PowerFleet Reports Third Quarter 2021 Financial Results
PowerFleet, Inc. (Nasdaq: PWFL) reported Q3 2021 revenue of $29.2 million, reflecting a 6% year-over-year increase. Recurring services revenue rose 10% to $18.5 million, making up 63% of total revenue. However, the company faced challenges due to supply chain issues, impacting industrial sales. The net loss for Q3 2021 was $4.5 million (or $(0.13) per share), a deterioration from $1.7 million the previous year. Notably, PowerFleet secured a follow-on order for 10,000 LV-500 units, demonstrating strong demand despite external challenges.
- Q3 2021 revenue increased to $29.2 million, up 6% year-over-year.
- Recurring services revenue rose to $18.5 million, up 10% year-over-year, making up 63% of total revenue.
- Secured a follow-on order for 10,000 LV-500 units, indicating strong demand.
- Cash and cash equivalents totaled $33.8 million, supporting financial stability.
- Net loss attributable to common stockholders increased to $4.5 million, up from $1.7 million year-over-year.
- Gross profit margin decreased from 54% to 49% year-over-year due to higher costs and product mix.
- Product gross profit dropped significantly, impacted by $400,000 one-time expense and supply chain issues.
WOODCLIFF LAKE, N.J., Nov. 04, 2021 (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 third quarter and nine months ended September 30, 2021.
Third Quarter 2021 Financial Highlights
- Total revenue was
$29.2 million , up6% year-over-year. - High margin, recurring and services revenue increased
10% year-over-year to$18.5 million , or63% of total revenue. - At quarter end, cash and cash equivalents totaled
$33.8 million and working capital was$49.4 million .
Nine Month 2021 Financial Highlights
- Total revenue was
$91.8 million , up9% year-over-year. - High margin, recurring and services revenue increased
7% to$54.1 million , or59% of total revenue.
Third Quarter 2021 and Recent Operational Highlights
- Selected by Hyundai Translead, the leading van trailer manufacturer in North America, to provide telematics for its HT LinkSense platform.
- Expanded deployment of LV-500 solar-powered trailer tracking solution with Day & Ross.
- Signed a follow-on order for 10,000 LV-500 and freight camera systems with deliveries starting in Q4 2021.
- Received the 2021 IoT Evolution Asset Tracking Award for LV-500 solar tracking solution with the LV-710 freight camera from IoT Evolution World and IoT Evolution Magazine.
Management Commentary
“We delivered
“Operationally, we had several notable successes in the third quarter, including our team in Israel shipping and installing over 7,800 of units in August, which marked a new monthly record. In the U.S., our Logistics team secured a follow-on order for 10,000 LV500 container telemetry devices and our Industrial team launched the first site at a major government agency, which served as a critical milestone towards moving forward with an additional 80 sites that represent a
“We entered the fourth quarter with a solid backlog in Logistics and Vehicle opportunities as well as implementations underway at Ford and the major government agency. We look to build on this momentum as we continue to close deals and launch several new products, which will add to our already robust opportunity pipeline.”
Third Quarter 2021 Financial Results
Total revenue increased
Services revenue was
Gross profit was
Selling, general and administrative expenses were
Net loss attributable to common stockholders totaled
Non-GAAP net loss, a non-GAAP metric, totaled
Adjusted EBITDA, a non-GAAP metric, totaled
At quarter-end, the company had
Nine Month 2021 Financial Results
Total revenue increased
Services revenue was
Gross profit was
Selling, general and administrative expenses were
Net loss attributable to common stockholders totaled
Non-GAAP net income, a non-GAAP metric, totaled
Adjusted EBITDA, a non-GAAP metric, totaled
Investor Conference Call
PowerFleet management will discuss these results and business outlook on a conference call today (Thursday, November 4, 2021) at 8:00 a.m. Eastern time (5:00 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
Entry code: 271464
The conference call will be broadcast simultaneously and available for replay here and in 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 non-GAAP net income (loss), non-GAAP net income (loss) per basic and diluted share and adjusted EBITDA. 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
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2020 | 2021 | 2020 | 2021 | ||||||||||||
| Net loss attributable to common stockholders | $ | (1,749,000) | $ | (4,541,000) | $ | (10,064,000) | $ | (10,157,000) | |||||||
| Non-controlling interest | 6,000 | (4,000) | (10,000) | (5,000) | |||||||||||
| Preferred stock dividend and accretion | 1,159,000 | 1,196,000 | 3,422,000 | 3,588,000 | |||||||||||
| Interest (income) expense, net | 625,000 | 506,000 | 1,985,000 | 1,562,000 | |||||||||||
| Other (income) expense, net | - | (7,000) | (7,000) | (5,000) | |||||||||||
| Income tax (benefit) expense | 529,000 | 161,000 | 1,182,000 | 701,000 | |||||||||||
| Depreciation and amortization | 2,109,000 | 2,146,000 | 6,159,000 | 6,376,000 | |||||||||||
| Stock-based compensation | 992,000 | 927,000 | 3,078,000 | 3,120,000 | |||||||||||
| Foreign currency translation | (76,000) | 620,000 | (25,000) | (11,000) | |||||||||||
| Impact of the fair value mark-up of acquired inventory | - | - | 124,000 | - | |||||||||||
| Adjusted EBITDA | $ | 3,595,000 | $ | 1,004,000 | $ | 5,844,000 | $ | 5,169,000 | |||||||
PowerFleet, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Net Income (Loss) Financial Measures
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2020 | 2021 | 2020 | 2021 | ||||||||||||
| Net loss attributable to common stockholders | $ | (1,749,000) | $ | (4,541,000) | $ | (10,064,000) | $ | (10,157,000) | |||||||
| Preferred stock dividend and accretion | 1,159,000 | 1,196,000 | 3,422,000 | 3,588,000 | |||||||||||
| Other (income) expense, net | - | (7,000) | (7,000) | (5,000) | |||||||||||
| Intangible assets amortization expense | 1,332,000 | 1,282,000 | 3,996,000 | 3,879,000 | |||||||||||
| Stock-based compensation | 992,000 | 927,000 | 3,078,000 | 3,120,000 | |||||||||||
| Foreign currency translation | (76,000) | 620,000 | (25,000) | (11,000) | |||||||||||
| Non-cash portion of income tax expense | 525,000 | 159,000 | 1,140,000 | 651,000 | |||||||||||
| Impact of the fair value mark-up of acquired inventory | - | - | 124,000 | - | |||||||||||
| Non-GAAP net income (loss) | $ | 2,183,000 | $ | (364,000) | $ | 1,664,000 | $ | 1,065,000 | |||||||
| Non-GAAP net income (loss) - basic | $ | 0.07 | $ | (0.01) | $ | 0.06 | $ | 0.03 | |||||||
| Non-GAAP net income (loss) - diluted | $ | 0.06 | $ | (0.01) | $ | 0.05 | $ | 0.02 | |||||||
| Weighted average common shares outstanding - basic | 30,143,000 | 35,019,000 | 29,528,000 | 34,398,000 | |||||||||||
| Weighted average common shares outstanding - diluted | 37,579,000 | 35,019,000 | 36,940,000 | 42,612,000 | |||||||||||
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 www.powerfleet.com, 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, 2020. 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
NMavrommatis@powerfleet.com
(201) 996-9000
PowerFleet Investor Contact
Matt Glover
Gateway Investor Relations
PWFL@gatewayir.com
(949) 574-3860
PowerFleet, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations Data
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2020 | 2021 | 2020 | 2021 | ||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
| Revenue: | |||||||||||||||
| Products | $ | 10,914,000 | $ | 10,785,000 | $ | 33,516,000 | $ | 37,671,000 | |||||||
| Services | 16,688,000 | 18,461,000 | 50,650,000 | 54,114,000 | |||||||||||
| 27,602,000 | 29,246,000 | 84,166,000 | 91,785,000 | ||||||||||||
| Cost of revenue: | |||||||||||||||
| Cost of products | 6,700,000 | 8,172,000 | 22,025,000 | 27,186,000 | |||||||||||
| Cost of services | 5,979,000 | 6,809,000 | 18,309,000 | 19,819,000 | |||||||||||
| 12,679,000 | 14,981,000 | 40,334,000 | 47,005,000 | ||||||||||||
| Gross Profit | 14,923,000 | 14,265,000 | 43,832,000 | 44,780,000 | |||||||||||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative expenses | 11,636,000 | 13,959,000 | 38,905,000 | 40,988,000 | |||||||||||
| Research and development expenses | 2,535,000 | 2,735,000 | 8,289,000 | 8,259,000 | |||||||||||
| 14,171,000 | 16,694,000 | 47,194,000 | 49,247,000 | ||||||||||||
| Loss from operations | 752,000 | (2,429,000 | ) | (3,362,000 | ) | (4,467,000 | ) | ||||||||
| Interest income | 10,000 | 11,000 | 41,000 | 35,000 | |||||||||||
| Interest expense | (597,000 | ) | (516,000 | ) | (2,026,000 | ) | (1,597,000 | ) | |||||||
| Foreign currency translation of debt | (220,000 | ) | (261,000 | ) | (130,000 | ) | 151,000 | ||||||||
| Other (expense) income, net | - | 7,000 | 7,000 | 5,000 | |||||||||||
| Net loss before income taxes | (55,000 | ) | (3,188,000 | ) | (5,470,000 | ) | (5,873,000 | ) | |||||||
| Income tax benefit (expense) | (529,000 | ) | (161,000 | ) | (1,182,000 | ) | (701,000 | ) | |||||||
| Net loss before non-controlling interest | (584,000 | ) | (3,349,000 | ) | (6,652,000 | ) | (6,574,000 | ) | |||||||
| Non-controlling interest | (6,000 | ) | 4,000 | 10,000 | 5,000 | ||||||||||
| Net loss | (590,000 | ) | (3,345,000 | ) | (6,642,000 | ) | (6,569,000 | ) | |||||||
| Accretion of preferred stock | (168,000 | ) | (168,000 | ) | (504,000 | ) | (504,000 | ) | |||||||
| Preferred stock dividend | (991,000 | ) | (1,028,000 | ) | (2,918,000 | ) | (3,084,000 | ) | |||||||
| Net loss attributable to common stockholders | $ | (1,749,000 | ) | $ | (4,541,000 | ) | $ | (10,064,000 | ) | $ | (10,157,000 | ) | |||
| Net loss per share - basic and diluted | $ | (0.06 | ) | $ | (0.13 | ) | $ | (0.34 | ) | $ | (0.30 | ) | |||
| Weighted average common shares outstanding - basic and diluted | 30,143,000 | 35,019,000 | 29,528,000 | 34,398,000 | |||||||||||
PowerFleet, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet Data
| As of | |||||||
| December 31, 2020 | September 30, 2021 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 18,127,000 | $ | 33,821,000 | |||
| Restricted cash | 308,000 | 308,000 | |||||
| Accounts receivable, net | 24,147,000 | 30,151,000 | |||||
| Inventory, net | 12,873,000 | 16,197,000 | |||||
| Deferred costs - current | 3,128,000 | 1,298,000 | |||||
| Prepaid expenses and other current assets | 6,184,000 | 7,256,000 | |||||
| Total current assets | 64,767,000 | 89,031,000 | |||||
| Deferred costs - less current portion | 2,233,000 | 1,174,000 | |||||
| Fixed assets, net | 8,804,000 | 8,852,000 | |||||
| Goodwill | 83,344,000 | 83,344,000 | |||||
| Intangible assets, net | 31,276,000 | 27,397,000 | |||||
| Right of use asset | 9,700,000 | 9,850,000 | |||||
| Severance payable fund | 4,056,000 | 4,095,000 | |||||
| Deferred tax asset | 1,506,000 | 893,000 | |||||
| Other assets | 3,115,000 | 3,656,000 | |||||
| Total assets | $ | 208,801,000 | $ | 228,292,000 | |||
| LIABILITIES | |||||||
| Current liabilities: | |||||||
| Short-term bank debt and current maturities of long-term debt | $ | 5,579,000 | $ | 6,225,000 | |||
| Accounts payable and accrued expenses | 20,225,000 | 24,655,000 | |||||
| Deferred revenue - current | 7,339,000 | 6,274,000 | |||||
| Lease liability - current | 2,755,000 | 2,508,000 | |||||
| Total current liabilities | 35,898,000 | 39,662,000 | |||||
| Long-term debt, less current maturities | 23,179,000 | 19,025,000 | |||||
| Deferred revenue - less current portion | 6,006,000 | 5,328,000 | |||||
| Lease liability - less current portion | 7,050,000 | 7,530,000 | |||||
| Accrued severance payable | 4,714,000 | 4,740,000 | |||||
| Other long-term liabilities | 674,000 | 711,000 | |||||
| Total liabilities | 77,521,000 | 76,996,000 | |||||
| MEZZANINE EQUITY | |||||||
| Convertible redeemable Preferred stock: Series A | 51,992,000 | 52,495,000 | |||||
| STOCKHOLDERS' EQUITY | - | - | |||||
| Total Powerfleet, Inc. stockholders' equity | 79,213,000 | 98,707,000 | |||||
| Non-controlling interest | 75,000 | 94,000 | |||||
| Total equity | 79,288,000 | 98,801,000 | |||||
| Total liabilities and stockholders' equity | $ | 208,801,000 | $ | 228,292,000 | |||
PowerFleet, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flow Data
| Nine Months Ended September 30, | |||||||
| 2020 | 2021 | ||||||
| (Unaudited) | |||||||
| Cash flows from operating activities (net of net assets acquired): | |||||||
| Net loss | $ | (6,642,000 | ) | $ | (6,569,000 | ) | |
| Adjustments to reconcile net loss to cash (used in) provided by operating activities: | |||||||
| Non-controlling interest | (10,000 | ) | (5,000 | ) | |||
| Inventory reserve | 189,000 | 122,000 | |||||
| Stock based compensation expense | 3,195,000 | 3,380,000 | |||||
| Depreciation and amortization | 6,159,000 | 6,377,000 | |||||
| Right-of-use assets, non-cash lease expense | 2,129,000 | 1,839,000 | |||||
| Bad debt expense | 640,000 | 824,000 | |||||
| Other non-cash items | (55,000 | ) | 229,000 | ||||
| Deferred taxes | 1,182,000 | 701,000 | |||||
| Changes in: | |||||||
| Operating assets and liabilities | (1,494,000 | ) | (8,145,000 | ) | |||
| Net cash (used in) provided by operating activities | 5,293,000 | (1,247,000 | ) | ||||
| Cash flows from investing activities: | |||||||
| Proceeds from sale of property and equipment | 55,000 | - | |||||
| Capital expenditures | (2,101,000 | ) | (2,534,000 | ) | |||
| Net cash (used in) investing activities | (2,046,000 | ) | (2,534,000 | ) | |||
| Cash flows from financing activities: | |||||||
| Net proceeds from stock offering | 4,041,000 | 26,907,000 | |||||
| Payment of preferred stock dividend | - | (3,084,000 | ) | ||||
| Repayment of long-term debt | (1,495,000 | ) | (4,040,000 | ) | |||
| Short-term bank debt, net | (290,000 | ) | 94,000 | ||||
| Proceeds from exercise of stock options | 371,000 | 170,000 | |||||
| Purchase of treasury stock upon vesting of restricted stock | (298,000 | ) | (383,000 | ) | |||
| Net cash (used in) provided by financing activities | 2,329,000 | 19,664,000 | |||||
| Effect of foreign exchange rate changes on cash and cash equivalents | (894,000 | ) | (189,000 | ) | |||
| Net increase in cash, cash equivalents and restricted cash | 4,682,000 | 15,694,000 | |||||
| Cash, cash equivalents and restricted cash - beginning of period | 16,703,000 | 18,435,000 | |||||
| Cash, cash equivalents and restricted cash - end of period | $ | 21,385,000 | $ | 34,129,000 | |||
FAQ
What were PowerFleet's earnings for Q3 2021?
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