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Powerfleet Reports Full Year 2022 and Fourth Quarter Financial Results

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Powerfleet, Inc. (PWFL) reported a significant operational improvement with a $5.8 million increase in operating cash flow for 2022, driven by strategic actions post-CEO appointment. Key metrics included a 7% revenue growth to $135.2 million and an 8% rise in high-margin services revenue, now comprising 58% of total revenue. The company's gross profit rose 7% to $64.2 million, with adjusted EBITDA improving 19% to $7.3 million. Powerfleet also successfully launched the Unity fleet intelligence platform and acquired Movingdots, enhancing its market reach. Despite ongoing challenges, the leadership's focus on efficiency and high-quality revenue positions the company for growth in 2023.

Positive
  • Operating cash flow improved by $5.8 million in 2022.
  • Total revenue increased by 7% to $135.2 million.
  • High-margin services revenue rose 8% to $78.8 million.
  • Gross profit increased 7% to $64.2 million, gross margin at 47%.
  • Adjusted EBITDA improved by 19% to $7.3 million.
  • Launched Unity fleet intelligence platform showing strong market traction.
  • Acquisition of Movingdots expected to expand global reach.
Negative
  • GAAP net loss decreased but remained at $11.9 million, slightly improving from $18.1 million in 2021.
  • Fourth quarter total revenue declined to $33.1 million from $34.4 million year-over-year.
  • Product revenue decreased to $13.1 million, down from $15.3 million in the same quarter last year.
  • Efficiency Program Yields a $5.8 million Improvement in Operating Cash Flow Performance in 2022
  • Strong Sales Execution Drives 13% Annual Growth in U.S. Services in 2022
  • Business Optimization and Focus on High Quality Revenue Drives an Absolute Sequential Increase in Gross Margin of 5% in 2H22

WOODCLIFF LAKE, N.J., March 09, 2023 (GLOBE NEWSWIRE) -- Powerfleet, Inc. (Nasdaq: PWFL), 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, reported results for the fourth quarter and year ended December 31, 2022.

Following the appointment of CEO Steve Towe in January 2022, the executive team and board of directors conducted an exhaustive 120-day review of Powerfleet’s business, product offerings, geographic markets, target customers, go-to market strategy and business model. The process culminated in a new roadmap to guide the company’s growth, focus areas, and day-to-day operations. The leadership team’s execution on the strategic plan is in the process of transforming Powerfleet into a world class, high growth, and profitable SaaS solutions provider.

2022 AND RECENT OPERATIONAL MILESTONES

  • Complete rebuild of executive and broader leadership team with a proven track record of delivering outsized results to stakeholders.
  • Implemented new growth strategy, which has produced tangible financial results and positioned the company for greater financial success in 2023 and beyond.
  • Repositioned to a SaaS solutions platform company and elevated the company’s value proposition with customers to offer more extensive business insights and solutions to transform their businesses. Initial success was demonstrated by the increase in high-margin services revenue, which was up 8% on a GAAP basis and 11% on a constant currency basis in 2022.
  • Completed phase one of the company’s optimization plan that removed $5 million of costs, which management has partially reallocated the cost-savings towards sales and marketing efforts within the company’s new cost envelope. In March 2023, launched phase two of the optimization plan, which, when completed, is expected to reduce operating expenses by an additional $3 million annually.
  • Launched Unity, a new game-changing fleet intelligence platform that unites people, assets, and data together to transform the way its customers do business. Unity’s go-to-market traction is ahead of schedule, highlighted by new customer engagements with Kearney and FEMSA.
  • Today announced the acquisition of Movingdots, a leading insurance telematics and sustainable mobility solutions provider, expanding Powerfleet’s global reach and total addressable market. The acquisition is scheduled to close by the end of Q1 2023.

SECOND HALF 2022 FINANCIAL HIGHLIGHTS (COMPARED TO FIRST HALF 2022)

  • High-margin services revenue increased 5% to $40.3 million. On a constant currency basis, the sequential increase was 8% or 16% on an annualized basis.
  • Gross profit increased by $3 million or 10% to $33.5 million, with gross margin expanding from 45% to 50%.
  • Product gross margin expanded from 20% to 29%.
  • Loss from operations improved by 54% or $2.9 million.
  • Adjusted EBITDA, a non-GAAP metric, improved by $2 million or 76%.

FULL YEAR 2022 FINANCIAL HIGHLIGHTS (COMPARED TO 2021)

  • Total revenue increased 7% to $135.2 million and 10% on a constant currency basis.
  • High-margin services revenue increased 8% to $78.8 million (58% of total revenue), and 11% on a constant currency basis.
  • Gross profit increased 7% to $64.2 million (47% of total revenue)
  • GAAP net loss improved to $7.0 million from $13.3 million in 2021.
  • Adjusted EBITDA, a non-GAAP metric, increased 19% to $7.3 million.
  • Ended the year with $18.0 million in cash and cash equivalents and a working capital position of $35.5 million.
  • Total subscribers increased 8% to 664,000 at year end.

MANAGEMENT COMMENTARY

“The fourth quarter marked a solid finish to a pivotal year as we continued to lay the groundwork for future growth, profitability, and expansion,” said Steve Towe, CEO at Powerfleet. “We are incredibly proud of the progress the team has made on the journey of transforming Powerfleet towards our mid- to long-term goal of being recognized as a world class, high growth, and profitable SaaS solutions provider.

“Even with the dramatic business transformation efforts and fundamental operational business change in 2022, we delivered 7% topline revenue growth (10% on a constant currency basis), 8% growth in high-margin services revenue (11% on a constant currency basis) and grew our subscriber base by 8%. From a profitability perspective, we improved gross profit by $4 million, reduced loss from operations by 65% from Q4 2021 to Q4 2022, decreased GAAP loss by $6.3 million, and grew adjusted EBITDA by 19% in 2022. These encouraging financial results were also achieved in the face of the ongoing macro-economic pressures and significant supply chain headwinds.”

Powerfleet CFO David Wilson commented: “During Q4, we initiated phase two of our business rationalization efforts designed to further enhance margins, reduce costs, and increase profitability. Our refined growth strategy produced double-digit growth in our key regions in Q4, including a 20% year-over-year increase in U.S. Industrial segment revenue and a 37% year-over-year revenue increase in Mexico. Overall, our topline results in Q4 reflect the decisive actions we took in the period to de-emphasize underperforming product lines and territories and terminate unprofitable contracts worth an estimated $2.5 million in the quarter. In parallel, our tight cash management produced the highest cash collections quarter in our history, which brought our cash position at year end to nearly $18 million.

“The opportunity ahead for our business is compelling. As we wrap up the first quarter of 2023, we are executing on our pipeline growth activities, delivering on our customer promises, and tracking ahead of plan. Despite the expected revenue reduction related to our ongoing strategic rationalization efforts, we anticipate generating sequential revenue growth in Q1, driven by robust double-digit growth from our U.S. industrial solutions, a trend we expect to continue through 2023.”

FOURTH QUARTER 2022 FINANCIAL RESULTS

Total revenue was $33.1 million, compared to $34.4 million in the same year-ago period.

Services revenue was $20.0 million, or 60% of total revenue, compared to $19.1 million, or 56% of total revenue, in the same year-ago period.

Product revenue, which drives future services revenue, was $13.1 million, or 40% of total revenue, compared to $15.3 million, or 44% of total revenue, in the same year-ago period.

Gross profit was $16.4 million, or 49% of total revenue, compared to $15.4 million, or 45% of total revenue, in the same year-ago period. Service gross profit was $12.8 million, or 64% of total service revenue, compared to $12.4 million, or 65% of total service revenue, in the same year-ago period. Product gross profit was $3.6 million, or 28% of total product revenue, compared to $3.1 million, or 20% of total product revenue, in the same year-ago period.

Operating expenses were $17.6 million, net of $1.0 million in foreign currency gains, compared to $18.9 million in the same year-ago period.

Net loss attributable to common stockholders totaled $2.9 million, or $(0.08) per basic and diluted share (based on 35.4 million weighted average shares outstanding), compared to net loss attributable to common stockholders of $7.9 million, or $(0.23) per basic and diluted share, in the same year-ago period (based on 35.1 million weighted average shares outstanding).

Adjusted EBITDA, a non-GAAP metric, totaled $1.4 million, compared to adjusted EBITDA of $1.0 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).

At quarter-end, the company had $18.0 million in cash and cash equivalents. The company’s working capital position at quarter-end was $35.5 million.

FULL YEAR 2022 FINANCIAL RESULTS

Total revenue was $135.2 million, compared to $126.2 million in the same year-ago period.

Services revenue was $78.8 million compared to $73.2 million, in 2021. Product revenue was $56.3 million compared to $53.0 million in 2021. Revenue mix was 58% service revenue and 42% product revenue, which was consistent with the prior year period.

Gross profit was $64.2 million, or 47% of total revenue, compared to $60.2 million, or 48% of total revenue, in 2021. Service gross profit was $50.5 million, compared to $46.6 million in 2021, with gross margin steady at 64% for both years. Product gross profit was $13.7 million, or 24% of total product revenue, compared to $13.5 million, or 26% of total product revenue, in 2021.

Operating expenses were $72.0 million, compared to $68.2 million in 2021. Operating expenses included foreign currency transaction loss of $0.9 million for 2022, compared to $0.1 million in 2021.

Net loss attributable to common stockholders totaled $11.9 million, or $(0.34) per basic and diluted share (based on 35.4 million weighted average shares outstanding), compared to net loss attributable to common stockholders of $18.1 million, or $(0.52) per basic and diluted share, in the same year-ago period (based on 34.6 million weighted average shares outstanding).

Adjusted EBITDA, a non-GAAP metric, totaled $7.3 million, compared to adjusted EBITDA of $6.2 million in 2021 (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 (Thursday, March 9, 2023) 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: 877-524-8416
International: +1 412-902-1028

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, adjusted EBITDA and services 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 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 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 Year Ended
 December 31, December 31,
 2021  2022  2021  2022 
            
Net loss attributable to common stockholders$(7,915,000) $(2,912,000) $(18,072,000) $(11,905,000)
Non-controlling interest 0   (1,000)  (5,000)  2,000 
Preferred stock dividend and accretion 1,196,000   1,255,000   4,784,000   4,902,000 
Interest (income) expense, net 348,000   131,000   1,909,000   1,624,000 
Other (income) expense, net (3,000)  (23,000)  (8,000)  (24,000)
Income tax (benefit) expense 1,906,000   189,000   2,607,000   296,000 
Depreciation and amortization 2,177,000   2,110,000   8,553,000   8,262,000 
Stock-based compensation 1,296,000   1,187,000   4,416,000   4,343,000 
Foreign currency translation 1,054,000   (883,000)  1,043,000   (1,842,000)
Severance related expenses 954,000   335,000   954,000   1,667,000 
            
Adjusted EBITDA$1,013,000  $1,388,000  $6,181,000  $7,325,000 
            


    
 Six Months Ended Six Months Ended
 June 30, December 31,
 2021  2022  2021  2022 
            
Net loss attributable to common stockholders$(5,616,000) $(5,458,000) $(12,456,000) $(6,447,000)
Non-controlling interest (1,000)  2,000   (4,000)  0 
Preferred stock dividend and accretion 2,392,000   2,412,000   2,392,000   2,490,000 
Interest (income) expense, net 1,056,000   991,000   853,000   633,000 
Other (income) expense, net 2,000   (2,000)  (10,000)  (22,000)
Income tax (benefit) expense 540,000   (663,000)  2,067,000   959,000 
Depreciation and amortization 4,230,000   4,133,000   4,323,000   4,129,000 
Stock-based compensation 2,193,000   2,086,000   2,223,000   2,257,000 
Foreign currency translation (631,000)  (1,690,000)  1,674,000   (152,000)
Severance related expenses -   845,000   954,000   822,000 
            
Adjusted EBITDA$4,165,000  $2,656,000  $2,016,000  $4,669,000 
            


 
POWERFLEET, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS) FINANCIAL MEASURES
(Unaudited)
             
 Three Months Ended Year Ended
 December 31, December 31,
 2021  2022  2021  2022 
            
Net loss attributable to common stockholders$(7,915,000) $(2,912,000) $(18,072,000) $(11,905,000)
Preferred stock dividend and accretion 1,196,000   1,255,000   4,784,000   4,902,000 
Other (income) expense, net (2,000)  (23,000)  (7,000)  (24,000)
Intangible assets amortization expense 1,274,000   1,292,000   5,153,000   5,108,000 
Stock-based compensation 1,296,000   1,187,000   4,416,000   4,343,000 
Foreign currency translation 1,054,000   (883,000)  1,043,000   (1,842,000)
Non-cash portion of income tax expense 1,898,000   189,000   2,549,000   244,000 
Severance related expenses 954,000   335,000   954,000   1,667,000 
Non-GAAP net income (loss) $(245,000) $440,000  $820,000  $2,493,000 
            
Non-GAAP net income (loss) - basic$(0.01) $0.01  $0.02  $0.07 
Non-GAAP net income (loss) - diluted$(0.01) $0.01  $0.02  $0.06 
Weighted average common shares outstanding - basic 35,083,000   35,446,000   34,571,000   35,393,000 
Weighted average common shares outstanding - diluted 35,083,000   43,424,000   42,720,000   43,108,000 
                

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, 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 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, including Powerfleet’s most recent annual report on Form 10-K. 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 Investor Contact
Matt Glover
Gateway Group, Inc.
PWFL@gatewayir.com
(949) 574-3860

Powerfleet Media Contact
Heather Smith
hsmith@powerfleet.com
(605) 203-0605


 
POWERFLEET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
 
 Three Months Ended Year Ended
 December 31, December 31,
 2021  2022  2021  2022 
 (Unaudited) (Unaudited) (Unaudited)(Unaudited)
Revenue:           
Products$15,310,000  $13,082,000  $52,981,000  $56,313,000 
Services 19,113,000   20,032,000   73,227,000   78,844,000 
            
  34,423,000   33,114,000   126,208,000   135,157,000 
Cost of revenue:           
Cost of products 12,259,000   9,484,000   39,445,000   42,636,000 
Cost of services 6,761,000   7,270,000   26,580,000   28,350,000 
            
  19,020,000   16,754,000   66,025,000   70,986,000 
            
Gross Profit 15,403,000   16,360,000   60,183,000   64,171,000 
            
Operating expenses:           
    Selling, general and administrative expenses 16,112,000   15,608,000   57,100,000   63,001,000 
    Research and development expenses 2,799,000   1,999,000   11,058,000   8,964,000 
            
  18,911,000   17,607,000   68,158,000   71,965,000 
            
Loss from operations (3,508,000)  (1,247,000)  (7,975,000)  (7,794,000)
Interest income 10,000   23,000   45,000   71,000 
Interest expense (357,000)  (154,000)  (1,954,000)  (1,695,000)
Foreign currency translation of debt (961,000)  (114,000)  (810,000)  2,689,000 
Other (expense) income, net 3,000   23,000   8,000   24,000 
            
Net loss before income taxes (4,813,000)  (1,469,000)  (10,686,000)  (6,705,000)
            
Income tax benefit (expense) (1,906,000)  (189,000)  (2,607,000)  (296,000)
            
Net loss before non-controlling interest (6,719,000)  (1,658,000)  (13,293,000)  (7,001,000)
Non-controlling interest    1,000   5,000   (2,000)
            
Net loss (6,719,000)  (1,657,000)  (13,288,000)  (7,003,000)
Accretion of preferred stock (168,000)  (167,000)  (672,000)  (671,000)
Preferred stock dividend (1,028,000)  (1,088,000)  (4,112,000)  (4,231,000)
            
Net loss attributable to common stockholders$(7,915,000) $(2,912,000) $(18,072,000) $(11,905,000)
            
Net loss per share - basic and diluted$(0.23) $(0.08) $(0.52) $(0.34)
Weighted average common shares outstanding - basic           
and diluted 35,083,000   35,446,000   34,571,000   35,393,000 
            


 
POWERFLEET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
 
 6 Months Ended
 December 31,  June 30, December 31,
 2021  2022  2022 
 (Unaudited) (Unaudited) (Unaudited)
Revenue:        
Products$26,095,000  $29,210,000  $27,103,000 
Services 37,574,000   38,545,000   40,299,000 
         
  63,669,000   67,755,000   67,402,000 
Cost of revenue:        
Cost of products 20,431,000   23,314,000   19,323,000 
Cost of services 13,570,000   13,812,000   14,538,000 
         
  34,001,000   37,126,000   33,861,000 
         
Gross Profit 29,668,000   30,629,000   33,541,000 
         
Operating expenses:        
    Selling, general and administrative expenses 30,071,000   30,729,000   32,272,000 
    Research and development expenses 5,534,000   5,230,000   3,734,000 
         
  35,605,000   35,959,000   36,006,000 
         
Loss from operations (5,937,000)  (5,330,000)  (2,465,000)
Interest income 21,000   28,000   43,000 
Interest expense (873,000)  (1,019,000)  (676,000)
Foreign currency translation of debt (1,222,000)  2,612,000   77,000 
Other (expense) income, net 10,000   2,000   23,000 
         
Net loss before income taxes (8,001,000)  (3,707,000)  (2,998,000)
         
Income tax benefit (expense) (2,067,000)  663,000   (959,000)
         
Net loss before non-controlling interest (10,068,000)  (3,044,000)  (3,957,000)
Non-controlling interest 4,000   (2,000)   
         
Net loss (10,064,000)  (3,046,000)  (3,957,000)
Accretion of preferred stock (336,000)  (336,000)  (335,000)
Preferred stock dividend (2,056,000)  (2,076,000)  (2,155,000)
         
Net loss attributable to common stockholders$(12,456,000) $(5,458,000) $(6,447,000)
         
Net loss per share - basic and diluted$(0.36) $(0.15) $(0.18)
Weighted average common shares outstanding - basic        
and diluted 35,083,000   35,359,000   35,446,000 
         


 
POWERFLEET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
      
 As of
 December 31, 2021 December 31, 2022
    (Unaudited)
ASSETS     
Current assets:     
    Cash and cash equivalents$26,452,000 $17,680,000
    Restricted cash 308,000  309,000
     Accounts receivable, net 32,094,000  32,493,000
    Inventory, net 18,243,000  22,272,000
    Deferred costs - current 1,762,000  762,000
    Prepaid expenses and other current assets 9,051,000  7,709,000
        Total current assets 87,910,000  81,225,000
      
Deferred costs - less current portion 249,000  -
Fixed assets, net 8,988,000  8,108,000
Goodwill 83,487,000  83,487,000
Intangible assets, net 26,122,000  24,049,000
Right of use asset 9,787,000  7,820,000
Severance payable fund 4,359,000  3,760,000
Deferred tax asset 4,262,000  3,225,000
Other assets 4,703,000  5,761,000
    Total assets$229,867,000 $217,435,000
      
LIABILITIES     
Current liabilities:     
    Short-term bank debt and current maturities of long-term debt$6,114,000 $10,312,000
    Accounts payable and accrued expenses 29,015,000  26,598,000
    Deferred revenue - current 6,519,000  6,363,000
    Lease liability - current 2,640,000  2,441,000
       Total current liabilities 44,288,000  45,714,000
      
Long-term debt, less current maturities 18,110,000  11,403,000
Deferred revenue - less current portion 4,428,000  4,390,000
Lease liability - less current portion 7,368,000  5,628,000
Accrued severance payable 4,887,000  4,365,000
Deferred tax liability 5,220,000  4,919,000
Other long-term liabilities 706,000  636,000
      
   Total liabilities 85,007,000  77,055,000
      
MEZZANINE EQUITY     
Convertible redeemable Preferred stock: Series A 52,663,000  57,565,000
      
STOCKHOLDERS' EQUITY -  -
Total Powerfleet, Inc. stockholders' equity 92,111,000  82,737,000
Non-controlling interest 86,000  78,000
Total equity 92,197,000  82,815,000
Total liabilities and stockholders' equity$229,867,000 $217,435,000
      


 
POWERFLEET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW DATA
  
 Year Ended December 31,
 2021  2022 
    (Unaudited)
Cash flows from operating activities (net of net assets acquired):     
Net loss$(13,288,000) $(7,003,000)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:     
Non-controlling interest (5,000)  2,000 
Inventory reserve (22,000)  149,000 
Stock based compensation expense 4,676,000   4,343,000 
Depreciation and amortization 8,553,000   8,262,000 
Right-of-use assets, non-cash lease expense 2,859,000   2,756,000 
Bad debt expense 1,442,000   66,000 
Other non-cash items 305,000   707,000 
Deferred taxes 2,607,000   134,000 
Changes in:     
Operating assets and liabilities (12,146,000)  (8,659,000)
      
Net cash (used in) provided by operating activities (5,019,000)  757,000 
      
Cash flows from investing activities:     
Purchase of investment -   (100,000)
Capital expenditures and capitalized software (3,398,000)  (5,738,000)
      
Net cash (used in) investing activities (3,398,000)  (5,838,000)
      
Cash flows from financing activities:     
Net proceeds from stock offering 26,867,000   - 
Payment of preferred stock dividend (4,112,000)  - 
Repayment of long-term debt (5,709,000)  (5,659,000)
Short-term bank debt, net (270,000)  5,588,000 
Proceeds from exercise of stock options 229,000   - 
Purchase of treasury stock upon vesting of restricted stock (794,000)  (211,000)
      
Net cash (used in) provided by financing activities 16,211,000   (282,000)
      
Effect of foreign exchange rate changes on cash and cash equivalents 531,000   (3,408,000)
Net increase in cash, cash equivalents and restricted cash 8,325,000   (8,771,000)
Cash, cash equivalents and restricted cash - beginning of period 18,435,000   26,760,000 
      
Cash, cash equivalents and restricted cash - end of period$26,760,000  $17,989,000 
      

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.

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) 2021  2022 $%
       
Service Revenue:      
Service Revenue as reported$19,108 $20,164 $1,056 5.5%
Conversion impact of U.S. Dollar  $1,248 $1,248  
Service revenue on a constant currency basis$19,108 $21,412 $2,304 12.1%
       
       
 Three Months Ended Dec 31, Year Over Year Change
($ in Thousands) 2021  2022 $%
       
Product Revenue:      
Product Revenue as reported$15,303 $12,951 ($2,352)(15.4%)
Conversion impact of U.S. Dollar  $145 $145  
Product Revenue revenue on a constant currency basis$15,303 $13,096 ($2,207)-14.4%
       
       
 Three Months Ended Dec 31, Year Over Year Change
($ in Thousands) 2021  2022 $%
       
Total Revenue:      
Total Revenue as reported$34,411 $33,115 ($1,296)(3.8%)
Conversion impact of U.S. Dollar$0 $1,393 $1,393  
Total revenue on a constant currency basis$34,411 $34,508 $97 0.3%


       
 Twelve Months Ended Dec 31, Year Over Year Change
($ in Thousands) 2021  2022 $%
       
Service Revenue:      
Service Revenue as reported$73,203 $78,880 $5,678 7.8%
Conversion impact of U.S. Dollar  $2,493 $2,493  
Service revenue on a constant currency basis$73,203 $81,373 $8,171 11.2%
       
       
 Twelve Months Ended Dec 31, Year Over Year Change
($ in Thousands) 2021  2022 $%
       
Product Revenue:      
Product Revenue as reported$53,000 $56,277 $3,277 6.2%
Conversion impact of U.S. Dollar  $608 $608  
Product Revenue revenue on a constant currency basis$53,000 $56,885 $3,885 7.3%
       
       
 Twelve Months Ended Dec 31, Year Over Year Change
($ in Thousands) 2021  2022 $%
       
Total Revenue:      
Total Revenue as reported$126,202 $135,157 $8,955 7.1%
Conversion impact of U.S. Dollar$0 $3,101 $3,101  
Total revenue on a constant currency basis$126,202 $138,258 $12,056 9.6%
         

 


FAQ

What were Powerfleet's 2022 revenue results for PWFL?

Powerfleet reported total revenue of $135.2 million for 2022, a 7% increase from the previous year.

How did Powerfleet improve its operating cash flow?

Powerfleet improved its operating cash flow by $5.8 million in 2022 primarily through efficiency programs.

What is PWFL's adjusted EBITDA for 2022?

Powerfleet's adjusted EBITDA for 2022 was $7.3 million, reflecting a 19% increase from 2021.

What is the impact of the acquisition of Movingdots on Powerfleet?

The acquisition of Movingdots is expected to expand Powerfleet's global reach and total addressable market.

What challenges did Powerfleet face in 2022?

Despite improvements, Powerfleet faced challenges with a net loss of $11.9 million and a decline in product revenue.

PowerFleet, Inc.

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Software - Infrastructure
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