Pointer Telocation Ltd. Reports Record Results for the Financial Year 2013

  Pointer Telocation Ltd. Reports Record Results for the Financial Year 2013

GAAP net income for the fourth quarter and full year of 2013 was $3.9 million
and $7.3 million, respectively;

Non-GAAP net income was $1.9 million and $7.4 million, up 17% and 26%
year-on-year, respectively;

Fourth quarter revenues were up 28% year-on-year, full year revenues were up
15%;

Revenues from international activities in the fourth quarter of 2013 were up
to 33% of total revenues, compared with 25% in the previous year.

PR Newswire

ROSH HAAYIN, Israel, Feb. 27, 2014

ROSH HAAYIN, Israel, Feb. 27, 2014 /PRNewswire/ -- 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, announced today its financial results for the three month period and
fiscal year ended December 31, 2013.

Financial Summary for the Fourth Quarter of 2013

Revenues increased 28% to $28.1 million compared to $21.9 million in the
fourth quarter of 2012. International activities for the fourth quarter of
2013 accounted for 33% of total revenues compared to 25% in the fourth quarter
of 2012.

Revenues from products increased 22% to $9.6 million (34% of revenues)
compared to $7.9 million (36% of revenues) in the fourth quarter of 2012.
Pointer's revenues from services increased 32% to $18.4 million (66% of
revenues) compared to $14.0 million (64% of revenues) in the fourth quarter of
2012. Revenues from products and services increased due to growth in MRM
activities.

Gross Profit was $9.1 million (32.5% of revenues), an increase of 28% compared
to $7.1 million (32.5% of revenues) in the fourth quarter of 2012.

Operating Income was $1.2 million (4.3% of revenues) compared to an operating
income of $1.2 million (5.5% of revenues) in the fourth quarter of 2012.

Profit from continuing operations attributable to Pointers' shareholders was
$3.7 million (13% of revenues), or $0.68 per share compared to net income of
609 thousand (2.8% of revenues), or $0.11 per share, in the fourth quarter of
2012. Profit from continuing operations included $2.9 million of onetime
profit in connection with the Brazilian transaction (comprised of $3.3 million
in profit from the Brazilian transaction offset by a one-time $0.4 million
'other expense' related to the termination cost of the former general manager
of Pointer's subsidiary).

Net income was $3.9 million (14.0% of revenues) compared with $896 thousand
(4.1% of revenues) in the fourth quarter of 2012.

Non GAAP net income was $1.9 million (6.8% of revenues), an increase of 17%
compared to non-GAAP net income of $1.6 million (7.5% of revenues) in the
fourth quarter of 2012.

Adjusted EBITDA was $2.7 million, which is comparable to that of the fourth
quarter of 2012.

Financial Summary for the Full Year of 2013

Revenues for 2013 increased 15% to $97.9 million compared to $84.8 million in
2012. International activities for 2013 accounted for 29% of total revenues
compared to 26% in 2012.

Revenues from products increased 14% to $34.6 million (35% of revenues)
compared to $30.4 million (36% of revenues) in 2012. Revenues from services
increased 16% to $63.2 million (64% of revenues) compared to $54.4 million
(64% of revenues) in 2012. Revenues from products and services increased due
to growth in MRM activities.

Gross Profit was $31.6 million (32.3% of revenues) in 2013, an increase of
12.4% compared to $28.1 million (33.1% of revenues) in 2012.

Operating Income was $6 million (6.1% of revenues) in 2013 compared to
operating income of $5.1 million (6.0% of revenues) in 2012.

Profit from continuing operations attributable to Pointers' shareholders was
$6.3 million (6.4% of revenues), or $1.14 per share, compared to net income of
$1.2 million (plus the part of loss from discontinued operations) (2.1% of
revenues), or $0.35 per share in 2012.

Net income was $7.3 million (7.4% of revenues) compared to $ 1.6 million (1.9%
of revenues) in 2012.

Non GAAP net income was $7.4 million (7.6% of revenues), compared to non-GAAP
net income of $5.9 million (6.9% of revenues) in 2012.

Adjusted EBITDA was $10.8 million, an increase of 2% compared to $10.6 million
2012.

David Mahlab, Pointer's Chief Executive Officer, commented on the results: "We
are delighted with our performance in 2013, including our strong growth in
revenue and full year net income as well as our general improvement in
profitability resulting from growth in our MRM activities. We continue
investing in infrastructure and recently released additional new mobile
resource management (MRM) technologies and services which will improve our
profitability, competitive market position and grow our business in 2014."

Mr. Mahlab further continued: "Towards the end of 2013 we fully consolidated
our Brazilian subsidiary, and post year-end, we purchased the remaining
minority holdings of our subsidiary Shagrir, reaching full ownership. These
two transactions greatly simplify our company structure and will enable us to
better benefit from the synergies across our various operations throughout the
world. We currently see global opportunities and keep searching for additional
growth through acquisitions mainly in developing markets, in which we can
leverage our infrastructure and know-how, to penetrate the market and grow our
business."

Conference Call Information

Pointer Telocation's management will host today, Thursday, February 27^th,
2014 a conference call with the investment community to review and discuss the
financial results, and will also be available to answer questions.

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

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

From USA: + 1-888-281-1167, From Israel: 03-918-0644

A replay will be available from February 28^th, 2014 at the company website:
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, intangible assets and profit raise from gaining
control in subsidiary previously treated by the equity method.

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, goodwill and profit raise from gaining
control in subsidiary previously treated by the equity method and a onetime
'other expense' related to the termination cost of a former general manger of
a Pointer subsidiary.

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 list of customers and products installed in more than 45 countries.
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. The Company's
top management and the development center are located in the Afek Industrial
Area of Rosh Ha'Ayin, Israel.

For more information, please visit 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.

Contact:
Zvi Fried, V.P. and Chief Financial Officer       Kenny Green/Ehud Helft, GK
                                                    Investor Relations
Tel.: +972-3-572 3111                               Tel.: +1 646 201 9246

E-mail: zvif@pointer.com                            E-mail: Pointer@gkir.com




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

                                              December 31,
                                              2013             2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                     $     3,349  $     3,685
Restricted cash                               81               108
Trade receivables                             19,793           16,215
Other accounts receivable and prepaid         2,033            2,069
expenses
Inventories                                   6,038            3,982
Total current assets                          31,294           26,059
LONG-TERM ASSETS:
Long-term accounts receivable                 546              582
Severance pay fund                            9,349            8,125
Property and equipment, net                   13,975           10,364
Investment and long term loans to affiliate   -                814
Other intangible assets, net                  3,045            2,242
Goodwill                                      55,455           47,190
Total long-term assets                        82,370           69,317
Total assets                                  $   113,664   $    95,376



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

                                              December 31,
                                              2013             2012
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current            $    10,624  $    11,129
maturities of long-term loans
Trade payables                                14,793           11,248
Deferred revenues and customer advances       7,900            6,954
Other accounts payable and accrued expenses   10,611           7,251
Total current liabilities                     43,928           36,582
LONG-TERM LIABILITIES:
Long-term loans from banks                    9,301            9,339
Long-term loans from shareholders and others  1,320            925
Other long-term liabilities                   5,739            3,765
Accrued severance pay                         10,317           9,419
                                              26,677           23,448
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY:
Pointer Telocation Ltd's shareholders'
equity:
Share capital                                 3,878            3,871
Additional paid-in capital                    120,996          120,290
Accumulated other comprehensive income        1,876            1,127
Accumulated deficit                           (89,220)         (95,540)
Total Pointer Telocation Ltd's shareholders'  37,530           29,748
equity
Non-controlling interest                      5,529            5,598
Total equity                                  43,059           35,346
Total liabilities and shareholders' equity    $   113,664   $    95,376



CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)

                              Year ended            Three months ended

                              December 31,         December 31,
                              2013       2012       2013        2012
Revenues:
Products                      $      $      $        $     
                              34,662    30,402    9,640      7,877
Services                      63,195     54,430     18,439      14,009
Total revenues              97,857       84,832     28,079      21,886
Cost of revenues:
Products                    20,763       17,988     5,964       4,582
Services                    45,497       38,573     12,987      10,182
Amortization and
impairment of intangible    -            181        -
assets
Total cost of revenues      66,260       56,742     18,951      14,764
Gross profit                31,597       28,090     9,128       7,122
Operating expenses:
Research and development    3,244        2,716      948         680
Selling and marketing       10,398       9,067      2,874       2,484
General and                 10,539       9,232      3,374       2,246
administrative
Other expenses              403          -          403         -
Amortization of             967          1,987      328         501
intangible assets
Total operating expenses    25,551       23,002     7,927       5,911
Operating income            6,046        5,088      1,201       1,211
Financial expenses, net     1,077        1,628      292         343
Other expenses (income),    (3,299)      5          (3,299)     (7)
net
Income before taxes on      8,268        3,455      4,208       875
income
Taxes on income             1,337        861        283         123
Income after taxes on       6,931        2,594      3,925       752
income
Equity in gains of         340          38         -           144
affiliate
Income from continuing      7,271        2,632      3,925       896
operations
Loss from discontinued      -            995        -           -
operations, net
Net income                  $       $      $        $     
                            7,271        1,637   3,925       896
Profit from continuing
operations attributable
to:
Equity holders of the       6,320        1,203      3,756       609
parent
Non-controlling interests   951          434        169         287
                            $       $      $        $     
                            7,271         1,637    3,925        896
Earnings per share from
continuing operations
attributable to Pointer
Telocation Ltd's
shareholders:
Basic net earnings per     $  1.14    $  0.35  $  0.68   $  0.11
share
Diluted net earnings per   $  1.1     $  0.35  $  0.65   $  0.11
share

CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

                                      Year ended            Three months ended

                                      December 31,          December 31,
                                      2013       2012       2013       2012
 Cash flows from operating
 activities:
                                      $      $      $      $   
  Net income                        7,271     1,637     3,925       
                                                                       896
 Adjustments required to reconcile
 net income to net cash provided by
 operating activities:
 Depreciation, amortization and       4,049      5,546      1,281      1,276
 impairment
 Profit raise from gaining control
 in subsidiary previously treated by  (3,299)    -          (3,299)    -
 the equity method
 Accrued interest and exchange rate
 changes of debenture and long-term   21         118        58         99
 loans
 Accrued severance pay, net           (397)      91         (283)      (12)
 Changes in long-term loans to        -          -          -          (34)
 affiliate
 Gain from sale of property and       (195)      (271)      (26)       (43)
 equipment, net
 Equity in gains of affiliate         (340)      (38)       -          (144)
 Amortization of stock-based          374        265        211        43
 compensation
 Decrease in restricted cash         27         15         10         5
 Decrease (increase) in trade         (1,270)    (1,572)    1,582      1,300
 receivables, net
 Increase in other accounts           148        46                    506
 receivable and prepaid expenses                            511
 Decrease (increase) in inventories   (685)      732        260        265
 Deferred income taxes, net           1,272      847        601        109
 Decrease (increase) in long-term     (4)        234                   (35)
 accounts receivable                                        (16)
 Increase (decrease) in trade         1,290      965        (241)      579
 payables
Increase (decrease) in other
accounts payable and accrued          1,449      (274)      (269)      (657)
expenses
Net cash provided by operating        9,711      8,341      4,305      4,153
activities
Cash flows from investing
activities:
Purchase of property and equipment    (4,663)    (4,033)    (1,475)    (818)
Proceeds from sale of property and    1,216      1,733      (242)      539
equipment
Investment and loans/Repayments in    137        (669)      36         25
affiliate
Acquisition of Subsidiary (a)         (3,973)    (251)      (3,973)    -
Purchase of activity (b)              -          (3,125)    -          -
Net cash used in investing            (7,283)    (6,345)    (5,654)    (254)
activities



CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

                           Year ended                Three months ended

                           December 31,              December 31,
                           2013           2012       2013         2012
Cash flows from financing
activities:
Receipt of long-term       7,127          11,670     3,417        2,346
loans from banks
Repayment of long-term     (10,137)       (12,253)   (2,278)      (2,856)
loans from banks
Dividend paid to           -              (1,215)    -            (1,215)
non-controlling interest
Proceeds from issuance of  7              1,945      7            -
shares
Short-term bank credit,    563            (345)      950          (306)
net
Net cash used in           (2,440)        (198)      2,096        (2,031)
financing activities
Effect of exchange rate
changes on cash and cash   (324)          419        (95)         (257)
equivalents
Increase (decrease) in     (336)          2,217      652          1,611
cash and cash equivalents
Cash and cash equivalents
at the beginning of the    3,685          1,468      2,697        2,074
year
Cash and cash equivalents  $    3,349  $       $         $   
at the end of the year                    3,685      3,349        3,685
(a) Acquisition of
subsidiary:
Working capital (Cash and  130            -          130          -
cash equivalent excluded)
Property and equipment     2,486          22         2,486        -
Technology                 -              58         -            -
Other intangible assets    1,690          -          1,690        -
Goodwill                   4,894          304        4,894        -
Long term loans from       (1,342)        -          (1,342)      -
banks and others
Investment in subsidiary
previously treated by the  (3885)         -          (3885)       -
equity method
Minority Interest          -              (133)      -            -
                           $           $      $        $     
                           3,973         251       3,973          -
(b)Purchase of business
activity:
Working capital            -              27         -            -
Property and equipment     -              112        -            -
Customer list              -              1,364      -            -
Goodwill                   -              1,669      -            -
Accrued severance pay,     -              (23)       -            -
net
Employees accruals         -              (24)       -            -
                           $        $      $       $     
                              -        3,125           -     -



ADDITIONAL INFORMATION
U.S. dollars in thousands

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

Non GAAP Net income

                                   Year ended               Three months ended

                                   December 31,             December 31,
                                   2013         2012        2013        2012
                                   Unaudited
GAAP Net income as reported:       $       $       $      $    
                                   7,271        1,637    3,925      896
amortization and impairment of    967          2,168       328      501
intangible assets
Loss from discontinued             -            995         -        -
operations, net
Other expenses of termination      403          -           403      -
costs
Profit raise from gaining control
in subsidiary previously treated   (3,299)      -           (3,299)  -
by the equity method
Stock based compensation expenses  374          265         211      43
Non-cash tax expenses (income)
resulting from timing differences
relating to the amortization of    1,700        819                  200
acquisition-related intangible                              350
assets and goodwill
Non-GAAP Net income                $       $       $      $    
                                   7,416        5,884    1,918    1,640

Adjusted EBITDA

                         Year ended                 Three months ended

                         December 31,               December 31,
                         2013         2012          2013             2012
                         Unaudited
GAAP Net income as       $       $        $       $     896
reported:                7,271       1,637        3,925
Loss from discontinued   -            995           -            -
operations, net
Financial expenses, net  1,077        1,628         292          343
Tax on income            1,337        861           282          123
Profit raise from
gaining control in
subsidiary previously    (3,299)      -                          -
treated by the equity                               (3,299)
method
Stock based
compensation expenses    374          265           211          43

Depreciation,
amortization and
impairment of goodwill   4,049        5,198         1,281        1,276
and intangible assets
Adjusted EBITDA          $        $         $         $     
                         10,809       10,584       2,692       2,681



SOURCE Pointer Telocation Ltd.

Website: http://www.pointer.com
 
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