2014

Pointer Telocation Reports 2011 Financial Results

ROSH HAAYIN, Israel, March 29, 2012 /PRNewswire/ --

 

  • Yearly revenues of $86 million, 16% growth from $74 million in 2010
  • 2011 EBITDA  -  $9.4 million
  • 2011 Non-GAAP net income of $3.9 million
  • 2011 Net loss - $8.5 million including a non-cash impairment charge of $6.7 million

Pointer Telocation Ltd. (Nasdaq CM: PNTR, TASE: PNTR) - a leading developer, manufacturer and operator of Mobile Resource Management (MRM) and roadside assistance services for the automotive industry, announced today its financial results for the fiscal year ended December 31, 2011.

Financial Highlights

Revenues: Pointer's total revenues for 2011 increased 16% to $86 million compared to $73.9 million in 2010.

International activities for 2011 were $24.4 million (28% of total revenues) compared to $20.1 million in 2010 (27% of total revenues).

Revenues from products in 2011 increased 22% to $31 million (36% of revenues) compared to $25.4 million (34.4% of revenues) in 2010.

Pointer's revenues from services in 2011 increased 13.6% to $55 million (64% of revenues) up from $48.4 million (65.6% of revenues), in 2010.

Gross Profit: In 2011, gross profit was $29 million up from $27.4 million in 2010.

Operating Income (loss): Operating loss of $2.6 million in 2011 compared to operating income of $6.6 million in 2010. The operating loss was primarily attributable to the non-cash impairment of $6.7 million goodwill and development technology of the Cellocator business, which we acquired in September 2007. Excluding this non-cash impairment, operating income in 2011 was $4.1 million.

Net Income (loss): Pointer recorded a net loss of $8.5 million, or $1.78 per share compared to net income of $1.1 million, or $0.24 per share, in 2010.

Non GAAP net income:  Pointer recorded non-GAAP net income of $3.9 million during 2011, as compared to non-GAAP net income of $5.4 million in 2010.

Adjusted EBITDA: Pointer's adjusted EBITDA for 2011 was $9.4 million compared to $11 million in 2010.

David Mahlab, Pointer's Chief Executive Officer, commented on the results: "Although 2011 was a challenging year, mainly for the technology segment, Pointer succeeded in expanding its business and achieved record revenues of $86 million, an increase of 16% compared to 2010. The net loss in 2011 was mainly caused by a non-cash impairment losses and unforeseen additional tax expenses due to new legislation in Israel. Despite of our losses in 2011, we believe that the continuous growth in service activities together with revenues from new products released at the end of 2011 will lead to increased revenues and an improvement in our bottom-line performance in 2012".

Conference Call Information:

Pointer Telocation's management will host today, Thursday, March 29th, 2012 a conference call with the investment community to review and discuss the financial results, and will also be available to answer questions.  

The conference call will commence at 10:30 AM EST, 16:30 PM Israel time.

To participate in the call, please dial in to one of the teleconferencing numbers below. Please begin placing your call at least 5 minutes before the time set for the commencement of the conference call.

From USA: + 1-888-668-9141, From Israel: 03-918-0650

A replay will be available from April 1st, 2012 at the company website: http://www.pointer.com

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 a non-GAAP financial performance measurement.

We calculate adjusted EBITDA by adding back to net income, financial expenses, taxes, depreciation, the effects of non-cash stock-based compensation expense, a non-recurring expense of $0.5 million, attributable to the Company's efforts to expand various services to Israeli insurance companies, and amortization including the effect of non-cash impairment charge related to the fair market value of Cellocator.

We calculate non-GAAP net income by adding back to net income, the effects of non-cash stock-based compensation expense, amortization of intangibles related to acquisitions and non-cash tax expenses resulting from timing differences relating to the amortization of acquisition-related intangible assets and goodwill.

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 three most recent 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 Road Side Assistance, Stolen Vehicle Recovery and Fleet Management. Pointer has a growing list of customers and products installed in more than 45 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.

CONSOLIDATED BALANCE SHEETS

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

                                                         December 31,
                                                        2011          2010
 
    ASSETS
 
    CURRENT ASSETS:
    Cash and cash equivalents                        $ 1,468       $ 2,233
    Restricted cash                                      123           133
    Trade receivables                                 14,427        13,914
    Other accounts receivable and prepaid expenses     1,946         2,982
    Inventories                                        4,467         3,739
 
    Total current assets                              22,431        23,001
 
    LONG-TERM ASSETS:
    Long-term accounts receivable                        805           832
    Severance pay fund                                 7,474         7,624
    Property and equipment, net                       10,839        11,255
    Investment in affiliate                              266           295
    Other intangible assets, net                       3,030         6,497
    Goodwill                                          44,493        53,926
 
    Total long-term assets                            66,907        80,429
 
    Total assets                                    $ 89,338     $ 103,430



CONSOLIDATED BALANCE SHEETS

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

                                                             December 31,
                                                            2011          2010
    LIABILITIES AND SHAREHOLDERS' EQUITY
 
    CURRENT LIABILITIES:
    Short-term bank credit and current maturities of
    long-term loans                                     $ 13,208      $ 13,170
    Trade payables                                         9,821        10,064
    Deferred revenues and customer advances                6,890         7,806
    Other accounts payable and accrued expenses            7,440         7,054
 
    Total current liabilities                             37,359        38,094
 
    LONG-TERM LIABILITIES:
    Long-term loans from banks                             7,715        11,526
    Long-term loans from shareholders and others             943           957
    Other long-term liabilities                            2,895           842
    Accrued severance pay                                  8,625         8,365
 
                                                          20,178        21,690
    COMMITMENTS AND CONTINGENT LIABILITIES
 
    EQUITY:
    Pointer Telocation Ltd's shareholders' equity:
    Share capital                                          3,353         3,280
    Additional paid-in capital                           119,147       118,512
    Accumulated other comprehensive income                   837         3,292
    Accumulated deficit                                  (96,743)      (88,216)
 
    Total Pointer Telocation Ltd's shareholders'
    equity                                                26,594        36,868
 
    Non-controlling interest                               5,207         6,778
 
    Total equity                                          31,801        43,646
 
    Total liabilities and shareholders' equity          $ 89,338     $ 103,430



CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands (except per share data)

                                            Year ended December 31,
                                                 2011        2010         2009
    Revenues:
    Products                                 $ 31,140    $ 25,415     $ 20,038
    Services                                   54,778      48,448       45,287
 
    Total revenues                             85,918      73,863       65,325
    Cost of revenues:
    Products                                   18,283      14,175       10,774
    Services                                   37,249      31,264       26,645
    Amortization and impairment of
    intangible assets                           1,498         978          976
 
    Total cost of revenues                     57,030      46,417       38,395
    Gross profit                               28,888      27,446       26,930
 
    Operating expenses:
    Research and development                    3,082       2,532        2,817
    Selling and marketing                       8,932       7,441        6,249
    General and administrative                 11,450       9,062        8,788
    Amortization of intangible assets           1,821       1,774        1,942
    Impairment of goodwill and intangible
    asset                                       6,216           -        2,959
 
    Total operating expenses                   31,501      20,809       22,755
 
    Operating income (loss)                    (2,613)      6,637        4,175
    Financial expenses, net                     1,779       1,976        2,070
    Other expenses, net                            77          21           16
 
    Income (loss) before taxes on income       (4,469)      4,640        2,089
    Taxes on income                             2,383       1,524          887
 
    Income (loss) after taxes on income        (6,852)      3,116        1,202
    Equity in losses of affiliate               1,634       1,158          677
 
    Net income (loss)                         (8,486)       1,958          525
    Less - net income attributable to
    non-controlling interest                     (41)        (828)      (2,632)
 
    Net income (loss) attributable to
    Pointer Telocation Ltd's shareholders   $ (8,527)     $ 1,130     $ (2,107)
 
    Earnings per share attributable to
    Pointer Telocation Ltd's shareholders:
    Basic net earnings (loss) per share      $ (1.78)      $ 0.24      $ (0.44)
    Diluted net earnings (loss) per share    $ (1.79)      $ 0.22      $ (0.47)


CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

                                                   Year ended December 31,
                                                    2011       2010       2009
 
    Cash flows from operating activities:
    Net income (loss)                          $ (8,486)    $ 1,958      $ 525
    Adjustments required to reconcile net
    income to net cash provided by operating
    activities:
    Depreciation, amortization and impairment     12,710      5,568      8,252
    Accrued interest and exchange rate
    changes of debenture and long-term loans         135        178        (85)
    Accrued severance pay, net                       487       (364)      (400)
    Gain from sale of property and equipment,
    net                                              (95)       (93)      (377)
    Equity in losses of affiliate                  1,634      1,158        677
    Amortization of stock-based compensation         515        121        367
    Impairment loss of loan to minority
    shareholder in subsidiary                        489          -          -
    Decrease (increase) in restricted cash            10       (133)         -
    Decrease (increase) in trade receivables,
    net                                           (1,462)    (1,618)     1,995
    Decrease (increase) in other accounts
    receivable and prepaid expenses                  373       (436)      (308)
    Decrease (increase) in inventories           (1,035)     (1,964)       128
    Write-off of inventories                         304        185        124
    Deferred income taxes                            170      1,322        773
    Decrease (increase) in long-term accounts
    receivable                                      (177)      (212)      (493)
    Increase (decrease) in trade payables            452        981       (413)
    Increase (decrease) in other accounts
    payable and accrued expenses                   2,457       (127)       461
 
    Net cash provided by operating activities      8,481      6,524     11,226
 
    Cash flows from investing activities:
    Decrease (increase) in other accounts
    receivable                                         -          -        279
    Purchase of property and equipment            (4,445)    (4,481)    (3,442)
    Proceeds from sale of property and
    equipment                                      1,050        641      1,215
    Investments in affiliates                     (1,740)    (1,490)      (640)
    Acquisition of subsidiary (a)                      -          -        (38)
    Proceeds from sale of investments in
    previously consolidated subsidiaries (b)          39          -          -
 
    Net cash used in investing activities         (5,096)    (5,330)    (2,626)



CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

                                                   Year ended December 31,
                                                   2011       2010       2009
 
    Cash flows from financing activities:
 
    Receipt of long-term loans from banks         8,384      5,090          -
    Repayment of long-term loans from banks      (8,937)    (7,016)    (6,027)
    Repayment of long-term loans from others     (1,071)    (1,122)       (32)
    Dividend paid to non-controlling interest    (1,594)    (2,250)      (871)
    Proceeds from issuance of shares and
    exercise of warrants, net                       281         57          -
    Short-term bank credit, net                  (1,002)     2,656       (983)
 
    Net cash used in financing activities        (3,939)    (2,585)    (7,913)
 
    Effect of exchange rate changes on cash
    and cash equivalents                           (211)       415       (186)
 
    Increase (decrease) in cash and cash
    equivalents                                    (765)      (976)       501
    Cash and cash equivalents at the
    beginning of the year                         2,233      3,209      2,708
 
    Cash and cash equivalents at the end of
    the year                                    $ 1,468    $ 2,233    $ 3,209


    (a) Acquisition of subsidiary:
 
        Fair value of assets acquired and
        liabilities assumed at date of
        acquisition:
 
        Working capital                              $ -      $ -  $ (112)
        Property and equipment                         -        -      60
        Customer list                                  -        -      24
        Goodwill                                       -        -     456
        Accrued severance pay, net                     -        -     (12)
        Non-controlling shareholders loan              -        -    (122)
        Non-controlling interest                       -        -    (256)
 
                                                     $ -      $ -    $ 38


CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

                                                    Year ended December 31,
                                                    2011       2010       2009
 
        Proceeds from sale of investments in
    (b) previously consolidated subsidiaries:
 
        The subsidiaries' assets and
        liabilities at date of sale:
 
        Working capital (excluding cash and
        cash equivalents)                           $ 32        $ -        $ -
        Non-controlling interests                    426          -          -
        Loss from sale of subsidiaries              (110)         -          -
        Receivables for sale of investments in
        subsidiaries                                (309)         -          -
 
                                                    $ 39        $ -        $ -
 
    (c) Non-cash investing activity:
 
        Purchase of property and equipment         $ 309       $ 45      $ 221
 
        Supplemental disclosure of cash flow
    (d) activity:
 
        Cash paid during the year for:
        Interest                                   $ 125    $ 1,462    $ 1,958
 
        Income taxes                                 $ -       $ 40       $ 87


ADDITIONAL INFORMATION

U.S. dollars in thousands

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

Adjusted EBITDA

                                             Year ended December 31,
                                            2011         2010           2009
                                                      Unaudited
 
    GAAP Net income as                                      
    reported:                            $ (8,486)     $ 1,958          $ 521
 
    One time charge
    attributable to
    efforts to expand
    services to
    Israeli insurance
    companies
    Financial expenses, net                 1,779       1,976          2,070
    Tax on income                           2,383       1,524            887
    One time charge
    attributable to efforts to
    expand services to Israeli
    insurance companies                       486
    Stock based compensation
    expenses                                  515         121            367
    Depreciation, amortization
    and impairment                         12,710       5,568          8,252
 
                                                            
    Non-GAAP Adjusted EBITDA              $ 9,387    $ 11,147       $ 12,097
 


Non GAAP Net income

                                       Year ended December 31,
                                     2011         2010             2009
                                                Unaudited
 
    GAAP Net income as                               
    reported:                    $ (8,486)    $  1,958            $ 521
 
    amortization and
    impairment of
    intangible assets                9,535       2,752            2,918
    Stock based
    compensation
 
    expenses                           515         121              367
    non-cash tax
    expenses (income)
    resulting from
    timing differences
    relating to the
    amortization of
    acquisition-related
    intangible assets
    and goodwill                     2,365         604             (312)
 
                                                    
    Non-GAAP Net income            $ 3,929     $ 5,435          $ 3,494
 


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


Chen Livne, Gelbart-Kahana Investor Relations
Tel: +972-3-607 4717, +972-54-302 2983
E-mail: chen@gk-biz.com

SOURCE Pointer Telocation Ltd



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