly 20)
Network installation
 
10 - 33
Buildings
 
6.67
Leasehold improvements
 
Over the term of the lease, including the option term or the useful lives of the assets, whichever is shorter
Schedule of Product Warranty Liability [Table Text Block]
payable and accrued expenses and other long term liabilities' captions in the Balance Sheet) during 2017 and 2016 are as follows:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Balance, beginning of the year
 
 
604
 
 
 
544
 
Warranties issued during the year
 
 
468
 
 
 
422
 
Settlements made during the year
 
 
(145
)
 
 
(182
)
Expirations
 
 
(360
)
 
 
(180
)
 
 
 
 
 
 
 
 
 
Balance end of year
 
 
567
 
 
 
604
 
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]
The fair value of the Company's stock options granted to employees and directors for the years ended December 31, 2017, 2016 and 2015 was estimated using the Black-Scholes-Merton option-pricing model, with the following weighted average assumptions:
 
 
 
Year ended
December 31,
 
 
2017
 
2016
 
2015
 
 
 
 
 
 
 
Risk free interest rate
 
0.86%-1.39%
 
0.8%-1.00%
 
1.29%-1.62%
Dividend yield
 
0%
 
0%
 
0%
Expected volatility
 
52.25%-57.73%
 
55.81%-60.84%
 
51.47%-49.78%
Expected term (in years)
 
4.00-5.50
 
4.00-5.50
 
4.00-5.50
Forfeiture rate
 
-
 
2%
 
2%
Allowance for Credit Losses on Financing Receivables [Table Text Block]
Changes in the allowance for doubtful accounts during 2017 and 2016 are as follows:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Balance at beginning of the year
 
 
1,281
 
 
 
1,053
 
 
 
 
 
 
 
 
 
 
Deductions during the year
 
 
(992
)
 
 
(339
)
Charged to expenses
 
 
802
 
 
 
511
 
Foreign currency translation adjustment
 
 
36
 
 
 
56
 
 
 
 
 
 
 
 
 
 
Balance at end of year
 
 
1,127
 
 
 
1,281
 
XML 50 R31.htm IDEA: XBRL DOCUMENT v3.8.0.1
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables)
12 Months Ended
Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block]
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Government authorities
 
 
517
 
 
 
583
 
Employees
 
 
30
 
 
 
35
 
Prepaid expenses
 
 
1,715
 
 
 
1,677
 
Others
 
 
603
 
 
 
209
 
 
 
 
 
 
 
 
 
 
 
 
 
2,865
 
 
 
2,504
 
XML 51 R32.htm IDEA: XBRL DOCUMENT v3.8.0.1
INVENTORIES (Tables)
12 Months Ended
Dec. 31, 2017
Inventory Disclosure [Abstract]  
Schedule of Inventory, Current [Table Text Block]
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Raw materials
 
 
3,621
 
 
 
2,510
 
Work in process
 
 
149
 
 
 
89
 
Finished goods
 
 
2,781
 
 
 
2,643
 
 
 
 
 
 
 
 
 
 
 
 
 
6,551
 
 
 
5,242
 
XML 52 R33.htm IDEA: XBRL DOCUMENT v3.8.0.1
PROPERTY AND EQUIPMENT (Tables)
12 Months Ended
Dec. 31, 2017
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment [Table Text Block]
 
a.
Composition:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
Cost:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Installed products
 
 
9,771
 
 
 
9,323
 
Computers and electronic equipment
 
 
7,353
 
 
 
5,550
 
Office furniture and equipment
 
 
1,397
 
 
 
1,205
 
Motor vehicles
 
 
349
 
 
 
339
 
Network installation
 
 
4,211
 
 
 
3,839
 
Leasehold improvements
 
 
778
 
 
 
670
 
 
 
 
 
 
 
 
 
 
 
 
 
23,859
 
 
 
20,926
 
 
 
 
 
 
 
 
 
 
Accumulated depreciation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Installed products
 
 
7,061
 
 
 
5,912
 
Computers and electronic equipment
 
 
4,768
 
 
 
3,981
 
Office furniture and equipment
 
 
1,290
 
 
 
994
 
Motor vehicles
 
 
237
 
 
 
175
 
Network installation
 
 
4,193
 
 
 
3,826
 
Leasehold improvements
 
 
462
 
 
 
424
 
 
 
 
 
 
 
 
 
 
 
 
 
18,011
 
 
 
15,312
 
 
 
 
 
 
 
 
 
 
Depreciated cost
 
 
5,848
 
 
 
5,614
 
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OTHER INTANGIBLE ASSETS, NET (Tables)
12 Months Ended
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Finite-Lived Intangible Assets [Table Text Block]
 
a.
Other intangible assets, net:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
Cost:
 
 
 
 
 
 
 
 
Patents
 
 
639
 
 
 
639
 
Developed technology
 
 
4,978
 
 
 
4,978
 
Customer related intangible
 
 
8,114
 
 
 
7,891
 
Others
 
 
874
 
 
 
874
 
Brand name
 
 
2,816
 
 
 
2,793
 
 
 
 
 
 
 
 
 
 
 
 
 
17,421
 
 
 
17,175
 
Accumulated amortization:
 
 
 
 
 
 
 
 
Patents
 
 
639
 
 
 
639
 
Developed technology (see note 2h)
 
 
4,945
 
 
 
4,901
 
Customer related intangible
 
 
6,853
 
 
 
6,534
 
Others
 
 
696
 
 
 
650
 
Brand name
 
 
2,353
 
 
 
2,273
 
 
 
 
 
 
 
 
 
 
 
 
 
15,486
 
 
 
14,997
 
 
 
 
 
 
 
 
 
 
Amortized cost
 
 
1,935
 
 
 
2,178
 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]
 
c.
Estimated amortization expenses for the years ending:
 
December 31,
 
 
 
 
 
 
 
2018
 
 
487
 
2019
 
 
399
 
2020
 
 
368
 
2021
 
 
343
 
2022 and after
 
 
338
 
 
 
 
 
 
 
 
 
1,935
 
XML 54 R35.htm IDEA: XBRL DOCUMENT v3.8.0.1
GOODWILL (Tables)
12 Months Ended
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill [Table Text Block]
 
The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 are as follows:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Goodwill, beginning of the year
 
 
38,107
 
 
 
31,388
 
Additions in respect of acquisitions
 
 
-
 
 
 
6,070
 
Foreign currency translation adjustments
 
 
2,903
 
 
 
649
 
 
 
 
 
 
 
 
 
 
Goodwill, end of year
 
 
41,010
 
 
 
38,107
 
Schedule of Good will Reporting Unit [Table Text Block]
 
The carrying value of goodwill by reporting unit as of 31 December, 2017 is as follows:
 
Reporting unit
 
2017
 
 
 
 
 
Cellocator
 
 
2,534
 
SVR (*)
 
 
30,245
 
Pointer brazil
 
 
2,338
 
Cielo brazil
 
 
5,893
 
 
 
 
 
 
 
 
 
41,010
 
 
The carrying value of goodwill by reporting unit as of 31 December 2016 is as follows:
 
Reporting unit
 
2016
 
 
 
 
 
Cellocator
 
 
2,534
 
SVR (*)
 
 
27,219
 
Pointer brazil
 
 
2,373
 
Cielo brazil
 
 
5,981
 
 
 
 
 
 
 
 
 
38,107
 
 
(*) SVR in Israel.
Schedule of Material Assumptions [Table Text Block]
 
The material assumptions used for the income approach for 2017 were:
 
 
 
Cellocator
 
 
SVR
 
 
Pointer brazil
 
 
Cielo
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate
 
 
16
%
 
 
15
%
 
 
21
%
 
 
21
%
Growth rate
 
 
3
%
 
 
2
%
 
 
6
%
 
 
6
%
Years of projected cash flows
 
 
5
 
 
 
5
 
 
 
5
 
 
 
5
 
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SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOANS FROM BANKS, SHAREHOLDERS AND OTHERS (Tables)
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Schedule of Short-term Debt [Table Text Block]
 
Classified by currency, linkage terms and annual interest rates, the credit and loans are as follows:
 
 
 
Interest rate
 
December 31,
 
 
 
2017
 
2016
 
2017
 
 
2016
 
 
 
%
 
 
 
 
 
 
Current maturities of long-term loans from banks, shareholders and others:
 
 
 
 
 
 
 
 
 
 
 
 
In, or linked to Dollars
 
Libor+2%
 
Libor+2%
 
 
4,856
 
 
 
4,497
 
In other currencies
 
10%-17%
 
10%-17%
 
 
245
 
 
 
339
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,101
 
 
 
4,836
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unutilized credit lines
 
 
 
 
 
 
10,954
 
 
 
8,714
 
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OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)
12 Months Ended
Dec. 31, 2017
Accounts Payable and Accrued Liabilities [Abstract]  
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Employees and payroll accruals
 
 
4,260
 
 
 
3,477
 
Government authorities
 
 
1,858
 
 
 
817
 
Provision for warranty
 
 
369
 
 
 
391
 
Accrued expenses
 
 
2,561
 
 
 
2,100
 
Related party
 
 
53
 
 
 
53
 
Others
 
 
16
 
 
 
1
 
 
 
 
 
 
 
 
 
 
 
 
 
9,117
 
 
 
6,839
 
XML 57 R38.htm IDEA: XBRL DOCUMENT v3.8.0.1
LONG-TERM LOANS FROM BANKS (Tables)
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Schedule of Long-term Debt Instruments [Table Text Block]
 
a.
Composition:
 
 
 
Interest rate
 
December 31,
 
 
 
2017
 
2016
 
2017
 
 
2016
 
 
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In, or linked to Dollars (see c below )
 
3.71%
 
3.71%
 
 
9,871
 
 
 
14,356
 
In other currencies
 
10%-17%
 
10%-17%
 
 
245
 
 
 
662
 
 
 
 
 
 
 
 
10,116
 
 
 
15,018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less - current maturities
 
 
 
 
 
 
5,101
 
 
 
4,836
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,015
 
 
 
10,182
 
Schedule of Maturities of Long-term Debt [Table Text Block]
 
b.
As of December 31, 2017, the aggregate annual maturities of the long-term loans are as follows:
 
2018 (current maturities)
 
 
5,101
 
2019
 
 
2,341
 
2020
 
 
1,506
 
2021 and thereafter
 
 
1,168
 
 
 
 
 
 
 
 
 
10,116
 
XML 58 R39.htm IDEA: XBRL DOCUMENT v3.8.0.1
DEFERRED TAXES AND OTHER LONG-TERM LIABILITIES (Tables)
12 Months Ended
Dec. 31, 2017
Deferred Revenue and Credits, Noncurrent [Abstract]  
Schedule of Other Assets and Other Liabilities [Table Text Block]
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Provision for warranty
 
 
199
 
 
 
213
 
Deferred tax
 
 
540
 
 
 
666
 
Deferred revenues
 
 
99
 
 
 
97
 
 
 
 
 
 
 
 
 
 
 
 
 
838
 
 
 
976
 
XML 59 R40.htm IDEA: XBRL DOCUMENT v3.8.0.1
COMMITMENTS AND CONTINGENT LIABILITIES (Tables)
12 Months Ended
Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]
 
The Company and its subsidiaries have leased offices, motor vehicles and locations for periods through 2020. Minimum annual rental payments under non-cancelable operating leases are as follows:
 
2018
 
 
2,367
 
2019
 
 
1,848
 
2020
 
 
504
 
2021
 
 
271
 
 
 
 
 
 
 
 
 
4,990
 
XML 60 R41.htm IDEA: XBRL DOCUMENT v3.8.0.1
EQUITY (Tables)
12 Months Ended
Dec. 31, 2017
Stockholders' Equity Note [Abstract]  
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]
A summary of employee option activity under the Company's Stock Option Plans and RSU's as of December 31, 2017 and changes during the year ended December 31, 2017 are as follows:
 
 
 
Number of
options
 
 
Weighted-
average
exercise
price
 
 
Weighted-
average
remaining
contractual
term
(in years)
 
 
Aggregate
intrinsic
value (in
thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at  January 1, 2017
 
 
556,134
 
 
$
5.15
 
 
 
 
 
 
 
 
 
Granted
 
 
21,500
 
 
$
0.87
 
 
 
 
 
 
 
 
 
Exercised
 
 
(185,675
)
 
$
2.10
 
 
 
 
 
 
 
 
 
Forfeited
 
 
(52,500
)
 
$
5.79
 
 
 
 
 
 
 
 
 
Outstanding at December 31, 2017
 
 
339,459
 
 
$
4.61
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at December 31, 2017
 
 
131,509
 
 
$
3.49
 
 
 
2.79
 
 
$
1,987
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested and expected to vest at December 31, 2017
 
 
335,300
 
 
$
4.67
 
 
 
4.44
 
 
$
1,566
 
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]
The following table summarizes information relating to employees' stock options and RSU's outstanding as of December 31, 2017, according to exercise prices:
 
Options outstanding
 
 
Options exercisable
 
Number
outstanding at
December 31,
2017
 
 
Weighted
average
remaining
contractual life
 
 
Weighted
average
exercise
price
 
 
Number
exercisable at
December 31,
2017
 
 
Weighted
average
exercise
price
 
 
 
 
Years
 
 
 
 
 
 
 
 
 
 
 
62,384
 
 
 
0.7
 
 
$
1.17
 
 
 
62,384
 
 
$
1.17
 
 
10,000
 
 
 
0.52
 
 
$
3.38
 
 
 
10,000
 
 
$
3.38
 
 
4,575
 
 
 
3.31
 
 
$
0.87
 
 
 
-
 
 
$
0.87
 
 
28,500
 
 
 
4.16
 
 
$
6.14
 
 
 
6,000
 
 
$
6.14
 
 
212,500
 
 
 
5.52
 
 
$
5.94
 
 
 
53,125
 
 
$
5.94
 
 
21,500
 
 
 
6.32
 
 
$
0.87
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
339,459
 
 
 
4.39
 
 
$
4.61
 
 
 
131,509
 
 
$
3.49
XML 61 R42.htm IDEA: XBRL DOCUMENT v3.8.0.1
NET EARNINGS PER SHARE (Tables)
12 Months Ended
Dec. 31, 2017
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
 
The following table sets forth the computation of basic and diluted net earnings per share:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
2015
 
Numerator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator for basic net earnings per share - Net income
 
$
16,518
 
 
$
3,444
 
 
$
3,945
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator for diluted net earnings per share - Net income
 
$
16,518
 
 
$
3,444
 
 
$
3,945
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator for basic net earnings per share - weighted-average number of shares outstanding (in thousands)
 
 
7,998
 
 
 
7,820
 
 
 
7,725
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands)
 
 
8,131
 
 
 
7,938
 
 
 
7,938
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic net earnings per share
 
$
2.07
 
 
$
0.45
 
 
$
0.51
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted net earnings per share
 
$
2.03
 
 
$
0.45
 
 
$
0.50
 
XML 62 R43.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Schedule of Corporate Income Tax Rate Of Significant Jurisdictions [Table Text Block]
 
Non-Israeli subsidiaries are taxed based on tax laws in their respective jurisdictions. The Corporate income tax rate of significant jurisdictions are as follows:
 
 
 
Tax rate
 
Mexico
 
 
30
%
Brazil
 
 
34
%
Argentina
 
 
35
%
United States (*)
 
 
35
%
(*)
Federal.
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]
Income (loss) before taxes on income:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
 
 
 
Domestic
 
 
8,813
 
 
 
5,936
 
 
 
4,189
 
Foreign
 
 
487
 
 
 
(743
)
 
 
413
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,300
 
 
 
5,193
 
 
 
4,602
 
Schedule of Deferred Tax Assets and Liabilities [Table Text Block]
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Reserves and accruals
 
 
392
 
 
 
985
 
Carryforward tax losses
 
 
23,950
 
 
 
23,271
 
Other temporary differences
 
 
666
 
 
 
423
 
 
 
 
 
 
 
 
 
 
Total deferred tax assets before valuation allowance
 
 
25,008
 
 
 
24,679
 
 
 
 
 
 
 
 
 
 
Valuation allowance (2)
 
 
(9,229
)
 
 
(17,621
)
 
 
 
 
 
 
 
 
 
Net deferred tax assets
 
 
15,779
 
 
 
7,058
 
 
 
 
 
 
 
 
 
 
Goodwill and other intangible assets
 
 
(6,696
)
 
 
(5,482
)
Other temporary differences
 
 
(38
)
 
 
(809
)
 
 
 
 
 
 
 
 
 
Total deferred tax liabilities
 
 
(6,734
)
 
 
(6,291
)
 
 
 
 
 
 
 
 
 
Total deferred tax Assets , net of deferred tax liabilities
 
 
9,045
 
 
 
767
 
Schedule of Deferred Taxes Included in Balance Sheets [Table Text Block]
Reconciling items between the statutory tax rate of the Company and the effective tax rate:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
2015
 
Income before taxes, as reported in the consolidated statements of operations
 
 
9,300
 
 
 
5,193
 
 
 
4,602
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statutory tax rate
 
 
24
%
 
 
25
%
 
 
26.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Theoretical tax expenses  on the above amount at the Israeli statutory tax rate
 
 
2,232
 
 
 
1,298
 
 
 
1,219
 
Tax adjustment in respect of different tax rates in subsidiaries and changes in tax rates
 
 
31
 
 
 
118
 
 
 
21
 
Change in valuation allowance in respect of deferred taxes
 
 
(8,950
)
 
 
-
 
 
 
-
 
Operating carryforward losses for which a valuation allowance was provided
 
 
3
 
 
 
197
 
 
 
17
 
Tax adjustment in respect of different tax rates due to approved enterprise
 
 
(567
)
 
 
-
 
 
 
-
 
Realization of carryforward tax losses for which a valuation allowance was provided
 
 
(404
)
 
 
40
 
 
 
(191
)
Provision for uncertain tax position
 
 
127
 
 
 
-
 
 
 
-
 
Nondeductible expenses and other permanent differences
 
 
307
 
 
 
192
 
 
 
65
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7,221
)
 
 
1,845
 
 
 
1,131
 
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
Taxes on income (tax benefit) included in the consolidated statements of operations:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
 
 
 
Current
 
 
927
 
 
 
501
 
 
 
348
 
Deferred
 
 
(8,148
)
 
 
1,344
 
 
 
783
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7,221
)
 
 
1,845
 
 
 
1,131
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Domestic
 
 
(7,674
)
 
 
1,768
 
 
 
1,256
 
Foreign
 
 
453
 
 
 
77
 
 
 
(125
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7,221
)
 
 
1,845
 
 
 
1,131
 
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
 
A reconciliation of the beginning and ending amount of unrecognized tax positions is as follows:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Balance at the beginning of the year
 
$
-
 
 
$
-
 
 
 
 
 
 
 
 
 
 
Additions based on tax positions taken related to the current year
 
 
127
 
 
 
-
 
Reductions related to settlement of tax matters and limitation
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
Balance at the end of the year
 
$
127
 
 
$
-
 
XML 63 R44.htm IDEA: XBRL DOCUMENT v3.8.0.1
BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Tables)
12 Months Ended
Dec. 31, 2017
Related Party Transactions [Abstract]  
Schedule of Related Party Transactions [Table Text Block]
 
a.
Balances with related parties:
 
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Long Term Loan (*)
 
 
973
 
 
 
831
 
DBSI (see Note 12f(1))
 
 
(53
)
 
 
(53
)
 
(*) On March 29, 2016 the board of directors approved to repay the Capital Note issued by Shagrir Group to the Company on December 2015, in the amount of NIS 8,000. In addition, the board of directors approved to convert NIS 4,100 to Shagrir Group equity and NIS 3,100 Shagrir group will issue as Capital Note for 5 years without any interest.
 
b.
Transactions with related parties:
 
 
 
Year ended
December 31,
 
 
 
2017
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
 
 
 
Management fees to DBSI (see Note 12f(1))
 
 
180
 
 
 
180
 
 
 
180
 
Sales to related parties
 
 
254
 
 
 
106
 
 
 
52
 
Purchase from related parties
 
 
682
 
 
 
847
 
 
 
145
 
XML 64 R45.htm IDEA: XBRL DOCUMENT v3.8.0.1
SEGMENT, CUSTOMER AND GEOGRAPHIC INFORMATION (Tables)
12 Months Ended
Dec. 31, 2017
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
 
b.
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenditure for assets
 
 
197
 
 
 
3,069
 
 
 
-
 
 
 
3,266
 
 
The following presents segment results of operations for the year ended December 31, 2016:
 
 
 
Cellocator
segment
 
 
MRM
segment
 
 
 
Elimination
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments revenues
 
 
22,707
 
 
 
49,620
 
 
 
(7,974
)
 
 
64,353
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments operating profit
 
 
1,660
 
 
 
4,708
 
 
 
(120
)
 
 
6,248
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments tangible and intangible assets
 
 
8,359
 
 
 
35,392
 
 
 
2,148
 
 
 
45,899
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation, amortization and impairment expenses
 
 
321
 
 
 
2,295
 
 
 
-
 
 
 
2,616
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenditure for assets
 
 
135
 
 
 
2,264
 
 
 
-
 
 
 
2,399
 
 
The following presents segment results of operations for the year ended December 31, 2015:
 
 
 
Cellocator
segment
 
 
MRM segment
 
 
 
Elimination
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments revenues
 
 
19,489
 
 
 
47,938
 
 
 
(6,860
)
 
 
60,567
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments operating profit
 
 
1,000
 
 
 
3,848
 
 
 
493
 
 
 
5,341
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments tangible and intangible assets
 
 
8,469
 
 
 
24,836
 
 
 
1,804
 
 
 
35,109
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation, amortization and impairment expenses
 
 
338
 
 
 
3,067
 
 
 
-
 
 
 
3,405
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenditure for assets
 
 
149
 
 
 
1,647
 
 
 
-
 
 
 
1,796
 
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]
  
c.
Summary information about geographical areas:
 
 
 
 
 
Year ended
December 31,
 
 
 
 
 
2017
 
 
2016
 
 
2015
 
1.
 
Revenues *):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Israel
 
 
35,230
 
 
 
29,438
 
 
 
26,487
 
 
Latin America (mainly Mexico)
 
 
9,603
 
 
 
7,009
 
 
 
7,601
 
 
 
Brazil
 
 
14,248
 
 
 
9,142
 
 
 
7,173
 
 
 
Argentina
 
 
4,607
 
 
 
3,995
 
 
 
4,616
 
 
 
Europe
 
 
4,413
 
 
 
4,501
 
 
 
5,271
 
 
 
Other
 
 
10,054
 
 
 
10,268
 
 
 
9,419
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
78,155
 
 
 
64,353
 
 
 
60,567
 
 
*) Revenues are attributed to geographic areas based on the location of the end customers.
XML 65 R46.htm IDEA: XBRL DOCUMENT v3.8.0.1
DISCONTINUED OPERATION (Tables)
12 Months Ended
Dec. 31, 2017
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations [Table Text Block]
a.
Below is data of the operating results attributed to the discontinued operation:
 
 
 
 
 
 
Year ended December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
Revenue from sales
 
 
18,248
 
 
 
40,498
 
Cost of sales
 
 
15,260
 
 
 
35,427
 
Gross profit
 
 
2,988
 
 
 
5,071
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
 
2,531
 
 
 
4,345
 
Operating income
 
 
457
 
 
 
726
 
 
 
 
 
 
 
 
 
 
Financial expenses,  net
 
 
54
 
 
 
139
 
Other income, net
 
 
-
 
 
 
(13
)
Taxes on income
 
 
249
 
 
 
273
 
Income from discontinued operation
 
 
154
 
 
 
327
 
 
c.
Below is data of the net cash flows provided by (used in) the discontinued operation:
 
 
 
Year ended December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
Operating activities
 
 
116
 
 
 
(2,111
)
 
 
 
 
 
 
 
 
 
Investing activities
 
 
(1,187
)
 
 
746
 
 
 
 
 
 
 
 
 
 
Financing activities
 
 
251
 
 
 
(41
)
XML 66 R47.htm IDEA: XBRL DOCUMENT v3.8.0.1
SELECTED STATEMENTS OF OPERATIONS DATA (Tables)
12 Months Ended
Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Selected Statements Of Operations Data [Table Text Block]
 
 
 
 
 
Year ended
December 31,
 
 
 
 
 
2017
 
 
2016
 
 
2015
 
a.
 
Financial expenses, net:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on short-term bank deposits
 
 
8
 
 
 
1
 
 
 
78
 
 
Interest on long-term loans to affiliate
 
 
51
 
 
 
56
 
 
 
267
 
 
 
Foreign currency transaction adjustments
 
 
205
 
 
 
130
 
 
 
374
 
 
 
Other
 
 
47
 
 
 
37
 
 
 
9
 
 
 
 
 
 
311
 
 
 
224
 
 
 
728
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bank charges and interest expenses
 
 
1,223
 
 
 
985
 
 
 
942
 
 
 
Foreign currency transaction adjustments
 
 
-
 
 
 
194
 
 
 
166
 
 
 
Interest on long-term loans to others
 
 
92
 
 
 
70
 
 
 
318
 
 
 
Other
 
 
-
 
 
 
21
 
 
 
31
 
 
 
 
 
 
1,315
 
 
 
1,270
 
 
 
1,457
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,004
 
 
 
1,046
 
 
 
729
 
XML 67 R48.htm IDEA: XBRL DOCUMENT v3.8.0.1
GENERAL (Details) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Sep. 09, 2014
Business Acquisition [Line Items]        
Working capital, net $ 0 $ (334) $ 0  
Property and equipment 0 1,239 0  
Other intangible assets 0 2,098 0  
Goodwill 0 (6,070) 0  
Payables for acquisition of investments in subsidiaries 0 496 0  
Fair values of assets acquired and liabilities, Net $ 0 $ (8,531) $ 0  
Global Telematics [Member] | Subsidiary [Member]        
Business Acquisition [Line Items]        
Working capital, net       $ 334
Property and equipment       1,239
Other intangible assets       2,100
Goodwill       6,068
Deferred taxes       (714)
Payables for acquisition of investments in subsidiaries       (496)
Fair values of assets acquired and liabilities, Net       $ 8,531
XML 68 R49.htm IDEA: XBRL DOCUMENT v3.8.0.1
GENERAL (Details 1) - Ceilo [Member] - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Business Acquisition [Line Items]    
Revenues $ 67,468 $ 64,516
Net income attributable to Pointer shareholders’ from continuing operations $ 3,820 $ 4,206
Basic income per share $ 0.49 $ 0.55
Diluted income per share $ 0.48 $ 0.53
XML 69 R50.htm IDEA: XBRL DOCUMENT v3.8.0.1
GENERAL (Details Textual) - USD ($)
$ in Thousands
12 Months Ended
Oct. 02, 2017
Apr. 09, 2014
Dec. 31, 2016
Dec. 31, 2013
Dec. 31, 2017
Sep. 09, 2014
May 31, 2014
Oct. 14, 2013
Oct. 13, 2013
Business Acquisition [Line Items]                  
Issued and Outstanding Share Capital,Percentage 12.00%                
Stock Issued During Period, Shares, Issued for Services 2,519,544                
Deferred Tax Assets, Valuation Allowance, Current [1]     $ 17,621   $ 9,229        
Pointers South Africa [Member]                  
Business Acquisition [Line Items]                  
Percentage of share capital held, parent 88.00%                
Issued and Outstanding Share Capital,Percentage 12.00%                
Stock Issued During Period, Shares, Issued for Services 2,519,544                
Equity Method Investment, Ownership Percentage 88.00%                
Shagrir Group [Member]                  
Business Acquisition [Line Items]                  
Debt Instrument, Interest Rate Terms   7%              
Pointer Brazil [Member]                  
Business Acquisition [Line Items]                  
Percentage of share capital held, parent                 48.80%
Noncontrolling Interest, Ownership Percentage by Parent             100.00%    
Percentage of share capital transferred               51.20%  
Percentage of share capital after transfer       100.00%          
Equity Method Investment, Ownership Percentage                 48.80%
Pointer Argentina [Member]                  
Business Acquisition [Line Items]                  
Percentage of share capital held, parent     93.00%            
Equity Method Investment, Ownership Percentage     93.00%            
Pointer Mexico [Member]                  
Business Acquisition [Line Items]                  
Percentage of share capital held, parent     100.00%            
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares     81,081,000            
Percentage of share capital held, other     26.00%            
Equity Method Investment, Ownership Percentage     100.00%            
Global Telematics S.A. Proprietary Limited [Member]                  
Business Acquisition [Line Items]                  
Noncontrolling Interest, Ownership Percentage by Parent           100.00%      
Business Acquisition Fair Value Of Consideration Transferred           $ 8,500      
[1] The Company and its subsidiaries have provided valuation allowances in respect of deferred tax assets resulting from tax losses carryforward and other temporary differences for amounts that are more likely than not be realized in the foreseeable future.
XML 70 R51.htm IDEA: XBRL DOCUMENT v3.8.0.1
SIGNIFICANT ACCOUNTING POLICIES (Details)
12 Months Ended
Dec. 31, 2017
Building [Member]  
Annual depreciation rate 6.67%
Leasehold Improvements [Member]  
Property, Plant and Equipment, Estimated Useful Lives Over the term of the lease including the option term
Maximum [Member] | Installed products [Member]  
Annual depreciation rate 33.00%
Maximum [Member] | Computers and electronic equipment [Member]  
Annual depreciation rate 33.00%
Maximum [Member] | Office furniture and equipment [Member]  
Annual depreciation rate 15.00%
Maximum [Member] | Motor vehicles [Member]  
Annual depreciation rate 20.00%
Maximum [Member] | Network installation [Member]  
Annual depreciation rate 33.00%
Minimum [Member] | Installed products [Member]  
Annual depreciation rate 20.00%
Minimum [Member] | Computers and electronic equipment [Member]  
Annual depreciation rate 10.00%
Minimum [Member] | Office furniture and equipment [Member]  
Annual depreciation rate 6.00%
Minimum [Member] | Motor vehicles [Member]  
Annual depreciation rate 15.00%
Minimum [Member] | Network installation [Member]  
Annual depreciation rate 10.00%
XML 71 R52.htm IDEA: XBRL DOCUMENT v3.8.0.1
SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Provision for Warranty [Line Items]    
Balance, beginning of the year $ 604 $ 544
Warranties issued during the year 468 422
Settlements made during the year (145) (182)
Expirations (360) (180)
Balance end of year $ 567 $ 604
XML 72 R53.htm IDEA: XBRL DOCUMENT v3.8.0.1
SIGNIFICANT ACCOUNTING POLICIES (Details 2)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Data Related to Options to Purchase the Company Shares [Line Items]      
Dividend yield 0.00% 0.00% 0.00%
Forfeiture rate 2.00% 2.00% 2.00%
Maximum [Member]      
Data Related to Options to Purchase the Company Shares [Line Items]      
Risk free interest rate 1.39% 1.00% 1.62%
Expected volatility 57.73% 60.84% 49.78%
Expected term (in years) 5 years 6 months 5 years 6 months 5 years 6 months
Minimum [Member]      
Data Related to Options to Purchase the Company Shares [Line Items]      
Risk free interest rate 0.86% 0.80% 1.29%
Expected volatility 52.25% 55.81% 51.47%
Expected term (in years) 4 years 4 years 4 years
XML 73 R54.htm IDEA: XBRL DOCUMENT v3.8.0.1
SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Changes in the Allowance for Doubtful Accounts [Line Items]    
Balance at beginning of the year $ 1,281 $ 1,053
Deductions during the year (992) (339)
Charged to expenses 802 511
Foreign currency translation adjustment 36 56
Balance at end of year $ 1,127 $ 1,281
XML 74 R55.htm IDEA: XBRL DOCUMENT v3.8.0.1
SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($)
$ in Thousands
12 Months Ended
Oct. 02, 2017
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Significant Accounting Policies [Line Items]        
Write-off of inventories   $ 129 $ 147 $ 113
Advertising expenses   $ 1,459 $ 1,337 $ 1,214
Anti-dilutive securities   20,125 202,000 64,000
Stock-based compensation expense   $ 380 $ 320 $ 309
Severance expenses   399 303 292
Bad debt expense   802 511 98
Goodwill, Impairment Loss       758
Unrecognized Tax Benefits   $ 127 $ 0 $ 0
Stock Issued During Period, Shares, Issued for Services 2,519,544      
Issued and Outstanding Share Capital,Percentage 12.00%      
Finite-Lived Intangible Assets [Member]        
Significant Accounting Policies [Line Items]        
Discount Rate For Cash Flows       25.00%
Long Term Growth Rate       7.10%
Projected Future Cash Flow Years       5 years
Impairment of Intangible Assets, Finite-lived       $ 159
XML 75 R56.htm IDEA: XBRL DOCUMENT v3.8.0.1
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Line Items]    
Government authorities $ 517 $ 583
Employees 30 35
Prepaid expenses 1,715 1,677
Others 603 209
Prepaid Expense and Other Assets, Current $ 2,865 $ 2,504
XML 76 R57.htm IDEA: XBRL DOCUMENT v3.8.0.1
INVENTORIES (Details) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Inventory [Line Items]    
Raw materials $ 3,621 $ 2,510
Work in process 149 89
Finished goods 2,781 2,643
Total inventory $ 6,551 $ 5,242
XML 77 R58.htm IDEA: XBRL DOCUMENT v3.8.0.1
PROPERTY AND EQUIPMENT (Details) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Property, Plant and Equipment [Line Items]    
Cost $ 23,859 $ 20,926
Accumulated depreciation 18,011 15,312
Depreciated cost 5,848 5,614
Installed products [Member]    
Property, Plant and Equipment [Line Items]    
Cost 9,771 9,323
Accumulated depreciation 7,061 5,912
Computers and electronic equipment [Member]    
Property, Plant and Equipment [Line Items]    
Cost 7,353 5,550
Accumulated depreciation 4,768 3,981
Office furniture and equipment [Member]    
Property, Plant and Equipment [Line Items]    
Cost 1,397 1,205
Accumulated depreciation 1,290 994
Motor vehicles [Member]    
Property, Plant and Equipment [Line Items]    
Cost 349 339
Accumulated depreciation 237 175
Network installation [Member]    
Property, Plant and Equipment [Line Items]    
Cost 4,211 3,839
Accumulated depreciation 4,193 3,826
Leasehold Improvements [Member]    
Property, Plant and Equipment [Line Items]    
Cost 778 670
Accumulated depreciation $ 462 $ 424
XML 78 R59.htm IDEA: XBRL DOCUMENT v3.8.0.1
PROPERTY AND EQUIPMENT (Details Textual) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Property, Plant and Equipment [Member]      
Property, Plant and Equipment [Line Items]      
Depreciation $ 2,461 $ 2,133 $ 1,674
XML 79 R60.htm IDEA: XBRL DOCUMENT v3.8.0.1
OTHER INTANGIBLE ASSETS, NET (Details) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]    
Cost $ 17,421 $ 17,175
Accumulated amortization 15,486 14,997
Amortized cost 1,935 2,178
Patents [Member]    
Finite-Lived Intangible Assets [Line Items]    
Cost 639 639
Accumulated amortization 639 639
Developed Technology [Member]    
Finite-Lived Intangible Assets [Line Items]    
Cost 4,978 4,978
Accumulated amortization 4,945 4,901
Customer related intangible [Member]    
Finite-Lived Intangible Assets [Line Items]    
Cost 8,114 7,891
Accumulated amortization 6,853 6,534
Others [Member]    
Finite-Lived Intangible Assets [Line Items]    
Cost 874 874
Accumulated amortization 696 650
Brand name [Member]    
Finite-Lived Intangible Assets [Line Items]    
Cost 2,816 2,793
Accumulated amortization $ 2,353 $ 2,273
XML 80 R61.htm IDEA: XBRL DOCUMENT v3.8.0.1
OTHER INTANGIBLE ASSETS, NET (Details 1)
$ in Thousands
Dec. 31, 2017
USD ($)
Finite-Lived Intangible Assets [Line Items]  
2018 $ 487
2019 399
2020 368
2021 343
2022 and after 338
Amortized cost $ 1,935
XML 81 R62.htm IDEA: XBRL DOCUMENT v3.8.0.1
OTHER INTANGIBLE ASSETS, NET (Details Textual) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]      
Amortization And Impairment Expenses Of Intangible Assets Continuing Operations $ 463 $ 473 $ 538
XML 82 R63.htm IDEA: XBRL DOCUMENT v3.8.0.1
GOODWILL (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Goodwill [Line Items]    
Goodwill, beginning of the year $ 38,107 $ 31,388
Additions in respect of acquisitions 0 6,070
Foreign currency translation adjustments 2,903 649
Goodwill, end of year $ 41,010 $ 38,107
XML 83 R64.htm IDEA: XBRL DOCUMENT v3.8.0.1
GOODWILL (Details 1) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Goodwill [Line Items]      
Goodwill $ 41,010 $ 38,107 $ 31,388
Pointer Brazil [Member]      
Goodwill [Line Items]      
Goodwill 2,338 2,373  
Cellocator [Member]      
Goodwill [Line Items]      
Goodwill 2,534 2,534  
SVR [Member]      
Goodwill [Line Items]      
Goodwill [1] 30,245 27,219  
Cielo Brazil [Member]      
Goodwill [Line Items]      
Goodwill $ 5,893 $ 5,981  
[1] SVR in Israel.
XML 84 R65.htm IDEA: XBRL DOCUMENT v3.8.0.1
GOODWILL (Details 2)
12 Months Ended
Dec. 31, 2017
Pointer Brazil [Member]  
Discount rate 21.00%
Growth rate 6.00%
Years of projected cash flows 5.00%
Cellocator [Member]  
Discount rate 16.00%
Growth rate 3.00%
Years of projected cash flows 5.00%
SVR [Member]  
Discount rate 15.00%
Growth rate 2.00%
Years of projected cash flows 5.00%
Cielo [Member]  
Discount rate 21.00%
Growth rate 6.00%
Years of projected cash flows 5.00%
XML 85 R66.htm IDEA: XBRL DOCUMENT v3.8.0.1
SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOANS FROM BANKS, SHAREHOLDERS AND OTHERS (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Debt Instrument [Line Items]    
Less - current maturities $ 5,101 $ 4,836
Unutilized credit lines 10,954 8,714
In Or Linked to Dollars [Member]    
Debt Instrument [Line Items]    
Less - current maturities $ 4,856 $ 4,497
In Or Linked to Dollars [Member] | Long-term Debt [Member]    
Debt Instrument [Line Items]    
Percentage over LIBOR 2.00% 2.00%
In Other Currencies [Member] | Long-Term Loans From Others [Member]    
Debt Instrument [Line Items]    
Less - current maturities $ 245 $ 339
In Other Currencies [Member] | Maximum [Member] | Long-term Debt [Member]    
Debt Instrument [Line Items]    
Interest rate 17.00% 17.00%
In Other Currencies [Member] | Minimum [Member] | Long-term Debt [Member]    
Debt Instrument [Line Items]    
Interest rate 10.00% 10.00%
XML 86 R67.htm IDEA: XBRL DOCUMENT v3.8.0.1
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Employees and payroll accruals $ 4,260 $ 3,477
Government authorities 1,858 817
Provision for warranty 369 391
Accrued expenses 2,561 2,100
Related party 53 53
Others 16 1
Other Accounts Payable and Accrued Liabilities $ 9,117 $ 6,839
XML 87 R68.htm IDEA: XBRL DOCUMENT v3.8.0.1
LONG-TERM LOANS FROM BANKS (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Debt Instrument [Line Items]    
Long-term Debt $ 10,116  
Less - current maturities 5,101 $ 4,836
Long-term loans from banks 5,015 10,182
Long-term Loans from Banks [Member]    
Debt Instrument [Line Items]    
Long-term Debt 10,116 15,018
Less - current maturities 5,101 4,836
Long-term loans from banks 5,015 10,182
In Other Currencies [Member] | Long-term Loans from Banks [Member]    
Debt Instrument [Line Items]    
Long-term Debt $ 245 $ 662
Minimum [Member] | In Other Currencies [Member] | Long-term Loans from Banks [Member]    
Debt Instrument [Line Items]    
Interest Rate   10.00%
Maximum [Member] | In Other Currencies [Member] | Long-term Loans from Banks [Member]    
Debt Instrument [Line Items]    
Interest Rate 17.00% 17.00%
In or Linked to Dollars [Member] | Long-term Loans from Banks [Member]    
Debt Instrument [Line Items]    
Interest Rate 3.71% 3.71%
Long-term Debt $ 9,871 $ 14,356
In or Linked to Dollars [Member] | Minimum [Member] | Long-term Loans from Banks [Member]    
Debt Instrument [Line Items]    
Interest Rate 10.00%  
XML 88 R69.htm IDEA: XBRL DOCUMENT v3.8.0.1
LONG-TERM LOANS FROM BANKS (Details 1)
$ in Thousands
Dec. 31, 2017
USD ($)
Maturities of Long-term Debt [Line Items]  
2018 (current maturities) $ 5,101
2019 2,341
2020 1,506
2021 and thereafter 1,168
Long-term loans from banks $ 10,116
XML 89 R70.htm IDEA: XBRL DOCUMENT v3.8.0.1
LONG-TERM LOANS FROM BANKS (Details Textual)
$ in Thousands
Dec. 31, 2017
USD ($)
Debt Instrument [Line Items]  
Minimum Ratio Of Shareholders Equity To Consolidated Assets 20.00%
Minimum Shareholders Equity $ 20,000
Year 2013-2014 [Member]  
Debt Instrument [Line Items]  
Maximum debt ratio 4.2
Year 2015 [Member]  
Debt Instrument [Line Items]  
Maximum debt ratio 3.5
Year 2016 [Member]  
Debt Instrument [Line Items]  
Maximum debt ratio 3
Year 2017 and thereafter [Member]  
Debt Instrument [Line Items]  
Maximum debt ratio 2.5
Company And Its Subsidiaries [Member]  
Debt Instrument [Line Items]  
Maximum debt ratio 4
XML 90 R71.htm IDEA: XBRL DOCUMENT v3.8.0.1
DEFERRED TAXES AND OTHER LONG-TERM LIABILITIES (Details) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Provision for warranty $ 199 $ 213
Deferred tax 540 666
Deferred revenues 99 97
Other long-term liabilities $ 838 $ 976
XML 91 R72.htm IDEA: XBRL DOCUMENT v3.8.0.1
COMMITMENTS AND CONTINGENT LIABILITIES (Details)
$ in Thousands
Dec. 31, 2017
USD ($)
COMMITMENTS AND CONTINGENT LIABILITIES [Line Items]  
2018 $ 2,367
2019 1,848
2020 504
2021 271
Total minimum annual rental payments $ 4,990
XML 92 R73.htm IDEA: XBRL DOCUMENT v3.8.0.1
COMMITMENTS AND CONTINGENT LIABILITIES (Details Textual) - USD ($)
$ in Thousands
1 Months Ended 12 Months Ended
Jul. 31, 2015
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
COMMITMENTS AND CONTINGENT LIABILITIES [Line Items]        
Bank Loans   $ 407    
Royalty Percentage   5.00%    
Accrued Royalties   $ 2,444    
Amount of claim   46    
Annual Management Fee   180    
Rent expenses   2,325 $ 2,327 $ 2,380
Loss Contingency Accrual, Provision   20    
Pointer Brazil [Member]        
COMMITMENTS AND CONTINGENT LIABILITIES [Line Items]        
Payments for Legal Settlements   515    
Litigation Settlement Interest   2,161    
Litigation Settlement, Expense   2,676    
Loss Contingency Accrual, Provision   $ 79    
Loss Contingency, Settlement Agreement, Terms   14 years    
Loss Contingency, Loss in Period $ 12,800      
XML 93 R74.htm IDEA: XBRL DOCUMENT v3.8.0.1
EQUITY (Details)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2017
USD ($)
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Options, outstanding at beginning of year | shares 556,134
Granted | shares 21,500
Exercised | shares (185,675)
Forfeited | shares (52,500)
Options, outstanding at end of year | shares 339,459
Options, exercisable at end of year | shares 131,509
Vested and expected to vest | shares 335,300
Weighted average exercise price, outstanding at beginning of year | $ / shares $ 5.15
Granted | $ / shares 0.87
Exercised | $ / shares 2.10
Forfeited | $ / shares 5.79
Weighted average exercise price, outstanding at end of year | $ / shares 4.61
Weighted average exercise price, exercisable at end of year | $ / shares 3.49
Vested and expected to vest | $ / shares $ 4.67
Weighted average remaining contractual term, exercisable at end of year 2 years 9 months 14 days
Vested and expected to vest 4 years 5 months 8 days
Aggregate intrinsic value, exercisable at end of year | $ $ 1,987
Vested and expected to vest | $ $ 1,566
XML 94 R75.htm IDEA: XBRL DOCUMENT v3.8.0.1
EQUITY (Details 1) - $ / shares
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number Of Options outstanding 339,459 556,134
Options outstanding, weighted average exercise price $ 4.61 $ 5.15
Number Of Options exercisable 131,509  
Options exercisable, weighted average exercise price $ 3.49  
Employee Stock Option [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number Of Options outstanding 339,459  
Options outstanding, Weighted average remaining contractual life 4 years 4 months 20 days  
Options outstanding, weighted average exercise price $ 4.61  
Number Of Options exercisable 131,509  
Options exercisable, weighted average exercise price $ 3.49  
Exercise Price 1.17 [Member] | Employee Stock Option [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number Of Options outstanding 62,384  
Options outstanding, Weighted average remaining contractual life 8 months 12 days  
Options outstanding, weighted average exercise price $ 1.17  
Number Of Options exercisable 62,384  
Options exercisable, weighted average exercise price $ 1.17  
Exercise Price 3.38 [Member] | Employee Stock Option [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number Of Options outstanding 10,000  
Options outstanding, Weighted average remaining contractual life 6 months 7 days  
Options outstanding, weighted average exercise price $ 3.38  
Number Of Options exercisable 10,000  
Options exercisable, weighted average exercise price $ 3.38  
Exercise Price 0.87 [Member] | Employee Stock Option [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number Of Options outstanding 4,575  
Options outstanding, Weighted average remaining contractual life 3 years 3 months 22 days  
Options outstanding, weighted average exercise price $ 0.87  
Number Of Options exercisable 0  
Options exercisable, weighted average exercise price $ 0.87  
Exercise Price 6.14 [Member] | Employee Stock Option [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number Of Options outstanding 28,500  
Options outstanding, Weighted average remaining contractual life 4 years 1 month 28 days  
Options outstanding, weighted average exercise price $ 6.14  
Number Of Options exercisable 6,000  
Options exercisable, weighted average exercise price $ 6.14  
Exercise Price 5.94 [Member] | Employee Stock Option [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number Of Options outstanding 212,500  
Options outstanding, Weighted average remaining contractual life 5 years 6 months 7 days  
Options outstanding, weighted average exercise price $ 5.94  
Number Of Options exercisable 53,125  
Options exercisable, weighted average exercise price $ 5.94  
Exercise Price 0.87 [Member] | Employee Stock Option [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number Of Options outstanding 21,500  
Options outstanding, Weighted average remaining contractual life 6 years 3 months 25 days  
Options outstanding, weighted average exercise price $ 0.87  
Number Of Options exercisable 0  
Options exercisable, weighted average exercise price $ 0  
XML 95 R76.htm IDEA: XBRL DOCUMENT v3.8.0.1
EQUITY (Details Textual)
1 Months Ended 12 Months Ended
Jul. 06, 2016
$ / shares
shares
Feb. 26, 2015
$ / shares
shares
Mar. 09, 2014
USD ($)
$ / shares
shares
Sep. 12, 2013
USD ($)
$ / shares
shares
Jul. 08, 2013
USD ($)
$ / shares
shares
Aug. 31, 2011
$ / shares
shares
Jan. 31, 2011
$ / shares
shares
Dec. 31, 2017
USD ($)
$ / shares
Dec. 31, 2016
USD ($)
$ / shares
Dec. 31, 2015
USD ($)
Dec. 31, 2014
₪ / shares
shares
Dec. 31, 2013
shares
Apr. 30, 2017
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                          
Proceeds from issuance of shares and exercise of options, net of issuance costs | $     $ 10,440,000         $ 395,000 $ 98,000 $ 15,000      
Shares sold     1,130,000                    
Sale of Stock, Price Per Share | $ / shares     $ 9.25                    
Options available for grant                         17,000
Options granted, weighted-average grant date fair value | $ / shares               $ 7.8 $ 5.9        
Options vested, weighted-average grant date fair value | $               $ 278,000          
Unrecognized compensation costs | $               $ 358,000          
Unrecognized compensation costs, recognition period               1 year 9 months 18 days          
Options granted       246,984 41,000 10,000 246,984            
Exercise price | $ / shares       $ 3.38 $ 3.38 $ 4.80 $ 7.00            
Amortization of stock compensation | $       $ 599,000       $ 518,000 $ 320,000 $ 309,000      
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares               $ 0.87          
Restricted Stock Units (RSUs) [Member]                          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                          
Options available for grant                         4,500
Exercise price | ₪ / shares                     ₪ 3    
Employee Share Option Plan 2013 [Member]                          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                          
Vesting period 4 years 4 years                      
Options available for grant                       376,712  
Options granted 250,000 77,000                      
Amortization of stock compensation | $               $ 346,662          
Minimum Favorable Tax Treatment Percentage On Option Exercise Price Determined                       100.00%  
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares $ 5.94 $ 8.35                      
Employee Share Option Plan 2013 [Member] | Restricted Stock Units (RSUs) [Member]                          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                          
Options available for grant                     46,300    
Chief Financial Officer [Member]                          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                          
Options granted         20,000                
Exercise price | $ / shares         $ 3.38                
Amortization of stock compensation | $         $ 31,000                
XML 96 R77.htm IDEA: XBRL DOCUMENT v3.8.0.1
NET EARNINGS PER SHARE (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Numerator:      
Numerator for basic net earnings per share - Net income $ 16,518 $ 3,444 $ 3,945
Numerator for diluted net earnings per share - Net income $ 16,518 $ 3,444 $ 3,945
Denominator:      
Denominator for basic net earnings per share - weighted-average number of shares outstanding (in thousands) 7,998 7,820 7,725
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands) 8,131 7,938 7,938
Basic net earnings per share $ 2.07 $ 0.45 $ 0.51
Diluted net earnings per share $ 2.03 $ 0.45 $ 0.50
XML 97 R78.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME TAXES (Details)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2014
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent   16.00%
MEXICO    
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent 30.00%  
BRAZIL    
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent 34.00%  
ARGENTINA    
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent 35.00%  
UNITED STATES    
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent [1] 35.00%  
[1] Federal.
XML 98 R79.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME TAXES (Details 1) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
New Accounting Pronouncement, Early Adoption [Line Items]      
Domestic $ 8,813 $ 5,936 $ 4,189
Foreign 487 (743) 413
Income (loss) before taxes on income $ 9,300 $ 5,193 $ 4,602
XML 99 R80.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME TAXES (Details 2) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Income Tax Disclosure [Line Items]    
Reserves and accruals $ 392 $ 985
Carryforward tax losses 23,950 23,271
Other temporary differences 666 423
Total deferred tax assets before valuation allowance 25,008 24,679
Valuation allowance (2) [1] (9,229) (17,621)
Net deferred tax assets 15,779 7,058
Goodwill and other intangible assets (6,696) (5,482)
Other temporary differences (38) (809)
Total deferred tax liabilities (6,734) (6,291)
Total deferred tax Assets , net of deferred tax liabilities $ 9,045 $ 767
[1] The Company and its subsidiaries have provided valuation allowances in respect of deferred tax assets resulting from tax losses carryforward and other temporary differences for amounts that are more likely than not be realized in the foreseeable future.
XML 100 R81.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME TAXES (Details 3) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income before taxes, as reported in the consolidated statements of operations $ 9,300 $ 5,193 $ 4,602
Statutory tax rate 24.00% 25.00% 26.50%
Theoretical tax expenses on the above amount at the Israeli statutory tax rate $ 2,232 $ 1,298 $ 1,219
Tax adjustment in respect of different tax rates in subsidiaries and changes in tax rates 31 118 21
Change in valuation allowance in respect of deferred taxes (8,950) 0 0
Operating carryforward losses for which a valuation allowance was provided 3 197 17
Tax adjustment in respect of different tax rates due to approved enterprise (567) 0 0
Realization of carryforward tax losses for which a valuation allowance was provided (404) 40 (191)
Provision for uncertain tax position 127 0 0
Nondeductible expenses and other permanent differences 307 192 65
Total taxes on income $ (7,221) $ 1,845 $ 1,131
XML 101 R82.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME TAXES (Details 4) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Current $ 927 $ 501 $ 348
Deferred (8,148) 1,344 783
Current Federal, State and Local, Tax Expense (Benefit), Total (7,221) 1,845 1,131
Domestic (7,674) 1,768 1,256
Foreign 453 77 (125)
Taxes on income $ (7,221) $ 1,845 $ 1,131
XML 102 R83.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME TAXES (Details 5) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Income Tax Disclosure [Line Items]    
Balance at the beginning of the year $ 0 $ 0
Additions based on tax positions taken related to the current year 127 0
Reductions related to settlement of tax matters and limitation 0 0
Balance at the end of the year $ 127 $ 0
XML 103 R84.htm IDEA: XBRL DOCUMENT v3.8.0.1
INCOME TAXES (Details Textual)
₪ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Dec. 31, 2016
ILS (₪)
Dec. 31, 2015
USD ($)
Dec. 31, 2014
Income Tax Disclosure [Line Items]            
Effective Income Tax Rate Reconciliation, Percent         26.50%  
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent           16.00%
Increase Decrease In Deferred Tax Liability | ₪       ₪ 1,265    
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent   7.50% 9.00% 9.00%   9.00%
Operating Loss Carryforwards   $ 90,813        
Deferred Tax Assets, Capital Loss Carryforwards   $ 44,625        
Dividend Distribution Tax Rate   20.00%        
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent   24.00% 25.00% 25.00% 26.50%  
Additional Increase Decrease in Deferred Tax Liabilities | ₪       ₪ 1,687    
Additional Increase Decrease in Deferred Tax Assets | ₪       1,046    
Additional Increase Decrease In Profit Or Loss Due To Change In Tax Rate     $ 166 640    
Increase Decrease in Deferred Tax Assets | ₪       729    
Increase Decrease In Profit Or Loss Due To Change In Tax Rate     138 ₪ 536    
Unrecognized Tax Benefits   $ 127 $ 0   $ 0  
Scenario, Plan [Member]            
Income Tax Disclosure [Line Items]            
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 23.00%          
Pointer Argentina [Member]            
Income Tax Disclosure [Line Items]            
Operating Loss Carryforwards   $ 67        
Pointer Argentina [Member] | Maximum [Member]            
Income Tax Disclosure [Line Items]            
Operating Loss Carryforwards, Expiration Period   2020        
Pointer Mexico [Member]            
Income Tax Disclosure [Line Items]            
Operating Loss Carryforwards   $ 1,813        
Pointer Mexico [Member] | Minimum [Member]            
Income Tax Disclosure [Line Items]            
Operating Loss Carryforwards, Expiration Period   2018        
Pointer Mexico [Member] | Maximum [Member]            
Income Tax Disclosure [Line Items]            
Operating Loss Carryforwards, Expiration Period   2027        
Pointer Brazil [Member]            
Income Tax Disclosure [Line Items]            
Operating Loss Carryforwards   $ 3,249        
Pointer South Africa [Member]            
Income Tax Disclosure [Line Items]            
Operating Loss Carryforwards   $ 7,304        
ISRAEL            
Income Tax Disclosure [Line Items]            
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent   24.00% 25.00% 25.00% 26.50%  
Legislative Amendments [Member]            
Income Tax Disclosure [Line Items]            
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent     25.00% 25.00%    
Approved Enterprise Benefits [Member]            
Income Tax Disclosure [Line Items]            
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent   24.00% 25.00% 25.00%   26.50%
XML 104 R85.htm IDEA: XBRL DOCUMENT v3.8.0.1
BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Other accounts payable and accrued expenses:      
Long Term Loan [1] $ 973 $ 831  
DBSI (see Note 12f(1)) 53 53  
Management fees to DBSI (see Note 12f(1)) 180 180 $ 180
Sales to related parties 254 106 52
Purchase from related parties $ 682 $ 847 $ 145
[1] On March 29, 2016 the board of directors approved to repay the Capital Note issued By Shagrir Group to the Company on December 2015, in the amount of NIS 8,000. In addition, the board of directors approved to convert NIS 4,100 to Shagrir Group equity and NIS 3,100 Shagrir group will issue as Capital Note for 5 years without any interest.
XML 105 R86.htm IDEA: XBRL DOCUMENT v3.8.0.1
BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Details Textual)
₪ in Thousands
1 Months Ended
Mar. 29, 2016
ILS (₪)
Shagrir Group [Member]  
Related Party Transaction [Line Items]  
Debt Conversion, Original Debt, Amount ₪ 4,100
Capital Note [Member]  
Related Party Transaction [Line Items]  
Repayments of Related Party Debt 8,000
Capital Note [Member] | Shagrir Group [Member]  
Related Party Transaction [Line Items]  
Proceeds from Related Party Debt ₪ 3,100
Debt Instrument, Term 5 years
XML 106 R87.htm IDEA: XBRL DOCUMENT v3.8.0.1
SEGMENT, CUSTOMER AND GEOGRAPHIC INFORMATION (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Segment Reporting Information [Line Items]      
Segments revenues [1] $ 78,155 $ 64,353 $ 60,567
Segments operating profit 10,309 6,248 5,341
Depreciation, amortization and impairment expenses 2,924 3,258 3,959
Operating Segments [Member]      
Segment Reporting Information [Line Items]      
Segments revenues 78,155 64,353 60,567
Segments operating profit 10,309 6,248 5,341
Segments tangible and intangible assets 48,793 45,899 35,109
Depreciation, amortization and impairment expenses 2,924 2,616 3,405
Expenditure for assets 3,266 2,399 1,796
Operating Segments [Member] | Cellocator [Member]      
Segment Reporting Information [Line Items]      
Segments revenues 24,364 22,707 19,489
Segments operating profit 2,742 1,660 1,000
Segments tangible and intangible assets 9,026 8,359 8,469
Depreciation, amortization and impairment expenses 144 321 338
Expenditure for assets 197 135 149
Operating Segments [Member] | MRM Segment [Member]      
Segment Reporting Information [Line Items]      
Segments revenues 62,208 49,620 47,938
Segments operating profit 7,569 4,708 3,848
Segments tangible and intangible assets 37,799 35,392 24,836
Depreciation, amortization and impairment expenses 2,780 2,295 3,067
Expenditure for assets 3,069 2,264 1,647
Operating Segments [Member] | Elimination [Member]      
Segment Reporting Information [Line Items]      
Segments revenues (8,417) (7,974) (6,860)
Segments operating profit (2) (120) 493
Segments tangible and intangible assets 1,968 2,148 1,804
Depreciation, amortization and impairment expenses 0 0 0
Expenditure for assets $ 0 $ 0 $ 0
[1] Revenues are attributed to geographic areas based on the location of the end customers.
XML 107 R88.htm IDEA: XBRL DOCUMENT v3.8.0.1
SEGMENT, CUSTOMER AND GEOGRAPHIC INFORMATION (Details 1) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Revenues [1] $ 78,155 $ 64,353 $ 60,567
Israel [Member]      
Revenues [1] 35,230 29,438 26,487
Latin America (mainly Mexico) [Member]      
Revenues [1] 9,603 7,009 7,601
Brazil [Member]      
Revenues [1] 14,248 9,142 7,173
Argentina [Member]      
Revenues [1] 4,607 3,995 4,616
Europe [Member]      
Revenues [1] 4,413 4,501 5,271
Other [Member]      
Revenues [1] $ 10,054 $ 10,268 $ 9,419
[1] Revenues are attributed to geographic areas based on the location of the end customers.
XML 108 R89.htm IDEA: XBRL DOCUMENT v3.8.0.1
SEGMENT, CUSTOMER AND GEOGRAPHIC INFORMATION (Details 2) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Long-Lived Assets $ 5,848 $ 5,614 $ 3,278
Israel [Member]      
Long-Lived Assets 1,999 1,248 978
Argentina [Member]      
Long-Lived Assets 614 627 539
Mexico [Member]      
Long-Lived Assets 358 298 229
Brazil [Member]      
Long-Lived Assets 2,398 2,949 1,090
South Africa [Member]      
Long-Lived Assets 463 489 436
Other [Member]      
Long-Lived Assets $ 16 $ 3 $ 6
XML 109 R90.htm IDEA: XBRL DOCUMENT v3.8.0.1
DISCONTINUED OPERATION (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Revenue from sales   $ 18,248 $ 40,498
Cost of sales   15,260 35,427
Gross profit   2,988 5,071
Selling, general and administrative expenses   2,531 4,345
Operating income   457 726
Financial expenses, net   54 139
Other income, net   0 (13)
Taxes on income   249 273
Income from discontinued operation $ 0 $ 120 $ 399
XML 110 R91.htm IDEA: XBRL DOCUMENT v3.8.0.1
DISCONTINUED OPERATION (Details 1) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Operating activities $ 116 $ (2,111)
Investing activities (1,187) 746
Financing activities $ 251 $ (41)
XML 111 R92.htm IDEA: XBRL DOCUMENT v3.8.0.1
SELECTED STATEMENTS OF OPERATIONS DATA (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income:      
Interest on short-term bank deposits $ 8 $ 1 $ 78
Interest on long-term loans to affiliate 51 56 267
Foreign currency transaction adjustments 205 130 374
Other 47 37 9
Total financial income 311 224 728
Expenses:      
Bank charges and interest expenses 1,223 985 942
Foreign currency transaction adjustments 0 194 166
Interest on long-term loans to others 92 70 318
Other 0 21 31
Total financial expenses 1,315 1,270 1,457
Financial expenses, net $ 1,004 $ 1,046 $ 729
XML 112 R93.htm IDEA: XBRL DOCUMENT v3.8.0.1
SUBSEQUENT EVENTS (Details Textual) - Subsequent Event [Member] - ₪ / shares
1 Months Ended
Mar. 27, 2018
Feb. 27, 2018
Chief Executive Officer [Member]    
Subsequent Event [Line Items]    
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 4 years  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period 120,000  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value ₪ 3.0  
Restricted Stock Units (RSUs) [Member]    
Subsequent Event [Line Items]    
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period   4 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period   89,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value   ₪ 3.0
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