305% Revenue Growth GIVATAYIM, Israel, November 23
/PRNewswire-FirstCall/ -- Nexus Telocation Systems Ltd. (Nasdaq
Capital Market: NXUS), a leading provider of stolen vehicle
retrieval services in Israel, Argentina and Mexico, and a leading
provider of road side assistance and towing services in Israel,
reports today its financial results for the third quarter and first
nine months of 2005. Financial Highlights: Q3 2005 is the second
financial quarter, after the acquisition of Shagrir's roadside
assistance and towing activities and assets, in which Nexus has
consolidated the financials of Shagrir, Nexus' Israeli subsidiary,
into its consolidated financial statements. The results show Nexus
achieving all its quantitative goals and an improvement in the
operating figures. Revenues: Nexus' revenues for the first nine
months and for the third quarter of 2005 increased by 305% and
144%, respectively to $27.1 million and $10.4 million from $6.7
million and $4.3 million, respectively, in the comparable periods
in 2004. Gross margin: For the third quarter and first nine months
of 2005, gross margin were 36.8% and 36.3%, respectively compared
to 40.3% and 31.2% in the same periods in 2004. Operating Profit
(loss): Nexus reports a $870 thousand operating profit in the third
quarter of 2005, compared to an operating loss of $313 thousand in
the third quarter of 2004. In the first nine months of 2005, Nexus
recorded an operating profit of $7 thousand, compared to an
operating loss of $1,440 thousand for the same period in 2004. On a
proforma basis without the non-cash amortizations of intangible
assets and deferred stock-based compensation, Nexus would have
recorded for the first nine months of 2005 an approximate operating
profit of $2,114 thousand. Net Loss: For the third quarter and
first nine months of 2005, net loss reduced to $0.3 million and
$2.7 million respectively, compared to $0.6 million and $1.9
million in the same periods in 2004. EBITDA: Nexus' EBITDA improved
to $2.3 million and $4.2 million in the third quarter and the first
nine months of 2005, respectively, as compared to a negative EBITDA
of $0.2 million in the third quarter of 2004 and a negative EBITDA
of $0.1 million in the first nine months of 2004. Commenting on the
result, Danny Stern, CEO, said: "We are pleased with our financial
results which reflect our expectations. Our new business structure,
which is mainly based on providing services, has enabled us to
strengthen our capability to increase revenues and profitability".
"We have recently completed the operational integration of our two
Israeli control centres into one, and expect to benefit from higher
operational efficiency and cost reduction. Management and strategy
changes as a result of the turnaround in our business are mostly
complete. Nevertheless, while over 90% of our revenues are derived
from Israel, our attention is now focused on leveraging our
businesses in all of the main markets in which we are competing,
namely Argentina, Mexico, Venezuela and Russia, as well as Israel.
" concluded Mr. Stern. Yossi Ben Shalom, Chairman of the Board
said: "as in Q2/2005, we are pleased with the year over year
growth, but it is the sequential growth and on-going improvement of
all main operational indicators, that is even more significant. As
we promised to our shareholders, Nexus is now a stronger and a
growing company, with a solid revenue base, that presents a growth
in revenues, improved operational profitability and higher EBITDA.
We are looking forward to further accomplishing our goals and
achieving additional growth. " Mr. Ben Shalom added: "Nexus shares
are again traded on Nasdaq Capital Market for the benefit of all
our shareholders. We believe that the increased coverage of our
company on this market will encourage a greater number of investors
to take an interest in our shares and choose to participate in our
growth." Conference Call Information: Nexus' management will host
conference calls with the investment community Today, November 23rd
in Hebrew on 16:00 local time and in English on 10:00 EST. To
listen to the conference calls, please dial: For the English
Conference Call US Toll free # +1-866-527-8676 or Israeli #
03-9180609 For the Hebrew Conference Call US Toll free #
+1-866-527-8676 or Israeli # 03-9180609 A replay of the conference
call will be available through November 24th, 2005 at the Company's
website http://www.nexus.telocation.com/. About Nexus: Nexus
Telocation Systems Ltd provides range of services to automobile
owners and insurance companies, including road-side assistance,
vehicle towing, stolen vehicle retrieval, fleet management and
other value added services. Nexus 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 Nexus'
technology and operational know-how. This press release contains
forward-looking statements with respect to the business, financial
condition and results of operations of Nexus and its affiliates.
These forward-looking statements are based on the current
expectations of the management of Nexus, 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. Nexus 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. Contact: Ronen Stein,
V.P. and Chief Financial Officer Tel.; +972-3-572-3111 E-mail: Yael
Nevat, Commitment-IR.com Tel: +972-3-611-4466 E-mail: CONDENSED
INTERIM CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands
September 30, December 31, 2005 2004 Unaudited ASSETS CURRENT
ASSETS: Cash and cash equivalents $ 1,988 $ 75 Short-term
investments - 15 Trade receivables 7,458 3,828 Other accounts
receivable and prepaid expenses 869 639 Inventories 1,483 1,343
Total current assets 11,798 5,900 LONG-TERM ASSETS: Long-term
accounts receivable 241 230 Severance pay fund 2,949 751 Property
and equipment, net 7,406 2,670 Goodwill 42,318 13,154 Other
intangible assets, net 10,640 2,808 Total long-term assets 63,554
19,613 Total assets $ 75,352 $ 25,513 CONDENSED INTERIM
CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands (except share
and per share data) September 30, December 31, 2005 2004 Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES:
Short-term bank credit and current maturities of long-term bank
loans $ 8,883 $ 7,064 Trade payables 4,457 *) 3,055 Other accounts
payable and accrued expenses 11,354 *) 2,479 Total current
liabilities 24,694 12,598 LONG-TERM LIABILITIES: Long-term loans
36,201 4,572 Accrued severance pay 3,851 1,257 Total long-term
liabilities 40,052 5,829 SHAREHOLDERS' EQUITY: Share capital -
Ordinary shares of NIS 3 par value: Authorized : 8,000,000 and
4,000,000 shares at September 30, 2005 and December 31, 2004,
respectively; Issued and outstanding: 2,458,910 and 1,704,505
shares at September 30, 2005 and December 31, 2004, respectively
1,667 1,145 Additional paid-in capital 100,646 94,127 Deferred
stock-based compensation (2) (117) Accumulated other comprehensive
loss (1,280) (353) Accumulated deficit (90,425) (87,716) Total
shareholders' equity 10,606 7,086 Total liabilities and
shareholders' equity $ 75,352 $ 25,513 *) Reclassified. CONDENSED
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in
thousands (except per share data) Year Nine months ended Three
months ended ended December September 30, September 30, 31, 2005
2004 2005 2004 2004 Unaudited Revenues: Products $ 6,784 $ 3,567 $
2,337 $2,093 $ 5,594 Services 20,284 3,118 8,078 2,181 5,375 Total
revenues 27,068 6,685 10,415 4,274 10,969 Cost of revenues:
Products 4,467 2,628 1,391 1,557 *) 4,297 Services 12,767 1,969
5,189 994 *) 3,301 Total cost of revenues 17,234 4,597 6,580 2,551
*) 7,598 Gross profit 9,834 2,088 3,835 1,723 3,371 Operating
expenses: Research and development, net 669 326 230 72 482 Selling
and marketing 2,835 914 905 645 *) 1,644 General and administrative
4,216 1,515 1,157 774 *) 2,775 Amortization of deferred stock
compensation 125 345 11 117 465 Amortization of intangible assets
1,982 428 662 428 932 Total operating expenses 9,827 3,528 2,965
2,036 6,298 Operating income (loss) 7 (1,440) 870 (313) (2,927)
Financial expenses, net (2,872) (447) (1,280) (275) (758) Other
income (expenses), net 156 (4) 62 (4) (42) Loss before taxes on
income 2,709 1,891 348 592 3,727 Taxes on income - 45 - 45 37 Net
loss $ 2,709 $ 1,936 $ 348 $ 637 $ 3,764 Basic and diluted net loss
per share $ 1.18 $ 1.41 $ 0.14 $ 0.37 $ 2.58 *) Reclassified
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(DEFICIENCY) U.S. dollars in thousands (except share data)
Additional Deferred Number of Share paid-in stock-based shares
capital capital compensation Balance as of January 1, 2004
1,145,300 $ 773 $ 83,239 $ (566) Issuance of shares, warrants and
options for the acquisition of additional interest in a subsidiary,
net 429,154 286 10,815 - Deferred stock-based compensation - - 16
(16) Amortization of deferred stock-based compensation - - - 465
Exercise of warrants 130,051 86 57 - Comprehensive loss: Other
comprehensive income - foreign currency translation adjustments - -
- - Net loss - - - - Total comprehensive loss Balance as of
December 31, 2004 1,704,505 1,145 94,127 (117) Issuance of shares,
warrants and options, net 722,587 500 6,391 - Deferred stock-based
compensation - - 10 (10) Amortization of deferred stock-based
compensation - - - 125 Exercise of warrants 31,818 22 118 -
Comprehensive loss: Other comprehensive loss - foreign currency
translation adjustments - - - - Net loss - - - - Total
comprehensive loss Balance as of September 30, 2005 (unaudited)
2,458,910 $ 1,667 $ 100,646 $ (2) Balance as of January 1, 2004
1,145,300 $ 773 $ 83,239 $ (566) Issuance of shares, warrants and
options for the acquisition of additional interest in a subsidiary,
net 429,154 286 10,815 - Deferred stock-based compensation - - 16
(16) Amortization of deferred stock-based compensation - - - 345
Exercise of warrants 130,051 86 57 - Comprehensive loss: Other
comprehensive loss - foreign currency translation adjustments - - -
- Net loss - - - - Total comprehensive loss Balance as of September
30, 2004 (unaudited) 1,704,505 $ 1,145 $ 94,127 $ (237) Accumulated
Total other Total shareholders' comprehensive Accumulated
comprehensive equity loss deficit loss (deficiency) Balance as of
January 1, 2004 $ (840) $ (83,952) $ (1,346) Issuance of shares,
warrants and options for the acquisition of additional interest in
a subsidiary, net - - 11,101 Deferred stock-based compensation - -
- Amortization of deferred stock-based compensation - - 465
Exercise of warrants - - 143 Comprehensive loss: Other
comprehensive income - foreign currency translation adjustments 487
- $ 487 487 Net loss - (3,764) (3,764) (3,764) Total comprehensive
loss $ (3,277) Balance as of December 31, 2004 (353) (87,716) 7,086
Issuance of shares, warrants and options, net - - 6,891 Deferred
stock-based compensation - - - Amortization of deferred stock-based
compensation - - 125 Exercise of warrants - - 140 Comprehensive
loss: Other comprehensive loss - foreign currency translation
adjustments (927) - $ (927) (927) Net loss - (2,709) (2,709)
(2,709) Total comprehensive loss $ (3,636) Balance as of September
30, 2005 (unaudited) $ (1,280) $ (90,425) $ 10,606 Balance as of
January 1, 2004 $ (840) $ (83,952) $ (1,346) Issuance of shares,
warrants and options for the acquisition of additional interest in
a subsidiary, net - - 11,101 Deferred stock-based compensation - -
- Amortization of deferred stock-based compensation - - 345
Exercise of warrants - - 143 Comprehensive loss: Other
comprehensive loss - foreign currency translation adjustments (17)
- $ (17) (17) Net loss - (1,936) (1,936) (1,936) Total
comprehensive loss $ (1,953) Balance as of September 30, 2004
(unaudited) $ (857) $ (85,888) $ 8,290 CONDENSED STATEMENTS OF
CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY) U.S. dollars in
thousands (except share data) Additional Deferred Number of Share
paid-in stock-based shares capital capital compensation Balance as
of July 1, 2005 (unaudited) 2,458,910 $ 1,667 $ 100,646 $ (13)
Amortization of deferred stock-based compensation - - - 11
Comprehensive loss: Other comprehensive loss - foreign currency
translation adjustments - - - - Net loss - - - - Total
comprehensive loss Balance as of September 30, 2005 (unaudited)
2,458,910 $ 1,667 $ 100,646 $ (2) Balance as of July 1, 2004
(unaudited) 1,698,319 $ 1,141 $ 94,131 $ (354) Amortization of
deferred stock-based compensation - - - 117 Exercise of warrants
6,186 4 (4) - Comprehensive loss: Other comprehensive loss -
foreign currency translation adjustments - - - - Net loss - - - -
Total comprehensive loss Balance as of September 30, 2004
(unaudited) 1,704,505 $ 1,145 $ 94,127 $ (237) Accumulated Total
other Total shareholders' comprehensive Accumulated comprehensive
equity loss deficit loss (deficiency) Balance as of July 1, 2005
(unaudited) $ (1,223) $ (90,077) $ 11,000 Amortization of deferred
stock-based compensation - - 11 Comprehensive loss: Other
comprehensive loss - foreign currency translation adjustments (57)
- $ (57) (57) Net loss - (348) (348) (348) Total comprehensive loss
$ (405) Balance as of September 30, 2005 (unaudited) $ (1,280) $
(90,425) $ 10,606 Balance as of July 1, 2004 (unaudited) $ (806) $
(85,251) $ 8,861 Amortization of deferred stock-based compensation
- - 117 Exercise of warrants - - - Comprehensive loss: Other
comprehensive loss - foreign currency translation adjustments (51)
- $ (51) (51) Net loss - (637) (637) (637) Total comprehensive loss
$ (688) Balance as of September 30, 2004 (unaudited) $ (857) $
(85,888) $ 8,290 CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH
FLOWS U.S. dollars in thousands Three months Year Nine months ended
ended ended September 30, September 30, December 2005 2004 2005
2004 31, 2004 Unaudited Cash flows from operating activities: Net
loss $(2,709) $(1,936) $ (348) $(637) $(3,764) Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities: Depreciation and amortization 3,869 1,448 1,307 843
2,065 Interest on convertible debenture and long-term loan 1,629 87
925 87 (43) Accrued severance pay, net 425 12 (175) 33 28 Write-off
of inventories - - - - 479 Gain from sale of property and
equipment, net (180) - (65) - (56) Amortization of deferred
stock-based compensation 125 345 11 117 465 Decrease (increase) in
trade receivables 1,721 (474) (10) (766) (355) Decrease (increase)
in other accounts receivable and prepaid expenses 1,954 376 (7) 276
289 Decrease (increase) in inventories (33) 129 (119) 227 291
Decrease (increase) in other long-term accounts receivable (30) (6)
5 10 (35) Increase in trade payables 329 492 213 385 1,238 Decrease
in other accounts payable and accrued expenses (2,145) (517) (564)
(511) (508) Net cash provided by (used in) operating activities
4,955 (44) 1,173 64 94 Cash flows from investing activities:
Purchase of property and equipment (1,354) (387) (214) (160) (873)
Proceeds from short-term bank deposits 15 - - - - Proceeds from
sale of property and equipment 316 - 123 - 58 Acquisition of
additional interest in Shagrir Motor Vehicle Systems, net of cash
acquired (a) - 10 - - 10 Acquisition of activities and assets of
Shagrir Towing Services Ltd. and Shagrir (1985) Ltd. (b) (43,847) -
(90) - - Net cash used in investing activities (44,870) (377) (181)
(160) (805) CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands Year Nine months ended Three months ended
ended December September 30, September 30, 31, 2005 2004 2005 2004
2004 Unaudited Cash flows from financing activities: Receipt of
long-term loans from banks 16,066 - - - - Repayment of long-term
loans from banks (1,079) (174) (810) (174) *) (376) Receipt of long
term loans from investors and others 21,093 - 158 - - Proceeds from
issuance of shares and exercise of warrants, net 6,105 143 - - 67
Short-term bank credit, net (481) (120) (440) (208) (504) Proceeds
from long-term loan - - - - *) 892 Net cash provided by (used in)
financing activities 41,704 (151) (1,092) (382) 79 Effect of
exchange rate on cash and cash equivalents 124 30 45 (18) (1)
Increase (decrease) in cash and cash equivalents 1,913 (542) (55)
(496) (633) Cash and cash equivalents at the beginning of the
period 75 708 2,043 662 708 Cash and cash equivalents at the end of
the period $ 1,988 $ 166 $ 1,988 $ 166 $ 75 DATASOURCE: Nexus
Telocation Systems Ltd CONTACT: Contact: Ronen Stein, V.P. and
Chief Financial Officer, Tel.; +972-3-572-3111, E-mail: ; Yael
Nevat, Commitment-IR.com, Tel: +972-3-611-4466, E-mail:
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