Pointer Telocation Reports Third Quarter 2018 Financial Results

Pointer Telocation Ltd. (NASDAQ: PNTR) (TASE: PNTR), a leading provider of telematic services and technology solutions for Fleet Management, Mobile Asset Management and Internet of Vehicles, announced its financial results for third quarter and nine months ended September 30, 2018.

Financial Highlights for Third Quarter 2018 Compared to Third Quarter 2017

• Total revenues of $18.7 million, down 7% as reported due to foreign currency exchange headwinds and up 1% on a constant currency basis
• Service revenues of $12.8 million, down 4% as reported and up 8% on a constant currency basis
• Operating income of $2.5 million (13% of revenue), down 13%
• Net income of $1.8 million, down 4%
• Cash, net of debt, totaled $2 million. Generated $3.1 million in operating cash flow during the quarter
• Total subscribers reached 274,000, an increase of 10%

Financial Highlights for First Nine Months of 2018 Compared to First Nine Months of 2017

• Total revenues of $59.4 million as reported, up from $59.3 million, and up 4% on a constant currency basis
• Service revenues of $39.8 million, up 3% as reported, and up 9% on a constant currency basis
• Operating income of $7.8 million (13% of revenue), down 2%
• Net income of $5.5 million, up 1%

Management Commentary

David Mahlab, Pointer’s Chief Executive Officer, commented:
“This was another solid quarter for Pointer. We delivered improved service margins, strong earnings and impressive cash flow generation while facing tough headwinds from foreign currency exchange rates in our markets in Latin America, which negatively impacted reported revenue. Our bottom line performance is good, and it demonstrates our underlying strength.

“During the period, we continued to advance our capabilities in the IOT space and in providing our safety and driver behavior solution through our machine learning technology. Our platform will harness our real-time driver data to deliver more efficient, cost-effective products and services to our customers, many of whom have already provided positive initial feedback on these upcoming offerings. Initial introduction of the solution has been well received by our customers. We are also currently beta testing our asset tracking solution in North America and intend to start shipping before the end of the year.

“As reported recently, in India, we have been officially certified to the AIS 140 standard, which we believe will drive a substantial increase in telematics adoption in this growing market. We expect to start delivering Cello CANiQ IN devices in India by the end of the year, and we should benefit from deliveries in the Americas as well. We expect a significant ramp up in North America in 2019 and beyond. Meanwhile, in Brazil we secured several new contracts during the third quarter that will have an impact in 2019 as well.

“Our markets, while highly fragmented, continue to expand, and we are positioned around the globe to pursue them.”

Yaniv Dorani, Pointer’s Chief Financial Officer, commented:
“During the period, we continued to strengthen our balance sheet and improve our capital structure. In the third quarter, we generated $3.1 million in operating cash flow and ended the quarter with $2.0 million in net cash, achieving positive net cash for the first time in more than a decade. Over the past nine months, we have reduced our long-term debt by $3.8 million.”

Revenues from services decreased 4% as reported to $12.8 million as compared to $13.3 million in the third quarter of 2017. In local currency terms, revenues from services increased by 8%. Revenues from products decreased 14% as reported in the third quarter of 2018 to $5.9 million from $6.9 million. In local currency terms, revenues from products decreased by 11%. The currency exchange rate impact on total revenues for the third quarter of 2018 compared to the third quarter of 2017 was approximately $1.8 million. – PR Newswire