Operating Income of $9.3 Million Also Exceeds Company Guidance of
$8 Million in 2008 ROSH HAAYIN, Israel, February 25
/PRNewswire-FirstCall/ -- Pointer Telocation Ltd. (Nasdaq Capital
Market: PNTR, Tel-Aviv Stock Exchange: PNTR) - a leading developer,
manufacturer and operator of advanced command and control
technologies and roadside assistance services for the automotive
industry, announced today its financial results for the fiscal year
ended December 31, 2008. The financial results for Pointer
Telocation Ltd. (Pointer) for 2008 include for the first time a
full year of financial results from the Cellocator business which
was acquired in September 2007. Pointer's 2008 financial results
reflect major progress in the implementation of Pointer's business
strategy to become a leading provider of technology and solutions
to the automotive and insurance industries. Today, Pointer's
products and services have a global presence with an installed
product base of over 500,000 units in more than 25 countries.
Financial Highlights: Revenues: Pointer's annual revenues for 2008
increased 48.5% to $76.6 million compared to $51.6 million in 2007.
Pointer's annual revenue topped the Company's prior guidance
released after the second quarter of 2008, which had upwardly
revised its estimated annual revenue in 2008 to $76.0 million from
$65.0 million. Pointer's international operations accounted for 29%
of its revenues in 2008 as compared to 17% in 2007. Pointer's
revenues from products for the full year of 2008 accounted for 40%
as compared with 30% of 2007 revenue. The increase in total
revenues and the growth in product sales and in international
activities in the 2008 as compared to 2007, are primarily
attributable to the inclusion of the operations of Cellocator in
2008. Gross Profit: In 2008, gross profit increased 55.6% to $29.4
million as compared to $18.9 million in 2007. As a percentage of
revenues, gross margin was 38.4%, in the full year of 2008,
compared to 36.6%in 2007. Operating Income: In 2008 Pointer
recorded $9.3 million in operating income, compared to $4.2 million
for the 2007. Operating income improved mainly because of growth in
total revenue and an increase in gross margin. Operating expenses
increased at a lower rate than the growth in revenue and gross
margin. Minority Interest: For 2008 Pointer reported a $2.2 million
minority share in the operations of Shagrir, compared to $1.4
million in full year 2007. Net Income: For the year ended December
31, 2008, Pointer recorded net income of $2.4 million or $0.5 per
share as compared to net loss of $0.3 million or $(0.08) per share
in 2007. Non-GAAP net income: For the year ended December 31, 2008,
Pointer's non-GAAP net income was $7.1 million, as compared to
non-GAAP net income of $2.2 million in 2007. EBITDA: Pointer's
EBITDA in 2008 increased 72% to $15.4 million as compared to $9.0
million in 2007. Balance Sheet Highlights: Shareholder's Equity
increased to $35.8 million at December 31, 2008 compared to $32.2
million at December 31, 2007. Total liabilities from banks and
other liabilities decreased to $31.7 million at December 31, 2008
from $36.8 million at December 31, 2007 due to Pointer's repayment
of loans during 2008. Danny Stern, Pointer CEO, said: "2008 was an
excellent year for Pointer, especially in Israel. Our Mexican
business, although still a very small part of our global business,
continues to grow in subscribers and revenues, despite economic
instability in that market. Events affecting the global vehicle
industry have a significant bearing on the demand for our
technology. We continue to closely monitor events affecting that
industry; however, at this point in time, we cannot estimate their
impact. On the other hand, our services business has a stable
outlook even considering the current uncertainties in the global
economy. Our Israeli subsidiary Shagrir, which provides Road Side
Assistance and Stolen Vehicle Recovery services, enjoyed growth and
profitability during 2008 and so is strongly positioned for 2009.
Pointer's strong EBITDA enables us to maintain R&D investment
in order to enhance our offering of products and services and
competitive advantages in the coming years," concluded Mr. Stern.
Conference Call Information: Pointer's management will host today,
February 25th, 2009 a conference call with the investment community
to review and discuss the financial results: - The Conference Call
will take place on 10:00 AM EST, 17:00 Israel time. To listen to
the call, please dial in to one of the following teleconferencing
numbers. Please begin placing your calls at least 5 minutes before
the conference call commences. From USA: +1-866-527-8676 From
Israel: 03-918-0610 A replay will be available from February 26,
2008 at the company website: http://www.pointer.com/.
Reconciliation between results on a GAAP and Non-GAAP basis is
provided in a table immediately following the condensed
consolidated statements of cash flows contained in the press
release. Pointer's non-GAAP net income adjusts GAAP net income 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. Pointer also 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. Our non-GAAP financial measures, such as non-GAAP net income
and EBITDA, 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 tables immediately following the condensed
consolidated statement of cash flows. About Pointer Telocation: The
Pointer Telocation Group, publiclly traded on Nasdaq (PNTR) and on
TASE (PNTR), develops, manufactures, provides and operates advanced
command and control technonogies for the automotive and cargo
industries. With 500,000 installations in 25 countries around the
world, The Pointer Group is Israel's leading exporter of
state-of-the-art solutions for managing vehicle fleets. As a
service provider, The Pointer Group operates through its subsidiary
Shagrir Systems Ltd., that provides comprehensive solutions for the
automotive markets in Israel, Argentina, Mexico and Romania. The
Pointer Telocation Group is headquartered in Rosh Ha'ayin, Israel.
CEO is Danny Stern. For more information, please visit
http://www.pointer.com/ Safe Harbor Statement 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. CONDENSED CONSOLIDATED
BALANCE SHEETS U.S. dollars in thousands December 31, 2008 2007
Unaudited ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,708
$ 1,200 Trade receivables, net 13,509 11,756 Other accounts
receivable and prepaid expenses 2,774 2,001 Inventories 3,999 2,657
Total current assets 22,990 17,614 LONG-TERM ASSETS: Long-term
accounts receivable 339 337 Severance pay fund 4,925 4,866 Property
and equipment, net 7,998 7,708 Deferred income taxes 1,037 941
Other intangible assets, net 14,894 18,058 Goodwill 50,416 50,712
Total long-term assets 79,609 82,622 Total assets $ 102,599 $
100,236 CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands
(except share and per share data) December 31, 2008 2007 Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES:
Short-term bank credit and current maturities of long-term loans $
7,849 $ 10,564 Trade payables 8,613 8,001 Deferred revenues and
customer advances 8,958 8,253 Other accounts payable and accrued
expenses 5,535 6,123 Total current liabilities 30,955 32,941
LONG-TERM LIABILITIES: Long-term loans from banks 20,520 18,460
Long-term loans from shareholders and others 3,305 5,767 Other
long-term liabilities 257 89 Accrued severance pay 6,375 5,730
Convertible debentures - 1,979 30,457 32,025 MINORITY INTEREST
5,372 3,067 SHAREHOLDERS' EQUITY 35,815 32,203 Total liabilities
and shareholders' equity $ 102,599 $ 100,236 CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS U.S. dollars in thousands (except per
share data) Year ended December 31, 2008 2007 2006 Unaudited
Revenues: Products $ 30,645 $ 15,821 $ 9,701 Services 46,010 35,806
32,211 Total revenues 76,655 51,627 41,912 Cost of revenues:
Products 16,392 9,414 5,602 Services 29,869 23,034 20,786
Amortization of intangible assets 980 277 - Total cost of revenues
47,241 32,725 26,388 Gross profit 29,414 18,902 15,524 Operating
expenses: Research and development, net 2,511 1,675 1,170 Selling
and marketing 6,934 4,934 3,927 General and administrative 8,311
6,209 4,749 Amortization of intangible assets and impairment of
long-lived assets 2,365 1,877 2,112 Other income, net - - (1,292)
Total operating expenses 20,121 14,695 10,666 Operating income
9,293 4,207 4,858 Financial expenses, net 4,054 2,814 2,577 Other
expenses (income), net (22) 12 (14) Income (loss) before taxes on
income 5,261 1,381 2,295 Taxes on income 640 353 82 Income (loss)
before minority interest 4,621 1,028 2,213 Minority interest 2,248
1,366 1,044 Net income (loss) $ 2,373 $ (338) $ 1,169 Basic net
earnings (loss) per share $ 0.51 $ (0.08) $ 0.39 Diluted net
earnings (loss) per share $ 0.50 $ (0.08) $ 0.31 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands
Year ended December 31, 2008 2007 2006 Unaudited Cash flows from
operating activities: Net income (loss) $ 2,373 $ (338) $ 1,169
Adjustments required to reconcile net income (loss) to net cash
provided by operating activities: Depreciation, amortization and
impairment 6,918 5,273 4,490 Accrued interest and exchange rate
changes of convertible debenture and long-term loans 1,187 750 137
Accrued severance pay, net 619 (70) (166) Gain from sale of
property and equipment, net (36) (182) (563) Amortization of
deferred stock-based compensation 230 783 251 Minority interest in
earnings of subsidiary 2,248 1,366 1,044 Increase in trade
receivables, net (1,773) (1,172) (1,167) Increase in other accounts
receivable and prepaid expenses (6) (421) (36) Increase in
inventories (2,088) (395) (490) Write-off of inventories 112 150
127 Deferred income taxes (178) (174) (99) Decrease (increase) in
long-term accounts receivable 23 (141) 60 Increase in trade
payables 888 730 1,049 Increase (decrease) in other accounts
payable and accrued expenses 379 1,855 (400) Net cash provided by
operating activities 10,896 8,014 5,406 Cash flows from investing
activities: Increase in other account receivables (357) - -
Purchase of property and equipment (3,476) (2,638) (2,277) Proceeds
from sale of property and equipment 605 860 1,026 Acquisition of
Cellocator (a) - (16,571) - Acquisition of other intangible assets
- (117) - Net cash used in investing activities (3,228) (18,466)
(1,251) Cash flows from financing activities: Receipt of long-term
loans from banks 9,064 5,000 2,243 Repayment of long-term loans
from banks (4,930) (4,347) (2,949) Receipt of long-term loans from
shareholders and others - - 131 Repayment of long-term loans from
others (10,201) (2,767) (4,529) Proceeds from issuance of shares
and exercise of warrants, net 1,000 9,588 3,481 Receipts on account
of shares - - 2,586 Short-term bank credit, net (970) (1,752) (973)
Net cash provided by (used in) financing activities (6,037) 5,722
(10) Effect of exchange rate changes on cash and cash equivalents
(123) 80 9 Increase (decrease) in cash and cash equivalents 1,508
(4,650) 4,154 Cash and cash equivalents at the beginning of the
year 1,200 5,850 1,696 Cash and cash equivalents at the end of the
year $ 2,708 $ 1,200 $ 5,850 CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS U.S. dollars in thousands Year ended December 31, 2008
2007 2006 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) $ -
Reconciliation Table of Non-GAAP Financial Measures U.S. dollars in
thousands Reconciliation of GAAP net income to non-GAAP net income
is as follows: Year ended December 31, 2008 2007 2006 Net income
(loss) as reported: $ 2,373 $ (338) $ 1,169 Amortization of
intangible assets and impairment of long-lived assets 3,345 2,154
2,112 Loan Discount 704 - - Tax on income 640 353 82 Non-GAAP Net
income $ 7,062 $ 2,169 $ 3,363 Reconciliation of GAAP to NON-GAAP
Operating Results U.S. dollars in thousands CONDENSED EBITDA Year
ended December 31, 2008 2007 2006 Net income (loss) as reported $
2,373 $ (338) $ 1,169 Non GAAP adjustment: Financial expenses, net
4,054 2,814 2,577 Taxes on income 640 353 82 Depreciation and
amortization 6,116 4,787 4,889 Minority interest 2,248 1,366 1,044
EBITDA $ 15,431 $ 8,982 $ 9,761 Contact: Zvi Fried Yael Nevat, V.P.
and 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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