Fourth quarter total revenue of $34.5 million, up 9% YoY (constant currency),
posting the best revenue quarter result in six quarters
Fourth quarter service revenue increased 16%
YoY (constant currency) and full year '23 service revenue increased
14% YoY (constant currency), demonstrating the company's
transformation to a SaaS-centric business model
Fourth quarter AEBITDA increased 110% YoY
while second half '23 AEBITDA increased by 141% versus first half
2023, reflecting strong gross margins and lower adjusted cash
operating expenses
Resounding support from shareholders and
financing finalized for the business combination with MiX
Telematics, with the new combined entity on track to commence on
April 2, 2024
WOODCLIFF LAKE, N.J., March 12,
2024 /PRNewswire/ -- Powerfleet,
Inc. (Nasdaq: PWFL), reported results for the
fourth quarter and full year ended December
31, 2023.
FOURTH QUARTER 2023 HIGHLIGHTS
- Total revenue was $34.5 million,
up 9% year-over-year (constant currency).
- Service revenue increased 16% year-over-year (constant
currency) to $21.7 million,
demonstrating the company's transformation to a SaaS-centric
business model.
- Gross profit increased $1.0
million or 6% year-over-year to $17.3
million despite $1.1 million
in non-recurring inventory adjustments.
- Adjusted EBITDA, a non-GAAP metric, totaled $2.9 million, an increase of 110%
year-over-year.
- Generated $3.3 million in
unlevered free cash flow after adjusting for transaction
costs.
SECOND HALF 2023 FINANCIAL MOMENTUM (COMPARED TO FIRST HALF
2023)
- Total revenue increased 6% to $68.7
million, driven by strong Unity sales in North America and conversion of higher margin
product sales.
- Gross profit increased $1.8
million or 6% to $34.4
million, showcasing the company's strategy of selling
high-margin products that drive sticky recurring SaaS revenue.
- Product gross margin expanded from 25.0% to 27.4%.
- Adjusted EBITDA, a non-GAAP metric, improved by $2.9 million or 141% to $4.9 million.
FULL-YEAR 2023 FINANCIAL AND OPERATIONAL HIGHLIGHTS (COMPARED
TO 2022)
- Total revenue increased 4% (constant currency).
- Exited low-quality revenue segments, unprofitable contracts,
and non-strategic lines of business, resulting in the shedding of
approximately $8 million in annual
revenue. This strategic decision significantly streamlined the
company's operations while reallocating resources toward more
profitable and higher growth areas.
- Service revenue increased 14% year-over-year (constant
currency) to $84.2 million, or 63% of
total revenue up from 58% in 2022.
- Gross profit increased by $2.9
million with gross margin expanding to 50.2% from
47.5%.
- Pivoted strategy centered on Unity-led high-quality SaaS
revenue helped drive SaaS revenue growth of 14% (constant
currency), including 16% growth in North
America.
- Implemented significant cost reduction initiatives to fund
accelerated investment in the Unity platform alongside further
enterprise SaaS-centric go-to-market resources.
- Successfully acquired, integrated, and absorbed the Movingdots
business, incorporating valuable intellectual property and a
top-tier data science and AI team. The acquisition also injected
$8.7 million in liquidity, bolstering
support for the business through 2023.
- Announced a transformative combination with MiX Telematics that
is expected to establish Powerfleet as a top-tier, global AIoT SaaS
company, paving the way for accelerated growth in recurring
revenues, expanded profitability, and enhanced investor value
creation opportunities.
MANAGEMENT COMMENTARY
"2023 was a year of stellar
transformation for Powerfleet," said CEO Steve Towe. "On top of the world-class
execution the team has delivered on strategic M&A activities,
we have demonstrated our ability to take bold decisions to reshape
the business and establish a platform to deliver significant
improvements in business performance.
"We are highly encouraged by the results of our pivot to our
data and AI-led Unity ecosystem and associated high-quality SaaS
revenue, which underpinned an annual increase in constant currency
service revenue of 14%, led by 16% growth in our strategically
important North America
territory.
"Effective execution of our strategic plan has also improved the
overall quality of revenue where we exited approximately
$8 million in annual revenue from
unprofitable contracts and non-strategic lines of business. These
moves have simplified our operations and allowed us to redirect
resources toward more profitable, higher-growth areas.
"As we promised shareholders when we embarked on this brave
strategy of shuttering low-quality revenue streams, we duly
returned to total revenue growth in the second half of 2023, with
revenue and gross profit both increasing by 6% compared to the
first half. Additionally, adjusted EBITDA in the second half of
2023 increased 141% compared to the first half, an impressive feat
given a full period of Movingdots operating expenses, macroeconomic
challenges in Israel, and a
$1 million charge for
inventory-related items in the fourth quarter."
David Wilson, Powerfleet
CFO, commented: "With the approval process complete and
financing finalized, everything is in place to simultaneously
consummate the MiX transaction and clear the stock overhang from
the convertible preferred instrument on April 2nd. During the post-signing and
pre-close phase of the MiX deal, the two organizations have been
working to ensure we make rapid progress on our integration
activities. We are acutely focused on making a quick start to
realizing efficiencies and expanding EBITDA and we look forward to
sharing progress in the upcoming quarters."
Towe added: "I'm immensely proud of the remarkable
strides we've taken across our business in such short order. Our
transformation has established a robust opportunity set to generate
substantial shareholder value starting in 2024. Unity's potential
has already proven the business can transcend traditional
telematics, positioning us to seize significant opportunities with
broader AIoT applications. With the added capabilities and talented
team from the MiX transaction now coming on board, growing
recurring SaaS revenue is an overriding area of focus and we are
primed to meet Rule of 40 performance in the next two years."
FOURTH QUARTER 2023 FINANCIAL RESULTS
Total revenue
was $34.5 million, compared to
$33.1 million in the same year-ago
period, an increase of 4% on an absolute basis and 9% on a constant
currency basis. Service revenue was $21.7
million, up 8% on an absolute basis and 16% on a constant
currency basis compared to the same year-ago period.
Gross profit margin was 50.2%, an improvement compared to 49.4%
in the year-ago period. Fourth quarter 2023 gross profit included
$1.1 million in non-recurring
inventory adjustments. Excluding the one-time costs, Q4 2023 gross
margin was 53.4%, or 4% higher than the year-ago period.
Operating expenses were $21.3
million, compared to $17.6
million in the same year-ago period. Excluding $3.7 million in non-recurring transaction
expenses, Q4 2023 operating expenses of $17.6 million were in line with the prior year
period. This performance reflects the company's commitment to
ensure Movingdots would be EBITDA neutral within two quarters of
closing the transaction, with cut-to-cover activities absorbing
$1.3 million of quarterly operating
expenses incurred by Movingdots.
Net loss attributable to common stockholders totaled
$(4.6) million, or $(0.13) per basic and diluted share (based on
35.7 million weighted average shares outstanding), inclusive of a
$1.5 million gain on bargain purchase
from the Movingdots transaction. Adjusting for the gain on bargain
purchase and transaction costs, net loss attributable to
stockholders totaled $(2.4) million,
or $(0.07) per basic and diluted
share.
Adjusted EBITDA, a non-GAAP metric, totaled $2.9 million, an improvement compared to
$1.4 million 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).
Powerfleet had $19.3 million in
cash and cash equivalents at quarter-end.
FULL-YEAR 2023 FINANCIAL RESULTS
While total revenue
was $133.6 million, compared to
$135.2 million in 2022, underlying
revenues increased by 4% on a constant currency basis. During 2023,
the company actively shed approximately $8
million of product revenue from the business and replaced it
with high-margin service revenue, which increased by 14% on a
constant currency basis.
Gross profit margin was 50.2%, an improvement compared to 47.5%
in 2022.
Operating expenses were $79.3
million, compared to $72.0
million in 2022. The higher operating expenses reflect
$5.5 million of non-recurring
transaction costs related to the MiX Telematics and Movingdots
transactions and $3.9 million in
recurring operating costs incurred by Movingdots.
Net loss attributable to common stockholders totaled
$(10.3) million, or $(0.29) per basic and diluted share (based on
35.6 million weighted average shares outstanding).
Adjusted EBITDA, a non-GAAP metric, inclusive of $3.9 million in operating expenses from
Movingdots, totaled $6.9 million,
compared to $7.3 million in 2022. See
the section below titled "Non-GAAP Financial Measures" for more
information about adjusted EBITDA and its reconciliation to GAAP
net income (loss).
INVESTOR CONFERENCE CALL
Powerfleet management will
discuss these results and business outlook on a conference call
today (Tuesday, March 12, 2024) at
8:30 a.m. Eastern time (5:30 a.m. Pacific time).
Powerfleet management will host the presentation, followed by a
question-and-answer session.
Toll Free: 888-506-0062
International: 973-528-0011
Participant Access Code: 821902
Webcast:
https://www.webcaster4.com/Webcast/Page/2467/49769
The conference call will be available for replay here and via
the investor section of the company's website at
ir.powerfleet.com.
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 total revenue and service revenue
excluding foreign exchange effect. 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 and
fluctuations in currency rates that may not be indicative of its
core operating results and business outlook. These non-GAAP
measures are not measures of financial performance or liquidity
under GAAP and, accordingly, should not be considered as an
alternative 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
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to common stockholders
|
$
|
(2,912,000)
|
|
$
|
(4,569,000)
|
|
$
|
(11,905,000)
|
|
$
|
(10,318,000)
|
Non-controlling
interest
|
|
(1,000)
|
|
|
32,000
|
|
|
2,000
|
|
|
35,000
|
Preferred stock
dividend and accretion
|
|
1,255,000
|
|
|
1,297,000
|
|
|
4,902,000
|
|
|
5,164,000
|
Interest (income)
expense, net
|
|
131,000
|
|
|
575,000
|
|
|
1,624,000
|
|
|
2,090,000
|
Other (income)
expense, net
|
|
(23,000)
|
|
|
7,000
|
|
|
(24,000)
|
|
|
29,000
|
Income tax
(benefit) expense
|
|
189,000
|
|
|
(296,000)
|
|
|
296,000
|
|
|
402,000
|
Depreciation and
amortization
|
|
2,110,000
|
|
|
2,291,000
|
|
|
8,262,000
|
|
|
9,215,000
|
Stock-based
compensation
|
|
1,187,000
|
|
|
1,122,000
|
|
|
4,343,000
|
|
|
3,908,000
|
Foreign currency
translation
|
|
(883,000)
|
|
|
144,000
|
|
|
(1,842,000)
|
|
|
(870,000)
|
Severance related
expenses
|
|
335,000
|
|
|
144,000
|
|
|
1,667,000
|
|
|
845,000
|
Gain on Bargain
purchase - Movingdots
|
|
-
|
|
|
(1,517,000)
|
|
|
-
|
|
|
(9,034,000)
|
Acquisition
Related Expenses
|
|
-
|
|
|
3,685,000
|
|
|
-
|
|
|
5,457,000
|
Adjusted
EBITDA
|
$
|
1,388,000
|
|
$
|
2,915,000
|
|
$
|
7,325,000
|
|
$
|
6,923,000
|
|
Six Months
Ended
|
|
June 30,
|
|
December 31,
|
|
2023
|
|
2023
|
|
|
|
|
|
|
Net loss
attributable to common stockholders
|
$
|
(780,000)
|
|
$
|
(9,538,000)
|
Non-controlling
interest
|
|
3,000
|
|
|
32,000
|
Preferred stock
dividend and accretion
|
|
2,572,000
|
|
|
2,592,000
|
Interest (income)
expense, net
|
|
974,000
|
|
|
1,116,000
|
Other (income)
expense, net
|
|
(1,000)
|
|
|
30,000
|
Income tax
(benefit) expense
|
|
436,000
|
|
|
(34,000)
|
Depreciation and
amortization
|
|
4,500,000
|
|
|
4,715,000
|
Stock-based
compensation
|
|
1,684,000
|
|
|
2,224,000
|
Foreign currency
translation
|
|
(942,000)
|
|
|
72,000
|
Severance related
expenses
|
|
559,000
|
|
|
286,000
|
Gain on Bargain
purchase - Movingdots
|
|
(7,517,000)
|
|
|
(1,517,000)
|
Acquisition
Related Expenses
|
|
540,000
|
|
|
4,917,000
|
Adjusted
EBITDA
|
$
|
2,028,000
|
|
$
|
4,895,000
|
ABOUT POWERFLEET
Powerfleet (Nasdaq: PWFL; TASE:
PWFL) is a global leader of internet of things (IoT)
software-as-a-service (SaaS) solutions that optimize the
performance of mobile assets and resources to unify business
operations. Our data science insights and advanced modular software
solutions help drive digital transformation through our customers'
and partners' ecosystems to help save lives, time, and money. We
help connect companies, enabling customers and their customers to
realize more effective strategies and results. Powerfleet's tenured
and talented team is at the heart of our approach to partnership
and tangible success. The company is headquartered in Woodcliff Lake, New Jersey, with our Pointer
Innovation Center (PIC) in Israel
and field offices around the globe. For more information, please
visit www.powerfleet.com.
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, as well as anticipated financial impacts of the
proposed transaction with MiX Telematics, the satisfaction of
closing conditions to the proposed transaction and the timing of
the completion of the proposed transaction. Forward-looking
statements 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
the proposed transaction with MiX Telematics; 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, the completion of the proposed transaction in the
anticipated timeframe or at all, the satisfaction of the closing
conditions to the proposed transaction, the failure to obtain
necessary regulatory approvals, the ability to realize the
anticipated benefits of the proposed transaction, the ability to
successfully integrate the businesses, disruption from the proposed
transaction making it more difficult to maintain business and
operational relationships, the negative effects of the consummation
of the proposed transaction on the market price of the combined
company's securities, significant transaction costs and unknown
liabilities, litigation or regulatory actions related to the
proposed transaction, future economic and business conditions, 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 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 (the "SEC"), including
Powerfleet's most recent annual report on Form 10-K, which are
available via the SEC's website at http://www.sec.gov. These risks
could cause actual results to differ materially from those
expressed in any forward-looking statements made by, or on behalf
of, Powerfleet. Therefore, you should not rely on any of these
forward-looking statements.
The forward-looking statements included in this press release
are made only as of the date of this press release, and except as
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
as a result of new information, future events, or otherwise.
NO OFFER OR SOLICITATION
This communication shall not
constitute an offer to buy or sell any securities, or the
solicitation of an offer to buy or sell any securities, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Powerfleet Investor Contact
Matt Glover
Gateway Group, Inc.
PWFL@gateway-grp.com
(949) 574-3860
Powerfleet Media Contact
Andrea Hayton
Powerfleet, Inc.
ahayton@powerfleet.com
(610) 401-1999
POWERFLEET, INC.
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December 31,
|
|
December 31,
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
$
|
13,082,000
|
|
$
|
12,828,000
|
|
$
|
56,313,000
|
|
$
|
49,391,000
|
Services
|
|
20,032,000
|
|
|
21,673,000
|
|
|
78,844,000
|
|
|
84,194,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
33,114,000
|
|
|
34,501,000
|
|
|
135,157,000
|
|
|
133,585,000
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
9,484,000
|
|
|
10,010,000
|
|
|
42,636,000
|
|
|
36,404,000
|
Cost of
services
|
|
7,270,000
|
|
|
7,161,000
|
|
|
28,350,000
|
|
|
30,084,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of
revenues:
|
|
16,754,000
|
|
|
17,171,000
|
|
|
70,986,000
|
|
|
66,488,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
16,360,000
|
|
|
17,330,000
|
|
|
64,171,000
|
|
|
67,097,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
15,608,000
|
|
|
19,304,000
|
|
|
63,001,000
|
|
|
71,067,000
|
Research and development
expenses
|
|
1,999,000
|
|
|
1,968,000
|
|
|
8,964,000
|
|
|
8,253,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
|
17,607,000
|
|
|
21,272,000
|
|
|
71,965,000
|
|
|
79,320,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(1,247,000)
|
|
|
(3,942,000)
|
|
|
(7,794,000)
|
|
|
(12,223,000)
|
Interest
income
|
|
23,000
|
|
|
34,000
|
|
|
71,000
|
|
|
103,000
|
Interest
expense
|
|
(154,000)
|
|
|
(591,000)
|
|
|
(1,695,000)
|
|
|
(2,194,000)
|
Gain on Bargain
purchase - Movingdots
|
|
-
|
|
|
1,517,000
|
|
|
-
|
|
|
9,034,000
|
Foreign currency
translation of debt
|
|
(114,000)
|
|
|
(547,000)
|
|
|
2,689,000
|
|
|
592,000
|
Other (expense)
income, net
|
|
23,000
|
|
|
(7,000)
|
|
|
24,000
|
|
|
(29,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income before income taxes
|
|
(1,469,000)
|
|
|
(3,536,000)
|
|
|
(6,705,000)
|
|
|
(4,717,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit (expense)
|
|
(189,000)
|
|
|
296,000
|
|
|
(296,000)
|
|
|
(402,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income before non-controlling interest
|
|
(1,658,000)
|
|
|
(3,240,000)
|
|
|
(7,001,000)
|
|
|
(5,119,000)
|
Non-controlling
interest
|
|
1,000
|
|
|
(32,000)
|
|
|
(2,000)
|
|
|
(35,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income
|
|
(1,657,000)
|
|
|
(3,272,000)
|
|
|
(7,003,000)
|
|
|
(5,154,000)
|
Accretion of
preferred stock
|
|
(167,000)
|
|
|
(168,000)
|
|
|
(671,000)
|
|
|
(671,000)
|
Preferred stock
dividend
|
|
(1,088,000)
|
|
|
(1,129,000)
|
|
|
(4,231,000)
|
|
|
(4,493,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income attributable to common stockholders
|
$
|
(2,912,000)
|
|
$
|
(4,569,000)
|
|
$
|
(11,905,000)
|
|
$
|
(10,318,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income per share - basic
|
$
|
(0.08)
|
|
$
|
(0.13)
|
|
$
|
(0.34)
|
|
$
|
(0.29)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income per share - diluted
|
$
|
(0.08)
|
|
$
|
(0.13)
|
|
$
|
(0.34)
|
|
$
|
(0.29)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
35,446,000
|
|
|
35,706,000
|
|
|
35,393,000
|
|
|
35,628,000
|
Weighted average
common shares outstanding - diluted
|
|
35,446,000
|
|
|
35,706,000
|
|
|
35,393,000
|
|
|
35,628,000
|
POWERFLEET, INC.
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
|
|
|
6 Months
Ended
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
2022
|
|
2023
|
|
2023
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenue:
|
|
|
|
|
|
|
|
Products
|
$
|
27,103,000
|
|
$
|
23,416,000
|
|
$
|
25,975,000
|
Services
|
|
40,299,000
|
|
|
41,473,000
|
|
|
42,721,000
|
|
|
|
|
|
|
|
|
|
|
|
67,402,000
|
|
|
64,889,000
|
|
|
68,696,000
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
19,323,000
|
|
|
17,552,000
|
|
|
18,853,000
|
Cost of
services
|
|
14,538,000
|
|
|
14,686,000
|
|
|
15,398,000
|
|
|
|
|
|
|
|
|
|
|
|
33,861,000
|
|
|
32,238,000
|
|
|
34,251,000
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
33,541,000
|
|
|
32,651,000
|
|
|
34,445,000
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
32,272,000
|
|
|
33,774,000
|
|
|
37,292,000
|
Research and development expenses
|
|
3,734,000
|
|
|
3,902,000
|
|
|
4,352,000
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
|
36,006,000
|
|
|
37,676,000
|
|
|
41,644,000
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(2,465,000)
|
|
(5,025,000)
|
|
(7,199,000)
|
Interest
income
|
|
43,000
|
|
46,000
|
|
57,000
|
Interest
expense
|
|
(676,000)
|
|
(1,020,000)
|
|
(1,174,000)
|
Gain on Bargain
purchase - Movingdots
|
|
-
|
|
|
7,517,000
|
|
|
1,517,000
|
Foreign currency
translation of debt
|
|
77,000
|
|
710,000
|
|
(118,000)
|
Other (expense) income,
net
|
|
23,000
|
|
3,000
|
|
(31,000)
|
|
|
|
|
|
|
|
|
Net loss before income
taxes
|
|
(2,998,000)
|
|
|
2,231,000
|
|
(6,948,000)
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
|
(959,000)
|
|
(436,000)
|
|
34,000
|
|
|
|
|
|
|
|
|
Net loss before
non-controlling interest
|
|
(3,957,000)
|
|
|
1,795,000
|
|
(6,914,000)
|
Non-controlling
interest
|
-
|
|
(3,000)
|
|
(32,000)
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(3,957,000)
|
|
|
1,792,000
|
|
(6,946,000)
|
Accretion of preferred
stock
|
|
(335,000)
|
|
(336,000)
|
|
(335,000)
|
Preferred stock
dividend
|
|
(2,155,000)
|
|
(2,236,000)
|
|
(2,257,000)
|
|
|
|
|
|
|
|
|
Net loss attributable
to common stockholders
|
|
(6,447,000)
|
|
|
(780,000)
|
|
|
(9,538,000)
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income per share - basic
|
$
|
(0.18)
|
|
$
|
0.01
|
|
$
|
(0.27)
|
|
|
|
|
|
|
|
|
|
Net (loss) /
income per share - diluted
|
$
|
(0.18)
|
|
$
|
0.01
|
|
$
|
(0.27)
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
35,446,000
|
|
|
35,577,000
|
|
|
35,679,500
|
Weighted average
common shares outstanding - diluted
|
|
35,446,000
|
|
|
35,670,000
|
|
|
35,679,500
|
POWERFLEET, INC.
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
|
|
|
|
|
As of
|
|
|
|
|
December 31,
2022
|
|
December 31,
2023
|
|
|
|
|
|
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$
|
17,680,000
|
|
$
|
19,022,000
|
Restricted
cash
|
|
|
|
|
309,000
|
|
|
310,000
|
Accounts receivable,
net
|
|
|
|
|
32,493,000
|
|
|
32,221,000
|
Inventory,
net
|
|
|
|
|
22,272,000
|
|
|
22,602,000
|
Deferred costs -
current
|
|
|
|
|
762,000
|
|
|
83,000
|
Prepaid expenses and other
current assets
|
|
|
|
|
7,709,000
|
|
|
7,811,000
|
Total current assets
|
|
|
|
|
81,225,000
|
|
|
82,049,000
|
|
|
|
|
|
|
|
|
|
Fixed assets,
net
|
|
|
|
|
9,249,000
|
|
|
12,556,000
|
Goodwill
|
|
|
|
|
83,487,000
|
|
|
83,487,000
|
Intangible
assets, net
|
|
|
|
|
22,908,000
|
|
|
20,257,000
|
Right of use
asset
|
|
|
|
|
7,820,000
|
|
|
6,195,000
|
Severance payable
fund
|
|
|
|
|
3,760,000
|
|
|
3,802,000
|
Deferred tax
asset
|
|
|
|
|
3,225,000
|
|
|
2,493,000
|
Other
assets
|
|
|
|
|
5,761,000
|
|
|
6,256,000
|
Total
assets
|
|
|
|
$
|
217,435,000
|
|
$
|
217,095,000
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Short-term bank debt and
current maturities of long-term debt
|
|
|
|
$
|
10,312,000
|
|
$
|
21,091,000
|
Accounts payable and accrued
expenses
|
|
|
|
|
26,598,000
|
|
|
32,086,000
|
Deferred revenue -
current
|
|
|
|
|
6,363,000
|
|
|
5,632,000
|
Lease liability -
current
|
|
|
|
|
2,441,000
|
|
|
1,503,000
|
Total
current liabilities
|
|
|
|
|
45,714,000
|
|
|
60,312,000
|
|
|
|
|
|
|
|
|
|
Long-term debt,
less current maturities
|
|
|
|
|
11,403,000
|
|
|
-
|
Deferred revenue
- less current portion
|
|
|
|
|
4,390,000
|
|
|
4,840,000
|
Lease liability -
less current portion
|
|
|
|
|
5,628,000
|
|
|
4,908,000
|
Accrued severance
payable
|
|
|
|
|
4,365,000
|
|
|
4,533,000
|
Deferred tax
liability
|
|
|
|
|
4,919,000
|
|
|
3,994,000
|
Other long-term
liabilities
|
|
|
|
|
636,000
|
|
|
900,000
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
77,055,000
|
|
|
79,487,000
|
|
|
|
|
|
|
|
|
|
MEZZANINE
EQUITY
|
|
|
|
|
|
|
|
|
Convertible
redeemable Preferred stock: Series A
|
|
|
|
|
57,565,000
|
|
|
59,343,000
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Total Powerfleet,
Inc. stockholders' equity
|
|
|
|
|
82,737,000
|
|
|
78,163,000
|
Non-controlling
interest
|
|
|
|
|
78,000
|
|
|
102,000
|
Total
equity
|
|
|
|
|
82,815,000
|
|
|
78,265,000
|
Total liabilities
and stockholders' equity
|
|
|
|
$
|
217,435,000
|
|
$
|
217,095,000
|
|
|
|
|
POWERFLEET, INC.
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW DATA
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
|
|
|
2022
|
|
2023
|
|
|
|
|
|
|
|
(Unaudited)
|
Cash flows from
operating activities (net of net assets acquired):
|
|
|
|
|
|
|
|
|
Net (loss) /
income
|
|
|
|
$
|
(7,003,000)
|
|
$
|
(5,154,000)
|
Adjustments to
reconcile net loss to cash (used in) provided by operating
activities:
|
|
|
|
|
|
|
|
|
Non-controlling
interest
|
|
|
|
|
2,000
|
|
|
35,000
|
Gain on bargain
purchase
|
|
|
|
|
-
|
|
|
(9,034,000)
|
Inventory
reserve
|
|
|
|
|
149,000
|
|
|
1,500,000
|
Stock based
compensation expense
|
|
|
|
|
4,343,000
|
|
|
3,908,000
|
Depreciation and
amortization
|
|
|
|
|
8,262,000
|
|
|
9,215,000
|
Right-of-use assets,
non-cash lease expense
|
|
|
|
|
2,756,000
|
|
|
2,814,000
|
Bad debt
expense
|
|
|
|
|
66,000
|
|
|
1,567,000
|
Deferred
taxes
|
|
|
|
|
134,000
|
|
|
(193,000)
|
Other non-cash
items
|
|
|
|
|
707,000
|
|
|
103,000
|
Changes in:
|
|
|
|
|
|
|
|
|
Operating assets and
liabilities
|
|
|
|
|
(8,659,000)
|
|
|
(238,000)
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
|
|
757,000
|
|
|
4,523,000
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Acquisitions, net of
cash assumed
|
|
|
|
|
-
|
|
|
8,722,000
|
Purchase of
investment
|
|
|
|
|
(100,000)
|
|
|
(100,000)
|
Capitalized software
development costs
|
|
|
|
|
(2,219,000)
|
|
|
(3,629,000)
|
Capital
expenditures
|
|
|
|
|
(3,519,000)
|
|
|
(3,590,000)
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
investing activities
|
|
|
|
|
(5,838,000)
|
|
|
1,403,000
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Payment of preferred
stock dividend
|
|
|
|
|
-
|
|
|
(3,385,000)
|
Repayment of long-term
debt
|
|
|
|
|
(5,659,000)
|
|
|
(4,408,000)
|
Short-term bank debt,
net
|
|
|
|
|
5,709,000
|
|
|
4,321,000
|
Purchase of treasury
stock upon vesting of restricted stock
|
|
|
|
|
(211,000)
|
|
|
(141,000)
|
Repayment of financing
lease
|
|
|
|
|
(121,000)
|
|
|
(129,000)
|
Proceeds from exercise
of stock options
|
|
|
|
|
-
|
|
|
36,000
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
financing activities
|
|
|
|
|
(282,000)
|
|
|
(3,706,000)
|
|
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
|
|
|
|
(3,408,000)
|
|
|
(877,000)
|
Net increase in
cash, cash equivalents and restricted cash
|
|
|
|
|
(8,771,000)
|
|
|
1,343,000
|
Cash, cash equivalents
and restricted cash - beginning of period
|
|
|
|
|
26,760,000
|
|
|
17,989,000
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash - end of period
|
|
|
|
$
|
17,989,000
|
|
$
|
19,332,000
|
CONSTANT CURRENCY
Constant currency information has
been presented to illustrate the impact of changes in currency
rates on the company's results. The constant currency information
has been determined by adjusting the current financial reporting
period results to the prior period average exchange rates,
determined as the average of the monthly exchange rates applicable
to the period. The measurement has been performed for each of the
company's currencies. The constant currency growth percentage has
been calculated by utilizing the constant currency results compared
to the prior period results.
The constant currency information represents non-GAAP
information. The company believes this provides a useful basis to
measure the performance of its business as it removes distortion
from the effects of foreign currency movements during the period;
however, this information should be considered as supplemental in
nature and should not be considered in isolation or as a substitute
for the related financial information prepared in accordance with
GAAP. See the section above titled "Non-GAAP Financial Measures"
for more information.
Due to a portion of the company's customers who are invoiced in
non-U.S. Dollar-denominated currencies, the company also calculates
subscription revenue growth rate on a constant currency basis,
thereby removing the effect of currency fluctuation on results of
operations.
|
Three Months Ended
Dec 31,
|
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Service
Revenue:
|
|
|
|
|
|
|
Service Revenue as
reported
|
$20,032
|
|
$21,673
|
|
$1,641
|
8.2 %
|
Conversion impact of
U.S. Dollar
|
|
|
$1,455
|
|
$1,455
|
|
Service revenue on a
constant currency basis
|
$20,032
|
|
$23,128
|
|
$3,096
|
15.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
Dec 31,
|
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Product
Revenue:
|
|
|
|
|
|
|
Product Revenue as
reported
|
$13,082
|
|
$12,828
|
|
($254)
|
(1.9 %)
|
Conversion impact of
U.S. Dollar
|
|
|
$112
|
|
$112
|
|
Product revenue on a
constant currency basis
|
$13,082
|
|
$12,940
|
|
($142)
|
(1.1 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
Dec 31,
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Total
Revenue:
|
|
|
|
|
|
|
Total Revenue as
reported
|
$33,114
|
|
$34,501
|
|
$1,387
|
4.2 %
|
Conversion impact of
U.S. Dollar
|
|
|
$1,567
|
|
$1,567
|
|
Total revenue on a
constant currency basis
|
$33,114
|
|
$36,068
|
|
$2,954
|
8.9 %
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Service
Revenue:
|
|
|
|
|
|
|
Service Revenue as
reported
|
$78,844
|
|
$84,194
|
|
$5,350
|
6.8 %
|
Conversion impact of
U.S. Dollar
|
|
|
$5,921
|
|
$5,921
|
|
Service revenue on a
constant currency basis
|
$78,844
|
|
$90,115
|
|
$11,271
|
14.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Product
Revenue:
|
|
|
|
|
|
|
Product Revenue as
reported
|
$56,313
|
|
$49,391
|
|
($6,922)
|
(12.3 %)
|
Conversion impact of
U.S. Dollar
|
|
|
$459
|
|
$459
|
|
Product revenue on a
constant currency basis
|
$56,313
|
|
$49,850
|
|
($6,463)
|
(11.5 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
Year Over Year
Change
|
($ in
Thousands)
|
2022
|
|
2023
|
|
$
|
%
|
|
|
|
|
|
|
|
Total
Revenue:
|
|
|
|
|
|
|
Total Revenue as
reported
|
$135,157
|
|
$133,585
|
|
($1,572)
|
(1.2 %)
|
Conversion impact of
U.S. Dollar
|
|
|
$6,380
|
|
$6,380
|
|
Total revenue on a
constant currency basis
|
$135,157
|
|
$139,965
|
|
$4,808
|
3.6 %
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/powerfleet-reports-full-year-2023-and-fourth-quarter-financial-results-302086234.html
SOURCE Powerfleet