Pointer Telocation Reports Q1 2013 Financial Results

- Revenues of $22.1 million
- Adjusted EBITDA - $2.8 million in Q1 2013
- Non-GAAP net income of $1.8 million in Q1 2013

PR Newswire

ROSH HAAYIN, Israel, May 13, 2013 /PRNewswire/ -- Pointer Telocation Ltd. (Nasdaq CM: PNTR) - a leading developer, manufacturer and operator of Mobile Resource Management (MRM) and roadside assistance services for the automotive industry, announced today its financial results for the first quarter of 2013.

Financial Highlights

Revenues: Pointer's revenues for the first quarter of 2013 increased 2% to $22.1 million as compared to $21.6 million in the first quarter of 2012.

International activities for the first quarter of 2013 were 27% of total revenues same as in the comparable period of 2012.

Revenues from products in the first quarter of 2013 decreased 5% to $7.4 million (34% of revenues) compared to $7.8 million (36% of revenues) in the same period in 2012.

Pointer's revenues from services in the first quarter of 2013 increased 7% to $14.7 million (66% of revenues) compared to $13.8 million (64% of revenues), in the comparable period of 2012.

Gross Profit: In the first quarter of 2013, gross profit was $7.2 million (33% of revenues) compared to $7.5 million (35% of revenues) in the first quarter of 2012.

Operating Income: Operating income increased 7% to $1.5 million in the first quarter of 2013 compared to $1.4 million in the first quarter of 2012.

Net Income: Pointer recorded net income of $0.8 million or $0.14 per share in the first quarter of 2013 compared to $0.2 million, or $0.03 per share, in the first quarter of 2012.

Non GAAP net income: Pointer recorded non-GAAP net income of $1.8 million in the first quarter of 2013, increase of 20% as compared to non-GAAP net income of $1.5 million in the first quarter of 2012.

Adjusted EBITDA: Pointer's adjusted EBITDA for the first quarter of 2013 was $2.8 million same as in the first quarter of 2012.

David Mahlab, Pointer's Chief Executive Officer, commented on the results: "We have continued to improve our performance with emphasis on profitability, which has improved while maintaining stability in our top line. We continue to face tough economic conditions worldwide, mainly in Europe. As a result, we have experienced recent prices and margins erosion as reflected in our gross margin performance although the overall company performance continues to improve. We are working intensively toward additional product releases later this year, both in technology and in services, which should enable us to maintain our market position and continue improving. While we are currently focusing our marketing efforts in Latin America on both the services and technology sides of our business, we keep exploring for growth opportunities in additional markets."

Conference Call Information:

Pointer Telocation's management will host today, Monday, May 13th, 2013 a conference call with the investment community to review and discuss the financial results, and will also be available to answer questions.   

The conference call will commence at 9:30 AM EDT, 16:30 PM Israel time.

To participate in the call, please dial in to one of the teleconferencing numbers below. Please begin placing your call at least 5 minutes before the time set for the commencement of the conference call.

From USA: + 1-800-896-9108, From Israel: 03-918-0688

A replay will be available from May 14th, 2013 at the company website: www.pointer.com


Reconciliation between results on a GAAP and Non-GAAP basis.

Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Condensed Interim Consolidated Statements of Cash Flows.

Pointer uses adjusted EBITDA and non-GAAP net income as a non-GAAP financial performance measurement.

We calculate adjusted EBITDA by adding back to net income, net loss from discontinued operations, financial expenses, taxes, depreciation, the effects of non-cash stock-based compensation expense, amortization and non-cash impairment of goodwill and intangible assets.

We calculate non-GAAP net income by adding back to net income, net loss from discontinued operations, the effects of non-cash stock based compensation expenses, amortization of intangibles related to acquisitions and non-cash tax expenses resulting from timing differences relating to the amortization of acquisition-related intangible assets and goodwill.

The purpose of such adjustments is to give an indication of our performance exclusive of non-GAAP charges that are considered by management to be outside of our core operating results.

Adjusted EBITDA and non-GAAP net income are provided to investors to complement results provided in accordance with GAAP, as management believes the measure helps illustrate underlying operating trends in the Company's business and uses the measure to establish internal budgets and goals, manage the business and evaluate performance. We believe that these non-GAAP measures help investors to understand our current and future operating cash flow and performance, especially as our acquisitions have resulted in amortization and non-cash items that have had a material impact on our GAAP profits. Adjusted EBITDA and non GAAP net income should not be considered in isolation or as a substitute for comparable measures calculated and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.

About Pointer Telocation:
Pointer Telocation is a leading provider of technology and services to the automotive and insurance industries, offering a set of services including Road Side Assistance, Stolen Vehicle Recovery and Fleet Management. Pointer has a growing list of customers and products installed in more than 45 countries. Cellocator, a Pointer Products Division, is a leading AVL (Automatic Vehicle Location) solutions provider for stolen vehicle retrieval, fleet management, car & driver safety, public safety, vehicle security and more. The Company's top management and the development center are located in the Afek Industrial Area of Rosh Ha'ayin, Israel.

For more information: http://www.pointer.com

Forward Looking Statements
This press release contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of the Company. The words "believe," "expect," "anticipate," "intend," "seems," "plan," "aim," "should" and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of the Company with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in the markets in which the Company operates and in general economic and business conditions, loss or gain of key customers and unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this press release. Various risks and uncertainties may affect the Company and its results of operations, as described in reports filed by the Company with the Securities and Exchange Commission from time to time. The Company does not assume any obligation to update these forward-looking statements.


Contact:


Zvi Fried, V.P. and Chief Financial Officer 

Chen Livne, Gelbart-Kahana Investor Relations

Tel: 972-3-572 3111

Tel: 972-3-607 4717, +972-54-302 2983

E-mail: zvif@pointer.com  

E-mail: chen@gk-biz.com

 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES






INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands













March 31,

2013


December 31,

2012



Unaudited








ASSETS










CURRENT ASSETS:










Cash and cash equivalents


$            2,330


$              3,685

Restricted cash


103


108

Trade receivables


18,548


16,215

Other accounts receivable and prepaid expenses


2,477


2,069

Inventories


4,144


3,982






Total current assets


27,602


26,059











LONG-TERM ASSETS:





Long-term accounts receivable


552


582

Severance pay fund


9,458


9,034

Property and equipment, net


10,093


10,364

Investment and long term loans to affiliate 


921


814

Other intangible assets, net


1,887


2,242

Goodwill


48,231


47,190






Total long-term assets


71,142


70,226






Total assets


$          98,744


$            96,285

 

 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES






INTERIM CONSOLIDATED BALANCE SHEETS

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













March 31,


December 31,



2013


2012



Unaudited



LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





Short-term bank credit and current maturities of long-term loans


$              9,622


$            11,129

Trade payables


11,338


11,248

Deferred revenues and customer advances


9,605


6,954

Other accounts payable and accrued expenses


6,291


7,251






Total current liabilities


36,856


36,582











LONG-TERM LIABILITIES:





Long-term loans from banks


9,003


9,339

Long-term loans from shareholders and others


927


925

Deferred tax and other long-term liabilities


4,008


3,765

Accrued severance pay


10,739


10,328








24,677


24,357

COMMITMENTS AND CONTINGENT LIABILITIES










EQUITY:





Pointer Telocation Ltd's shareholders' equity:





Share capital


3,871


3,871

Additional paid-in capital


120,655


120,290

Accumulated other comprehensive income


1,514


1,127

Accumulated deficit


(94,733)


(95,540)






Total Pointer Telocation Ltd's shareholders' equity


31,307


29,748






Non-controlling interest


5,904


5,598






Total equity


37,211


35,346






Total liabilities and equity


$            98,744


$            96,285

 

 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES






INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands













Three months ended

March 31,


Year ended

December 31,



2013


2012


2012



Unaudited










Revenues:







Products


$             7,422


$             7,825


$          30,402

Services


14,723


13,783


54,430








Total revenues


22,145


21,608


84,832








Cost of revenues:







Products


4,381


4,625


17,988

Services


10,560


9,427


38,573

Amortization and impairment of intangible assets


-


60


181








Total cost of revenues


14,941


14,112


56,742








Gross profit


7,204


7,496


28,090








Operating expenses:







Research and development


670


716


2,716

Selling and marketing


2,325


2,259


9,067

General and administrative


2,283


2,588


9,232

Amortization of intangible assets


381


504


1,987








Total operating expenses


5,659


6,067


23,002








Operating income


1,545


1,429


5,088

Financial expenses, net


338


465


1,628

Other income (expenses), net


6


(7)


(5)








Income before taxes on income


1,213


957


3,455

Taxes on income


164


289


861








Income  after taxes on income


1,049


668


2,594

Equity in gains (losses) of affiliate


112


(48)


38








Income from continuing operations


1,161


620


2,632








Loss from discontinued operations, net


-


182


995








Net income


$             1,161


$                438


$            1,637

 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES






INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands













Three months ended

March 31,


Year ended

December 31,



2013


2012


2012



Unaudited










Other comprehensive income (loss):







Currency translation adjustments of foreign operations


$               695


$               655


$               299

Realized losses (gains) on derivatives designated as cash flow

    hedges


(24)


(79)


224

Unrealized losses on derivatives designated as cash flow

    hedges


-


263


14








Total comprehensive income


1,832


1,277


2,174








Profit from continuing operations attributable to:







Equity holders of the parent


807


301


1,833

Non-controlling interests


354


319


799










1,161


620


2,632








Loss from discontinued operations attributable to:







Equity holders of the parent


-


138


630

Non-controlling interests


-


44


365










-


$              182


$               995






















Total comprehensive income attributable to:







Equity holders of the parent


$           1,194


$              746


$            1,493

Non-controlling interests


638


531


681










$           1,832


$           1,277


$            2,174








Earnings per share attributable to Pointer Telocation Ltd's

    shareholders:







Basic net earnings per share


$             0.14


$             0.03


$               0.23








Diluted net earnings per share


$             0.14


$             0.03


$               0.23

 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES






INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands













Three months ended

March 31,


Year ended

December 31,



2013


2012


2012



Unaudited










Cash flows from operating activities:














Net income


$         1,161


$            438


$          1,637

Adjustments required to reconcile net income to net cash

    provided by operating activities:







Depreciation, amortization and impairment


1,083


1,350


5,546

Accrued interest and exchange rate changes of debenture

   and long-term loans


(24)


14


118

Accrued severance pay, net


(40)


(37)


91

Gain from sale of property and equipment, net


(68)


(38)


(271)

Equity in losses (gains) of affiliate


(112)


48


(38)

Amortization of stock-based compensation


33


101


265

Decrease in restricted cash


5


2


15

Increase in trade receivables, net


(2,013)


(3,038)


(1,572)

Decrease (increase) in other accounts receivable and

   prepaid expenses


(393)


(259)


46

Decrease (increase) in inventories


(53)


802


395

Write-off of inventories


18


-


337

Deferred income taxes


161


-


847

Decrease in long-term accounts receivable


23


156


234

Increase (decrease)  in trade payables


(178)


165


965

Increase  (decrease) in other accounts payable and accrued

   expenses


1,416


1,832


(274)








Net cash provided by operating activities


1,019


1,536


8,341








Cash flows from investing activities:














Purchase of property and equipment


(1,027)


(1,307)


(4,033)

Proceeds from sale of property and equipment


670


432


1,733

Investment and loans/Repayments in affiliate


32


(729)


(669)

Acquisition of subsidiary (a)


-


(251)


(251)

Purchase of business activity (b)


-


(3,125)


(3,125)








Net cash used in investing activities


(325)


(4,980)


(6,345)








 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES






INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands













Three months ended

March 31,


Year ended

December 31,



2013


2012


2012



Unaudited










Cash flows from financing activities:














Repayment of long-term loans from banks


(3,175)


(2,607)


(12,253)

Repayment of long-term loans from others


(3)


-


-

Receipt of long-term loans from banks


1,348


3,181


11,670

Dividend paid to the non-controlling interest


-


-


(1,215)

Proceeds from issuance of shares and exercise of warrants


-


5


1,945

Short-term bank credit, net


(376)


2,130


(345)








Net cash provided by (used in) financing activities


(2,206)


2,709


(198)








Effect of exchange rate changes on cash and cash equivalents


157


31


419








Decrease in cash and cash equivalents


(1,355)


(704)


2,217

Cash and cash equivalents at the beginning of the period


3,685


1,468


1,468








Cash and cash equivalents at the end of the period


$         2,330


$            764


$          3,685

 

 




Three months ended

March 31,

Year ended

December 31,




2013


2012


2012

























(a)

Acquisition of subsidiary:








Property and equipment


$                   -


$                 22


$                 22


Technology


-


58


58


Goodwill


-


304


304


Minority Interest

 


-


(133)


(133)












$                   -


$               251


$               251









POINTER TELOCATION LTD. AND ITS SUBSIDIARIES






INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands














Three months ended

March 31,

Year ended

December 31,




2013


2012


2012

























(b)

Purchase of activity:








Working capital


$                   -


$                 27


$                 27


Property and equipment


-


112


112


Customer list


-


1,364


1,364


Goodwill


-


1,669


1,669


Accrued severance pay, net


-


(23)


(23)


Minority Interest

Employees accruals


-


(24)


(24)












$                   -


$            3,125


$            3,125


















 

 

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES






ADDITIONAL INFORMATION

U.S. dollars in thousands






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


Adjusted EBITDA









Three months ended

March 31,

Year ended

December 31,




2013


2012


2012


GAAP Net income as reported:


$            1,161


$               438


$            1,637










Financial expenses, net


338


470


1,628


Tax on income


164


289


861


Loss from discontinued operations, net


-


182


995


Stock based compensation  expenses


33


101


265


Depreciation, amortization and impairment


1,083


1,338


5,198












$            2,779


$            2,818


$          10,584























Non GAAP Net income









Three months ended

March 31,

Year ended

December 31,




2013


2012


2012


GAAP Net income as reported:


$            1,161


$               438


$            1,637










amortization and impairment of  intangible assets


381


564


2,168


Loss from discontinued operations, net


-


182


995


Stock based compensation

 expenses


33


101


265


non-cash tax expenses (income) resulting from timing

differences relating to the amortization of acquisition-

related intangible assets and goodwill            


248


218


819












$            1,823


$            1,503


$            5,884


















 

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