$16.9M Revenue in Q3 2009, 8% Increase Compared to Q2 2009 ; EBITDA
- $3.6M in Q3 2009, Compared to $2.6M in Q2 2009 ROSH HAAYIN,
Israel, November 11 /PRNewswire-FirstCall/ -- Pointer Telocation
Ltd. (Nasdaq Capital Market: PNTR, Tel-Aviv Stock Exchange: PNTR) -
a leading provider of Automatic Vehicle Location (AVL) technology,
stolen vehicle retrieval services, fleet management, car &
driver safety, public safety, vehicle security, asset management
and road side assistance, announced today its financial results for
the first nine months and third quarter of 2009. Financial
Highlights: Revenues: Pointer's revenues for the third quarter of
2009 decreased by 18%, to $16.9 million, from $20.7 million in the
comparable period in 2008. In the first nine months of 2009,
revenues were $48.5 million, a 17% decrease over the same period of
2008. Pointer's revenues from services in the third quarter and the
first nine months of 2009 were 68% and 69%, respectively, of total
revenues, as compared with 58% and 59% for these periods in 2008,
respectively. International activities for the third quarter of
2009 were 21% of total revenue compared to 31.5% in the comparable
period in 2008. Gross Profit: For the third quarter of 2009, gross
profit decreased 8% to $7 million from $7.7 million in the third
quarter of 2008. As a percentage of revenues, gross profit was 41%
in the third quarter of 2009, as compared to 37% in the third
quarter of 2008. In the first nine months of 2009, gross profit
decreased 7.7% to $20.5 million from $22.3 million in the first
nine months of 2008. Gross margin for the first nine months of 2009
was 42%, as compared to 38% for the first nine months of 2008.
Operating Income: Pointer's operating income increased 9% to $2.5
million in the third quarter of 2009, compared to operating income
of $2.3 million for the third quarter of 2008. Operating margin was
15% in the third quarter of 2009, as compared to approximately 11%
in the third quarter of 2008. In the first nine months of 2009,
operating income was $2.7 million compared to $7.1 million for the
same period of 2008. In the first nine months of 2009, the
operating income was primarily affected by the non-cash impairment
of $3.0 million, attributable to a revised estimate of the fair
market value of the business with certain customers of the
Cellocator business which we acquired in September 2007. Excluding
this non-cash impairment, operating income during the first nine
months of 2009 was $5.7 million. Net Income: Pointer recorded net
income attributable to Pointer shareholders of $1.1 million or
$0.23 per share in the third quarter of 2009, as compared to net
income of $0.7 million or $0.15 per share in the third quarter of
2008. Net income attributable to a non-controlling interest in
affiliates in the third quarter of 2009 was $0.7 million compared
to $0.4 million for the third quarter of 2008. For the third
quarter of 2009 the net income, before giving effect to the
exclusion of those earnings relating to non-controlling interests
in accordance with SFAS 160, was $1.8 million. For the first nine
months of 2009, Pointer recorded net loss attributable to Pointer
shareholders of $1.7 million or ($0.38) per share, compared to net
income of $2.3 million or $0.48 per share in the same period of
2008. Net income attributable to non-controlling interest in
affiliates in the first nine months of 2009 was $2.4 million
compared to $1.3 million for the third quarter of 2008. For the
first nine months of 2009, the net income, before giving effect to
the exclusion of those earnings relating to non-controlling
interests in accordance with SFAS 160, was $0.7 million. Non-GAAP
net income attributable to Pointer: Pointer recorded non-GAAP net
income of $1.9 million during the third quarter of 2009, as
compared to non-GAAP net income of $1.6 million in the third
quarter of 2008. For the first nine months of 2009, Pointer's
non-GAAP net income was $3.5 million, compared to non-GAAP net
income of $5.1 million in the same period of 2008. An explanation
of how we derive Non-GAAP net income is included on the first
paragraph in page four of this press release. EBITDA: Pointer's
EBITDA for the third quarter of 2009 and for the first nine months
of 2009 was $3.6 million and $9.3 million, respectively, as
compared to $3.8 million and $11.9 million in the comparable
periods of 2008. Danny Stern, Pointer CEO, said: "We are proud to
report improved gross margins. These are the outcome of measures
taken to improve our efficiency over the past challenging four
quarters of industrial and global slowdown. The gross margins will
support profitability when the economy picks-up. Our services
sector seems to have overcome the slowdown. Our product &
technology division still demonstrates weakness in revenues,
although the above-mentioned efficiency measures partly offset the
slowdown's negative impact on income. Our Latin American
subsidiaries have reported improved performance. As we have stated
in previous quarters, our strong cash generative business, which
yielded $9.3M in EBITDA during the first nine month of 2009,
enables us to continue our R&D efforts. Our R&D efforts are
designed to offer our partners as-of mid 2010, the next generation
of our products & technologies. These efforts, we believe, will
further contribute to our showing of improved profitability." Mr.
Stern concluded that Pointer expects to be able to leverage a
market upturn as a result of its decreasing debt to equity ratio.
He also noted that this reduction in debt is a key indicator of the
group's strength. Conference Call Information: Pointer Telocation's
management will host a conference call with the investment
community to review and discuss the financial results: Conference
call will take place today, November 11th, 2009 on 9:30 AM EST,
16:30 Israel time. To listen to the call, please dial in to one of
the following teleconferencing numbers. Please begin placing your
call at least 5 minutes before the conference call commences. From
USA: +1-888-407-2553 From Israel: 03-918-0609 International:
+972-3-918-0609 A replay of the conference call will be available
through November 12th, 2009 on the Company's website at
http://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. Non-GAAP
net income consist of GAAP net income adjusted to exclude
amortization of acquired intangible assets, deferred income tax,
impairment of long-lived assets and a onetime non-cash expense
relating to a loan discount in the amount of $0.7 million as part
of a loan replacement which we reported in the second quarter of
2009, 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. Our non-GAAP financial measures 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 a table
immediately following the consolidated statements of cash flows in
this press release. Pointer uses EBITDA as a non-GAAP financial
performance measurement. EBITDA is calculated by adding back to net
income interest, taxes and depreciation and amortization including
in respect of our non-cash impairment charge related to the fair
market value of the business with certain customers from our
acquisition of Cellocator. 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. A reconciliation of EBITDA to GAAP measures
is provided in a table immediately following the consolidated
statements of cash flows in this press release. 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.
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 client list with products installed in over 400,000
vehicles across the globe: the UK, Greece, Mexico, Argentina,
Brazil, Russia, Croatia, Germany, Czech Republic, Latvia, Turkey,
Hong Kong, Singapore, India, Costa Rica, Norway, Venezuela,
Hungary, Israel and more. 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. In 2004,
Cellocator was selected as the official security and location
equipment supplier for the Olympic Games in Athens. For more
information: http://www.pointer.com/. CONDENSED INTERIM
CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands September 30,
December 31, 2009 2008 Unaudited ASSETS CURRENT ASSETS: Cash and
cash equivalents $ 3,013 $ 2,708 Trade receivables, net 14,250
13,509 Other accounts receivable and prepaid expenses 3,451 2,774
Inventories 2,642 3,999 Total current assets 23,356 22,990
LONG-TERM ASSETS: Long-term accounts receivable and deferred
expenses 647 339 Severance pay fund 5,993 4,925 Property and
equipment, net 8,838 7,998 Deferred income taxes 1,049 1,037 Other
intangible assets, net 9,736 14,894 Goodwill 51,411 50,416 Total
long-term assets 77,674 79,609 Total assets $ 101,030 $ 102,599
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS U.S. dollars in
thousands (except share and per share data) September 30, December
31, 2009 2008 Unaudited LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES: Short-term bank credit and current maturities
of long-term loans $ 10,698 $ 7,849 Trade payables 8,092 8,613
Deferred revenues and customer advances 9,792 8,701 Other accounts
payable and accrued expenses 6,107 5,792 Total current liabilities
34,689 30,955 LONG-TERM LIABILITIES: Long-term loans from banks
15,963 20,520 Long-term loans from shareholders and others 974
3,305 Other long-term liabilities 580 257 Accrued severance pay
7,036 6,375 Total long-term liabilities 24,553 30,457 Shareholders'
equity *) 41,788 41,187 Total liabilities and shareholders' equity
$ 101,030 $ 102,599 *) Reclassification due to the adoption of SFAS
160. INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in
thousands (except share and per share data) Nine months Three
months Year ended ended ended December September 30, September 30,
31, 2009 2008 2009 2008 2008 Unaudited Revenues: Products $15,101
$24,029 $ 5,395 $ 8,708 $ 30,645 Services 33,354 34,567 11,500
12,003 46,010 Total revenues 48,455 58,596 16,895 20,711 76,655
Cost of revenues: Products 7,974 12,837 2,555 4,725 16,392 Services
19,190 22,757 7,086 8,084 29,869 Amortization of intangible assets
738 735 246 245 980 Total cost of revenues 27,902 36,329 9,887
13,054 47,241 Gross profit 20,553 22,267 7,008 7,657 29,414
Operating expenses: Research and development, net 2,113 1,792 653
621 2,511 Selling and marketing 4,461 5,408 1,482 1,931 6,934
General and administrative 6,777 6,130 1,903 2,210 8,311
Amortization of intangible assets 1,489 1,818 442 583 2,365
Impairment of intangible assets 2,959 - - - - Total operating
expenses 17,799 15,148 4,480 5,345 20,121 Operating income 2,754
7,119 2,528 2,312 9,293 Financial expenses, net 1,574 3,252 477
1,077 4,054 Other( income) expenses, net 15 (19) 3 - (22) Income
before taxes on income 1,165 3,886 2,048 1,235 5,261 Taxes on
income 79 320 38 90 640 Income after Income taxes 1,086 3,566 2,010
1,145 4,621 Equity in losses of affiliate 382 - 191 - - Net income
*) $ 704 $3,566 $ 1,819 $ 1,145 $ 4,621 Less: net income
attributable to the noncontrolling interest *) $ 2,429 $1,303 $ 692
$ 431 $ 2,248 Net income (loss) attributable to Pointer's
shareholders $(1,725) $2,263 $ 1,127 $ 714 $ 2,373 Basic net
earnings (loss) per share $(0.36) $ 0.49 $ 0.24 $ 0.15 $ 0.51
Diluted net earnings (loss) per share $(0.38) $ 0.48 $ 0.23 $ 0.15
$ 0.50 *) Reclassification due to the adoption of SFAS 160. INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands
Three months Year Nine months ended ended ended December September
30, September 30, 31, 2009 2008 2009 2008 2008 Unaudited Cash flows
from operating activities: Net income *) $ 704 $ 3,566 $ 1,819 $
1,145 $ 4,621 Adjustments required to reconcile net income to net
cash provided by operating activities: Depreciation ,amortization
and impairment 6,934 5,036 1,281 1,613 6,918 Accrued interest and
exchange rate changes of convertible debenture and long-term loans
(113) 1,214 16 (30) 1,187 Accrued severance pay, net (415) 365
(160) 198 619 Gain (loss) from sale of property and equipment, net
(205) (133) (67) 25 (36) Equity in losses of affiliate 382 - 191 -
- Amortization of deferred stock-based compensation 318 226 48 86
350 Decrease (increase) in trade receivables, net (568) (3,313) 91
(1,039) (1,773) Decrease (increase) in other accounts receivable
and prepaid expenses (384) (551) (229) 175 (6) Decrease (increase)
in inventories 156 (1,088) (150) (821) (2,088) Decrease (increase)
in long-term accounts receivable and deferred expenses (226) 49
(63) 1 23 Write-off of inventories 39 75 75 112 Increase in
deferred income taxes - - - - (178) Increase (decrease) in trade
payables (339) 1,958 347 1,821 888 Increase (decrease) in other
accounts payable and accrued expenses 1,072 163 (820) (1,418) 379
Net cash provided by operating activities 7,355 7,567 2,304 1,831
11,016 Cash flows from investing activities: Purchase of property
and equipment (2,525) (2,537) (1,188) (761) (3,476) Proceeds from
sale of property and equipment 861 512 302 133 605 Investments in
affiliate (300) - (100) - - Acquisition of subsidiary (a) (38) - -
- - Increase in long-term accounts receivable - (247) - (19) (357)
Net cash used in investing activities (2,002) (2,272) (986) (647)
(3,228) Cash flows from financing activities: Receipt of long-term
loans from banks - 9,254 - 2,155 9,064 Repayment of long-term loans
from banks (4,423) (2,727) (1,553) (639) (4,930) Repayment of
long-term loans from shareholders and others (23) (10,394) (8)
(1,526) (10,201) Dividend paid to the noncontrolling interest (871)
- (285) - Proceeds from issuance of shares and exercise of
warrants, net - 1,000 - 1,000 1,000 Short-term bank credit, net 414
(1,137) 848 (512) (970) Net cash provided by (used in) financing
activities (4,903) (4,004) (998) 478 (6,037) Effect of exchange
rate on cash and cash equivalents (145) (44) (135) 247 (243)
Increase in cash and cash equivalents 305 1,247 185 1,909 1,508
Cash and cash equivalents at the beginning of the period 2,708
1,200 2,828 538 1,200 Cash and cash equivalents at the end of the
period $ 3,013 $ 2,447 $ 3,013 $ 2,447 $ 2,708 *) Reclassification
due to the adoption of SFAS 160. CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS U.S. dollars in thousands Nine months
Three months ended ended Year ended September 30, September
December 30, 31, 2009 2008 2009 2008 2008 Unaudited Acquisition of
(a) subsidiary Fair value of assets acquired and liabilities
assumed at date of acquisition: Working capital (40) - - - -
Property and equipment 60 - - - - Customer list 24 - - - - Goodwill
384 - - - - Accrued severance pay, net (12) - - - - Shareholders
loan (122) - - - - Minority interest (256) - - - - 38 - - - -
Reconciliation Tables of Non-GAAP Measures U.S. dollars in
thousands Reconciliation of GAAP net income to non-GAAP net income
is as follows: Year Three months ended Nine months ended ended
December September 30 September 30 31 2009 2008 2009 2008 2008
Unaudited GAAP Net income as reported: $ 704 $ 3,566 $1,819 $1,145
$ 4,621 Net income attributable to the noncontrolling interest
(2,429) (1,303) (692) (431) (2,248) Amortization of intangible
assets 2,227 2,553 688 828 3,345 Impairment of long-lived assets
2,959 - - - - Loan Discount - - - - 704 Tax on income 79 320 38 90
640 Non-GAAP Net income $ 3,540 $ 5,136 $1,853 $1,632 $ 7,062
Reconciliation of GAAP net income to EBITDA To supplement the
consolidated financial statements presented in accordance with
generally accepted accounting principles ("GAAP"), the Company 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. Reconciliation of the GAAP
to non-GAAP operating results is as follows: CONDENSED EBITDA US
dollars in thousands Year ended Nine months ended Three months
ended December September 30 September 30 31 2009 2008 2009 2008
2008 Unaudited GAAP Net income as reported: $ 704 $3,566 $1,819 $
1,145 $ 4,621 Financial expenses, net 1,574 3,252 477 1,077 4,054
Tax on income 79 320 38 90 640 Depreciation ,amortization and
impairment 6,933 4,719 1,279 1,524 6,116 EBITDA $ 9,290 $11,857 $
3,613 $3,836 $15,431 Contact: Zvi Fried, V.P. and Yael Nevat, Chief
Financial Officer Commitment-IR.com Tel: +972-3-572-3111 Tel:
+972-9-741-8866 E-mail: E-mail: DATASOURCE: Pointer Telocation Ltd
CONTACT: Contact: Zvi Fried, V.P. and Chief Financial Officer,
Tel.; +972-3-572-3111, E-mail: ; Yael Nevat, Commitment-IR.com,
Tel: +972-9-741-8866, E-mail:
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