PNTR
$14.38
Pointer Telocation
($.12)
(.83%)
Earnings Details
1st Quarter March 2019
Thursday, May 23, 2019 8:00:00 AM
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Summary

Pointer Telocation (PNTR) Reports 1st Quarter Earnings

Pointer Telocation (PNTR) reported 1st Quarter March 2019 earnings of $0.16 per share on revenue of $18.3 million. The consensus earnings estimate was $0.17 per share on revenue of $19.3 million. Revenue fell 12.6% compared to the same quarter a year ago.

Pointer Telocation Ltd provides mobile resource management products & services for the automotive & insurance industries. It offers road-side assistance, vehicle towing, stolen vehicle retrieval services & fleet management, among others.

Results
Reported Earnings
$0.16
Earnings Whisper
-
Consensus Estimate
$0.17
Reported Revenue
$18.3 Mil
Revenue Estimate
$19.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Pointer Telocation Reports Results for the First Quarter of 2019

ROSH HAAYIN, Israel, May 23, 2019 /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 the first quarter of 2019.

Pointer Telocation Ltd Logo (PRNewsfoto/Pointer Telocation Ltd)

Financial Highlights for the First Quarter of 2019 Compared to the First Quarter of 2018

  • Total revenues of $18.3 million, down 13% as reported due an exceptional volume of product sales in the same period a year ago and continued foreign currency exchange devaluation. Total revenues were down 3% on a constant currency basis
  • Service revenues of $12.4 million, down 11% as reported, up 2% on a constant currency basis
  • Operating income of $1.2 million (7% of revenue), down from $2.6 million from the same period a year ago
  • Net income of $0.6 million, down from $1.8 million from the same period a year ago
  • Non-GAAP net income of $1.7 million, down from $2.5 million from the same period a year ago
  • EBITDA of $1.9 million, down from $3.3 million from the same period a year ago
  • Adjusted EBITDA of $2.2 million down from $3.4 million from the same period a year ago
  • Cash, net of debt, totaled $2.5 million
  • Total subscribers reached 272,000, an increase of 3% year over year

Management Commentary

David Mahlab, Pointer's Chief Executive Officer, commented:

"Despite continued currency headwinds and difficult comparability due to an exceptional volume of product sales a year ago, we continued to deliver positive earnings on both a GAAP and non-GAAP basis and reduced our long-term debt in the first quarter. Also, we delivered positive EBITDA and Adjusted EBITDA while maintaining elevated spending in R&D and Sales and Marketing to support our North America market expansion."

"Our Q1 2019 results also include approximately $0.5 million of cost associated with the acquisition of Pointer by ID Systems, which we expect to close during the third quarter 2019. During Q1 2019, we have significantly reduced services to low margin customers, leading to an increase in our Average Revenue Per Unit in constant currency, and accelerating our operating efficiency."  

"For the remainder of 2019, we continue to expect double-digit growth in our overall business. We expect to see significant revenues in the second quarter from product sales in North America, fulfilling our largest product order ever, as announced earlier this year, and stable growth in our service business supported by the recently announced service orders in Brazil.  These should accelerate growth on our top and bottom lines in the second half of the year."

Yaniv Dorani, Pointer's Chief Financial Officer, commented:

"In the first quarter, we generated $1.9 million in EBITDA and ended the quarter with $2.5 million in net cash. We reduced our debt by $0.7 million, and we remain on track for continued positive EBITDA and long-term debt reduction throughout the remainder of 2019."

 

First Quarter of 2019 Financial Summary Compared to First Quarter of 2018


(in millions, except per share amounts)

2019

2018

Total Revenues

$18.3

$20.9

Service Revenues

$12.4

$13.8

Operating Income (% of Revenue)

$1.2 (7%)

$2.6 (12%)

Net Income

$0.6

$1.8

Diluted EPS

$0.07

$0.21

Non-GAAP Diluted EPS

$0.20

$0.30

EBITDA

$1.9

$3.3

Adjusted EBITDA

$2.2

$3.4

 

In Q1 2019, revenues from services decreased 11% as reported to $12.4 million as compared to $13.8 million in Q1 2018. In local currency terms, revenues from services increased by 2%.  Revenues from products decreased 17% as reported in Q1 2019 to $5.9 million from $7.1 million in Q1 2018. In local currency terms, revenues from products decreased by 14%. The currency exchange rate impact on total revenues for the first quarter of 2019 compared to the first quarter of 2018 was approximately $1.9 million. The currency exchange rate impact on operating income for the first quarter of 2019 compared to the first quarter of 2018 was approximately $0.1 million.

Conference Call Information 

As previously announced, Pointer Telocation's management will host a conference call today, at 9:00 a.m. Eastern Time, 2:00 p.m. UK time, 4:00 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 1-201-689-8562
From Israel 1-809-406-247
From 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=133125.

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, adjusted EBITDA, Non-GAAP operating income, Non-GAAP net income and presentation of results in a constant currency based on the local currencies in which operations are conducted prior to giving effect to exchange rates into U.S. dollars 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 adjusted EBITDA by adding back to EBITDA Stock-based compensation expenses. 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 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 and acquisition related one-time costs.

Pointer calculates results on a constant currency based on the local currencies on a nominal value, without giving effect to conversion into U.S. dollar.

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 and to neutralize fluctuations in local currencies against the dollar.

EBITDA, Adjusted EBITDA, Non-GAAP operating and net income and presentation of results on a constant currency basis 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, adjusted EBITDA, Non-GAAP operating and net income and presentation of results on a constant currency basis 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 Telocation

For 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 Statements

Certain 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 expectations for growth and levels of revenues in the remainder of 2019, and, in particular, in North America and Brazil, the Company's overall growth in terms of revenues and profits in the second half of 2019, and the expected closing of the merger with I.D. Systems 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.

 

 

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands




March 31,
2019


December 31,
2018

ASSETS










CURRENT ASSETS:





Cash and cash equivalents


6,875


8,528

Trade and unbilled receivables


14,954


13,902

Other accounts receivable and prepaid expenses


3,966


3,362

Inventories


7,141


6,432






Total current assets


32,936


32,224











LONG-TERM ASSETS:





Long-term loan to related party


991


948

Long-term unbilled and other accounts receivable


1,257


1,258

Severance pay fund


3,250


3,038

Property and equipment, net


6,417


5,915

Other intangible assets, net


1,130


1,229

Goodwill


38,404


37,538

Deferred tax asset


7,987


7,934

Operating lease right-of-use asset


3,702


-






Total long-term assets


63,138


57,860






Total assets


96,074


90,084






 

 

 

INTERIM COLSOLIDATED BALANCE SHEETS

U.S. dollars in thousands




March 31,


December 31,



2019


2018

LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





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


2,022


 

2,354

Trade payables


5,497


5,743

Deferred revenues and customer advances


1,097


785

Other accounts payable and accrued expenses


9,015


8,490






Total current liabilities


17,631


17,372











LONG-TERM LIABILITIES:





Long-term loans from banks


2,308


2,685

Deferred taxes and other long-term liabilities


434


360

Accrued severance pay


3,640


3,531

Operating lease liability


3,714


-






Total long term liabilities


10,096


6,576






COMMITMENTS AND CONTINGENT LIABILITIES










EQUITY:





Pointer Telocation Ltd.'s shareholders' equity:





Share capital 


6,050


6,050

Additional paid-in capital


130,659


130,309

Accumulated other comprehensive income


(6,842)


(8,151)

Accumulated deficit


(61,650)


(62,278)






Total Pointer Telocation Ltd.'s shareholders' equity


68,217


65,930






Non-controlling interest


130


206






Total equity


68,347


66,136






Total liabilities and equity


96,074


90,084

 

 

 

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS


U.S. dollars in thousands, except for share and per share information






Three Months ended

March 31,


Year ended

December 31,




2019


2018


2018


Revenues:








Products


5,892


7,059


25,243


Services


12,366


13,824


52,543










Total revenues


18,258


20,883


77,786










Cost of revenues:








Products


3,783


4,224


15,104


Services


5,216


5,711


21,674










Total cost of revenues


8,999


9,935


36,778










Gross profit


9,259


10,948


41,008










Operating expenses:








Research and development


1,271


1,237


4,707


Selling and marketing


3,658


3,868


14,560


General and administrative


2,586


2,886


11,169


Amortization of intangible assets


95


127


456


One-time acquisition related costs


451


262


300










Total operating expenses


8,061


8,380


31,192










Operating income


1,198


2,568


9,816


Financial expenses, net


221


334


1,133


Other expenses


-


16


3










Income before taxes on income


977


2,218


8,680


Taxes on income


376


449


1,753










Net income


601


1,769


6,927










Earnings per share from continuing
operations attributable to Pointer
Telocation Ltd.'s shareholders:








Basic net earnings per share


0.07


0.22


0.85










Diluted net earnings per share


0.07


0.21


0.84










Weighted average -Basic number of shares


8,139,584


8,059,654


8,099,952










Weighted average – fully diluted number of shares


8,326,391


8,294,562


8,279,562


 

 

 

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands




Three Months ended

March 31,


Year ended

December 31,



2019


2018


2018








Cash flows from operating activities:














Net income


601


1,769


6,927

Adjustments required to reconcile net 
income to net cash provided by 
operating activities:







Depreciation and amortization


679


718


2,571

Accrued interest and exchange rate
changes of debenture and long-term loans


(62)


1


(20)

Accrued severance pay, net


(115)


78


71

Gain from sale of property and equipment, net


(16)


(27)


(101)

 Stock-based compensation


349


142


1,198

Increase in trade and unbilled receivables, net


(793)


(988)


(1,121)

Increase in other accounts receivable
and prepaid expenses


(853)


(620)


(855)

Decrease (increase) in inventories


(802)


210


(56)

Decrease (increase) in deferred income
taxes


120


154


779

Decrease in long-term unbilled and
other accounts receivable


555


157


220

Decrease (increase)  in trade payables


(796)


(111)


48

Increase (decrease) in other accounts
payable and accrued expenses


867


836


(1,064)








Net cash provided by operating activities


(266)


2,319


8,597








Cash flows from investing activities:







Purchase of property and equipment


(530)


(958)


(2,721)

Proceeds from sale of property and equipment


16


27


101








Net cash used in investing activities


(514)


(931)


(2,620)









 

 

 

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS


U.S. dollars in thousands






Three months ended

March 31,


Year ended

December 31,




2019


2018


2018










Cash flows from financing activities:
















Repayment of long-term loans from banks


(1,218)


(1,351)


(5,078)


 Proceeds from issuance of shares and exercise of 
options, net of issuance costs


-


4


89


Short-term bank credit, net


514


58


32










Net cash used in financing activities


(704)


(1,289)


(4,957)










Effect of exchange rate on cash and cash equivalents


(169)


292


133










Increase in cash and cash equivalents


(1,653)


391


1,153


Cash and cash equivalents at the beginning of the
period


8,528


7,375


7,375










Cash and cash equivalents at the end of the period


6,875


7,766


8,528










Supplemental disclosure for non-cash activities:








Operating lease right-of-use asset


4,096


-


-


 

 

 

ADDITIONAL INFORMATION


U.S. dollars in thousands, except share and per share data




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






Three months ended

March 31,


Year ended

December 31,




2019


2018


2018










GAAP gross profit


9,259


10,948


41,008


Stock-based compensation expenses


34


9


104


Non-GAAP gross profit


9,293


10,957


41,112


















GAAP operating income


1,198


2,568


9,816


Stock-based compensation expenses


349


142


1,198


Amortization and impairment of long lived assets


95


127


456


Acquisition related one-time costs


451


262


300


Non-GAAP operating income


2,093


3,099


11,770










GAAP net income


601


1,769


6,927


Stock-based compensation expenses


349


142


1,198


Amortization and impairment of long lived assets


95


127


456


Non cash tax expenses


166


171


759


Acquisition related one-time costs


451


262


300


Non-GAAP net income


1,662


2,471


9,640










Non-GAAP net income per share from continuing
operations - Diluted


0.20


 

0.30


1.16


Non-GAAP weighted average number of shares -
Diluted*


8,326,391


8,294,562


8,279,562










* 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.


 

 

 

EBITDA and Adjusted EBITDA

U.S. dollars in thousands




Three months ended
March 31,


Year ended
December 31,



2019


2018


2018








GAAP Net income as reported:


601


1,769


6,927








Financial expenses, net


221


334


1,133

Tax on income


376


449


1,753

Depreciation and amortization of goodwill and
intangible assets


679


718


2,571








EBITDA


1,877


3,270


12,384








Stock-based compensation expenses


349


142


1,198








Adjusted EBITDA


2,226


3,412


13,582








 

 

 

Company contact: 

Yaniv Dorani, CFO
Tel: +972-3-5723111
E-mail: yanivd@pointer.com

Investor Relations Contact at Hayden IR, LLC:

Brett Maas                 
Tel: +1-646-536-7331
E-mail: brett@haydenir.com

Dave Fore
Tel: +1-206-395-2711
E-mail: dave@haydenir.com

 

 

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SOURCE Pointer Telocation Ltd