UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of September 2015
Commission File Number: 001-13138
Pointer
Telocation Ltd.
(Translation of registrant's name into English)
14 Hamelacha Street, Rosh Ha'ayin, Israel
4809133
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Pointer Telocation Ltd.
Pointer Telocation Ltd. is publishing its unaudited interim consolidated financial statements as well as its Operating and Financial Review and Prospects, as of June 30, 2015.
Exhibits
Exhibit 1 | Pointer Telocation’s consolidated interim financial statements as of June 30, 2015. |
Exhibit 2 | Pointer Telocation’s Operating and Financial Review and Prospects as of June 30, 2015. |
This Form 6-K is being incorporated by reference into all effective registration statements filed by the Registrant under the Securities Act of 1933.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
POINTER TELOCATION LTD. | |
Date: September 24, 2015 | By: /s/ Yossi Ben Shalom |
Yossi Ben Shalom Chairman of the Board of Directors |
Exhibit 1
POINTER TELOCATION LTD. AND SUBSIDIARIES
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2015
IN U.S. DOLLARS
UNAUDITED
INDEX
- - - - - - - - - - - -
POINTER TELOCATION LTD. AND SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, | December 31, | |||||||
2015 | 2014 | |||||||
Unaudited | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 8,447 | $ | 8,557 | ||||
Restricted cash | - | 62 | ||||||
Trade receivables (net of allowance for doubtful accounts of $1,428 and $1,270 at June 30, 2015 and December 31, 2014, respectively) | 19,738 | 19,032 | ||||||
Other accounts receivable and prepaid expenses | 2,416 | 1,853 | ||||||
Inventories | 6,025 | 6,133 | ||||||
Deferred tax asset | 544 | 901 | ||||||
Property and equipment held for sale | 706 | 1,034 | ||||||
Total current assets | 37,876 | 37,572 | ||||||
LONG-TERM ASSETS: | ||||||||
Long-term accounts receivable | 438 | 408 | ||||||
Severance pay fund | 8,662 | 8,609 | ||||||
Property and equipment, net | 9,592 | 10,075 | ||||||
Other intangible assets, net | 1,469 | 1,950 | ||||||
Goodwill | 49,709 | 48,941 | ||||||
Deferred tax asset | 3,185 | 3,449 | ||||||
Total long-term assets | 73,055 | 73,432 | ||||||
Total assets | $ | 110,931 | $ | 111,004 |
The accompanying notes are an integral part of the interim consolidated financial statements.
2 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
June 30, | December 31, | |||||||
2015 | 2014 | |||||||
Unaudited | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Short-term bank credit and current maturities of long-term loans | $ | 5,206 | $ | 7,478 | ||||
Trade payables | 12,070 | 11,460 | ||||||
Deferred revenues and customer advances | 7,085 | 6,420 | ||||||
Other accounts payable and accrued expenses | 8,343 | 8,972 | ||||||
Total current liabilities | 32,704 | 34,330 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Long-term loans from banks | 10,802 | 12,046 | ||||||
Long-term loans from others | 921 | 997 | ||||||
Deferred taxes and other long-term liabilities | 301 | 298 | ||||||
Accrued severance pay | 9,575 | 9,537 | ||||||
Total long term liabilities | 21,599 | 22,878 | ||||||
EQUITY: | ||||||||
Pointer Telocation Ltd's shareholders' equity: | ||||||||
Share capital | ||||||||
Ordinary shares of NIS 3 par value - | ||||||||
Authorized: 8,000,000 unaudited shares at June 30, 2015 and December 31, 2014; Issued and outstanding: 7,701,439 and unaudited 7,688,564 shares at June 30, 2015 and December 31, 2014, respectively | 5,707 | 5,705 | ||||||
Additional paid-in capital | 129,797 | 129,618 | ||||||
Accumulated other comprehensive income | (2,961 | ) | (2,909 | ) | ||||
Accumulated deficit | (72,901 | ) | (75,767 | ) | ||||
Total Pointer Telocation Ltd.'s shareholders' equity | 59,642 | 56,647 | ||||||
Non-controlling interest | (3,014 | ) | (2,851 | ) | ||||
Total equity | 56,628 | 53,796 | ||||||
Total liabilities and equity | $ | 110,931 | $ | 111,004 |
The accompanying notes are an integral part of the interim consolidated financial statements.
3 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
U.S. dollars in thousands (except per share data)
Six months ended June 30, | Three months ended June 30, | Year ended December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2014 | ||||||||||||||||
Unaudited | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Products | $ | 14,256 | $ | 17,170 | $ | 7,173 | $ | 8,054 | $ | 33,099 | ||||||||||
Services | 36,031 | 35,719 | 18,137 | 17,820 | 72,191 | |||||||||||||||
Total revenues | 50,287 | 52,889 | 25,310 | 25,874 | 105,290 | |||||||||||||||
Cost of revenues: | ||||||||||||||||||||
Products | 8,428 | 10,342 | 4,345 | 4,946 | 19,279 | |||||||||||||||
Services | 24,742 | 24,553 | 12,454 | 12,344 | 50,461 | |||||||||||||||
Total cost of revenues | 33,170 | 34,895 | 16,799 | 17,290 | 69,740 | |||||||||||||||
Gross profit | 17,117 | 17,994 | 8,511 | 8,584 | 35,550 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 1,718 | 1,766 | 824 | 908 | 3,390 | |||||||||||||||
Selling and marketing | 5,906 | 5,523 | 3,100 | 2,832 | 11,219 | |||||||||||||||
General and administrative | 5,392 | 5,901 | 2,756 | 2,944 | 11,883 | |||||||||||||||
Other general and administrative expenses | - | - | - | - | 683 | |||||||||||||||
Other income | - | - | - | - | (288 | ) | ||||||||||||||
Amortization of intangible assets | 390 | 567 | 190 | 230 | 994 | |||||||||||||||
Impairment of intangible and tangible assets | - | - | - | - | 1,122 | |||||||||||||||
Total operating expenses | 13,406 | 13,757 | 6,870 | 6,914 | 29,003 | |||||||||||||||
Operating income | 3,711 | 4,237 | 1,641 | 1,670 | 6,547 | |||||||||||||||
Financial expenses, net | 177 | 812 | 371 | 308 | 2,424 | |||||||||||||||
Other expenses (income), net | 14 | (6 | ) | 14 | (9 | ) | 232 | |||||||||||||
Income before taxes on income | 3,520 | 3,431 | 1,256 | 1,371 | 3,891 | |||||||||||||||
Taxes on income | 755 | 1,014 | 355 | 414 | (8,849 | ) | ||||||||||||||
Net income | $ | 2,765 | $ | 2,417 | $ | 901 | $ | 957 | $ | 12,740 |
4 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
U.S. dollars in thousands (except per share data)
Six months ended June 30, | Three months ended June 30, | Year ended December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2014 | ||||||||||||||||
Unaudited | ||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||
Currency translation adjustments of foreign operations | $ | (114 | ) | $ | 367 | $ | 2,497 | $ | 413 | $ | (4,292 | ) | ||||||||
Total comprehensive income | 2,651 | 2,784 | 3,398 | 1,370 | 8,448 | |||||||||||||||
Net Income (loss) attributable to: | ||||||||||||||||||||
Equity holders of the parent | $ | 2,866 | $ | 2,612 | $ | 1,001 | $ | 1,146 | $ | 13,453 | ||||||||||
Non-controlling interests | (101 | ) | (195 | ) | (100 | ) | (189 | ) | (713 | ) | ||||||||||
$ | 2,765 | $ | 2,417 | $ | 901 | $ | 957 | $ | 12,740 | |||||||||||
Total comprehensive income (loss) attributable to: | ||||||||||||||||||||
Equity holders of the parent | $ | 2,814 | $ | 3,151 | $ | 3,539 | $ | 1,575 | $ | 9,088 | ||||||||||
Non-controlling interests | (163 | ) | (367 | ) | (141 | ) | (205 | ) | (640 | ) | ||||||||||
$ | 2,651 | $ | 2,784 | $ | 3,398 | $ | 1,370 | $ | 8,448 | |||||||||||
Earnings per share attributable to Pointer Telocation Ltd.'s shareholders: | ||||||||||||||||||||
Basic net earnings per share | $ | 0.37 | $ | 0.36 | $ | 0.13 | $ | 0.15 | $ | 1.81 | ||||||||||
Diluted net earnings per share | $ | 0.36 | $ | 0.35 | $ | 0.13 | $ | 0.14 | $ | 1.74 |
The accompanying notes are an integral part of the interim consolidated financial statements.
5 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands (except share data)
Pointer Telocation Ltd.'s Shareholders | ||||||||||||||||||||||||||||
Number of shares | Share capital | Additional paid-in capital | Accumulated Other | Accumulated Deficit | Non- controlling interest | Total equity | ||||||||||||||||||||||
Balance as of January 1, 2014 | 5,565,558 | 3,878 | 120,996 | 1,456 | (89,220 | ) | 5,529 | 42,639 | ||||||||||||||||||||
Issuance of share capital (net of issue expenses of USD 383 thousands) | 2,123,006 | 1,827 | 19,615 | - | - | - | 21,442 | |||||||||||||||||||||
Stock-based compensation expenses | - | - | 375 | - | - | - | 375 | |||||||||||||||||||||
Acquisition of non-controlling interests | - | - | (11,368 | ) | - | - | (7,740 | ) | (19,108 | ) | ||||||||||||||||||
Other comprehensive income | - | - | - | (4,365 | ) | - | 73 | (4,292 | ) | |||||||||||||||||||
Net income attributable to Non -controlling interest | - | - | - | - | - | (713 | ) | (713 | ) | |||||||||||||||||||
Net income attributable to Pointer shareholders | - | - | - | - | 13,453 | - | 13,453 | |||||||||||||||||||||
Balance as of December 31, 2014 | 7,688,564 | $ | 5,705 | $ | 129,618 | $ | (2,909 | ) | $ | (75,767 | ) | $ | (2,851 | ) | $ | 53,796 | ||||||||||||
Issuance of share capital | 12,875 | 2 | 5 | - | - | - | 7 | |||||||||||||||||||||
Stock-based compensation expenses | - | - | 174 | - | - | - | 174 | |||||||||||||||||||||
Other comprehensive income | - | - | - | (52 | ) | - | (62 | ) | (114 | ) | ||||||||||||||||||
Net income attributable to Non -controlling interest | - | - | - | - | - | (101 | ) | (101 | ) | |||||||||||||||||||
Net income attributable to Pointer shareholders | - | - | - | - | 2,866 | - | 2,866 | |||||||||||||||||||||
Balance as of June 30, 2015 (unaudited) | 7,701,439 | $ | 5,707 | $ | 129,797 | $ | (2,961 | ) | $ | (72,901 | ) | $ | (3,014 | ) | $ | 56,628 | ||||||||||||
Accumulated other comprehensive income for six month that ended on June 30, 2015: | ||||||||||||||||||||||||||||
Accumulated foreign currency translation differences, net | (2,961 | ) | ||||||||||||||||||||||||||
Accumulated other comprehensive income | $ | (2,961 | ) |
The accompanying notes are an integral part of the interim consolidated financial statements.
6 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands (except share data)
Pointer Telocation Ltd.'s Shareholders | ||||||||||||||||||||||||||||
Number | Additional paid-in | Accumulated other comprehensive | Accumulated | Non- controlling | Total | |||||||||||||||||||||||
of shares | Share capital | capital | income | deficit | interest | equity | ||||||||||||||||||||||
Balance as of January 1, 2014 | 5,565,558 | 3,878 | 120,996 | 1,456 | (89,220 | ) | 5,529 | 42,639 | ||||||||||||||||||||
Issuance of share capital (net of issue expenses of USD 383 thousands) | 2,123,006 | 1,827 | 19,615 | - | - | - | 21,442 | |||||||||||||||||||||
Stock-based compensation expenses | - | - | 175 | - | - | - | 175 | |||||||||||||||||||||
Acquisition of non-controlling interests | - | - | (11,368 | ) | - | - | (7,740 | ) | (19,108 | ) | ||||||||||||||||||
Other comprehensive income | - | - | - | 539 | - | (172 | ) | 367 | ||||||||||||||||||||
Net income attributable to Non -controlling interest | - | - | - | - | - | (195 | ) | (195 | ) | |||||||||||||||||||
Net income attributable to Pointer shareholders | - | - | - | - | 2,612 | - | 2,612 | |||||||||||||||||||||
Balance as of June 30, 2014 (unaudited) | 7,688,564 | $ | 5,705 | $ | 129,418 | $ | 1,995 | $ | (86,608 | ) | $ | (2,578 | ) | $ | 47,932 | |||||||||||||
Accumulated other comprehensive income for six month that ended on June 30, 2014: | ||||||||||||||||||||||||||||
Accumulated foreign currency translation differences, net | 1,995 | |||||||||||||||||||||||||||
Accumulated other comprehensive income | $ | 1,995 |
The accompanying notes are an integral part of the interim consolidated financial statements.
7 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
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, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2014 | ||||||||||||||||
Unaudited | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income | $ | 2,765 | $ | 2,417 | $ | 901 | $ | 957 | $ | 12,740 | ||||||||||
Adjustments required to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 1,985 | 2,475 | 979 | 1,194 | 4,767 | |||||||||||||||
Impairment of tangible and intangible assets | - | - | - | 1,122 | ||||||||||||||||
Gain from a bargain purchase | - | - | - | (288 | ) | |||||||||||||||
Accrued interest and exchange rate changes of debenture and long-term loans | 10 | 9 | 376 | 4 | 17 | |||||||||||||||
Accrued severance pay, net | (38 | ) | 125 | (6 | ) | 138 | 56 | |||||||||||||
Gain from sale of property and equipment, net | (72 | ) | (97 | ) | (38 | ) | (32 | ) | (95 | ) | ||||||||||
Stock-based compensation | 174 | 175 | 83 | 127 | 375 | |||||||||||||||
Decrease in restricted cash | 62 | 16 | - | 1 | 19 | |||||||||||||||
Decrease (Increase) in trade receivables, net | (513 | ) | (1,705 | ) | (10 | ) | 378 | (1,141 | ) | |||||||||||
Increase in other accounts receivable and prepaid expenses | (1,060 | ) | (629 | ) | (1,106 | ) | (69 | ) | (21 | ) | ||||||||||
Increase in inventories | (180 | ) | (217 | ) | (171 | ) | (481 | ) | (462 | ) | ||||||||||
Deferred income taxes | 387 | 804 | 197 | 319 | (9,120 | ) | ||||||||||||||
Decrease (increase) in long-term accounts receivable | 14 | (9 | ) | 12 | (50 | ) | 126 | |||||||||||||
Increase (decrease) in trade payables | 900 | 493 | 837 | 1,117 | (654 | ) | ||||||||||||||
Decrease in other accounts payable and accrued expenses | (291 | ) | (1,342 | ) | (701 | ) | (988 | ) | (1,845 | ) | ||||||||||
Net cash provided by operating activities | 4,143 | 2,515 | 1,353 | 2,615 | 5,596 |
The accompanying notes are an integral part of the interim consolidated financial statements.
8 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
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, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2014 | ||||||||||||||||
Unaudited | ||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Purchase of property and equipment | (1,354 | ) | (2,248 | ) | (769 | ) | (1,094 | ) | (4,458 | ) | ||||||||||
Proceeds from sale of property and equipment | 648 | 867 | 337 | 160 | 1,529 | |||||||||||||||
Acquisition of subsidiary (a) | - | - | - | - | (688 | ) | ||||||||||||||
Proceeds from sale of investments in previously consolidated subsidiaries (b) | - | - | - | - | (41 | ) | ||||||||||||||
Net cash used in investing activities | (706 | ) | (1,381 | ) | (432 | ) | (934 | ) | (3,658 | ) | ||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Receipt of long-term loans from banks | 15,103 | 12,927 | 4,546 | 1,490 | 12,577 | |||||||||||||||
Repayment of long-term loans from banks | (17,729 | ) | (4,803 | ) | (6,335 | ) | (2,597 | ) | (8,986 | ) | ||||||||||
Repayment of long-term loans from shareholders | (32 | ) | (366 | ) | (19 | ) | (251 | ) | (301 | ) | ||||||||||
Proceeds from issuance of shares and exercise of options, net of issuance costs | 6 | 10,065 | - | 6 | 10,074 | |||||||||||||||
Repurchase of shares from non-controlling interests | - | (7,740 | ) | - | - | (7,740 | ) | |||||||||||||
Short-term bank credit, net | (486 | ) | (2,582 | ) | (18 | ) | (1,382 | ) | (1,640 | ) | ||||||||||
Net cash provided by (used in) financing activities | (3,138 | ) | 7,501 | (1,826 | ) | (2,734 | ) | 3,984 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (409 | ) | (194 | ) | 1,098 | (227 | ) | (714 | ) | |||||||||||
Increase (decrease) in cash and cash equivalents | (110 | ) | 8,441 | 193 | (1,280 | ) | 5,208 | |||||||||||||
Cash and cash equivalents at the beginning of the period | 8,557 | 3,349 | 8,254 | 13,070 | 3,349 | |||||||||||||||
Cash and cash equivalents at the end of the period | $ | 8,447 | $ | 11,790 | $ | 8,447 | $ | 11,790 | $ | 8,557 |
The accompanying notes are an integral part of the interim consolidated financial statements.
9 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
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, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2014 | ||||||||||||||||||
Unaudited | ||||||||||||||||||||||
(a) | Acquisition of subsidiary: | |||||||||||||||||||||
Working capital (Cash and cash equivalent excluded) | $ | - | $ | - | $ | - | $ | - | $ | 221 | ||||||||||||
Property and equipment | - | - | - | - | 565 | |||||||||||||||||
Other intangible assets | - | - | - | - | 190 | |||||||||||||||||
Goodwill | - | - | - | - | (288 | ) | ||||||||||||||||
Long term loans from banks and others | - | - | - | - | - | |||||||||||||||||
Investment in subsidiary previously accounted for by the equity method | - | - | - | - | - | |||||||||||||||||
$ | - | $ | - | $ | - | $ | - | $ | 688 | |||||||||||||
(b) | Proceeds from sale of investments in previously consolidated subsidiaries: | |||||||||||||||||||||
The subsidiaries' assets and liabilities at date of sale: | ||||||||||||||||||||||
Working capital (excluding cash and cash equivalents) | $ | - | $ | - | $ | - | $ | - | $ | (18 | ) | |||||||||||
Property and equipment | - | - | - | - | (30 | ) | ||||||||||||||||
Long term loans from banks and others | - | - | - | - | 5 | |||||||||||||||||
Non-controlling interests | - | - | - | - | (125 | ) | ||||||||||||||||
Loss from sale of subsidiaries | - | - | - | - | 209 | |||||||||||||||||
$ | - | $ | - | $ | - | $ | - | $ | 41 | |||||||||||||
(c) | Non-cash activity: | |||||||||||||||||||||
Purchase of property and equipment | $ | 264 | $ | 179 | $ | 208 | $ | 179 | $ | 45 | ||||||||||||
Issuance of shares in respect of acquisition of non-controlling interests in subsidiary | $ | - | $ | 11,368 | $ | - | $ | - | $ | 11,368 | ||||||||||||
(d) | Supplemental disclosure of cash flow activity: | |||||||||||||||||||||
Cash paid during the year for: | ||||||||||||||||||||||
Interest | $ | 414 | $ | 1,900 | $ | 220 | $ | 298 | $ | 2,604 | ||||||||||||
Income taxes | $ | 18 | $ | 238 | $ | 6 | $ | 101 | $ | 367 |
The accompanying notes are an integral part of the interim consolidated financial statements.
10 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
NOTE 1: | SIGNIFICANT ACCOUNTING POLICIES |
a. | Unaudited interim financial information: |
The accompanying consolidated balance sheet as of June 30, 2015, consolidated statements of operations for the three and six months ended June 30, 2015 and 2014 and consolidated statements of cash flows for the three and six months ended June 30, 2015 and 2014 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company's consolidated financial position as of June 30, 2015, the Company's consolidated results of operations for the three and six months ended June 30, 2015 and 2014 and the Company's consolidated cash flows for the three and six months ended June 30, 2015 and 2014.
The balance sheet at December 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.
These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2014 included in the Company's Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission ("SEC") on March 31, 2015.
Results for the three and six months ended June 30, 2015 are not necessarily indicative of results that may be expected for the year ending December 31, 2015.
b. | Use of estimates: |
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. The company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
c. | Principles of consolidation: |
Our consolidated financial statements include the accounts of the Company and its' wholly and majority owned subsidiaries, referred to herein as the group.
Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.
11 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
NOTE 1: | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
d. | Accounting Standards still not effective |
In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. On July 9, 2015, the FASB agreed to delay the effective date by one year. In accordance with the agreed upon delay, the new standard is effective for us beginning in the first quarter of 2018. Early adoption is not permitted. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected a transition method nor have we determined the impact of the new standard on our consolidated condensed financial statements.
12 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
NOTE 2:- | INVENTORIES |
June 30, | December 31, | |||||||
2015 | 2014 | |||||||
Unaudited | ||||||||
Raw materials | $ | 2,459 | $ | 2,696 | ||||
Work in process | 281 | 61 | ||||||
Finished goods | 3,285 | 3,376 | ||||||
$ | 6,025 | $ | 6,133 |
NOTE 3:- | COMMITMENTS AND CONTINGENT LIABILITIES |
a. | Charges: |
As collateral for its liabilities, the Company has recorded floating charges on all of its assets, including the intellectual property and equipment, in favor of banks.
b. | Collateral: |
1. | To secure Shagrir's obligations for providing services to several of its customers, Shagrir provided such customers with a bank guarantee in the amount of approximately $2,832, in effect between January 2015 and December 2018. |
2. | The Company obtained bank guarantees in the amount of $283 in favor of its lessor, customs and customers. |
13 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
NOTE 3:- | COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) |
c. | Royalties: |
The Company has undertaken to pay royalties to the BIRD Foundation ("BIRD"), at the rate of 5% on sales proceeds of products developed with the participation of BIRD up to the amount received, linked to the U.S. dollar. The contingent obligation as of June 30, 2015 is $2,444. No royalties were accrued or paid during 2015 and 2014.
d. | Litigation: |
As of June 30, 2015, several claims were filed against Shagrir, mainly by customers. The claims are in an amount aggregating to approximately $1,801. The substance of the claims is the malfunction of Shagrir's products, which occurred during the ordinary course of business. Shagrir's management, based on the opinion of its legal counsel, is of the opinion that no material costs will arise to Shagrir in respect of these claims. Therefore, Shagrir has not recorded any provision regarding these claims.
e. | Commitments: |
1. | The Company and DBSI Investments Ltd. ("DBSI"), an equity owner in the Company (see Note 6), are parties to a management services agreement pursuant to which DBSI provides management services in consideration of annual management fees of $180. The previous three year agreement commenced on August 1, 2011, and on April 2014, the shareholders of the Company approved an additional three year period commencing August 1, 2015. |
f. | Covenants: |
In respect of the bank loans provided to the Company for the purpose of funding the 2007 acquisition transaction, pursuant to which the Company acquired the activities and assets of Cellocator Ltd. ("Cellocator") and the acquisition of Pointer Brazil and in connection with the utilization of its credit facilities, the Company is required to meet certain financial covenants as follows:
1. | The ratio of the shareholders’ equity to the total consolidated assets will not be less than 20% and the shareholders equity will not be less than $20,000, starting December 31, 2007. |
14 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
NOTE 3:- | COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) |
2. | The ratio of the Company and its subsidiaries' debt (debt to banks, convertible debenture and loans from others that are not subordinated to the bank less cash) to the annual EBITDA will not exceed 4 in 2010 and thereafter. |
3. | The ratio of the Company’s debt (debt to banks, convertible debenture and loans from others was not subordinated to the bank less cash) to the annual EBITDA will not exceed 4.2 in 2013-2014, 3.5 in 2015, 3 in 2016 and 2.5 in 2017 and thereafter. |
As of June 30, 2015, the Company is in compliance, and expects to remain in compliance, with the financial covenants of its credit facilities in 2015.
Under the credit facility (in respect of the loans denominated in NIS) from the bank, Shagrir is required to meet certain financial covenants as follows:
The ratio of the shareholders’ equity, including loans from shareholders, to the total consolidated assets will not be less than 40%, at any time.
As of June 30, 2015, Shagrir is in compliance and expects to remain in compliance with the financial covenants of its credit facility.
g. | In December 2011 one of the Company's Argentinean subsidiaries received a notification from the C.N.C. (Telecommunication Authority Agency) stating that the subsidiary is subject to a new tax (1% over sales related to data transmission) that had not been applicable to the subsidiary in the past. |
As of the issuance of these financial statements, the subsidiary had only answered this notification but plans to appeal in the near future. Management has recorded a provision for the full amount (i.e. capital plus interest of $193).
15 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
NOTE 4:- | NET EARNINGS PER SHARE |
The following table sets forth the computation of basic and diluted net earnings per share from continuing operations:
Six months ended June 30, | Three months ended June 30, | Year ended December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2014 | ||||||||||||||||
Unaudited | ||||||||||||||||||||
Numerator: | ||||||||||||||||||||
Numerator for basic net earnings per share - Net income from continuing operations | $ | 2,866 | $ | 2,612 | $ | 1,001 | $ | 1,146 | $ | 13,453 | ||||||||||
Numerator for diluted net earnings per share - Net income from continuing operations | $ | 2,866 | $ | 2,612 | $ | 1,001 | $ | 1,146 | $ | 13,453 | ||||||||||
Denominator: | ||||||||||||||||||||
Denominator for basic net earnings per share - weighted-average number of shares outstanding (in thousands) | 7,695 | 7,201 | 7,701 | 7,689 | 7,446 | |||||||||||||||
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands) | 7,961 | 7,542 | 7,957 | 8,030 | 7,727 | |||||||||||||||
Basic net earnings per share from continuing operations | $ | 0.37 | $ | 0.36 | $ | 0.13 | $ | 0.15 | $ | 1.81 | ||||||||||
Diluted net earnings per share from continuing operations | $ | 0.36 | $ | 0.35 | $ | 0.13 | $ | 0.14 | $ | 1.74 |
NOTE 5:- | INCOME TAXES |
The effective tax rate for the six months ended June 30, 2015 was 21% as compared to 30% for the six months ended June 30, 2014. The decrease is mainly due to the consolidation of the Brazilian subsidiary in October 2014, whose effective tax rate is 0%.
NOTE 6:- | BALANCES AND TRANSACTIONS WITH RELATED PARTIES |
a. | Balances with related parties: |
June 30, | December 31, | |||||||
2015 | 2014 | |||||||
Unaudited | ||||||||
Other accounts payable and accrued expenses: DBSI (see note 3e(1)) | $ | 53 | $ | 53 |
b. | Transactions with related parties: |
Six months ended June 30, | Three months ended June 30, | Year ended December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2014 | ||||||||||||||||
Unaudited | ||||||||||||||||||||
Management fees to DBSI (see Note 3e(1)) | $ | 45 | $ | 90 | $ | 45 | $ | 45 | $ | 180 |
16 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
NOTE 7:- | SEGMENT INFORMATION |
a. | The following segment identification is identical to the segment used in the latest annual consolidated financial report. |
b. | The following presents segment results of operations for the six months ended June 30, 2015 (unaudited): |
Cellocator segment | MRM segment | RSA segment | Elimination | Total | ||||||||||||||||
Segments revenues | $ | 11,009 | $ | 22,484 | $ | 17,663 | $ | (869 | ) | $ | 50,287 | |||||||||
Segments operating profit | $ | 1,243 | $ | 1,717 | $ | 592 | $ | 159 | $ | 3,711 | ||||||||||
Segments tangible and intangible assets | $ | 8,758 | $ | 26,926 | $ | 22,172 | $ | 3,620 | $ | 61,476 | ||||||||||
Depreciation and amortization | $ | 171 | $ | 1,175 | $ | 639 | $ | - | $ | 1,985 | ||||||||||
Expenditures for assets | $ | 79 | $ | 906 | $ | 369 | $ | - | $ | 1,354 |
c. | The following presents segment results of operations for the six months ended June 30, 2014 (unaudited): |
Cellocator segment | MRM
| RSA | Elimination | Total | ||||||||||||||||
Segments revenues | $ | 11,265 | $ | 28,914 | $ | 18,041 | $ | (5,331 | ) | $ | 52,889 | |||||||||
Segments operating profit (loss) | $ | 1,517 | $ | 4,778 | $ | 768 | $ | (2,826 | ) | $ | 4,237 | |||||||||
Segments tangible and intangible assets | $ | 9,468 | $ | 30,278 | $ | 20,607 | $ | 5,434 | $ | 71,787 | ||||||||||
Depreciation, amortization and impairment expenses | $ | 177 | $ | 1,347 | $ | 951 | $ | - | $ | 2,475 | ||||||||||
Expenditures for assets | $ | 104 | $ | 1,730 | $ | 414 | $ | - | $ | 2,248 |
17 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
NOTE 7:- | SEGMENT INFORMATION (Cont.) |
d. | The following presents segment results of operations for the three months ended June 30, 2015 (unaudited): |
Cellocator segment | MRM segment | RSA segment | Elimination | Total | ||||||||||||||||
Segments revenues | $ | 5,545 | $ | 11,124 | $ | 8,921 | $ | (280 | ) | $ | 25,310 | |||||||||
Segments operating profit | $ | 612 | $ | 730 | $ | 244 | $ | 55 | $ | 1,641 | ||||||||||
Segments tangible and intangible assets | $ | 8,758 | $ | 26,926 | $ | 22,172 | $ | 3,620 | $ | 61,476 | ||||||||||
Depreciation and amortization | $ | 85 | $ | 584 | $ | 310 | $ | - | $ | 979 | ||||||||||
Expenditures for assets | $ | 50 | $ | 466 | $ | 253 | $ | - | $ | 769 |
e. | The following presents segment results of operations for the three months ended June 30, 2014 (unaudited): |
Cellocator segment | MRM segment | RSA segment | Elimination | Total | ||||||||||||||||
Segments revenues | $ | 5,867 | $ | 13,886 | $ | 9,122 | $ | (3,001 | ) | $ | 25,874 | |||||||||
Segments operating profit (loss) | $ | 933 | $ | 900 | $ | 263 | $ | (426 | ) | $ | 1,670 | |||||||||
Segments tangible and intangible assets | $ | 9,468 | $ | 30,278 | $ | 20,607 | $ | 5,434 | $ | 71,787 | ||||||||||
Depreciation, amortization and impairment expenses | $ | 89 | $ | 628 | $ | 477 | $ | - | $ | 1,194 | ||||||||||
Expenditures for assets | $ | 72 | $ | 739 | $ | 283 | $ | - | $ | 1,094 |
18 |
POINTER TELOCATION LTD. AND SUBSIDIARIES
NOTE 7:- | SEGMENT INFORMATION (Cont.) |
f. | The following presents segment results of operations for the year ended December 31, 2014: |
Cellocator segment | MRM segment | RSA segment | Elimination | Total | ||||||||||||||||
Segments revenues | $ | 24,063 | $ | 55,911 | $ | 36,168 | $ | (10,852 | ) | $ | 105,290 | |||||||||
Segments operating profit (loss) | $ | 3,859 | $ | 5,619 | $ | (60 | ) | $ | (2,871 | ) | $ | 6,547 | ||||||||
Segments tangible and intangible assets | $ | 8,679 | $ | 26,878 | $ | 22,038 | $ | 4,405 | $ | 62,000 | ||||||||||
Depreciation, amortization and impairment expenses | $ | 349 | $ | 2,188 | $ | 2,230 | $ | - | $ | 4,767 | ||||||||||
Expenditures for assets | $ | 165 | $ | 2,586 | $ | 1,706 | $ | - | $ | 4,457 |
NOTE | 8:- SUBSEQUENT EVENTS |
1. | On September 3, 2015 the company acquired 26% of the issued share capital of Pointer Mexico. |
Following the completion of the transaction Pointer holds 100% of the issued share capital of Pointer Mexico.
In consideration for the 26% interest in Pointer Mexico, Pointer issued to the Seller an aggregate of 81,081 ordinary shares.
2. | On August 6, 2015, the company received, from the State Revenue Services of São Paulo, a tax deficiency notice against its subsidiary in Brazil, Pointer do Brasil Comercial Ltda., claiming that the vehicle tracking and monitoring services provided by such subsidiary should be classified as telecommunication services and therefore subject to the imposition of State Value Added Tax – ICMS, resulting in an imposition of 25% state value added tax on all revenues of this subsidiary during the period between February 2012 and January 2014. The tax deficiency notice was in the amount of R$9,858,745 (approximately US$2.4 million) plus interest in the amount of R$3,165,599 (approximately US$0.8 million) and penalties in the amount of R$26,666,821 (approximately US$6.4 million). |
Based on the legal advice received, the assessment of company management is that the merits of the case are favorable to the company. As a result, the company has not made any provisions in its consolidated financial statements in respect of the alleged tax deficiency and the imposition of state value added tax as described above.
- - - - - - - - - - - - - - - - - - -
19 |
Exhibit 2
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The information contained in this section should be read in conjunction with (1) our unaudited condensed interim consolidated financial statements as of June 30, 2015 and for the six months then ended and related notes included elsewhere in this report and (2) our consolidated financial statements and related notes included in our Annual Report on Form 20-F for the year ended December 31, 2014 and the other information contained in such Annual Report, particularly the information in Item 5 - “Operating and Financial Review and Prospects”. Our financial statements have been prepared in accordance with generally accepted accounting principles in United States (“US GAAP”).
Forward-Looking Statements
The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The use of the words “may,” “believe,” “will,” “projects,” “expects,” “plans” or “intends,” or words of similar import, identifies a statement as “forward-looking.” The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements are based on the assumption that the Company will not lose a significant customer or customers or experience increased fluctuations of demand or rescheduling of purchase orders, that our markets will be maintained in a manner consistent with our historical experience , that our products will remain accepted within their respective markets and will not be replaced by new technology, that competitive conditions within our markets will not change materially or adversely, that we will retain key technical and management personnel, that our forecasts will accurately anticipate market demand, and that there will be no material adverse change in our operations or business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. In addition, our business and operations are subject to substantial risks which increase the uncertainty inherent in the forward-looking statements. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives or plans will be achieved. Factors that could cause actual results to differ from our expectations or projections include the risks and uncertainties relating to our business described in our annual report on Form 20-F. Except as required by applicable law, including the securities laws of the United States, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
A. | RESULTS OF OPERATIONS |
Six months Ended June 30,
(in thousands of U.S. Dollars – except weighted average number of ordinary shares,
and basic and diluted income per ordinary share)
2015 | 2014 | |
Statement of Income Data: | ||
Revenues:
|
||
Products |
14,256 | 17,170 |
Services | 36,031 | 35,719 |
Total Revenues | 50,287 | 52,889 |
Cost of Revenues: | ||
Products | 8,428 | 10,342 |
Services | 24,742 | 24,553 |
Amortization of intangible assets | - | - |
Total Cost of Revenues | 33,170 | 34,895 |
Gross Profit | 17,117 | 17,994 |
2015 | 2014 | |
Operating Expenses:
|
||
Research and development, net |
1,718 | 1,766 |
Sales and marketing expenses | 5,906 | 5,523 |
General and administrative | 5,392 | 5,901 |
Amortization of intangible assets | 390 | 567 |
Total Operating Expenses | 13,406 | 13,757 |
Total Operating Income | 3,711 | 4,237 |
Financial expenses, net | 177 | 812 |
Other (income) expenses | 14 | 6)) |
Income before tax on income | 3,520 | 3,431 |
Taxes on income | 755 | 1,014 |
Net Income | 2,765 | 2,471 |
Net loss attributable to non-controlling interest | (101) | (195) |
Net Income attributable to Pointer Telocation Ltd. Shareholders | 2,866 | 2,612 |
Basic net earnings per share attributable to Pointer Telocation Ltd. shareholders | 0.37 | 0.36 |
Diluted net earnings per share attributable to Pointer Telocation Ltd. shareholders | 0.36 | 0.35 |
Basic weighted average number of shares outstanding (in thousands) |
7,695 | 7,201 |
Diluted weighted average number of shares outstanding (in thousands) |
7,961 | 7,542 |
Six Months Ended June 30, 2015 Compared with Six Months Ended June
30, 2014
Revenues. Revenues decreased by $2.6 million or 5%, from $52.9 million in the six months ending June 30, 2014 to $50.3 million in the six months ending June 30, 2015.
The revenues from the sale of our products decreased by $2.9 million, or 17%, from $17.2 million in the six months ending June 30, 2014 to $14.3 million in the six months ending June 30, 2015. This decrease is primarily attributable to the absence of two low margin customers.
The revenues from our services increased by $0.3 million, or 0.9%, from $35.7 million in the six months ending June 30, 2014 to $36.0 million in the six months ending June 30, 2015.
The increase was primarily attributable to an increase in recurring revenues from fleet management and stolen vehicle recovery services, partially offset by the devaluation of various local currencies where we have operations against the US dollar.
Revenues from our services in the six months ending June 30, 2015 accounted for 71.7% of our total revenues as compared with 67.5% in the six months ending June 30, 2014.
Cost of Revenues. Our cost of revenues decreased by $1.7 million to $33.2 million for the six months ending June 30, 2015 as compared to $34.9 million for the same period in 2014. This decrease is mainly associated with the decrease in our revenues from products.
Gross Profit. Our gross profit decreased to $17.1 million in the six months ending June 30, 2015, as compared to $18 million for the same period in 2014. As a percentage of total revenues, gross profit accounted for 34% in the six months ending June 30, 2015 approximately the same as in the six months ending June 30, 2014. Our gross margin on products sales in the six months ending June 30, 2015 was 41% compared to 40% in the six months ending June 30, 2014. Despite the decrease of our revenues from products, our margins remained stable, largely as a result of ceasing sales to two customers with low margins. Gross margin for services was approximately 31% in the six months ending June 30, 2015, approximately the same as in the six months ending June 30, 2014.
Research and Development Costs. Research and development expenses were $1.7 million in the six months ending June 30, 2015, comparing to $1.8 million in the six months ending June 30, 2014. We intend to maintain our level of R&D expenditures in order to bring new technologies to the market.
Sales and Marketing Expenses. Sales and marketing costs increased by $0.4 million to $5.9 million in the six months ending June 30, 2015 from $5.5 million in the six months ending June 30, 2014. The increase is mainly due to the increase in sales and marketing efforts, and the consolidation of the South African subsidiary results (commencing October 2014), offset by decrease in expenses linked to currencies which devaluated against the USD.
General and Administrative Expenses. General and administrative expenses decreased by $0.5 million to $5.4 million in the six months ending June 30, 2015 from $5.9 million in the six months ending June 30, 2014. The decrease is mainly due to a decrease in expenses as a result of certain currencies in which we incur expenses being devaluated against the USD which offset other increased expenses related to the consolidation of our South African subsidiary commencing October 2014.
Amortization of Intangible Assets and Impairment of Long Lived Assets. Amortization of intangible assets and impairment of long lived assets was $0.4 million in the six months ending June 30, 2015 compared to $0.6 million in the six months ending June 30, 2014. The decrease is mainly due to the end of the amortization period of certain of our assets and the devaluation of the Brazilian Real against the US dollar.
Operating Profit. As a result of the foregoing, we recorded a $3.7 million operating profit in the six months ending June 30, 2015, compared to an operating profit of $4.2 million in the six months ending June 30, 2014.
Financial Expenses (Net). Financial expenses decreased from $0.8 million in the six months ending June 30, 2014 to $0.2 million in the six months ending June 30, 2015. The decrease is due to the lower net debt to banks in the first six months of 2015 and the impact of our New Israeli Shekel (“NIS”) denominated loans that were linked to the US dollar.
Taxes on income. Taxes on income were $0.8 million in the six months ending June 30, 2015 comparing to $1 million in the six months ending June 30, 2014. The effective tax rate for the six months ended June 30, 2015, was 21% as compared to 30% for the six months ended June 30, 2014. The decrease is mainly due to the consolidation of the South African subsidiary in which the effective tax rate is 0% and the decrease in the tax expenses in our Brazilian subsidiary.
Net Income from continuing operations. We recorded net income of $2.8 million in the six months ending June 30, 2015 compared to a net income of $2.4 million in the six months ending June 30, 2014.
Net loss attributable to non-controlling interests. We recorded net loss attributable to non-controlling interests in the amount of $0.1 million in the six months ending June 30, 2015, compared to $0.2 million net loss attributable to non-controlling interests in the six months ending June 30, 2014.
Net Income attributable to Pointer shareholders. In the six months ending June 30, 2015, we recorded net income attributable to Pointer shareholders of $2.9 million, compared to $2.6 million in the six months ending June 30, 2014.
Impact of Exchange Rate Fluctuations on Results of Operations, Liabilities and Assets
Our results of operations, liabilities and assets were mainly impacted by the fluctuations of exchange rates between the U.S. Dollar and the NIS, Brazilian Real, Argentinean Peso, Mexican Peso, the Euro and the South African Rand.
During the six months ended June 30, 2015, the exchange rate of the U.S. Dollar in relation to the NIS decreased by 3.1%, while the Israeli Consumer Price Index (“CPI”) decreased by 0.2%.During the six months ended June 30, 2014 there was a decrease of 1% in the exchange rate of the U.S. Dollar in relation to the NIS and no change in the CPI.
We believe that the rate of inflation in Israel did not have a material effect on our business to date. However, our U.S. Dollar costs will increase if inflation in Israel exceeds the revaluation of the NIS against the U.S. Dollar.
Regarding our operations of our subsidiary Pointer Do Brasil Comercial Ltda. ("Pointer Brazil") and the fact that most of Pointer Brazil’s revenues are denominated in the Brazilian Real , while our consolidated financial statements are expressed in U.S. dollars, we believe that inflation in Brazil and fluctuations in the exchange rate between the U.S. Dollar and Brazil Real may have a significant effect on the business and overall profitability of Pointer Brazil and, as a consequence, on the results of our operations. From January 1, 2015 to June 30, 2015, the value of the Brazil Real increased by approximately 18.3% against the U.S. dollar. From January 1, 2015 until June 30, 2015, the U.S. Dollar - Brazil Real exchange rate fluctuated between 2.6537 and 3.1403 Real to the Dollar.
Regarding our operations in Argentina and the fact that most of the revenues of our subsidiary Pointer Argentina S.A (“Pointer Argentina”) are denominated in the Argentinean Peso, while our consolidated financial statements are expressed in U.S. dollars, we believe that inflation in Argentina and fluctuations in the exchange rate between the U.S. Dollar and Argentinean Peso may have a significant effect on the business and overall profitability of Pointer Argentina and as a consequence, on the results of our operations. From January 1, 2015 to June 30, 2015, the value of the Argentinean Peso increased by approximately 8% against the U.S. dollar. From January 1, 2015 until June 30, 2015 the U.S. Dollar – Argentinean Peso exchange rate fluctuated between 8.4605 and 9.1376 Pesos to the Dollar.
Regarding our operations of our subsidiary Pointer Recuperation de Mexico S.A. ("Pointer Mexico") and the fact that most of Pointer Mexico’s revenues are denominated in the Mexican Peso, while our consolidated financial statements are expressed in U.S. dollars, we believe that inflation in Mexico and fluctuations in the exchange rate between the U.S. Dollar and Mexican Peso may have a significant effect on the business and overall profitability of our Pointer Mexico and as a consequence, on the results of our operations. From January 1, 2015 to June 30, 2015, the value of the Mexican Peso increased by approximately 6.3% against the U.S. dollar. From January 1, 2015 until June 30, 2015, the U.S. Dollar – Mexican Peso exchange rate fluctuated between 14.7285 and 15.6516 Pesos to the Dollar.
B. | LIQUIDITY AND CAPITAL RESOURCES |
As of June 30, 2015, we had a working capital of $5.2 million, our current assets to current liabilities ratio was 116%, we had cash and cash equivalents of $8.5 million and an unused credit facility of $10.5 million. We believe that we have access to sufficient capital to meet our requirements for at least the next twelve months.
Our credit facilities and loans contain a number of restrictive covenants that limit the operating and financial flexibility of the Company. As of June 30, 2015 we are in compliance with the financial covenants of our credit facilities.
In the six months ended June 30, 2015, net cash provided by our continuing operating activities amounted to $4.1 million as compared to net cash provided from continuing operating activities of $2.5 million in the six months ended June 30, 2014. The increase was primarily attributable to an increase in the working capital in the six months ended June 30, 2015.
In the six months ended June 30, 2015, net cash used in our continuing investment activities was $0.7 million as compared to $1.4 million in the six months ended June 30, 2014. The decrease was primarily attributable to a decrease in the purchase of property and equipment.
In the six months ended June 30, 2015, net cash used in our financing activities was $3.1 million as compared to net cash provided by financing activities of $7.5 million in the six months ended June 30, 2014. The decrease was primarily attributable to repayment of long term loans from banks.
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NET EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2015 |
Jun. 30, 2014 |
Jun. 30, 2015 |
Jun. 30, 2014 |
Dec. 31, 2014 |
|
Numerator: | |||||
Numerator for basic net earnings per share - Net income from continuing operations | $ 1,001 | $ 1,146 | $ 2,866 | $ 2,612 | $ 13,453 |
Numerator for diluted net earnings per share - Net income from continuing operations | $ 1,001 | $ 1,146 | $ 2,866 | $ 2,612 | $ 13,453 |
Denominator: | |||||
Denominator for basic net earnings per share - weighted-average number of shares outstanding | 7,701 | 7,689 | 7,695 | 7,201 | 7,446 |
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises | 7,957 | 8,030 | 7,961 | 7,542 | 7,727 |
Basic net earnings per share from continuing operations | $ 0.13 | $ 0.15 | $ 0.37 | $ 0.36 | $ 1.81 |
Diluted net earnings per share from continuing operations | $ 0.13 | $ 0.14 | $ 0.36 | $ 0.35 | $ 1.74 |
SUBSEQUENT EVENTS (Details Textual) - Subsequent Event [Member] $ in Millions |
1 Months Ended | ||
---|---|---|---|
Sep. 03, 2015
shares
|
Aug. 06, 2015
USD ($)
|
Aug. 06, 2015
BRL
|
|
Subsequent Event [Line Items] | |||
Income Tax Examination, Estimate of Possible Loss | $ 2.4 | BRL 9,858,745 | |
Income Tax Examination, Interest Expense | 0.8 | 3,165,599 | |
Income Tax Examination, Penalties Expense | $ 6.4 | BRL 26,666,821 | |
Income Tax Examination Percentage Of Imposition | 25.00% | 25.00% | |
Pointer Mexico [Member] | |||
Subsequent Event [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 26.00% | ||
Estimated Percentage of Owned of Issued Share Capital | 100.00% | ||
Stock Issued During Period, Shares, Acquisitions | 81,081 |
INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2014 |
Dec. 31, 2014 |
|
Payments of Stock Issuance Costs | $ 383 | $ 383 |
SEGMENT INFORMATION (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - Accumulated other comprehensive income (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2015 |
Jun. 30, 2014 |
---|---|---|
Accumulated foreign currency translation differences, net | $ (2,961) | $ 1,995 |
Accumulated other comprehensive income | $ (2,961) | $ 1,995 |
INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands |
Jun. 30, 2015
USD ($)
shares
|
Jun. 30, 2015
₪ / shares
|
Dec. 31, 2014
USD ($)
shares
|
Dec. 31, 2014
₪ / shares
|
---|---|---|---|---|
Allowance for Doubtful Accounts Receivable, Current | $ | $ 1,428 | $ 1,270 | ||
Ordinary shares, Par or Stated Value Per Share (in dollars per share) | ₪ / shares | ₪ 3 | ₪ 3 | ||
Ordinary shares, Shares Authorized | 8,000,000 | 8,000,000 | ||
Ordinary shares, Shares, Issued | 7,701,439 | 7,688,564 | ||
Ordinary shares, Shares, Outstanding | 7,701,439 | 7,688,564 |
SUBSEQUENT EVENTS |
6 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2015 | ||||||||||
Subsequent Events [Abstract] | ||||||||||
Subsequent Events [Text Block] |
Following the completion of the transaction Pointer holds 100% of the issued share capital of Pointer Mexico. In consideration for the 26% interest in Pointer Mexico, Pointer issued to the Seller an aggregate of 81,081 ordinary shares.
Based on the legal advice received, the assessment of company management is that the merits of the case are favorable to the company. As a result, the company has not made any provisions in its consolidated financial statements in respect of the alleged tax deficiency and the imposition of state value added tax as described above. |
Document And Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2015 | |
Document Information [Line Items] | |
Entity Registrant Name | Pointer Telocation Ltd |
Entity Central Index Key | 0000920532 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Trading Symbol | PNTR |
Document Type | 6-K |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2015 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2015 |
SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2015 | ||||||||
Accounting Policies [Abstract] | ||||||||
Basis of Accounting, Policy [Policy Text Block] |
The accompanying consolidated balance sheet as of June 30, 2015, consolidated statements of operations for the three and six months ended June 30, 2015 and 2014 and consolidated statements of cash flows for the three and six months ended June 30, 2015 and 2014 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company's consolidated financial position as of June 30, 2015, the Company's consolidated results of operations for the three and six months ended June 30, 2015 and 2014 and the Company's consolidated cash flows for the three and six months ended June 30, 2015 and 2014. The balance sheet at December 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2014 included in the Company's Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission ("SEC") on March 31, 2015. Results for the three and six months ended June 30, 2015 are not necessarily indicative of results that may be expected for the year ending December 31, 2015. |
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Use of Estimates, Policy [Policy Text Block] |
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Consolidation, Policy [Policy Text Block] |
Our consolidated financial statements include the accounts of the Company and its' wholly and majority owned subsidiaries, referred to herein as the group. Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation. |
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Accounting Standards Still Not Effective [Policy Text Block] |
In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. On July 9, 2015, the FASB agreed to delay the effective date by one year. In accordance with the agreed upon delay, the new standard is effective for us beginning in the first quarter of 2018. Early adoption is not permitted. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected a transition method nor have we determined the impact of the new standard on our consolidated condensed financial statements. |
INTERIM CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2015 |
Jun. 30, 2014 |
Jun. 30, 2015 |
Jun. 30, 2014 |
Dec. 31, 2014 |
|
Revenues: | |||||
Products | $ 7,173 | $ 8,054 | $ 14,256 | $ 17,170 | $ 33,099 |
Services | 18,137 | 17,820 | 36,031 | 35,719 | 72,191 |
Total revenues | 25,310 | 25,874 | 50,287 | 52,889 | 105,290 |
Cost of revenues: | |||||
Products | 4,345 | 4,946 | 8,428 | 10,342 | 19,279 |
Services | 12,454 | 12,344 | 24,742 | 24,553 | 50,461 |
Total cost of revenues | 16,799 | 17,290 | 33,170 | 34,895 | 69,740 |
Gross profit | 8,511 | 8,584 | 17,117 | 17,994 | 35,550 |
Operating expenses: | |||||
Research and development | 824 | 908 | 1,718 | 1,766 | 3,390 |
Selling and marketing | 3,100 | 2,832 | 5,906 | 5,523 | 11,219 |
General and administrative | 2,756 | 2,944 | 5,392 | 5,901 | 11,883 |
Other general and administrative expenses | 0 | 0 | 0 | 0 | 683 |
Other income | 0 | 0 | 0 | 0 | (288) |
Amortization of intangible assets | 190 | 230 | 390 | 567 | 994 |
Impairment of intangible and tangible assets | 0 | 0 | 0 | 0 | 1,122 |
Total operating expenses | 6,870 | 6,914 | 13,406 | 13,757 | 29,003 |
Operating income | 1,641 | 1,670 | 3,711 | 4,237 | 6,547 |
Financial expenses, net | 371 | 308 | 177 | 812 | 2,424 |
Other expenses (income), net | 14 | (9) | 14 | (6) | 232 |
Income before taxes on income | 1,256 | 1,371 | 3,520 | 3,431 | 3,891 |
Taxes on income | 355 | 414 | 755 | 1,014 | (8,849) |
Net income | 901 | 957 | 2,765 | 2,417 | 12,740 |
Other comprehensive income (loss): | |||||
Currency translation adjustments of foreign operations | 2,497 | 413 | (114) | 367 | (4,292) |
Total comprehensive income | 3,398 | 1,370 | 2,651 | 2,784 | 8,448 |
Net Income (loss) attributable to: | |||||
Equity holders of the parent | 1,001 | 1,146 | 2,866 | 2,612 | 13,453 |
Non-controlling interests | (100) | (189) | (101) | (195) | (713) |
Total | 901 | 957 | 2,765 | 2,417 | 12,740 |
Total comprehensive income (loss) attributable to: | |||||
Equity holders of the parent | 3,539 | 1,575 | 2,814 | 3,151 | 9,088 |
Non-controlling interests | (141) | (205) | (163) | (367) | (640) |
Total comprehensive income | $ 3,398 | $ 1,370 | $ 2,651 | $ 2,784 | $ 8,448 |
Earnings per share attributable to Pointer Telocation Ltd.'s shareholders: | |||||
Basic net earnings per share (in dollars per share) | $ 0.13 | $ 0.15 | $ 0.37 | $ 0.36 | $ 1.81 |
Diluted net earnings per share (in dollars per share) | $ 0.13 | $ 0.14 | $ 0.36 | $ 0.35 | $ 1.74 |
COMMITMENTS AND CONTINGENT LIABILITIES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] |
As collateral for its liabilities, the Company has recorded floating charges on all of its assets, including the intellectual property and equipment, in favor of banks.
The Company has undertaken to pay royalties to the BIRD Foundation ("BIRD"), at the rate of 5% on sales proceeds of products developed with the participation of BIRD up to the amount received, linked to the U.S. dollar. The contingent obligation as of June 30, 2015 is $2,444. No royalties were accrued or paid during 2015 and 2014.
As of June 30, 2015, several claims were filed against Shagrir, mainly by customers. The claims are in an amount aggregating to approximately $1,801. The substance of the claims is the malfunction of Shagrir's products, which occurred during the ordinary course of business. Shagrir's management, based on the opinion of its legal counsel, is of the opinion that no material costs will arise to Shagrir in respect of these claims. Therefore, Shagrir has not recorded any provision regarding these claims.
In respect of the bank loans provided to the Company for the purpose of funding the 2007 acquisition transaction, pursuant to which the Company acquired the activities and assets of Cellocator Ltd. ("Cellocator") and the acquisition of Pointer Brazil and in connection with the utilization of its credit facilities, the Company is required to meet certain financial covenants as follows:
As of June 30, 2015, the Company is in compliance, and expects to remain in compliance, with the financial covenants of its credit facilities in 2015. Under the credit facility (in respect of the loans denominated in NIS) from the bank, Shagrir is required to meet certain financial covenants as follows: The ratio of the shareholders’ equity, including loans from shareholders, to the total consolidated assets will not be less than 40%, at any time. As of June 30, 2015, Shagrir is in compliance and expects to remain in compliance with the financial covenants of its credit facility.
As of the issuance of these financial statements, the subsidiary had only answered this notification but plans to appeal in the near future. Management has recorded a provision for the full amount (i.e. capital plus interest of $193). |
INVENTORIES |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Text Block] |
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INVENTORIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2015 |
Dec. 31, 2014 |
---|---|---|
Inventory [Line Items] | ||
Raw materials | $ 2,459 | $ 2,696 |
Work in process | 281 | 61 |
Finished goods | 3,285 | 3,376 |
Total inventory | $ 6,025 | $ 6,133 |
INVENTORIES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current [Table Text Block] |
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BALANCES AND TRANSACTIONS WITH RELATED PARTIES |
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Related Party Transactions Disclosure [Text Block] |
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NET EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET EARNINGS (LOSS) PER SHARE[Text Block] |
The following table sets forth the computation of basic and diluted net earnings per share from continuing operations:
|
INCOME TAXES |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2015 | |||||
Income Tax Disclosure [Abstract] | |||||
Income Tax Disclosure [Text Block] |
The effective tax rate for the six months ended June 30, 2015 was 21% as compared to 30% for the six months ended June 30, 2014. The decrease is mainly due to the consolidation of the Brazilian subsidiary in October 2014, whose effective tax rate is 0%. |
SEGMENT INFORMATION |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] |
|
BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] |
|
INCOME TAXES (Details Textual) |
6 Months Ended | |
---|---|---|
Jun. 30, 2015 |
Jun. 30, 2014 |
|
Income Tax Disclosure [Line Items] | ||
Effective Income Tax Rate Reconciliation, Percent | 21.00% | 30.00% |
Secretariat of the Federal Revenue Bureau of Brazil [Member] | ||
Income Tax Disclosure [Line Items] | ||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 0.00% |
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SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2015 | |||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||
Significant Accounting Policies [Text Block] |
The accompanying consolidated balance sheet as of June 30, 2015, consolidated statements of operations for the three and six months ended June 30, 2015 and 2014 and consolidated statements of cash flows for the three and six months ended June 30, 2015 and 2014 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company's consolidated financial position as of June 30, 2015, the Company's consolidated results of operations for the three and six months ended June 30, 2015 and 2014 and the Company's consolidated cash flows for the three and six months ended June 30, 2015 and 2014. The balance sheet at December 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2014 included in the Company's Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission ("SEC") on March 31, 2015. Results for the three and six months ended June 30, 2015 are not necessarily indicative of results that may be expected for the year ending December 31, 2015.
Our consolidated financial statements include the accounts of the Company and its' wholly and majority owned subsidiaries, referred to herein as the group. Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.
In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. On July 9, 2015, the FASB agreed to delay the effective date by one year. In accordance with the agreed upon delay, the new standard is effective for us beginning in the first quarter of 2018. Early adoption is not permitted. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected a transition method nor have we determined the impact of the new standard on our consolidated condensed financial statements. |
BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2015 |
Jun. 30, 2014 |
Jun. 30, 2015 |
Jun. 30, 2014 |
Dec. 31, 2014 |
|
Accounts Payable and Accrued Liabilities [Abstract] | |||||
Other accounts payable and accrued expenses: DBSI (see note 3e(1)) | $ 53 | $ 53 | $ 53 | ||
Management fees to DBSI (see Note 3e(1)) | $ 45 | $ 45 | $ 45 | $ 90 | $ 180 |
NET EARNINGS PER SHARE (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of basic and diluted net earnings per share from continuing operations:
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