Micronet Enertec Technologies, Inc. Reports First Quarter Results

MONTVALE, N.J., May 16, 2016 /PRNewswire/ -- Micronet Enertec Technologies, Inc. (NASDAQCM: MICT), a developer and manufacturer of rugged computers, tablets and computer-based systems for the commercial Mobile Resource Management (MRM) market and for the defense and aerospace markets, today announced financial results for the first quarter ended March 31, 2016.

David Lucatz, Chief Executive Officer of Micronet Enertec Technologies, Inc. stated, "During the quarter we saw growing marketplace interest in our products as the transportation industry makes preparations to meet the requirements of the recent federal mandate requiring electronic logging (the ELD mandate).  As we expected, the ELD mandate is driving increased demand for our products, particularly the TREQ®317 rugged tablet, because they are an easily adaptable and compliant solution.  We have received favorable feedback on the field performance of our devices and we are seeing a steady stream of opportunities in the pipeline.  In addition to our existing fleet solutions, we continue to develop additional solutions and to broaden our product lines in order to penetrate additional market segments and we expect to further expand our current opportunities in the MRM market.  Our backlog and pipeline are increasing and we are consistently growing our customer base and our reputation as a provider of reliable, rugged ELD compliance solutions."  

First Quarter 2015 Review

• Total revenue increased 14% to $6.5 million for the first quarter of 2016, as compared to $5.7 million in the first quarter of 2015.
• Gross profit margin was 32%, as compared to 31% in the first quarter of 2015. The increase in overall gross margin was related to cost savings and higher margin in first quarter product mix.
• Research and development (R&D) expense for the first quarter of 2016 was $700,000, or 11% of sales, compared to $743,000, or 13% of sales, in the first quarter of 2015.  
• Selling, General and Administrative (SG&A) expense decreased by $86,000 to $1.5 million, or 23% of sales, as compared to $1.6 million, or 28% of sales, in the first quarter of 2015. 
• Net loss attributed to MICT for the first quarter of 2016 was $339,000, or ($0.06) per basic and diluted share, as compared to a net loss of $705,000, or ($0.12) per basic and diluted share, for the first quarter of 2015.  Non-GAAP net loss for the quarter was $116,000 or ($0.02) per basic and diluted share, as compared to $456,000, or ($0.08) per basic and diluted share, for the first quarter of 2015. A reconciliation of GAAP to non-GAAP net income and earnings per share is provided in the table at the end of this press release.
• The Company reported an operating loss of $343,000 for the first quarter of 2016, as compared to an operating loss of $874,000 in the first quarter of 2015.
• At March 31, 2016, the Company reported cash and marketable securities totaling $11.4 million and working capital of $13.1 million.

Recent Developments

Following the close of the first quarter the Company announced that it had received a $2 million order for its TREQ®317 rugged Android tablet, to be used as part of a major telematics company's compliance solution for local and long haul fleets related to the ELD mandate.  Additionally, also subsequent to the quarter, the Company announced that its wholly owned subsidiary, Enertec Systems, has been awarded a three stage $5.8 million project for the production of computer-based Defense Command and Control systems for a multi-billion Israeli-based Defense and Aerospace contractor. The 1st order of $3.4 million has already received and we expect to receive additional orders towards the end of 2016.      

Mr. Lucatz continued, "Demand for our TREQ®317 All-In-One solution is strong and growing, as demonstrated by this recent order. The ELD mandate potentially represents a more than $1 billion market opportunity as it requires the compliance of millions of vehicles in the U.S. and Canada.  We believe that our ability to provide telematics solutions that enable compliance with the mandate is a potentially significant growth engine for Micronet and we look forward to bringing our durable, reliable, in-cab solutions to fleet operators worldwide. We are seeing positive momentum related to macro trends in the MRM industry and we are optimistic regarding our prospects for 2016 as the market continues to develop and our products gain recognition."

"Likewise, we are seeing significant market interest in our Command and Control defense systems and this recent order is the largest ever received by Enertec.  We are encouraged by the growing backlog and pipeline in our Aerospace and Defense business and we continue to build upon our reputation as a dependable and innovative provider of state-of-the-art Command and Control defense systems," he concluded.      

Conference Call

Micronet Enertec will host a conference call today at 9:00 a.m. ET to discuss the Company's financial results for the first quarter ended March 31, 2016. The conference call number for U.S. based callers is (888) 281-1167, callers from outside of the U.S. should dial 972-3-918-0685.

Participants may also access a live webcast of the conference call through the Investor Relations section of Micronet Enertec's website at: 

http://www.veidan-stream.com/?con=Micronet_Enertec_Technologies_Q1_2016_Results

A telephone replay of the call will be available for two weeks at: 1-888-269-0005, outside of the U.S: 972-3-3-925-5929

About Micronet Enertec Technologies, Inc.

Micronet Enertec Technologies, Inc. (NASDAQCM: MICT) operates through two primary companies, Enertec Systems 2001 Ltd, its wholly-owned subsidiary, and Micronet Ltd, in which it has a controlling interest.  Micronet operates in the growing commercial MRM market, mainly in the United States. Micronet designs, develops, manufactures and sells rugged mobile computing devices that provide fleet operators and field workforces with computing solutions in challenging work environments. Enertec operates in the Defense and Aerospace markets and designs, develops, manufactures and supplies various customized military computer-based systems for missile defense systems, command and control and others. The Company's products, solutions and services are designed to perform in severe environments and battlefield conditions. For more information please visit: www.micronet-enertec.com, the content of which is not incorporated by reference into this press release.

Forward-looking Statement

This press release contains express or implied forward-looking statements within the Private Securities Litigation Reform Act of 1995 and other U.S. Federal securities laws. These forward-looking statements include, but are not limited to those statements regarding our future revenue growth, our pipeline and backlog, increased volumes and demand in the markets in which we operate, our product offerings and future market opportunities, the market potential of our Command and Control defense systems, the roll-out of our new TREQ®317 All-In-One wireless platforms, the expected market potential created by the ELD mandate in the U.S. and Canada, and expected new opportunities for the Company and anticipated Company growth resulting from the ELD mandate. The forward-looking statements contained in this press release are subject to risks and uncertainties, including those discussed in the "Risk Factors" section and elsewhere in the Company's annual report on Form 10-K for the year ended December 31, 2015 and in subsequent filings with the Securities and Exchange Commission. Except as otherwise required by law, the Company is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

Tables To Follow

 

 

Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the U.S., or GAAP, we provide additional financial metrics that are not prepared in accordance with GAAP, or non-GAAP financial measures. Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance.

Management believes that these non-GAAP financial measures reflect our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in our business, as they exclude expenses and gains that are not reflective of our ongoing operating results. Management also believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.

The non-GAAP financial measures do not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP.

The non-GAAP adjustments, and the basis for excluding them from non-GAAP financial measures, are outlined below:

• Amortization of acquired intangible assets - We are required to amortize the intangible assets, included in our GAAP financial statements, related to the transaction and acquisition 2014 acquisition of the Beijer Electronic Inc.'s U.S. vehicle operation and the 2012 purchase of controlling shares of Micronet. The amount of an acquisition's purchase price allocated to intangible assets and term of its related amortization are unique to these transactions. The amortization of acquired intangible assets are non-cash charges. We believe that such charges do not reflect our operational performance. Therefore, we exclude amortization of acquired intangible assets to provide investors with a consistent basis for comparing pre- and post-transaction operating results.  
• Stock-based compensation - The share based awards granted to certain individuals. They are non-cash and affected by our historical stock prices which are irrelevant to forward-looking analyses and are not necessarily linked to our operational performance.  

The following table reconciles, for the periods presented, GAAP net loss attributable to Micronet Enertec to non-GAAP net income attributable to Micronet Enertec and GAAP loss per diluted share attributable to Micronet Enertec to non-GAAP net loss per diluted share attributable to Micronet Enertec:

 

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SOURCE Micronet Enertec Technologies, Inc.