Q3 2023 total revenue increased 7%
sequentially to $34.2 million,
marking the highest revenue performance in four quarters
Company's SaaS-centric business model
transformation continues at pace with high-margin service revenue
increasing 11% in Q3 2023 and 14% for the year to date compared to
prior year periods (constant currency)
AEBITDA increased threefold following the
execution of annualized $4 million
cost reduction measures to absorb AI and data science talent
acquired with the Movingdots transaction
North America
total business grew 12% year over year in the quarter leading to
service revenue YTD growth of 15%, reflecting the adoption of the
Unity data platform for new and existing customers
Previously announced transformative business
combination with MiX Telematics expected to double revenue and
provide the foundation for future Rule of 40 financial
performance
WOODCLIFF LAKE, N.J., Nov. 9, 2023
/PRNewswire/ -- Powerfleet, Inc. (Nasdaq:
PWFL), reported results for the third quarter and nine
months ended September 30, 2023.
THIRD QUARTER 2023 FINANCIAL AND OPERATIONAL
HIGHLIGHTS
- Business returned to topline growth with revenue of
$34.2 million, up 7% sequentially
with the increase of new sales centered on Unity and safety led
solutions outstripping the shuttering low value and non-core
business.
- Service revenue increased 11% year-over-year (constant
currency) to $21.0 million, or 62% of
total revenue, demonstrating the company's transformation to a SaaS
centric business model.
- Product revenue increased 19% sequentially and product gross
margin expanded to 33% from 22% in the prior quarter, showcasing
the company's strategy to pivot selling high-margin products that
drive enduring SaaS revenue.
- Total North American business revenue increased 12%
year-over-year, with service revenue growing by15% year to date
fueled by Unity data platform success.
- Adjusted EBITDA totaled $2.0
million; three times higher than Q2 2023 following cost
reduction activities of $4 million
per year absorbing the incremental operating expenses from the Q1
2023 Movingdots acquisition.
- Subscriber count increased 8% year-over-year, totaling 707,342
at quarter end.
MANAGEMENT COMMENTARY
"These highly satisfying quarterly results underscore remarkable
execution by our global team and are particularly impressive as
they were achieved during our pursuit and signing of a
transformative business combination with MiX Telematics," said
Powerfleet CEO Steve
Towe.
"Business expansion continues to be led by North America with total revenue increasing by
an impressive 12% in the quarter and 15% for the first nine months
of the year. This performance provides compelling proof points of
the adoption of our Unity data integration platform and its
potential to drive meaningful recurring SaaS revenues and
best-in-class net dollar retention.
The success of our Powerfleet business model transformation,
shifting focus from devices to the Unity SaaS platform, was always
expected to be evident in quarters rather than months. We made bold
strategic choices to close out non-core and low-margin product
lines while strengthening the pipeline of SaaS-centric offerings to
enable high quality revenue growth. I am delighted to share that we
have now moved past the expected inflection point with our Q3
results posting a 7% sequential increase in total revenue, and the
highest revenue performance in four quarters.
"Our announced combination with MiX is a game changer and meets
multiple strategic objectives for the company, deepening our
opportunity to create meaningfully increased shareholder value
while simultaneously addressing the current balance sheet overhang.
We are excited about the business combination and the momentum we
are building and look forward to sharing more about our future
vision for shareholder value creation, the integration strategy,
growth drivers, go-to-market approach, technology roadmap, and
financial targets for the combined business during our Investor
Day."
David Wilson, Powerfleet
CFO, added: "We are successfully executing our strategic
priorities to build a high-value business focused on high-quality,
recurring SaaS revenue. Our Q3 performance is a clear testament to
our transformation, both financially and operationally. Notably,
our rapid execution of strategic measures, including a $4 million cost-cutting initiative for
Movingdots, directly led to a threefold increase in adjusted
EBITDA."
KEY THIRD QUARTER 2023 FINANCIAL RESULTS
Total revenue
was $34.2 million, compared to
$34.3 million in the same year-ago
period, an increase of 5% on a constant currency basis with
$2.0 million of low value product
revenue actively shed from the business and replaced with high
margin service revenue which increased by 11% on a constant
currency basis.
Gross profit margin of 50.1%, was in line with the prior year
period with improved product margins offset by the commencement of
depreciation expense for the Unity platform.
Operating expenses were $20.4
million compared to $18.4
million in the same year-ago period. Current year
operating expenses included $1.4
million in one-time rationalization and deal costs related
to the announced business combination with Mix Telematics; and
$1.2 million in Movingdots' run rate
expense,
Net loss attributable to common stockholders totaled
$(5.0) million, or $(0.14) per basic and diluted share (based on
35.7 million weighted average shares outstanding) while adjusted
EBITDA, a non-GAAP metric, totaled $2.0
million. See the section below titled "Non-GAAP Financial
Measures" for more information about adjusted EBITDA and its
reconciliation to GAAP net income (loss).
Powerfleet had $19.6 million in
cash and cash equivalents and a working capital position of
$34.5 million at quarter-end.
INVESTOR CONFERENCE CALL
Powerfleet management will
discuss these results and business outlook on a conference call
today (Thursday, November 9, 2023) at
8:30 a.m. Eastern time (5:30 a.m. Pacific time).
Powerfleet management will host the presentation, followed by a
question-and-answer session.
Toll Free: 888-506-0062
International: 973-528-0011
Participant Access Code: 531533
Webcast: https://www.webcaster4.com/Webcast/Page/2467/49375
The conference call will be available for replay here and via
the investor section of the company's website at
ir.powerfleet.com.
If you have any difficulty connecting with the conference call,
please contact Powerfleet's investor relations team at
949-574-3860.
INVESTOR DAY
As previously announced, Powerfleet and
MiX Telematics are hosting a joint Investor Day for financial
analysts and institutional investors on Thursday, November 16 at The InterContinental New
York Barclay hotel in New York,
NY.
Powerfleet and MiX Telematics leadership teams will share the
strategic rationale and expected benefits for the previously
announced business combination, which will create one of the
largest mobile asset Internet of Things (IoT) Software-as-a-Service
(SaaS) providers in the world. Senior leaders from the Powerfleet
and MiX organizations will present the vision, integration
strategy, growth drivers, go-to-market approach, Unity platform and
AI roadmap, customer success stories, and financial targets for the
combined business, followed by a live Q&A.
In-person attendance is by invitation only. For those who would
like to attend the event in-person, please contact respectively
Powerfleet's investor relations team
at PWFL@gateway-grp.com or MiX's investor relations team
at MiXT@gatewayir.com.
A live webcast will be available on the investor relations
section of each company's website. A replay of the webcast will be
available shortly after the event concludes.
NON-GAAP FINANCIAL MEASURES
To supplement its
financial statements presented in accordance with Generally
Accepted Accounting Principles (GAAP), Powerfleet provides certain
non-GAAP measures of financial performance. These non-GAAP measures
include adjusted EBITDA and total revenue and service revenue
excluding foreign exchange effect. Reference to these non-GAAP
measures should be considered in addition to results prepared under
current accounting standards, but are not a substitute for, or
superior to, GAAP results. These non-GAAP measures are provided to
enhance investors' overall understanding of Powerfleet's current
financial performance. Specifically, Powerfleet believes the
non-GAAP measures provide useful information to both management and
investors by excluding certain expenses, gains and losses and
fluctuations in currency rates that may not be indicative of its
core operating results and business outlook. These non-GAAP
measures are not measures of financial performance or liquidity
under GAAP and, accordingly, should not be considered as an
alternative to net income or cash flow from operating activities as
an indicator of operating performance or liquidity. Because
Powerfleet's method for calculating the non-GAAP measures may
differ from other companies' methods, the non-GAAP measures may not
be comparable to similarly titled measures reported by other
companies. Reconciliation of all non-GAAP measures included in this
press release to the nearest GAAP measures can be found in the
financial tables included in this press release.
POWERFLEET, INC. AND
SUBSIDIARIES
|
RECONCILIATION OF
GAAP TO ADJUSTED EBITDA FINANCIAL MEASURES
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to common stockholders
|
$
|
(3,535,000)
|
|
$
|
(4,969,000)
|
|
$
|
(8,994,000)
|
|
$
|
(5,749,000)
|
Non-controlling
interest
|
|
1,000
|
|
|
-
|
|
|
3,000
|
|
|
3,000
|
Preferred stock
dividend and accretion
|
|
1,235,000
|
|
|
1,295,000
|
|
|
3,647,000
|
|
|
3,867,000
|
Interest (income)
expense, net
|
|
502,000
|
|
|
560,000
|
|
|
1,493,000
|
|
|
1,534,000
|
Other (income)
expense, net
|
|
0
|
|
|
5,000
|
|
|
(1,000)
|
|
|
4,000
|
Income tax
(benefit) expense
|
|
770,000
|
|
|
262,000
|
|
|
107,000
|
|
|
698,000
|
Depreciation and
amortization
|
|
2,019,000
|
|
|
2,409,000
|
|
|
6,152,000
|
|
|
6,926,000
|
Stock-based
compensation
|
|
1,070,000
|
|
|
1,100,000
|
|
|
3,156,000
|
|
|
2,785,000
|
Foreign currency
translation
|
|
731,000
|
|
|
(72,000)
|
|
|
(959,000)
|
|
|
(1,014,000)
|
Severance related
expenses
|
|
486,000
|
|
|
142,000
|
|
|
1,332,000
|
|
|
701,000
|
Gain on Bargain
purchase - Movingdots
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(7,517,000)
|
Acquisition
Related Expenses
|
|
-
|
|
|
1,232,000
|
|
|
-
|
|
|
1,772,000
|
Adjusted
EBITDA
|
$
|
3,279,000
|
|
$
|
1,964,000
|
|
$
|
5,936,000
|
|
$
|
4,010,000
|
ABOUT POWERFLEET
Powerfleet (Nasdaq: PWFL; TASE: PWFL)
is a global leader of internet of things (IoT)
software-as-a-service (SaaS) solutions that optimize the
performance of mobile assets and resources to unify business
operations. Our data science insights and advanced modular software
solutions help drive digital transformation through our customers'
and partners' ecosystems to help save lives, time, and money. We
help connect companies, enabling customers and their customers to
realize more effective strategies and results. Powerfleet's tenured
and talented team is at the heart of our approach to partnership
and tangible success. The company is headquartered in Woodcliff Lake, New Jersey, with our Pointer
Innovation Center (PIC) in Israel
and field offices around the globe. For more information, please
visit www.powerfleet.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains forward-looking
statements within the meaning of federal securities laws.
Forward-looking statements include statements with respect to
Powerfleet's beliefs, plans, goals, objectives, expectations,
anticipations, assumptions, estimates, intentions, and future
performance, and involve known and unknown risks, uncertainties and
other factors, which may be beyond Powerfleet's control, and which
may cause its actual results, performance or achievements to be
materially different from future results, performance or
achievements expressed or implied by such forward-looking
statements. All statements other than statements of historical fact
are statements that could be forward-looking statements. For
example, forward-looking statements include statements regarding
the proposed transaction with MiX Telematics; prospects for
additional customers; potential contract values; market forecasts;
projections of earnings, revenues, synergies, accretion, or other
financial information; emerging new products; and plans,
strategies, and objectives of management for future operations,
including growing revenue, controlling operating costs, increasing
production volumes, and expanding business with core customers. The
risks and uncertainties referred to above include, but are not
limited to, future economic and business conditions, the ability to
recognize the anticipated benefits of the proposed transaction with
MiX Telematics, the loss of key customers or reduction in the
purchase of products by any such customers, the failure of the
market for Powerfleet's products to continue to develop, the
inability to protect Powerfleet's intellectual property, the
inability to manage growth, the effects of competition from a
variety of local, regional, national and other providers of
wireless solutions, risks related to the proposed transaction with
MiX Telematics and other risks detailed from time to time in
Powerfleet's filings with the Securities and Exchange Commission
(the "SEC"), including Powerfleet's most recent annual report on
Form 10-K. These risks could cause actual results to differ
materially from those expressed in any forward-looking statements
made by, or on behalf of, Powerfleet. Unless otherwise required by
applicable law, Powerfleet assumes no obligation to update the
information contained in this press release, and expressly
disclaims any obligation to do so, whether a result of new
information, future events, or otherwise.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In
connection with the proposed transaction with MiX, Powerfleet
intends to file with the SEC a registration statement on Form S-4
that will include a joint proxy statement of Powerfleet and MiX and
a prospectus of Powerfleet. Furthermore, Powerfleet intends to
procure a secondary inward listing on the Johannesburg Stock
Exchange to accommodate existing and future South African
Shareholders.
Additionally, MiX intends to prepare a scheme circular for MiX
shareholders in accordance with the Companies Act of South Africa (including the Companies Act
Regulations, 2011 thereunder) and the JSE's listings requirements
with respect to a shareholder meeting at which MiX shareholders
will be asked to vote on the proposed transaction. The scheme
circular will be issued to MiX shareholders together with the proxy
statement/prospectus. If you hold MiX ordinary shares through an
intermediary such as a broker/dealer or clearing agency, or if you
hold MiX ADSs, you should consult with your intermediary or The
Bank of New York Mellon, the depositary for the MiX ADSs, as
applicable, about how to obtain information on the MiX shareholder
meeting.
After Powerfleet's registration statement has been filed and
declared effective by the SEC, Powerfleet will send the definitive
proxy statement/prospectus to Powerfleet stockholders entitled to
vote at the meeting relating to the proposed transaction, and MiX
will send the scheme circular, together with the definitive proxy
statement/prospectus, to MiX shareholders entitled to vote at the
meeting relating to the proposed transaction. MiX and Powerfleet
may file other relevant materials with the SEC in connection with
the proposed transaction. INVESTORS AND SHAREHOLDERS ARE URGED TO
READ THE REGISTRATION STATEMENT, JOINT PROXY STATEMENT/PROSPECTUS
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO AND ANY DOCUMENTS
INCORPORATED BY REFERENCE THEREIN), THE SCHEME CIRCULAR AND OTHER
DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and shareholders will be able to obtain free copies of
these documents (if and when available) and other documents
containing important information about Powerfleet and MiX once such
documents are filed with the SEC through the website maintained by
the SEC at www.sec.gov. Powerfleet or MiX make available copies of
materials they file with, or furnish to, the SEC free of charge at
https://ir.powerfleet.com and http://investor.mixtelematics.com,
respectively.
NO OFFER OR SOLICITATION
This communication shall not
constitute an offer to buy or sell any securities, or the
solicitation of an offer to buy or sell any securities, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
PARTICIPANTS IN THE SOLICITATION
Powerfleet, MiX and
their respective directors, executive officers and certain
employees and other persons may be deemed to be participants in the
solicitation of proxies from the shareholders of Powerfleet and MiX
in connection with the proposed transaction. Securityholders may
obtain information regarding the names, affiliations and interests
of Powerfleet's directors and executive officers in its Annual
Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC
on March 31, 2023, its amended Annual
Report on Form 10-K/A for the year ended December 31, 2022, which was filed with the SEC
on May 1, 2023, and its definitive
proxy statement for its 2023 annual meeting of stockholders, which
was filed with the SEC on June 21,
2023. Securityholders may obtain information regarding the
names, affiliations and interests of MiX's directors and executive
officers in its Annual Report on Form 10-K for the year ended
March 31, 2023, which was filed with
the SEC on June 22, 2023, and its
definitive proxy statement for its 2023 annual general meeting of
shareholders, which was filed with the SEC on July 28, 2023. Other information regarding the
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the joint proxy statement/prospectus and other
relevant materials to be filed with the SEC regarding the proposed
transaction when such materials become available. Investors should
read the joint proxy statement/prospectus carefully when it becomes
available before making any voting or investment decisions. You may
obtain free copies of these documents from Powerfleet or MiX using
the sources indicated above.
Powerfleet Investor Contact
Matt Glover
Gateway Group, Inc.
PWFL@gatewayir.com
(949) 574-3860
Powerfleet Media Contact
Andrea Hayton
Powerfleet, Inc.
ahayton@powerfleet.com
(610) 401-1999
POWERFLEET, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
$
|
14,021,000
|
|
$
|
13,147,000
|
|
$
|
43,231,000
|
|
$
|
36,563,000
|
Services
|
|
20,267,000
|
|
|
21,048,000
|
|
|
58,812,000
|
|
|
62,521,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
34,288,000
|
|
|
34,195,000
|
|
|
102,043,000
|
|
|
99,084,000
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
9,839,000
|
|
|
8,843,000
|
|
|
33,152,000
|
|
|
26,394,000
|
Cost of
services
|
|
7,268,000
|
|
|
8,237,000
|
|
|
21,081,000
|
|
|
22,923,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of
revenues:
|
|
17,107,000
|
|
|
17,080,000
|
|
|
54,233,000
|
|
|
49,317,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
17,181,000
|
|
|
17,115,000
|
|
|
47,810,000
|
|
|
49,767,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
16,664,000
|
|
|
17,988,000
|
|
|
47,393,000
|
|
|
51,763,000
|
Research and development
expenses
|
|
1,735,000
|
|
|
2,384,000
|
|
|
6,965,000
|
|
|
6,285,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
|
18,399,000
|
|
|
20,372,000
|
|
|
54,358,000
|
|
|
58,048,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(1,218,000)
|
|
|
(3,257,000)
|
|
|
(6,548,000)
|
|
|
(8,281,000)
|
Interest
income
|
|
20,000
|
|
|
23,000
|
|
|
48,000
|
|
|
69,000
|
Interest
expense
|
|
(522,000)
|
|
|
(583,000)
|
|
|
(1,541,000)
|
|
|
(1,603,000)
|
Gain on Bargain
purchase - Movingdots
|
|
-
|
|
|
-
|
|
|
-
|
|
|
7,517,000
|
Foreign currency
translation of debt
|
|
191,000
|
|
|
429,000
|
|
|
2,803,000
|
|
|
1,139,000
|
Other (expense)
income, net
|
|
-
|
|
|
(24,000)
|
|
|
1,000
|
|
|
(22,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income before income taxes
|
|
(1,529,000)
|
|
|
(3,412,000)
|
|
|
(5,237,000)
|
|
|
(1,181,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit (expense)
|
|
(770,000)
|
|
|
(262,000)
|
|
|
(107,000)
|
|
|
(698,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income before non-controlling interest
|
|
(2,299,000)
|
|
|
(3,674,000)
|
|
|
(5,344,000)
|
|
|
(1,879,000)
|
Non-controlling
interest
|
|
(1,000)
|
|
|
-
|
|
|
(3,000)
|
|
|
(3,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income
|
|
(2,300,000)
|
|
|
(3,674,000)
|
|
|
(5,347,000)
|
|
|
(1,882,000)
|
Accretion of
preferred stock
|
|
(168,000)
|
|
|
(167,000)
|
|
|
(504,000)
|
|
|
(503,000)
|
Preferred stock
dividend
|
|
(1,067,000)
|
|
|
(1,128,000)
|
|
|
(3,143,000)
|
|
|
(3,364,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income attributable to common stockholders
|
$
|
(3,535,000)
|
|
$
|
(4,969,000)
|
|
$
|
(8,994,000)
|
|
$
|
(5,749,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income per share - basic
|
$
|
(0.10)
|
|
$
|
(0.14)
|
|
$
|
(0.25)
|
|
$
|
(0.16)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income per share - diluted
|
$
|
(0.10)
|
|
$
|
(0.14)
|
|
$
|
(0.25)
|
|
$
|
(0.16)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
35,406,000
|
|
|
35,653,000
|
|
|
35,375,000
|
|
|
35,602,000
|
Weighted average
common shares outstanding - diluted
|
|
35,406,000
|
|
|
35,653,000
|
|
|
35,375,000
|
|
|
35,602,000
|
|
|
|
|
|
|
|
|
|
|
|
|
POWERFLEET, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
|
|
|
|
|
As of
|
|
|
|
|
December 31,
2022
|
|
September 30,
2023
|
|
|
|
|
|
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$
|
17,680,000
|
|
$
|
19,297,000
|
Restricted
cash
|
|
|
|
|
309,000
|
|
|
310,000
|
Accounts receivable,
net
|
|
|
|
|
32,493,000
|
|
|
33,606,000
|
Inventory,
net
|
|
|
|
|
22,272,000
|
|
|
21,055,000
|
Deferred costs -
current
|
|
|
|
|
762,000
|
|
|
191,000
|
Prepaid expenses and other
current assets
|
|
|
|
|
7,709,000
|
|
|
8,721,000
|
Total current assets
|
|
|
|
|
81,225,000
|
|
|
83,180,000
|
|
|
|
|
|
|
|
|
|
Fixed assets,
net
|
|
|
|
|
9,249,000
|
|
|
10,222,000
|
Goodwill
|
|
|
|
|
83,487,000
|
|
|
83,487,000
|
Intangible
assets, net
|
|
|
|
|
22,908,000
|
|
|
21,157,000
|
Right of use
asset
|
|
|
|
|
7,820,000
|
|
|
6,490,000
|
Severance payable
fund
|
|
|
|
|
3,760,000
|
|
|
3,427,000
|
Deferred tax
asset
|
|
|
|
|
3,225,000
|
|
|
1,915,000
|
Other
assets
|
|
|
|
|
5,761,000
|
|
|
6,228,000
|
Total
assets
|
|
|
|
$
|
217,435,000
|
|
$
|
216,106,000
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Short-term bank debt and
current maturities of long-term debt
|
|
|
|
$
|
10,312,000
|
|
$
|
12,137,000
|
Accounts payable and accrued
expenses
|
|
|
|
|
26,598,000
|
|
|
28,109,000
|
Deferred revenue -
current
|
|
|
|
|
6,363,000
|
|
|
6,101,000
|
Lease liability -
current
|
|
|
|
|
2,441,000
|
|
|
2,286,000
|
Total
current liabilities
|
|
|
|
|
45,714,000
|
|
|
48,633,000
|
|
|
|
|
|
|
|
|
|
Long-term debt,
less current maturities
|
|
|
|
|
11,403,000
|
|
|
9,617,000
|
Deferred revenue
- less current portion
|
|
|
|
|
4,390,000
|
|
|
4,804,000
|
Lease liability -
less current portion
|
|
|
|
|
5,628,000
|
|
|
4,415,000
|
Accrued severance
payable
|
|
|
|
|
4,365,000
|
|
|
4,142,000
|
Deferred tax
liability
|
|
|
|
|
4,919,000
|
|
|
4,283,000
|
Other long-term
liabilities
|
|
|
|
|
636,000
|
|
|
649,000
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
77,055,000
|
|
|
76,543,000
|
|
|
|
|
|
|
|
|
|
MEZZANINE
EQUITY
|
|
|
|
|
|
|
|
|
Convertible
redeemable Preferred stock: Series A
|
|
|
|
|
57,565,000
|
|
|
59,176,000
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Total Powerfleet,
Inc. stockholders' equity
|
|
|
|
|
82,737,000
|
|
|
80,324,000
|
Non-controlling
interest
|
|
|
|
|
78,000
|
|
|
63,000
|
Total
equity
|
|
|
|
|
82,815,000
|
|
|
80,387,000
|
Total liabilities
and stockholders' equity
|
|
|
|
$
|
217,435,000
|
|
$
|
216,106,000
|
|
|
|
|
|
|
|
|
|
POWERFLEET, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW DATA
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2022
|
|
2023
|
|
|
|
|
|
|
|
(Unaudited)
|
Cash flows from
operating activities (net of net assets acquired):
|
|
|
|
|
|
|
|
|
Net (loss) /
income
|
|
|
|
$
|
(5,347,000)
|
|
$
|
(1,882,000)
|
Adjustments to
reconcile net loss to cash (used in) provided by operating
activities:
|
|
|
|
|
|
|
|
|
Non-controlling
interest
|
|
|
|
|
3,000
|
|
|
3,000
|
Gain on bargain
purchase
|
|
|
|
|
-
|
|
|
(7,517,000)
|
Inventory
reserve
|
|
|
|
|
177,000
|
|
|
619,000
|
Stock based
compensation expense
|
|
|
|
|
3,156,000
|
|
|
2,785,000
|
Depreciation and
amortization
|
|
|
|
|
6,152,000
|
|
|
6,926,000
|
Right-of-use assets,
non-cash lease expense
|
|
|
|
|
2,071,000
|
|
|
1,900,000
|
Bad debt
expense
|
|
|
|
|
102,000
|
|
|
1,161,000
|
Deferred
taxes
|
|
|
|
|
107,000
|
|
|
674,000
|
Other non-cash
items
|
|
|
|
|
660,000
|
|
|
172,000
|
Changes in:
|
|
|
|
|
|
|
|
|
Operating assets and
liabilities
|
|
|
|
|
(8,795,000)
|
|
|
(5,073,000)
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
|
|
|
|
(1,714,000)
|
|
|
(232,000)
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Acquisitions, net of
cash assumed
|
|
|
|
|
-
|
|
|
8,722,000
|
Purchase of
investment
|
|
|
|
|
-
|
|
|
(100,000)
|
Capitalized software
development costs
|
|
|
|
|
-
|
|
|
(2,727,000)
|
Capital
expenditures
|
|
|
|
|
(4,001,000)
|
|
|
(2,626,000)
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
investing activities
|
|
|
|
|
(4,001,000)
|
|
|
3,269,000
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Payment of preferred
stock dividend
|
|
|
|
|
-
|
|
|
(2,257,000)
|
Repayment of long-term
debt
|
|
|
|
|
(4,279,000)
|
|
|
(3,986,000)
|
Short-term bank debt,
net
|
|
|
|
|
3,949,000
|
|
|
4,995,000
|
Purchase of treasury
stock upon vesting of restricted stock
|
|
|
|
|
(193,000)
|
|
|
(138,000)
|
Proceeds from exercise
of stock options
|
|
|
|
|
-
|
|
|
37,000
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by financing activities
|
|
|
|
|
(523,000)
|
|
|
(1,349,000)
|
|
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
|
|
|
|
(3,510,000)
|
|
|
(70,000)
|
Net increase in
cash, cash equivalents and restricted cash
|
|
|
|
|
(9,748,000)
|
|
|
1,618,000
|
Cash, cash equivalents
and restricted cash - beginning of period
|
|
|
|
|
26,760,000
|
|
|
17,989,000
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash - end of period
|
|
|
|
$
|
17,012,000
|
|
$
|
19,607,000
|
|
|
|
|
|
|
|
|
|
CONSTANT CURRENCY
Constant currency information has
been presented to illustrate the impact of changes in currency
rates on the company's results. The constant currency information
has been determined by adjusting the current financial reporting
period results to the prior period average exchange rates,
determined as the average of the monthly exchange rates applicable
to the period. The measurement has been performed for each of the
company's currencies. The constant currency growth percentage has
been calculated by utilizing the constant currency results compared
to the prior period results.
The constant currency information represents non-GAAP
information. The company believes this provides a useful basis to
measure the performance of its business as it removes distortion
from the effects of foreign currency movements during the period;
however, this information should be considered as supplemental in
nature and should not be considered in isolation or as a substitute
for the related financial information prepared in accordance with
GAAP. See the section above titled "Non-GAAP Financial Measures"
for more information.
Due to a portion of the company's customers who are invoiced in
non-U.S. Dollar denominated currencies, the company also calculates
subscription revenue growth rate on a constant currency basis,
thereby removing the effect of currency fluctuation on results of
operations.
|
|
|
|
|
|
|
|
Three Months Ended
Sept 30,
|
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Service
Revenue:
|
|
|
|
|
|
|
Service Revenue as
reported
|
$20,267
|
|
$21,048
|
|
$781
|
3.9 %
|
Conversion impact of
U.S. Dollar
|
|
|
$1,470
|
|
$1,470
|
|
Service revenue on a
constant currency basis
|
$20,267
|
|
$22,518
|
|
$2,251
|
11.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
Sept 30,
|
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Product
Revenue:
|
|
|
|
|
|
|
Product Revenue as
reported
|
$14,021
|
|
$13,147
|
|
($874)
|
(6.2 %)
|
Conversion impact of
U.S. Dollar
|
|
|
$154
|
|
$154
|
|
Product revenue on a
constant currency basis
|
$14,021
|
|
$13,301
|
|
($720)
|
(5.1 %)
|
|
|
|
|
|
|
|
|
Three Months Ended
Sept 30,
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Total
Revenue:
|
|
|
|
|
|
|
Total Revenue as
reported
|
$34,288
|
|
$34,195
|
|
($93)
|
(0.3 %)
|
Conversion impact of
U.S. Dollar
|
|
|
$1,624
|
|
$1,624
|
|
Total revenue on a
constant currency basis
|
$34,288
|
|
$35,819
|
|
$1,531
|
4.5 %
|
|
Nine Months Ended
September 30,
|
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Service
Revenue:
|
|
|
|
|
|
|
Service Revenue as
reported
|
$58,812
|
|
$62,521
|
|
$3,709
|
6.3 %
|
Conversion impact of
U.S. Dollar
|
|
|
$4,420
|
|
$4,420
|
|
Service revenue on a
constant currency basis
|
$58,812
|
|
$66,941
|
|
$8,129
|
13.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Product
Revenue:
|
|
|
|
|
|
|
Product Revenue as
reported
|
$43,231
|
|
$36,563
|
|
($6,668)
|
(15.4 %)
|
Conversion impact of
U.S. Dollar
|
|
|
$348
|
|
$348
|
|
Product revenue on a
constant currency basis
|
$43,231
|
|
$36,911
|
|
($6,320)
|
(14.6 %)
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Total
Revenue:
|
|
|
|
|
|
|
Total Revenue as
reported
|
$102,043
|
|
$99,084
|
|
($2,959)
|
(2.9 %)
|
Conversion impact of
U.S. Dollar
|
|
|
$4,768
|
|
$4,768
|
|
Total revenue on a
constant currency basis
|
$102,043
|
|
$103,852
|
|
$1,809
|
1.8 %
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/powerfleet-reports-third-quarter-and-nine-month-2023-financial-results-301982701.html
SOURCE Powerfleet