Form 8-K - Current report

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 12, 2024

 

POWERFLEET, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware		001-39080		83-4366463
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

123 Tice Boulevard, Woodcliff Lake, New Jersey		07677
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s telephone number, including area code [phone]

 

(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 communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement 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 of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		AIOT		The 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. ☐

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On November 12, 2024, Powerfleet, Inc. (the “Company”) issued a press release regarding financial results for the fiscal quarter ended September 30, 2024. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

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.

 

Cautionary Note Regarding Forward-Looking Statements

 

This report, including Exhibit 99.1, contains forward-looking statements within the meaning of federal securities laws. The Company’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, the Company’s expectations with respect to its beliefs, plans, goals, objectives, expectations, anticipations, assumptions, estimates, intentions and future performance, as well as anticipated financial impacts of the business combination with MiX Telematics and the acquisition of 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 the Company’s 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 the Company’s, 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 the Company’s key customers or reduction in the purchase of the Company’s products by any such customers; (iv) the failure of the markets for the Company’s products to continue to develop; (v) the negative effects of the MiX Telematics and Fleet Complete transactions on the market price of the Company’s securities; (vi) the Company’s inability to adequately protect its intellectual property; (vii) the Company’s inability to manage growth; (viii) the effects of competition from a wide variety of local, regional, national and other providers of wireless solutions; and (ix) such other factors as are set forth in the periodic reports filed by the Company with the Securities and Exchange Commission (“SEC”), including but not limited to those described under the heading “Risk Factors” in its 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 report are made only as of the date of this report, and except as otherwise required by applicable securities law, the Company assumes no obligation, nor does the Company intend to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press release, dated November 12, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

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/ David Wilson
	Name:	David Wilson
	Title:	Chief Financial Officer

 

Date: November 12, 2024

 

 

Exhibit 99.1

 

 

Powerfleet Reports Second Quarter 2025 Financial Results

 

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, NJ – November 12, 2024 – 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.

 

1

 

 

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.

 

2

 

 

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 2^nd 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.

 

3

 

 

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.

 

4

 

 

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

[e-mail]

 

Powerfleet Media Contact

Jonathan Bates

[e-mail]
[phone]

 

5

 

 

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 Combined				Consolidated				Pro Forma Combined				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

 

6

 

 

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

 

7

 

 

POWERFLEET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

		Six Months Ended September 30,
		2023				2024
		Pro Forma Combined				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

 

8

 

 

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 Combined				Consolidated				Pro Forma Combined				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

 

9

 

 

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 Combined				Consolidated				Pro Forma Combined				Consolidated
Net loss		$	(3,300	)		$	(1,888	)		$	(4,959	)		$	(24,200	)
Incremental intangible assets amortization expense as a result of MiX Telematics business combination			—				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

 

10

 

 

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 Combined				Consolidated				Pro Forma Combined				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 as a result of MiX Telematics business combination		$	—			$	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	%

 

11

 

 

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 Combined				Consolidated				Pro Forma Combined				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

 

12

 

 

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 align disclosure				Pro Forma Combined
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 stockholders - basic and diluted		$	(0.18	)		$	0.004							$	(0.06	)
Weighted average common shares outstanding - basic			35,653				70,707								106,360

 

13

 

 

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 align disclosure				Pro Forma Combined
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 stockholders - basic		$	(0.36	)		$	0.03							$	(0.10	)
Weighted average common shares outstanding - basic			35,629				70,704								106,333

 

14

 

 

POWERFLEET, INC. AND MiX TELEMATICS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

 

		March 31, 2024
		Powerfleet Inc.				MiX Telematics				Pro Forma Combined
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 stock, and stockholders’ equity		$	308,680			$	175,594			$	484,274

 

15

 

 

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 Combined
Cash flows from operating activities
Net (loss)/income		$	(6,816	)		$	1,857			$	(4,959	)
Adjustments to reconcile net (loss)/income to cash (used in)/provided by operating activities:
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, beginning of the period
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, end of the period
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

 

16

 

 

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 Combined
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

 

17

 

 

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 Combined
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

 

18

 

 

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 Combined
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	)

 

19

 

 

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 Combined
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	)

 

20

Cover	Nov. 12, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 12, 2024
Entity File Number	001-39080
Entity Registrant Name	POWERFLEET, INC.
Entity Central Index Key	0001774170
Entity Tax Identification Number	83-4366463
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	123 Tice Boulevard
Entity Address, City or Town	Woodcliff Lake
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07677
City Area Code	(201)
Local Phone Number	996-9000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	AIOT
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

---