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

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.

CONSOLIDATED BALANCE SHEETS
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CONSOLIDATED BALANCE SHEETS
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CONSOLIDATED STATEMENTS OF OPERATIONS
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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ADDITIONAL INFORMATION
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The following table reconciles the GAAP to non-GAAP operating results:

Non GAAP Net income

Adjusted EBITDA

SOURCE Pointer Telocation Ltd.