Pointer Telocation Reports Q3 2012 Financial Results:

            Pointer Telocation Reports Q3 2012 Financial Results:

PR Newswire

ROSH HAAYIN, Israel, November 28, 2012

ROSH HAAYIN, Israel, November 28, 2012 /PRNewswire/ --

  oRevenues of $20.2M
  oNon-GAAP Net Income of $ 1.4M
  oAdjusted EBITDA $2.5M

Pointer Telocation Ltd. (Nasdaq CM: PNTR) - a leading developer, manufacturer
and operator of Mobile Resource Management (MRM) and roadside assistance
services for the automotive industry and insurance market, announced today its
financial results for the third quarter of 2012.

Financial Highlights

Revenues: Pointer's revenues for the third quarter of 2012 decreased 9.7% to
$20.2 million, as compared to $22.3 million in the third quarter of 2011.

International activities for the third quarter of 2012 were 26% of total
revenues compared to 28% in the comparable period of 2011.

Revenues from products in the third quarter of 2012 were $7 million, compared
to $8.3 million in the same period in 2011. (34.7% and 37.1%, of revenues
respectively).

Pointer's revenues from services in the third quarter of 2012 decreased 6.3%
to $13.2 million, from $14.1 million, in the comparable period of 2011 (65.3%
and 62.9%, of revenues respectively).

Gross Profit: In the third quarter of 2012, gross profit decreased 12% to $6.8
million from $7.6 million in the third quarter of 2011.

Operating Income: In the third quarter of 2012, operating income was $1.2
million, similar to $1.2 million in the third quarter of 2011.

Net Income: Pointer recorded net income attributable to Pointer's shareholders
for the third quarter of 2012 of $229 thousand or $0.04 per share, compared to
a net loss of $188 thousand or a $0.04 loss per share in the third quarter of
2011.

Net income attributable to a non-controlling interest in affiliates in the
third quarter of 2012 was $123 thousand compared to $277 thousand for the
comparable period in 2011.

AdjustedEBITDA: Pointer's adjusted EBITDA for the third quarter of 2012 was
$2.5 million, as compared to $2.6 million in the comparable period in 2011.

David Mahlab, Pointer's Chief Executive Officer, commented on the results: "We
have succeeded in maintaining our bottom line results though our revenue
declined this quarter. The declining revenues are mainly as a result of
currency exchange rates and weakness in sales of the technology sector due to
global economy conditions. We have concentrated on improving our operations in
order to face prevailing market conditions and to accommodate our expense
level. We expect the weak global economy to continue to affect us, but expect
that our efforts in launching new products and our additional investment in
Latin America together with continued improvement of our operating costs will
enable us to achieve our long term goals."

Conference Call Information:

Pointer Telocation's management will host today, Wednesday, November 28^th,
2012 a conference call with the investment community to review and discuss the
financial results of Q3 2012, and will also be available to answer questions.


The conference call will commence at 9:30 AM EST, 4:30 PM Israel time.

To participate in the call, please dial in to one of the teleconferencing
numbers below. Please begin placing your call at least 5 minutes before the
time set for the commencement of the conference call.

From USA 1-888-668-9141; From Israel: 03-918-0609

A replay will be available from November 29^th, 2012 on the Company's website:
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.

Pointer uses adjusted EBITDA and non-GAAP net income as a non-GAAP financial
performance measurement.

We calculate adjusted EBITDA by adding back to net income, net loss from
discontinued operations, financial expenses, taxes, depreciation, the effects
of non-cash stock-based compensation expense, amortization and non-cash
impairment of goodwill and intangible assets.

We calculate non-GAAP net income by adding back to net income, net loss from
discontinued operations, the effects of non-cash stock based compensation
expenses, amortization of intangibles related to acquisitions and non-cash tax
expenses resulting from timing differences relating to the amortization of
acquisition-related intangible assets and goodwill.

The purpose of such adjustments is to give an indication of our performance
exclusive of non-GAAP charges that are considered by management to be outside
of our core operating results.

Adjusted EBITDA and non-GAAP net income are 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. We believe that these non-GAAP measures
help investors to understand our current and future operating cash flow and
performance, especially as our acquisitions have resulted in amortization and
non-cash items that have had a material impact on our GAAP profits. Adjusted
EBITDA and non GAAP net income should not be considered in isolation or as a
substitute for comparable measures calculated and should be read in
conjunction with our consolidated financial statements prepared in accordance
with GAAP. These non-GAAP financial measures may differ materially from the
non-GAAP financial measures used by other companies.

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 45 countries. Cellocator,
a Pointer Products Division, is a leading MRM (Mobile Resource Management)
technology developer and manufacturer.

For more information: http://www.pointer.com

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.

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

                                                                     December
                                                   September 30,          31,
                                                            2012         2011
                                                       Unaudited

    ASSETS

    CURRENT ASSETS:
    Cash and cash equivalents                            $ 2,074      $ 1,468
    Restricted cash                                          113          123
    Trade receivables                                     16,958       14,427
    Other accounts receivable and prepaid
    expenses                                               2,529        1,946
    Inventories                                            4,161        4,467

    Total current assets                                  25,835       22,431

    LONG-TERM ASSETS:
    Long-term accounts receivable                            551          805
    Severance pay fund                                     8,401        7,474
    Property and equipment, net                           10,300       10,839
    Investment and long term loans to affiliate              771          266
    Other intangible assets, net                           2,672        3,030
    Goodwill                                              45,147       44,493

    Total long-term assets                                67,842       66,907

    Total assets                                        $ 93,677     $ 89,338

The accompanying notes are an integral part of the interim consolidated
financial statements.

INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except share and per share data)

                                                   September 30,  December 31,
                                                            2012          2011
                                                       Unaudited

    LIABILITIES AND SHAREHOLDERS' EQUITY

    CURRENT LIABILITIES:
    Short-term bank credit and current maturities
    of long-term loans                                  $ 12,468      $ 13,208
    Trade payables                                        10,156         9,821
    Deferred revenues and customer advances                7,392         6,890
    Other accounts payable and accrued expenses            7,028         7,440

    Total current liabilities                             37,044        37,359

    LONG-TERM LIABILITIES:
    Long-term loans from banks                             8,022         7,715
    Long-term loans from shareholders and others             931           943
    Other long-term liabilities                            3,691         2,895
    Accrued severance pay                                  9,652         8,625

                                                          22,296        20,178
    COMMITMENTS AND CONTINGENT LIABILITIES

    EQUITY:
    Pointer Telocation Ltd's shareholders'
    equity:
    Share capital                                          3,871         3,353
    Additional paid-in capital                           120,570       119,147
    Accumulated other comprehensive income                  (190)          837
    Accumulated deficit                                  (96,147)      (96,743)

    Total Pointer Telocation Ltd's shareholders'
    equity                                                28,104        26,594

    Non-controlling interest                               6,233         5,207

    Total equity                                          34,337        31,801

    LIABILITIES AND SHAREHOLDERS' EQUITY                $ 93,677      $ 89,338

The accompanying notes are an integral part of the interim consolidated
financial statements.

INTERIM CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

U.S. dollars in thousands (except share and per share data)

                                                                        Year
                          Nine months ended      Three months ended    ended
                                                                      December
                            September 30,          September 30,        31,
                             2012       2011        2012        2011      2011
                                          Unaudited

    Revenues:
                                           $
    Products             $ 22,525     24,084     $ 7,009     $ 8,287  $ 31,140
    Services               40,421     41,429      13,162      14,046    54,778

    Total revenues         62,946     65,513      20,171      22,333    85,918

    Cost of revenues:
    Products               13,406     13,784       4,126       4,894    18,283
    Services               28,391     27,858       9,317       9,610    37,249
    Amortization of
    intangible assets         181        733          60         244     1,498

    Total cost of
    revenues               41,978     42,375      13,503      14,748    57,030

    Gross profit           20,968     23,138       6,668       7,585    28,888

    Operating expenses:
    Research and
    development             2,036      2,290         647         783     3,082
    Selling and
    marketing               6,583      6,839       2,138       2,493     8,932
    General and
    administrative          6,986      8,579       2,177       2,612    11,450
    Amortization of
    intangible assets       1,486      1,383         481         459     1,821
    Impairment of
    goodwill and
    intangible assets           -          -           -           -     6,216

    Total operating
    expenses               17,091     19,091       5,443       6,347    31,501

    Operating income        3,877      4,047       1,225       1,238    (2,613)
    Financial expenses,
    net                     1,285      1,370         357         520     1,779
    Other expenses
    (income), net              12         92           3         101        77

    Income before taxes
    on income               2,580      2,585         865         617    (4,469)
    Taxes on income           738        950         192         257     2,383

    Income after Income
    taxes                   1,842      1,635         673         360    (6,852)
    Equity in losses of
    affiliate                 106      1,069          25         271     1,634

    Income from
    continuing
    operations              1,736        566         648          89    (8,486)
    Loss from
    discontinued
    operations, net           995          -         296           -         -

    Net income (loss)         741        566         352          89    (8,486)


The accompanying notes are an integral part of the interim consolidated
financial statements.

INTERIM CONSOLIDATED STATEMENTS OFINCOME AND COMPREHENSIVE INCOME

U.S. dollars in thousands (except share and per share data)

                                                                        Year
                         Nine months ended      Three months ended     ended
                                                                      December
                           September 30,           September 30,        31,
                           2012        2011        2012         2011      2011
                                         Unaudited
    Other
    comprehensive
    income (loss):
    Currency
    translation
    adjustments of
    foreign operations     (960)     (1,871)        (35)      (2,978)   (2,605)
    Realized losses on
    derivatives
    designated as cash
    flow hedges             237        (225)         76          (76)     (219)
    Unrealized losses
    on derivatives
    designated as cash
    flow hedges             (31)        (61)         (5)        (273)     (162)

    Total
    comprehensive
    income (loss)
                            (13)     (1,591)        388       (3,238)  (11,472)
    Profit from
    continuing
    operations
    attributable to:
    Equity holders of
    the parent            1,224         238         503         (188)   (8,527)
    Non-controlling
    interests               512         328         145          277        41

                          1,736         566         648           89    (8,486)

    Loss from
    discontinued
    operations
    attributable to:
    Equity holders of
    the parent              630           -         274            -         -
    Non-controlling
    interests               365           -          22            -         -

                            995           -         296            -         -
    Total
    comprehensive
    income (loss)
    attributable to:
    Equity holders of
    the parent             (110)     (1,476)        229       (2,776)  (10,982)
    Non-controlling
    interests                97        (115)        159         (462)     (490)

                            (13)     (1,591)        388       (3,238)  (11,472)

    Earnings (loss)
    per share
    attributable to
    Pointer Telocation
    Ltd's
    shareholders:
    Basic net earnings
    (loss) per share     $ 0.12      $ 0.05      $ 0.04      $ (0.04)  $ (1.78)

    Diluted net
    earnings (loss)
    per share            $ 0.12      $ 0.04      $ 0.04      $ (0.04)  $ (1.79)

The accompanying notes are an integral part of the interim consolidated
financial statements.

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,
                               2012        2011     2012        2011      2011
                                           Unaudited

                                                                             $
    Net income (loss)         $ 741       $ 566    $ 352        $ 89    (8,486)
    Adjustments required
    to reconcile net
    income to net cash
    provided by operating
    activities:
    Depreciation,
    amortization and
    impairment                4,270       4,646    1,211       1,578    12,710
    Accrued interest and
    exchange rate changes
    of debenture and
    long-term loans              19         100       16           6       135
    Accrued severance pay,
    net                         103         552      148         202       487
    changes of long-term
    loans to affiliate           34           -        6           -         -
    Gain from sale of
    property and
    equipment, net             (228)       (138)    (104)        (85)      (95)
    Equity in losses of
    affiliate                   106       1,069       25         271     1,634
    Stock-based
    compensation expenses       222         352       55         122       515
    Impairment loss of
    loan to minority
    shareholder in
    subsidiary                    -           -        -           -       489
    Decrease in restricted
    cash                         10           7        4           3        10
    Decrease (increase) in
    trade receivables, net   (2,872)     (3,170)    (555)         510   (1,462)
    Decrease (increase) in
    other accounts
    receivable and prepaid
    expenses                   (460)        287      182         406       373
    Decrease (increase) in
    inventories                 358      (1,244)    (441)       (756)   (1,035)
    Write-off of
    inventories                 109          66       25          28       304
    Deferred income taxes         -          58        -          90       170
    Decrease (increase) in
    long-term accounts
    receivable                  269         271       36         (68)     (177)
    Increase (decrease) in
    trade payables              386       1,719     (587)        963       452
    Increase (decrease) in
    other accounts payable
    and accrued expenses      1,121       2,217     (284)       (423)    2,457

    Net cash provided by
    operating activities      4,188       7,358       89       2,936     8,481

    Cash flows from
    investing activities:

    Purchase of property
    and equipment            (3,215)     (3,930)    (818)     (1,321)   (4,445)
    Proceeds from sale of
    property and equipment    1,194         676      448         405     1,050
    Investment and
    loans/Repayments in
    affiliate                  (694)     (1,496)      23        (390)   (1,740)
    Acquisition of
    Subsidiary (a)             (251)          -        -           -         -
    Purchase of activity
    (b)                      (3,125)          -        -           -         -
    Proceeds from sale of
    investments in
    previously
    consolidated
    subsidiaries (c)              -          39        -          39        39

    Net cash used in
    investing activities     (6,091)     (4,711)    (347)     (1,267)   (5,096)

The accompanying notes are an integral part of the interim consolidated
financial statements.

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,
                             2012        2011       2012        2011      2011
                                          Unaudited

    Cash flows from
    financing
    activities:

    Proceeds from
    issuance of shares
    and exercise of
    options, net            1,945          48      1,803          15       281
    Repayment of
    long-term loans from
    banks                  (9,397)     (6,096)    (3,740)     (1,607)   (8,937)
    Repayment of
    long-term loans from
    others                      -      (1,061)         -      (1,039)   (1,071)
    Receipt of long-term
    loans from banks,
    shareholders and
    others                  9,324       6,232      1,687         (16)    8,384
    Dividend paid to the
    non-controlling
    interest                    -        (896)         -           -    (1,594)
    Short-term bank
    credit, net               (39)     (1,631)      (302)        259    (1,002)

    Net cash provided by
    (used in) financing
    activities              1,833      (3,404)      (552)     (2,388)   (3,939)

    Effect of exchange
    rate on cash and
    cash equivalents          676        (320)       549        (388)     (211)

    Increase (decrease)
    in cash and cash
    equivalents               606      (1,077)      (261)     (1,107)     (765)
    Cash and cash
    equivalents at the
    beginning of the
    period                  1,468       2,233      2,335       2,263     2,233

    Cash and cash
    equivalents at the
    end of the period     $ 2,074     $ 1,156    $ 2,074     $ 1,156   $ 1,468

The accompanying notes are an integral part of the interim consolidated
financial statements.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

                              Nine months           Three months       Year
                                 ended                 ended           ended
                                                                     December
                             September 30,         September 30,        31,
                              2012       2011       2012       2011       2011
                           Unaudited

        Acquisition of
    (a) subsidiary:

        Property and
        equipment             $ 22        $ -        $ -        $ -        $ -
        Technology              58          -          -          -          -
        Goodwill               304          -          -          -          -
        Minority Interest     (133)         -          -          -          -
                             $ 251        $ -        $ -        $ -        $ -

        Purchase of
    (b) activity:

        Working capital       $ 27        $ -        $ -        $ -        $ -
        Property and
        equipment              112          -          -          -          -
        Customer list        1,364          -          -          -          -
        Goodwill             1,669          -          -          -          -
        Accrued severance
        pay, net               (23)         -          -          -          -
        Employees
        accruals               (24)         -          -          -          -
                           $ 3,125        $ -        $ -        $ -        $ -

        Proceeds from
        sale of
        investments in
        previously
        consolidated
    (c) subsidiaries:

        The subsidiaries'
        assets and
        liabilities at
        date of sale:

        Working capital
        (excluding cash
        and cash
        equivalents)           $ -       $ 32        $ -       $ 32       $ 32
        Non-controlling
        interests                         426                   426        426
        Gain (Loss) from
        sale of
        subsidiaries             -       (110)         -       (110)      (110)
        Receivables for
        sale of
        investments in
        subsidiaries             -       (309)         -       (309)      (309)

                               $ -       $ 39        $ -       $ 39       $ 39

ADDITIONAL INFORMATION

U.S. dollars in thousands

The following table reconciles the GAAP to non-GAAP operating results:

Non GAAP Net income

                             Nine months              Three months       Year
                                ended                    ended          ended
                                                                       December
                            September 30,            September 30,       31,
                         2012            2011      2012          2011      2011
                         Unaudited

    GAAP Net income                                                           $
    (loss) as reported:     $ 741       $ 566         $ 352      $ 89    (8,486)
    Loss from
    discontinued
    operations, net           995           -           296         -         -
    amortization and
    impairment of
    goodwill and
    intangible assets
    from continuing
    operations              1,667       2,116           541       703     9,535
    Stock based
    compensation

    expenses                  222         352            55       122       515
    non-cash tax
    expenses resulting
    from timing
    differences
    relating to the
    amortization of
    acquisition-related
    intangible assets
    and goodwill              619         479           200       163     2,365

                                                                    $
    Non-GAAP Net income   $ 4,244     $ 3,513       $ 1,444     1,077   $ 3,929


Adjusted EBITDA

                                                                          Year
                       Nine months ended          Three months ended     ended
                                                                        December
                         September 30,               September 30,        31,
                      2012             2011       2012            2011      2011
                     Unaudited

    GAAP Net income
    (loss) as                                                                  $
    reported:            $ 741        $ 566          $ 352        $ 89    (8,486)

    Loss from
    discontinued
    operations, net        995            -            296           -         -
    One time charge
    attributable to
    efforts to
    expand services
    to Israeli
    insurance
    companies                -          486              -           -       486
    Financial
    expenses, net        1,285        1,370            357         520     1,779
    Tax on income          738          950            192         257     2,383
    Stock based
    compensation
    expenses               222          352             55         122       515
    Depreciation ,
    amortization
    and impairment
    of goodwill and
    intangible
    assets               3,922        4,646          1,216       1,578    12,710

    Non-GAAP
    Adjusted EBITDA    $ 7,903      $ 8,370        $ 2,468     $ 2,566   $ 9,387


Contact:

Zvi Fried, V.P. and Chief Financial Officer
Tel.; +972-3-572-3111
E-mail: zvif@pointer.com

Yael Shugol Eyal,Gelbart-Kahana Investor relations
Tel: +972-54-302-2983
E-mail: yaels@gk-biz.com

SOURCE Pointer Telocation Ltd
 
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