Pointer Telocation Reports $16.75 Million in Revenue in Q1 2010 - 4.7% Growth Compared to Q1 2009
EBITDA of $2.75 Million; Net Debt Balance of $20.1 Million, Down From $25.8 Million at March 2009
ROSH HAAYIN, Israel, May 25, 2010 /PRNewswire-FirstCall/ -- Pointer Telocation Ltd. (Nasdaq Capital Market: PNTR, Tel-Aviv Stock Exchange: PNTR) - a leading developer, manufacturer and operator of advanced command and control technologies and roadside assistance services for the automotive industry, announced today its financial results for the first quarter of 2010.
Financial Highlights:
Revenue: Pointer's revenue for the first quarter of 2010 was $16.75 million as compared to $16 million, for the comparable period in 2009. International activities constituted 21% of total revenues compared with 24% for the comparable period in 2009. Revenues from products were $4.8 million, consisting 29% of total revenues, as compared to $5.2 million for the first quarter of 2009. Revenues from services increased 10% to $11.9 million compared to $10.8 million for the first quarter of 2009 and constituted 71% of total revenue, compared to 67%, for the same period in 2009.
Gross Profit: For the first quarter of 2010, gross profit decreased 7% to $6.4 million from $6.9 million in the first quarter of 2009. As a percentage of revenues, gross profit was approximately 38% in the first quarter of 2010, as compared to 43% for the same period in 2009. Gross margin decreased mainly as a result of the increased contribution of services to total revenue.
Operating Income: Pointer reported operating income of $1.6 million for the first quarter of 2010, compared to an operating income of $1.8 million for the first quarter of 2009.
Net Income: Pointer recorded a net income attributable to Pointer's shareholders for the first quarter of 2010 of $65 thousand, or $0.01 per share, as compared to net income of $3 thousand for the first quarter of 2009. Net income attributable to a non-controlling interest in the first quarter of 2010 was $0.5 million, as compared to $1.1 million in the first quarter of 2009. For first quarter of 2010, net income, before giving effect to the exclusion of those earnings relating to non-controlling interests in accordance with SFAS 160, was $0.5 million.
EBITDA:
Pointer's EBITDA decreased to $2.75 million in the first quarter of 2010, as compared to $3.14 million for the comparable period in 2009.
Net Liabilities to banks and others decreased by $5.7 million to $20.1 million as of March 31, 2010 compared to $25.8 million as of March 31, 2009.
Danny Stern, Pointer CEO, said: "Pointer's technology, know-how and strong market presence continue to draw an increased number of business partners from new countries and from various sectors - car dealers, fleet operators as well as insurance companies - who are motivated by the increased demand for high-quality technology and services. As in the past years, Pointer's financial strength, based on its strong EBITDA enables us to continue to invest more than 10% of our revenues from products in R&D, and expand our development of new markets, while at the same time continuing to service our debt.
Conference Call Information:
Pointer Telocation's management will host a conference call with the investment community to review and discuss the financial results:
Conference call will take place on 9:30 AM EST, 16:30 Israel time.
To listen to the call, please dial in to one of the following teleconferencing numbers. Please begin placing your call at least 5 minutes before the conference call commences.
From USA: +1-888-281-1167
From Israel: 03-918-0664
A replay will be available from May 26th, 2010 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 EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income financial expenses, taxes, depreciation and amortization including in respect of our non-cash impairment charge related to the fair market value of the business with certain customers from our acquisition of Cellocator. 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.
EBITDA is 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. EBITDA 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.
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.
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 client list with products installed in over 400,000 vehicles across the globe: the UK, Greece, Mexico, Argentina, Brazil, Russia, Croatia, Germany, Czech Republic, Latvia, Turkey, Hong Kong, Singapore, India, Costa Rica, Norway, Venezuela, Hungary, Israel and more. 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. In 2004, Cellocator was selected as the official security and location equipment supplier for the Olympic Games in Athens. For more information: http://www.pointer.com.
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
March 31, December 31,
2010 2009
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,715 $ 3,209
Trade receivables 13,278 11,619
Other accounts receivable and prepaid
expenses 3,673 3,033
Inventories 2,642 2,219
Total current assets 22,308 20,080
LONG-TERM ASSETS:
Long-term accounts receivable 724 673
Severance pay fund 6,362 6,070
Property and equipment, net 10,084 9,401
Deferred income taxes 100 507
Other intangible assets, net 8,401 9,022
Goodwill 51,930 51,220
Total long-term assets 77,601 76,893
Total assets $ 99,909 $ 96,973
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
March 31, December 31,
2010 2009
Unaudited
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current
maturities of long-term loans $ 8,608 $ 9,146
Trade payables 9,319 8,639
Deferred revenues and customer
advances 10,762 8,253
Other accounts payable and accrued
expenses 7,414 6,248
Total current liabilities 36,103 32,286
LONG-TERM LIABILITIES:
Long-term loans from banks and
others 14,174 15,456
Other long-term liabilities 773 621
Accrued severance pay 7,385 7,131
22,332 23,208
SHAREHOLDERS' EQUITY:
Pointer Telocation Ltd.
shareholders' equity 34,329 33,809
Non-controlling interest 7,145 7,670
Total shareholders' equity 41,474 41,479
Total liabilities and shareholders'
equity $ 99,909 $ 96,973
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Three months ended
Year ended
March 31, December 31,
2010 2009 2009
Unaudited
Revenues:
Products $ 4,810 $ 5,184 $ 20,038
Services 11,940 10,802 45,287
Total revenues 16,750 15,986 65,325
Cost of revenues:
Products 2,774 2,961 10,774
Services 7,293 5,858 26,645
Amortization of intangible
assets 246 246 976
Total cost of revenues 10,313 9,065 38,395
Gross profit 6,437 6,921 26,930
Operating expenses:
Research and development 543 754 2,817
Selling and marketing 1,867 1,484 6,249
General and administrative 1,951 2,386 8,788
Amortization of intangible
assets 452 524 1,942
Impairment of intangible
asset - - 2,959
Total operating expenses 4,813 5,148 22,755
Operating income 1,624 1,773 4,175
Financial expenses, net 313 675 2,070
Other expenses, net 3 12 16
Income before taxes on income 1,308 1,086 2,089
Taxes on income 507 19 887
Income after taxes on income 801 1,067 1,202
Equity in losses of affiliate 264 - 677
Net income 537 1,067 525
Less - net income
attributable to
non-controlling interest 472 1,064 2,632
Net income (loss)
attributable to Pointer
Telocation Ltd. shareholders $ 65 $ 3 $ (2,107)
Earnings per share
attributable to Pointer
Telocation Ltd's
shareholders:
Basic net earnings (loss) per
share $ 0.01 $ 0.00 $ (0.44)
Diluted net earnings (loss)
per share $ 0.01 $ 0.00 $ (0.47)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three months ended Year ended
December
March 31, 31,
2010 2009 2009
Unaudited
Cash flows from operating
activities:
Consolidated net income $ 537 $ 1,067 $ 525
Adjustments required to
reconcile net income to net
cash provided by operating
activities:
Depreciation, amortization
and impairment 1,394 1,381 8,252
Accrued interest and
exchange rate changes of
debenture and long-term
loans 7 (25) (85)
Accrued severance pay, net (55) (112) (400)
Gain from sale of property
and equipment, net (39) (75) (377)
Equity in losses of
affiliate 264 - 677
Amortization of stock-based
compensation 48 144 367
Decrease (increase) in trade
receivables, net (1,477) (942) 1,995
Increase in other accounts
receivable and prepaid
expenses (625) (727) (308)
Decrease (increase) in
inventories (639) 321 128
Write-off of inventories - - 124
Deferred income taxes 478 - 773
Increase in long-term
accounts receivable (43) (114) (493)
Increase (decrease) in trade
payables 825 (1,523) (413)
Increase in other accounts
payable and accrued expenses 2,458 1,792 461
Net cash provided by
operating activities 3,133 1,187 11,226
Cash flows from investing
activities:
Decrease in other accounts
receivable - - 279
Purchase of property and
equipment (1,137) (469) (3,442)
Proceeds from sale of
property and equipment 220 222 1,215
Investment in affiliate (210) - (640)
Acquisition of subsidiary (a) - - (38)
Net cash used in investing
activities (1,127) (247) (2,626)
Cash flows from financing
activities:
Proceeds from issuance of
shares 48 - -
Repayment of long-term loans
from banks (1,636) (1,424) (6,027)
Repayment of long-term loans
from others (10) (7) (32)
Receipt of long-term loans
from shareholders and others - 48 -
Dividend paid to the
non-controlling interest - - (871)
Short-term bank credit, net (451) (947) (983)
Net cash used in financing
activities (2,049) (2,330) (7,913)
Effect of exchange rate
changes on cash and cash
equivalents (451) 21 (186)
Increase(decrease) in cash
and cash equivalents (494) (1,369) 501
Cash and cash equivalents at
the beginning of the period 3,209 2,708 2,708
Cash and cash equivalents at
the end of the period $ 2,715 $ 1,339 $ 3,209
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three months ended Year ended
March 31, December 31,
2010 2009 2009
Unaudited
(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
Reconciliation of GAAP net income to EBITDA
Reconciliation of GAAP to NON-GAAP Operating Results
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income financial expenses, taxes, depreciation, amortization. EBITDA is 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. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. Reconciliation the GAAP to non-GAAP operating results:
CONDENSED EBITDA
US dollars in thousands
Three months ended
Year ended
March 31, December 31,
2010 2009 2009
Unaudited
Net income (loss) as reported: $ 537 $ 1,067 $ 525
Financial expenses, net 313 675 2,070
Tax on income 507 19 887
Depreciation and amortization 1,395 1,379 8,254
Non-GAAP EBITDA $ 2,752 $ 3,140 $ 11,736
Contact:
Zvi Fried, V.P. and Chief Financial Officer
Tel.; +972-3-572-3111
E-mail: [email protected]
Yael Nevat, Commitment-IR.com
Tel: +972-9-741-8866
E-mail: [email protected]
SOURCE Pointer Telocation Ltd
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