Press Releases

PowerFleet Reports First Quarter 2020 Financial Results

WOODCLIFF LAKE, N.J., May 14, 2020 (GLOBE NEWSWIRE) -- PowerFleet, Inc. (Nasdaq: PWFL), a global leader and provider of subscription-based wireless IoT and M2M solutions for securing, controlling, tracking, and managing high-value enterprise assets, reported results for the first quarter ended March 31, 2020.

Q1 2020 Financial and Operational Highlights

  • Generated $30.8 million in total revenue, including $17.6 million (57% of total revenue) of high margin, recurring and services revenue
  • Produced $2.8 million in operating cash flow
  • Maintained solid liquidity position with $16.6 million in cash and cash equivalents and $24.1 million of working capital
  • Recognized by Department of Homeland Security as key technology supplier, providing continuity of product and services to customers to date

Management Commentary

“Our uninterrupted operational execution in the first quarter is a testament to our organization’s commitment to helping our customers and partners meet the increasing demands and challenges from the global COVID-19 pandemic,” said CEO Chris Wolfe. “While we did see some orders get temporarily postponed in late March, which impacted our results in the period, we were still able to generate $30.8 million in total revenue, $17.6 million in high-margin, recurring and services revenue, and $2.8 million of operating cash flow, demonstrating our business model’s resiliency.

“Recognizing the ongoing uncertainty from the COVID-19 crisis and its effects on the global economy, we enacted several precautionary measures to further ensure our business remains financially secure and our long-term viability remains intact. In March, we implemented a cost savings plan to reduce our operating costs and further optimize our organization. We expect that will begin to see the benefit of these cost saving initiatives starting in the second quarter. These proactive measures coupled with our solid cash and liquidity position give us confidence that we will not only weather this storm but come out stronger when the economy recovers.

“PowerFleet continues to provide the critical customer support during these times to enable our customers to react quickly and safely as they move critical cargo across the globe. Our technology is relied upon by global enterprises across the food distribution supply chain, including Walmart, Nestle, Proctor & Gamble, General Mills, Publix, and Kraft. These companies are the backbone of the U.S. and global food distribution supply chain and we are committed to supporting these critical operations at this time.

“While we have seen some orders temporarily being postponed, we have not had any significant cancellations, which keeps us cautiously optimistic about the deals in our pipeline. One notable win in our first quarter was the world’s largest online retailer, who selected one of our forklift manufacturing partners to deploy our technology at several U.S. sites in the second quarter. We were also selected by one of the world’s largest logistics companies to deploy our industrial mobility solutions in nearly all their U.S. facilities in the second half of 2020. We’re seeing an equal amount of opportunities abroad as well, including a major 3,000-unit tender we won in South Africa and a similar-sized deal in Mexico.

“While these are encouraging trends, we do see the start of our second quarter being impacted by order postponements, but this may change as countries and states open up their economies in May. The proactive cost savings measures we’ve taken in the near-term will allow us to drive our business forward today and the resiliency in our business model and the secular growth drivers ensure that our business is positioned for growth in a post COVID-19 environment.”

First Quarter 2020 Financial Results
Financial results for the quarter ended March 31, 2020 include consolidated results for both I.D. Systems, Inc. and Pointer Telocation Ltd., which was acquired on October 3, 2019. Financial results for the quarter ended March 31, 2019 include only financial results from I.D. Systems, Inc. prior to its acquisition of Pointer Telocation Ltd.

Total revenue increased to $30.8 million from $13.6 million in the same year-ago period. Services revenue was $17.6 million (57.1% of total revenue), compared to $6.4 million (46.7% of total revenue) in the same year-ago period. Product revenue was $13.2 million (42.9% of total revenue), compared to $7.2 million (53.3% of total revenue) in the same year-ago period.

Gross profit increased to $14.9 million (48.3% of total revenue) from $7.0 million (51.6% of total revenue) in the same year-ago period. Service gross profit was $11.0 million (62.3% of total service revenue), compared to $4.0 million (63.0% of total service revenue) in the same year-ago period. Product gross profit was $3.9 million (29.6% of total product revenue), compared to $3.0 million (41.5% of total product revenue) in the same year-ago period.

Selling, general and administrative expenses were $13.4 million, compared to $7.2 million in the same year-ago period. Research and development expenses were $3.2 million, compared to $1.7 million in the same year-ago period. Depreciation and amortization expenses were $1.7 million, compared to $358,000 in the same year-ago period.

Net loss attributable to common stockholders totaled $4.5 million or $(0.16) per basic and diluted share (based on 29.0 million weighted average shares outstanding), compared to net loss of $2.2 million or $(0.12) per basic and diluted share in the same year-ago period (based on 17.6 million weighted average shares outstanding). 

Adjusted EBITDA, a non-GAAP metric, totaled $152,000, compared to adjusted EBITDA of $240,000 in the same year-ago period (See the section below titled “Non-GAAP Financial Measures” for more information about adjusted EBITDA and its reconciliation to GAAP net income/loss).

At quarter-end, the company had $16.6 million in cash and cash equivalents. The company’s working capital position at quarter-end was $24.1 million.

Investor Conference Call

PowerFleet management will discuss these results and business outlook on a conference call today (Thursday, May 14, 2020) at 8:30 a.m. Eastern time (5:30 a.m. Pacific time).

PowerFleet CEO Chris Wolfe and CFO Ned Mavrommatis will host the call, followed by a question and answer session where sell-side analysts and major institutional shareholders can ask questions.

U.S. dial-in: (877) 307-1379

International dial-in: (443) 877-4066

Passcode: 3798573

The conference call will be broadcast simultaneously and available for replay in the investor section of the company’s website at

If you have any difficulty connecting with the conference call, please contact PowerFleet’s investor relations team at (949) 574-3860.


Non-GAAP Financial Measures

To supplement its financial statements presented in accordance with Generally Accepted Accounting Principles (GAAP), PowerFleet provides certain non-GAAP measures of financial performance. These non-GAAP measures include adjusted EBITDA and adjusted EBITDA per basic and diluted share. Reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, or superior to, GAAP results. These non-GAAP measures are provided to enhance investors’ overall understanding of PowerFleet’s current financial performance. Specifically, PowerFleet believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results and business outlook. Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternate to net income or cash flow from operating activities as an indicator of operating performance or liquidity. Because PowerFleet’s method for calculating the non-GAAP measures may differ from other companies’ methods, the non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliation of all non-GAAP measures included in this press release to the nearest GAAP measures can be found in the financial tables included in this press release.

PowerFleet, Inc. and Subsidiaries
Reconciliation of GAAP to Adjusted EBITDA Financial Measures

  Three Months Ended
  March 31,
    2019   2020 
Net loss attributable to common stockholders   $ (2,194,000 )   $ (4,549,000 )
Minority interest     -       (15,000 )
Dividends on preferred stock     -       1,123,000  
Interest (income) expense, net     (45,000 )     735,000  
Other (income) expense, net     38,000       (2,000 )
Income tax (benefit) expense     -       193,000  
Depreciation and amortization     382,000       2,067,000  
Stock-based compensation     583,000       1,109,000  
Foreign currency translation losses     26,000       (642,000 )
Acquisition-related fees     1,449,000       -  
Impact of the fair value mark-up of acquired inventory     -       133,000  
Adjusted EBITDA   $ 239,000     $ 152,000  

About PowerFleet
PowerFleet®, Inc. (NASDAQ: PWFL; TASE: PWFL) is a global leader and provider of subscription-based wireless IoT and M2M solutions for securing, controlling, tracking, and managing high-value enterprise assets such as industrial trucks, tractor trailers, containers, cargo, and vehicles and truck fleets. The company is headquartered in Woodcliff Lake, New Jersey, with offices located around the globe. PowerFleet’s patented technologies address the needs of organizations to monitor and analyze their assets to increase efficiency and productivity, reduce costs, and improve profitability. Our offerings are sold under the global brands PowerFleet, Pointer, and Cellocator. For more information, please visit, the content of which does not form a part of this press release.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements include statements with respect to PowerFleet’s beliefs, plans, goals, objectives, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond PowerFleet’s control, and which may cause its actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. For example, forward-looking statements include statements regarding: prospects for additional customers; potential contract values; market forecasts; projections of earnings, revenues, synergies, accretion or other financial information; emerging new products; and plans, strategies and objectives of management for future operations, including growing revenue, controlling operating costs, increasing production volumes, and expanding business with core customers. The risks and uncertainties referred to above include, but are not limited to, future economic and business conditions, the ability to recognize the anticipated benefits of the acquisition of Pointer, which may be affected by, among other things, the loss of key customers or reduction in the purchase of products by any such customers, the failure of the market for PowerFleet’s products to continue to develop, the possibility that PowerFleet may not be able to integrate successfully the business, operations and employees of I.D. Systems and Pointer, the inability to protect PowerFleet’s intellectual property, the inability to manage growth, the effects of competition from a variety of local, regional, national and other providers of wireless solutions, and other risks detailed from time to time in PowerFleet’s filings with the Securities and Exchange Commission, including PowerFleet’s annual report on Form 10-K for the year ended December 31, 2019. These risks could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, PowerFleet. Unless otherwise required by applicable law, PowerFleet assumes no obligation to update the information contained in this press release, and expressly disclaims any obligation to do so, whether a result of new information, future events, or otherwise.

PowerFleet Company Contact
Ned Mavrommatis, CFO
(201) 996-9000 

PowerFleet Investor Contact 
Matt Glover
Gateway Investor Relations
(949) 574-3860

PowerFleet, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations Data

  Three Months Ended
  March 31,
    2019     2020 
  (Unaudited)   (Unaudited)
Products   $ 7,249,000       $ 13,208,000  
Services     6,362,000         17,591,000  
      13,611,000         30,799,000  
Cost of revenue:          
Cost of products     4,239,000         9,302,000  
Cost of services     2,354,000         6,631,000  
      6,593,000         15,933,000  
Gross profit     7,018,000         14,866,000  
Operating expenses:          
Selling, general and administrative expenses     7,201,000         13,408,000  
Research and development expenses     1,660,000         3,172,000  
Depreciation and amortization expenses     358,000         1,695,000  
      9,219,000         18,275,000  
Loss from operations     (2,201,000 )       (3,409,000 )
Interest income     65,000         14,000  
Interest expense     (20,000 )       145,000  
Other expense     (38,000 )       2,000  
Net loss before income taxes     (2,194,000 )       (3,248,000 )
Income tax expense     -         (193,000 )
Net loss before minority interest     (2,194,000 )       (3,441,000 )
Minority interest     -         15,000  
Preferred stock dividends     -         (1,123,000 )
Net loss attributable to common stockholders   $ (2,194,000 )     $ (4,549,000 )
Net loss per share - basic and diluted   $ (0.12 )     $ (0.16 )
Weighted average common shares outstanding - basic and diluted     17,621,000         29,034,000  

PowerFleet, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet Data

  As of
  December 31, 2019   March 31, 2020
ASSETS       (Unaudited)
Current assets:          
Cash and cash equivalents   $ 16,395,000       $ 16,606,000  
Restricted cash     308,000         308,000  
Accounts receivable, net     27,016,000         24,880,000  
Inventory, net     16,381,000         15,149,000  
Deferred costs - current     3,720,000         3,656,000  
Prepaid expenses and other current assets     7,370,000         6,703,000  
Total current assets     71,190,000         67,302,000  
Deferred costs - less current portion     4,810,000         4,061,000  
Fixed assets, net     8,240,000         7,166,000  
Goodwill     89,068,000         88,871,000  
Intangible assets, net     36,639,000         35,272,000  
Right of use asset     7,024,000         7,069,000  
Severance payable fund     3,530,000         3,368,000  
Other assets     2,532,000         2,652,000  
    $ 223,033,000       $ 215,761,000  
Current liabilities:          
Short-term bank debt and current maturities of long-term debt $ 3,373,000       $ 3,933,000  
Convertible note payable     5,000,000         5,000,000  
Accounts payable and accrued expenses     24,880,000         23,128,000  
Deferred revenue - current     7,687,000         8,437,000  
Lease liability - current     868,000         2,699,000  
Total current liabilities     41,808,000         43,197,000  
Long-term debt, less current maturities     26,515,000         24,503,000  
Deferred revenue - less current portion     8,544,000         7,438,000  
Lease liability - less current portion     6,371,000         4,553,000  
Accrued severance payable     4,062,000         4,024,000  
Deferred tax liability     3,722,000         4,397,000  
Other long-term liabilities     438,000         751,000  
Total liabilities     91,460,000         88,863,000  
Convertible redeemable Preferred stock: Series A     47,393,000         48,516,000  
Total Powerfleet, Inc. stockholders’ equity     84,190,000         78,427,000  
Non-controlling interest     (10,000 )       (45,000 )
Total equity     84,180,000         78,382,000  
Total liabilities and stockholders’ equity   $ 223,033,000       $ 215,761,000  

PowerFleet, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flow Data

  Three Months Ended March 31,
     2019   2020 
Cash flows from operating activities (net of net assets acquired):        
Net loss before minority interest   $ (2,194,000 )   $ (3,441,000 )
Adjustments to reconcile net loss to cash (used in) provided by operating activities:    
 Inventory reserve     45,000       63,000  
 Stock based compensation expense     583,000       1,109,000  
 Depreciation and amortization     382,000       2,067,000  
 Right of use asset non-cash lease expense     160,000       731,000  
 Bad debt expense     72,000       184,000  
 Deferred income taxes     -       193,000  
 Change in contingent consideration     20,000       -  
 Other non-cash items     33,000       (8,000 )
 Changes in:        
 Accounts receivable     (3,928,000 )     820,000  
 Inventory      (255,000 )     691,000  
 Prepaid expenses and other assets     141,000       (549,000 )
 Deferred costs     (834,000 )     812,000  
 Deferred revenue     2,702,000       (924,000 )
 Accounts payable and accrued expenses     1,653,000       1,694,000  
 Lease liabilities     (196,000 )     (785,000 )
 Accrued severance payable, net     -       100,000  
 Net cash used in operating activities     (1,616,000 )     2,757,000  
 Cash flows from investing activities:        
 Acquisitions     (3,097,000 )     -  
 Proceeds from sale of property and equipment     -       16,000  
 Capital expenditures     (234,000 )     (471,000 )
 Purchases of investments     (99,000 )     -  
 Proceeds from the sale and maturities of investments     4,638,000       -  
 Net cash (used in) provided by investing activities     1,208,000       (455,000 )
 Cash flows from financing activities:        
 Repayments of long-term debt     -       (479,000 )
 Short-term bank debt, net     -       104,000  
 Proceeds from exercise of stock options     -       127,000  
 Shares withheld pursuant to vesting of restricted stock     (226,000 )     (232,000 )
Net cash provided by financing activities     (226,000 )     (480,000 )
 Effect of foreign exchange rate changes on cash and cash equivalents     (10,000 )     (1,611,000 )
 Net increase in cash, cash equivalents and restricted cash     (644,000 )     211,000  
 Cash, cash equivalents and restricted cash - beginning of period     10,466,000       16,703,000  
Cash, cash equivalents and restricted cash - end of period $   9,822,000   $   16,914,000  

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Source: PowerFleet, Inc.