Pointer Telocation Reports Q2 2012 Financial Results
ROSH HAAYIN, Israel, August 27, 2012 /PRNewswire/ --
- Revenues of $21.2M
- Non-GAAP Net Income of $ 1.1M
- Adjusted EBITDA $2.5M
Pointer Telocation Ltd. (Nasdaq CM: PNTR) - a leading developer, manufacturer and operator of Mobile Resource Management (MRM) and roadside assistance services for the automotive industry and insurance market, announced today its financial results for the second quarter of 2012.
Financial Highlights
Revenues: Pointer's revenues for the second quarter of 2012 decreased 4% to $21.2 million, as compared to $22.1 million in the second quarter of 2011.
International activities for the second quarter of 2012 were 27% of total revenues compared to 28% in the comparable period of 2011.
Revenues from products in the second quarter of 2012 were $7.7 million, compared to $7.9 million in the same period in 2011.
Pointer's revenues from services in the second quarter of 2012 decreased 5% to $13.5 million, from $14.2 million, in the comparable period of 2011(64% of revenues in both periods).
Gross Profit: In the second quarter of 2012, gross profit decreased 12% to $6.8 million from $7.7 million in the second quarter of 2011.
Operating Income: In the second quarter of 2012, operating income was $0.7 million, compared to $1.3 million in the second quarter of 2011.
Net Income: Pointer recorded net income attributable to Pointer's shareholders for the second quarter of 2012 of $200 thousand or $0.04 per share, compared to net income of $40 thousand or $0.01 per share in the second quarter of 2011.
Net loss attributable to a non-controlling interest in affiliates in the second quarter of 2012 was $250 thousand compared to a net income of $130 thousand for the comparable period in 2011.
Adjusted EBITDA: Pointer's adjusted EBITDA for the second quarter of 2012 was $2.5 million, as compared to $2.7 million in the comparable period in 2011.
David Mahlab, Pointer's Chief Executive Officer, commented on the results: "We have succeeded to maintain our revenue level and positive net income despite the challenges of the weak global market which has influenced our target market significantly and driven down prices. Our recently launched products have been well received and together with costs savings, and an aggressive sales and marketing approach we were able to maintain momentum. We expect the weak global economy to continue to affect us, but our efforts in launching new products and our additional investment in Latin America should enable us to achieve our long term goals."
Conference Call Information:
Pointer Telocation's management will host today, Monday, August 27th, 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 9:30 AM EST, 4:30 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: 03-918-0609
A replay will be available from August 28th, 2012 on the Company's 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, amortization and non-cash impairment of goodwill and intangible assets.
We calculate non-GAAP net income by adding back to net income, 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 client list with products installed in over 45 countries. Cellocator, a Pointer Products Division, is a leading MRM (Mobile Resource Management) technology developer and manufacturer.
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, December 31,
2012 2011
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,335 $ 1,468
Restricted cash 117 123
Trade receivables 16,347 14,427
Other accounts receivable and prepaid expenses 2,689 1,946
Inventories 3,655 4,467
Total current assets 25,143 22,431
LONG-TERM ASSETS:
Long-term accounts receivable and other 579 805
Severance pay fund 8,036 7,474
Property and equipment, net 10,682 10,839
Long-term loans to affiliate 689 -
Investment in affiliate 140 266
Other intangible assets, net 3,216 3,030
Goodwill 45,028 44,493
Total long-term assets 68,370 66,907
Total assets $ 93,513 $ 89,338
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
June 30, December 31,
2012 2011
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities of
long-term loans $ 14,146 $ 13,208
Trade payables 10,747 9,821
Deferred revenues and customer advances 7,829 6,890
Other accounts payable and accrued expenses 6,950 7,440
Total current liabilities 39,672 37,359
LONG-TERM LIABILITIES:
Long-term loans from banks 8,570 7,715
Long-term loans from shareholders and others 929 943
Other long-term liabilities 3,354 2,895
Accrued severance pay 9,139 8,625
21,992 20,178
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY:
Pointer Telocation Ltd's shareholders' equity:
Share capital 3,393 3,353
Additional paid-in capital 119,190 119,147
Accumulated other comprehensive income (194) 837
Accumulated deficit (96,376) (96,743)
Total Pointer Telocation Ltd's shareholders' equity 26,013 26,594
Non-controlling interest 5,836 5,207
Total equity 31,849 31,801
LIABILITIES AND SHAREHOLDERS' EQUITY $ 93,513 $ 89,338
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands
Year
Six months ended Three months ended ended
December
June 30, June 30, 31,
2012 2011 2012 2011 2011
Unaudited
Revenues:
Products $ 15,516 $ 15,797 $ 7,691 $ 7,953 $ 31,140
Services 27,261 27,383 13,478 14,163 54,778
Total revenues 42,777 43,180 21,169 22,116 85,918
Cost of revenues:
Products 9,280 8,890 4,655 4,474 18,283
Services 19,194 18,248 9,698 9,696 37,249
Amortization of
intangible assets 121 489 61 245 1,498
Total cost of
revenues 28,595 27,627 14,414 14,415 57,030
Gross profit 14,182 15,553 6,755 7,701 28,888
Operating
expenses:
Research and
development 1,389 1,507 673 772 3,082
Selling and
marketing 4,493 4,346 2,211 2,277 8,932
General and
administrative 4,974 5,967 2,301 2,849 11,450
Amortization of
intangible assets 1,005 924 501 471 1,821
Impairment of
goodwill and
intangible assets 354 - 354 - 6,216
Total operating
expenses 12,215 12,744 6,040 6,369 31,501
Operating income 1,967 2,809 715 1,332 (2,613)
Financial
expenses, net 942 850 472 452 1,779
Other expenses
(income), net 9 (9) 3 (4) 77
Income before
taxes on income 1,016 1,968 240 884 (4,469)
Taxes on income 546 693 256 336 2,383
Income (loss)
after Income taxes 470 1,275 (16) 548 (6,852)
Equity in losses
of affiliate 81 798 33 374 1,634
Net income (loss) 389 477 (49) 174 (8,486)
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands
Year
Six months ended Three months ended ended
December
June 30, June 30, 31,
2012 2011 2012 2011 2011
Unaudited
Other comprehensive
income (loss):
Currency translation
adjustments of
foreign operations (843) 810 (1,236) 397 (2,605)
Realized gains
(losses) on
derivatives
designated as cash
flow hedges (161) 172 (82) 108 (219)
Unrealized gains
(losses) on
derivatives
designated as cash
flow hedges 295 (109) 32 10 (162)
Total comprehensive
income (loss)
(320) 1,350 (1,335) 689 (11,472)
Profit (loss)
attributable to:
Equity holders of
the parent 365 426 201 44 (8,527)
Non-controlling
interests 24 51 (250) 130 41
389 477 (49) 174 (8,486)
Other comprehensive
income (loss)
attributable to:
Equity holders of
the parent (262) 1,003 (745) 397 (10,982)
Non-controlling
interests (58) 347 (590) 292 (490)
(320) 1,350 (1,335) 689 (11,472)
Earnings (loss) per
share attributable
to Pointer
Telocation Ltd's
shareholders:
Basic net earnings
per share $ 0.07 $ 0.09 $ 0.04 $ 0.01 $ (1.78)
Diluted net earnings
(loss) per share $ 0.07 $ 0.08 $ 0.04 $ 0.01 $ (1.79)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three months Year
Six months ended ended ended
December
June 30, June 30, 31,
2012 2011 2012 2011 2011
Unaudited
$
Net income (loss) $ 389 $ 477 $ (49) $ 174 (8,486)
Adjustments required to
reconcile net income to
net cash provided by
operating activities:
Depreciation,
amortization and
impairment of goodwill
and intangible assets 3,059 3,068 1,709 1,576 12,710
Accrued interest and
exchange rate changes of
debenture and long-term
loans 4 94 18 78 135
Accrued interest and
exchange rate changes of
long-term loans to
affiliate 28 - - - -
Accrued severance pay,
net (45) 350 (8) 318 487
Gain from sale of
property and equipment,
net (124) (53) (86) (22) (95)
Equity in losses of
affiliate 81 798 33 374 1,634
Amortization of
stock-based compensation 168 230 67 142 515
Impairment loss of loan
to minority shareholder
in subsidiary 489
Decrease in restricted
cash 6 4 4 2 10
Decrease (increase) in
trade receivables, net (2,317) (3,680) 721 (750) (1,462)
Decrease (increase) in
other accounts
receivable and prepaid
expenses (641) (119) (382) 571 373
Decrease (increase) in
inventories 799 (488) (4) (664) (1,035)
Write-off of inventories 84 38 84 38 304
Deferred income taxes - (32) - (15) 170
Decrease (increase) in
long-term accounts
receivable 233 340 77 120 (177)
Increase in trade
payables 973 756 809 (907) 452
Increase (decrease) in
other accounts payable
and accrued expenses 1,405 2,640 (427) 830 2,457
Net cash provided by
operating activities 4,102 4,423 2,566 1,865 8,481
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year
Six months ended Three months ended ended
December
June 30, June 30, 31,
2012 2011 2012 2011 2011
Unaudited
Cash flows from
investing
activities:
Purchase of
property and
equipment (2,398) (2,609) (1,090) (1,232) (4,445)
Proceeds from
sale of property
and equipment 746 271 314 106 1,050
Investment in
affiliate, net (717) (1,106) 12 (563) (1,740)
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 (5,745) (3,444) (764) (1,689) (5,096)
Cash flows from
financing
activities:
Proceeds from
issuance of
shares 143 33 138 10 281
Repayment of
long-term loans
from banks (5,658) (4,489) (3,051) (2,577) (8,937)
Repayment of
long-term loans
from others - (22) - (14) (1,071)
Receipt of
long-term loans
from banks,
shareholders and
others 7,637 6,248 4,456 4,304 8,384
Dividend paid to
the
non-controlling
interest - (896) - (896) (1,594)
Short-term bank
credit, net 263 (1,890) (1,867) (101) (1,002)
Net cash provided
by (used in)
financing
activities 2,385 (1,016) (324) 726 (3,939)
Effect of
exchange rate on
cash and cash
equivalents 125 67 93 (147) (211)
Increase
(decrease) in
cash and cash
equivalents 867 30 1,571 755 (765)
Cash and cash
equivalents at
the beginning of
the period 1,468 2,233 764 1,508 2,233
Cash and cash
equivalents at
the end of the
period $ 2,335 $ 2,263 $ 2,335 $ 2,263 $ 1,468
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months Three months
ended ended Year ended
June 30 June 30 December 31
2012 2011 2012 2011 2011
Unaudited
Acquisition of
(a) subsidiary:
Property and
equipment $ 22 $ - $ - $ - $ -
Technology 58 - - - -
Goodwill 304 - - - -
Minority
Interest (133) - - - -
$ 251 $ - $ - $ - $ -
Purchase of
(b) 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 $ - $ - $ - $ -
Proceeds from
sale of
investments in
previously
consolidated
(c) 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:
Non GAAP Net income
Year
Three months ended
Six months ended ended
December
June 30 June 30 31
2012 2011 2012 2011 2011
Unaudited
GAAP Net income
(loss) as reported $ 389 $ 477 $ (49) $ 174 $ (8,486)
amortization and
impairment of
goodwill and
intangible assets 1,480 1,413 916 716 9,535
Stock based
compensation
expenses 168 230 67 142 515
non-cash tax
expenses resulting
from timing
differences
relating to the
amortization of
acquisition-related
intangible assets
and goodwill 419 316 201 160 2,365
Non-GAAP Net income $ 2,456 $ 2,436 $ 1,135 $ 1,192 $ 3,929
Adjusted EBITDA
Year
Three months ended
Six months ended ended
December
June 30 June 30 31
2012 2011 2012 2011 2011
Unaudited
GAAP Net income
(loss) as
reported: $ 389 $ 477 $ (49) $ 174 $ (8,486)
One time charge
attributable to
efforts to
expand services
to Israeli
insurance
companies - - - - 486
Financial
expenses, net 942 850 472 452 1,779
Tax on income 546 693 256 336 2,383
Stock based
compensation
expenses 168 230 67 142 515
Depreciation ,
amortization and
impairment of
goodwill and
intangible
assets 3,059 3,068 1,709 1,576 12,710
Non-GAAP
Adjusted EBITDA $ 5,104 $ 5,318 $ 2,455 $ 2,680 $ 9,387
Contact:
Zvi Fried
V.P. and Chief Financial Officer
Tel: +972-3-572-3111
E-mail: [email protected]
Chen Livne
Gelbart-Kahana Investor relations
Tel: +972-54-302-2983
E-mail: [email protected]
SOURCE Pointer Telocation Ltd
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