6-K

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 November 2011

Commission File Number: 001-13138

Pointer Telocation Ltd.

(Translation of registrant's name into English)

14 Hamelacha Street, Rosh Ha'ayin, Israel 48091

(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 xForm 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): ____

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes oNo x

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________

Pointer Telocation Ltd.

On November 30, 2011, the Registrant announced its financial results for nine and three month period ending September 30, 2011 and issued its unaudited interim consolidated financial statements as of September 30, 2011 and for the nine and three months periods then ended. Attached hereto are the following exhibits:

Exhibit 99.1	Registrant's press release dated November 30, 2011
Exhibit 99.2	Registrant’s unaudited condensed interim consolidated financial statements as of September 30, 2011 and for the nine and three months periods then ended
Exhibit 99.3	Management’s Discussion and Analysis of Financial Condition and   Results of Operations

This Form 6-K, including all exhibits hereto, is hereby incorporated by reference into all effective registration statements filed by us under the Securities Act of 1933.

Signatures

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.

      Date: November 30, 2011 POINTER TELOCATION LTD.   By: /s/ Yossi Ben Shalom —————————————— Yossi Ben Shalom Chairman of the Board of Directors

EX-99.1

Exhibit 99.1

For Immediate Release

Pointer Telocation Reports Q3 2011 Financial Results

· Record Revenues of $65.5M in first nine months of 2011, increase of 22% over 2010  

· Non-GAAP net income for Q3 2011 $1.1M

ROSH HAAYIN, Israel, November 30, 2011 - Pointer Telocation Ltd.(Nasdaq CM: PNTR, TASE: PNTR) - a leading developer, manufacturer and operator of Mobile Resource Management (MRM) and roadside assistance services for the automotive industry, announced today its financial results for the third quarter of 2011.

David Mahlab, Chief Executive Officer of Pointer, commented on the results: "We are pleased to report continuous growth in revenues and services in the third quarter, resulting from the increase in our business in Latin America and Israel. Our business in Brazil serves as a growth engine and we expect this momentum to continue in the coming quarters. We also expect an additional increase in our revenues from services in Israel. Nevertheless, the uncertainties in Europe and the global market, the high US Dollar exchange rate vs. the Israeli Shekel, and the tax increases expected in Israel tax rates in 2012, are all likely to affect the company's future financial results, and will require us to make adjustments to meet the challenging market conditions in the fourth quarter and in 2012. During 2011, Pointer continued to develop new products and penetrated new markets to reinforce and expand its customer base, consequently, we are confident that in the long run, this strategy will bear fruit, including improvements in our bottom line".

Financial Highlights

Revenues: Pointer's revenues for the third quarter of 2011 increased 21% to $22.3 million, as compared to $18.5 million in the third quarter of 2010. In the first nine months of 2011, revenues increased 22% to $65.5 million, as compared to $53.5 million in the first nine months of 2010.

International activities for the third quarter and for the first nine months of 2011 were 28% of total revenues, as compared to 26% of total revenues in the first nine months of 2010.

Revenues from products in the third quarter of 2011 increased 29% to $8.3 million (37% of revenues), as compared to $6.4 million (35% of revenues) in the third quarter of 2010. Revenues from products in the first nine months of 2011 increased 38% to $24.1 million (37% of revenues), as compared to $17.5 million (33% of revenues) in the first nine months of 2010.

Pointer's revenues from services in the third quarter of 2011 increased 16% to $14 million (63% of revenues), up from $12.1 million (65% of revenues), in the comparable period of 2010. Revenues from services in the first nine months of 2011 increased 15% to $41.4 million (63% of revenues), compared to $36.1 million (67% of revenues) in the first nine months of 2010.

Gross Profit: In the third quarter of 2011, gross profit increased 12% to $7.6 million from $6.8 million in the third quarter of 2010. In the first nine months of 2011 gross profit was $23.1 million, an increase of 15% as compared to gross profit of $20.1 million in the first nine months of 2010.

Operating Income: In the third quarter of 2011, operating income was $1.2 million, compared to $1.7 million in the third quarter of 2010. Operating income in the first nine months of 2011 was $4 million compared to operating income of $5.3 million in the first nine months of 2010.

Net Income: Pointer recorded net loss for the third quarter of 2011 of $188 thousand or $0.04 diluted net loss per share, compared to a net income of $438 thousand or $0.09 diluted net income per share in the third quarter of 2010.

Non-GAAP net income for the third quarter of 2011 was $1.1 million, compared to $ 1.4 million in the third quarter of 2010. Non-GAAP net income for the first nine months of 2011 was $3.5 million, compared to $4.2 million in the first nine months of 2010.

Adjusted EBITDA: Pointer's adjusted EBITDA for the third quarter of 2011 was $2.4 million, as compared to $2.8 million in the comparable period in 2010. Pointer's adjusted EBITDA for the first nine months of 2011 was $8 million, as compared to $8.6 million in the first nine months of 2010.

Conference Call Information:

Pointer Telocation's management will host today, Wednesday, November 30, 2011 a conference call with the investment community to review and discuss the financial results, and will also be available to answer questions.

The conference call will commence at 09:30 AM EST, 4:30 PM Israel time.

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

From USA 1-888-668-9141; From Israel: 03-918-0609

A replay will be available from December 1st, 2011 on the Company’s website: www.pointer.com

Reconciliation between results on a GAAP and Non-GAAP basis:

Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Condensed Interim Consolidated Statements of Cash Flows.

Pointer uses adjusted EBITDA and non-GAAP net income as a non-GAAP financial performance measurement.

We calculate adjusted EBITDA by adding back to net income, financial expenses, taxes, depreciation, a non-recurring expense of $0.5 million, attributable to the Company's efforts to expand various services to Israeli insurance companies, and amortization including the effect of non-cash impairment charge related to the fair market value of Cellocator.

We calculate non-GAAP net income by adding back to net income, non-cash equity based compensation, amortization of intangibles related to acquisitions and non-cash tax expenses resulting from timing differences relating to the amortization of acquisition-related intangible assets and goodwill.

The purpose of such adjustments is to give an indication of our performance exclusive of non-GAAP charges that are considered by management to be outside of our core operating results.

Adjusted EBITDA and non-GAAP net income are provided to investors to complement results provided in accordance with GAAP, as management believes the measure helps illustrate underlying operating trends in the Company's business and uses the measure to establish internal budgets and goals, manage the business and evaluate performance. We believe that these non-GAAP measures help investors to understand our current and future operating cash flow and performance, especially as our three most recent acquisitions have resulted in amortization and non-cash items that have had a material impact on our GAAP profits. Adjusted EBITDA and non GAAP net income should not be considered in isolation or as a substitute for comparable measures calculated and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.

About Pointer Telocation:

Pointer Telocation is a leading provider of technology and services to the automotive and insurance industries, offering a set of services including Road Side Assistance, Stolen Vehicle Recovery and Fleet Management. Pointer has a growing list of customers and products installed in more than 45 countries. Cellocator, a Pointer Products Division, is a leading AVL (Automatic Vehicle Location) solutions provider for stolen vehicle retrieval, fleet management, car & driver safety, public safety, vehicle security and more. The Company's top management and the development center are located in the Afek Industrial Area of Rosh Ha'ayin, Israel.

For more information: http://www.pointer.com

Forward Looking Statements

This press release contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of the Company. The words "believe," "expect," "anticipate," "intend," "seems," "plan," "aim," "should" and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of the Company with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in the markets in which the Company operates and in general economic and business conditions, loss or gain of key customers and unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this press release. Various risks and uncertainties may affect the Company and its results of operations, as described in reports filed by the Company with the Securities and Exchange Commission from time to time. The Company does not assume any obligation to update these forward-looking statements.

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

IN U.S. DOLLARS

UNAUDITED

INDEX

	Page
Interim Consolidated Balance Sheets	2 - 3
Interim Consolidated Statements of Operations	4
Interim Consolidated Statements of Cash Flows	5 - 6
Additional information	7

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

	September 30,		December 31,
	2011		2010
	Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,156	$	2,233
Restricted cash		126		133
Trade receivables		16,560		13,914
Other accounts receivable and prepaid expenses		2,355		2,982
Inventories		4,924		3,739
Total current assets		25,121		23,001
LONG-TERM ASSETS:
Long-term accounts receivable		709		832
Severance pay fund		7,475		7,624
Property and equipment, net		11,484		11,255
Investment in affiliate		515		295
Other intangible assets, net		4,287		6,497
Goodwill		51,942		53,926
Total long-term assets		76,412		80,429
Total assets	$	101,533	$	103,430

The accompanying notes are an integral part of the interim consolidated financial statements.

2

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS

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

	September 30,			December 31,
	2011			2010
	Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities of long-term loans	$	12,846		$	13,170
Trade payables		11,233			10,064
Deferred revenues and customer advances		8,257			7,806
Other accounts payable and accrued expenses		7,360			7,054
Total current liabilities		39,696			38,094
LONG-TERM LIABILITIES:
Long-term loans from banks		8,582			11,526
Long-term loans from shareholders and others		952			957
Other long-term liabilities		1,598			842
Accrued severance pay		8,713			8,365
		19,845			21,690
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY:
Pointer Telocation Ltd’s shareholders' equity:
Share capital -
Ordinary shares of NIS 3 par value -
Authorized: 8,000,000 shares at September 30, 2011 and December 31, 2010; Issued and outstanding: 4,785,848 and 4,771,181 shares at September 30, 2011 and December 31, 2010, respectively		3,293			3,280
Additional paid-in capital		118,811			118,512
Accumulated other comprehensive income		1,577			3,292
Accumulated deficit		(87,978	)		(88,216	)
Total Pointer Telocation Ltd’s shareholders' equity		35,703			36,868
Non-controlling interest		6,289			6,778
Total equity		41,992			43,646
Total liabilities and shareholders' equity	$	101,533		$	103,430

The accompanying notes are an integral part of the interim consolidated financial statements.

3

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Nine months ended September 30,				Three months ended September 30,					Year ended December 31,
	2011		2010		2011			2010		2010
	Unaudited
Revenues:
Products	$	24,084	$	17,464	$	8,287		$	6,423	$	25,415
Services		41,429		36,114		14,046			12,104		48,448
Total revenues		65,513		53,578		22,333			18,527		73,863
Cost of revenues:
Products		13,784		9,578		4,894			3,358		14,175
Services		27,858		23,125		9,610			8,166		31,264
Amortization of intangible assets		733		738		244			246		978
Total cost of revenues		42,375		33,441		14,748			11,770		46,417
Gross profit		23,138		20,137		7,585			6,757		27,446
Operating expenses:
Research and development		2,290		1,779		783			613		2,532
Selling and marketing		6,839		5,420		2,493			1,795		7,441
General and administrative		8,579		6,295		2,612			2,231		9,062
Amortization of intangible assets		1,383		1,319		459			430		1,774
Total operating expenses		19,091		14,813		6,347			5,069		20,809
Operating income		4,047		5,324		1,238			1,688		6,637
Financial expenses, net		1,370		1,516		520			522		1,976
Other expenses, net		92		23		101			-		21
Income before taxes on income		2,585		3,785		617			1,166		4,640
Taxes on income		950		1,323		257			331		1,524
Income after taxes on income		1,635		2,462		360			835		3,116
Equity in losses of affiliate		1,069		836		271			295		1,158
Net income		566		1,626		89			540		1,958
Less - net income attributable to non-controlling interest		328		836		277			102		828
Net income (loss) attributable to Pointer Telocation Ltd. shareholders	$	238	$	790	$	(188	)	$	438	$	1,130
Earnings per share attributable to Pointer Telocation Ltd's shareholders:
Basic net earnings (loss) per share	$	0.05	$	0.17	$	(0.04	)	$	0.09	$	0.24
Diluted net earnings (loss) per share	$	0.04	$	0.15	$	(0.04	)	$	0.09	$	0.22

The accompanying notes are an integral part of the interim consolidated financial statements.

4

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Nine months ended September 30,						Three months ended September 30,						Year ended December 31,
	2011			2010			2011			2010			2010
	Unaudited
Cash flows from operating activities:
Consolidated net income	$	566		$	1,626		$	89		$	540		$	1,958
Adjustments required to reconcile consolidated net income to net cash provided by operating activities:
Depreciation, amortization and impairment		4,646			4,160			1,578			1,419			5,568
Accrued interest and exchange rate changes of debenture and long-term loans		100			95			6			34			178
Accrued severance pay, net		552			(187	)		202			(132	)		(364	)
Gain from sale of property and equipment, net		(138	)		(68	)		(85	)		(30	)		(93	)
Equity in losses of affiliate		1,069			836			271			295			1,158
Stock-based compensation expenses		352			94			122			22			121
Increase in restricted cash		7			-			3			-			(133	)
Increase in trade receivables, net		(3,170	)		(3,090	)		510			(708	)		(1,618	)
Decrease (increase) in other accounts receivable and prepaid expenses		287			(990	)		406			322			(436	)
Increase in inventories		(1,244	)		(2,107	)		(756	)		(587	)		(1,964	)
Write-off of inventories		66			-			28			-			(212	)
Deferred income taxes		58			1,241			90			334			185
Increase in long-term accounts receivable		271			(479	)		(68	)		(68	)		1,322
Increase in trade payables		1,719			2,040			963			1,190			981
Increase (decrease) in other accounts payable and accrued expenses		2,217			374			(423	)		(514	)		(127	)
Net cash provided by operating activities		7,358			3,545			2,936			2,117			6,524
Cash flows from investing activities:
Purchase of property and equipment		(3,931	)		(2,931	)		(1,322	)		(993	)		(4,481	)
Proceeds from sale of property and equipment		676			440			405			84			641
Proceeds from sale of investments in previously consolidated subsidiaries (a)		40			-			40			-			-
Investments in affiliate		(1,496	)		(900	)		(390	)		(420	)		(1,490	)
Net cash used in investing activities		(4,711	)		(3,391	)		(1,267	)		(1,329	)		(5,330	)
Cash flows from financing activities:
Receipt of long-term loans from banks		6,232			3,180			(16	)		1,851			57
Repayment of long-term loans from banks		(6,096	)		(4,202	)		(1,607	)		(919	)		(7,016	)
Repayment of long-term loans from shareholders and others		(1,061	)		(1,134	)		(1,039	)		(1,115	)		(1,122	)
Receipt of long-term loans from shareholders and others		-			43			-			-			5,090
Proceeds from issuance of shares and exercise of options, net		48			57			15			-			-
Dividend paid to the non-controlling interest		(896	)		(1,170	)		-			-			(2,250	)
Short-term bank credit, net		(1,631	)		1,257			259			(2,257	)		2,656
Net cash used in financing activities		(3,404	)		(1,969	)		(2,388	)		(2,440	)		(2,585	)
Effect of exchange rate changes on cash and cash equivalents		(320	)		293			(388	)		141			415
Decrease in cash and cash equivalents		(1,077	)		(1,522	)		(1,107	)		(1,511	)		(976	)
Cash and cash equivalents at the beginning of the period		2,233			3,209			2,263			3,198			3,209
Cash and cash equivalents at the end of the period	$	1,156		$	1,687		$	1,156		$	1,687		$	2,233

The accompanying notes are an integral part of the interim consolidated financial statements.

5

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

		Nine months ended September 30,					Three months ended September 30,					Year ended December 31,
		2011			2010		2011			2010		2010
		Unaudited
(a)	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)	$	281		$	-	$	281		$	-	$	-
	Non-controlling interests		(432	)		-		(432	)		-		-
	Gain from sale of subsidiaries Receivables for sale of investments in subsidiaries		111			-		111			-		-
		$	40		$	-	$	40		$	-	$	-

6

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

ADDITIONAL INFORMATION

U.S. dollars in thousands

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

Non GAAP Net income

	Nine months ended September 30				Three months ended September 30				Year ended December 31
	2011		2010		2011		2010		2010
	Unaudited
GAAP Net income as reported:	$	566	$	1,626	$	89	$	540	$	1,958
Amortization of intangible assets		2,116		2,057		703		676		2,752
Stock based compensation expenses		352		94		122		22		121
non-cash tax expenses resulting from timing differences relating to the amortization of acquisition-related intangible assets and goodwill		479		451		163		150		604
Non-GAAP Net income	$	3,513	$	4,228	$	1,077	$	1,388	$	5,435

Adjusted EBITDA

	Nine months ended September 30				Three months ended September 30				Year ended December 31
	2011		2010		2011		2010		2010
	Unaudited
GAAP Net income as reported:	$	566	$	1,626	$	89	$	540	$	1,958
One time charge attributable to efforts to expand services to Israeli insurance companies		486		-		-		-		-
Financial expenses, net		1,370		1,516		520		522		1,976
Tax on income		950		1,323		257		331		1,524
Depreciation and amortization		4,646		4,160		1,578		1,419		5,568
Non-GAAP Adjusted EBITDA	$	8,018	$	8,625	$	2,444	$	2,812	$	11,026

7

EX-99.2

Exhibit 99.2

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2011

IN U.S. DOLLARS

UNAUDITED

INDEX

	Page
Interim Consolidated Balance Sheets	F-2 - F-3
Interim Consolidated Statements of Operations	F-4
Interim Statements of Changes in Shareholders' Equity	F-5 - F-6
Interim Consolidated Statements of Cash Flows	F-7 - F-8
Notes to Interim Consolidated Financial Statements	F-9 - F-19

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

	September 30,		December 31,
	2011		2010
	Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,156	$	2,233
Restricted cash		126		133
Trade receivables		16,560		13,914
Other accounts receivable and prepaid expenses		2,355		2,982
Inventories		4,924		3,739
Total current assets		25,121		23,001
LONG-TERM ASSETS:
Long-term accounts receivable		709		832
Severance pay fund		7,475		7,624
Property and equipment, net		11,484		11,255
Investment in affiliate		515		295
Other intangible assets, net		4,287		6,497
Goodwill		51,942		53,926
Total long-term assets		76,412		80,429
Total assets	$	101,533	$	103,430

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 2

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS

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

	September 30,			December 31,
	2011			2010
	Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities of long-term loans	$	12,846		$	13,170
Trade payables		11,233			10,064
Deferred revenues and customer advances		8,257			7,806
Other accounts payable and accrued expenses		7,360			7,054
Total current liabilities		39,696			38,094
LONG-TERM LIABILITIES:
Long-term loans from banks		8,582			11,526
Long-term loans from shareholders and others		952			957
Other long-term liabilities		1,598			842
Accrued severance pay		8,713			8,365
		19,845			21,690
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY:
Pointer Telocation Ltd's shareholders' equity:
Share capital -
Ordinary shares of NIS 3 par value -
Authorized: 8,000,000 shares at September 30, 2011 and December 31, 2010; Issued and outstanding: 4,785,848 and 4,771,181 shares at September 30, 2011 and December 31, 2010, respectively		3,293			3,280
Additional paid-in capital		118,811			118,512
Accumulated other comprehensive income		1,577			3,292
Accumulated deficit		(87,978	)		(88,216	)
Total Pointer Telocation Ltd's shareholders' equity		35,703			36,868
Non-controlling interest		6,289			6,778
Total equity		41,992			43,646
Total liabilities and shareholders' equity	$	101,533		$	103,430

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 3

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Nine months ended September 30,				Three months ended September 30,					Year ended December 31,
	2011		2010		2011			2010		2010
	Unaudited
Revenues:
Products	$	24,084	$	17,464	$	8,287		$	6,423	$	25,415
Services		41,429		36,114		14,046			12,104		48,448
Total revenues		65,513		53,578		22,333			18,527		73,863
Cost of revenues:
Products		13,784		9,578		4,894			3,358		14,175
Services		27,858		23,125		9,610			8,166		31,264
Amortization of intangible assets		733		738		244			246		978
Total cost of revenues		42,375		33,441		14,748			11,770		46,417
Gross profit		23,138		20,137		7,585			6,757		27,446
Operating expenses:
Research and development		2,290		1,779		783			613		2,532
Selling and marketing		6,839		5,420		2,493			1,795		7,441
General and administrative		8,579		6,295		2,612			2,231		9,062
Amortization of intangible assets		1,383		1,319		459			430		1,774
Total operating expenses		19,091		14,813		6,347			5,069		20,809
Operating income		4,047		5,324		1,238			1,688		6,637
Financial expenses, net		1,370		1,516		520			522		1,976
Other expenses, net		92		23		101			-		21
Income before taxes on income		2,585		3,785		617			1,166		4,640
Taxes on income (Note 6)		950		1,323		257			331		1,524
Income after taxes on income		1,635		2,462		360			835		3,116
Equity in losses of affiliate		1,069		836		271			295		1,158
Net income		566		1,626		89			540		1,958
Less - net income attributable to non-controlling interest		328		836		277			102		828
Net income (loss) attributable to Pointer Telocation Ltd. shareholders	$	238	$	790	$	(188	)	$	438	$	1,130
Earnings per share attributable to Pointer Telocation Ltd's shareholders:
Basic net earnings (loss) per share (Note 5)	$	0.05	$	0.17	$	(0.04	)	$	0.09	$	0.24
Diluted net earnings (loss) per share (Note 5)	$	0.04	$	0.15	$	(0.04	)	$	0.09	$	0.22

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 4

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

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

			Pointer Telocation Ltd.'s Shareholders
	Number of		Share		Additional paid-in			Accumulated other comprehensive			Accumulated			Non- controlling			Comprehensive			Total
	shares		capital		capital			income			deficit			interest			income			equity
Balance as of January 1, 2010		4,752,931	$	3,266	$	118,348		$	1,541		$	(89,346	)	$	7,670					$	41,479
Issuance of shares in respect of Stock-based compensation		18,250		14		43			-			-			-						57
Stock-based compensation expenses		-		-		121			-			-			-						121
Dividend paid to non-controlling interest		-		-		-			-			-			(2,250	)					(2,250	)
Comprehensive income:
Foreign currency translation adjustments		-		-		-			1,598			-			530		$	2,128			2,128
Realized gains on derivativesdesignated as cash flow hedges		-		-		-			29			-			-			29			29
Unrealized gains on derivativesdesignated as cash flow hedges		-		-		-			124			-			-			124			124
Net income		-		-		-			-			1,130			828			1,958			1,958
Total comprehensive income																	$	4,239
Balance as of December 31, 2010		4,771,181		3,280		118,512			3,292			(88,216	)		6,778						43,646
Issuance of shares in respect of Stock-based compensation		14,667		13		35			-			-			-						48
Stock-based compensation expenses		-		-		352			-			-			-						352
Dividend paid to non-controlling interest		-		-		-			-			-			(896	)					(896	)
Exercise of options in subsidiary		-		-		(88	)		-			-			88						-
Sale of subsidiary		-		-		-			-			-			432						432
Comprehensive income:
Foreign currency translation adjustments		-		-		-			(1,429	)		-			(441	)	$	(1,870	)		(1,870	)
Realized losses on derivativesdesignated as cash flow hedges		-		-		-			(248	)		-			-			(248	)		(248	)
Unrealized losses on derivativesdesignated as cash flow hedges		-		-		-			(38	)		-			-			(38	)		(38	)
Net income		-		-		-			-			238			328			566			566
Total comprehensive income																	$	1,590
Balance as of September 30, 2011 (unaudited)		4,785,848		3,293		118,811			1,577			(87,978	)		6,289						41,992

Accumulated other comprehensive income for nine month that ended on September 30, 2011:

Accumulated loss on derivative instruments	$	(118	)
Accumulated foreign currency translation differences, net		1,695
Accumulated other comprehensive income	$	1,577

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 5

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

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

			Pointer Telocation Ltd. shareholders
	Number of		Share		Additional paid-in		Receipts on account		Accumulated other comprehensive			Accumulated			Non-controlling			Comprehensive			Total
	shares		capital		capital		of shares		income (loss)			deficit			interest			income			equity
Balance as of January 1, 2010		4,752,931	$	3,266	$	118,348	$	-	$	1,541		$	(89,346	)	$	7,670					$	41,479
Stock-based compensation expenses		-		-		94		-		-			-			-						94
Issuance of share capital to employees resulting from exercise of options		18,250		14		44		-		-			-			-						58
Dividend paid to the non-controlling interest		-		-		-		-		-			-			(1,170	)					(1,170	)
Comprehensive income:													-
Foreign currency translation adjustments		-		-		-		-		838			-			230		$	1,068			1,068
Realized losses on derivativesdesignated as cash flow hedges		-		-		-		-		(12	)		-			-			(12	)		(12	)
Unrealized gains on derivativesdesignated as cash flow hedges		-		-		-		-		117			-			-			117			117
Net income		-		-		-		-		-			790			836			1,626			1,626
Total comprehensive income																		$	2,799
Balance as of September 30, 2010 (unaudited)		4,771,181	$	3,280	$	118,486	$	-	$	2,484		$	(88,556	)	$	7,566					$	43,260

Accumulated other comprehensive income for nine month that ended on September 30, 2010:

Accumulated gain on derivative instruments	$	118
Accumulated foreign currency translation differences, net		2,366
Accumulated other comprehensive income	$	2,484

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 6

.

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Nine months ended September 30,						Three months ended September 30,						Year ended December 31,
	2011			2010			2011			2010			2010
	Unaudited
Cash flows from operating activities:
Net income	$	566		$	1,626		$	89		$	540		$	1,958
Adjustments required to reconcile consolidated net income to net cash provided by operating activities:
Depreciation, amortization and impairment		4,646			4,160			1,578			1,419			5,568
Accrued interest and exchange rate changes of debenture and long-term loans		100			95			6			34			178
Accrued severance pay, net		552			(187	)		202			(132	)		(364	)
Gain from sale of property and equipment, net		(138	)		(68	)		(85	)		(30	)		(93	)
Equity in losses of affiliate		1,069			836			271			295			1,158
Stock-based compensation expenses		352			94			122			22			121
Decrease (increase) in restricted cash		7			-			3			-			(133	)
Decrease (increase) in trade receivables, net		(3,170	)		(3,090	)		510			(708	)		(1,618	)
Decrease (increase) in other accounts receivable and prepaid expenses		287			(990	)		406			322			(436	)
Increase in inventories		(1,244	)		(2,107	)		(756	)		(587	)		(1,964	)
Write-off of inventories		66			-			28			-			(212	)
Deferred income taxes		58			1,241			90			334			185
Decrease (increase) in long-term accounts receivable		271			(479	)		(68	)		(68	)		1,322
Increase in trade payables		1,719			2,040			963			1,190			981
Increase (decrease) in other accounts payable and accrued expenses		2,217			374			(423	)		(514	)		(127	)
Net cash provided by operating activities		7,358			3,545			2,936			2,117			6,524
Cash flows from investing activities:
Purchase of property and equipment		(3,931	)		(2,931	)		(1,322	)		(993	)		(4,481	)
Proceeds from sale of property and equipment		676			440			405			84			641
Proceeds from sale of investments in previously consolidated subsidiaries (a)		40			-			40			-			-
Investments in affiliate		(1,496	)		(900	)		(390	)		(420	)		(1,490	)
Net cash used in investing activities		(4,711	)		(3,391	)		(1,267	)		(1,329	)		(5,330	)
Cash flows from financing activities:
Receipt of long-term loans from banks		6,232			3,180			(16	)		1,851			57
Repayment of long-term loans from banks		(6,096	)		(4,202	)		(1,607	)		(919	)		(7,016	)
Repayment of long-term loans from shareholders and others		(1,061	)		(1,134	)		(1,039	)		(1,115	)		(1,122	)
Receipt of long-term loans from shareholders and others		-			43			-			-			5,090
Proceeds from issuance of shares and exercise of options, net		48			57			15			-			-
Dividend paid to the non-controlling interest		(896	)		(1,170	)		-			-			(2,250	)
Short-term bank credit, net		(1,631	)		1,257			259			(2,257	)		2,656
Net cash used in financing activities		(3,404	)		(1,969	)		(2,388	)		(2,440	)		(2,585	)
Effect of exchange rate changes on cash and cash equivalents		(320	)		293			(388	)		141			415
Decrease in cash and cash equivalents		(1,077	)		(1,522	)		(1,107	)		(1,511	)		(976	)
Cash and cash equivalents at the beginning of the period		2,233			3,209			2,263			3,198			3,209
Cash and cash equivalents at the end of the period	$	1,156		$	1,687		$	1,156		$	1,687		$	2,233

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 7

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

		Nine months ended September 30,					Three months ended September 30,					Year ended December 31,
		2011			2010		2011			2010		2010
		Unaudited
(a)	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)	$	281		$	-	$	281		$	-	$	-
	Non-controlling interests		(432	)		-		(432	)		-		-
	Gain from sale of subsidiaries Receivables      for sale of investments in subsidiaries		111			-		111			-		-
		$	40		$	-	$	40		$	-	$	-
(b)	Non-cash investing activity:
	Purchase of property and equipment	$	70		$	219	$	68		$	219	$	45
(c)	Supplemental disclosure of cash flow activity:
	Cash paid during the period for:
	Interest	$	1,160		$	925	$	169		$	289	$	1,462
	Income taxes	$	-		$	99	$	-		$	81	$	40

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 8

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1:- GENERAL

On July 10, 2011 the company subsidiary's "Shagrir system Ltd." signed an agreement to sell all of the subsidiary's share capital Rider Mekvuzat Shagrir LTD ("Rider") to Native Nehoray LTD ("Nehoray") for its denominate value. In addition, the Company sold to Nehoray the rights to receive payments from loan that the Company provided to Rider in the amount of 4,779 NIS including interest and linkage to the Consumer Price index of NIS 1,205. As a result of the agreement, the Company recorded a capital loss in the amount of NIS 393.

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

a. Unaudited interim financial information:

The accompanying consolidated balance sheet as of September 30, 2011, consolidated statements of operations for the three and nine months ended September 30, 2010 and 2011 and consolidated statements of cash flows for the three and nine months ended September 30, 2010 and 2011 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 September 30, 2011, the Company's consolidated results of operations for the three and nine months ended September 30, 2010 and 2011 and the Company's consolidated cash flows for the three and nine months ended September 30, 2010 and 2011.

The balance sheet at December 31, 2010 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, 2010 included in the Company's Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission ("SEC") on March 31, 2011.

Results for the three and nine months ended September 30, 2011 are not necessarily indicative of results that may be expected for the year ending December 31, 2011.

F - 9

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

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.

d.  Impact of new Accounting Standards adopted during the period:

Beginning January 1, 2011 the Company applies an amendment to ASC 605-25, "Revenue Recognition - Multiple-Element Arrangements", that provides amendments to the criteria for separating consideration in multiple-deliverable arrangements to: (i) provide updated guidance on whether multiple deliverables exist, how the deliverables in an arrangement should be separated, and how the consideration should be allocated;  (ii) require an entity to allocate revenue in an arrangement using estimated selling prices of deliverables if a vendor does not have VSOE of selling price  or third-party evidence of selling price; (iii) eliminate the use of the residual method and require an entity to allocate revenue using the relative selling price method and (iv) require expanded disclosures of qualitative and quantitative information regarding application of the multiple-deliverable revenue arrangement guidance. The impact of the adoption was not material to the consolidated results of operations and financial condition.

e. Impact of recently issued accounting standards still not effective for the Company:

In September 2011, the FASB amended its accounting guidance on testing goodwill for impairment by providing entities an option to perform a qualitative assessment to determine whether further impairment testing is necessary. The amendments do not change the guidance for how goodwill is calculated or when goodwill is tested for impairment. The amendments are effective for fiscal years beginning after December 15, 2011. The Company does not anticipate material impact on its financial statements upon adoption.

F - 10

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 3:- INVENTORIES

	September 30,		December 31,
	2011		2010
	Unaudited
Raw materials	$	2,898	$	2,002
Work in process		159		46
Finished goods		1,867		1,691
	$	4,924	$	3,739

NOTE 4:- 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 about $ 1,394, in effect until January 2016.

2. The Company obtained bank guarantees in the amount of $ 103 in favor of its lessor and customs.

3. As of September 30, 2011, the use of $ 126 has been restricted following B.C.R.A. (Central Bank of Argentina) regulations.

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 September 30, 2011 is $ 2,409. No royalties were accrued or paid during 2011 and 2010.

d. Litigation:

As of September 30, 2011, several claims were filed against Shagrir, mainly by customers. The claims are in an amount aggregating to approximately $ 126. 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 to these claims.

F - 11

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

e. Commitments:

1. The Company and DBSI Investment Ltd. ("DBSI"), an equity owner in the Company (see Note 7), have entered into a management services agreement pursuant to which DBSI shall provide management services in consideration of annual management fees of $ 180 for a period of three years commencing on August  1, 2011.

2. During 1998, the Company entered into an agreement with Shagrir, for the supply of the services and equipment required to set up reception bases to be positioned throughout Israel. An addendum to the agreement was entered into in 2004 (the "First Addendum"). The agreement was for a period of 10 years with an option to extend it by an additional 10 years. During 2008, the Company and Shagrir entered into a second addendum to the agreement that extended the agreement by a period of 5 years, until 2013.

3. Shagrir entered into a management services agreement with its shareholders, pursuant to which the shareholders will grant management services to the Shagrir, in consideration of NIS 1,000 thousand per year. This amount is split between the Company (NIS 120 thousand) and the other shareholders of Shagrir.

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 Cellocator, 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.

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 5 in 2008, 4.5 in 2009 and 4 in 2010 and thereafter.

F - 12

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

3. The ratio of Pointer Telocation Ltd.'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 in 2008, 3.5 in 2009 and 2.5 in 2010 and thereafter.

As of September 30, 2011 we are in compliance with the financial covenants of our credit facilities still as of the press release date the company management can’t expect whether the company will meet all of its financial covenants as of December 31, 2011. In case that the company will not meet all of its financial covenants the company will request the lender of its credit facilities to waive the covenant on a one time basis in respect of its 2011 results.

Under the credit facility (in respect of the loans denominated in NIS) from the bank, Shagrir is required to meet financial covenants.

The financial covenants are:

1. The ratio of the debt to the bank to the annual EBITDA will not exceed 5.5.

2. The ratio of the annual EBITDA to the current maturities (the loan principal plus interest) of long-term loans from the bank will not be less than 1, at any time.

3. The shareholders' equity, including loans from shareholders, will not be less than NIS 50 million, at any time

4. Shagrir will not decide on any distribution of dividends in Shagrir without prior written consent from the bank. Shagrir received such consent from the bank prior to its dividend distribution in May and September 2009.

As of September 30, 2011, Shagrir is in compliance and expect to remain in compliance with the financial covenants of its credit facility in 2011.

F - 13

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5:- NET EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted net earnings (loss) per share:

	Nine months ended September 30,						Three months ended September 30,						Year ended December 31,
	2011			2010			2011			2010			2010
	Unaudited
Numerator:
Numerator for basic net earnings per share - Net income (loss)	$	238		$	790		$	(188	)	$	438		$	1,130
Effect of diluting securities		(31	)		(56	)		(7	)		(15	)		(69	)
Numerator for diluted net earnings per share - Net income (loss)	$	207		$	734		$	(195	)	$	423		$	1,061
Denominator:
Denominator for basic net earnings per share - weighted-average number of shares outstanding (in thousands)		4,779			4,766			4,784			4,771			4,768
Effect of diluting securities (in thousands)		51			64			37			79			66
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises (in thousands)		4,830			4,830			4,821			4,850			4,834
Basic net earnings (loss) per share	$	0.05		$	0.17		$	(0.04	)	$	0.09		$	0.24
Diluted net earnings (loss) per share	$	0.04		$	0.15		$	(0.04	)	$	0.09		$	0.22

F - 14

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 6:- INCOME TAXES

The effective tax rate for the nine-months ended September 30, 2011 was 36.8% as compared to 35% for the nine months ended September 30, 2010. The effective tax rate for the nine months ended September 30, 2011 and September 30, 2010 was impacted mainly due to a valuation allowance against deferred tax assets.

NOTE 7:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES

a. Balances with related parties:

	September 30,		December 31,
	2011		2010
	Unaudited
Other accounts payable and accrued expenses:
DBSI (see Note 4e(1))	$	52	$	52
	$	52	$	52

b. Transactions with related parties:

	Nine months ended September 30,				Three months ended September 30,				Year ended December 31,
	2011		2010		2011		2010		2010
	Unaudited
Management fees to DBSI (see Note 4e(1))	$	135	$	135	$	45	$	45	$	180
Interest on loans from shareholders (*)	$	31	$	155	$	10	$	155	$	-

(*) As of September 30, 2011, the debenture was paid in full.

F - 15

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8:- 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 nine months ended September 30, 2011 (unaudited):

	Cellocator segment			Pointer segment		Total
Segments revenues	$	18,804		$	52,153	$	70,957
Intersegments revenues		(5,444	)		-		(5,444	)
Revenues from external customers	$	13,360		$	52,153	$	65,513
Segments operating profit	$	368		$	3,679	$	4,047
Segments assets	$	24,135		$	77,398	$	101,533

The Pointer segment revenues include revenue from services in the amount of $ 70.

The following presents segment results of operations for the nine months ended September 30, 2010 (unaudited):

	Cellocator segment			Pointer segment		Total
Segments revenues	$	16,236		$	43,428	$	59,664
Intersegments revenues		(6,086	)		-		(6,086	)
Revenues from external customers	$	10,150		$	43,428	$	53,578
Segments operating profit	$	1,623		$	3,701	$	5,324
Segments assets	$	25,655		$	77,041	$	102,696

The Pointer segment revenues include revenue from services in the amount of $ 36.

F - 16

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8:- SEGMENT INFORMATION (Cont.)

The following presents segment results of operations for the three months ended September 30, 2011 (unaudited):

	Cellocator segment			Pointer segment		Total
Segments revenues	$	6,805		$	17,736	$	24,541
Intersegments revenues		(2,208	)		-		(2,208	)
Revenues from external customers	$	4,597		$	17,736	$	22,333
Segments operating profit	$	(264	)	$	1,502	$	1,238
Segments assets	$	24,135		$	77,398	$	101,533

The Pointer segment revenues include revenue from services in the amount of $ 30.

The following presents segment results of operations for the three months ended September 30, 2010 (unaudited):

	Cellocator segment			Pointer segment		Total
Segments revenues	$	6,172		$	14,680	$	20,852
Intersegments revenues		(2,325	)		-		(2,325	)
Revenues from external customers	$	3,847		$	14,680	$	18,527
Segments operating profit	$	1,094		$	594	$	1,688
Segments assets	$	25,655		$	77,041	$	102,696

The Pointer segment revenues include revenue from services in the amount of $ 12.

F - 17

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8:- SEGMENT INFORMATION (Cont.)

The following presents segment results of operations for the year ended December 31, 2010:

	Cellocator segment			Pointer segment		Total
Segments revenues	$	23,533		$	58,627	$	82,160
Intersegments revenues		(8,297	)		-		(8,297	)
Revenues from external customers	$	15,236		$	58,627	$	73,863
Segments operating profit	$	2,839		$	3,798	$	6,637
Segments assets	$	25,163		$	80,112	$	105,275
Depreciation and amortization expenses	$	1,360		$	4,208	$	5,568
Expenditures for assets	$	471		$	4,010	$	4,481

The Pointer segment revenues include revenue from services in the amount of $ 48.

NOTE 9:- SUBSEQUENT EVENTS

a. In early November 2011, a Memorandum of Law for Socioeconomic Change (Legislative Amendments) (Taxes), 2011 ("the Memorandum of Law"), was published. The Memorandum of Law proposes, among others, to cancel, effective from 2012, the scheduled progressive reduction in the corporate tax rate. The Memorandum of Law also proposes to raise the corporate tax rate to 25% in 2012. In view of the proposed increase in the corporate tax rate to 25% in 2012, the real capital gains tax rate and the real betterment tax rate will also be increased.

The deferred tax balances included in the financial statements as of September 30, 2011, are measured using  the tax rates which were in effect as of the date of the financial statements and do not take into account the potential effects of the Memorandum of Law. Any such effects will be recognized in the financial statements the date of which is subsequent to the date the Law is substantively enacted.

Based on the balances of deferred taxes as of September 30, 2011, the Company estimates that the effect on net income as a result of the issuance of the Memorandum of Law will be an increase in the amount of approximately $ 1,000, an amount which might increase concurrently with the approval of the Memorandum of Law by the Israeli Parliament.

F - 18

POINTER TELOCATION LTD. AND ITS SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 9:- SUBSEQUENT EVENTS (Cont.)

b. In November 2011, the Company subsidiary "Shagrir system Ltd.", together with T.M.C Transportation LTD ("TMC"), signed an agreement for the establishment of a limited partnership, TMC Systems, LP ("the partnership"). The Company will hold 51% of the partnership's capital.  The activities of TMC will be transferred to the partnership.

The partnership engages in the solutions for management, control and collection of travels in cabs.

The Company will grant a shareholders' loan to the partnership in the amount up to NIS 2.5 million, linked to interest at the rate of Prime + 4%.

c. On November 11, 2011, the Company subsidiary "Shagrir system Ltd.", entered into an agreement to acquire the activities of K.S Operations Ltd. ("K.S"), in consideration of an amount aggregating to NIS 12.5 million. Consummation of the transaction is contingent on meeting certain administrative prerequisites and obtaining the Anti-trust Commissioner's approval. In any event, the transaction will not be consummated before December 31, 2011.

K.S is engaged in the operation of garages, in the framework of which, it provides tinsmith's and paint services, and the sale of spare parts for motor vehicles.

F - 19

EX-99.3

Exhibit 99.3

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

 CONDITION AND RESULTS OF OPERATIONS

The information contained in this section should be read in conjunction with (1) our unaudited condensed interim consolidated financial statements as of September 30, 2011 and for the nine months then ended and related notes included 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, 2010 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”).

Results of Operations

The following table sets forth certain statement of operations data as a percentage of total revenues for the periods indicated.

Nine months Ended September 30,

(in thousands of U.S. Dollars – except weighted average number of ordinary shares,

and basic and diluted income per ordinary share)

	2011		2010
Statement of Income Data:
Revenues:
Products		24,084		17,464
Services		41,429		36,114
Total Revenues		65,513		53,578
Cost of revenues:
Products		13,784		9,578
Services		27,858		23,125
Amortization of intangible assets		733		738
Total Cost of Revenues		42,375		33,441
Gross profit		23,138		20,137
Operating Expenses:
Research and development, net		2,290		1,779
Sales and marketing expenses		6,839		5,420
General and administrative		8,579		6,295
Amortization of intangible assets		1,383		1,319
Impairment of intangible asset		-		-
Other income, net		19,091		14,813
Total operating income		4,047		5,324
Financial expenses, net		1,370		1,516
Other expenses		92		23
Income before tax on income		2,585		3,785
Taxes on income		950		1,323
Income after taxes on income		1,635		2,462
Equity in losses of affiliate		1,069		836
Net income		566		1,626
Net income attributable to non-controlling interest		328		836
Net income attributable to Pointer Telocation Ltd. Shareholders		238		790
Basic net earnings per share attributable to Pointer Telocation Ltd. shareholders		0.05		0.17
Diluted net earnings per share attributable to Pointer Telocation Ltd. shareholders		0.04		0.15
Basic weighted average number of shares outstanding (in thousands)		4,779		4,766
Diluted weighted average number of shares outstanding (in thousands)		4,830		4,830

Nine Months Ended September 30, 2011 Compared with Nine Months Ended September 30, 2010

Revenues.  Revenues increased by $11.9 million or 22.3%, from $53.6 million in the nine months ending September 30 2010 to $65.5 million in the nine months ending September 30, 2011.

The revenues from the sale of our products increased by $6.6 million, or 37.9%, from $17.5 million in the nine months ending September 30, 2010 to $24.1 million in the nine months ending September 30, 2011. This increase is primarily attributable to an increase in the sales of our operations conducted through the Cellocator segment of our business.

The revenues from our services increased by $5.3 million, or 14.7%, from $36.1 million in the nine months ending September 30, 2010 to $41.4 million in the nine months ending September 30, 2011. Approximately $2.2 million is attributable to the NIS revaluation against the U.S dollar by 6% during the period.

Revenues from our services in the nine months ending September 30, 2011 accounted for 63% of our total revenues as compared with 67% in the nine months ending September 30, 2010. This change is primarily attributable to the increase in sales of our operations conducted through the Cellocator segment of our business.

Our international revenues in the nine months ending September 30, 2011 accounted for 28% of total revenues compared to 26% in the nine months ending September 30, 2010. The increase in international sales is primarily attributable to an increase in the sales of the Cellocator segment in the nine months ending September 30, 2011.  Sales to Latin America increased from $7.8 million in the nine months ending September 30, 2010 to $9.9 million in the nine months ending September 30, 2011. Sales to Europe increased from $5.3 million in the nine months ending September 30, 2010 to $7.3 million in the nine months ending September 30, 2011.

Cost of Revenues. Our cost of revenues increased by $8.9 million to $42.4 million for the nine months ending September 30, 2011 as compared to $33.4 million for the same period in 2010. This increase of $8.9 million is associated with an increase of $4.2 million in the cost of products due to increased sales of our Cellocator segment, and an increase of $4.7 million attributable to increased cost of services.

Gross Profit. Our gross profit increased to $23.1 million in the nine months ending September 30, 2011, as compared to $20.1 million for the same period in 2010. As a percentage of total revenues gross profit accounted for 35% in the nine months ending September 30, 2011 compared to 38% in the nine months ending September 30, 2010. Our gross margin on products sales in the nine months ending September 30, 2011 was 43% compared to 45% in the nine months ending September 30, 2010 due to a reduction in the prices of products in the Cellocator segment in the nine month period ended September 30, 2011. Gross margins in services were approximately 32% in the nine months ending September 30, 2011 as compared to 36% in the nine months ending September 30, 2010. Gross margins decreased mainly as a result of the price erosion in the Israeli market.

Research and Development Costs. Research and development expenses increased by $0.5 million from $1.8 million in the nine months ending September 30, 2010 to $2.3 million in the nine months ending September 30, 2011.

Sales and Marketing Expenses. Sales and marketing costs increased by $1.4 million to $6.8 million in the nine months ending September 30, 2011 from $5.4 million in the nine months ending September 30, 2010. The increase is due to the increase in sales and marketing efforts in Israel and USA, as well as the costs associated with our expansion into new territories.

General and Administrative Expenses. General and administrative expenses increased by $2.3 million to $8.6 million in the nine months ending September 30, 2011 from $6.3 million in the nine months ending September 30, 2010. The increase is mainly due to increase in salary and Stock-based compensation expenses in the nine months ending September 30, 2011.

Amortization of intangible assets and Impairment of long lived assets. Amortization of intangible assets and impairment of long lived assets was $2.1 million in the nine months ending September 30, 2011, approximately the same as in the nine months ending September 30, 2010.

Operating Profit. As a result of the foregoing, we recorded in the nine months ending September 30, 2011 a $4 million operating profit, compared to an operating profit of $5.3 million in the nine months ending September 30, 2010.

Financial Expenses (Net). Financial expenses decreased from $1.5 million in the nine months ending September 30, 2010 to $1.4 million in the nine months ending September 30, 2011.

Taxes on income.  Taxes on income were $1 million in the nine months ending September 30, 2011, as compared to $1.3 million in the nine months ending September 30, 2010. The effective tax rate for the nine months ended September 30, 2011, was 37% as compared to 35% for the nine months ended September 30, 2010.

Equity in losses of our Brazilian affiliate. In the nine months ending September 30, 2011, we recorded equity in losses of the Brazilian affiliate, Pointer do Brazil Commercial S.A., in the amount of $1 million compared to $0.8 million in the nine months ending September 30, 2010. The increase is due to our increased investment in the Brazilian market.

Net Income. We recorded net income of $0.6 million in the nine months ending September 30, 2011 and $1.6 million in the nine months ending September 30, 2010.

Net Income attributable to non-controlling interests.  We recorded net income attributable to non-controlling interests in the amount of $0.3 million in the nine months ending September 30, 2011, compared to $0.8 million the nine months ending September 30, 2010.

Net Income attributable to Pointer shareholders. In the nine months ending September 30, 2011, we recorded a net income of $0.2 million, compared to $0.8 million in the nine months ending September 30, 2010.

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 New Israeli Shekel (“NIS”), and to a lesser extent between the U.S. Dollar and the Argentine Peso, the Mexican Peso, the Euro and the Brazilian Real.

During the nine months ended September 30, 2011, the exchange rate of the U.S. Dollar in relation to the NIS increased by 4.6% and the Israeli Consumer Price Index (“CPI”) increased by 2.2% (during the nine months ended September 30, 2010 there was a decrease of 3% in the exchange rate of the U.S. Dollar in relation to the NIS and an increase of 1.9% 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 in Argentina and the fact that most of the revenues of our subsidiary Pointer Localizacion Y Asistencia S.A (“PLA”) are not denominated 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 PLA and as a consequence, on the results of our operations. From January 1, 2011 to September 30, 2011, the value of the Argentinean Peso increased by approximately 6% against the U.S. dollar. From January 1, 2011 until November 23, 2011 the U.S. Dollar – Argentinean Peso exchange rate fluctuated between 3.89 and 4.27 Pesos to the Dollar.

Regarding our operations in Mexico and the fact that most of PRM's revenues are not denominated 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 Mexican subsidiary, Pointer Recuperacion de Mexico, SA de CV and as a consequence, on the results of our operations. From January 1, 2011 to September 30, 2011, the value of the Mexican Peso increased by approximately 9% against the U.S. dollar. From January 1, 2011 until November 23, 2011, the U.S. Dollar – Mexican Peso exchange rate fluctuated between 11.47 and 13.98 Pesos to the Dollar.

We are engaged from time to time in hedging expenses relating to foreign currency exchange rates and other transactions intended to manage the risks relating to foreign currency exchange rates or interest rate fluctuations. In the nine months ended September 30, 2010 and the nine months ended September 30, 2011 we entered into a foreign currency hedging transaction to manage risk related to salary expenses. We may in the future continue to undertake such transactions if management determines that this is necessary to offset the risks described above.

B. LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2011, we had a negative working capital of $14.6 million, our current assets to current liabilities ratio was 0.63 and we had cash and cash equivalents of $1.3 million and an unused credit facility of $ 6.3 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 Pointer and Shagrir. As of September 30, 2011 we are in compliance with the financial covenants of our credit facilities still as of the press release date the company management can’t expect whether the company will meet all of its financial covenants as of December 31, 2011. In case that the company will not meet all of its financial covenants the company will request the lender of its credit facilities to waive the covenant on a one time basis in respect of its 2011 results.

In the nine months ended September 30, 2011, net cash provided by our continuing operating activities amounted to $7.4 million as compared to net cash provided from continuing operating activities of $3.5 million in the nine months ended September 30, 2010. The increase was primarily attributable to a decrease in other account receivables and an increase in other account payables and accrued expenses.

In the nine months ended September 30, 2011, net cash used in our continuing investment activities was $4.7 million as compared to $3.4 million in the nine months ended September 30, 2010. The increase was primarily attributable to our investment in an affiliate and an increase in purchases of property and equipment.

In the nine months ended September 30, 2011, net cash used in financing activities was $3.4 million as compared to $2 million in the nine months ended September 30, 2010. The increase was primarily attributable to an increase in short term bank credit which was offset by receipt of long term loans from banks.