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PowerFleet Reports Third Quarter 2020 Financial Results

Whole Income Will increase 7% Sequentially to $27.6 Million, Driving Gross Revenue Growth and Profitability Enhancements, Reflecting Working Mannequin Leverage and Enterprise ResiliencyWOODCLIFF LAKE, N.J., Nov. 09, 2020 (GLOBE NEWSWIRE) — PowerFleet, Inc. (Nasdaq: PWFL), a world chief and supplier of subscription-based wi-fi IoT and M2M options for securing, controlling, monitoring, and managing high-value enterprise property, reported outcomes for the third quarter ended September 30, 2020. Third Quarter 2020 Monetary Highlights * Whole income elevated 7% sequentially to $27.6 million * Excessive margin, recurring and providers income elevated 2% sequentially to $16.7 million * Gross revenue elevated 6% sequentially to $14.9 million (54.1% of complete income) * Working bills decreased 4% sequentially to $14.2 million * Web loss attributable to widespread stockholders totaled $1.7 million, an enchancment of $2.1 million in comparison with web lack of $3.8 million within the second quarter of 2020 * Adjusted EBITDA, a non-GAAP metric, elevated 71% sequentially to $3.6 million (13.0% of complete income) * Working money generated for the primary 9 months of 2020 totaled $5.3 million * AT quarter finish, money and money equivalents totaled $21.1 million and $31.2 million of working capitalThird Quarter 2020 and Latest Operational Highlights * Maintained strong on-air subscriber models at over 570,000 * Continued our roll-out at Ryder to embed telematics into its forklifts and different materials dealing with gear inside its warehouses * Prolonged and expanded partnership with Jungheinrich AG to supply new options and channel affiliation in Europe, Center East and Africa (EMEA) and North America * Chosen by Day & Ross to outfit a big portion of their trailer fleet with PowerFleet’s LV-500 photo voltaic monitoring resolution and the PowerFleet LV-710 Freight Digicam * Tapped by Kautex to enhance its security, compliance and utilization by PowerFleet’s telematics options * Supplied The French Purple Cross with a plug and play traceability resolution used throughout cargo of healthcare gear and provides to reply successfully to the COVID-19 pandemicManagement Commentary “Our robust monetary outcomes for the third quarter exhibit the resiliency of our enterprise and continued deal with driving worthwhile development,” stated PowerFleet CEO Chris Wolfe. “Regardless of the continued headwinds we skilled in sure markets because of the pandemic, we delivered strong sequential enhancements in all of our key monetary metrics, together with a 7% enhance in complete income, a 6% enhance in gross revenue, a 71% enhance in adjusted EBITDA in addition to a decrease web loss. We’re inspired by the numerous enchancment in our bottom-line on a GAAP foundation, in addition to the $3.6 million we generated in adjusted EBITDA, which marked the best quarterly degree since our acquisition of Pointer, reflecting the leverage in our monetary mannequin. Our deal with vertical integration and value optimization measures additionally produced robust gross margins and diminished working bills.“Operationally, we’re inspired by our world group’s execution and constructing gross sales momentum. In the course of the quarter we secured a number of notable wins, together with Kautex for a worldwide settlement with growth alternatives into further European areas. Moreover, we’re seeing rising demand for our dry van, container and chilly chain mobility platforms. In our PowerFleet for Logistics phase, we considerably expanded our enterprise with two current clients, who acknowledge the worth of PowerFleet options, software program and analytics for crucial operational visibility in high-demand environments.“Trying forward, our 570,000-subscriber base gives us with not solely high-margin recurring providers and subscription revenues but additionally good visibility as we enter 2021. Our monetary basis stays robust with $21 million of money, and our constant money stream technology, present us with a diversified and secure plan to execute our development technique. We stay assured in our continued capability to execute our technique and lengthen our place as one of many world’s main world IoT corporations centered on provide chain visibility, fleet administration and distinctive asset and IoT options.”Third Quarter 2020 Monetary Outcomes Monetary outcomes for the quarter ended September 30, 2020 embody consolidated outcomes for each I.D. Programs, Inc. and Pointer Telocation Ltd., which was acquired on October 3, 2019. Monetary outcomes for the quarter ended September 30, 2019 embody solely monetary outcomes from I.D. Programs, Inc. previous to its acquisition of Pointer Telocation Ltd.Whole income elevated to $27.6 million from $25.8 million within the prior quarter and elevated from $16.9 million in the identical year-ago interval. Providers income was $16.7 million (60.5% of complete income), an enchancment from $16.4 million (63.5% of complete income) within the prior quarter and from $5.8 million (34.5% of complete income) in the identical year-ago interval. Product income was $10.9 million (39.5% of complete income), in comparison with $9.4 million (36.5% of complete income) within the prior quarter and $11.1 million (65.5% of complete income) in the identical year-ago interval.Gross revenue elevated to $14.9 million (54.1% of complete income) from $14.0 million (54.5% of complete income) within the prior quarter and from $7.6 million (45.2% of complete income) in the identical year-ago interval. Service gross revenue was $10.7 million (64.2% of complete service income), in comparison with $10.7 million (65.2% of complete service income) within the prior quarter and $3.8 million (65.2% of complete service income) in the identical year-ago interval. Product gross revenue was $4.2 million (38.6% of complete product income), in comparison with $3.4 million (35.9% of complete product income) within the prior quarter and $3.8 million (34.7% of complete product income) in the identical year-ago interval.Promoting, common and administrative bills have been $10.3 million, in comparison with $10.3 million within the prior quarter and $5.9 million in the identical year-ago interval. Analysis and improvement bills have been $2.5 million, in comparison with $2.6 million within the prior quarter and $1.8 million in the identical year-ago interval. Depreciation and amortization bills have been $1.4 million, in comparison with $1.8 million within the prior quarter and $419,000 in the identical year-ago interval.Web loss attributable to widespread stockholders totaled $1.7 million or $(0.06) per fundamental and diluted share (primarily based on 30.1 million weighted common shares excellent), an enchancment from web lack of $3.8 million or $(0.13) per fundamental and diluted share (primarily based on 29.4 million weighted common shares excellent) within the prior quarter and web lack of $2.1 million or $(0.12) per fundamental and diluted share in the identical year-ago interval (primarily based on 17.9 million weighted common shares excellent).Adjusted EBITDA, a non-GAAP metric, totaled $3.6 million, an enchancment from $2.1 million within the prior quarter and from $738,000 in the identical year-ago interval (See the part beneath titled “Non-GAAP Monetary Measures” for extra details about adjusted EBITDA and its reconciliation to GAAP web revenue/loss).At quarter-end, the corporate had $21.1 million in money and money equivalents. The corporate’s working capital place at quarter-end was $31.2 million.Investor Convention Name PowerFleet administration will focus on these outcomes and enterprise outlook on a convention name immediately (Monday, November 9, 2020) at 8:30 a.m. Japanese time (5:30 a.m. Pacific time).PowerFleet CEO Chris Wolfe and CFO Ned Mavrommatis will host the decision, adopted by a query and reply session the place sell-side analysts and main institutional shareholders can ask questions.U.S. dial-in: 877-407-0778 Worldwide dial-in: 201 689 8565 Passcode: 38420The convention name shall be broadcast concurrently and accessible for replay within the investor part of the corporate’s web site at ir.powerfleet.com.When you’ve got any issue connecting with the convention name, please contact PowerFleet’s investor relations group at (949) 574-3860.Non-GAAP Monetary Measures To complement its monetary statements introduced in accordance with Usually Accepted Accounting Ideas (GAAP), PowerFleet gives sure non-GAAP measures of monetary efficiency. These non-GAAP measures embody adjusted EBITDA and adjusted EBITDA per fundamental and diluted share. Reference to those non-GAAP measures ought to be thought of along with outcomes ready below present accounting requirements, however aren’t an alternative to, or superior to, GAAP outcomes. These non-GAAP measures are supplied to boost buyers’ general understanding of PowerFleet’s present monetary efficiency. Particularly, PowerFleet believes the non-GAAP measures present helpful data to each administration and buyers by excluding sure bills, features and losses that might not be indicative of its core working outcomes and enterprise outlook. Adjusted EBITDA will not be a measure of monetary efficiency or liquidity below GAAP and, accordingly, shouldn’t be thought of as an alternate to web revenue or money stream from working actions as an indicator of working efficiency or liquidity. As a result of PowerFleet’s technique for calculating the non-GAAP measures might differ from different corporations’ strategies, the non-GAAP measures might not be similar to equally titled measures reported by different corporations. Reconciliation of all non-GAAP measures included on this press launch to the closest GAAP measures will be discovered within the monetary tables included on this press launch.PowerFleet, Inc. and Subsidiaries Reconciliation of GAAP to Adjusted EBITDA Monetary Measures (Unaudited) Three Months Ended 9 Months Ended  September 30,September 30,  2019   2020  2019   2020         Web loss attributable to widespread stockholders$(2,099,000) $(1,749,000) $(6,878,000) $(10,064,000) Minority curiosity –   6,000   –   (10,000) Dividends on most popular inventory –   1,159,000   –   3,422,000  Curiosity (revenue) expense, web (27,000)  625,000   (54,000)  1,985,000  Different (revenue) expense, web –   –   46,000   (7,000) Revenue tax (profit) expense –   529,000   –   1,182,000  Depreciation and amortization 447,000   2,109,000   1,299,000   6,159,000  Inventory-based compensation 548,000   992,000   1,732,000   3,078,000  International foreign money translation losses 258,000   (76,000)  288,000   (25,000) Acquisition-related charges 1,611,000   –   4,673,000   –  Impression of the truthful worth mark-up of acquired stock –   –   –   124,000           Adjusted EBITDA$738,000  $ 3,595,000  $1,106,000  $ 5,844,000           About PowerFleet PowerFleet® Inc. (NASDAQ: PWFL; TASE: PWFL) is a world chief and supplier of subscription-based wi-fi IoT and M2M options for securing, controlling, monitoring, and managing high-value enterprise property akin to industrial vehicles, tractor trailers, containers, cargo, and automobiles and truck fleets. The corporate is headquartered in Woodcliff Lake, New Jersey, with places of work positioned across the globe. PowerFleet’s patented applied sciences tackle the wants of organizations to observe and analyze their property to extend effectivity and productiveness, cut back prices, and enhance profitability. Our choices are offered below the worldwide manufacturers PowerFleet, Pointer, and Cellocator. For extra data, please go to www.powerfleet.com, the content material of which doesn’t type part of this press launch.Cautionary Word Relating to Ahead-Trying Statements This press launch accommodates forward-looking statements inside the that means of federal securities legal guidelines. Ahead-looking statements embody statements with respect to PowerFleet’s beliefs, plans, targets, goals, expectations, anticipations, assumptions, estimates, intentions, and future efficiency, and contain recognized and unknown dangers, uncertainties and different components, which can be past PowerFleet’s management, and which can trigger its precise outcomes, efficiency or achievements to be materially totally different from future outcomes, efficiency or achievements expressed or implied by such forward-looking statements. All statements aside from statements of historic reality are statements that may very well be forward-looking statements. For instance, forward-looking statements embody statements relating to: prospects for added clients; potential contract values; market forecasts; projections of earnings, revenues, synergies, accretion or different monetary data; rising new merchandise; and plans, methods and goals of administration for future operations, together with rising income, controlling working prices, rising manufacturing volumes, and increasing enterprise with core clients. The dangers and uncertainties referred to above embody, however aren’t restricted to, future financial and enterprise circumstances, the flexibility to acknowledge the anticipated advantages of the acquisition of Pointer, which can be affected by, amongst different issues, the lack of key clients or discount within the buy of merchandise by any such clients, the failure of the marketplace for PowerFleet’s merchandise to proceed to develop, the likelihood that PowerFleet might not have the ability to combine efficiently the enterprise, operations and workers of I.D. Programs and Pointer, the shortcoming to guard PowerFleet’s mental property, the shortcoming to handle development, the results of competitors from a wide range of native, regional, nationwide and different suppliers of wi-fi options, and different dangers detailed every now and then in PowerFleet’s filings with the Securities and Trade Fee, together with PowerFleet’s annual report on Type 10-Okay for the 12 months ended December 31, 2019. These dangers may trigger precise outcomes to vary materially from these expressed in any forward-looking statements made by, or on behalf of, PowerFleet. Except in any other case required by relevant regulation, PowerFleet assumes no obligation to replace the data contained on this press launch, and expressly disclaims any obligation to take action, whether or not a results of new data, future occasions, or in any other case.PowerFleet Firm Contact Ned Mavrommatis, CFO  NMavrommatis@powerfleet.com (201) 996-9000 PowerFleet Investor Contact  Matt Glover Gateway Investor Relations PWFL@gatewayIR.com   (949) 574-3860PowerFleet, Inc. and Subsidiaries Condensed Consolidated Statements of Operations Knowledge (Unaudited) Three Months Ended 9 Months Ended September 30,September 30,  2019 2020 2019 2020          Income:        Merchandise$11,062,000  $ 10,914,000  $28,954,000  $ 33,516,000  Providers 5,822,000   16,688,000   17,815,000   50,650,000             16,884,000   27,602,000   46,769,000   84,166,000  Price of income:        Price of merchandise 7,227,000   6,700,000   18,528,000   22,025,000  Price of providers 2,027,000   5,979,000   6,522,000   18,309,000             9,254,000   12,679,000   25,050,000   40,334,000           Gross revenue 7,630,000   14,923,000   21,719,000   43,832,000           Working bills:        Promoting, common and administrative bills 5,902,000   10,256,000   17,203,000   34,002,000  Analysis and improvement bills 1,824,000   2,535,000   5,508,000   8,289,000  Depreciation and amortization bills 419,000   1,380,000   1,221,000   4,903,000  Acquisition-related bills 1,611,000   –   4,673,000   –             9,756,000   14,171,000   28,605,000   47,194,000           Revenue (loss) from operations (2,126,000)  752,000   (6,886,000)  (3,362,000) Curiosity revenue 37,000   10,000   110,000   41,000  Curiosity expense (10,000)  (817,000)  (56,000)  (2,156,000) Different expense –   –   (46,000)  7,000           Web loss earlier than revenue taxes (2,099,000)  (55,000)  (6,878,000)  (5,470,000)          Revenue tax expense –   (529,000)  –   (1,182,000)          Web loss earlier than minority curiosity (2,099,000)  (584,000)  (6,878,000)  (6,652,000) Minority curiosity –   (6,000)  –   10,000  Most well-liked inventory dividends –   (1,159,000)  –   (3,422,000)          Web loss attributable to widespread stockholders$(2,099,000) $ (1,749,000) $(6,878,000) $ (10,064,000)          Web loss per share – fundamental and diluted$(0.12) $ (0.06) $(0.39) $ (0.34)          Weighted common widespread shares excellent – fundamental and diluted 17,929,000   30,143,000   17,744,000   29,528,000           PowerFleet, Inc. and Subsidiaries Condensed Consolidated Stability Sheet Knowledge (Unaudited) As of  December 31, 2019 September 30, 2020 ASSETS  (Unaudited) Present property:    Money and money equivalents$16,395,000  $ 21,077,000  Restricted money 308,000   308,000  Accounts receivable, web 27,016,000   23,705,000  Stock, web 16,381,000   14,354,000  Deferred prices – present 3,720,000   3,292,000  Pay as you go bills and different present property 7,370,000   5,960,000       Whole present property 71,190,000   68,696,000       Deferred prices – much less present portion 4,810,000   2,830,000  Fastened property, web 8,240,000   7,425,000  Goodwill 89,068,000   88,872,000  Intangible property, web 36,639,000   32,608,000  Proper of use asset 7,024,000   7,514,000  Severance payable fund 3,530,000   3,618,000  Different property 2,532,000   2,784,000   $223,033,000  $ 214,347,000       LIABILITIES    Present liabilities:    Quick-term financial institution debt and present maturities of long-term debt$3,373,000  $ 4,414,000  Convertible word payable 5,000,000   5,000,000  Accounts payable and accrued bills 24,880,000   19,153,000  Deferred income – present 7,687,000   7,385,000  Lease legal responsibility – present 868,000   1,558,000       Whole present liabilities 41,808,000   37,510,000       Lengthy-term debt, much less present maturities 26,515,000   23,669,000  Deferred income – much less present portion 8,544,000   6,703,000  Lease legal responsibility – much less present portion 6,371,000   6,115,000  Accrued severance payable 4,062,000   4,287,000  Deferred tax legal responsibility 3,722,000   4,992,000  Different long-term liabilities 438,000   736,000         91,460,000   84,012,000  MEZZANINE EQUITY    Convertible redeemable Most well-liked inventory: Collection A 47,393,000   50,815,000       STOCKHOLDERS’ EQUITY         Whole Powerfleet, Inc. stockholders’ fairness 84,190,000   79,555,000  Non-controlling curiosity (10,000)  (35,000) Whole fairness 84,180,000   79,520,000  Whole liabilities and stockholders’ fairness$223,033,000  $ 214,347,000       PowerFleet, Inc. and Subsidiaries Condensed Consolidated Statements of Money Circulation Knowledge (Unaudited) 9 Months ended September 30,  2019 2020        Money flows from working actions (web of web property acquired):      Web loss earlier than minority curiosity$(6,878,000) $ (6,652,000) Changes to reconcile web loss to money (utilized in) supplied by working actions:    Stock reserve 156,000   189,000  Inventory primarily based compensation expense 1,732,000   3,078,000  Depreciation and amortization 1,299,000   6,159,000  Proper-of-use property, non-cash lease expense 526,000   2,129,000  Unhealthy debt expense 155,000   309,000  Deferred revenue taxes –   1,182,000  Change in contingent consideration 54,000   –  Different non-cash gadgets 22,000   (55,000) Adjustments in:    Working property and liabilities (1,371,000)  (1,046,000)      Web money (utilized in) supplied by working actions (4,305,000)  5,293,000       Money flows from investing actions:    Acquisitions, web of money assumed (4,350,000)  –  Proceeds from sale of property and gear –   55,000  Capital expenditures (501,000)  (2,101,000) Purchases of investments (99,000)  –  Proceeds from the sale and maturities of investments 4,638,000   –       Web money utilized in investing actions (312,000)  (2,046,000)      Money flows from financing actions:    Web proceeds from inventory providing –   4,041,000  Repayments of long-term debt –   (1,495,000) Quick-term financial institution credit score, web –   (290,000) Proceeds from train of inventory choices 177,000   371,000  Shares repurchased pursuant to vesting of restricted inventory (291,000)  (298,000)      Web money (utilized in) supplied by financing actions (114,000)  2,329,000       Impact of international alternate fee adjustments on money and money equivalents 132,000   (894,000) Web (lower) enhance in money, money equivalents and restricted money (4,599,000)  4,682,000  Money, money equivalents and restricted money – starting of interval 10,466,000   16,703,000       Money, money equivalents and restricted money – finish of interval 5,867,000 $ 21,385,000



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