PNTR
$7.65
Pointer Telocation
Earnings Details
3rd Quarter September 2016
Thursday, November 17, 2016 6:44:00 AM
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Summary

Pointer Telocation (PNTR) Recent Earnings

Pointer Telocation (PNTR) reported 3rd Quarter September 2016 earnings of $0.17 per share on revenue of $15.9 million. The consensus earnings estimate was $0.11 per share on revenue of $15.4 million. Revenue fell 36.1% 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
$0.17
Earnings Whisper
-
Consensus Estimate
$0.11
Reported Revenue
$15.9 Mil
Revenue Estimate
$15.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Pointer Telocation Reports Q3 2016 Financial Results

Pointer Telocation Ltd. (Nasdaq CM: PNTR; TASE: PNTR) - a leading developer, manufacturer and operator of Mobile Resource Management (MRM) services, today announced its financial results for the third quarter of 2016.

On June 8, 2016 Pointer spun off its Israeli subsidiary, Shagrir Group Vehicle Services Ltd., through which Pointer carried out its road side assistance (RSA) activities and listed Shagrir’s shares for trade on the Tel Aviv Stock Exchange. The results of Shagrir until that date are included in Pointer’s results as discontinued operations.

Revenues for the third quarter of 2016 increased 9.3% to $15.9 million as compared to $14.6 million in the third quarter of 2015. In local currency terms, revenues increased by 14%.

Revenues from products in the third quarter of 2016 increased 6% to $5.4 million (34% of revenues) compared to $5.1 million (35% of revenues) in the comparable period of 2015.

Revenues from services in the third quarter of 2016 increased 11% to $10.5 million (66% of revenues) compared to $9.5 million (65% of revenues), in the comparable period of 2015. In local currency terms in the territories where the subsidiaries operate, revenue from services increased by 18%.

Gross profit was $7.8 million (49.2% of revenues) compared to $7.1 million (49% of revenues) in the third quarter of 2015.

Non-GAAP operating income was $1.8 million (11% of revenues), compared to $1.6 million (11% of revenues) in the third quarter of 2015.

Non-GAAP net income from continuing operations was $1.4 million (9% of revenues), compared with $1.3 million (9.2% of revenues).

Adjusted EBITDA from continuing operations was $2.0 million, approximately the same as in the third quarter of 2015.

Management Comment

David Mahlab, Pointer’s Chief Executive Officer, commented: "We are pleased with our financial results, particularly with the growth in revenue. Just as importantly, we completed the acquisition of Cielo Telecom, a fleet management company in Brazil, which will bring us an additional 16,000 subscribers. Our subscriber base, which is now in excess of 214,000, demonstrates our ability to execute on our long term strategy and will bring us incremental service revenues in the coming quarters.

Mr. Mahlab further noted, "With the new SAAS solutions we have recently launched, together with our enhanced product offering, we are looking at more opportunities in our end markets. In Brazil, we will focus on integrating our new acquisition into our operations, while maintaining our overall growth and profitability. We continue to look for potential acquisitions in our target markets, which will enable us to increase our customer base and further improve our financial performance".

Conference Call Information Pointer Telocation’s management will host a conference call today, at 7:00am Pacific Time, 10:00 Eastern Time, 17:00 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: +1 888 407 2553; 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 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 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, non-cash tax expenses, spin-off related expenses and losses and acquisition related one-time costs.

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 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.

INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30,
December 31,
2016
2015
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
14,066
7,252
Trade receivables
10,865
9,494
Other accounts receivable and prepaid expenses
2,185
1,596
Inventories
4,777
4,697
Current assets of discontinued operation
-
11,616
Total current assets
31,893
34,655
LONG-TERM ASSETS:
Long-term loans to related party
838
-
Long-term accounts receivable
543
490
Severance pay fund
3,127
2,740
Property and equipment, net
3,867
3,278
Other intangible assets, net
292
443
Goodwill
32,820
31,388
Deferred tax asset
1,852
3,086
Long Term assets of discontinued operation
-
27,358
Total long-term assets
43,339
68,783
Total assets
75,232
103,438
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30,
December 31,
2016
2015
Unaudited
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities of long-term loans
4,730
4,820
Trade payables
6,054
4,651
Deferred revenues and customer advances
692
671
Other accounts payable and accrued expenses
5,275
5,168
Current liabilities of discontinued operation
-
15,142
Total current liabilities
16,751
30,452
LONG-TERM LIABILITIES:
Long-term loans from banks
11,563
8,385
Deferred revenues and other long-term liabilities
336
258
Accrued severance pay
3,478
3,345
Long term liabilities of discontinued operation
-
5,963
Total long term liabilities
15,377
17,951
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY:
Pointer Telocation Ltd’s shareholders’ equity:
Share capital
5,819
5,770
Additional paid-in capital
128,313
128,410
Accumulated other comprehensive loss
(4,588)
(6,254)
Accumulated deficit
(86,604)
(71,822)
Total Pointer Telocation Ltd’s shareholders’ equity
42,940
56,104
Non-controlling interest
164
(1,069)
Total equity
43,104
55,035
Total liabilities and equity
75,232
103,438
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands
Nine months ended
Three months ended
Year ended
September 30,
September 30,
December 31,
2016
2015
2016
2015
2015
Unaudited
Unaudited
Revenues:
Products
16,948
16,625
5,394
5,090
22,266
Services
30,007
28,837
10,522
9,470
38,301
Total revenues
46,955
45,462
15,916
14,560
60,567
Cost of revenues:
Products
10,479
10,081
3,301
3,176
13,435
Services
13,563
13,616
4,789
4,244
17,879
Total cost of revenues
24,042
23,697
8,090
7,420
31,314
Gross profit
22,913
21,765
7,826
7,140
29,253
Operating expenses:
Research and development
2,694
2,534
870
816
3,409
Selling and marketing
8,714
7,480
3,099
2,401
10,468
General and administrative
6,378
6,589
2,152
2,198
9,278
Amortization of intangible assets
300
566
105
274
538
Impairment of intangible and tangible assets
-
-
-
-
917
One-time acquisition related costs
200
-
200
-
-
Total operating expenses
18,286
17,169
6,426
5,689
24,610
Operating income
4,627
4,596
1,400
1,451
4,643
Financial expenses (income),
net
622
(64)
379
157
63
Other expenses (income), net
5
11
8
(2)
10
Income before taxes on income
4,000
4,649
1,013
1,296
4,570
Taxes on income
1,151
957
298
312
1,307
Income from continuing operations
2,849
3,692
715
984
3,263
Income from discontinued operations, net
154
164
-
107
535
Net income
3,003
3,856
715
1,091
3,798
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Nine months ended
Three months ended
Year ended
September 30,
September 30,
December 31,
2016
2015
2016
2015
2015
Unaudited
Profit
(loss) from continuing operations attributable to:
Pointer Telocation Ltd’s shareholders
2,835
3,803
712
1,007
3,338
Non-controlling interests
14
(111)
3
(23)
(75)
2,849
3,692
715
984
3,263
Profit
(loss) from discontinued operations attributable to:
Pointer Telocation Ltd’s shareholders
120
184
-
112
607
Non-controlling interests
34
(20)
-
(5)
(72)
154
164
-
107
535
Earnings per share from continuing operations attributable to Pointer Telocation Ltd’s shareholders:
Basic net earnings
per share
$
0.36
$
0.49
$
0.09
$
0.13
$
0.43
Diluted net earnings
per share
$
0.36
$
0.48
$
0.09
$
0.12
$
0.42
Weighted average -Basic number of shares
7,799,257
7,705,355
7,825,840
7,725,653
7,725,246
Weighted average - fully diluted number of shares
7,938,800
7,957,361
7,967,559
7,950,062
7,938,489
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Nine months ended
Three months ended Year ended
September 30,
September 30,
December 31,
2016
2015
2016 2015
2015
Unaudited
Unaudited
Cash flows from operating activities:
Net income
$3,003
$
3,856
$ 715
$1,091
$
3,798
Adjustments required to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization
2,306
2,946
529
961
3,959
Impairment of tangible and intangible assets
-
-
-
-
917
Accrued interest and exchange rate changes of
29
4
(45)
(6)
(888)
debenture and long-term loans
Accrued severance pay, net
37
(19)
(84)
19
17
Gain from sale of property and equipment, net
(205)
(88)
(25)
(16)
(143)
Stock-based compensation
205
245
111
71
309
Decrease
in restricted cash
-
62
-
-
62
Decrease (increase) in trade receivables, net
(3,430)
(293)
854
220
(236)
Decrease (increase)
in other accounts receivable and prepaid expenses
(750)
(234)
156
826
(469)
Decrease (increase) in inventories
90
120
(353)
300
658
Decrease in deferred income taxes
1,722
551
685
164
1,080
Decrease (increase) in long-term accounts receivable
(240)
(106)
(231)
(120)
(91)
Increase (decrease) in trade payables
2,052
296
10
(604)
1,277
Increase (decrease) in other accounts payable
1,568
(1,040)
(893)
(749)
(1,448)
and accrued expenses
Net cash provided by operating activities
6,387
6,300
1,429
2,157
8,802
Cash flows from investing activities:
Purchase of property and equipment
(3,577)
(2,511)
(716)
(1,157)
(3,616)
Purchase of other intangible assets
(115)
-
-
-
-
Proceeds from sale of property and equipment
624
829
30
181
1,266
Net cash used in investing activities
(3,068)
(1,682)
(686)
(976)
(2,350)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Nine months ended
Three months ended
Year ended
December 31,
September 30,
September 30,
2016
2015
2016
2015
2015
Unaudited
Unaudited
Cash flows from financing activities:
Receipt of long-term loans from banks
6,762
15,159
6,667
56
14,934
Repayment of long-term loans from banks
(3,575)
(18,403)
(1,325)
(674)
(19,503)
Repayment of long-term loans from shareholders
-
-
-
32
-
Proceeds from issuance of shares and exercise of options, net of issuance costs
71
15
71
9
15
Short-term bank credit, net
72
(222)
(56)
264
(915)
Distribution as a dividend in kind of previously consolidated subsidiary (a)
(1,870)
-
-
-
-
Net cash used in financing activities
1,460
(3,451)
5,357
(313)
(5,469)
Effect of exchange rate on cash and cash equivalents
(60)
(1,544)
221
(1,135)
(193)
Increase (decrease) in cash and cash equivalents
4,719
(377)
6,321
(267)
790
Cash and cash equivalents at the beginning of the period
9,347
8,557
7,745
8,447
8,557
Cash and cash equivalents at the end of the period-
14,066
7,293
14,066
7,293
7,252
Continuing operations
Cash and cash equivalents at the end of the period-
-
887
-
887
2,095
Discontinued operation
Total Cash and cash equivalents at the end of the period
$
14,066
$
8,180
$
14,066
$
8,180
$
9,347
(a)
Distribution as a dividend in kind of previously consolidated subsidiary:
The subsidiaries’ assets and liabilities at date of
distribution:
Working capital (excluding cash and cash equivalents)
(5,443)
-
-
-
-
Property and equipment
7,048
-
-
-
-
Goodwill and other intangible assets
15,883
-
-
-
-
Other long term liabilities
(1,781)
-
-
-
-
Non-controlling interest
373
-
-
-
-
Accumulated other comprehensive loss
(213)
-
-
-
-
Dividend in kind
(17,737)
-
-
-
-
$
(1,870)
$
-
$
-
$
-
$
-
ADDITIONAL INFORMATION
U.S. dollars in thousands (except share and per share data)
The following table reconciles the GAAP to non-GAAP operating results:
Nine months ended
Three months ended
Year ended
September 30,
September 30,
December 31,
2016
2015
2016
2015
2015
GAAP gross profit
22,913
21,765
7,826
7,140
29,253
Stock-based compensation expenses
5
8
1
2
11
Non-GAAP gross profit
22,918
21,773
7,827
7,142
29,264
GAAP operating expenses
18,286
17,169
6,426
5,689
24,610
Stock-based compensation expenses
200
237
110
69
298
Amortization and impairment of long lived assets
300
418
105
126
1,455
Acquisition related one-time costs
200
-
200
--
-
Non-GAAP operating expenses
17,586
16,514
6,011
5,494
22,857
GAAP operating income
4,627
4,596
1,400
1,451
4,643
Non-GAAP operating income
5,332
5,259
1,816
1,648
6,407
GAAP net income from continuing operations
2,849
3,692
715
984
3,263
Stock-based compensation
205
245
111
71
309
Amortization and impairment of long lived assets
300
418
105
126
1,455
Non cash tax expenses
1,151
507
298
164
1,307
Acquisition related one-time costs
200
-
200
-
-
Non-GAAP net income from continuing operations
$
4,705
$
4,862
$
1,429
$
1,345
$
6,334
Income (loss) from discontinued operation
154
164
-
107
535
Non cash tax expenses
249
186
-
76
97
Spin-off related expenses and losses
349
-
-
-
-
Amortization and impairment of long lived assets
67
148
-
50
197
Non-GAAP net income
$
5,524
$
5,360
$
1,429
$
1,578
$
7,163
Non-GAAP net income per share from continuing operations - Diluted
$
0.59
$
0.61
$
0.18
$
0.17
$
0.80
Non-GAAP weighted average number of shares - Diluted*
7,938,800
7,957,361
7,967,559
7,950,062
7,938,489

* 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 EBITDA
U.S. dollars in thousands
Nine months ended
Three months ended
Year ended
September 30,
September 30,
December 31,
2016
2015
2016
2015
2015
GAAP Net income from continuing operations as reported:
$
2,849
$
3,692
$
715
$
984
$
3,263
Financial expenses (income), net
622
(63)
379
158
63
Tax on income
1,151
957
298
312
1,307
Stock based compensation expenses
205
245
111
71
309
Depreciation, amortization and impairment of goodwill and
intangible assets
1,638
1,732
529
516
3,157
Adjusted EBITDA from continuing operations
$
6,465
$
6,563
$ 2,032
$
2,041
$
8,099
Income
from
discontinued operation
154
164
-
107
535
Financial expenses, net
47
599
-
202
806
Tax on income
249
185
-
74
97
Depreciation, amortization and impairment of goodwill and
intangible assets
668
1,215
-
446
1,719
Adjusted EBITDA
$
7,583
$
8,726
$
2,032
$
2,870
$
11,256

Contact:

Zvi Fried, V.P. and Chief Financial Officer Tel.: +972-3-572-3111 E-mail: zvif@pointer.com

Gavriel Frohwein/Ehud Helft, GK Investor Relations Tel: +1-646-688-3559E-mail: pointer@gkir.com

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/pointer-telocation-reports-q3-2016-financial-results-300365038.html

SOURCE Pointer Telocation Ltd

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