Micronet Enertec Technologies, Inc. Reports Record Revenues and Increased Gross Margins in the First Quarter of 2013

EMERSON, N.J., May 30, 2013 /PRNewswire/ -- Micronet Enertec Technologies, Inc. (NASDAQ: MICT), a developer and manufacturer that integrates and globally markets rugged computers, tablets and computer-based systems for the commercial Mobile Resource Management (MRM) market and for the defense and aerospace markets, announced today record financial results for the first quarter ended March 31, 2013.

First Quarter 2013 Financial Highlights

• Total Revenue for the first quarter was $10.3 million, an increase of 431% compared to $2.0 million for the first quarter of 2012. The growth in revenues is mainly attributed to the acquisition of Micronet and was also impacted by organic growth.
• Gross Profit for the first quarter was $3.6 million, compared to $0.6 million for the first quarter of 2012. Gross margin was 35% compared to 30% for the same period in 2012.
• Operating Income for the first quarter was $1.5 million, compared to $0.04 million for the first quarter of 2012.
• Non-GAAP Adjusted Earnings Attributable to Micronet Enertec, were $0.7 million for the first quarter, compared to a Non-GAAP net loss of $0.07 million for the first quarter of 2012, excluding amortization of intangible assets and other non-cash items.
• Non-GAAP Diluted Adjusted EPS Attributable to Micronet Enertec for the first quarter was $0.18 based on 3.924 million diluted shares outstanding compared to loss of $0.02 per share based on 3.242 million diluted shares outstanding for the same period last year.
• Balance Sheet: As of March 31, 2013, total cash and cash equivalents was $11.4 million, an increase of $0.8 million since December 31, 2012.

GAAP Net loss attributable to Micronet Enertec for the first quarter was $0.46 million, compared to a net loss attributable to Micronet Enertec of $0.15 million for the same period last year. GAAP net loss per share attributable to Micronet Enertec for the first quarter was $0.13, based on 3.484 million diluted shares outstanding, compared to $0.05, based on 3.242 million diluted shares outstanding, for the same period last year. This first quarter included non-cash expenses in the total amount of $1.2 million.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

David Lucatz, Micronet Enertec's CEO commented, "The first quarter was a positive start for 2013 and a significant milestone in fulfilling our goal to become a leading supplier of mobile powerful computers for the growing needs of Mobile Resource Management solutions and for mission-critical military missions.  We grew from a Company that recorded $2 million in revenues for the first quarter of 2012 to $10 million in revenues for the first quarter of 2013, enjoying organic growth of 23% in sales in the defense and aerospace market and 15% in the MRM market compared to Q1 last year. In conjunction with our growth, we improved gross margins from 30% in the first quarter of 2012 to 35% in the first quarter of 2013, achieving gross profit of $3.6 million in Q1 2013 versus $0.6 million in 2012.

"During the first quarter of 2013, we invested over $0.7 million in R&D, developing the next generation of our solutions based on comprehensive knowledge of market needs and close discussions with our customers," Mr. Lucatz continued. "We are confident that our marketing and engineering teams will present innovative and unique solutions to ensure our future success and increased market share in the multi-billion dollar markets in which we operate.

"We also saw great progress in further solidifying the foundation of our business to position ourselves for long-term sustainable growth. After the quarter ended, we closed on our $8.1 million public offering of common stock and warrants and we received approval from the Indian government for the operation of our joint venture. We are very excited about the multi-billion dollar Indian defense market and we plan to increase our share in this market in the coming years," Mr. Lucatz concluded.

Quarterly Conference Call

Micronet Enertec will host a conference call today at 10 a.m. EDT to discuss the company's financial results for the first quarter of 2013, management's business outlook and other matters.

To access this call, dial: 1-888-407-2553. Callers from outside of the U.S. may access the call by dialing 972-3-9180644. Please dial a few minutes before 10 a.m. EDT. Participants may also access a live webcast of the conference call through the Investor Relations section of Micronet Enertec's website at http://www.micronet-enertec.com/IR-events. A telephone replay of the call will be available for two weeks at: 1-877-456-0009, in Israel: 03-9255948.

About Micronet Enertec Technologies, Inc.

Micronet Enertec Technologies, Inc., formerly known as Lapis Technologies, Inc., operates through two companies, Enertec Systems 2001 Ltd ("Enertec"), its wholly-owned subsidiary, and Micronet Ltd ("Micronet"), in which it has a controlling interest.  Micronet operates in the growing commercial Mobile Resource Management (MRM) market, mainly in the United States.  Micronet designs, develops, manufactures and sells rugged mobile computing devices that provide fleet operators and field workforces with computing solutions in challenging work environments.  Enertec operates in the Defense and Aerospace markets and designs, develops, manufactures and supplies various customized military computer-based systems for missile defense systems, command and control and others.  The Company's products, solutions and services are designed to perform in severe environments and battlefield conditions. For more information, please visit: www.micronet-enertec.com.

Micronet Enertec Technologies, Inc. Forward-looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Words such as "expect," "believe," "intend," "plan," "continue," "may," "will," "anticipate," and similar expressions are intended to identify forward-looking statements.  Actual results may differ materially from those projected in any forward-looking statement.  More detailed information about the risk factors affecting the Company's performance is contained under the heading "Risk Factors" in the Company's Annual Report on Form 10-K filed with the SEC, which is available on the SEC's web site, www.sec.gov.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analyses only as of the date hereof.  The Company neither intends to, nor assumes any obligation to, update or revise these forward-looking statements in light of developments that differ from those anticipated.

Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States of America, or GAAP, we provide additional financial metrics that are not prepared in accordance with GAAP, or non-GAAP. Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance.

Management believes that these non-GAAP financial measures reflect our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in our business, as they exclude expenses and gains that may be infrequent, unusual in nature and not reflective of our ongoing operating results. Management also believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.

The non-GAAP financial measures do not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP.

The non-GAAP adjustments, and the basis for excluding them from non-GAAP financial measures, are outlined below:

• Amortization of acquired intangible assets – We are required to amortize the intangible assets, included in our GAAP financial statements, related to the acquisition of Micronet. The amount of an acquisition's purchase price allocated to intangible assets and term of its related amortization are unique to the acquisition. The amortization of acquired intangible assets are non-cash charges. We expect that such charges will be nonrecurring and do not reflect our operational performance. Therefore, we exclude amortization of acquired intangible assets to provide investors with a consistent basis for comparing pre- and post-acquisition operating results.
• Amortization of secured note discount and related expenses – These interest expenses are non-cash and are related to amortization of discount of certain secured promissory notes issued to UTA Capital LLC or the amendment of their terms that occurred in January 2013. Such expenses do not reflect our on-going operations and most of them to be incurred up to the end of fiscal 2013 throughout the Note period.
• Change in fair value of call / put options and warrants  – The change in fair value in 2013 of the call options relating to our acquisition of Micronet is recorded as interest expense. The change in fair value is derived primarily from Micronet's share price and does not reflect our on-going operations.  In 2012, the change in fair value of UTA warrants derived from changes in the price of our Common Stock.

The following table reconciles, for the periods presented, GAAP net loss attributable to Micronet Enertec to non-GAAP net income attributable to Micronet Enertec and GAAP loss per diluted share attributable to Micronet Enertec to non-GAAP net income per diluted share attributable to Micronet Enertec:

SOURCE Micronet Enertec Technologies, Inc.