WOODCLIFF LAKE, N.J., Feb. 25, 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 fourth quarter and full year ended December 31, 2020.

Fourth Quarter and Full Year 2020 Financial Highlights

• Total revenue increased 7% sequentially to $29.4 million.
• Solid gross profit margin of 51.6%, an improvement from 47.4% in Q4 2019.
• High margin, recurring and services revenue increased 4% sequentially to $17.3 million.
• Generated $8.8 million of operating cash for the full year of 2020.
• At quarter end, cash and cash equivalents totaled $18.1 million and $28.9 million of working capital. Pro forma cash and cash equivalent position, including the net proceeds from the underwritten public offering closed on February 1, 2021, was $45.0 million.

Fourth Quarter 2020 and Recent Operational Highlights

• Selected by Panhandle Transportation Group (PTG) to monitor and remotely manage refrigerated trailers and cargo through PowerFleet’s reefer solution, the LV-400.
• Chosen by Nucor Tubular Products to improve safety, compliance, and utilization by using PowerFleet's telematics solutions.
• Deployed hundreds of IoT-enabled defibrillators in Israel, which were installed across the country in telephone booths, lottery stalls and supermarkets as part of a $2 million deployment program.
• Leveraged Pointer’s best-in-class IoT solutions to secure multiple new contracts with companies.
• Signed a deal with McGuire Transportation, a regional dry van trucking company, to upgrade its trailer management solution for its U.S.-based operations.

Management Commentary“The fourth quarter was a solid finish to a very unpredictable 2020,” said PowerFleet CEO Chris Wolfe. “Our continued execution against strategic initiatives, including focus on driving profitable growth, and our leaner cost structure enabled us to deliver 7% sequential topline growth, 4% sequential increase in high margin recurring and services revenue, and improved GAAP and non-GAAP profitability measures for the quarter. These improving financial metrics demonstrate the leverage in our business model and the ongoing benefits from our cost optimization measures, which together helped to produce strong gross margins and $8.8 million in operating cash for 2020.

“From a sales perspective, we finished the year strong with several new customer wins, a solid backlog of installations, and a robust prospect pipeline entering 2021. We remain encouraged by our growing product portfolio, expanded partnership with Jungheinrich as well as notable new wins, including Kautex, Panhandle Transportation Group, Nucor Tubular, and McGuire Transportation.

“Looking ahead in 2021, end market demand for our dry van, container, and cold chain mobility platforms is steadily improving in North America and we are gaining numerous cold chain and IoT pharma customers in Israel. As the global economy recovers and countries reopen, PowerFleet is well positioned to leverage our enhanced scale, strong balance sheet, and expansive international footprint to effectively compete and win global tenders. We believe these factors will enable PowerFleet to capture an increasing share of the growing, multi-billion-dollar global industrial IoT market.”

Fourth Quarter 2020 Financial Results
Total revenue was $29.4 million, compared to $35.1 million in the same year-ago period. The decrease in revenue was related to the reduction in product revenue from Avis and the impact from COVID-19.
Services revenue was $17.3 million (58.8% of total revenue), compared to $18.7 million (53.2% of total revenue) in the same year-ago period. Product revenue was $12.1 million (41.2% of total revenue), compared to $16.5 million (46.8% of total revenue) in the same year-ago period.

Gross profit was $15.2 million (51.6% of total revenue), compared to $16.6 million (47.4% of total revenue) in the same year-ago period. Service gross profit was $11.2 million (65.0% of total service revenue), compared to $11.6 million (62.3% of total service revenue) in the same year-ago period. Product gross profit was $3.9 million (32.5% of total product revenue), compared to $5.0 million (30.4% of total product revenue) in the same year-ago period.

Selling, general and administrative expenses were $13.0 million, compared to $14.7 million in the same year-ago period. Research and development expenses were $2.3 million, compared to $3.0 million in the same year-ago period. The year-over-year decrease in operating expenses reflects the cost savings initiatives implemented in 2020.

Net loss attributable to common stockholders totaled $3.5 million or $(0.12) per basic and diluted share (based on 30.2 million weighted average shares outstanding), compared to net loss attributable to common stockholders of $5.2 million or $(0.18) per basic and diluted share in the same year-ago period (based on 28.6 million weighted average shares outstanding). The net loss attributable to common shareholders in the fourth quarter of 2020 included $2.0 million in non-cash expense related to foreign currency translation of debt outstanding in local currency at the company’s Israeli subsidiary. Due to this non-cash expense as well as additional gains and losses that may not be indicative of PowerFleet’s core operating results, the company is supplementing its GAAP results with certain non-GAAP measures, including non-GAAP net income (loss), non-GAAP net income (loss) per basic and diluted share and adjusted EBITDA.

Non-GAAP net income attributable to common stockholders totaled $2.0 million or $0.07 per basic and $0.05 per diluted share (based on 30.2 million weighted average basic shares outstanding and 38.1 million weighted average diluted shares outstanding), an improvement compared to non-GAAP net loss attributable to common stockholders of $606,000 or $(0.02) per basic and diluted share (based on 28.6 million weighted average basic and diluted shares outstanding) in the same year-ago period (See the section below titled “Non-GAAP Financial Measures” for more information about non-GAAP net income and its reconciliation to GAAP net income/loss).

Adjusted EBITDA, a non-GAAP metric, totaled $3.2 million, compared to adjusted EBITDA of $2.1 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 $18.1 million in cash and cash equivalents. The Company’s working capital position at quarter-end was $28.9 million.

Full Year 2020 Financial Results
Financial results for the full year ended December 31, 2020 include financial results from Pointer Telocation Ltd., which was acquired on October 3, 2019. Financial results for the year ended December 31, 2019 include financial results from I.D. Systems, Inc., and financial results for Pointer Telocation Ltd. for the fourth quarter of 2019.

Total revenue increased to $113.6 million from $81.9 million in 2019. Services revenue was $67.9 million (59.8% of total revenue), compared to $36.5 million (44.6% of total revenue) in 2019. Product revenue was $45.7 million (40.2% of total revenue), compared to $45.4 million (55.4% of total revenue) in 2019.

Gross profit increased to $59.0 million (52.0% of total revenue) from $38.4 million (46.8% of total revenue) in 2019. Services gross profit was $43.6 million (64.2% of services revenue), compared to $22.9 million (62.8% of services revenue) in 2019. Product gross profit was $15.4 million (33.8% of product revenue), compared to $15.4 million (34.0% of product revenue) in 2019.

Selling, general and administrative expenses were $51.9 million, compared to $33.1 million in 2019. Research and development expenses were $10.6 million, compared to $8.5 million in 2019.

Net loss attributable to common stockholders totaled $13.6 million or $(0.46) per basic and diluted share (based on 29.7 million weighted average shares outstanding), compared to net loss of $12.0 million or $(0.59) per basic and diluted share in 2019 (based on 20.5 million weighted average shares outstanding). The net loss attributable to common shareholders in the 2020 included $2.1 million in non-cash expense related to foreign currency translation of debt outstanding in local currency at the company’s Israeli subsidiary. Due to this non-cash expense as well as additional gains and losses that may not be indicative of PowerFleet’s core operating results, the company is supplementing its GAAP results with certain non-GAAP measures including non-GAAP net income (loss), non-GAAP net income (loss) per basic and diluted share and adjusted EBITDA.

Non-GAAP net income attributable to common stockholders totaled $3.7 million or $0.12 per basic and $0.10 per diluted share (based on 29.7 million weighted average basic shares outstanding and 37.1 million weighted average diluted shares outstanding), an improvement compared to non-GAAP net loss attributable to common stockholders of $4.7 million or $(0.23) per basic and diluted share (based on 20.5 million weighted average basic and diluted shares outstanding) in 2019 (See the section below titled “Non-GAAP Financial Measures” for more information about non-GAAP net income and its reconciliation to GAAP net income/loss).

Adjusted EBITDA, a non-GAAP metric, totaled $9.1 million compared to adjusted EBITDA of $3.2 million in 2019 (See the section below titled “Non-GAAP Financial Measures” for more information about adjusted EBITDA and its reconciliation to GAAP net income/loss).

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.