ROSH HA'AYIN, Israel, November 13 /PRNewswire-FirstCall/ -- Pointer
Telocation Ltd. (Nasdaq Capital Market: PNTR, Tel-Aviv Stock Exchange: PNTR)
- a leading provider of Automatic Vehicle Location (AVL) technology, stolen
vehicle retrieval services, fleet management, car & driver safety, public
safety, vehicle security, asset management and road side assistance,
announced today its financial results for the first nine months and third
quarter of 2008.
Financial Highlights:
Revenues: Pointer's revenues for the third quarter of 2008 increased by
68%, to $20.7 million, from $12.3 million in the comparable period in 2007.
In the first nine months of 2008, revenues were $58.6 million, a 65.7%
increase over the same period of 2007. Pointer's revenues from services in
the third quarter and the first nine months of 2008 were 58% and 59%,
respectively, of total revenues, as compared with 72% and 74% for these
periods in 2007 respectively. International activities for the third quarter
of 2008 were 31.5% of total revenue compared to 13.7% in the comparable
period in 2007.
Gross Profit: For the third quarter of 2008, gross profit increased 76.2%
to $7.7 million from $4.3 million in the third quarter of 2007. As a
percentage of revenues, gross profit was 37% in the third quarter of 2008, as
compared to 35% in the third quarter of 2007. In the first nine months of
2008, gross profit increased 75.1% to $22.3 million from $12.7 million in the
first nine months of 2007. Gross margin for the first nine months of 2008 was
38%, as compared to 36% for the first nine months of 2007.
Operating Income: Pointer's operating income increased 145% to $2.3
million in the third quarter of 2008, compared to operating income of $0.9
million for the third quarter of 2007. Operating margin was 11% in the third
quarter of 2008, as compared to approximately 7.6% in the third quarter of
2007. In the first nine months of 2008, operating income increased 160% to
$7.1 million, compared to $2.7 million for the same period of 2007. Operating
margin for the first nine months of 2008 was 12%, compared to 7.7% for the
first nine months of 2007.
Minority share: For the third quarter of 2008 and nine months ended
September 30, 2008, Pointer reported a $431 thousand and $1.3 million
minority share in the operations of Shagrir, compared to $178 thousand and
$0.9 million in the comparable periods of 2007. Pointer holds 56.6% interest
in Shagrir.
Net Income: Pointer presents net income of $0.7 million during the third
quarter of 2008, as compared to net income of $3 thousand in the third
quarter of 2007. For the first nine months of 2008, Pointer recorded net
income of $2.3 million, compared to net loss of $565 thousand in the same
period of 2007.
Non GAAP net income: Pointer recorded non-GAAP net income of $1.6 million
during the third quarter of 2008, as compared to non-GAAP net income of $497
thousand in the third quarter of 2007. For the first nine months of 2008,
Pointer's non-GAAP net income was $5.8 million, compared to non-GAAP net
income of $1 million in the same period of 2007. Non-GAAP net income is
defined as net income excluding certain non-cash expenses, including
amortization of acquired intangible assets, deferred income tax, impairment
of long-lived assets and a onetime non-cash expense relating to a loan
discount in the amount of $0.7 million as part of a loan replacement which we
reported in the second quarter of 2008.
EBITDA: Pointer's EBITDA for the third quarter of 2008 and for the first
nine months of 2008 was $3.8 million and $11.9 million, respectively, as
compared to $1.9 million and $5.8 million in the comparable periods of 2007.
Total Shareholders' Equity: Pointer's total shareholders' equity
increased by 18% during the first nine months of 2008 to $38 million.
Danny Stern, Pointer CEO, said: "Pointer continued to grow during the
third quarter. We recently launched a new asset management product, which is
expected to enhance sales in new untapped markets targeted by the company.
Our products are designed to improve customers' ability to be efficient in
vehicle utilization and energy consumption, and therefore are properly suited
for a market that is savings driven. The company is closely monitoring
changes in the car industry and volatility in exchange rates relating to the
recent financial crisis, which currently impact our visibility into the
coming months' performance. We are preparing ourselves to adjust our
expenditures to revenues. However, on the other hand, we also see this period
as an opportunity for business initiatives, since the company is positioned
very well globally. Our cash generative business yielded nine month EBITDA of
$11.9 million, and these earnings enable us to maintain our R&D efforts and
to enhance our competitive advantages", concluded Mr. Stern.
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 today, November 13th, 2008 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: +1-888-668-9141
From Israel: 03-918-0610
International: +972-3-918-0610
A replay of the conference call will be available through November 14th,
2008 on the Company's website at http://www.pointer.com.
Reconciliation between results on a GAAP and Non-GAAP basis.
To supplement the consolidated financial statements presented in
accordance with generally accepted accounting principles ("GAAP"), the
Company uses non-GAAP measures of net income and EBITDA. A reconciliation
between results in a GAAP and Non-GAAP basis is provided in a table
immediately following the Condensed Interim Consolidated Statements of Cash
Flows. Net income is adjusted from results based on GAAP to exclude
amortization of acquired intangible assets and deferred income tax, as well
as certain business combination accounting entries and a non-cash expense due
to a loan discount as part of a loan replacement. These non-GAAP financial
measures are provided to enhance overall understanding of the Company's
current financial performance and prospects for the future. Specifically, the
Company believes the non-GAAP results provide useful information to both
management and investors as these non-GAAP results exclude amortization of
acquired intangible assets and deferred income tax, as well as certain
business combination accounting entries, and a one-time non-cash expense due
to a loan discount, that the Company believes are not indicative of our core
operating results. Our non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP measures, and
should be read in conjunction with our consolidated financial statements
prepared in accordance with GAAP.
Our management regularly uses our supplemental non-GAAP financial
measures internally to understand, manage and evaluate our business and make
operating decisions. 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. These non-GAAP financial measures may differ materially from the
non-GAAP financial measures used by other companies.
Pointer also uses EBITDA as a non-GAAP financial performance measurement.
EBITDA is calculated by adding back to net income interest, taxes,
depreciation, amortization and minority interest. 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. A reconciliation of EBITDA to GAAP
measures is also provided in a table following the Condensed Interim
Consolidated Statements of Cash Flows accompanying this press release.
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, 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
Safe Harbor Statement
This press release contains forward-looking statements with respect to
the business, financial condition and results of operations of Pointer and
its affiliates. These forward-looking statements are based on the current
expectations of the management of Pointer, only, and are subject to risk and
uncertainties relating to changes in technology and market requirements, the
company's concentration on one industry in limited territories, decline in
demand for the company's products and those of its affiliates, inability to
timely develop and introduce new technologies, products and applications, and
loss of market share and pressure on pricing resulting from competition,
which could cause the actual results or performance of the company to differ
materially from those contemplated in such forward-looking statements.
Pointer undertakes no obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. For a more
detailed description of the risks and uncertainties affecting the company,
reference is made to the company's reports filed from time to time with the
Securities and Exchange Commission.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31,
2008 2007
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,447 $ 1,200
Trade receivables, net 16,234 11,756
Other accounts receivable and prepaid
expenses 2,703 2,001
Inventories 3,419 2,657
Total current assets 24,803 17,614
LONG-TERM ASSETS:
Long-term accounts receivable and deferred
expenses 612 337
Severance pay fund 5,540 4,866
Property and equipment, net 8,975 7,708
Deferred income taxes 1,058 941
Other intangible assets, net 16,431 18,058
Goodwill 55,598 50,712
Total long-term assets 88,214 82,622
Total assets $ 113,017 $ 100,236
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
September 30, December 31,
2008 2007
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities
of long-term loans $ 9,062 $ 10,564
Trade payables 10,725 8,001
Deferred revenues and customer advances 10,563 8,253
Other accounts payable and accrued expenses 5,184 6,123
Total current liabilities 35,534 32,941
LONG-TERM LIABILITIES:
Long-term loans from banks 24,135 18,460
Long-term loans from shareholders and others 3,321 5,767
Other long-term liabilities 245 89
Accrued severance pay 6,856 5,730
Convertible debentures - 1,979
34,557 32,025
MINORITY INTEREST 4,865 3,067
SHAREHOLDERS' EQUITY 38,061 32,203
Total liabilities and shareholders' equity $ 113,017 $ 100,236
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Year
Nine months ended Three months ended ended
December
September 30, September 30, 31,
2008 2007 2008 2007 2007
Unaudited
Revenues:
Products
$ 24,029 $9,172 $ 8,708 $ 3,400 $ 15,821
Services 34,567 26,184 12,003 8,921 35,806
Total revenues 58,596 35,356 20,711 12,321 51,627
Cost of revenues:
Products 12,837 5,850 4,725 2,184 9,414
Services 22,757 16,759 8,084 5,759 23,034
Amortization of
intangible assets 735 33 245 33 277
Total cost of
revenues 36,329 22,642 13,054 7,976 32,725
Gross profit 22,267 12,714 7,657 4,345 18,902
Operating expenses:
Research and
development, net 1,792 1,126 621 451 1,675
Selling and
marketing 5,408 3,360 1,931 1,117 4,934
General and
administrative 6,130 4,255 2,210 1,444 6,209
Amortization of
intangible assets 1,818 1,238 583 391 1,877
Total operating
expenses 15,148 9,979 5,345 3,403 14,695
Operating income 7,119 2,735 2,312 942 4,207
Financial expenses,
net 3,252 2,044 1,077 659 2,814
Other income
(expenses), net 19 (17) - (32) (12)
Income before taxes
on income 3,886 674 1,235 251 1,381
Taxes on income 320 357 90 70 353
Net income (loss)
before minority
interest 3,566 317 1,145 181 1,028
Minority interest 1,303 882 431 178 1,366
Net income
(loss) $ 2,263 $ (565) $ 714 $ 3 $ (338)
Basic net earnings
(loss) per share $ 0.49 $ (0.14) $ 0.15 $ 0.00 $ (0.08)
Diluted net
earnings (loss) per
share $ 0.48 $ (0.14) $ 0.15 $ 0.00 $ (0.08)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year
Nine months ended Three months ended ended
December
September 30, September 30, 31,
2008 2007 2008 2007 2007
Unaudited
Cash flows from
operating
activities:
Net income (loss) $ 2,263 $ (565) $ 714 $ 3 $ (338)
Adjustments
required to
reconcile net
income (loss) to
net cash provided
by operating
activities:
Depreciation,
amortization and
impairment 5,036 3,415 1,613 1,096 5,273
Accrued interest
and exchange rate
changes of
convertible
debenture and
long-term loans 1,214 694 (30) 509 750
Accrued severance
pay, net 365 (80) 198 (89) (70)
Gain from sale of
property and
equipment, net (133) (149) 25 (10) (182)
Amortization of
deferred
stock-based
compensation 226 366 86 60 783
Minority interest
in earning of
subsidiary 1,303 1,241 431 387 1,366
Increase in trade
receivables, net (3,313) (1,648) (1,039) 346 (1,172)
Increase in other
accounts
receivable and
prepaid expenses (551) (559) 175 (11) (421)
Decrease
(increase) in
inventories (1,088) (317) (821) (448) (395)
Decrease
(increase) in
long-term
accounts
receivable and
deferred expenses 49 31 1 33 (141)
Write-off of
inventories 75 150 75 135 150
Increase in
deferred income
taxes - - - - (174)
Increase in trade
payables 1,958 756 1,821 293 730
Increase
(decrease) in
other accounts
payable and
accrued expenses 163 1,839 (1,418) 276 1,855
Net cash provided
by operating
activities 7,567 5,174 1,831 2,580 8,014
Cash flows from
investing
activities:
Purchase of
property and
equipment (2,537) (2,106) (761) (336) (2,638)
Proceeds from
sale of property
and equipment 512 759 133 258 860
Increase in
long-term
accounts
receivable (247) - (19) - -
Acquisition of
Cellocator (a) - (16,332) - (16,332) (16,571)
Acquisition of
other intangible
assets - (135) - - (117)
Net cash used in
investing
activities (2,272) (17,814) (647) (16,410) (18,466)
Cash flows from
financing
activities:
Receipt of
long-term loans
from banks 9,254 5,000 2,155 5,000 5,000
Repayment of
long-term loans
from banks (2,727) (3,392) (639) (1,446) (4,347)
Repayment of
long-term loans
from shareholders
and others (10,394) (2,024) (1,526) (684) (2,767)
Proceeds from
issuance of
shares and
exercise of
warrants, net 1,000 9,588 1,000 (5) 9,588
Short-term bank
credit, net (1,137) (441) (512) 406 (1,752)
Net cash provided
by (used in)
financing
activities (4,004) 8,731 478 3,271 5,722
Effect of
exchange rate on
cash and cash
equivalents (44) (61) 247 (113) 80
Increase in cash
and cash
equivalents 1,247 (3,970) 1,909 (10,672) (4,650)
Cash and cash
equivalents at
the beginning of
the period 1,200 5,850 538 12,552 5,850
Cash and cash
equivalents at
the end of the
period $ 2,447 $ 1,880 $ 2,447 $ 1,880 $ 1,200
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Nine months Three months Year
ended ended ended
December
September 30, September 30, 31,
2008 2007 2008 2007 2007
Unaudited
(a) Acquisition of
Cellocator:
Fair value of
assets acquired and
liabilities assumed
at date of
acquisition:
Working capital $ - $ (1,220) $ - $ (1,220) $ (1,323)
Property and
equipment - (151) - (151) (151)
Customer
relationships - (3,876) - (3,876) (3,943)
Brand name - (1,749) - (1,749) (1,775)
Developed
Technology - (4,886) - (4,886) (4,890)
Goodwill - (8,645) - (8,645) (8,750)
Accrued severance
pay, net - 107 - 107 20
- (20,420) - (20,420) (20,812)
Fair value of
shares issued - 1,428 - 1,428 1,430
Fair value of
convertible
debentures - 1,952 - 1,952 1,951
Accrued expenses - 708 - 708 860
- 4,088 - 4,088 4,241
$ - $ (16,332) $ - $ (16,332) $(16,571)
Reconciliation Tables of Non-GAAP Measures
U.S. dollars in thousands
Reconciliation of GAAP net income to non-GAAP net income is as follows:
Year
Nine months ended Three months ended ended
December
September 30, September 30, 31,
2008 2007 2008 2007 2007
Unaudited
Net income (loss)
as reported $ 2,263 $ (565) $ 714 $ 3 $ (338)
Amortization of
intangible assets
and impairment of
long-lived assets 2,553 1,241 828 424 2,154
Loan Discount 704 - 9 - -
Taxes on income 320 357 90 70 353
Non-GAAP Net income
$ 5,840 $ 1,033 $ 1,641 $ 497 $ 2,169
Reconciliation of GAAP net income to EBITDA
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 interest, taxes, depreciation,
amortization and minority interest. 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 of the GAAP to non-GAAP operating
results is as follows:
CONDENSED EBITDA
US dollars in thousands
Year
Nine months ended Three months ended ended
December
September 30, September 30, 31,
2008 2007 2008 2007 2007
Unaudited
Net income (loss) $
as reported $ 2,263 (565) $ 714 $ 3 $ (338)
Non GAAP
adjustment:
Financial expenses,
net 3,252 2,044 1,077 659 2,814
Taxes on income 320 357 90 70 353
Depreciation and
amortization 4,719 3,061 1,525 1,002 4,787
Minority interest 1,303 882 431 178 1,366
EBITDA $
$ 11,857 5,779 $ 3,837 $ 1,912 $ 8,982
Contact:
Zvi Fried, V.P. and Chief Financial Officer
Tel: +972-3-572 3111
E-mail: zvif@pointer.com
Yael Nevat, Commitment-IR.com
Tel: +972-9-741 8866
E-mail: yael@commitment-IR.com
