Pointer Telocation Reports its Financial Results for Q1/2007
Revenue Increased 17.2% to Record $11.3 Million Over Q1 2006
Gross Profit Increased 12.2% to $4.1 Million Over Q1 2006
GIVATAYIM, Israel, May 17 -- Pointer Telocation Ltd. (Nasdaq Capital Market: PNTR; Tel-Aviv Stock Exchange: PNTR), a leading provider of services to insurance companies and car owners, including road-side assistance, towing and stolen vehicle retrieval services in Israel, Argentina and Mexico, reports its financial results for the first quarter of 2007.
During recent months, Pointer's management efforts were focused on acquiring new technologies and expanding activities in territories of operation. These involved two M&A transactions announced in March 2007 and the raising of approximately $13 million in order to finance these deals.
Financial Highlights:
Revenues: Pointer's revenues for the first quarter of 2007 increased by 17.2%, to $11.3 million from $9.7 million, in the comparable period in 2006. The increase is in line with Pointer's internal growth plan. International activities were 10% of total revenue compared to 6.3% in the comparable period in 2006.
Gross Profit: For the first quarter of 2007, gross profit increased 12.2% to $4.1 million from $3.6 million in Q1 2006. As a percentage of revenues, gross profit is approximately 36% in Q1 2007, as compared to approximately 37% in the same period in 2006. Gross margin decreased mainly as a result of increased demand for cellular/GPS solutions, where the company currently sells third party solutions.
Operating Profit: Pointer reports a $0.95 million operating profit for the first quarter of 2007, compared to an operating profit of $0.98 million for the first quarter of 2006.
Minority share: Pointer reports the minority interest which has been attributed to Shagrir shareholders since Q4 2006. For the first quarter of 2007, Pointer reports a $434 thousand minority share, compared to zero in the first quarter of 2006.
Net loss: Pointer recorded a loss of $180 thousand during the first quarter of 2007, as compared to a net profit of $21 thousand in the first quarter of 2006. Net loss in the first quarter of 2007 was due mainly to lower gross margins. Excluding amortization of $415 thousand and non-cash taxes on income of $182 thousand, Pointer would have presented net income of $417 thousand in Q1 2007.
Cash Flow: Pointer recorded net cash provided by operating activities of $1.7 million in the first quarter of 2007 compared to $0.8 million in the comparable period in 2006.
Total Shareholder's Equity increased during the first quarter of 2007 to $21.6 million, mainly as a result of the funds raised from a previously reported PIPE in Israel.
Danny Stern, Pointer CEO, said: "During recent months we have focused our attention on achieving the acquisitions announced in March 2007 and on completing private placements in which high-quality long-term shareholders invested in the company. In Argentina we acquired 2 portfolios of SVR companies. These have already yielded 20% subscription growth", concluded Mr. Stern.
Conference Call Information:
Pointer's management will host two conference calls with the investment community today, May 17st, 2007.
The Hebrew conference call will start at 16:00 Israel time (GMT +2, 9:00 EST)
The English conference call will start at 10:00 EST (17:00 Israel time)
To listen to the conference calls, please dial:
From USA: +1-888-281-1167
From Israel: 03-918-0688
A replay of the conference call will be available through May 18th, 2007 on the Company's website at www.pointer.com.
About Pointer Telocation:
Pointer Telocation Ltd www.pointer.com provides range of services to insurance companies and automobile owners, including road-side assistance, vehicle towing, stolen vehicle retrieval, fleet management and other value added services. Pointer Telocation provides services, for the most part, in Israel, through its subsidiary Shagrir and in Argentina and Mexico through its local subsidiaries. Independent operators provide similar services in Russia and Venezuela utilizing Pointer's technology and operational know-how.
Safe Harbor Statement
This press release contains forward-looking statements with respect to the business, financial condition and results of operations of Pointer and its affiliates. These forward-looking statements are based on the current expectations of the management of Pointer, only, and are subject to risk and uncertainties relating to changes in technology and market requirements, the company's concentration on one industry in limited territories, decline in demand for the company's products and those of its affiliates, inability to timely develop and introduce new technologies, products and applications, and loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of the company to differ materially from those contemplated in such forward-looking statements. Pointer undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risks and uncertainties affecting the company, reference is made to the company's reports filed from time to time with the Securities and Exchange Commission.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
March 31, December 31,
2007 2006
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,361 $ 5,850
Trade receivables, net 9,791 8,315
Other accounts receivable and prepaid expenses 1,082 557
Inventories 1,027 1,447
Total current assets 18,261 16,169
LONG-TERM ASSETS:
Long-term accounts receivable 204 183
Severance pay fund 3,931 3,794
Property and equipment, net 7,794 7,346
Goodwill 39,174 38,707
Other intangible assets, net 8,435 8,612
Deferred income taxes 1,615 1,588
Total long-term assets 61,153 60,230
Total assets $ 79,414 $ 76,399
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
March 31, December 31,
2007 2006
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities of
long-term loans $ 11,067 $ 11,801
Trade payables 5,790 5,378
Deferred revenues and customer advances 8,669 6,584
Other accounts payable and accrued expenses 3,831 4,091
Total current liabilities 29,357 27,854
LONG-TERM LIABILITIES:
Long-term loans from banks 15,120 15,833
Long-term loans from shareholders 296 280
Long-term loans from others 6,639 7,210
Accrued severance pay 4,743 4,650
26,798 27,973
MINORITY INTEREST 1,685 1,142
SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares of NIS 3 par value:
Authorized - 8,000,000 shares at March 31, 2007 and
December 31, 2006, respectively; Issued and
outstanding - 3,222,875 shares at March 31, 2007
and December 31, 2006, respectively 2,439 2,140
Additional paid-in capital 108,192 103,880
Receipt on account of shares - 2,586
Accumulated other comprehensive income 397 98
Accumulated deficit (89,454) (89,274)
Total shareholders' equity 21,574 19,430
Total liabilities and shareholders' equity $ 79,414 $ 76,399
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Year
Three months ended ended
December
March 31, 31,
2007 2006 2006
Unaudited
Revenues:
Products $ 2,949 $ 1,952 $ 9,701
Services 8,396 7,725 32,211
Total revenues 11,345 9,677 41,912
Cost of revenues:
Products 1,906 1,272 5,602
Services 5,369 4,778 20,786
Total cost of revenues 7,275 6,050 26,388
Gross profit 4,070 3,627 15,524
Operating expenses:
Research and development, net 332 256 1,170
Selling and marketing 1,112 811 3,927
General and administrative 1,260 1,123 4,749
Amortization of intangible assets 415 459 1,740
Total operating expenses 3,119 2,649 11,586
Other income net - - (1,292)
Impairment of long lived assets - - 372
Operating income 951 978 4,858
Financial expenses, net 525 778 2,577
Other income, net 10 6 14
Income before taxes on income 436 206 2,295
Taxes on income 182 185 82
Net income before minority interest 254 21 2,213
Minority interest 434 - 1,044
Net income (loss) $ (180) $ 21 $ 1,169
Basic and diluted net earnings (loss) per
share $ (0.06) $ 0.01 $ 0.39
CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands
Additional
Number of Share paid-in
shares capital capital
Balance as of January 1, 2006 2,479,020 $ 1,680 $ 100,707
Deferred stock-based compensation - - (1)
Stock-based compensation expanses - - 153
Exercise of warrants and stock options 743,855 460 3,021
Receipt on account of shares - - -
Comprehensive income:
Foreign currency translation adjustments - - -
Net income - - -
Total comprehensive income
Balance as of December 31, 2006 3,222,875 2,140 103,880
Issuance of shares - 299 1,554
Stock-based compensation expanses - - 172
Receipt on account of shares - - 2,586
Comprehensive income:
Foreign currency translation adjustments - -
Net loss - -
Total comprehensive income
Balance as of March 31, 2007 (unaudited) 3,222,875 $ 2,439 $ 108,192
Balance as of January 1, 2006 2,479,020 $ 1,680 $ 100,707
Deferred stock-based compensation - - (1)
Amortization of deferred stock-based
compensation - - 35
Exercise of warrants and options 490,918 315 1,846
Comprehensive loss:
Foreign currency translation adjustments - - -
Net income - - -
Total comprehensive loss
Balance as of March 31, 2006 (unaudited) 2,969,938 $ 1,995 $ 102,587
Accumulated
Deferred Receipts other
stock-based on account comprehensive
compensation of shares Income (loss)
Balance as of January 1, 2006 $ (1) $ - $ (1,138)
Deferred stock-based compensation 1 - -
Stock-based compensation expanses - - -
Exercise of warrants and stock
options - - -
Receipt on account of shares - 2,586 -
Comprehensive income:
Foreign currency translation
adjustments - 1,236
Net income - - -
Total comprehensive income
Balance as of December 31, 2006 - 2,586 98
Issuance of shares - - -
Stock-based compensation expanses - - -
Receipt on account of shares - (2,586)
Comprehensive income:
Foreign currency translation
adjustments - - 299
Net loss - - -
Total comprehensive income
Balance as of March 31, 2007
(unaudited) $ - $ - $ 397
Balance as of January 1, 2006 $ (1) $ - $ (1,138)
Deferred stock-based compensation 1 - -
Amortization of deferred stock-based
compensation - - -
Exercise of warrants and options - - -
Comprehensive loss:
Foreign currency translation
adjustments - - (146)
Net income - - -
Total comprehensive loss
Balance as of March 31, 2006
(unaudited) $ - $ - $ (1,284)
Total
Comprehensive Total
Accumulated income shareholders'
deficit (loss) equity
Balance as of January 1, 2006 $ (90,443) $ 10,805
Deferred stock-based compensation - -
Stock-based compensation expanses - 153
Exercise of warrants and stock
options - 3,481
Receipt on account of shares - 2,586
Comprehensive income:
Foreign currency translation
adjustments - $ 1,236 1,236
Net income 1,169 1,169 1,169
Total comprehensive income $ 2,405
Balance as of December 31, 2006 (89,274) 19,430
Issuance of shares - 1,853
Stock-based compensation expanses - 172
Receipt on account of shares - -
Comprehensive income:
Foreign currency translation
adjustments - $ 299 299
Net loss (180) (180) (180)
Total comprehensive income $ 119
Balance as of March 31, 2007
(unaudited) $ (89,454) $ 21,574
Balance as of January 1, 2006 $ (90,443) $ 10,805
Deferred stock-based compensation - -
Amortization of deferred
stock-based compensation - 35
Exercise of warrants and options - 2,161
Comprehensive loss:
Foreign currency translation
adjustments - $ (146) (146)
Net income 21 21 21
Total comprehensive loss $ 125
Balance as of March 31, 2006
(unaudited) $ (90,422) $ 12,876
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year
Three months ended ended
December
March 31, 31,
2007 2006 2006
Unaudited
Cash flows from operating activities:
Net income (loss) $(180) $21 $1,169
Adjustments required to reconcile net income
(loss) to net cash provided by operating
activities:
Depreciation and amortization 1,194 1,281 5,983
Accrued interest and exchange rate changes of
convertible debenture and long-term loans (14) 170 137
Accrued severance pay, net (54) (102) (166)
Gain from sale of property and equipment, net (80) (138) (567)
Amortization of deferred stock-based
compensation 172 35 153
Increase in minority interest 543 - 1,142
Increase in trade receivables, net (1,334) (1,984) (1,167)
Decrease in other accounts receivable and
prepaid expenses (536) (439) (36)
Decrease (increase) in inventories 118 320 (432)
Write-off of inventories - - 69
Increase in deferred income taxes - - (1,588)
Decrease (increase) in other long-term
accounts receivable (1) 9 60
Increase in trade payables 325 232 1,049
Increase (decrease) in other accounts payable
and accrued expenses 1,558 1,408 (400)
Net cash provided by operating activities 1,711 813 5,406
Cash flows from investing activities:
Purchase of property and equipment (820) (436) (2,277)
Proceeds from short-term bank deposits - - -
Proceeds from sale of property and equipment 254 216 -
Proceeds from realization of investment in
subsidiary - - 1,026
Net cash used in investing activities (566) (220) (1,251)
Cash flows from financing activities:
Receipt of long-term loans from banks - - 2,243
Repayment of long-term loans from banks (500) (394) (2,949)
Receipt of long-term loans from shareholders
and others 95 131
Repayment of long-term loans from others (656) (521) (4,529)
Proceeds from issuance of shares and exercise
of warrants, net 1,853 2,161 6,067
Short-term bank credit, net (1,350) (1,026) (973)
Net cash provided by (used in) financing
activities (653) 315 (10)
Effect of exchange rate on cash and cash
equivalents 19 25 9
Increase in cash and cash equivalents 511 933 4,154
Cash and cash equivalents at the beginning of
the period 5,850 1,696 1,696
Cash and cash equivalents at the end of the
period $ 6,361 $ 2,629 $ 5,850