Pointer Telocation Presents 2008 Results
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Operating Income of $9.3 Million Also Exceeds Company Guidance of $8 Million in 2008
71.8% Growth in EBITDA to $15.4 Million in 2008
Net Income of $2.4 Million in 2008 Compared net Loss of 0.3 Million in 2007
ROSH HAAYIN, Israel, February 25, 2009: Pointer Telocation Ltd. (Nasdaq Capital Market: PNTR, Tel-Aviv Stock Exchange: PNTR) - a leading developer, manufacturer and operator of advanced command and control technologies and roadside assistance services for the automotive industry, announced today its financial results for the fiscal year ended December 31, 2008. The financial results for Pointer Telocation Ltd. (Pointer) for 2008 include for the first time a full year of financial results from the Cellocator business which was acquired in September 2007.
Pointer's 2008 financial results reflect major progress in the implementation of Pointer's business strategy to become a leading provider of technology and solutions to the automotive and insurance industries. Today, Pointer's products and services have a global presence with an installed product base of over 500,000 units in more than 25 countries.
Financial Highlights:
Revenues: Pointer's annual revenues for 2008 increased 48.5% to $76.6 million compared to $51.6 million in 2007. Pointer's annual revenue topped the Company's prior guidance released after the second quarter of 2008, which had upwardly revised its estimated annual revenue in 2008 to $76.0 million from $65.0 million.
Pointer's international operations accounted for 29% of its revenues in 2008 as compared to 17% in 2007. Pointer's revenues from products for the full year of 2008 accounted for 40% as compared with 30% of 2007 revenue.
The increase in total revenues and the growth in product sales and in international activities in the 2008 as compared to 2007, are primarily attributable to the inclusion of the operations of Cellocator in 2008.
Gross Profit:
In 2008, gross profit increased 55.6% to $29.4 million as compared to $18.9 million in 2007. As a percentage of revenues, gross margin was 38.4%, in the full year of 2008, compared to 36.6%in 2007.
Operating Income:
In 2008 Pointer recorded $9.3 million in operating income, compared to $4.2 million for the 2007. Operating income improved mainly because of growth in total revenue and an increase in gross margin. Operating expenses increased at a lower rate than the growth in revenue and gross margin.
Minority Interest:
For 2008 Pointer reported a $2.2 million minority share in the operations of Shagrir, compared to $1.4 million in full year 2007.
Net Income:
For the year ended December 31, 2008, Pointer recorded net income of $2.4 million or $0.5 per share as compared to net loss of $0.3 million or $(0.08) per share in 2007.
Non-GAAP net income:
For the year ended December 31, 2008, Pointer's non-GAAP net income was $7.1 million, as compared to non-GAAP net income of $2.2 million in 2007.
EBITDA:
Pointer's EBITDA in 2008 increased 72% to $15.4 million as compared to $9.0 million in 2007.
Balance Sheet Highlights:
Shareholder's Equity increased to $35.8 million at December 31, 2008 compared to $32.2 million at December 31, 2007.
Total liabilities from banks and other liabilities decreased to $31.7 million at December 31, 2008 from $36.8 million at December 31, 2007 due to Pointer's repayment of loans during 2008.
Danny Stern, Pointer CEO, said: "2008 was an excellent year for Pointer, especially in Israel. Our Mexican business, although still a very small part of our global business, continues to grow in subscribers and revenues, despite economic instability in that market. Events affecting the global vehicle industry have a significant bearing on the demand for our technology. We continue to closely monitor events affecting that industry; however, at this point in time, we cannot estimate their impact. On the other hand, our services business has a stable outlook even considering the current uncertainties in the global economy. Our Israeli subsidiary Shagrir, which provides Road Side Assistance and Stolen Vehicle Recovery services, enjoyed growth and profitability during 2008 and so is strongly positioned for 2009. Pointer's strong EBITDA enables us to maintain R&D investment in order to enhance our offering of products and services and competitive advantages in the coming years," concluded Mr. Stern.
Conference Call Information:
Pointer's management will host today, February 25th, 2009 a conference call with the investment community to review and discuss the financial results:
- The Conference Call will take place on 10:00 AM EST, 17:00 Israel time.
To listen to the call, please dial in to one of the following teleconferencing numbers. Please begin placing your calls at least 5 minutes before the conference call commences.
From USA: +1-866-527-8676
From Israel: 03-918-0610
A replay will be available from February 26, 2008 at the company website: POINTER.
Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the condensed consolidated statements of cash flows contained in the press release. Pointer's non-GAAP net income adjusts GAAP net income to exclude amortization of acquired intangible assets and deferred income tax, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of our performance exclusive of non-GAAP charges and other items that are considered by management to be outside of our core operating results.
Pointer also uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income interest, taxes, depreciation, amortization and minority interest. EBITDA is 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. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP.
Our non-GAAP financial measures, such as non-GAAP net income and EBITDA, are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP.
Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. 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. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and non-GAAP basis is provided in tables immediately following the condensed consolidated statement of cash flows.