8-K
Powerfleet, Inc. (AIOT)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM8-K
CURRENTREPORT
PURSUANTTO SECTION 13 OR 15(d) OF THE
SECURITIESEXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 12, 2020
POWERFLEET,INC.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-39080 | 83-4366463 |
|---|---|---|
| (State<br> or Other Jurisdiction | (Commission | (IRS<br> Employer |
| of<br>Incorporation) | File<br> Number) | Identification<br> No.) |
| 123<br> Tice Boulevard, Woodcliff Lake, New Jersey | 07677 | |
| --- | --- | |
| (Address<br> of Principal Executive Offices) | (Zip<br> Code) |
Registrant’s telephone number, including area code (201) 996-9000
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| [ ] | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title<br> of each class | Trading<br> Symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| Common<br> Stock, par value $0.01 per share | PWFL | The<br> Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item2.02. Results of Operations and Financial Condition.
On March 12, 2020, PowerFleet, Inc. (the “Registrant”) issued a press release regarding financial results for the fiscal quarter and fiscal year ended December 31, 2019. A copy of the press release is being furnished as Exhibit 99.1 to this report.
The information in this report is being furnished pursuant to Item 2.02 of Form 8-K. In accordance with General Instruction B.2. of Form 8-K, the information in this report, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such a filing.
Forward-Looking Statements
This report, including Exhibit 99.1 furnished herewith, contains forward looking statements within the meaning of federal securities laws. Forward-looking statements include statements with respect to the Registrant’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 the Registrant’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 Telocation Ltd. (“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 the Registrant’s products to continue to develop, the possibility that the Registrant may not be able to integrate successfully the business, operations and employees of I.D. Systems, Inc. (“I.D. Systems”) and Pointer, the inability to protect the Registrant’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 the Registrant’s, I.D. Systems’ and Pointer’s filings with the Securities and Exchange Commission, including I.D. Systems’ annual report on Form 10-K for the year ended December 31, 2018, Pointer’s annual report on Form 20-F for the year ended December 31, 2018 and the Registrant’s registration statement on Form S-4 filed with the Securities and Exchange Commission on May 24, 2019, as amended on July 1, 2019 and July 23, 2019. These risks could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Registrant. Unless otherwise required by applicable law, the Registrant assumes no obligation to update any forward-looking statements, and expressly disclaims any obligation to do so, whether as a result of new information, future events or otherwise.
Item9.01. Financial Statements and Exhibits.
| (d) | Exhibits |
|---|
As described above, the following exhibit is furnished as part of this report:
Exhibit 99.1 – Press release, dated March 12, 2020.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| POWERFLEET, INC. | |
|---|---|
| By: | /s/ Ned Mavrommatis |
| Name: | Ned Mavrommatis |
| Title: | Chief Financial<br> Officer |
Date: March 12, 2020
EXHIBIT INDEX
| Exhibit<br> Number | Description |
|---|---|
| 99.1 | Press release, dated March 12, 2020 |
Exhibit99.1
PowerFleet Reports Fourth Quarter and Full Year 2019 Financial Results
QuarterlyGAAP Revenue Totaled Record $35.1M, Up 17% Year-over-Year on a Pro Forma Basis
Woodcliff Lake, NJ — March 12, 2020 — 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, 2019.
ManagementCommentary
“The fourth quarter was a strong finish to a transformational year for PowerFleet,” said CEO Chris Wolfe. “As our results for the quarter demonstrated, we are beginning to recognize the material financial benefits as well as operational efficiencies and deal flow as a larger organization. This was highlighted by the record $35.1 million in total revenue, which was up 17% year-over-year on a pro forma basis, driven by solid contribution in high-margin recurring solutions and services revenue. We ended the quarter with approximately 550,000 mobile subscription units on our platform, putting us on track to meet our target of at least 600,000 mobile subscriber units by the end of 2020.
“Our powerful portfolio of solutions spanning the industrial, logistics and commercial vehicle industries continues to differentiate PowerFleet in the market. The best companies in the world continue to choose our mobility platforms and full end-to-end solutions to power their asset and fleet monitoring and management needs, and this was again validated in the fourth quarter. We secured several major new wins with leading transportation companies in our logistics business and had similar success in our industrial business, highlighted by multiple wins through our dealer channel. Our sales through Jungheinrich continue to build momentum, as we are seeing an increasing volume of orders secured in Europe. In our connected car business, we continued to execute on our program with Avis Budget Group and are in the process of bringing Pointer’s products into the U.S. to pursue the class 1 through class 5 fleet management market.
“Along that line, the integration of Pointer is proceeding rapidly, with several milestones achieved in the first six months post-close, including the consolidation of our strategic and tactical plans and product roadmaps. The alignment of our sales and go-to-market motions are yielding early success, validating one of the core theses for the business combination. In addition to our growth and cross-selling initiatives, we’ve already eliminated duplicative corporate costs and have identified more than $3 million in supply chain savings that we expect to realize in 2020 as well as incremental cost savings expected in 2021 related to the platform consolidation currently underway.
“Today, we are a much stronger business with greater scale and resources, an industry-leading end-to-end IoT platform, significant cross-selling opportunities, and robust secular tailwinds working in our favor. Longer term, our vision of creating PowerFleet as a global IoT software and solutions provider is progressing, which we believe will generate significant shareholder value through global operational and financial scale, sustainable profitability and cash flow generation.”
FourthQuarter 2019 Financial Results
Financial results for the quarter ended December 31, 2019 include consolidated results for both I.D. Systems, Inc. and Pointer Telocation Ltd., which was acquired on October 3, 2019. Financial results for the quarter ended December 31, 2018 include only financial results from I.D. Systems, Inc. prior to its acquisition of Pointer Telocation Ltd.
Total revenue increased to $35.1 million from $11.5 million in the same year-ago period. Services revenue was $18.7 million (53.2% of total revenue), compared to $4.3 million (37.6% of total revenue) in the same year-ago period. Product revenue was $16.5 million (46.8% of total revenue), compared to $7.2 million (62.4% of total revenue) in the same year-ago period.
Gross profit increased to $16.6 million (47.4% of total revenue) from $6.1 million (53.3% of total revenue) in the same year-ago period. Service gross profit was $11.6 million (62.3% of total service revenue), compared to $3.1 million (70.7% of total service revenue) in the same year-ago period. Product gross profit was $5.0 million (30.4% of total product revenue), compared to $3.1 million (42.8% of total product revenue) in the same year-ago period.
Selling, general and administrative expenses were $12.7 million, compared to $6.2 million in the same year-ago period. Research and development expenses were $3.0 million, compared to $1.9 million in the same year-ago period. Depreciation and amortization expenses were $2.0 million, compared to $387,000 in the same year-ago period. Severance expenses related to the Pointer acquisition were $1.7 million, compared to no severance expenses in the same year-ago period. Acquisition-related expenses were $462,000, compared to $428,000 in the same year-ago period.
Net loss attributable to common stockholders totaled $5.2 million or $(0.18) per basic and diluted share (based on 28.6 million weighted average shares outstanding), compared to net loss of $2.8 million or $(0.16) per basic and diluted share in the same year-ago period (based on 17.6 million weighted average shares outstanding).
Adjusted EBITDA, a non-GAAP metric, totaled $2.1 million or $0.06 per diluted share (based on 35.5 million weighted average shares outstanding), compared to adjusted EBITDA loss of $595,000 or $(0.03) per basic and diluted share (based on 17.6 million weighted average shares outstanding) 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 $16.4 million in cash and cash equivalents. The company’s working capital position at quarter-end was $29.3 million.
Full Year 2019 Financial Results
Financial results for the full year ended December 31, 2019 include financial results from Pointer Telocation Ltd., which was acquired on October 3, 2019. Financial results for the year ended December 31, 2018 include only financial results from I.D. Systems, Inc. prior to its acquisition of Pointer Telocation Ltd.
Total revenue increased to $81.9 million from $53.1 million in 2018. Services revenue was $36.5 million (44.6% of total revenue), compared to $16.2 million (30.5% of total revenue) in 2018. Product revenue was $45.4 million (55.4% of total revenue), compared to $36.9 million (69.5% of total revenue) in 2018.
Gross profit increased to $38.4 million (46.8% of total revenue) from $25.8 million (48.6% of total revenue) in 2018. Services gross profit was $22.9 million (62.8% of services revenue), compared to $11.5 million (71.4% of services revenue) in 2018. Product gross profit was $15.4 million (34.0% of product revenue), compared to $14.3 million (38.6% of product revenue) in 2018.
Selling, general and administrative expenses were $29.8 million, compared to $22.2 million in 2018. Research and development expenses were $8.5 million, compared to $6.9 million in 2018. Depreciation and amortization expenses were $3.3 million, compared to $1.6 million in 2018. Severance expenses related to the Pointer acquisition were $1.7 million, compared to no severance expenses in 2018. Acquisition-related expenses were $5.1 million, compared to $867,000 in 2018.
Net loss attributable to common stockholders totaled $12.0 million or $(0.59) per basic and diluted share (based on $20.5 million weighted average shares outstanding), compared to net loss of $5.8 million or $(0.34) per basic and diluted share in 2018 (based on 17.2 million weighted average shares outstanding).
Adjusted EBITDA, a non-GAAP metric, totaled $3.2 million or $0.14 per diluted share (based on 22.3 million weighted average shares outstanding), compared to adjusted EBITDA loss of $23,000 or $0.00 per basic and diluted share (based on 17.2 million weighted average shares outstanding) in 2018 (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 12, 2020) at 8:30 a.m. Eastern time (5:30 a.m. Pacific time).
PowerFleet CEO Chris Wolfe and CFO Ned Mavrommatis will host the call, followed by a question and answer session where sell-side analysts and major institutional shareholders can ask questions.
U.S. dial-in: (877) 307-1379
International dial-in: (443) 877-4066
Passcode: 3989798
The conference call will be broadcast simultaneously and available for replay in 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 adjusted EBITDA and adjusted EBITDA per basic and diluted share. 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
Reconciliationof GAAP to Adjusted EBITDA Financial Measures
(Unaudited)
| Three Months Ended<br> <br>December 31, | Year Ended<br> <br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2018 | 2019 | |||||||||
| Net<br> loss attributable to common stockholders | $ | (2,809,000 | ) | $ | (5,169,000 | ) | $ | (5,812,000 | ) | $ | (12,047,000 | ) |
| Minority<br> interest | - | (18,000 | ) | (18,000 | ) | |||||||
| Dividends<br> on preferred stock | - | 1,084,000 | 1,084,000 | |||||||||
| Interest<br> (income) expense, net | (22,000 | ) | 877,000 | (89,000 | ) | 823,000 | ||||||
| Other<br> (income) expense, net | 12,000 | 4,000 | 165,000 | 50,000 | ||||||||
| Income<br> tax (benefit) expense | - | (75,000 | ) | - | (75,000 | ) | ||||||
| Depreciation<br> and amortization | 387,000 | 2,042,000 | 1,561,000 | 3,341,000 | ||||||||
| Stock-based<br> compensation | 505,000 | 801,000 | 2,163,000 | 2,533,000 | ||||||||
| Foreign<br> currency translation losses | 68,000 | 179,000 | 214,000 | 467,000 | ||||||||
| Litigation<br> expenses and settlement | 836,000 | - | 968,000 | - | ||||||||
| Acquisition-related<br> fees | 428,000 | 462,000 | 807,000 | 5,135,000 | ||||||||
| Severance<br> expenses related to the acquisition | - | 1,724,000 | - | 1,724,000 | ||||||||
| Impact<br> of the fair value mark-up of acquired inventory | - | 211,000 | 211,000 | |||||||||
| Adjusted<br> EBITDA | $ | (595,000 | ) | $ | 2,122,000 | $ | (23,000 | ) | $ | 3,228,000 | ||
| Non-GAAP<br> adjusted EBITDA per share - basic | $ | (0.03 | ) | $ | 0.07 | $ | - | $ | 0.16 | |||
| Non-GAAP<br> adjusted EBITDA per share - diluted | $ | (0.03 | ) | $ | 0.06 | $ | - | $ | 0.14 | |||
| Weighted<br> average common shares outstanding - basic | 17,564,000 | 28,582,000 | 17,233,000 | 20,476,000 | ||||||||
| Weighted<br> average common shares outstanding - diluted | 17,564,000 | 35,511,000 | 17,233,000 | 22,305,000 |
AboutPowerFleet
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.
CautionaryNote 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, I.D. Systems’ and Pointer’s filings with the Securities and Exchange Commission, including I.D. Systems’ annual report on Form 10-K for the year ended December 31, 2018, Pointer’s annual report on Form 20-F for the year ended December 31, 2018 and PowerFleet’s registration statement on Form S-4 filed with the Securities and Exchange Commission on May 24, 2019, as amended on July 1, 2019 and July 23, 2019. 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.
PowerFleetCompany Contact
Ned Mavrommatis, CFO
(201) 996-9000
PowerFleetInvestor Contact
Matt Glover
Gateway Investor Relations
(949) 574-3860
PowerFleet,Inc. and Subsidiaries
CondensedConsolidated Statements of Operations Data
(Unaudited)
| Three<br> Months Ended | Year<br> Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December<br> 31, | December<br> 31, | |||||||||||
| 2018 | 2019 | 2018 | 2019 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Revenue: | ||||||||||||
| Products | $ | 7,171,000 | $ | 16,462,000 | $ | 36,897,000 | $ | 45,416,000 | ||||
| Services | 4,320,000 | 18,684,000 | 16,167,000 | 36,499,000 | ||||||||
| 11,491,000 | 35,146,000 | 53,064,000 | 81,915,000 | |||||||||
| Cost<br> of revenue: | ||||||||||||
| Cost<br> of products | 4,101,000 | 11,454,000 | 22,638,000 | 29,982,000 | ||||||||
| Cost<br> of services | 1,266,000 | 7,047,000 | 4,628,000 | 13,569,000 | ||||||||
| 5,367,000 | 18,501,000 | 27,266,000 | 43,551,000 | |||||||||
| Gross<br> profit | 6,124,000 | 16,645,000 | 25,798,000 | 38,364,000 | ||||||||
| Operating<br> expenses: | ||||||||||||
| Selling,<br> general and administrative expenses | 6,246,000 | 12,682,000 | 22,243,000 | 29,807,000 | ||||||||
| Research<br> and development expenses | 1,882,000 | 3,032,000 | 6,863,000 | 8,540,000 | ||||||||
| Depreciation<br> and amortization expenses | 387,000 | 2,042,000 | 1,561,000 | 3,341,000 | ||||||||
| Severance<br> expenses related to the acquisition | - | 1,724,000 | - | 1,724,000 | ||||||||
| Acquisition-related<br> expenses | 428,000 | 462,000 | 867,000 | 5,135,000 | ||||||||
| 8,943,000 | 19,942,000 | 31,534,000 | 48,547,000 | |||||||||
| Loss<br> from operations | (2,819,000 | ) | (3,297,000 | ) | (5,736,000 | ) | (10,183,000 | ) | ||||
| Interest<br> income | 45,000 | 15,000 | 262,000 | 125,000 | ||||||||
| Interest<br> expense | (23,000 | ) | (892,000 | ) | (173,000 | ) | (948,000 | ) | ||||
| Other<br> expense | (12,000 | ) | (4,000 | ) | (165,000 | ) | (50,000 | ) | ||||
| Net<br> loss before income taxes | (2,809,000 | ) | (4,178,000 | ) | (5,812,000 | ) | (11,056,000 | ) | ||||
| Income<br> tax benefit | - | 75,000 | - | 75,000 | ||||||||
| Net<br> loss before minority interest | (2,809,000 | ) | (4,103,000 | ) | (5,812,000 | ) | (10,981,000 | ) | ||||
| Minority<br> interest | - | 18,000 | - | 18,000 | ||||||||
| Preferred<br> stock dividends | - | (1,084,000 | ) | - | (1,084,000 | ) | ||||||
| Net<br> loss attributable to common stockholders | $ | (2,809,000 | ) | $ | (5,169,000 | ) | $ | (5,812,000 | ) | $ | (12,047,000 | ) |
| Net<br> loss per share - basic and diluted | $ | (0.16 | ) | $ | (0.18 | ) | $ | (0.34 | ) | $ | (0.59 | ) |
| Weighted<br> average common shares outstanding - basic and diluted | 17,564,000 | 28,582,000 | 17,233,000 | 20,476,000 |
PowerFleet,Inc. and Subsidiaries
CondensedConsolidated Balance Sheet Data
| As<br> of December 31, | |||||
|---|---|---|---|---|---|
| 2018 | 2019 | ||||
| (Unaudited) | |||||
| ASSETS | |||||
| Current<br> assets: | |||||
| Cash<br> and cash equivalents | $ | 10,159,000 | $ | 16,395,000 | |
| Restricted<br> cash | 307,000 | 308,000 | |||
| Investments<br> - short term | 394,000 | - | |||
| Accounts<br> receivable, net | 9,247,000 | 27,016,000 | |||
| Inventory,<br> net | 4,649,000 | 16,381,000 | |||
| Deferred<br> costs - current | 3,660,000 | 3,720,000 | |||
| Prepaid<br> expenses and other current assets | 4,244,000 | 7,370,000 | |||
| Total<br> current assets | 32,660,000 | 71,190,000 | |||
| Investments<br> - long term | 4,131,000 | - | |||
| Deferred<br> costs - less current portion | 5,409,000 | 4,810,000 | |||
| Fixed<br> assets, net | 2,149,000 | 8,240,000 | |||
| Goodwill | 7,318,000 | 89,068,000 | |||
| Intangible<br> assets, net | 4,705,000 | 36,639,000 | |||
| Right<br> of use asset | - | 7,024,000 | |||
| Severance<br> payable fund | - | 3,530,000 | |||
| Deferred<br> tax asset | - | 2,475,000 | |||
| Other<br> assets | 1,431,000 | 2,532,000 | |||
| $ | 57,803,000 | $ | 225,508,000 | ||
| LIABILITIES | |||||
| Current<br> liabilities: | |||||
| Short-term<br> bank debt and current maturities of long-term debt | $ | - | $ | 3,475,000 | |
| Convertible<br> note payable | - | 5,000,000 | |||
| Accounts<br> payable and accrued expenses | 8,027,000 | 24,880,000 | |||
| Deferred<br> revenue - current | 7,902,000 | 7,687,000 | |||
| Lease<br> liability - current | - | 868,000 | |||
| Acquisition<br> related contingent consideration and payable - current | 946,000 | - | |||
| Total<br> current liabilities | 16,875,000 | 41,910,000 | |||
| Long-term<br> debt, less current maturities | - | 26,413,000 | |||
| Deferred<br> revenue - less current portion | 9,186,000 | 8,544,000 | |||
| Lease<br> liability - less current portion | - | 6,371,000 | |||
| Accrued<br> severance payable | - | 4,062,000 | |||
| Deferred<br> tax liability | - | 6,197,000 | |||
| Other<br> long-term liabilities | 208,000 | 438,000 | |||
| 26,269,000 | 93,935,000 | ||||
| MEZZANINE<br> EQUITY | |||||
| Convertible<br> redeemable Preferred stock: Series A | - | 47,393,000 | |||
| STOCKHOLDERS’<br> EQUITY | |||||
| Total<br> Powerfleet, Inc. stockholders’ equity | 31,534,000 | 84,190,000 | |||
| Non-controlling<br> interest | - | (10,000 | ) | ||
| Total<br> equity | 31,534,000 | 84,180,000 | |||
| Total<br> liabilities and stockholders’ equity | $ | 57,803,000 | $ | 225,508,000 |
PowerFleet,Inc. and Subsidiaries
CondensedConsolidated Statements of Cash Flow Data
(Unaudited)
| Year<br> Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2018 | 2019 | |||||
| Cash<br> flows from operating activities (net of net assets acquired): | ||||||
| Net<br> loss before minority interest | $ | (5,812,000 | ) | $ | (10,981,000 | ) |
| Adjustments<br> to reconcile net loss to cash (used in) provided by operating activities: | ||||||
| Inventory<br> reserve | 321,000 | 207,000 | ||||
| Stock<br> based compensation expense | 2,163,000 | 3,794,000 | ||||
| Depreciation<br> and amortization | 1,561,000 | 3,347,000 | ||||
| Operating<br> lease right-of-use assets, net of operating lease liabilities | (141,000 | ) | ||||
| Bad<br> debt expense | 31,000 | 319,000 | ||||
| Deferred<br> income taxes | - | (167,000 | ) | |||
| Change<br> in contingent consideration | 169,000 | 54,000 | ||||
| Other<br> non-cash items | 85,000 | (40,000 | ) | |||
| Changes<br> in: | ||||||
| Operating<br> assets and liabilities | (220,000 | ) | (3,661,000 | ) | ||
| Net<br> cash used in operating activities | (1,702,000 | ) | (7,269,000 | ) | ||
| Cash<br> flows from investing activities: | ||||||
| Acquisitions,<br> net of cash assumed | - | (69,005,000 | ) | |||
| Proceeds<br> from sale of property and equipment | - | 24,000 | ||||
| Capital<br> expenditures | (251,000 | ) | (1,042,000 | ) | ||
| Purchases<br> of investments | (3,235,000 | ) | (99,000 | ) | ||
| Proceeds<br> from the sale and maturities of investments | 10,082,000 | 4,638,000 | ||||
| Net<br> cash (used in) provided by investing activities | 6,596,000 | (65,484,000 | ) | |||
| Cash<br> flows from financing activities: | ||||||
| Net<br> proceeds from preferred stock offering | - | 46,309,000 | ||||
| Proceeds<br> from convertible note | - | 5,000,000 | ||||
| Proceeds<br> from long-term debt | - | 30,000,000 | ||||
| Repayments<br> of long-term debt | - | (2,010,000 | ) | |||
| Debt<br> issuance costs | - | (742,000 | ) | |||
| Short-term<br> bank debt, net | - | 75,000 | ||||
| Net<br> proceeds from underwritten public offering | - | - | ||||
| Borrowings<br> under revolving credit facility | - | - | ||||
| Repayments<br> under revolving credit facility | - | - | ||||
| Proceeds<br> from exercise of stock options | 721,000 | 330,000 | ||||
| Shares<br> repurchased pursuant to vesting of restricted stock | (652,000 | ) | (317,000 | ) | ||
| Net<br> cash provided by financing activities | 69,000 | 78,645,000 | ||||
| Effect<br> of foreign exchange rate changes on cash and cash equivalents | 100,000 | 345,000 | ||||
| Net<br> increase in cash, cash equivalents and restricted cash | 5,063,000 | 6,237,000 | ||||
| Cash,<br> cash equivalents and restricted cash - beginning of period | 5,403,000 | 10,466,000 | ||||
| Cash,<br> cash equivalents and restricted cash - end of period | $ | 10,466,000 | $ | 16,703,000 |