MiX Telematics Reports Second Quarter Fiscal 2022 U.S. GAAP Financial Results
MiX Telematics reported strong Q2 fiscal 2022 results with total revenues of $36.1 million, up 16.6% year-over-year. Subscription revenues reached $30.9 million, an 11.8% increase, driven by net subscriber additions of 16,700, totaling over 770,000 subscribers. Although net income fell to $1.3 million from $3.5 million year-over-year, adjusted EBITDA remained solid at $7.9 million. The company had $39.8 million in cash. Due to COVID-19, MiX suspended its financial guidance for fiscal 2022.
- Total revenues increased by 16.6% year-over-year to $36.1 million.
- Subscription revenues rose by 11.8% to $30.9 million.
- Net subscriber additions of 16,700 brought the total to over 770,000.
- Adjusted EBITDA was solid at $7.9 million, maintaining a margin of 21.9%.
- Net income decreased to $1.3 million from $3.5 million year-over-year.
- Operating income fell to $3.7 million with an operating income margin of 10.3%.
- Gross profit margin decreased to 63.7% from 66.7% due to lower-margin hardware revenues.
- Operating expenses increased by $3.2 million, or 19.7%, year-over-year.
Second Quarter Highlights:
-
Total revenues of
$36.1 million -
Subscription revenues of
$30.9 million - Net subscriber additions of 16,700, bringing the total base to over 770,000 subscribers
-
Net income of
$1.3 million -
Adjusted EBITDA of
$7.9 million 21.9% margin -
Cash and cash equivalents of
$39.8 million
MIDRAND,
“MiX is back on a growth trajectory, highlighted by our second consecutive quarter of year-over-year revenue expansion. In Q2, we almost doubled the number of net subscriber adds compared to the first quarter, contributing to Annualized Recurring Revenue growth of
Joselowitz continued, “We are committed to investing in our growth initiatives while continuing to deliver high levels of profitability. Our performance in the first half of the year positions the company well to achieve our financial and operational objectives for fiscal 2022.”
Financial Results for the Three Months Ended
Subscription Revenues: Subscription revenues were
The majority of our revenues and subscription revenues are derived from currencies other than the
Total Revenues: Total revenues were
The impact of translating foreign currencies to
Gross Margin: Gross profit was
Income From Operations: Income from operations was
Net Income and Earnings Per Share: Net income was
Earnings per diluted ordinary share was 0.2
The Company’s effective tax rate was
Adjusted EBITDA: Adjusted EBITDA, a non-GAAP measure, was
Non-GAAP Net Income and Non-GAAP Net Income Per Share: Non-GAAP net income was
Cash and Cash Equivalents and Cash Flow: At
Net cash provided by operating activities for the second quarter of fiscal 2022 was
Net cash used in financing activities amounted to
During the quarter, the South African Rand weakened against the
Quarterly Dividend
The most recent dividend payment of 4 South African cents (0.3
The details with respect to the dividends declared for holders of our ADSs are as follows:
Ex dividend on |
|
|
Record date |
|
|
Approximate date of currency conversion |
|
|
Approximate dividend payment date |
|
Share Repurchases
No shares were repurchased during the three months ended
Business Outlook
Due to the uncertainty surrounding the level of business disruption as a result of the spread of COVID-19, the Company has suspended its practice of issuing financial guidance and as a consequence no guidance has been issued for the full 2022 fiscal year.
Conference Call Information
- The live webcast of the call will be available at the “Investor Information” page of the Company’s website, http://investor.mixtelematics.com.
-
To access the call, dial +1-877-451-6152 (within
the United States ) or 0 800 983 831 (withinSouth Africa ) or +1-201-389-0879 (outside ofthe United States ). The conference ID is 13723894. -
A replay of this conference call will be available for a limited time at +1-844-512-2921 (within
the United States ) or +1-412-317-6671 (withinSouth Africa or outside ofthe United States ). The replay conference ID is 13723894. - A replay of the webcast will also be available for a limited time at http://investor.mixtelematics.com.
About
Forward-Looking Statements
This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, statements regarding our position to execute on our growth strategy, and our ability to expand our leadership position. These forward-looking statements include, but are not limited to, Company’s beliefs, plans, goals, objectives, expectations, assumptions, estimates, intentions, future performance, other statements that are not historical facts and statements identified by words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in, or suggested by, these forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved.
Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of known and unknown risks and uncertainties, some of which are beyond our control including, without limitation:
- the severity and duration of the COVID-19 pandemic, the pandemic’s economic impact on the geographical locations of our regional service organizations and central service organization, the impact of the pandemic on our customers’ ability to meet their financial obligations, our ability to implement cost containment and business recovery strategies during the pandemic, local and foreign government regulations implemented to combat the pandemic and any future developments on the pandemic;
- our ability to attract, sell to and retain customers;
- our ability to improve our growth strategies successfully, including our ability to increase sales to existing customers;
- our ability to adapt to rapid technological change in our industry;
- competition from industry consolidation;
- loss of key personnel or our failure to attract, train and retain other highly qualified personnel;
- our ability to integrate any businesses we acquire;
- the introduction of new solutions and international expansion;
- our dependence on key suppliers and vendors to manufacture our hardware;
- our dependence on our network of dealers and distributors to sell our solutions;
- businesses may not continue to adopt fleet management solutions;
- our future business and system development, results of operations and financial condition;
- expected changes in our profitability and certain cost or expense items as a percentage of our revenue;
- changes in the practices of insurance companies;
- the impact of laws and regulations relating to the Internet and data privacy;
- our ability to protect our intellectual property and proprietary technologies and address any infringement claims;
- our ability to defend ourselves from litigation or administrative proceedings relating to labor, regulatory, tax or similar issues;
- significant disruption in service on, or security breaches of, our websites or computer systems;
- our dependence on third-party technology;
- fluctuations in the value of the South African Rand;
-
economic, social, political, labor and other conditions and developments in
South Africa and globally; - our ability to issue securities and access the capital markets in the future; and
-
other risks set forth in our filings with the
U.S. Securities Exchange Commission .
We assume no obligation to update any forward-looking statements contained in this press release and expressly disclaim any obligation to do so, whether as a result of new information, future events or otherwise, except as required by law.
Use of Non-GAAP Financial Measures
This press release and the accompanying tables include references to Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP net income and non-GAAP net income per share, free cash flow and constant currency, which are non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses these measures, please see Annexure A titled “Non-GAAP Financial Measures”. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP is provided in Annexure A.
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, except share amounts) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
45,489 |
|
|
$ |
39,831 |
|
Restricted cash |
|
854 |
|
|
883 |
|
||
Accounts receivables, net |
|
19,265 |
|
|
21,897 |
|
||
Inventory, net |
|
3,109 |
|
|
3,111 |
|
||
Prepaid expenses and other current assets |
|
8,509 |
|
|
8,677 |
|
||
Total current assets |
|
77,226 |
|
|
74,399 |
|
||
Property and equipment, net |
|
23,463 |
|
|
27,769 |
|
||
|
|
43,938 |
|
|
43,344 |
|
||
Intangible assets, net |
|
18,303 |
|
|
18,849 |
|
||
Deferred tax assets |
|
3,782 |
|
|
4,506 |
|
||
Other assets |
|
4,434 |
|
|
4,344 |
|
||
Total assets |
|
$ |
171,146 |
|
|
$ |
173,211 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Short-term debt |
|
$ |
1,674 |
|
|
$ |
2,139 |
|
Accounts payables |
|
6,560 |
|
|
6,064 |
|
||
Accrued expenses and other liabilities |
|
17,330 |
|
|
18,957 |
|
||
Deferred revenue |
|
5,788 |
|
|
5,591 |
|
||
Income taxes payable |
|
1,345 |
|
|
1,541 |
|
||
Total current liabilities |
|
32,697 |
|
|
34,292 |
|
||
Deferred tax liabilities |
|
9,187 |
|
|
9,170 |
|
||
Long-term accrued expenses and other liabilities |
|
5,863 |
|
|
5,479 |
|
||
Total liabilities |
|
47,747 |
|
|
48,941 |
|
||
|
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
|
|
|
|
|
||||
Preference shares: 100 million shares authorized but not issued |
|
— |
|
|
— |
|
||
Ordinary shares: 605.6 million and 606.4 million no-par value shares issued and outstanding as of |
|
67,401 |
|
|
67,401 |
|
||
Less treasury stock at cost: 53.8 million shares as of |
|
(17,315 |
) |
|
(17,315 |
) |
||
Retained earnings |
|
76,710 |
|
|
78,468 |
|
||
Accumulated other comprehensive income |
|
1,924 |
|
|
343 |
|
||
Additional paid-in capital |
|
(5,326 |
) |
|
(4,632 |
) |
||
|
|
123,394 |
|
|
124,265 |
|
||
Non-controlling interest |
|
5 |
|
|
5 |
|
||
Total stockholders’ equity |
|
123,399 |
|
|
124,270 |
|
||
|
|
|
|
|
||||
Total liabilities and stockholders’ equity |
|
$ |
171,146 |
|
|
$ |
173,211 |
|
|
|||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||
(In thousands, except per share data) |
|||||||||||||
(Unaudited) |
|||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
2020 |
|
2021 |
|
2020 |
|
2021 |
||||||
Revenue |
|
|
|
|
|
|
|
||||||
Subscription |
$ |
27,623 |
|
|
$ |
30,885 |
|
$ |
53,498 |
|
|
$ |
61,975 |
Hardware and other |
3,325 |
|
|
5,189 |
|
4,947 |
|
|
8,997 |
||||
Total revenue |
30,948 |
|
|
36,074 |
|
58,445 |
|
|
70,972 |
||||
Cost of revenue |
|
|
|
|
|
|
|
||||||
Subscription |
7,676 |
|
|
9,219 |
|
15,025 |
|
|
18,346 |
||||
Hardware and other |
2,621 |
|
|
3,887 |
|
3,850 |
|
|
6,803 |
||||
Total cost of revenue |
10,297 |
|
|
13,106 |
|
18,875 |
|
|
25,149 |
||||
Gross profit |
20,651 |
|
|
22,968 |
|
39,570 |
|
|
45,823 |
||||
Operating expenses |
|
|
|
|
|
|
|
||||||
Sales and marketing |
2,447 |
|
|
3,872 |
|
5,193 |
|
|
7,384 |
||||
Administration and other |
13,631 |
|
|
15,366 |
|
27,122 |
|
|
30,373 |
||||
Total operating expenses |
16,078 |
|
|
19,238 |
|
32,315 |
|
|
37,757 |
||||
Income from operations |
4,573 |
|
|
3,730 |
|
7,255 |
|
|
8,066 |
||||
Other (expense)/income |
(77 |
) |
|
199 |
|
(175 |
) |
|
64 |
||||
Net interest expense |
70 |
|
|
141 |
|
140 |
|
|
219 |
||||
Income before income tax expense |
4,426 |
|
|
3,788 |
|
6,940 |
|
|
7,911 |
||||
Income tax expense |
974 |
|
|
2,489 |
|
1,066 |
|
|
3,081 |
||||
Net income |
3,452 |
|
|
1,299 |
|
5,874 |
|
|
4,830 |
||||
Less: Net income attributable to non-controlling interest |
— |
|
|
— |
|
— |
|
|
— |
||||
Net income attributable to |
$ |
3,452 |
|
|
$ |
1,299 |
|
$ |
5,874 |
|
|
$ |
4,830 |
|
|
|
|
|
|
|
|
||||||
Net income per ordinary share: |
|
|
|
|
|
|
|
||||||
Basic |
$ |
0.01 |
|
|
$ |
0.002 |
|
$ |
0.01 |
|
|
$ |
0.01 |
Diluted |
$ |
0.01 |
|
|
$ |
0.002 |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
||||||
Net income per American Depositary Share: |
|
|
|
|
|
|
|
||||||
Basic |
$ |
0.16 |
|
|
$ |
0.06 |
|
$ |
0.27 |
|
|
$ |
0.22 |
Diluted |
$ |
0.15 |
|
|
$ |
0.06 |
|
$ |
0.26 |
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
||||||
Ordinary shares: |
|
|
|
|
|
|
|
||||||
Weighted average |
548,008 |
|
|
552,386 |
|
547,569 |
|
|
552,124 |
||||
Diluted weighted average |
558,951 |
|
|
565,622 |
|
558,829 |
|
|
565,322 |
||||
|
|
|
|
|
|
|
|
||||||
American Depositary Shares: |
|
|
|
|
|
|
|
||||||
Weighted average |
21,920 |
|
|
22,095 |
|
21,903 |
|
|
22,085 |
||||
Diluted weighted average |
22,358 |
|
|
22,625 |
|
22,353 |
|
|
22,613 |
||||
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
Six Months Ended |
||||||
|
|
2020 |
|
2021 |
||||
Cash flows from operating activities: |
|
|
|
|
||||
Cash generated from operations |
|
$ |
22,295 |
|
|
$ |
14,223 |
|
Interest received |
|
206 |
|
|
221 |
|
||
Interest paid |
(153 |
) |
|
(197 |
) |
|||
Income tax paid |
|
(1,590 |
) |
|
(3,582 |
) |
||
Net cash provided by operating activities |
|
20,758 |
|
|
10,665 |
|
||
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Acquisition of property and equipment – in-vehicle devices |
|
(2,590 |
) |
|
(9,740 |
) |
||
Acquisition of property and equipment – other |
|
(160 |
) |
|
(851 |
) |
||
Proceeds from the sale of property and equipment |
|
— |
|
|
54 |
|
||
Acquisition of intangible assets |
|
(1,972 |
) |
|
(2,833 |
) |
||
Net cash used in investing activities |
|
(4,722 |
) |
|
(13,370 |
) |
||
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from issuance of ordinary shares in relation to stock options exercised |
|
825 |
|
|
— |
|
||
Cash paid on dividends to |
|
(2,506 |
) |
|
(3,058 |
) |
||
Movement in short-term debt |
|
740 |
|
|
474 |
|
||
Net cash used in financing activities |
|
(941 |
) |
|
(2,584 |
) |
||
|
|
|
|
|
||||
Net increase/(decrease) in cash and cash equivalents, and restricted cash |
|
15,095 |
|
|
(5,289 |
) |
||
Cash and cash equivalents, and restricted cash at beginning of the period |
|
18,652 |
|
|
46,343 |
|
||
Effect of exchange rate changes on cash and cash equivalents, and restricted cash |
|
887 |
|
|
(340 |
) |
||
Cash and cash equivalents, and restricted cash at end of the period |
|
$ |
34,634 |
|
|
$ |
40,714 |
|
Segment Information
Our operating segments are based on the geographical location of our Regional Sales Offices (“RSOs”) and also include our
Each RSO’s results reflect the external revenue earned, as well as its performance before the remaining CSO and corporate costs allocations. Segment performance is measured and evaluated by the chief operating decision maker (“CODM”) using Segment Adjusted EBITDA, which is a measure that uses net income excluding net interest income/(expense), foreign exchange gains or losses, operating lease expenses, stock-based compensation costs, restructuring costs, and gains or losses on the disposal or impairments of long-lived assets and subsidiaries. Product development costs are capitalized and amortized and this amortization is excluded from Segment Adjusted EBITDA.
The segment information provided to the CODM is as follows (in thousands and unaudited):
|
Three Months Ended |
||||||||||||||
|
Subscription
|
|
Hardware and
|
|
Total Revenue |
|
Segment Adjusted
|
||||||||
Regional Sales Offices |
|
|
|
|
|
|
|
||||||||
|
$ |
14,855 |
|
|
$ |
1,635 |
|
|
$ |
16,490 |
|
|
$ |
7,249 |
|
|
2,919 |
|
|
474 |
|
|
3,393 |
|
|
1,536 |
|
||||
|
4,786 |
|
|
240 |
|
|
5,026 |
|
|
2,170 |
|
||||
|
4,118 |
|
|
948 |
|
|
5,066 |
|
|
2,405 |
|
||||
|
928 |
|
|
28 |
|
|
956 |
|
|
363 |
|
||||
Total Regional Sales Offices |
27,606 |
|
|
3,325 |
|
|
30,931 |
|
|
13,723 |
|
||||
|
17 |
|
|
— |
|
|
17 |
|
|
(1,674 |
) |
||||
Total Segment Results |
$ |
27,623 |
|
|
$ |
3,325 |
|
|
$ |
30,948 |
|
|
$ |
12,049 |
|
|
Three Months Ended |
||||||||||||||
|
Subscription
|
|
Hardware and Other
|
|
Total Revenue |
|
Segment Adjusted
|
||||||||
Regional Sales Offices |
|
|
|
|
|
|
|
||||||||
|
$ |
18,686 |
|
|
$ |
1,596 |
|
|
$ |
20,282 |
|
|
$ |
8,874 |
|
|
3,413 |
|
|
1,337 |
|
|
4,750 |
|
|
1,682 |
|
||||
|
3,444 |
|
|
468 |
|
|
3,912 |
|
|
33 |
|
||||
|
4,207 |
|
|
1,750 |
|
|
5,957 |
|
|
2,665 |
|
||||
|
1,121 |
|
|
16 |
|
|
1,137 |
|
|
288 |
|
||||
Total Regional Sales Offices |
30,871 |
|
|
5,167 |
|
|
36,038 |
|
|
13,542 |
|
||||
|
14 |
|
|
22 |
|
|
36 |
|
|
(2,457 |
) |
||||
Total Segment Results |
$ |
30,885 |
|
|
$ |
5,189 |
|
|
$ |
36,074 |
|
|
$ |
11,085 |
|
|
Six Months Ended |
||||||||||||||
|
Subscription
|
|
Hardware and
|
|
Total Revenue |
|
Segment Adjusted
|
||||||||
Regional Sales Offices |
|
|
|
|
|
|
|
||||||||
|
$ |
28,778 |
|
|
$ |
2,236 |
|
|
$ |
31,014 |
|
|
$ |
14,494 |
|
|
5,769 |
|
|
608 |
|
|
6,377 |
|
|
2,838 |
|
||||
|
8,961 |
|
|
395 |
|
|
9,356 |
|
|
3,578 |
|
||||
|
7,999 |
|
|
1,657 |
|
|
9,656 |
|
|
4,323 |
|
||||
|
1,959 |
|
|
51 |
|
|
2,010 |
|
|
773 |
|
||||
Total Regional Sales Offices |
53,466 |
|
|
4,947 |
|
|
58,413 |
|
|
26,006 |
|
||||
|
32 |
|
|
— |
|
|
32 |
|
|
(3,537 |
) |
||||
Total Segment Results |
$ |
53,498 |
|
|
$ |
4,947 |
|
|
$ |
58,445 |
|
|
$ |
22,469 |
|
|
Six Months Ended |
||||||||||||||
|
Subscription
|
|
Hardware and
|
|
Total Revenue |
|
Segment Adjusted
|
||||||||
Regional Sales Offices |
|
|
|
|
|
|
|
||||||||
|
$ |
37,397 |
|
|
$ |
2,811 |
|
|
$ |
40,208 |
|
|
$ |
17,778 |
|
|
6,786 |
|
|
2,598 |
|
|
9,384 |
|
|
3,433 |
|
||||
|
7,067 |
|
|
663 |
|
|
7,730 |
|
|
572 |
|
||||
|
8,556 |
|
|
2,855 |
|
|
11,411 |
|
|
5,208 |
|
||||
|
2,141 |
|
|
48 |
|
|
2,189 |
|
|
605 |
|
||||
Total Regional Sales Offices |
61,947 |
|
|
8,975 |
|
|
70,922 |
|
|
27,596 |
|
||||
|
28 |
|
|
22 |
|
|
50 |
|
|
(5,044 |
) |
||||
Total Segment Results |
$ |
61,975 |
|
|
$ |
8,997 |
|
|
$ |
70,972 |
|
|
$ |
22,552 |
|
The following table (unaudited and shown in thousands) reconciles total Segment Adjusted EBITDA to income before tax expense for the periods shown:
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2020 |
|
2021 |
|
2020 |
|
2021 |
||||||||
Segment Adjusted EBITDA |
$ |
12,049 |
|
|
$ |
11,085 |
|
|
$ |
22,469 |
|
|
$ |
22,552 |
|
Corporate and consolidation entries |
(2,507 |
) |
|
(2,474 |
) |
|
(4,837 |
) |
|
(4,850 |
) |
||||
Operating lease costs (1) |
(399 |
) |
|
(373 |
) |
|
(791 |
) |
|
(780 |
) |
||||
Product development costs (2) |
(271 |
) |
|
(335 |
) |
|
(514 |
) |
|
(698 |
) |
||||
Depreciation and amortization |
(3,836 |
) |
|
(3,668 |
) |
|
(7,464 |
) |
|
(7,347 |
) |
||||
Impairment of long-lived assets |
(1 |
) |
|
(28 |
) |
|
(1 |
) |
|
(28 |
) |
||||
Stock-based compensation costs |
(301 |
) |
|
(330 |
) |
|
(594 |
) |
|
(694 |
) |
||||
Increase in restructuring costs (3) |
(153 |
) |
|
(51 |
) |
|
(997 |
) |
|
(52 |
) |
||||
Net (loss)/profit on sale of property and equipment |
(7 |
) |
|
43 |
|
|
(8 |
) |
|
43 |
|
||||
Net foreign exchange (losses)/gains |
(78 |
) |
|
60 |
|
|
(183 |
) |
|
(16 |
) |
||||
Net interest expense |
(70 |
) |
|
(141 |
) |
|
(140 |
) |
|
(219 |
) |
||||
Income before tax expense |
$ |
4,426 |
|
|
$ |
3,788 |
|
|
$ |
6,940 |
|
|
$ |
7,911 |
|
|
|
|
|
|
|
|
|
||||||||
Description of reconciling items: |
|||||||||||||||
|
|||||||||||||||
Annexure A: Non-GAAP Financial Measures
We use certain measures to assess the financial performance of the business. Certain of these measures are termed “non-GAAP measures” because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with GAAP, or are calculated using financial measures that are not calculated in accordance with GAAP. These non-GAAP measures include Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per share, free cash flow and constant currency information.
An explanation of the relevance of each of the non-GAAP measures, a reconciliation of the non-GAAP measures to the most directly comparable measures calculated and presented in accordance with GAAP and a discussion of their limitations is set out below. We do not regard these non-GAAP measures as a substitute for, or superior to, the equivalent measures calculated and presented in accordance with GAAP or those calculated using financial measures that are calculated in accordance with GAAP.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA margin are two of the profit measures reviewed by the chief operating decision maker (“CODM”). We define Adjusted EBITDA as the income before income taxes, net interest income, net foreign exchange gains/(losses), depreciation of property and equipment including capitalized customer in-vehicle devices, amortization of intangible assets including capitalized internal-use software development costs and intangible assets identified as part of a business combination, stock-based compensation costs, restructuring costs and profits/(losses) on the disposal or impairments of assets or subsidiaries. We define Adjusted EBITDA margin as Adjusted EBITDA divided by total revenue.
We have included Adjusted EBITDA and Adjusted EBITDA margin in this press release because they are key measures that the Company’s management and Board of Directors use to understand and evaluate its core operating performance and trends; to prepare and approve its annual budget; and to develop short and long-term operational plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA and Adjusted EBITDA margin can provide a useful measure for period-to-period comparisons of the Company’s core business. Accordingly, the Company believes that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating its operating results.
A reconciliation of net income (the most directly comparable financial measure presented in accordance with GAAP) to Adjusted EBITDA for the periods shown is presented below (in thousands and unaudited):
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2020 |
|
2021 |
|
2020 |
|
2021 |
||||||||
Net income |
$ |
3,452 |
|
|
$ |
1,299 |
|
|
$ |
5,874 |
|
|
$ |
4,830 |
|
Plus: Income tax expense |
974 |
|
|
2,489 |
|
|
1,066 |
|
|
3,081 |
|
||||
Plus: Net interest expense |
70 |
|
|
141 |
|
|
140 |
|
|
219 |
|
||||
Plus: Foreign exchange losses/(gains) |
78 |
|
|
(60 |
) |
|
183 |
|
|
16 |
|
||||
Plus: Depreciation (1) |
2,946 |
|
|
2,650 |
|
|
5,782 |
|
|
5,344 |
|
||||
Plus: Amortization (2) |
890 |
|
|
1,018 |
|
|
1,682 |
|
|
2,003 |
|
||||
Plus: Impairment of long-lived assets |
1 |
|
|
28 |
|
|
1 |
|
|
28 |
|
||||
Plus: Stock-based compensation costs |
301 |
|
|
330 |
|
|
594 |
|
|
694 |
|
||||
Plus: Net loss/(profit) on sale of property and equipment |
7 |
|
|
(43 |
) |
|
8 |
|
|
(43 |
) |
||||
Plus: Restructuring costs |
153 |
|
|
51 |
|
|
997 |
|
|
52 |
|
||||
Adjusted EBITDA |
$ |
8,872 |
|
|
$ |
7,903 |
|
|
$ |
16,327 |
|
|
$ |
16,224 |
|
Adjusted EBITDA margin |
28.7 |
% |
|
21.9 |
% |
|
27.9 |
% |
|
22.9 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
|
|||||||||||||||
Our use of Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and should not be considered as performance measures in isolation from, or as a substitute for, analysis of our results as reported under GAAP.
Some of these limitations are:
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
- Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to the Company;
- other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure; and
- certain of the adjustments (such as restructuring costs, impairment of long-lived assets and others) made in calculating Adjusted EBITDA are those that management believes are not representative of our underlying operations and, therefore, are subjective in nature.
Because of these limitations, Adjusted EBITDA and Adjusted EBITDA margin should be considered alongside other financial performance measures, including income from operations, net income and our other results.
Non-GAAP Net Income and Non-GAAP Net Income Per Share
Non-GAAP net income is defined as net income excluding net foreign exchange gains/(losses) net of tax.
We have included non-GAAP net income per share in this press release because it provides a useful measure for period-to-period comparisons of our core business by excluding net foreign exchange gains/(losses) net of tax and associated tax consequences from earnings. Accordingly, we believe that non-GAAP net income per share provides useful information to investors and others in understanding and evaluating our operating results.
The following tables (in thousands, except per share data, and unaudited) reconcile Net Income to Non-GAAP Net Income and Diluted Net Income Per Ordinary Share or ADS to Non-GAAP Net Income Per Ordinary Share or ADS for the periods shown:
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
|
2020 |
|
2021 |
|
2020 |
|
2021 |
|||||||
Net income |
$ |
3,452 |
|
|
$ |
1,299 |
|
|
$ |
5,874 |
|
|
$ |
4,830 |
Net foreign exchange losses/(gains) |
78 |
|
|
(60 |
) |
|
183 |
|
|
16 |
||||
Income tax effect of net foreign exchange (losses)/gains |
(305 |
) |
|
1,052 |
|
|
(1,003 |
) |
|
310 |
||||
Non-GAAP net income |
$ |
3,225 |
|
|
$ |
2,291 |
|
|
$ |
5,054 |
|
|
$ |
5,156 |
|
|
|
|
|
|
|
|
|||||||
Net income per ordinary share – diluted |
$ |
0.01 |
|
|
$ |
0.002 |
|
|
$ |
0.01 |
|
|
$ |
0.01 |
Effect of net foreign exchange losses/(gains) to net income |
# |
|
# |
|
# |
|
# |
|||||||
Income tax effect of net foreign exchange (losses)/gains |
# |
|
0.002 |
|
|
# |
|
# |
||||||
Non-GAAP net income per ordinary share – diluted |
$ |
0.01 |
|
|
$ |
0.004 |
|
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|||||||
Net income per ADS – diluted |
$ |
0.15 |
|
|
$ |
0.06 |
|
|
$ |
0.26 |
|
|
$ |
0.21 |
Effect of net foreign exchange losses/(gains) to net income |
* |
|
* |
|
0.01 |
|
|
* |
||||||
Income tax effect of net foreign exchange (losses)/gains |
(0.01 |
) |
|
0.05 |
|
|
(0.04 |
) |
|
0.01 |
||||
Non-GAAP net income per ADS – diluted |
$ |
0.14 |
|
|
$ |
0.10 |
|
|
$ |
0.23 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|||||||
# Amount less than |
|
|
|
|
|
|
|
|||||||
* Amount less than |
|
|
|
|
|
|
|
|||||||
Free Cash Flow
Free cash flow is determined as net cash provided by operating activities less capital expenditure for investing activities. We believe that free cash flow provides useful information to investors and others in understanding and evaluating the Company’s cash flows as it provides detail of the amount of cash the Company generates or utilizes after accounting for all capital expenditures including investments in in-vehicle devices.
The following table (in thousands and unaudited) reconciles Net Cash Provided by Operating Activities to Free Cash Flow for the periods shown:
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2020 |
|
2021 |
|
2020 |
|
2021 |
||||||||
Net cash provided by operating activities |
$ |
11,401 |
|
|
$ |
5,939 |
|
|
$ |
20,758 |
|
|
$ |
10,665 |
|
Less: Capital expenditure payments |
(2,602 |
) |
|
(9,072 |
) |
|
(4,722 |
) |
|
(13,424 |
) |
||||
Free cash flow |
$ |
8,799 |
|
|
$ |
(3,133 |
) |
|
$ |
16,036 |
|
|
$ |
(2,759 |
) |
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, including the South African Rand and British Pound. 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. We believe this provides a useful basis to measure the performance of our business as it removes distortion from the effects of foreign currency movements during the period.
Due to the significant portion of our customers who are invoiced in non-
The following tables (in thousands, except year over year change) provide the unaudited constant currency reconciliation to the most directly comparable GAAP measure for the periods shown:
Subscription Revenue: |
|
|
|
|
|
|||||
|
Three Months Ended |
|
Year Over Year
|
|||||||
|
2020 |
|
2021 |
|
|
|||||
Subscription revenue as reported |
$ |
27,623 |
|
|
$ |
30,885 |
|
|
11.8 |
% |
Conversion impact of |
— |
|
|
(2,461 |
) |
|
(8.9 |
)% |
||
Subscription revenue on a constant currency basis |
$ |
27,623 |
|
|
$ |
28,424 |
|
|
2.9 |
% |
|
|
|
|
|
|
|||||
Total Revenue: |
|
|
|
|
|
|||||
|
Three Months Ended |
|
Year Over Year
|
|||||||
|
2020 |
|
2021 |
|
|
|||||
Total revenue as reported |
$ |
30,948 |
|
|
$ |
36,074 |
|
|
16.6 |
% |
Conversion impact of |
— |
|
|
(2,774 |
) |
|
(9.0 |
)% |
||
Total revenue on a constant currency basis |
$ |
30,948 |
|
|
$ |
33,300 |
|
|
7.6 |
% |
Subscription Revenue: |
|
|
|
|
|
|||||
|
Six Months Ended |
|
Year Over Year
|
|||||||
|
2020 |
|
2021 |
|
|
|||||
Subscription revenue as reported |
$ |
53,498 |
|
|
$ |
61,975 |
|
|
15.8 |
% |
Conversion impact of |
— |
|
|
(6,819 |
) |
|
(12.7 |
)% |
||
Subscription revenue on a constant currency basis |
$ |
53,498 |
|
|
$ |
55,156 |
|
|
3.1 |
% |
|
|
|
|
|
|
|||||
Total Revenue: |
|
|
|
|
|
|||||
|
Six Months Ended |
|
Year Over Year
|
|||||||
|
2020 |
|
2021 |
|
|
|||||
Total revenue as reported |
$ |
58,445 |
|
|
$ |
70,972 |
|
|
21.4 |
% |
Conversion impact of |
— |
|
|
(7,559 |
) |
|
(12.9 |
)% |
||
Total revenue on a constant currency basis |
$ |
58,445 |
|
|
$ |
63,413 |
|
|
8.5 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20211028005107/en/
Investor Contact
ICR for
ir@mixtelematics.com
+1-855-564-9835
Source:
FAQ
What were MiX Telematics' earnings for Q2 fiscal 2022?
How much did MiX Telematics' subscription revenues grow in Q2 fiscal 2022?
What was the adjusted EBITDA margin for MiX Telematics in Q2 fiscal 2022?
Did MiX Telematics provide financial guidance for fiscal 2022?
