PNTR
$7.51
Pointer Telocation
($.02)
(.27%)
Earnings Details
2nd Quarter June 2016
Thursday, August 11, 2016 6:00:00 AM
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Summary

Pointer Telocation (PNTR) Recent Earnings

Pointer Telocation (PNTR) reported 2nd Quarter June 2016 earnings of $0.18 per share on revenue of $16.2 million. The consensus earnings estimate was $0.12 per share on revenue of $15.2 million. Revenue fell 35.9% 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
$0.18
Earnings Whisper
-
Consensus Estimate
$0.12
Reported Revenue
$16.2 Mil
Revenue Estimate
$15.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Pointer Telocation Reports Q2 2016 Financial Results

Highlights (excluding Shagrir) in the Second Quarter 2016

-- Revenues of $16.2 million; up 15% YoY in local currencies (up 5% in US dollars);

Service revenues were $10.2 million; up 20% YoY in local currency terms (up 4% in US dollars);

-- Adjusted EBITDA (from continuing operations) was $2.3 million, up 9% YoY

-- Total MRM subscribers reached 192,000; a 13% increase of 22,000 since Q2 2015 end

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 second 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 second quarter of 2016 increased 4.6% to $16.2 million as compared to $15.5 million in the second quarter of 2015. In local currency terms, revenues increased by 15%.

Revenues from products in the second quarter of 2016 increased 5.1% to $6 million (37% of revenues) compared to $5.8 million (37% of revenues) in the comparable period of 2015.

Revenues from services in the second quarter of 2016 increased 4.4% to $10.2 million (63% of revenues) compared to $9.7 million (63% of revenues), in the comparable period of 2015. In local currency terms in the territories where the subsidiaries operate, revenue from services increased by 20%.

Gross profit was $7.7 million (47.7% of revenues) compared to $7.2 million (46.7% of revenues) in the second quarter of 2015.

Non-GAAP operating income was $1.8 million (11% of revenues), compared to $1.6 million (10.6% of revenues) in the second quarter of 2015.

Non-GAAP net income from continuing operations was $1.4 million (9% of revenues), compared with $1.3 million (8.6% of revenues).

Adjusted EBITDA from continuing operations was $2.3 million compared with $2.1 million in the second quarter of 2015, an increase of 9%.

Management Comment

David Mahlab, Pointer’s Chief Executive Officer, commented: "We are very pleased with our financial results, but just as importantly, with the strategic developments in the quarter. Our spin-off of the Shagrir RSA business culminates a long process which is a key and important part of our long term strategy. It enables Pointer to focus fully on the MRM market, makes our operations more transparent and allows the value inherent in our business to become clearer."

Mr. Mahlab continued, "In local currency terms, our revenues in the quarter grew strongly by 15% year over year, built on the solid subscriber growth expanding by 13% in the past year. As we have an existing infrastructure in place, we can add each new subscriber at minimal incremental cost. Solid operating leverage is therefore inherent to our business model, and it is also clear given the year-over-year growth of 17% in operating income."

Mr. Mahlab further noted, "We see new opportunities in our end-markets, in all our target territories. This was evidenced by our recent contract, whereby we are managing the vehicles and personnel responsible for transit control, emergency and contingencies during the Olympic Games currently held in Rio. More generally, we see an uptick in tenders in which we are competing and winning. We continue to invest in sales and marketing as well as R&D, in order to capitalize on these opportunities and on the new solutions we continue to develop. We are also examining potential acquisitions in the markets in which we operate, which will enable us to increase our customer base and further benefit from the leverage in our business model."

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: +1-866-744-5399; From Israel: 03-918-0691

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 and spin-off related expenses and losses.

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
June 30, 2016
December 31, 2015
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
7,745
9,347
Trade receivables
11,627
9,494
Other accounts receivable and prepaid expenses
2,360
1,596
Inventories
4,416
4,697
Assets of discontinued operation (*)
-
36,879
Total current assets
26,148
62,013
LONG-TERM ASSETS:
Long term loan to others
820
-
Long-term accounts receivable
499
490
Severance pay fund
3,000
2,740
Property and equipment, net
3,614
3,278
Other intangible assets, net
398
443
Goodwill
32,208
31,388
Deferred tax asset
2,202
3,086
Total long-term assets
42,741
41,425
Total assets
68,889
103,438
(*) Excluding cash and cash equivalents
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30,
December 31,
2016
2015
Unaudited
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities of long-term loans
4,572
4,820
Trade payables
5,871
4,651
Deferred revenues and customer advances
735
671
Other accounts payable and accrued expenses
6,160
5,168
Liabilities of discontinued operation
-
21,105
Total current liabilities
17,338
36,415
LONG-TERM LIABILITIES:
Long-term loans from banks
6,340
8,385
Deferred taxes and other long-term liabilities
331
258
Accrued severance pay
3,429
3,345
Total long term liabilities
10,100
11,988
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY:
Pointer Telocation Ltd’s shareholders’ equity:
Share capital
5,775
5,770
Additional paid-in capital
128,183
128,410
Accumulated other comprehensive loss
(5,351)
(6,254)
Accumulated deficit
(87,316)
(71,822)
Total Pointer Telocation Ltd’s shareholders’ equity
41,291
56,104
Non-controlling interest
160
(1,069)
Total equity
41,451
55,035
Total liabilities and equity
68,889
103,438
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands
Six months ended
Three months ended
Year ended
June 30,
June 30,
December 31,
2016
2015
2016
2015
2015
Unaudited
Unaudited
Revenues:
Products
11,555
11,535
6,048
5,753
22,266
Services
19,485
19,368
10,166
9,738
38,301
Total revenues
31,040
30,903
16,214
15,491
60,567
Cost of revenues:
Products
7,178
6,906
3,782
3,583
13,435
Services
8,774
9,372
4,702
4,673
17,879
Total cost of revenues
15,952
16,278
8,484
8,256
31,314
Gross profit
15,088
14,625
7,730
7,235
29,253
Operating expenses:
Research and development
1,824
1,718
919
824
3,409
Selling and marketing
5,615
5,079
2,968
2,640
10,468
General and administrative
4,227
4,391
2,093
2,220
9,278
Amortization of intangible assets
195
292
105
140
538
Impairment of intangible and tangible assets
-
-
-
-
917
Total operating expenses
11,861
11,480
6,085
5,824
24,610
Operating income
3,227
3,145
1,645
1,411
4,643
Financial expenses (income),
net
243
(221)
323
147
63
Other expenses (income), net
(4)
13
2
13
10
Income before taxes on income
2,988
3,353
1,320
1,251
4,570
Taxes on income
854
645
276
309
1,307
Income from continuing operations
2,134
2,708
1,044
942
3,263
Income (loss) from discontinued operations, net
154
57
(168)
(41)
535
Net income
2,288
2,765
876
901
3,798
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Six months ended
Three months ended
Year ended
June 30,
June 30,
December 31,
2016
2015
2016
2015
2015
Unaudited
Profit
(loss) from continuing operations attributable to:
2,123
2,765
1,037
1,004
3,338
Equity holders of the parent
11
(57)
7
(62)
(75)
Non-controlling interests
2,134
2,708
1,044
942
3,263
Profit
(loss) from discontinued operations attributable to:
Equity holders of the parent
120
103
(175)
(1)
607
Non-controlling interests
34
(46)
7
(40)
(72)
154
57
(168)
(41)
535
Earnings per share from continuing operations attributable
to Pointer Telocation Ltd’s shareholders:
Basic net earnings (loss) per share
$
0.29
$
0.37
$
0.11
$
0.13
$
0.51
Diluted net earnings (loss) per share
$
0.28
$
0.36
$
0.11
$
0.13
$
0.50
Weighted average -Basic number of shares
7,787,009
7,694,976
7,789,365
7,701,317
7,725,246
Weighted average - fully diluted number of shares
7,924,421
7,961,010
7,934,321
7,957,222
7,938,489
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months ended
Three months ended
Year ended
June 30,
June 30,
December 31,
2016
2015
2016
2015
2015
Unaudited
Unaudited
Cash flows from operating activities:
Net income
$
2,288
$
2,765
$ 876
$
901
$
3,798
Adjustments required to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization
1,775
1,985
877
979
3,959
Impairment of tangible and intangible assets
-
-
-
-
917
Accrued interest and exchange rate changes of
74
10
290
376
(888)
debenture and long-term loans
Accrued severance pay, net
121
(38)
74
(6)
17
Gain from sale of property and equipment, net
(179)
(72)
(53)
(38)
(143)
Stock-based compensation
94
174
36
83
309
Decrease
in restricted cash
-
62
-
-
62
Decrease in trade receivables, net
(4,284)
(513)
(585)
(10)
(236)
Increase
in other accounts receivable
(906)
(1,060)
(249)
(1,106)
(469)
and prepaid expenses
Decrease (increase) in inventories
443
(180)
207
(171)
658
Decrease Deferred income taxes
1,038
387
248
197
1,080
Decrease (increase) in long-term accounts
(9)
14
126
12
(91)
receivable
Increase in trade payables
2,042
900
296
837
1,277
Increase (decrease) in other accounts payable
2,460
(291)
1,293
(701)
(1,448)
and accrued expenses
Net cash provided by operating activities
4,957
4,143
3,436
1,353
8,802
Cash flows from investing activities:
Purchase of property and equipment
(2,861)
(1,354)
(1,284)
(769)
(3,616)
Purchase of other intangible assets
(115)
-
(115)
-
-
Proceeds from sale of property and equipment
594
648
118
337
1,266
Net cash used in investing activities
(2,382)
(706)
(1,281)
(432)
(2,350)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months ended
Three months ended
Year ended
June 30,
June 30,
December 31,
2016
2015
2016
2015
2015
Unaudited
Unaudited
Cash flows from financing activities:
Receipt of long-term loans from banks
95
15,103
-
4,546
14,934
Repayment of long-term loans from banks
(2,250)
(17,729)
(1,123)
(6,335)
(19,503)
Repayment of long-term loans from shareholders
-
(32)
-
(19)
-
Proceeds from issuance of shares and exercise of options, net of issuance costs
-
6
-
-
15
Short-term bank credit, net
128
(486)
83
(18)
(915)
Distribution as a dividend in kind of previously consolidated subsidiary (a)
(1,870)
-
(1,870)
-
-
Net cash used in financing activities
(3,897)
(3,138)
(2,910)
(1,826)
(5,469)
Effect of exchange rate on cash and cash equivalents
(280)
(409)
(155)
1,098
(193)
Increase (decrease) in cash and cash equivalents
(1,602)
(110)
(910)
193
790
Cash and cash equivalents at the beginning of the period
$
9,347
8,557
$
8,655
8,254
8,557
Cash and cash equivalents at the end of the period
$
7,745
$
8,447
$
7,745
$
8,447
$
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)
-
(5,443)
-
-
Property and equipment
7,048
-
7,048
-
-
Goodwill and other intangible assets
15,883
-
15,883
-
-
Other long term liabilities
(1,781)
-
(1,781)
-
-
Non-controlling interest
373
-
373
-
-
Accumulated other comprehensive loss
(213)
-
(213)
-
-
Dividend in kind
(17,737)
-
(17,737)
-
-
$
(1,870)
$
-
$
(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:
Six months ended
Three months ended
Year ended
June 30,
June 30,
December 31,
2016
2015
2016
2015
2015
GAAP gross profit
15,088
14,625
7,730
7,235
29,253
Stock-based compensation expenses
4
6
1
3
11
Non-GAAP gross profit
15,092
14,631
7,731
7,238
29,264
GAAP operating expenses
11,861
11,480
6,085
5,824
24,610
Stock-based compensation expenses
90
168
35
80
298
Amortization and impairment of long lived assets
195
292
105
140
1,455
Non-GAAP operating expenses
11,576
11,020
5,945
5,604
22,857
GAAP operating income
3,227
3,145
1,645
1,411
4,643
Non-GAAP operating income
3,516
3,611
1,786
1,634
6,407
GAAP net income from continuing operations
2,134
2,708
1,044
942
3,263
Stock-based compensation
94
174
36
83
309
Amortization and impairment of long lived assets
195
292
105
140
1,455
Non cash tax expenses
854
343
276
165
1,307
Non-GAAP net income from continuing operations
$
3,277
$
3,517
$
1,461
$
1,330
$
6,334
Income (loss) from discontinued operation
154
57
(168)
(41)
535
Non cash tax expenses
249
110
91
46
97
Spin-off related expenses and losses
349
-
349
-
-
Amortization and impairment of long lived assets
67
98
28
50
197
Non-GAAP net income
$
4,096
$
3,782
$
1,761
$
1,385
$
7,163
Non-GAAP net income per share from continuing operations - Diluted
$
0.41
$
0.44
$
0.18
$
0.17
$
0.80
Non-GAAP weighted average number of shares - Diluted*
7,924,421
7,961,010
7,934,321
7,957,222
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
Six months ended
Three months ended
Year ended
June 30,
June 30,
December 31,
2016
2015
2016
2015
2015
GAAP Net income from continuing operations
$
2,134
$
2,708
$
1,044
$
942
$
3,263
as reported:
Financial expenses (income), net
243
(221)
323
147
63
Tax on income
854
645
276
309
1,307
Stock based compensation expenses
94
174
36
83
309
Depreciation, amortization and impairment of
1,109
1,216
591
600
3,157
goodwill and
intangible assets
Adjusted EBITDA from continuing operations
$
4,434
$
4,522
$
2,270
$
2,081
$
8,099
Income (loss) from
discontinued operation
154
57
(168)
(41)
535
Financial expenses (income), net
47
398
28
224
806
Tax on income
249
110
91
46
97
Depreciation, amortization and impairment of
goodwill and
intangible assets
668
769
288
380
1,719
Adjusted EBITDA
$
5,552
$
5,856
$
2,489
$
2,690
$
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-q2-2016-financial-results-300312334.html

SOURCE Pointer Telocation Ltd

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