Pointer Telocation Ltd. Reports Record Results for the Financial Year 2013 - 13 WTHR Indianapolis

Pointer Telocation Ltd. Reports Record Results for the Financial Year 2013

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SOURCE Pointer Telocation Ltd.

GAAP net income for the fourth quarter and full year of 2013 was $3.9 million and $7.3 million, respectively;

Non-GAAP net income was $1.9 million and $7.4 million, up 17% and 26% year-on-year, respectively;

Fourth quarter revenues were up 28% year-on-year, full year revenues were up 15%;

Revenues from international activities in the fourth quarter of 2013 were up to 33% of total revenues, compared with 25% in the previous year.

ROSH HAAYIN, Israel, Feb. 27, 2014 /PRNewswire/ -- 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, announced today its financial results for the three month period and fiscal year ended December 31, 2013.

Financial Summary for the Fourth Quarter of 2013

Revenues increased 28% to $28.1 million compared to $21.9 million in the fourth quarter of 2012. International activities for the fourth quarter of 2013 accounted for 33% of total revenues compared to 25% in the fourth quarter of 2012.

Revenues from products increased 22% to $9.6 million (34% of revenues) compared to $7.9 million (36% of revenues) in the fourth quarter of 2012. Pointer's revenues from services increased 32% to $18.4 million (66% of revenues) compared to $14.0 million (64% of revenues) in the fourth quarter of 2012. Revenues from products and services increased due to growth in MRM activities. 

Gross Profit was $9.1 million (32.5% of revenues), an increase of 28% compared to $7.1 million (32.5% of revenues) in the fourth quarter of 2012.

Operating Income was $1.2 million (4.3% of revenues) compared to an operating income of $1.2 million (5.5% of revenues) in the fourth quarter of 2012.

Profit from continuing operations attributable to Pointers' shareholders was $3.7 million (13% of revenues), or $0.68 per share compared to net income of 609 thousand (2.8% of revenues), or $0.11 per share, in the fourth quarter of 2012. Profit from continuing operations included $2.9 million of onetime profit in connection with the Brazilian transaction (comprised of $3.3 million in profit from the Brazilian transaction offset by a one-time $0.4 million 'other expense' related to the termination cost of the former general manager of Pointer's subsidiary).

Net income was $3.9 million (14.0% of revenues) compared with $896 thousand (4.1% of revenues) in the fourth quarter of 2012.

Non GAAP net income was $1.9 million (6.8% of revenues), an increase of 17% compared to non-GAAP net income of $1.6 million (7.5% of revenues) in the fourth quarter of 2012.

Adjusted EBITDA was $2.7 million, which is comparable to that of the fourth quarter of 2012.

Financial Summary for the Full Year of 2013

Revenues for 2013 increased 15% to $97.9 million compared to $84.8 million in 2012. International activities for 2013 accounted for 29% of total revenues compared to 26% in 2012.

Revenues from products increased 14% to $34.6 million (35% of revenues) compared to $30.4 million (36% of revenues) in 2012. Revenues from services increased 16% to $63.2 million (64% of revenues) compared to $54.4 million (64% of revenues) in 2012. Revenues from products and services increased due to growth in MRM activities.

Gross Profit was $31.6 million (32.3% of revenues) in 2013, an increase of 12.4% compared to $28.1 million (33.1% of revenues) in 2012.

Operating Income was $6 million (6.1% of revenues) in 2013 compared to operating income of $5.1 million (6.0% of revenues) in 2012.

Profit from continuing operations attributable to Pointers' shareholders was $6.3 million (6.4% of revenues), or $1.14 per share, compared to net income of $1.2 million (plus the part of loss from discontinued operations) (2.1% of revenues), or $0.35 per share in 2012.

Net income was $7.3 million (7.4% of revenues) compared to $ 1.6 million (1.9% of revenues) in 2012.

Non GAAP net income was $7.4 million (7.6% of revenues), compared to non-GAAP net income of $5.9 million (6.9% of revenues) in 2012.

Adjusted EBITDA was $10.8 million, an increase of 2% compared to $10.6 million 2012.

David Mahlab, Pointer's Chief Executive Officer, commented on the results: "We are delighted with our performance in 2013, including our strong growth in revenue and full year net income as well as our general improvement in profitability resulting from growth in our MRM activities. We continue investing in infrastructure and recently released additional new mobile resource management (MRM) technologies and services which will improve our profitability, competitive market position and grow our business in 2014."

Mr. Mahlab further continued: "Towards the end of 2013 we fully consolidated our Brazilian subsidiary, and post year-end, we purchased the remaining minority holdings of our subsidiary Shagrir, reaching full ownership. These two transactions greatly simplify our company structure and will enable us to better benefit from the synergies across our various operations throughout the world. We currently see global opportunities and keep searching for additional growth through acquisitions mainly in developing markets, in which we can leverage our infrastructure and know-how, to penetrate the market and grow our business."

Conference Call Information

Pointer Telocation's management will host today, Thursday,  February 27th, 2014 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 Eastern Time, 4:30 PM Israel time.

To participate in the call, please dial in to one of the teleconference numbers below. Please begin placing your call at least 5 minutes before the time set for the commencement of the conference call.

From USA: + 1-888-281-1167, From Israel: 03-918-0644

A replay will be available from February 28th, 2014 at the company website: 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, intangible assets  and profit raise from gaining control in subsidiary previously treated by the equity method.

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, goodwill and profit raise from gaining control in subsidiary previously treated by the equity method and a onetime 'other expense' related to the termination cost of a former general manger of a Pointer subsidiary.

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, please visit 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.


Contact:




Zvi Fried, V.P. and Chief Financial Officer  



Kenny Green/Ehud Helft, GK Investor Relations

Tel.: +972-3-572 3111                                 



Tel.: +1 646 201 9246

E-mail: zvif@pointer.com                             



E-mail: Pointer@gkir.com

 

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



December 31,



2013


2012






ASSETS










CURRENT ASSETS:





Cash and cash equivalents


$         3,349


$         3,685

Restricted cash


81


108

Trade receivables


19,793


16,215

Other accounts receivable and prepaid expenses


2,033


2,069

Inventories


6,038


3,982






Total current assets


31,294


26,059











LONG-TERM ASSETS:





Long-term accounts receivable


546


582

Severance pay fund


9,349


8,125

Property and equipment, net


13,975


10,364

Investment and long term loans to affiliate


-


814

Other intangible assets, net


3,045


2,242

Goodwill


55,455


47,190






Total long-term assets


82,370


69,317






Total assets


$      113,664


$        95,376

 


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




December 31,



2013


2012

LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





Short-term bank credit and current maturities of long-term loans


$        10,624


$        11,129

Trade payables


14,793


11,248

Deferred revenues and customer advances


7,900


6,954

Other accounts payable and accrued expenses


10,611


7,251






Total current liabilities


43,928


36,582











LONG-TERM LIABILITIES:





Long-term loans from banks


9,301


9,339

Long-term loans from shareholders and others


1,320


925

Other long-term liabilities


5,739


3,765

Accrued severance pay


10,317


9,419








26,677


23,448

COMMITMENTS AND CONTINGENT LIABILITIES










EQUITY:





Pointer Telocation Ltd's shareholders' equity:





Share capital


3,878


3,871

Additional paid-in capital


120,996


120,290

Accumulated other comprehensive income


1,876


1,127

Accumulated deficit


(89,220)


(95,540)






Total Pointer Telocation Ltd's shareholders' equity


37,530


29,748






Non-controlling interest


5,529


5,598






Total equity


43,059


35,346






Total liabilities and shareholders' equity


$      113,664


$        95,376

 

CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)










Year ended

 December 31,


Three months ended

December 31,




2013


2012


2013


2012


Revenues:











Products


$          34,662


$          30,402


$        9,640


$            7,877



Services


63,195


54,430


18,439


14,009



Total revenues


97,857


84,832


28,079


21,886



Cost of revenues:











Products


20,763


17,988


5,964


4,582



Services


45,497


38,573


12,987


10,182



Amortization and impairment of intangible assets


-


181


-
















Total cost of revenues


66,260


56,742


18,951


14,764



Gross profit


31,597


28,090


9,128


7,122














Operating expenses:











Research and development


3,244


2,716


948


680



Selling and marketing


10,398


9,067


2,874


2,484



General and administrative


10,539


9,232


3,374


2,246



Other expenses


403


-


403


-



Amortization of intangible assets


967


1,987


328


501














Total operating expenses


25,551


23,002


7,927


5,911














Operating income


6,046


5,088


1,201


1,211



Financial expenses, net


1,077


1,628


292


343



Other expenses (income), net


(3,299)


5


(3,299)


(7)














Income before taxes on income


8,268


3,455


4,208


875



Taxes on income


1,337


861


283


123














Income after taxes on income


6,931


2,594


3,925


752



Equity in gains  of affiliate


340


38


-


144














Income from continuing operations


7,271


2,632


3,925


896



Loss from discontinued operations, net


-


995


-


-



Net income


$            7,271


$            1,637


$        3,925


$              896

























Profit from continuing operations attributable to:











Equity holders of the parent


6,320


1,203


3,756


609



Non-controlling interests


951


434


169


287





$           7,271


$           1,637


$        3,925


$               896

























Earnings per share from continuing operations attributable to Pointer Telocation Ltd's shareholders:











Basic net earnings  per share


$    1.14


$    0.35


$    0.68


$    0.11














Diluted net earnings  per share


$    1.1


$    0.35


$    0.65


$    0.11

















































CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands



Year ended

December 31,


Three months ended

December 31,



2013


2012


2013


2012











Cash flows from operating activities:











   Net income


$          7,271


$          1,637


$          3,925


$             896


Adjustments required to reconcile net income  to net cash provided by operating activities:










Depreciation, amortization and impairment


4,049


5,546


1,281


1,276


Profit raise from gaining control in subsidiary previously treated by the equity method


(3,299)


-




-


(3,299)


Accrued interest and exchange rate changes of debenture and long-term loans


21


118




99


58


Accrued severance pay, net


(397)


91


(283)


(12)


Changes in long-term loans to affiliate


-


-


-


(34)


Gain from sale of property and equipment, net


(195)


(271)


(26)


(43)


Equity in gains of affiliate


(340)


(38)


-


(144)


Amortization of stock-based compensation


374


265


211


43


Decrease  in restricted cash


27


15


10


5


Decrease (increase) in trade receivables, net


(1,270)


(1,572)


1,582


1,300


Increase in other accounts receivable and prepaid expenses


148


46




506


511


Decrease (increase) in inventories


(685)


732


260


265


Deferred income taxes, net


1,272


847


601


109


Decrease (increase) in long-term accounts receivable


(4)


234




(35)


(16)


Increase (decrease) in trade payables


1,290


965


(241)


579

Increase (decrease) in other accounts payable and accrued expenses


1,449


(274)




(657)

(269)










Net cash provided by operating activities


9,711


8,341


4,305


4,153










Cash flows from investing activities:









Purchase of property and equipment


(4,663)


(4,033)


(1,475)


(818)

Proceeds from sale of property and equipment


1,216


1,733


(242)


539

Investment and loans/Repayments in affiliate


137


(669)


36


25

Acquisition of Subsidiary (a)


(3,973)


(251)


(3,973)


-

Purchase of activity (b)


-


(3,125)


-


-










Net cash used in investing activities


(7,283)


(6,345)


(5,654)


(254)



















 

CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands



Year ended

December 31,


Three months ended

December 31,



2013


2012


2013


2012












Cash flows from financing activities:




















Receipt of long-term loans from banks


7,127


11,670


3,417


2,346


Repayment of long-term loans from banks


(10,137)


(12,253)


(2,278)


(2,856)


Dividend paid to non-controlling interest


-


(1,215)


-


(1,215)


Proceeds from issuance of shares


7


1,945


7


-


Short-term bank credit, net


563


(345)


950


(306)












Net cash used in financing activities


(2,440)


(198)


2,096


(2,031)












Effect of exchange rate changes on cash and cash equivalents


(324)


419




(257)


(95)






















Increase (decrease) in cash and cash equivalents


(336)


2,217


652


1,611


Cash and cash equivalents at the beginning of the year

3,685

1,468

2,697

2,074












Cash and cash equivalents at the end of the year


$       3,349


$       3,685


$       3,349


$       3,685












(a) Acquisition of subsidiary:










Working capital (Cash and cash equivalent excluded)


130


-


130


-


Property and equipment


2,486


22


2,486


-


Technology


-


58


-


-


Other intangible assets


1,690


-


1,690


-


Goodwill


4,894


304


4,894


-


Long term loans from banks and others


(1,342)


-


(1,342)


-


Investment in subsidiary previously treated by the equity method


(3885)


-




-


(3885)


Minority Interest


-


(133)


-


-
























$        3,973


$          251


$         3,973


$                -












(b)Purchase of business 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


$                     -


$                  -


 

ADDITIONAL INFORMATION
U.S. dollars in thousands

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

Non GAAP Net income



Year ended

December 31,


Three months ended

December 31,



2013


2012


2013


2012



Unaudited










GAAP Net income as reported:


$            7,271


$            1,637


$      3,925


$               896



967


2,168




501

amortization and impairment of  intangible assets

328

Loss from discontinued operations, net


-


995


-


-

Other expenses of termination costs


403


-


403


-

Profit raise from gaining control in subsidiary previously treated by the equity method


(3,299)


-




-

(3,299)

Stock based compensation expenses


374


265


211


43

Non-cash tax expenses (income) resulting from timing differences relating to the amortization of acquisition-related intangible assets and goodwill


1,700


819




200



350










Non-GAAP Net income


$            7,416


$            5,884


$      1,918


$            1,640












Adjusted EBITDA



Year ended

December 31,


Three months ended

December 31,




2013


2012


2013


2012




Unaudited











GAAP Net income as reported:


$            7,271


$            1,637


$            3,925


$         896










Loss from discontinued operations, net


-


995


-


-

Financial expenses, net


1,077


1,628


292


343

Tax on income


1,337


861


282


123

Profit raise from gaining control in subsidiary previously treated by the equity method


(3,299)


-




-

(3,299)

Stock based compensation expenses

Depreciation, amortization and impairment of goodwill and  intangible assets


374


265


211


43





4,049


5,198



1,281

1,276










Adjusted EBITDA


$         10,809


$          10,584


$        2,692


$            2,681













 

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