Exhibit 1
For Immediate Release
Pointer Telocation Reports
Record First Quarter 2017 Financial Results
Financial Highlights of the Quarter
| · | Record revenues of $19.0 million, up 28% year-over-year; |
| · | Service revenues of $12.3 million, up 33% year-over-year; |
| · | Record EBITDA of $3.1 million, up 48% year-over-year; |
| · | Total subscribers reached 231,000, an increase of 25% year-over-year; |
ROSH HAAYIN, Israel, May 18, 2017 /PRNewswire/ -- Pointer Telocation Ltd. (Nasdaq CM: PNTR; Tel-Aviv Stock Exchange: PNTR) - a leading developer, manufacturer and operator of Mobile Resource Management (MRM) services, announced today its financial results for the first quarter of 2017.
On June 8, 2016 Pointer spun off its Israeli subsidiary, Shagrir Group Vehicle Services Ltd., through which Pointer carried out its road side assistance (RSA) activities and listed Shagrir's shares for trade on the Tel Aviv Stock Exchange. The results of Shagrir until that date are included in Pointer's results as discontinued operation.
Financial summary for the first quarter of 2017
Revenues for the first quarter of 2017 increased 28% to $19.0 million as compared to $14.8 million in the first quarter of 2016.
Revenues from products in the first quarter of 2017 increased 21% to $6.7 million (35% of revenues) compared to $5.5 million (37% of revenues) in the comparable period of 2016.
Revenues from services in the first quarter of 2017 increased 33% to $12.3 million (65% of revenues) compared to $9.3 million (63% of revenues), in the comparable period of 2016. The growth in service revenue was primarily due to the growth in the subscriber base which grew by 46,000 subscribers since March 31, 2016 and 9,000 subscribers since December 31, 2016.
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Gross profit was $9.4 million (49.3% of revenues) compared to $7.4 million (49.6% of revenues) in the first quarter of 2016. The lower margin was primarily due to a lower margin on product revenues due to the mix sold in the quarter.
Operating income on a GAAP basis was $2.3 million (11.9% of revenues), compared with $1.6 million (10.7% of revenues) in the first quarter of 2016.
Non-GAAP operating income was $2.6 million (13.7% of revenues), an increase of 50% compared to $1.7 million (11.7% of revenues) in the first quarter of 2016.
GAAP net income (from continuing operations) was $1.6 million compared with a net income of $1.1 million in the first quarter of 2016.
Non-GAAP net income (from continuing operations) was $2.3 million (12.1% of revenues), an increase of 27%, compared with $1.8 million (12.2% of revenues) in the first quarter of 2016.
EBITDA (from continuing operations) was $3.1 million, an increase of 48% compared with $2.1 million in the fourth quarter of 2016
Management Comment
David Mahlab, Pointer's Chief Executive Officer, commented: “We are very happy with the results of the quarter, which were at record levels across the board, driven primarily by subscriber growth of over 46,000 users since last year and adding 9,000 new subscribers in this quarter. The operating leverage inherent to our SAAS business model allows us to strongly benefit from the growth in the subscriber base, as was demonstrated by the solid improvement in our operating margin in the quarter.”
Mr. Mahlab continued, “We have recently seen a broad increase in interest for safety and driver behavior solutions and for improving fleet efficiencies. As part of this trend, we are in discussions with potential new customers in new territories. In a few cases, it is for providing a similar solution to that which we provided to the Coca-Cola bottling company, Femsa, in Mexico, to improve all aspects of its distribution and driver safety. In other cases, it is for providing a similar solution to that which we provided in New York City for a fleet of over 4,000 for-hire vehicles for driver behavior. Pointer is very well positioned, with the right solutions in place, to capitalize on this increased interest globally.”
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Conference Call Information Pointer Telocation's management will host a conference call today, at 7:00am Pacific Time, 10:00 Eastern Time, 17:00 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 the USA: +1 888 668 9141; From Israel: 03-918-0644; From the UK 0-800-917-5108
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 EBITDA and Non-GAAP net income as Non-GAAP financial performance measurements.
Pointer calculates EBITDA by adding back to net income financial expenses, taxes, depreciation and amortization and impairment of goodwill and intangible assets.
Pointer calculates Non-GAAP net income by adding back to net income the effects of non-cash stock based compensation expenses, amortization and impairment of long lived assets, non-cash tax expenses, other expenses of retirement costs, spin-off related expenses and losses and acquisition related one-time costs.
The purpose of such adjustments is to give an indication of the Company’s performance exclusive of Non-GAAP charges that are considered by management to be outside of the Company’s core operating results.
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. Management believes that these non-GAAP measures help investors to understand the Company’s current and future operating cash flow and performance, especially as the Company’s acquisitions have resulted in amortization and non-cash items that have had a material impact on the Company’s GAAP profits. 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 the Company’s 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
For over 20 years, Pointer has rewritten the rules for the Mobile Resource Management (MRM) market and is a pioneer in the Connected Car segment. Pointer has in-depth knowledge of the needs of this market and has developed a full suite of tools, technology and services to respond to them. The vehicles of the future will be intimately networked with the outside world, enhancing and optimizing the in-car experience.
Pointer’s innovative and reliable cloud-based software-as-a-service (SAAS) platform extracts and captures an organization’s critical mobility data points – from office, drivers, routes, points-of-interest, logistic-network, vehicles, trailers, containers and cargo. The SAAS platform analyzes the raw data converting it into valuable information for Pointer's customers providing them with actionable insights and thus enabling the customers to improve their bottom line and increase their profitably.
For more information, please visit http://www.pointer.com
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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:
Yaniv Dorani, CFO
Tel.: +972-3-572 3111
E-mail: yanivd@pointer.com
Gavriel Frohwein/Ehud Helft, GK Investor Relations
Tel: +1-646-688-3559
E-mail: pointer@gkir.com
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POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
March 31, 2017 | December 31, 2016 | |||||||
| Unaudited | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 5,754 | $ | 6,066 | ||||
| Trade receivables | 12,845 | 11,464 | ||||||
| Other accounts receivable and prepaid expenses | 3,155 | 2,504 | ||||||
| Inventories | 5,485 | 5,242 | ||||||
| Total current assets | 27,239 | 25,276 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Long-term loan to related party | 892 | 831 | ||||||
| Long-term accounts receivable | 618 | 564 | ||||||
| Severance pay fund | 3,129 | 2,878 | ||||||
| Property and equipment, net | 5,843 | 5,614 | ||||||
| Other intangible assets, net | 2,126 | 2,178 | ||||||
| Goodwill | 39,998 | 38,107 | ||||||
| Deferred tax asset | 1,097 | 1,433 | ||||||
| Total long-term assets | 53,703 | 51,605 | ||||||
| Total assets | $ | 80,942 | $ | 76,881 | ||||
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POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
| March 31, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Unaudited | ||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Short-term bank credit and current maturities of long-term loans | $ | 5,008 | $ | 4,836 | ||||
| Trade payables | 6,957 | 7,116 | ||||||
| Deferred revenues and customer advances | 1,162 | 1,037 | ||||||
| Other accounts payable and accrued expenses | 7,570 | 6,839 | ||||||
| Total current liabilities | 20,697 | 19,828 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Long-term loans from banks | 8,809 | 10,182 | ||||||
| Deferred taxes and other long-term liabilities | 1,015 | 976 | ||||||
| Accrued severance pay | 3,530 | 3,206 | ||||||
| Total long term liabilities | 13,354 | 14,364 | ||||||
| COMMITMENTS AND CONTINGENT LIABILITIES | ||||||||
| EQUITY: | ||||||||
| Pointer Telocation Ltd's shareholders' equity: | ||||||||
| Share capital | 5,887 | 5,837 | ||||||
| Additional paid-in capital | 128,576 | 128,438 | ||||||
| Accumulated other comprehensive income | (3,188 | ) | (5,633 | ) | ||||
| Accumulated deficit | (84,558 | ) | (86,115 | ) | ||||
| Total Pointer Telocation Ltd's shareholders' equity | 46,717 | 42,527 | ||||||
| Non-controlling interest | 174 | 162 | ||||||
| Total equity | 46,891 | 42,689 | ||||||
| Total liabilities and equity | $ | 80,942 | $ | 76,881 | ||||
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POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands
Three months ended March 31, | Year ended December 31, | |||||||||||
| 2017 | 2016 | 2016 | ||||||||||
| Unaudited | ||||||||||||
| Revenues: | ||||||||||||
| Products | $ | 6,682 | $ | 5,507 | $ | 22,784 | ||||||
| Services | 12,349 | 9,319 | 41,569 | |||||||||
| Total revenues | 19,031 | 14,826 | 64,353 | |||||||||
| Cost of revenues: | ||||||||||||
| Products | 4,276 | 3,396 | 13,904 | |||||||||
| Services | 5,363 | 4,072 | 18,672 | |||||||||
| Total cost of revenues | 9,639 | 7,468 | 32,576 | |||||||||
| Gross profit | 9,392 | 7,358 | 31,777 | |||||||||
| Operating expenses: | ||||||||||||
| Research and development | 970 | 905 | 3,669 | |||||||||
| Selling and marketing | 3,305 | 2,647 | 11,774 | |||||||||
| General and administrative | 2,748 | 2,133 | 9,004 | |||||||||
| Amortization of intangible assets | 113 | 90 | 473 | |||||||||
| One-time acquisition related costs | - | - | 609 | |||||||||
| Total operating expenses | 7,136 | 5,775 | 25,529 | |||||||||
| Operating income | 2,256 | 1,583 | 6,248 | |||||||||
| Financial expenses (income), net | 160 | (80 | ) | 1,046 | ||||||||
| Other expenses (income) | - | (4 | ) | 9 | ||||||||
| Income before taxes on income | 2,096 | 1,667 | 5,193 | |||||||||
| Taxes on income | 529 | 577 | 1,845 | |||||||||
| Income from continuing operations | 1,567 | 1,090 | 3,348 | |||||||||
| Income from discontinued operation, net | - | 323 | 154 | |||||||||
| Net income | $ | 1,567 | $ | 1,413 | $ | 3,502 | ||||||
| Earnings per share from continuing operations attributable to Pointer Telocation Ltd's shareholders: | ||||||||||||
| Basic net earnings per share | $ | 0.20 | $ | 0.14 | $ | 0.43 | ||||||
| Diluted net earnings per share | $ | 0.19 | $ | 0.14 | $ | 0.42 | ||||||
| Weighted average -Basic number of shares | 7,907,139 | 7,784,654 | 7,820,767 | |||||||||
| Weighted average – fully diluted number of shares | 8,030,787 | 7,914,521 | 7,938,290 | |||||||||
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POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three months ended March 31, | Year ended December 31, | |||||||||||
| 2017 | 2016 | 2016 | ||||||||||
| Unaudited | ||||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 1,567 | $ | 1,413 | $ | 3,502 | ||||||
| Adjustments required to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 850 | 898 | 3,258 | |||||||||
| Accrued interest and exchange rate changes of debenture and long-term loans | - | (216 | ) | 29 | ||||||||
| Accrued severance pay, net | 58 | 47 | 20 | |||||||||
| Gain from sale of property and equipment, net | (18 | ) | (126 | ) | (232 | ) | ||||||
| Stock-based compensation | 111 | 57 | 320 | |||||||||
| Increase in trade receivables, net | (925 | ) | (3,699 | ) | (3,489 | ) | ||||||
| Increase in other accounts receivable and prepaid expenses | (611 | ) | (657 | ) | (942 | ) | ||||||
| Decrease (increase) in inventories | (149 | ) | 236 | (1,063 | ) | |||||||
| Decrease in deferred income taxes | 370 | 790 | 1,774 | |||||||||
| Decrease (increase) in long-term accounts receivable | (71 | ) | (135 | ) | 99 | |||||||
| Increase (decrease) in trade payables | (479 | ) | 1,746 | 3,346 | ||||||||
| Increase in other accounts payable and accrued expenses | 802 | 1,167 | 2,455 | |||||||||
| Net cash provided by operating activities | 1,505 | 1,521 | 9,077 | |||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of property and equipment | (768 | ) | (1,577 | ) | (4,129 | ) | ||||||
| Purchase of other intangible assets | - | - | (115 | ) | ||||||||
| Proceeds from sale of property and equipment | 18 | 476 | 648 | |||||||||
| Acquisition of subsidiary (a) | - | - | (8,531 | ) | ||||||||
| Net cash used in investing activities | (750 | ) | (1,101 | ) | (12,127 | ) | ||||||
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POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three months ended March 31, | Year ended December 31, | |||||||||||
| 2017 | 2016 | 2016 | ||||||||||
| Unaudited | ||||||||||||
| Cash flows from financing activities: | ||||||||||||
| Receipt of long-term loans from banks | - | 210 | 6,263 | |||||||||
| Repayment of long-term loans from banks | (950 | ) | (1,243 | ) | (4,976 | ) | ||||||
| Proceeds from issuance of shares and exercise of options, net of issuance costs | 79 | - | 98 | |||||||||
| Distribution as a dividend in kind of previously consolidated subsidiary (b) | - | - | (1,870 | ) | ||||||||
| Short-term bank credit, net | (281 | ) | 45 | 716 | ||||||||
| Net cash provided (used) in financing activities | (1,152 | ) | (988 | ) | 231 | |||||||
| Effect of exchange rate on cash and cash equivalents | 85 | (124 | ) | (462 | ) | |||||||
| Decrease in cash and cash equivalents | (312 | ) | (692 | ) | (3,281 | ) | ||||||
| Cash and cash equivalents at the beginning of the period | 6,066 | 9,347 | 9,347 | |||||||||
| Cash and cash equivalents at the end of the period- continuing operations | $ | 5,754 | $ | 6,892 | $ | 6,066 | ||||||
| Cash and cash equivalents at the end of the period- discontinued operation | - | $ | 1,763 | - | ||||||||
| Cash and cash equivalents at the end of the period | $ | 5,754 | $ | 8,655 | $ | 6,066 | ||||||
| (a) | Acquisition of subsidiary: | ||||||||||||
| Working capital (Cash and cash equivalent excluded) | $ | - | $ | - | $ | (334 | ) | ||||||
| Property and equipment | - | - | (1,239 | ) | |||||||||
| Intangible assets | - | - | (2,098 | ) | |||||||||
| Goodwill | - | - | (6,070 | ) | |||||||||
| Deferred taxes | - | - | 714 | ||||||||||
| Payables for acquisition of investments in subsidiaries | - | - | 496 | ||||||||||
| $ | - | $ | - | $ | (8,531 | ) | |||||||
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POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three months ended March 31, | Year ended December 31, | ||||||||||||
| 2017 | 2016 | 2016 | |||||||||||
| Unaudited | |||||||||||||
| (b) | Distribution as a dividend in kind of previously consolidated subsidiary: | ||||||||||||
| The subsidiaries' assets and liabilities at date of distribution: | |||||||||||||
| Working capital (excluding cash and cash equivalents) | - | - | (5,443 | ) | |||||||||
| Property and equipment | - | - | 7,048 | ||||||||||
| Goodwill and other intangible assets | - | - | 15,883 | ||||||||||
| Other long term liabilities | - | - | (1,781 | ) | |||||||||
| Non-controlling interest | - | - | 373 | ||||||||||
| Accumulated other comprehensive loss | - | - | (213 | ) | |||||||||
| Dividend in kind | - | - | (17,737 | ) | |||||||||
| $ | - | $ | - | $ | (1,870 | ) | |||||||
| (c) | Non-cash investing activity: | ||||||||||||
| Purchase of property and equipment | $ | 102 | $ | 215 | $ | 48 | |||||||
- - - - - - -
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POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
ADDITIONAL INFORMATION
U.S. dollars in thousands (except share and per share data)
The following table reconciles the GAAP to non-GAAP operating results:
Three months ended March 31, | Year ended December 31, | |||||||||||
| 2017 | 2016 | 2016 | ||||||||||
| GAAP gross profit | $ | 9,392 | $ | 7,358 | $ | 31,777 | ||||||
| Stock-based compensation expenses | 1 | 2 | 6 | |||||||||
| Non-GAAP gross profit | $ | 9,393 | $ | 7,360 | 31,783 | |||||||
| GAAP operating expenses | $ | 7,136 | $ | 5,775 | $ | 25,529 | ||||||
| Stock-based compensation expenses | 110 | 55 | 314 | |||||||||
| Amortization and impairment of long lived assets | 113 | 90 | 473 | |||||||||
| Other expenses of retirement costs | 125 | - | - | |||||||||
| Acquisition related one-time costs | - | - | 609 | |||||||||
| Non-GAAP operating expenses | $ | 6,788 | $ | 5,630 | $ | 24,133 | ||||||
| GAAP operating income | $ | 2,256 | $ | 1,583 | $ | 6,248 | ||||||
| Non-GAAP operating income from continuing operations | $ | 2,605 | $ | 1,730 | $ | 7,650 | ||||||
| GAAP net income from continuing operations | $ | 1,567 | $ | 1,090 | $ | 3,348 | ||||||
| Stock-based compensation expenses | 111 | 57 | 320 | |||||||||
| Amortization and impairment of long lived assets | 113 | 90 | 473 | |||||||||
| Other expenses of retirement costs | 125 | - | - | |||||||||
| Non cash tax expenses | 386 | 577 | 1,723 | |||||||||
| Acquisition related one-time costs | - | - | 609 | |||||||||
| Non-GAAP net income from continuing operations | $ | 2,302 | $ | 1,814 | $ | 6,473 | ||||||
| Income from discontinued operation | - | 323 | 154 | |||||||||
| Non cash tax expenses | - | 158 | 249 | |||||||||
| Spin-off related expenses and losses | - | - | 349 | |||||||||
| Amortization and impairment of long lived assets | - | 39 | 67 | |||||||||
| Non-GAAP net income | $ | 2,302 | $ | 2,334 | $ | 7,292 | ||||||
| Non-GAAP net income from continuing operations per share - Diluted | $ | 0.29 | $ | 0.23 | $ | 0.82 | ||||||
| Non-GAAP weighted average number of shares - Diluted* | 8,030,787 | 7,914,521 | 7,938,290 | |||||||||
* In calculating diluted non-GAAP net income per share, the diluted weighted average number of shares outstanding excludes the effects of stock-based compensation expenses in accordance with FASB ASC 718.
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POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
EBITDA
U.S. dollars in thousands
Three months ended March 31, | Year ended December 31, | |||||||||||
| 2017 | 2016 | 2016 | ||||||||||
| GAAP Net income from continuing operations as reported: | $ | 1,567 | $ | 1,090 | $ | 3,348 | ||||||
| Financial expenses, net | 160 | (80 | ) | 1,046 | ||||||||
| Tax on income | 529 | 577 | 1,845 | |||||||||
| Depreciation, amortization and impairment of goodwill and intangible assets | 850 | 518 | 2,590 | |||||||||
| EBITDA from continuing operations | $ | 3,106 | $ | 2,105 | $ | 8,829 | ||||||
| Income from discontinued operation | - | 323 | 154 | |||||||||
| Financial expenses, net | - | 19 | 47 | |||||||||
| Taxes on income | - | 178 | 249 | |||||||||
| Depreciation, amortization and impairment of goodwill and intangible assets | - | 380 | 668 | |||||||||
| EBITDA | $ | 3,106 | $ | 3,005 | $ | 9,947 | ||||||
- - - - - -
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