Pointer Telocation Reports Q2 2014 Financial Results - 100.7 Jack FM San Diego Radio & DSC- sandiegojack

Pointer Telocation Reports Q2 2014 Financial Results

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SOURCE Pointer Telocation Ltd.

ROSH HAAYIN, Israel, Aug. 14, 2014 /PRNewswire/ --

Highlights

  • First half 2014 revenues of $52.9 million, up 17% year-over-year;
  • Second quarter revenues of $25.9 million, up 11% year-over-year;
  • Second quarter gross profit of $8.6 million, up 12% year-over-year;
  • Second quarter adjusted EBITDA of $3.0 million, up 11% year-over-year;

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 second quarter and first half of 2014.

Financial Highlights

Revenues: Pointer's revenues for the second quarter of 2014 increased 11% to $25.9 million as compared to $23.2 million in the second quarter of 2013.

International activities for each of the second quarter and for the first half of 2014 accounted for 31% of total revenues, compared to 26% in the same periods in 2013.

Revenues from services in the second quarter of 2014 increased 20% to $17.8 million (69% of revenues) compared to $14.8 million (64% of revenues), in the comparable period of 2013.

For the first half of 2014 revenues from services increased 21% to $35.7 million (67% of revenues) compared to $29.6 million (65% of revenues), in the comparable period of 2014.

Gross Profit: In the second quarter of 2014, gross profit was $8.6 million (33.2% of revenues) compared to $7.6 million (32.9% of revenues) in the second quarter of 2013.

Operating Income: Operating income in the second quarter of 2014 was $1.7 million, approximately the same as in the second quarter of 2013.

Net Income: Pointer recorded net income of $1.0 million, or $0.15 per share, in the second quarter of 2014 compared to $1.3 million, or $0.17 per share, in the second quarter of 2013.

Non-GAAP net income: Pointer recorded Non-GAAP net income of $1.7 million in the second quarter of 2014, approximately the same as in the second quarter of 2013.

Adjusted EBITDA: Pointer's adjusted EBITDA for the second quarter of 2014 was $3.0 million, an increase of 11% compared to $2.7 million in the second quarter of 2013.

Management Comment

David Mahlab, Pointer's Chief Executive Officer, commented on the results: "Our second quarter results demonstrate continued year over year growth in revenue and EBITDA. It also demonstrates a further shift towards service revenues as a larger part of our overall revenue mix. This is very much in-line with our long-term strategic plan to focus on growing the service segment, which provides a recurring revenue stream on an ongoing monthly basis."

Conference Call Information:

Pointer Telocation's management will host a conference call today, at 9:30 Eastern Time, 16:30 Israel time. On the call, management will review and discuss the results.  To listen to the call, please dial in to one of the following teleconferencing numbers. Please begin placing your call a few minutes before the conference call commences.

Dial in numbers are as follows:

From USA: + 1-888-407 2553

From Israel: 03-918-0610

A replay will be available a few hours following the call on the company's website.

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 Non-GAAP financial performance measurements.

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 and intangible assets.

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 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 developer, manufacturer and operator of Mobile Resource Management (MRM) and roadside assistance services for the automotive industry. 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: 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

Ehud Helft, GK Investor & Public Relations

Tel.; 972-3-572 3111

Tel: +1 646 201 9246

E-mail: zvif@pointer.com

E-mail: pointer@gkir.com

 

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands








June 30,
2014


December 31,
2013



Unaudited








ASSETS










Cash and cash equivalents


$       11,790


$              3,349

Restricted cash


65


81

Trade receivables


21,356


19,793

Other accounts receivable and prepaid expenses


2,563


2,033

Inventories


6,359


6,038






Total current assets


42,133


31,294











LONG-TERM ASSETS:





Long-term accounts receivable


537


546

Severance pay fund


9,517


9,349

Property and equipment, net


13,438


13,975

Other intangible assets, net


2,471


2,936

Goodwill


55,878


55,127






Total long-term assets


81,841


81,933






Total assets


$      123,974


$          113,227











INTERIM CONSOLIDATED BALANCE SHEETS

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








June 30,


December 31,



2014


2013



Unaudited



LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





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


$              8,787


$            10,643

Trade payables


14,958


14,793

Deferred revenues and customer advances


8,396


7,753

Other accounts payable and accrued expenses


8,748


10,768






Total current liabilities


40,889


43,957











LONG-TERM LIABILITIES:





Long-term loans from banks


16,776


9,301

Long-term loans from others


1,161


1,301

Deferred taxes and other long-term liabilities


6,596


5,712

Accrued severance pay


10,620


10,317








35,153


26,631

COMMITMENTS AND CONTINGENT LIABILITIES










EQUITY:





Pointer Telocation Ltd's shareholders' equity:





Share capital


5,705


3,878

Additional paid-in capital


140,786


120,996

Accumulated other comprehensive loss from transactions with shareholders

Accumulated other comprehensive income


(11,368)


-

1,995

1,456

Accumulated deficit


(86,608)


(89,220)






Total Pointer Telocation Ltd's shareholders' equity


50,510


37,110






Non-controlling interest


(2,578)


5,529






Total equity


47,932


42,639






Total liabilities and equity


$          123,974


$          113,227

 


INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands










Six months ended

June 30,


Three months ended

June 30,


Year ended

December 31,



2014


2013


2014


2013


2013



Unaudited



Revenues:











Products


$       17,170


$       15,816


$         8,054


$         8,394


$          34,662

Services


35,719


29,564


17,820


14,841


63,195












Total revenues


52,889


45,380


25,874


23,235


97,857












Cost of revenues:











Products


10,342


9,198


4,946


4,817


20,763

Services


24,553


21,343


12,344


10,783


45,497












Total cost of revenues


34,895


30,541


17,290


15,600


66,260












Gross profit


17,994


14,839


8,584


7,635


31,597












Operating expenses:











Research and development


1,766


1,470


908


800


3,244

Selling and marketing


5,523


4,894


2,832


2,569


10,398

General and administrative


5,901


4,653


2,944


2,370


10,539

Other expenses


-


-


-


-


403

Amortization of intangible assets


567


510


230


129


967












Total operating expenses


13,757


11,527


6,914


5,868


25,551












Operating income


4,237


3,312


1,670


1,767


6,046

Financial expenses, net


812


598


308


260


1,077

Other income, net


6


7


9


1


3,299












Income before taxes on income


3,431


2,721


1,371


1,508


8,268

Taxes on income


1,014


467


414


303


1,337












Income after taxes on income


2,417


2,254


957


1,205


6,931

Equity in gains of affiliate


-


182


-


70


340












Income from continuing operations


2,417


2,436


957


1,275


7,271












Net income


$       2,417


$       2,436


$          957


$       1,275


$            7,271












 

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands














Six months ended

June 30,


Three months ended

June 30,


Year ended

December 31,



2014


2013


2014


2013


2013



Unaudited














Profit  (loss) from continuing operations attributable to:











Equity holders of the parent


2,612


1,778


1,146


971


6,320

Non-controlling interests


(195)


658


(189)


304


951














2,417


2,436


957


1,275


7,271























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











Basic net earnings (loss) per share


$         0.36


$        0.32


$            0.15


$            0.17


$               1.14












Diluted net earnings (loss) per share


$         0.35


$        0.32


$            0.14


$            0.17


$               1.10













INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands










Six months ended

June 30,


Three months ended

June 30,


Year ended

December 31,



2014


2013


2014


2013


2013



Unaudited



Cash flows from operating activities:






















Net income


$       2,417


$       2,436


$          957


$       1,275


$          7,271

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






















Depreciation, amortization and impairment


2,475


1,913


1,194


830


4,049

Gain from obtaining control in a subsidiary previously 
     accounted for by the equity method


-


-


-


-


(3,299)

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


9


(19)


4


5


21

Accrued severance pay, net


125


(67)


138


(27)


(397)

Gain from sale of property and equipment, net


(97)


(166)


(32)


(98)


(195)

Equity in gains of affiliate


-


(182)


-


(70)


(340)

Amortization of stock-based compensation


175


58


127


25


374

Decrease in restricted cash


16


10


1


5


27

Increase (decrease) in trade receivables, net


(1,705)


(1,478)


378


535


(1,270)

Decrease (increase) in other accounts receivable and 
     prepaid expenses


(629)


(257)


(69)


136


148

Increase in inventories


(217)


(94)


(481)


(59)


(685)

Deferred income taxes


804


432


319


271


1,272

Decrease (increase) in long-term accounts receivable


(9)


32


(50)


9


(4)

Increase (decrease)  in trade payables


493


(428)


1,117


(250)


1,290

Increase (decrease) in other accounts payable and 
     accrued expenses


(1,342)


1,259


(988)


(157)


1,449












Net cash provided by operating activities


2,515


3,449


2,615


2,430


9,711












Cash flows from investing activities:











Purchase of property and equipment


(2,248)


(2,436)


(1,094)


(1,409)


(4,663)

Proceeds from sale of property and equipment


867


798


160


128


1,216

Investment and loans/Repayments in affiliate, net


(7,740)


66


-


34


137

Acquisition of subsidiary (a)


-


-


-


-


(3,973)












Net cash used in investing activities


(9,121)


(1,572)


(934)


(1,247)


(7,283)












 

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands










Six months ended

June 30,


Three months ended

June 30,


Year ended

December 31,



2014


2013


2014


2013


2013



Unaudited



Cash flows from financing activities:











Receipt of long-term loans from banks


12,927


3,681


1,490


2,333


7,127

Repayment of long-term loans from banks


(4,803)


(5,598)


(2,597)


(2,420)


(10,137)

Repayment of long-term loans from others


(366)


-


(251)


-


-

Proceeds from issuance of shares


10,065


-


6


-


7

Short-term bank credit, net


(2,582)


(1,046)


(1,382)


(670)


563












Net cash provided by (used in) financing activities


15,241


(2,963)


(2,734)


(757)


(2,440)












Effect of exchange rate changes on cash and cash equivalents


(194)


(194)


(227)


(351)


(324)












Increase (decrease) in cash and cash equivalents


8,441


(1,280)


(1,280)


75


(336)

Cash and cash equivalents at the beginning of the period


3,349


3,685


13,070


2,330


3,685












Cash and cash equivalents at the end of the period


$     11,790


$       2,405


$     11,790


$       2,405



$             3,349















 




Six months ended

June 30,


Three months ended

June 30,


Year ended

December 31,




2014


2013


2014


2013


2013




Unaudited



(a)

Acquisition of subsidiary:
























Working capital (Cash and cash equivalent 
     excluded)


$             -


$             -


$             -


$             -


$                       130


Property and equipment


-


-


-


-


2,486


Other intangible assets


-


-


-


-


1,690


Goodwill


-


-


-


-


4,894


Long term loans from banks and others


-


-


-


-


(1,342)


Investment in subsidiary previously accounted for 
     by the equity method


-


-


-


-


(3,885)
















$               -


$                -


$                -


$                -


$                       3,973













(b)

Non cash investing activity:












Issuance of shares in respect of acquisition

of non-controlling interests in subsidiary


11,385


-


-


-


-
















$       11,385


$             -


$              -


$             -


$                   -





























ADDITIONAL INFORMATION

U.S. dollars in thousands








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








Non-GAAP Net Income










Six months ended

June 30


Three months ended

June 30


Year ended

December 31



2014


2013


2014


2013


2013



Unaudited

























GAAP Net income as reported


$          2,417


$          2,436


$              957


$           1,275


$            7,271












Amortization and impairment of 
     intangible assets


567


510


230


129


967

Other expenses of termination costs


-


-


-


-


403

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


-


-


-


-


(3,299)

Stock based compensation  expenses


182


58


133


25


374

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


708


563


356


315


1,700























Non-GAAP Net income


$          3,874


$          3,567


$           1,676


$           1,744


$            7,416

 

 

Adjusted EBITDA



Six months ended

June 30


Three months ended

June 30


Year ended

December 31



2014


2013


2014


2013


2013



Unaudited














GAAP Net income  as reported:


$        2,417


$        2,436


$           957


$        1,275


$            7,271












Loss from discontinued operations, net


-


-


-


-


1,077

Financial expenses, net


812


598


307


260


1,337

Tax on income


1,014


467


414


303


(3,299)

Stock based compensation  expenses


182


58


133


25


374

Depreciation, amortization and 
     impairment of goodwill and 
     intangible assets


2,475


1,913


1,194


830


4,049












Adjusted EBITDA


$           6,900


$           5,472


$           3,005


$           2,693


$          10,809

 

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