Pointer Telocation Reports Q1 2016 Financial Results

ROSH HAAYIN, Israel, June 8, 2016 /PRNewswire/ -- Pointer Telocation Ltd. (Nasdaq CM: PNTR; Tel-Aviv Stock Exchange: PNTR) - a leading developer, manufacturer and operator of Mobile Resource Management (MRM) services, announced today its financial results for the first quarter of 2016.

Given the spin-off of the Company's subsidiary Shagrir Group Vehicle Services Ltd., the RSA business, Pointer is focusing on the results of its MRM business. The financial summary of the MRM business in the table and description immediately below do not include Shagrir's results.

Financial Summary of the MRM business for the First Quarter of 2016

 

MRM revenues for the first quarter of 2016 decreased 3.8% to $14.8 million as compared to $15.4 million in the first quarter of 2015. In local currency terms, MRM revenues increased by 7%.

Revenues from products in the first quarter of 2016 decreased 4.7% to $5.5 million (37% of revenues) compared to $5.8 million (38% of revenues) in the comparable period of 2015.

Revenues from services in the first quarter of 2016 decreased 3.2% to $9.3 million (63% of revenues) compared to $9.6 million (62% of revenues), in the comparable period of 2015. In local currency terms in the territories where the subsidiaries operate, MRM revenue from services increased by 14%.

MRM non-GAAP gross profit was $7.4 million (49.6% of revenues) compared to $7.4 million (48.0% of revenues) in the first quarter of 2015.

MRM non-GAAP operating income was $1.8 million (11.9% of revenues) compared to $2.0 million (12.8% of revenues) in the first quarter of 2015.

In connection with Pointer's expected spin-off of Shagrir to Pointer's shareholders, pro-forma information providing additional details of the financial performance of the MRM business is provided separately in Exhibit A and is for informational purposes only.

Shagrir's results are included in the financial summary of the consolidated results below, and in Pointer's results of the second quarter they will appear as discontinued operations. Thereafter they will no longer be part of Pointer's results. 

Financial Summary of the Consolidated Results of the QuarterRevenues for the first quarter of 2016 increased 2.7% to $25.7 million as compared to $25 million in the first quarter of 2015. Gross profit was $9.1 million (35.6% of revenues) an increase of 6.3% compared to $8.6 million (34.5% of revenues) in the first quarter of 2015. Operating income was $2.1 million (8.2% of revenues), approximately the same as in the first quarter of 2015. Net income was $1.4 million or $0.17 per share in the first quarter of 2016 a decrease of 24% as compared to $1.9 million, or $0.23 per share, in the first quarter of 2015.Non-GAAP net income was $2.3 million in the first quarter of 2016, a decrease of 2.6% as compared to non-GAAP net income of $2.4 million in the first quarter of 2015.

Management Comment

David Mahlab, Pointer's Chief Executive Officer, commented: "We are pleased with our results, especially the growth in MRM service revenues in local currency terms and the growth in the subscriber base. While the currency devaluations in many of our markets versus the US dollar have had a significant negative impact on our financial results over the past year, our results demonstrate that the underlying business remains strong and both the growth in revenues in local currency terms and in the subscriber base demonstrate that."

Mr. Mahlab continued, "While it was a long process, we are pleased that the spin-off to our shareholders of the Shagrir business is at the finishing line. This step is an important part of our long term strategy of becoming a focused IOT & MRM company, as it simplifies the overall Pointer business structure and makes the value inherent in our business clearer to investors."

Mr. Mahlab further noted, "Within our MRM technology division, we see many opportunities for future growth. We have launched two new products which are beginning to see market traction, and we continue to invest in our SAAS infrastructure. We are also seeing a renewed positive momentum in Brazil and the growth in our subscriber base is beginning to accelerate, which will enable us to benefit from the operating leverage inherent in our business model. Thus, we believe we are at an interesting inflection point in our development and growth."

Conference Call Information Pointer Telocation's management will host a conference call today, at 6:00 am Pacific Time, 9:00 am Eastern Time, 4:00 pm Israel time. On the call, management will review and discuss the results.  To listen to the call, please dial in to one of the following teleconferencing numbers. Please begin placing your call a few minutes before the conference call commences.

Dial in numbers are as follows:

From the USA: +1-888-668-9141

From Israel: 03-918-0609

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

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

Pointer uses adjusted EBITDA and Non-GAAP net income as Non-GAAP financial performance measurements.

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

We calculate Non-GAAP net income by adding back to net income, the effects of non-cash stock based compensation expenses, amortization and impairment of long lived assets and non-cash tax expenses.

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

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

About Pointer Telocation: Pointer Telocation is a leading provider of technology and services to the automotive and insurance industries, offering a set of services including Mobile Resource Management, Fleet Management and Stolen Vehicle Recovery. Pointer has a growing list of customers and products installed in 50 countries. Cellocator, a Pointer Products Division, is a leading AVL (Automatic Vehicle Location) solutions provider for stolen vehicle retrieval, fleet management, car & driver safety, public safety, vehicle security and more. The Company's top management and the development center are located in the Afek Industrial Area of Rosh Ha'ayin, Israel.

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

Forward Looking StatementsThis 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.

INTERIM CONSOLIDATED BALANCE SHEETSU.S. dollars in thousands

 

INTERIM CONSOLIDATED BALANCE SHEETSU.S. dollars in thousands

 

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONSU.S. dollars in thousands

 

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONSU.S. dollars in thousands (except share and per share data)

 

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousands

 

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousands

 

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

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

 

* In calculating diluted non-GAAP net income per share, the diluted weighted average number of shares outstanding excludes the effects of stock-based compensation expenses in accordance with FASB ASC 718.

 

ADJUSTED EBITDAU.S. dollars in thousands

 

EXHIBIT A: MRM INCOME STATEMENT CARVE-OUTU.S. dollars in thousands

 

 

Contact:

Zvi Fried, V.P. and Chief Financial Officer                     Tel.: +972-3-572 3111                                        E-mail: [email protected]

Gavriel Frohwein/Ehud Helft, GK Investor Relations Tel: +1-646-688-3559 E-mail: [email protected]  

 

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SOURCE Pointer Telocation Ltd