REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
14 Hamelacha Street
Rosh Ha'ayin, 48091
Israel
Indicate by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is
also thereby furnishing the information to the Commission
pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
For Immediate Release
Pointer Telocation Announces Record Quarter - $752
thousand Net Income in Q1 2008 Compared with Net Loss
of $180 thousand in Q1 2007
| — | Revenue increased 63% to record $18.5 million over the first quarter of 2007 |
| — | Non-GAAP net income increased 340% to $1.8 million over the first quarter of 2007 |
| — | EBITDA increased 94% to $3.8 million over the first quarter of 2007 |
Rosh HaAyin, Israel May 15th, 2008 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 quarter of 2008.
The successful merger of Cellocator’s business together with strong internal growth has resulted in an exceedingly good quarter. Following first indications in the fourth quarter of 2007, Q1 2008 presents the second consecutive quarter of improved profits. Pointer’s technologies and services businesses continue to attract more companies worldwide and increase their business and financial strength.
Financial Highlights:
Revenues: Pointer’s revenues for the first quarter of 2008 increased by 63%, to $18.5 million from $11.3 million, in the comparable period in 2007. International activities consist of 28% of total revenues compared with 10% in the comparable period in 2007. Revenues from products were $7.6 million and consist of 41% of total revenues, as compared to $2.9 million in the first quarter of 2007 – which indicate growth of 158%. Revenues from services increased 30% to $10.9 million and 59% of total revenue, compared to $8.4 million and 74%, respectively, in the first quarter of 2007.
Gross Profit: For the first quarter of 2008, gross profit increased 76% to $7.2 million from $4.1 million in the first quarter of 2007. As a percentage of revenues, gross profit is approximately 39% in the first quarter of 2008, as compared to approximately 36% in the same period in 2007. Gross margin increased mainly as a result of increased portion of products contribution of total revenue.
Operating Income: Pointer reported a $2.3 million operating income for the first quarter of 2008, compared to an operating income of $0.95 million for the first quarter of 2007.
Minority share: For the first quarter of 2008, Pointer reported a $561 thousand minority share, compared to $434 thousands in the first quarter of 2007.
Net Income: Pointer recorded a net income of $752 thousand, or $0.16 per share during the first quarter of 2008, as compared to a net loss of $180 thousand, or $(0.06) per share in the first quarter of 2007. Improved bottom line is in line with internal growth and the successful merger of Cellocator business into Pointer Telocation, taking place from September 2007.
Non-GAAP net
income:
Pointer’s non-GAAP net income in
the first quarter of 2008 was $1.8 million, as compared to non-GAAP net income of $0.4
million in the first quarter of 2007. The non-GAAP net income in the first quarter of 2008
excludes amortization of $ 0.85 million and non-cash taxes on income of $ 218 thousand.
EBITDA:
Pointer’s EBITDA increased to
$3.8 million in the first quarter of 2008, as compared to $2 million in the comparable
period in 2007.
Danny Stern, Pointer CEO, said: “We are proud to present the 12th consecutive quarter of revenue growth and a second consecutive quarter of improved profits following our Cellocator acquisition. Our operating parameters continue to improve as a result of both internal growth and the successful merger of Cellocator’s business. International revenue was responsible for 28% of revenue in Q1 2008 and was derived from exports and activities in over 25 countries. 41% of revenue was generated from our technology and products sales. In addition, all our subsidiaries presented improved operating results, which further provides evidence that internal growth is a major business driver. Pointer’s technology, know-how and stronger market presence continue to draw an increased number of business partners from additional countries and from various sectors – car dealers, fleet operators as well as insurance companies – who are motivated by an increase in the demand for high-quality technology and services”, concluded Mr. Stern.
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 financial measures consist of GAAP financial measures adjusted 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. 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 operations.
Pointer 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. A reconciliation of EBITDA to GAAP measures is included in the financial tables accompanying this press release.
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 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: +1-800-994-4498
From Israel: 03-918-0688
A replay of the conference call will be available through May 16th, 2008 on the Company’s website at www.pointer.com.
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, 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: www.pointer.com
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.
POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
| CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS |
| U.S. dollars in thousands |
| March 31, 2008 |
December 31, 2007 | |||||||
|---|---|---|---|---|---|---|---|---|
| Unaudited |
||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 648 | $ | 1,200 | ||||
| Trade receivables, net | 14,973 | 11,756 | ||||||
| Other accounts receivable and prepaid expenses | 2,937 | 2,001 | ||||||
| Inventories | 2,542 | 2,657 | ||||||
| Total current assets | 21,100 | 17,614 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Long-term accounts receivable | 465 | 337 | ||||||
| Severance pay fund | 5,300 | 4,866 | ||||||
| Property and equipment, net | 8,208 | 7,708 | ||||||
| Deferred income taxes | 1,019 | 941 | ||||||
| Other intangible assets, net | 17,835 | 18,058 | ||||||
| Goodwill | 53,954 | 50,712 | ||||||
| Total long-term assets | 86,781 | 82,622 | ||||||
| Total assets | $ | 107,881 | $ | 100,236 | ||||
POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
| CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS |
| U.S. dollars in thousands (except share and per share data) |
| March 31, 2008 |
December 31, 2007 | |||||||
|---|---|---|---|---|---|---|---|---|
| Unaudited |
||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Short-term bank credit and current maturities of long-term loans | $ | 11,383 | $ | 10,564 | ||||
| Trade payables | 8,540 | 8,001 | ||||||
| Deferred revenues and customer advances | 11,326 | 8,253 | ||||||
| Other accounts payable and accrued expenses | 5,182 | 6,123 | ||||||
| Total current liabilities | 36,431 | 32,941 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Long-term loans from banks | 18,610 | 18,460 | ||||||
| Long-term loans from shareholders and others | 5,665 | 5,767 | ||||||
| Other long-term liabilities | 112 | 89 | ||||||
| Accrued severance pay | 6,565 | 5,730 | ||||||
| Convertible debentures | 1,995 | 1,979 | ||||||
| 32,947 | 32,025 | |||||||
| MINORITY INTEREST | 3,911 | 3,067 | ||||||
| SHAREHOLDERS' EQUITY: | ||||||||
| Share capital - | ||||||||
| Ordinary shares of NIS 3 par value: | ||||||||
| Authorized - 8,000,000 shares at March 31, 2008 and December 31, 2007, | ||||||||
| respectively; Issued and outstanding - 4,612,875 shares at March 31, | ||||||||
| 2008 and December 31, 2007, respectively | 3,139 | 3,139 | ||||||
| Additional paid-in capital | 116,981 | 116,910 | ||||||
| Accumulated other comprehensive income | 3,332 | 1,766 | ||||||
| Accumulated deficit | (88,860 | ) | (89,612 | ) | ||||
| Total shareholders' equity | 34,592 | 32,203 | ||||||
| Total liabilities and shareholders' equity | $ | 107,881 | $ | 100,236 | ||||
POINTER TELOCATION LTD. AND ITS SUBSIDIARIES
| CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS |
| U.S. dollars in thousands (except share and per share data) |
| Three months ended March 31, |
Year ended December 31, |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2008 |
2007 |
2007 | |||||||||
| Unaudited |
|||||||||||
| Revenues: | |||||||||||
| Products | $ | 7,607 | $ | 2,949 | $ | 15,821 | |||||
| Services | 10,871 | 8,396 | 35,806 | ||||||||
| Total revenues | 18,478 | 11,345 | 51,627 | ||||||||
| Cost of revenues: | |||||||||||
| Products | 3,957 | 1,906 | 9,414 | ||||||||
| Services | 7,107 | 5,369 | 23,034 | ||||||||
| Amortization of intangible assets | 245 | - | 277 | ||||||||
| Total cost of revenues | 11,309 | 7,275 | 32,725 | ||||||||
| Gross profit | 7,169 | 4,070 | 18,902 | ||||||||
| Operating expenses: | |||||||||||
| Research and development, net | 673 | 332 | 1,675 | ||||||||
| Selling and marketing | 1,700 | 1,112 | 4,934 | ||||||||
| General and administrative | 1,925 | 1,260 | 6,209 | ||||||||
| Amortization of intangible assets | 606 | 415 | 1,877 | ||||||||
| Total operating expenses | 4,904 | 3,119 | 14,695 | ||||||||
| Operating income | 2,265 | 951 | 4,207 | ||||||||
| Financial expenses, net | 750 | 525 | 2,814 | ||||||||
| Other income, net | 16 | 10 | (12 | ) | |||||||
| Income before taxes on income | 1,531 | 436 | 1,381 | ||||||||
| Taxes on income | 218 | 182 | 353 | ||||||||
| Net income before minority interest | 1,313 | 254 | 1,028 | ||||||||
| Minority interest | 561 | 434 | 1,366 | ||||||||
| Net income (loss) | $ | 752 | $ | (180 | ) | $ | (338 | ) | |||
| Basic and Diluted net earnings (loss) per share | $ | 0.16 | $ | (0.06 | ) | $ | (0.08 | ) | |||
| POINTER TELOCATION LTD. AND ITS SUBSIDIARIES |
| CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS |
| U.S. dollars in thousands |
| Three months ended March 31, |
Year ended December 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2008 |
2007 |
2007 | |||||||||
| Unaudited |
|||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 752 | $ | (180 | ) | $ | (338 | ) | |||
| Adjustments required to reconcile net income (loss) to net cash | |||||||||||
| provided by operating activities: | |||||||||||
| Depreciation and amortization | 1,779 | 1,194 | 5,273 | ||||||||
| Accrued interest and exchange rate changes of convertible | |||||||||||
| debenture and long-term loans | 185 | (14 | ) | 750 | |||||||
| Accrued severance pay, net | 345 | (54 | ) | (70 | ) | ||||||
| Gain from sale of property and equipment, net | (88 | ) | (80 | ) | (182 | ) | |||||
| Amortization of deferred stock-based compensation | 71 | 172 | 783 | ||||||||
| Increase in minority interest | 561 | 543 | 1,366 | ||||||||
| Increase in trade receivables, net | (2,443 | ) | (1,334 | ) | (1,172 | ) | |||||
| Inecrease in other accounts receivable and prepaid expenses | (843 | ) | (536 | ) | (421 | ) | |||||
| Decrease (increase) in inventories | 68 | 118 | (395 | ) | |||||||
| Write-off of inventories | - | - | 150 | ||||||||
| Increase in deferred income taxes | - | - | (174 | ) | |||||||
| Increase in other long-term accounts receivable | - | - | (141 | ) | |||||||
| Increase in trade payables | 36 | 324 | 730 | ||||||||
| Increase in other accounts payable and accrued expenses | 1,241 | 1,558 | 1,855 | ||||||||
| Net cash provided by operating activities | 1,664 | 1,711 | 8,014 | ||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of property and equipment | (719 | ) | (820 | ) | (2,638 | ) | |||||
| Proceeds from sale of property and equipment | 242 | 254 | 860 | ||||||||
| Increase in long-term accounts receivable, net | (102 | ) | - | - | |||||||
| Acquisition of Cellocator (a) | - | - | (16,571 | ) | |||||||
| Acquisition of other intangible assets | - | - | (117 | ) | |||||||
| Net cash used in investing activities | (579 | ) | (566 | ) | (18,466 | ) | |||||
| Cash flows from financing activities: | |||||||||||
| Receipt of long-term loans from banks | - | - | 5,000 | ||||||||
| Repayment of long-term loans from banks | (1,012 | ) | (500 | ) | (4,347 | ) | |||||
| Repayment of long-term loans from others | (823 | ) | (656 | ) | (2,767 | ) | |||||
| Proceeds from issuance of shares and exercise of warrants, net | - | 1,853 | 9,588 | ||||||||
| Short-term bank credit, net | 226 | (1,350 | ) | (1,752 | ) | ||||||
| Net cash provided by (used in) financing activities | (1,609 | ) | (653 | ) | 5,722 | ||||||
| Effect of exchange rate on cash and cash equivalents | (28 | ) | 19 | 80 | |||||||
| Increase(decrease) in cash and cash equivalents | (552 | ) | 511 | (4,650 | ) | ||||||
| Cash and cash equivalents at the beginning of the period | 1,200 | 5,850 | 5,850 | ||||||||
| Cash and cash equivalents at the end of the period | $ | 648 | $ | 6,361 | $ | 1,200 | |||||
| POINTER TELOCATION LTD. AND ITS SUBSIDIARIES |
| CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS |
| U.S. dollars in thousands |
| Three months ended March 31, |
Year ended December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2008 |
2007 |
2007 | ||||||||||
| Unaudited |
||||||||||||
| (a) | Acquisition of Cellocator and Matan activities: | |||||||||||
| Fair value of assets acquired and liabilities assumed at date | ||||||||||||
| of acquisition: | ||||||||||||
| Working capital | $ | - | $ | - | $ | (1,323 | ) | |||||
| Property and equipment | - | - | (151 | ) | ||||||||
| Customer related intangibles | - | - | (3,943 | ) | ||||||||
| Brand name | (1,775 | ) | ||||||||||
| Developed technology | - | - | (4,890 | ) | ||||||||
| Goodwill | - | - | (8,750 | ) | ||||||||
| Accrued severance pay, net | - | - | 20 | |||||||||
| - | - | (20,812 | ) | |||||||||
| Fair value of shares issued | - | - | 1,430 | |||||||||
| Fair value of convertible debentures | - | - | 1,951 | |||||||||
| Accrued expenses | - | - | 860 | |||||||||
| 4,241 | ||||||||||||
| $ | - | $ | - | $ | (16,571 | ) | ||||||
| POINTER TELOCATION LTD. AND ITS SUBSIDIARIES |
| Reconciliation Table of Non-GAAP Measures |
| U.S. dollars in thousands |
| Three months ended March 31, |
Year ended December 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2008 |
2007 |
2007 | |||||||||
| Net income (loss) as reported | $ | 752 | $ | (180 | ) | $ | (338 | ) | |||
| Amortization of intangible assets and impairment of | |||||||||||
| long-lived assets | 851 | 415 | 2,154 | ||||||||
| Taxes on income | 218 | 182 | 353 | ||||||||
| Non-GAAP Net income (loss) | $ | 1,821 | $ | 417 | $ | 2,169 | |||||
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 the GAAP to non-GAAP operating results:
CONDENSED EBITDA
US dollars in thousands
| Three months ended March 31, |
Year ended December 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2008 |
2007 |
2007 | |||||||||
| Net income (loss) as reported | $ | 752 | $ | (180 | ) | $ | (338 | ) | |||
| Non GAAP adjustment: | |||||||||||
| Financial expenses, net | 750 | 525 | 2,814 | ||||||||
| Taxes on income | 218 | 182 | 353 | ||||||||
| Depreciation and amortization | 1,562 | 1,016 | 4,787 | ||||||||
| Minority interest | 561 | 434 | 1,366 | ||||||||
| EBITDA | $ | 3,843 | $ | 1,977 | $ | 8,982 | |||||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| POINTER TELOCATION LTD. By: /s/ Yossi Ben Shalom —————————————— Yossi Ben Shalom Chairman of the Board of Directors |
Date: May 15, 2008