Pointer Telocation Reports 2012 Financial Results

ROSH HAAYIN, Israel, March 4, 2013 /PRNewswire/ --

  • Annual revenues of $85 million
  • 2012 adjusted EBITDA - $10.6 million compared to $9.4 million in 2011
  • 2012 Non-GAAP net income of $5.9 million compared to $3.9 million in 2011

Pointer Telocation Ltd. (NasdaqCM: 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, 2012.

Financial Highlights

Revenues: Pointer's total revenues for 2012 decreased 1% to $85 million compared to $85.9 million in 2011.

International activities for 2012 accounted for revenue of $22.3 million (26% of total revenues) compared to $23.7 million in 2011 (28% of total revenues).

Revenues from products in 2012 decreased 2% to $30.4 million (36% of revenues) compared to $31 million (36% of revenues) in 2011.

Pointer's revenues from services in 2012 decreased 1% to $54.4 million (64% of revenues) compared to $54.8 million (64% of revenues), in 2011.

Gross Profit: In 2012, gross profit was $28 million (33% of revenues) compared to $28.9 million (34% of revenues) in 2011.

Operating Income (loss): Operating income was $5.1 million in 2012 compared to an operating loss of $2.6 million in 2011.

Net Income (loss): Pointer recorded a net income of $1.2 million or $0.23 per share compared to net loss of $8.5 million, or $1.79 loss per share, in 2011.

Non GAAP net income: Pointer recorded non-GAAP net income of $5.9 million during 2012, as compared to non-GAAP net income of $3.9 million in 2011.

Adjusted EBITDA: Pointer's adjusted EBITDA for 2012 was $10.6 million compared to $9.4 million in 2011.

David Mahlab, Pointer's Chief Executive Officer, commented on the results: "We succeeded in basically maintaining our revenue level - it was eroded by approximately $1million or 1% vs. 2011 as we faced a tough economic situation worldwide and especially in Europe. Much more important to note is that we have returned to profitability GAAP based, improving our bottom line significantly vs. 2011 despite basically maintaining our level of revenues year over year. Now we are launching a new driver behavior solution which, together with additional product releases planned later this year, should help us maintain our position in the market and help us face the economic situation worldwide. We are continuing in our efforts to improve results especially in view of our business in Latin America."

Conference Call Information:

Pointer Telocation's management will host today, Monday, March 4th, 2013 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 March 5th, 2013 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, net loss from discontinued operations, financial expenses, taxes, depreciation, the effects of non-cash stock-based compensation expense, amortization and non-cash impairment of goodwill and intangible assets.

We calculate non-GAAP net income by adding back to net income, net loss from discontinued operations, the effects of non-cash stock based compensation expenses, 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 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,
                                                      2012         2011

    ASSETS

    CURRENT ASSETS:
    Cash and cash equivalents                       $ 3,685      $ 1,468
    Restricted cash                                     108          123
    Trade receivables                                16,215       14,427
    Other accounts receivable and prepaid expenses    2,069        1,946
    Inventories                                       3,982        4,467

    Total current assets                             26,059       22,431

    LONG-TERM ASSETS:
    Long-term accounts receivable                       582          805
    Severance pay fund                                9,034        7,474
    Property and equipment, net                      10,364       10,839
    Investment and long term loans to affiliate         814          266
    Other intangible assets, net                      2,242        3,030
    Goodwill                                         47,190       44,493

    Total long-term assets                           70,226       66,907

    Total assets                                   $ 96,285     $ 89,338



CONSOLIDATED BALANCE SHEETS

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

                                                               December 31,
                                                             2012         2011
    LIABILITIES AND SHAREHOLDERS' EQUITY

    CURRENT LIABILITIES:
    Short-term bank credit and current maturities of
    long-term loans                                      $ 11,129     $ 13,208
    Trade payables                                         11,248        9,821
    Deferred revenues and customer advances                 6,954        6,890
    Other accounts payable and accrued expenses             7,251        7,440

    Total current liabilities                              36,582       37,359

    LONG-TERM LIABILITIES:
    Long-term loans from banks                              9,339        7,715
    Long-term loans from shareholders and others              925          943
    Other long-term liabilities                             3,765        2,895
    Accrued severance pay                                  10,328        8,625

                                                           24,357       20,178
    COMMITMENTS AND CONTINGENT LIABILITIES

    EQUITY:
    Pointer Telocation Ltd's shareholders' equity:
    Share capital                                           3,871        3,353
    Additional paid-in capital                            120,613      119,147
    Accumulated other comprehensive income                    798          837
    Accumulated deficit                                   (95,534)     (96,743)

    Total Pointer Telocation Ltd's shareholders' equity    29,748       26,594

    Non-controlling interest                                5,598        5,207

    Total equity                                           35,346       31,801

    Total liabilities and shareholders' equity           $ 96,285     $ 89,338



CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

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

                                                Year ended December 31,
                                               2012        2011         2010
    Revenues:
    Products                               $ 30,402    $ 31,140     $ 25,415
    Services                                 54,430      54,778       48,448

    Total revenues                           84,832      85,918       73,863
    Cost of revenues:
    Products                                 17,988      18,283       14,175
    Services                                 38,573      37,249       31,264
    Amortization and impairment of
    intangible assets                           181       1,498          978

    Total cost of revenues                   56,742      57,030       46,417
    Gross profit                             28,090      28,888       27,446

    Operating expenses:
    Research and development                  2,716       3,082        2,532
    Selling and marketing                     9,067       8,932        7,441
    General and administrative                9,232      11,450        9,062
    Amortization of intangible assets         1,987       1,821        1,774
    Impairment of goodwill and intangible
    asset                                         -       6,216            -

    Total operating expenses                 23,002      31,501       20,809

    Operating income (loss)                   5,088      (2,613)       6,637
    Financial expenses, net                   1,628       1,779        1,976
    Other expenses, net                           5          77           21

    Income (loss) before taxes on income      3,455      (4,469)       4,640
    Taxes on income                             861       2,383        1,524

    Income (loss) after taxes on income       2,594      (6,852)       3,116
    Equity in losses (gains) of affiliate       (38)      1,634        1,158

    Income from continuing operations         2,632      (8,486)       1,958
    Loss from discontinued operations, net      995           -            -

    Net income (loss)                       $ 1,637    $ (8,486)     $ 1,958



                                                    Year ended December 31,
                                                 2012        2011       2010
    Other comprehensive income (loss):
    Currency translation adjustments of
    foreign operations                           299       (2,605)     2,128
    Realized losses on derivatives designated
    as cash flow hedges                          224         (219)        29
    Unrealized losses on derivatives
    designated as cash flow hedges                14         (162)       124

    Total comprehensive income (loss)          2,174      (11,472)     4,239

    Profit from continuing operations
    attributable to:
    Equity holders of the parent               1,203       (8,527)     1,130
    Non-controlling interests                    434           41        828

                                               1,637       (8,486)     1,958

    Loss from discontinued operations
    attributable to:
    Equity holders of the parent                 630            -          -
    Non-controlling interests                    365            -          -

                                                 995            -          -
    Total comprehensive income (loss)
    attributable to:
    Equity holders of the parent               1,170      (10,982)     2,881
    Non-controlling interests                  1,004         (490)     1,358

                                               2,174      (11,472)     4,239

    Earnings (loss) per share attributable to
    Pointer Telocation Ltd's shareholders:
    Basic net earnings (loss) per share       $ 0.23      $ (1.78)    $ 0.24

    Diluted net earnings (loss) per share     $ 0.23      $ (1.79)    $ 0.22


The accompanying notes are an integral part of the interim consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

                                                   Year ended December 31,
                                                  2012        2011        2010

    Cash flows from operating activities:
    Net income (loss)                          $ 1,637    $ (8,486)    $ 1,958
    Adjustments required to reconcile net
    income to net cash provided by operating
    activities:
    Depreciation, amortization and impairment    5,546      12,710       5,568
    Accrued interest and exchange rate
    changes of debenture and long-term loans       118         135         178
    Accrued severance pay, net                      91         487        (364)
    Gain from sale of property and equipment,
    net                                           (271)        (95)        (93)
    Equity in losses of affiliate                  (38)      1,634       1,158
    Amortization of stock-based compensation       265         515         121
    Impairment loss of loan to minority
    shareholder in subsidiary                        -         489           -
    Decrease (increase) in restricted cash          15          10        (133)
    Increase in trade receivables, net          (1,572)     (1,462)     (1,618)
    Decrease (increase) in other accounts
    receivable and prepaid expenses                 46         373        (436)
    Decrease (increase) in inventories             395      (1,035)     (1,964)
    Write-off of inventories                       337         304         185
    Deferred income taxes                            -         170       1,322
    Decrease (increase) in long-term accounts
    receivable                                     234        (177)       (212)
    Increase in trade payables                     965         452         981
    Increase (decrease) in other accounts
    payable and accrued expenses                   573       2,457        (127)

    Net cash provided by operating activities    8,341       8,481       6,524

    Cash flows from investing activities:
    Purchase of property and equipment          (4,033)     (4,445)     (4,481)
    Proceeds from sale of property and
    equipment                                    1,733       1,050         641
    Investment and loans/Repayments in
    affiliate                                     (669)     (1,740)     (1,490)
    Acquisition of Subsidiary (a)                 (251)
    Purchase of activity (b)                    (3,125)
    Proceeds from sale of investments in
    previously consolidated subsidiaries (c)         -          39           -

    Net cash used in investing activities       (6,345)     (5,096)     (5,330)



CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

                                                 Year ended December 31,
                                                2012       2011       2010

    Cash flows from financing activities:

    Receipt of long-term loans from banks     11,670      8,384      5,090
    Repayment of long-term loans from banks  (12,253)    (8,937)    (7,016)
    Repayment of long-term loans from
    others                                         -     (1,071)    (1,122)
    Dividend paid to non-controlling
    interest                                  (1,215)    (1,594)    (2,250)
    Proceeds from issuance of shares and
    exercise of warrants, net                  1,945        281         57
    Short-term bank credit, net                 (345)    (1,002)     2,656

    Net cash used in financing activities       (198)    (3,939)    (2,585)

    Effect of exchange rate changes on cash
    and cash equivalents                         419       (211)       415

    Increase (decrease) in cash and cash
    equivalents                                2,217       (765)      (976)
    Cash and cash equivalents at the
    beginning of the year                      1,468      2,233      3,209

    Cash and cash equivalents at the end of
    the year                                 $ 3,685    $ 1,468    $ 2,233    (a) Acquisition of subsidiary:
        Property and equipment                  $ 22        $ -        $ -
        Technology                                58          -          -
        Goodwill                                 304          -          -
        Minority Interest                       (133)         -          -

                                               $ 251        $ -        $ -    (b) Purchase of activity:
        Working capital                         $ 27        $ -        $ -
        Property and equipment                   112
        Customer list                          1,364
        Goodwill                               1,669          -          -
        Accrued severance pay, net               (23)         -          -
        Employees accruals                       (24)         -          -

                                             $ 3,125        $ -        $ -


CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

                                                    Year ended December 31,
                                                  2012       2011       2010

        Proceeds from sale of investments in
    (c) 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       $ -



ADDITIONAL INFORMATION

U.S. dollars in thousands

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

Adjusted EBITDA

                                             Year ended December 31,
                                     2012             2011              2010
                                                    Unaudited

    GAAP Net income as
    reported:                     $ 1,637         $ (8,486)          $ 1,958

    One time charge
    attributable to
    efforts to expand
    services to
    Israeli insurance
    companies
    Financial expenses, net         1,628            1,779             1,976
    Tax on income                     861            2,383             1,524
    One time charge
    attributable to efforts to
    expand services to Israeli
    insurance companies                 -              486
    Loss from discontinued
    operations, net                   995
    Stock based compensation
    expenses                          265              515               121
    Depreciation, amortization
    and impairment                  5,198           12,710             5,568

    Non-GAAP Adjusted EBITDA      $ 10,584         $ 9,387          $ 11,147



Non GAAP Net income

                                       Year ended December 31,
                              2012              2011               2010
                                              Unaudited

    GAAP Net income as
    reported:               $ 1,637          $ (8,486)          $ 1,958

    amortization and
    impairment of
    intangible assets         2,168             9,535             2,752
    Loss from
    discontinued
    operations, net             995
    Stock based
    compensation
    expenses                    265               515               121
    non-cash tax
    expenses (income)
    resulting from
    timing differences
    relating to the
    amortization of
    acquisition-related
    intangible assets
    and goodwill                819             2,365               604

    Non-GAAP Net income     $ 5,884           $ 3,929           $ 5,435



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.co


SOURCE Pointer Telocation Ltd



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