PR Newswire
WOODCLIFF LAKE, N.J., Nov. 12, 2024
Q2 FY25 revenue up 7%, to $77.0 million, and Adjusted EBITDA up 41%, to $14.5 million year-over-year, demonstrating continued strong execution of the immediate business objectives post-MiX combination.
First half FY25 results exceeded expectations with revenue up 9%, to $152.4 million and Adjusted EBITDA up 46% year-over -year, to $28.2 million.
50% of the planned two-year annualized cost synergy target of $27 million secured within 6 months of the close of the MiX combination.
WOODCLIFF LAKE, N.J., Nov. 12, 2024 /PRNewswire/ -- Powerfleet, Inc. (Nasdaq: AIOT) reported its financial results for the second quarter ended September 30, 2024. This marks the second full quarter following the closing of the business combination with MiX Telematics Ltd. with the prior year comparison numbers adjusted to reflect the pro forma financial performance of the combined businesses.
SECOND QUARTER 2025 FINANCIAL HIGHLIGHTS
- Total revenue was $77.0 million, up 7% year-over-year, driven by the continued strength of our Unity safety solutions.
- Product revenue rose by 13% year-over-year to $20.3 million, with adjusted gross margins expanding by 3% sequentially to 35%, exceeding current guidance of +30%.
- Service revenue growth of 5% was in line with annual revenue guidance, reaching $56.7 million, with adjusted gross margins expanding by 1.0% to 63.7% versus the prior year.
- Realized $13.5 million in annual cost synergies within the first six months of the MiX combination, achieving 50% of the two-year $27 million target. Cost synergies are the major driver of reduction in adjusted operating expenses, which declined by over 5% to $36.9 million versus the prior year.
- Adjusted EBITDA, a non-GAAP metric, increased by 41% to $14.5 million versus the prior year, benefiting from the flow through of expanded gross profit and the realization of cost synergies.
FIRST HALF 2025 FINANCIAL HIGHLIGHTS
- Total revenue was $152.4 million, up 9% year-over-year, running ahead of annual guidance and reflecting strong execution in the first six months following the close of the MiX combination.
- Gross profit, after adjusting for the amortization of acquisition-related intangibles and other integration expenses, increased by $6.4 million, or 8% versus the prior year.
- Adjusted EBITDA, a non-GAAP metric, increased by $8.9 million, or 46%, to $28.2 million versus the prior year, driven by increased gross margin from higher sales and the benefits of cost synergies.
MANAGEMENT COMMENTARY
"Just six months into the MiX combination, we're already seeing the integration gain strong momentum, setting the foundation for us to fully capitalize on the additional strategic opportunities offered by the Fleet Complete acquisition," said CEO Steve Towe.
"In the first half of fiscal 2025, we reported revenue of $152 million—up 9% from last year—and a 46% increase in adjusted EBITDA to $28.2 million. We have already secured $13.5 million in annual run-rate cost synergies, achieving 50% of our two-year $27 million target from the MiX combination within 6 months."
"We are energized by the expanded opportunities gained through the Fleet Complete acquisition. Our strategic direction is sharply focused on three key priorities: maximizing efficiency to accelerate adjusted EBITDA growth, driving towards accelerated top-line revenue expansion, and enhancing customer retention. These priorities serve as the foundation for how we align our resources, empower our teams, and execute initiatives for maximum impact."
"On the revenue front, we're driving the adoption of our Unity platform, in-warehouse solutions, and AI camera offerings to meet growing demand across North America, Europe, and beyond. Leveraging the Fleet Complete North American channel relationships, we expect accelerated growth beginning in FY2026, as well as global traction for their mid-market products and differentiated AI camera solutions. These initiatives underscore our strategy to capture high-demand markets while deepening customer engagement and expanding wallet share with highly sticky integrated solutions."
SECOND QUARTER 2025 FINANCIAL RESULTS
Total revenue for the quarter increased by 7% year-over-year to $77.0 million, up from $72.0 million in the same period of the prior year. This growth was largely driven by the continued success of our differentiated safety-centric product solutions, with product revenue, a leading indicator, increasing 13% to $20.3 million.
Service revenue grew by 5% year-over-year to $56.7 million, aligning with our annual guidance and demonstrating the resilience of our broad offerings and global portfolio, which more than offset the previously disclosed expected churn in the legacy MiX customer base.
Combined gross margin of 53.7% reflects a $1.2 million non-cash amortization expense related to acquisition-related intangibles from the MiX combination, along with $0.7 million in inventory write-offs due to integration efforts to streamline product offerings. Excluding these expenses, adjusted gross margin was 56.1%, in both the current and prior year.
Operating expenses for the quarter totaled $40.8 million, including $3.9 million in one-time transaction and restructuring costs, versus the prior year of $41.0 million, which included $2.0 million in one-time costs. On an adjusted basis, total operating expenses were down by 5% annually, reflecting the success of our cost synergy program, which secured $13.5 million in annual savings through the end of September.
We reported a net loss attributable to common stockholders of $1.9 million, or $(0.02) per share, compared to $(0.06) in the prior year. However, after adjusting for one-time expenses and the amortization of acquisition-related intangibles, adjusted earnings per basic share was $0.02 for the current year versus a loss of $(0.01) in the prior period.
Adjusted EBITDA increased by 41% to $14.5 million from $10.3 million in the previous year. This growth was driven by strong top-line performance, resulting in a $2.9 million increase in gross margin after accounting for the impact of the amortization of acquisition-related intangibles plus the flow through benefits of cost synergies.
Excluding $62 million in proceeds from the private placement related to the Fleet Complete acquisition, we ended the quarter with net debt of $119 million. Adjusting for $1.9 million in unsettled transaction costs, pro forma net debt stood at $121 million, versus $110 million at the close of the MiX combination. The $11 million increase in pro forma net debt was primarily driven by an increase in net working capital of $8.2 million that is directly attributable to higher net receivables following strong top-line performance.
FULL-YEAR 2025 FINANCIAL OUTLOOK
We are reaffirming our guidance from the October 2nd fireside chat. Capturing six months of Fleet Complete's financial performance, full-year 2025 revenue is expected to exceed $352.5 million. Adjusted EBITDA is anticipated to exceed $72.5 million, inclusive of an incremental $5 million in secured exit run-rate cost synergies. This guidance reflects Fleet Complete's pre-acquisition accounting treatment, which remains subject to review as we work to conform to US GAAP standards.
INVESTOR CONFERENCE CALL
As previously announced, Powerfleet will hold a conference call on Tuesday, November 12, 2024, at 8:30 a.m. Eastern time (5:30 a.m. Pacific time) to discuss results for the second quarter fiscal 2025 ended September 30, 2024.
Management will make prepared remarks followed by a question-and-answer session.
Date: Tuesday, November 12, 2024
Time: 8:30 a.m. Eastern time (5:30 a.m. Pacific time)
Toll Free: 888-506-0062
International: 973-528-0011
Participant Access Code: 216765
The conference call will be broadcast simultaneously and available for replay here and via the investor section of the company's website at ir.powerfleet.com.
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, adjusted gross margin, adjusted operating expenses, adjusted earnings per share, net debt and net working capital. 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, gross margin, cash flow from operating activities or earnings per share 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 most directly comparable GAAP measures can be found in the financial tables included in this press release.
ABOUT POWERFLEET
Powerfleet (Nasdaq: AIOT; JSE: PWR) is a global leader in the artificial intelligence of things (AIoT) software-as-a-service (SaaS) mobile asset industry. With more than 30 years of experience, Powerfleet unifies business operations through the ingestion, harmonization, and integration of data, irrespective of source, and delivers actionable insights to help companies save lives, time, and money. Powerfleet's ethos transcends our data ecosystem and commitment to innovation; our people-centric approach empowers our customers to realize impactful and sustained business improvement. The company is headquartered in New Jersey, United States, with offices around the globe. Explore more at www.powerfleet.com. Powerfleet has a primary listing on The Nasdaq Global Market and a secondary listing on the Main Board of the Johannesburg Stock Exchange (JSE).
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of federal securities laws. Powerfleet's actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements may be identified by words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions.
These forward-looking statements include, without limitation, our expectations with respect to its beliefs, plans, goals, objectives, expectations, anticipations, assumptions, estimates, intentions and future performance, as well as anticipated financial impacts of our transactions with MiX Telematics and Fleet Complete. Forward-looking statements involve significant known and unknown risks, uncertainties and other factors, which may cause their actual results, performance or achievements to be materially different from the 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. Most of these factors are outside our control and are difficult to predict. The risks and uncertainties referred to above include, but are not limited to, risks related to: (i) future economic and business conditions, including the conflict between Israel and Hamas; (ii) integration of our, MiX Telematics' and Fleet Complete's businesses and the ability to recognize the anticipated synergies and benefits of the transactions with MiX Telematics and Fleet Complete; (iii) the loss of any of our key customers or reduction in the purchase of our products by any such customers; (iv) the failure of the markets for our products to continue to develop; (v) the negative effects of the transactions on the market price of our securities; (vi) our inability to adequately protect our intellectual property; (vii) our inability to manage growth; (viii) the effects of competition from a wide variety of local, regional, national and other providers of wireless solutions; (ix) failure to make timely filings of our periodic reports with the Securities and Exchange Commission ("SEC")and (x) such other factors as are set forth in the periodic reports filed by us with the SEC, including but not limited to those described under the heading "Risk Factors" in our annual reports on Form 10-K, quarterly reports on Form 10-Q and any other filings made with the SEC from time to time, which are available via the SEC's website at http://www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by these forward-looking statements. 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 securities law, we assume no obligation, nor do we intend to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.
Powerfleet Investor Contacts
Carolyn Capaccio and Jody Burfening
LHA Investor Relations
[email protected]
Powerfleet Media Contact
Jonathan Bates
[email protected]
+44 121 717-5360
POWERFLEET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) | |||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Pro Forma | Consolidated | Pro Forma | Consolidated | ||||
Revenues: | |||||||
Products | $ 17,947 | $ 20,293 | $ 32,470 | $ 39,031 | |||
Services | 54,057 | 56,725 | 107,977 | 113,417 | |||
Total revenues | 72,004 | 77,018 | 140,447 | 152,448 | |||
Cost of revenues: | |||||||
Cost of products | 11,454 | 13,929 | 22,385 | 26,680 | |||
Cost of services | 20,169 | 21,746 | 38,550 | 44,777 | |||
Total cost of revenues | 31,623 | 35,675 | 60,935 | 71,457 | |||
Gross profit | 40,381 | 41,343 | 79,512 | 80,991 | |||
Operating expenses: | |||||||
Selling, general and administrative expenses | 36,941 | 37,335 | 71,516 | 92,117 | |||
Research and development expenses | 4,062 | 3,435 | 7,626 | 6,536 | |||
Total operating expenses | 41,003 | 40,770 | 79,142 | 98,653 | |||
(Loss)/profit from operations | (622) | 573 | 370 | (17,662) | |||
Interest income | 221 | 168 | 512 | 472 | |||
Interest expense | (693) | (4,042) | (1,367) | (6,733) | |||
Bargain purchase - Movingdots | — | — | 283 | — | |||
Other income/(expense), net | 385 | 1,674 | (324) | 1,050 | |||
Net loss before income taxes | (709) | (1,627) | (526) | (22,873) | |||
Income tax expense | (2,591) | (256) | (4,427) | (1,309) | |||
Net loss before non-controlling interest | (3,300) | (1,883) | (4,953) | (24,182) | |||
Non-controlling interest | — | (5) | (6) | (18) | |||
Net loss | (3,300) | (1,888) | (4,959) | (24,200) | |||
Accretion of preferred stock | (1,834) | — | (3,606) | — | |||
Preferred stock dividend | (1,128) | — | (2,257) | (25) | |||
Net loss attributable to common stockholders | $ (6,262) | $ (1,888) | $ (10,822) | $ (24,225) | |||
Net loss per share attributable to common stockholders - basic and diluted | $ (0.06) | $ (0.02) | $ (0.10) | $ (0.23) | |||
Weighted average common shares outstanding - basic and diluted | 106,360 | 107,532 | 106,333 | 107,335 | |||
POWERFLEET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) | ||||
March 31, 2024 | September 30, 2024 | |||
Pro Forma Combined | Consolidated | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 51,091 | $ 25,962 | ||
Restricted cash | 86,104 | 63,074 | ||
Accounts receivables, net | 55,008 | 64,819 | ||
Inventory, net | 25,800 | 23,488 | ||
Deferred costs - current | 42 | 13 | ||
Prepaid expenses and other current assets | 17,784 | 17,985 | ||
Total current assets | 235,829 | 195,341 | ||
Fixed assets, net | 48,306 | 51,928 | ||
Goodwill | 121,713 | 300,283 | ||
Intangible assets, net | 40,444 | 167,320 | ||
Right-of-use asset | 11,222 | 9,402 | ||
Severance payable fund | 3,796 | 3,864 | ||
Deferred tax asset | 3,874 | 3,602 | ||
Other assets | 19,090 | 16,595 | ||
Total assets | $ 484,274 | $ 748,335 | ||
LIABILITIES | ||||
Current liabilities: | ||||
Short-term bank debt and current maturities of long-term debt | $ 22,109 | $ 35,339 | ||
Accounts payable and accrued expenses | 60,763 | 66,098 | ||
Deferred revenue - current | 12,236 | 10,447 | ||
Lease liability - current | 2,648 | 2,248 | ||
Total current liabilities | 97,756 | 114,132 | ||
Long-term debt - less current maturities | 113,810 | 111,011 | ||
Deferred revenue - less current portion | 4,892 | 4,674 | ||
Lease liability - less current portion | 8,773 | 7,713 | ||
Accrued severance payable | 4,597 | 4,677 | ||
Deferred tax liability | 18,669 | 52,113 | ||
Other long-term liabilities | 2,980 | 2,905 | ||
Total liabilities | 251,477 | 297,225 | ||
Convertible redeemable preferred stock: Series A | 90,273 | — | ||
STOCKHOLDERS' EQUITY | ||||
Preferred stock | — | — | ||
Common stock | 63,842 | 1,096 | ||
Additional paid-in capital | 200,218 | 641,736 | ||
Accumulated deficit | (78,516) | (178,996) | ||
Accumulated other comprehensive loss | (17,133) | (1,364) | ||
Treasury stock | (25,997) | (11,518) | ||
Total stockholders' equity | 142,414 | 450,954 | ||
Non-controlling interest | 110 | 156 | ||
Total equity | 142,524 | 451,110 | ||
Total liabilities, convertible redeemable preferred stock, and stockholders' equity | $ 484,274 | $ 748,335 | ||
POWERFLEET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | ||||
Six Months Ended September 30, | ||||
2023 | 2024 | |||
Pro Forma | Consolidated | |||
Cash flows from operating activities | ||||
Net loss | $ (4,959) | $ (24,200) | ||
Adjustments to reconcile net loss to cash (used in)/provided by operating activities: | ||||
Non-controlling interest | 6 | 18 | ||
Gain on bargain purchase | (283) | — | ||
Inventory reserve | 650 | 904 | ||
Stock based compensation expense | 2,518 | 7,300 | ||
Depreciation and amortization | 13,577 | 19,399 | ||
Right-of-use assets, non-cash lease expense | 1,242 | 1,515 | ||
Derivative mark-to-market adjustment | — | (2,197) | ||
Bad debts expense | 3,235 | 4,369 | ||
Deferred income taxes | 3,268 | (283) | ||
Shares issued for transaction bonuses | — | 889 | ||
Lease termination and modification losses | — | 184 | ||
Other non-cash items | 2,613 | 1,522 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivables | (9,404) | (12,553) | ||
Inventories | (1,558) | 955 | ||
Prepaid expenses and other current assets | 47 | (3,009) | ||
Deferred costs | (4,105) | (3,619) | ||
Deferred revenue | 222 | (99) | ||
Accounts payable and accrued expenses | 5,453 | (71) | ||
Lease liabilities | (1,247) | (1,856) | ||
Accrued severance payable, net | 91 | 40 | ||
Net cash provided by/(used in) operating activities | 11,366 | (10,792) | ||
Cash flows from investing activities: | ||||
Acquisition, net of cash assumed | — | 27,531 | ||
Proceeds from sale of fixed assets | — | 217 | ||
Capitalized software development costs | (4,964) | (4,676) | ||
Capital expenditures | (9,866) | (10,454) | ||
Deferred consideration paid | (267) | — | ||
Repayment of loan advanced to external parties | — | 294 | ||
Net cash (used in)/provided by investing activities | (15,097) | 12,912 | ||
Cash flows from financing activities: | ||||
Repayment of long-term debt | (2,656) | (978) | ||
Short-term bank debt, net | 7,328 | 9,955 | ||
Purchase of treasury stock upon vesting of restricted stock | (640) | (2,836) | ||
Payment of preferred stock dividend and redemption of preferred stock | (2,257) | (90,298) | ||
Proceeds from private placement, net | — | 61,851 | ||
Proceeds from exercise of stock options, net | 36 | — | ||
Cash paid on dividends to affiliates | (2,673) | (6) | ||
Net cash used in financing activities | (862) | (22,312) | ||
Effect of foreign exchange rate changes on cash and cash equivalents | (1,331) | (436) | ||
Net decrease in cash and cash equivalents, and restricted cash | (5,924) | (20,628) | ||
Cash and cash equivalents, and restricted cash at beginning of the period | 55,746 | 109,664 | ||
Cash and cash equivalents, and restricted cash at end of the period | $ 49,822 | $ 89,036 | ||
Reconciliation of cash, cash equivalents, and restricted cash, beginning of the period | ||||
Cash and cash equivalents | 54,656 | 24,354 | ||
Restricted cash | 1,090 | 85,310 | ||
Cash, cash equivalents, and restricted cash, beginning of the period | $ 55,746 | $ 109,664 | ||
Reconciliation of cash, cash equivalents, and restricted cash, end of the period | ||||
Cash and cash equivalents | 48,757 | 25,962 | ||
Restricted cash | 1,065 | 63,074 | ||
Cash, cash equivalents, and restricted cash, end of the period | $ 49,822 | $ 89,036 | ||
Supplemental disclosure of cash flow information: | ||||
Cash paid for: | ||||
Taxes | $ 1,270 | $ 774 | ||
Interest | $ 875 | $ 6,262 | ||
Noncash investing and financing activities: | ||||
Common stock issued for transaction bonus | $ — | $ 9 | ||
Shares issued in connection with MiX Combination | $ — | $ 362,005 | ||
POWERFLEET, INC. AND SUBSIDIARIES | |||||||
RECONCILIATION OF GAAP TO ADJUSTED EBITDA FINANCIAL MEASURES | |||||||
(In thousands) | |||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Pro Forma | Consolidated | Pro Forma | Consolidated | ||||
Net loss attributable to common stockholders | $ (6,262) | $ (1,888) | $ (10,822) | $ (24,225) | |||
Non-controlling interest | — | 5 | 6 | 18 | |||
Preferred stock dividend and accretion | 2,962 | — | 5,863 | 25 | |||
Interest expense, net | 472 | 3,345 | 1,162 | 6,261 | |||
Income tax expense | 2,591 | 256 | 4,427 | 1,309 | |||
Depreciation and amortization | 7,243 | 9,064 | 13,577 | 19,399 | |||
Stock-based compensation | 1,426 | 1,371 | 2,518 | 7,300 | |||
Foreign currency losses | 74 | 636 | 442 | 745 | |||
Restructuring-related expenses | 149 | 1,069 | 597 | 2,267 | |||
Gain on bargain purchase - Movingdots | — | — | (283) | — | |||
Derivative mark-to-market adjustment | — | (2,197) | — | (2,197) | |||
Net profit on fixed assets | — | — | (4) | — | |||
Contingent consideration remeasurement | (514) | — | (538) | — | |||
Acquisition related expenses | 2,028 | 1,406 | 2,251 | 15,571 | |||
Integration-related costs | — | 1,410 | — | 1,739 | |||
Non-recurring transitional service agreement costs | 121 | — | 121 | — | |||
Adjusted EBITDA | $ 10,290 | $ 14,477 | $ 19,317 | $ 28,212 | |||
POWERFLEET, INC. AND SUBSIDIARIES | |||||||
RECONCILIATION OF GAAP TO NON-GAAP NET LOSS FINANCIAL MEASURES | |||||||
(In thousands) | |||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Pro Forma | Consolidated | Pro Forma | Consolidated | ||||
Net loss | $ (3,300) | $ (1,888) | $ (4,959) | $ (24,200) | |||
Incremental intangible assets amortization expense as a result | — | 1,163 | — | 4,158 | |||
Stock-based compensation (non-recurring/accelerated cost) | — | — | — | 4,693 | |||
Foreign currency losses | 74 | 636 | 442 | 745 | |||
Income tax effect of net foreign exchange gains/(losses) | 109 | (1,109) | 534 | (1,856) | |||
Restructuring related expenses | 149 | 1,069 | 597 | 2,267 | |||
Income tax effect of restructuring costs | (2) | (21) | (7) | (124) | |||
Acquisition-related expenses | 2,028 | 1,406 | 2,251 | 15,571 | |||
Integration-related expenses | — | 1,410 | — | 1,739 | |||
Non-recurring transitional service agreement costs | 121 | — | 121 | — | |||
Contingent consideration remeasurement | (514) | — | (538) | — | |||
Income tax effect of contingent consideration remeasurement | (5) | — | — | — | |||
Non-GAAP net (loss)/profit | $ (1,340) | $ 2,666 | $ (1,559) | $ 2,993 | |||
Weighted average shares outstanding | 106,360 | 107,532 | 106,333 | 107,335 | |||
Non-GAAP net (loss)/profit per share - basic | $ (0.01) | $ 0.02 | $ (0.01) | $ 0.03 | |||
POWERFLEET, INC. AND SUBSIDIARIES | |||||||
ADJUSTED GROSS PROFIT MARGINS | |||||||
(In thousands) | |||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Pro Forma | Consolidated | Pro Forma | Consolidated | ||||
Revenues: | |||||||
Products | $ 17,947 | $ 20,293 | $ 32,470 | $ 39,031 | |||
Services | 54,057 | 56,725 | 107,977 | 113,417 | |||
Total revenues | 72,004 | 77,018 | 140,447 | 152,448 | |||
Cost of revenues: | |||||||
Cost of products | 11,454 | 13,929 | 22,385 | 26,680 | |||
Cost of services | 20,169 | 21,746 | 38,550 | 44,777 | |||
Total cost of revenues | 31,623 | 35,675 | 60,935 | 71,457 | |||
Gross profit | $ 40,381 | $ 41,343 | $ 79,512 | $ 80,991 | |||
Product margin | 36.2 % | 31.4 % | 31.1 % | 31.6 % | |||
Service margin | 62.7 % | 61.7 % | 64.3 % | 60.5 % | |||
Total gross profit margin | 56.1 % | 53.7 % | 56.6 % | 53.1 % | |||
Incremental intangible assets amortization expense | $ — | $ 1,163 | $ — | $ 4,158 | |||
Inventory rationalization | $ — | $ 734 | $ — | $ 734 | |||
Product margin | 36.2 % | 35.0 % | 31.1 % | 33.5 % | |||
Service margin | 62.7 % | 63.7 % | 64.3 % | 64.2 % | |||
Adjusted total gross profit margin | 56.1 % | 56.1 % | 56.6 % | 56.3 % | |||
POWERFLEET, INC. AND SUBSIDIARIES | |||||||
ADJUSTED OPERATING EXPENSES | |||||||
(In thousands) | |||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||
2023 | 2024 | 2023 | 2024 | ||||
Pro Forma | Consolidated | Pro Forma | Consolidated | ||||
Total operating expenses | $ 41,003 | $ 40,770 | $ 79,142 | $ 98,653 | |||
Adjusted for once-off costs | |||||||
Acquisition-related expenses | 2,028 | 1,406 | 2,251 | 15,571 | |||
Integration-related costs | — | 1,410 | — | 1,739 | |||
Stock-based compensation (non-recurring/accelerated cost) | — | — | — | 4,693 | |||
Restructuring-related expenses | 156 | 1,069 | 627 | 2,267 | |||
2,184 | 3,885 | 2,878 | 24,270 | ||||
Adjusted operating expenses | $ 38,819 | $ 36,885 | $ 76,264 | $ 74,383 | |||
POWERFLEET, INC. AND MiX TELEMATICS CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) | |||||||
Three Months Ended September 30, 2023 | |||||||
Powerfleet Inc. | MiX Telematics | Adjustments to | Pro Forma | ||||
Revenues: | |||||||
Products | $ 13,233 | $ 5,324 | $ (610) | $ 17,947 | |||
Services | 21,010 | 32,437 | 610 | 54,057 | |||
Total revenues | 34,243 | 37,761 | — | 72,004 | |||
Cost of revenues: | |||||||
Cost of products | 8,842 | 3,269 | (657) | 11,454 | |||
Cost of services | 8,294 | 11,218 | 657 | 20,169 | |||
Total cost of revenues | 17,136 | 14,487 | — | 31,623 | |||
Gross profit | 17,107 | 23,274 | — | 40,381 | |||
Operating expenses: | |||||||
Selling, general and administrative expenses | 17,778 | 19,163 | — | 36,941 | |||
Research and development expenses | 2,426 | 1,636 | — | 4,062 | |||
Total operating expenses | 20,204 | 20,799 | — | 41,003 | |||
(Loss)/income from operations | (3,097) | 2,475 | — | (622) | |||
Interest income | 23 | 198 | — | 221 | |||
Interest expense | (154) | (539) | — | (693) | |||
Bargain purchase - Movingdots | — | — | — | — | |||
Other (expense)/income, net | (25) | 410 | — | 385 | |||
Net (loss)/income before income taxes | (3,253) | 2,544 | — | (709) | |||
Income tax expense | (295) | (2,296) | — | (2,591) | |||
Net (loss)/income before non-controlling interest | (3,548) | 248 | — | (3,300) | |||
Non-controlling interest | — | — | — | — | |||
Net (loss)/income | (3,548) | 248 | — | (3,300) | |||
Accretion of preferred stock | (1,834) | — | — | (1,834) | |||
Preferred stock dividend | (1,128) | — | — | (1,128) | |||
Net (loss)/income attributable to common stockholders | $ (6,510) | $ 248 | $ — | $ (6,262) | |||
Net (loss)/income per share attributable to common | $ (0.18) | $ 0.004 | $ (0.06) | ||||
Weighted average common shares outstanding - basic | 35,653 | 70,707 | 106,360 | ||||
POWERFLEET, INC. AND MiX TELEMATICS CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) | |||||||
Six Months Ended September 30, 2023 | |||||||
Powerfleet Inc. | MiX Telematics | Adjustments to | Pro Forma | ||||
Revenues: | |||||||
Products | $ 24,317 | $ 9,464 | $ (1,311) | $ 32,470 | |||
Services | 42,018 | 64,648 | 1,311 | 107,977 | |||
Total revenues | 66,335 | 74,112 | — | 140,447 | |||
Cost of revenues: | |||||||
Cost of products | 17,392 | 6,294 | (1,301) | 22,385 | |||
Cost of services | 15,818 | 21,431 | 1,301 | 38,550 | |||
Total cost of revenues | 33,210 | 27,725 | — | 60,935 | |||
Gross profit | 33,125 | 46,387 | — | 79,512 | |||
Operating expenses: | |||||||
Selling, general and administrative expenses | 34,976 | 36,540 | — | 71,516 | |||
Research and development expenses | 4,646 | 2,980 | — | 7,626 | |||
Total operating expenses | 39,622 | 39,520 | 79,142 | 79,142 | |||
(Loss)/income from operations | (6,497) | 6,867 | — | 370 | |||
Interest income | 45 | 467 | — | 512 | |||
Interest expense | (327) | (1,040) | — | (1,367) | |||
Bargain purchase - Movingdots | 283 | — | — | 283 | |||
Other expense, net | (25) | (299) | — | (324) | |||
Net (loss)/income before income taxes | (6,521) | 5,995 | — | (526) | |||
Income tax expense | (289) | (4,138) | — | (4,427) | |||
Net (loss)/income before non-controlling interest | (6,810) | 1,857 | — | (4,953) | |||
Non-controlling interest | (6) | — | — | (6) | |||
Net (loss)/income | (6,816) | 1,857 | — | (4,959) | |||
Accretion of preferred stock | (3,606) | — | — | (3,606) | |||
Preferred stock dividend | (2,257) | — | — | (2,257) | |||
Net (loss)/income attributable to common stockholders | $ (12,679) | $ 1,857 | $ — | $ (10,822) | |||
Net (loss)/income per share attributable to common | $ (0.36) | $ 0.03 | $ (0.10) | ||||
Weighted average common shares outstanding - basic | 35,629 | 70,704 | 106,333 | ||||
POWERFLEET, INC. AND MiX TELEMATICS CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) | |||||
March 31, 2024 | |||||
Powerfleet Inc. | MiX Telematics | Pro Forma | |||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ 24,354 | $ 26,737 | $ 51,091 | ||
Restricted cash | 85,310 | 794 | 86,104 | ||
Accounts receivables, net | 30,333 | 24,675 | 55,008 | ||
Inventory, net | 21,658 | 4,142 | 25,800 | ||
Deferred costs - current | 42 | — | 42 | ||
Prepaid expenses and other current assets | 8,091 | 9,693 | 17,784 | ||
Total current assets | 169,788 | 66,041 | 235,829 | ||
Fixed assets, net | 12,719 | 35,587 | 48,306 | ||
Goodwill | 83,487 | 38,226 | 121,713 | ||
Intangible assets, net | 19,652 | 20,792 | 40,444 | ||
Right-of-use asset | 7,428 | 3,794 | 11,222 | ||
Severance payable fund | 3,796 | — | 3,796 | ||
Deferred tax asset | 2,781 | 1,093 | 3,874 | ||
Other assets | 9,029 | 10,061 | 19,090 | ||
Total assets | $ 308,680 | $ 175,594 | $ 484,274 | ||
LIABILITIES | |||||
Current liabilities: | |||||
Short-term bank debt and current maturities of long-term debt | $ 1,951 | $ 20,158 | $ 22,109 | ||
Accounts payable and accrued expenses | 34,008 | 26,755 | 60,763 | ||
Deferred revenue - current | 5,842 | 6,394 | 12,236 | ||
Lease liability - current | 1,789 | 859 | 2,648 | ||
Total current liabilities | 43,590 | 54,166 | 97,756 | ||
Long-term debt - less current maturities | 113,810 | — | 113,810 | ||
Deferred revenue - less current portion | 4,892 | — | 4,892 | ||
Lease liability - less current portion | 5,921 | 2,852 | 8,773 | ||
Accrued severance payable | 4,597 | — | 4,597 | ||
Deferred tax liability | 4,465 | 14,204 | 18,669 | ||
Other long-term liabilities | 2,496 | 484 | 2,980 | ||
Total liabilities | 179,771 | 71,706 | 251,477 | ||
Convertible redeemable preferred stock: Series A | 90,273 | — | 90,273 | ||
STOCKHOLDERS' EQUITY | |||||
Preferred stock | — | — | — | ||
Common stock | 387 | 63,455 | 63,842 | ||
Additional paid-in capital | 202,607 | (2,389) | 200,218 | ||
Accumulated deficit | (154,796) | 76,280 | (78,516) | ||
Accumulated other comprehensive loss | (985) | (16,148) | (17,133) | ||
Treasury stock | (8,682) | (17,315) | (25,997) | ||
Total stockholders' equity | 38,531 | 103,883 | 142,414 | ||
Non-controlling interest | 105 | 5 | 110 | ||
Total equity | 38,636 | 103,888 | 142,524 | ||
Total liabilities, convertible redeemable preferred | $ 308,680 | $ 175,594 | $ 484,274 | ||
POWERFLEET, INC. AND MiX TELEMATICS CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||
Six Months Ended September 30, 2023 | |||||
Powerfleet Inc. | MiX Telematics | Pro Forma | |||
Cash flows from operating activities | |||||
Net (loss)/income | $ (6,816) | $ 1,857 | $ (4,959) | ||
Adjustments to reconcile net (loss)/income to cash | |||||
Non-controlling interest | 6 | — | 6 | ||
Gain on bargain purchase | (283) | — | (283) | ||
Inventory reserve | 617 | 33 | 650 | ||
Stock based compensation expense | 1,953 | 565 | 2,518 | ||
Depreciation and amortization | 4,807 | 8,770 | 13,577 | ||
Right-of-use assets, non-cash lease expense | 1,242 | — | 1,242 | ||
Bad debts expense | 933 | 2,302 | 3,235 | ||
Deferred income taxes | 285 | 2,983 | 3,268 | ||
Other non-cash items | 126 | 2,487 | 2,613 | ||
Changes in operating assets and liabilities: | |||||
Accounts receivables | (3,866) | (5,538) | (9,404) | ||
Inventories | (2,023) | 465 | (1,558) | ||
Prepaid expenses and other current assets | 51 | (4) | 47 | ||
Deferred costs | 332 | (4,437) | (4,105) | ||
Deferred revenue | 222 | — | 222 | ||
Accounts payable and accrued expenses | 1,498 | 3,955 | 5,453 | ||
Lease liabilities | (1,247) | — | (1,247) | ||
Accrued severance payable, net | 91 | — | 91 | ||
Net cash (used in)/provided by operating activities | (2,072) | 13,438 | 11,366 | ||
Cash flows from investing activities: | |||||
Capitalized software development costs | (2,047) | (2,917) | (4,964) | ||
Capital expenditures | (1,441) | (8,425) | (9,866) | ||
Deferred consideration paid | — | (267) | (267) | ||
Net cash used in investing activities | (3,488) | (11,609) | (15,097) | ||
Cash flows from financing activities: | |||||
Repayment of long-term debt | (2,656) | — | (2,656) | ||
Short-term bank debt, net | 4,996 | 2,332 | 7,328 | ||
Purchase of treasury stock upon vesting of restricted stock | (94) | (546) | (640) | ||
Payment of preferred stock dividend and redemption of preferred stock | (2,257) | — | (2,257) | ||
Proceeds from exercise of stock options, net | 36 | — | 36 | ||
Cash paid on dividends to affiliates | — | (2,673) | (2,673) | ||
Net cash from/(used in) financing activities | 25 | (887) | (862) | ||
Effect of foreign exchange rate changes on cash and cash equivalents | 53 | (1,384) | (1,331) | ||
Net decrease in cash and cash equivalents, and restricted cash | (5,482) | (442) | (5,924) | ||
Cash and cash equivalents, and restricted cash at beginning of the period | 25,089 | 30,657 | 55,746 | ||
Cash and cash equivalents, and restricted cash at end of the period | $ 19,607 | $ 30,215 | $ 49,822 | ||
Reconciliation of cash, cash equivalents, and restricted | |||||
Cash and cash equivalents | 24,780 | 29,876 | 54,656 | ||
Restricted cash | 309 | 781 | 1,090 | ||
Cash, cash equivalents, and restricted cash, beginning of the period | $ 25,089 | $ 30,657 | $ 55,746 | ||
Reconciliation of cash, cash equivalents, and restricted | |||||
Cash and cash equivalents | 19,297 | 29,460 | 48,757 | ||
Restricted cash | 310 | 755 | 1,065 | ||
Cash, cash equivalents, and restricted cash, end of the period | $ 19,607 | $ 30,215 | $ 49,822 | ||
Supplemental disclosure of cash flow information: | |||||
Cash paid for: | |||||
Taxes | $ 115 | $ 1,155 | $ 1,270 | ||
Interest | $ 538 | $ 337 | $ 875 | ||
POWERFLEET, INC. AND MiX TELEMATICS | |||||
RECONCILIATION OF GAAP TO ADJUSTED EBITDA FINANCIAL MEASURES | |||||
(In thousands) | |||||
Three Months Ended September 30, 2023 | |||||
Powerfleet Inc. | MiX Telematics | Pro Forma | |||
Net (loss)/profit attributable to common stockholders | $ (6,510) | $ 248 | $ (6,262) | ||
Non-controlling interest | — | — | — | ||
Preferred stock dividend and accretion | 2,962 | — | 2,962 | ||
Interest expense, net | 131 | 341 | 472 | ||
Income tax expense | 295 | 2,296 | 2,591 | ||
Depreciation and amortization | 2,485 | 4,758 | 7,243 | ||
Stock-based compensation | 1,101 | 325 | 1,426 | ||
Foreign currency (gains)/losses | (49) | 123 | 74 | ||
Restructuring-related expenses | 142 | 7 | 149 | ||
Contingent consideration remeasurement | — | (514) | (514) | ||
Acquisition related expenses | 1,232 | 796 | 2,028 | ||
Non-recurring transitional service agreement costs | — | 121 | 121 | ||
Adjusted EBITDA | $ 1,789 | $ 8,501 | $ 10,290 | ||
POWERFLEET, INC. AND MiX TELEMATICS | |||||
RECONCILIATION OF GAAP TO ADJUSTED EBITDA FINANCIAL MEASURES | |||||
(In thousands) | |||||
Six Months Ended September 30, 2023 | |||||
Powerfleet Inc. | MiX Telematics | Pro Forma | |||
Net (loss)/profit attributable to common stockholders | $ (12,679) | $ 1,857 | $ (10,822) | ||
Non-controlling interest | 6 | — | 6 | ||
Preferred stock dividend and accretion | 5,863 | — | 5,863 | ||
Interest expense, net | 588 | 574 | 1,162 | ||
Income tax expense | 289 | 4,138 | 4,427 | ||
Depreciation and amortization | 4,807 | 8,770 | 13,577 | ||
Stock-based compensation | 1,953 | 565 | 2,518 | ||
Foreign currency translation | (411) | 853 | 442 | ||
Restructuring related expenses | 567 | 30 | 597 | ||
Gain on Bargain purchase - Movingdots | (283) | — | (283) | ||
Net profit on fixed assets | — | (4) | (4) | ||
Contingent consideration remeasurement | — | (538) | (538) | ||
Acquisition related expenses | 1,455 | 796 | 2,251 | ||
Non-recurring transitional service agreement costs | — | 121 | 121 | ||
Adjusted EBITDA | $ 2,155 | $ 17,162 | $ 19,317 | ||
POWERFLEET, INC. AND MiX TELEMATICS | |||||
RECONCILIATION OF GAAP TO NON-GAAP NET (LOSS)/INCOME FINANCIAL MEASURES | |||||
(In thousands) | |||||
Three Months Ended September 30, 2023 | |||||
Powerfleet Inc. | MiX Telematics | Pro Forma | |||
Net (loss)/income | $ (3,548) | $ 248 | $ (3,300) | ||
Foreign currency (gains)/losses | (49) | 123 | 74 | ||
Income tax effect of net foreign exchange gains/(losses) | — | 109 | 109 | ||
Restructuring related expenses | 142 | 7 | 149 | ||
Income tax effect of restructuring costs | — | (2) | (2) | ||
Acquisition related expenses | 1,232 | 796 | 2,028 | ||
Non-recurring transitional service agreement costs | — | 121 | 121 | ||
Contingent consideration remeasurement | — | (514) | (514) | ||
Income tax effect of contingent consideration remeasurement | — | (5) | (5) | ||
Non-GAAP net (loss)/income | $ (2,223) | $ 883 | $ (1,340) | ||
Weighted average shares outstanding | 35,653 | 70,707 | 106,360 | ||
Non-GAAP net (loss)/income per share - basic | $ (0.06) | $ 0.01 | $ (0.01) | ||
POWERFLEET, INC. AND MiX TELEMATICS | |||||
RECONCILIATION OF GAAP TO NON-GAAP NET (LOSS)/INCOME FINANCIAL MEASURES | |||||
(In thousands) | |||||
Six Months Ended September 30, 2023 | |||||
Powerfleet Inc. | MiX Telematics | Pro Forma | |||
Net (loss)/income | $ (6,816) | $ 1,857 | $ (4,959) | ||
Foreign currency (gains)/losses | (411) | 853 | 442 | ||
Income tax effect of net foreign exchange gains | — | 534 | 534 | ||
Restructuring related expenses | 567 | 30 | 597 | ||
Income tax effect of restructuring costs | — | (7) | (7) | ||
Acquisition related expenses | 1,455 | 796 | 2,251 | ||
Non-recurring transitional service agreement costs | — | 121 | 121 | ||
Contingent consideration remeasurement | — | (538) | (538) | ||
Non-GAAP net (loss)/income | $ (5,205) | $ 3,646 | $ (1,559) | ||
Weighted average shares outstanding | 35,629 | 70,704 | 106,333 | ||
Non-GAAP net (loss)/income per share - basic | $ (0.15) | $ 0.05 | $ (0.01) | ||
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SOURCE Powerfleet
