Pointer Telocation Reports Third Quarter 2018 Financial Results

ROSH HAAYIN, Israel, Nov. 15, 2018 /PRNewswire/ --  Pointer Telocation Ltd. (NASDAQ: PNTR) (TASE: PNTR), a leading provider of telematic services and technology solutions for Fleet Management, Mobile Asset Management and Internet of Vehicles, announced its financial results for third quarter and nine months ended September 30, 2018.

Financial Highlights for Third Quarter 2018 Compared to Third Quarter 2017

• Total revenues of $18.7 million, down 7% as reported due to foreign currency exchange headwinds and up 1% on a constant currency basis
• Service revenues of $12.8 million, down 4% as reported and up 8% on a constant currency basis
• Operating income of $2.5 million (13% of revenue), down 13%
• Net income of $1.8 million, down 4%
• Cash, net of debt, totaled $2 million. Generated $3.1 million in operating cash flow during the quarter
• Total subscribers reached 274,000, an increase of 10%  

Financial Highlights for First Nine Months of 2018 Compared to First Nine Months of 2017

• Total revenues of $59.4 million as reported, up from $59.3 million, and up 4% on a constant currency basis
• Service revenues of $39.8 million, up 3% as reported, and up 9% on a constant currency basis
• Operating income of $7.8 million (13% of revenue), down 2%
• Net income of $5.5 million, up 1%

Management Commentary

David Mahlab, Pointer's Chief Executive Officer, commented:"This was another solid quarter for Pointer. We delivered improved service margins, strong earnings and impressive cash flow generation while facing tough headwinds from foreign currency exchange rates in our markets in Latin America, which negatively impacted reported revenue. Our bottom line performance is good, and it demonstrates our underlying strength.

"During the period, we continued to advance our capabilities in the IOT space and in providing our safety and driver behavior solution through our machine learning technology. Our platform will harness our real-time driver data to deliver more efficient, cost-effective products and services to our customers, many of whom have already provided positive initial feedback on these upcoming offerings. Initial introduction of the solution has been well received by our customers. We are also currently beta testing our asset tracking solution in North America and intend to start shipping before the end of the year. 

"As reported recently, in India, we have been officially certified to the AIS 140 standard, which we believe will drive a substantial increase in telematics adoption in this growing market. We expect to start delivering Cello CANiQ IN devices in India by the end of the year, and we should benefit from deliveries in the Americas as well. We expect a significant ramp up in North America in 2019 and beyond. Meanwhile, in Brazil we secured several new contracts during the third quarter that will have an impact in 2019 as well.

"Our markets, while highly fragmented, continue to expand, and we are positioned around the globe to pursue them."

Yaniv Dorani, Pointer's Chief Financial Officer, commented:"During the period, we continued to strengthen our balance sheet and improve our capital structure. In the third quarter, we generated $3.1 million in operating cash flow and ended the quarter with $2.0 million in net cash, achieving positive net cash for the first time in more than a decade. Over the past nine months, we have reduced our long-term debt by $3.8 million."

 

 

 

Revenues from services decreased 4% as reported to $12.8 million as compared to $13.3 million in the third quarter of 2017. In local currency terms, revenues from services increased by 8%. Revenues from products decreased 14% as reported in the third quarter of 2018 to $5.9 million from $6.9 million. In local currency terms, revenues from products decreased by 11%. The currency exchange rate impact on total revenues for the third quarter of 2018 compared to the third quarter of 2017 was approximately $1.8 million.

Conference Call Information 

As previously announced, Pointer Telocation's management will host a conference call today, at 10:00 a.m. Eastern Time, 3:00 p.m. UK time, 17:00 p.m. 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 +1-877-407-0789 or 1-201-689-8562From Israel 1-809-406-247From the UK 0-800-756-3429

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

The call will also be accompanied by a live webcast over the Internet and accessible at http://public.viavid.com/index.php?id=131448.

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 EBITDA, Non-GAAP operating income and Non-GAAP net income as Non-GAAP financial performance measurements.

Pointer calculates EBITDA by adding back to net income financial expenses, taxes and depreciation and amortization of intangible assets.

Pointer calculates Non-GAAP operating income by adding back to operating income the effects of non-cash stock-based compensation expenses, amortization of long-lived assets, other expenses of retirement costs and losses and acquisition related one-time costs.

Pointer calculates Non-GAAP net income by adding back to net income the effects of non-cash stock-based compensation expenses, amortization of long lived assets, non-cash tax expenses, other expenses of retirement costs and acquisition related one-time costs.

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

EBITDA and Non-GAAP operating and net income are provided to investors to complement the results provided in accordance with GAAP, as management believes these measures help to illustrate underlying operating trends in the Company's business and uses these measures to establish internal budgets and goals, manage the business and evaluate performance. Management believes that these Non-GAAP measures help investors to understand the Company's current and future operating cash flow and performance, especially as the Company's acquisitions have resulted in amortization and non-cash items that have had a material impact on the Company's GAAP profits. EBITDA and Non-GAAP operating and net income should not be considered in isolation or as a substitute for comparable measures calculated and should be read in conjunction with the Company's 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 TelocationFor over 20 years, Pointer has rewritten the rules for the Mobile Resource Management (MRM) market and is a pioneer in the Connected Car segment. Pointer has in-depth knowledge of the needs of this market and has developed a full suite of tools, technology and services to respond to them. The vehicles of the future will be intimately networked with the outside world, enhancing and optimizing the in-car experience.

Pointer's innovative and reliable cloud-based software-as-a-service (SAAS) platform extracts and captures an organization's critical mobility data points – from office, drivers, routes, points-of-interest, logistic-network, vehicles, trailers, containers and cargo. The SAAS platform analyzes the raw data converting it into valuable information for Pointer's customers providing them with actionable insights and thus enabling the customers to improve their bottom line and increase their profitability.

For more information, please visit http://www.pointer.com, the content of which does not form a part of this press release.

Risks Regarding Forward Looking StatementsCertain statements made herein that use words such as "estimate", "project", "intend", "expect", "believe", "may", "might", "predict", "potential", "anticipate", "plan" or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. For example, when the Company discusses its platform that will harness its real-time driver data to deliver better products and services, the Company's strength, adoption of the Company's solutions and other trends in the markets and various territories, it is using forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties that could cause the actual results, performance or achievements of the Company to be materially different from those that may be expressed or implied by such statements, including, among others, changes in general economic and business conditions. For additional information regarding these and other risks and uncertainties associated with the Company's business, reference is made to the Company's reports filed from time to time with the U.S. Securities and Exchange Commission. The Company does not undertake to revise or update any forward-looking statements for any reason.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company contact: Yaniv Dorani, CFO Tel: +972-3-5723111 E-mail: [email protected]  Investor Relations Contact at Hayden IR, LLC: Brett Maas Tel: +1-646-536-7331 E-mail: [email protected]   Dave Fore Tel: +1-206-395-2711 E-mail: [email protected]

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SOURCE Pointer Telocation Ltd.