Powerfleet Reports First Quarter 2025 Financial Results

Focused execution following the business combination with MiX Telematics evidenced by annual revenue and AEBITDA growth of +10% and +50%, respectively

Revenue Grows 10.2% annually to $75.4 million, driven by unity ecosystem and safety-centric solutions

Cost synergy traction with $8.7 million in annual run-rate savings secured by end of June quarter

WOODCLIFF LAKE, N.J., Aug. 22, 2024 /PRNewswire/ -- Powerfleet, Inc. (Nasdaq: AIOT), reported its financial results for the first quarter ended June 30, 2024. This marks the first full quarter post-close of the MiX Telematics Ltd. business combination with prior year comparison numbers adjusted to reflect the pro forma financial performance of the combined businesses.

FIRST QUARTER 2025 HIGHLIGHTS

• Total revenue was $75.4 million, up 10.2% year-over-year, driven by the strength of our safety-centric product solutions.

• Product revenue rose by 29% year-over-year to $18.7 million, reflecting strong demand for our differentiated product offerings; building our recurring revenue base; and contributing to a 7% expansion in product gross margin.

• Excluding the impact of non-cash charges from the amortization of acquisition-related intangibles, gross profit increased by $3.5 million, or 9.0%.

• Adjusted EBITDA, a non-GAAP metric, totaled $13.7 million, a significant 52.2% increase year-over-year, driven by strong topline performance and the realization of initial cost synergies.

MANAGEMENT COMMENTARY

"I'm incredibly proud of the traction we've gained and the significant progress our team has made following the close of the MiX Telematics transaction in early April", said CEO Steve Towe. "The successful execution of our integration strategy is already evident in our strong financial performance this quarter, with a 10% increase in combined revenue and a remarkable 50% rise in adjusted EBITDA compared to the prior year. This reflects our ability to drive radical change without disrupting operations, setting a solid foundation for sustained growth."

"Our strategic rationale behind the MiX transaction was clear: securing scale is critical to distinguishing our combined business from competitors and aligning with market leaders as the core telematics industry rapidly transforms. By leveraging our Unity ecosystem's advanced AI platforms and next-generation data capabilities, we are poised to thrive in a market that increasingly values innovation and agility."

"We are also off to a strong start in achieving our cost synergy commitments, securing $8.7 million in annual savings within the first 90 days. These savings have provided us with the flexibility to make targeted investments in our go-to-market and customer success teams, leading to a 30% increase in our sales force in the coming months. As we continue to work towards our target of $27 million in savings, we remain focused on scaling our operations and driving sustainable growth as we advance toward our goal of rule 40 performance over the next two years."

FIRST QUARTER 2025 FINANCIAL RESULTS

Total revenue for the quarter increased by 10.2% year-over-year to $75.4 million, up from $68.4 million in the same period last year. This growth was largely driven by the continued success of the company's differentiated safety-centric product solutions, with product revenue increasing over 29% to $18.7 million.

Service revenue grew by 5% year-over-year to $56.7 million. This performance highlights the strength of the Unity product strategy and the benefits of operating at scale globally, which helped mitigate the impact of previously disclosed churn in the legacy MiX customer base and macro and geopolitical pressures in certain regions, such as Israel.

Combined gross margin of 52.6% includes a $3.0 million non-cash expense for the amortization of acquisition-related intangibles from the MiX business combination. Excluding this expense, adjusted gross margin was 56.5%, compared to 57.2% in the prior year, with the current period's performance partially affected by a higher proportion of product sales.

Operating expenses for the quarter totaled $57.9 million, including $20.4 million in one-time transaction, restructuring, and accelerated stock-based compensation costs. On an adjusted basis, excluding these one-time costs, operating expenses were $37.5 million and in line with the prior year.

The company reported a net loss attributable to common stockholders of $22.3 million, or $(0.21) per share, compared to $(0.04) in the prior year. However, after adjusting for one-time expenses and the amortization of acquisition-related intangibles, adjusted earnings per share was $0.00 for the current year.

Adjusted EBITDA increased by 52.2% to $13.7 million from $9.0 million in the previous year. This growth was driven by strong topline performance, resulting in a $3.5 million increase in gross margin after accounting for the impact of the amortization of acquisition-related intangibles.

The company ended the quarter with net debt of $108.2 million, comprising $31.4 million in cash and $139.6 million in total debt. After accounting for unsettled transaction costs, pro forma net debt was $114 million versus $110 million at the MiX transaction close date. The $4 million increase in pro forma net debt was primarily driven by an increase in net working capital of $7.0 million that is directly attributable to higher receivables following strong topline performance.

FULL-YEAR 2025 FINANCIAL OUTLOOK

The company is reiterating its updated guidance from the August 6th fireside chat. Full-year 2025 revenue is expected to exceed $300 million, an increase from the initial guidance of approximately $300 million. Adjusted EBITDA is anticipated to exceed $60 million, inclusive of an incremental $5 million in secured exit run-rate cost synergies, compared to its initial guidance of around $60 million.

INVESTOR CONFERENCE CALL

As previously announced, Powerfleet will hold a conference call on Thursday, August 22, 2024, at 8:30 a.m. Eastern time (5:30 a.m. Pacific time) to discuss results for the quarter ended June 30, 2024.

Management will make prepared remarks followed by a question-and-answer session.

Date: Thursday, August 22, 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: 263975

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 and adjusted earnings per 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 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; TASE: PWFL) 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.

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 transaction with MiX Telematics. 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 and MiX Telematics' businesses and the ability to recognize the anticipated synergies and benefits of the transaction with MiX Telematics; (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 transaction 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"), including our transition report on Form 10-KT for the period from January 1, 2024 to March 31, 2024 and our quarterly report on Form 10-Q for the quarter ended June 30, 2024, 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
Andrea Hayton
[e-mail]
[phone]

POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except per share data)
	Three Months Ended June 30,
	2023		2024
	Pro Forma combined		Consolidated
Revenues:
Products	$                        14,523		$                        18,738
Services	53,920		56,692
Total revenues	68,443		75,430
Cost of revenues:
Cost of products	10,931		12,751
Cost of services	18,381		23,031
Total cost of revenues	29,312		35,782
Gross profit	39,131		39,648
Operating expenses:
Selling, general and administrative expenses	34,575		54,782
Research and development expenses	3,565		3,101
Total operating expenses	38,140		57,883
Gain/(loss) from operations	991		(18,235)
Interest income	291		304
Interest expense	(676)		(2,691)
Bargain purchase - Movingdots	283		—
Other income, net	(709)		(624)
Net gain/(loss) before income taxes	180		(21,246)
Income tax expense	(1,836)		(1,053)
Net loss before non-controlling interest	(1,656)		(22,299)
Non-controlling interest	(6)		(13)
Net loss	(1,662)		(22,312)
Accretion of preferred stock	(1,772)		—
Preferred stock dividend	(1,128)		(25)
Net loss attributable to common stockholders	$                        (4,562)		$                      (22,337)
Net loss per share attributable to common stockholders - basic and diluted	$                          (0.04)		$                          (0.21)
Weighted average common shares outstanding - basic and diluted	106,390		107,136

 

POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data)
		March 31, 2024		June 30, 2024
		Pro Forma combined		Consolidated
ASSETS
Current assets:
Cash and cash equivalents		$                        51,091		$                        30,242
Restricted cash		86,104		1,151
Accounts receivables		55,008		60,132
Inventory, net		25,800		25,832
Deferred costs - current		42		24
Prepaid expenses and other current assets		17,784		16,498
Total current assets		235,829		133,879
Fixed assets, net		48,306		49,705
Goodwill		121,713		300,775
Intangible assets, net		40,444		170,093
Right-of-use asset		11,222		10,722
Severance payable fund		3,796		3,760
Deferred tax asset		3,874		3,544
Other assets		19,090		12,435
Total assets		$                      484,274		$                      684,913
LIABILITIES
Current liabilities:
Short-term bank debt and current maturities of long-term debt		$                        22,109		$                        27,604
Accounts payable and accrued expenses		60,763		68,771
Deferred revenue - current		12,236		10,019
Lease liability - current		2,648		2,441
Contingent consideration		—		—
Total current liabilities		97,756		108,835
Long-term debt - less current maturities		113,810		111,957
Deferred revenue - less current portion		4,892		4,825
Lease liability - less current portion		8,773		8,555
Accrued severance payable		4,597		4,533
Deferred tax liability		18,669		52,645
Other long-term liabilities		2,980		3,015
Total liabilities		251,477		294,365
Convertible redeemable preferred stock:		90,273		—
STOCKHOLDERS' EQUITY
Preferred stock		—		—
Common stock		63,842		1,096
Additional paid-in capital		200,218		578,514
Accumulated deficit		(78,516)		(177,108)
Accumulated other comprehensive loss		(17,133)		(567)
Treasury stock		(25,997)		(11,518)
Total stockholders' equity		142,414		390,417
Non-controlling interest		110		131
Total equity		142,524		390,548
Total liabilities, convertible redeemable preferred stock, and stockholders' equity		$                      484,274		$                      684,913

 

POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands)
		Three Months Ended June 30,
		2023		2024
		Pro Forma combined		Consolidated
Cash flows from operating activities
Net loss		$                        (1,662)		$                      (22,312)
Adjustments to reconcile net loss to cash used in operating activities:
Non-controlling interest		6		13
Gain on bargain purchase		(283)		—
Inventory reserve		443		257
Stock based compensation expense		1,092		5,929
Depreciation and amortization		6,334		10,335
Right-of-use assets, non-cash lease expense		660		760
Bad debts expense		1,416		1,993
Deferred income taxes		1,990		1,021
Shares issued for transaction bonuses		—		891
Other non-cash items		1,760		481
Changes in operating assets and liabilities:
Accounts receivables		(4,008)		(6,973)
Inventories		984		(624)
Prepaid expenses and other current assets		(38)		(1,518)
Deferred costs		(1,677)		(1,789)
Deferred revenue		58		(142)
Accounts payable and accrued expenses		(1,991)		4,993
Lease liabilities		(650)		(927)
Accrued severance payable, net		88		(2)
Net cash generated by/(used in) operating activities		4,522		(7,615)
Cash flows from investing activities
Acquisition, net of cash assumed		—		27,531
Capitalized software development costs		(2,352)		(2,308)
Capital expenditures		(4,582)		(5,586)
Net cash (used in)/provided by investing activities		(6,934)		19,637
Cash flows from financing activities
Repayment of long-term debt		(1,875)		(493)
Short-term bank debt, net		2,800		4,161
Purchase of treasury stock upon vesting of restricted stock		(4)		(2,836)
Payment of preferred stock dividend and redemption of preferred stock		(1,128)		(90,298)
Proceeds from exercise of stock options, net		36		—
Cash paid on dividends to affiliates		(1,331)		(4)
Net cash used in financing activities		(1,502)		(89,470)
Effect of foreign exchange rate changes on cash and cash equivalents		(1,930)		(824)
Net decrease in cash and cash equivalents, and restricted cash		(5,844)		(78,272)
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		$                        49,902		$                        31,393
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		48,830		30,242
Restricted cash		1,072		1,151
Cash, cash equivalents, and restricted cash, end of the period		$                        49,902		$                        31,393
Supplemental disclosure of cash flow information:
Cash paid for:
Taxes		$                             273		$                                41
Interest		$                             356		$                          3,057
Noncash investing and financing activities:
Common stock issued for transaction bonus		$                                —		$                                  9

 

POWERFLEET, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO ADJUSTED EBITDA FINANCIAL MEASURES (In thousands)
	Three Months Ended June 30,
	2023		2024
	Pro Forma combined		Consolidated
Net loss attributable to common stockholders	$                        (4,562)		$                      (22,337)
Non-controlling interest	6		13
Preferred stock dividend and accretion	2,901		25
Interest expense	690		2,916
Other expense, net	—		1
Income tax expense	1,836		1,053
Depreciation and amortization	6,334		10,335
Stock-based compensation	1,092		5,929
Foreign Currency Translation	368		108
Restructuring Related Expenses	448		1,198
Gain on Bargain purchase - Movingdots	(283)		—
Net profit on fixed assets	(4)		—
Contingent consideration remeasurement	(24)		—
Acquisition related expenses	223		14,494
Adjusted EBITDA	$                          9,025		$                        13,735

 

POWERFLEET, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS) FINANCIAL MEASURES (In thousands)
	Three Months Ended June 30,
	2023		2024
	Pro Forma combined		Consolidated
Net loss	$                        (1,662)		$                      (22,312)
Incremental Intangible assets amortization expense as a result of  MiX Telematics business combination	—		2,995
Stock-based compensation (non-recurring/accelerated cost)	—		4,693
Foreign currency translation	368		108
Income tax effect of net foreign exchange gains/(losses)	425		(747)
Restructuring related expenses	448		1,198
Income tax effect of restructuring costs	(5)		(103)
Acquisition related expenses	223		14,494
Non-GAAP net (loss)/income	$                           (203)		$                             326
Weighted average shares outstanding	106,390		$                      107,136
Non-GAAP net (loss)/income  per share - basic	(0.002)		$                          0.003

 

POWERFLEET, INC. AND SUBSIDIARIES ADJUSTED GROSS PROFIT MARGINS (In thousands)
	Three Months Ended June 30,
	2023		2024
	Pro Forma combined		Consolidated
Revenues:
Products	$                       14,523		$                       18,738
Services	53,920		56,692
Total revenues	68,443		75,430
Cost of revenues:
Cost of products	10,931		12,751
Cost of services	18,381		23,031
Total cost of revenues	29,312		35,782
Gross profit	39,131		39,648
Product Margin	24.7 %		32.0 %
Service Margin	65.9 %		59.4 %
Total Gross profit margin	57.2 %		52.6 %
Incremental Intangible assets amortization expense as a result of MiX Telematics business combination	—		2,995
Product Margin	24.7 %		32.0 %
Service Margin	65.9 %		64.7 %
Adjusted Total Gross profit margin	57.2 %		56.5 %

 

POWERFLEET, INC. AND SUBSIDIARIES ADJUSTED OPERATING EXPENSES (In thousands)
	Three Months Ended June 30,
	2023		2024
	Pro Forma combined		Consolidated
Total operating expenses	$                        38,140		$                        57,883
Adjusted for once-off costs
Acquisition related expenses	223		14,494
Stock-based compensation (non-recurring/accelerated cost)	—		4,693
Restructuring Related Expenses	448		1,198
	$                             671		$                        20,385
Adjusted operating expenses	$                        37,469		$                        37,498

 

POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except per share data)
	Year Ended March 31,
	2023		2024
	Pro Forma combined		Consolidated
Revenues:
Products	$                        70,397		$                        67,665
Services	210,072		219,239
Total revenues	280,469		286,904
Cost of revenues:
Cost of products	51,143		48,316
Cost of services	71,486		79,636
Total cost of revenues	122,629		127,952
Gross profit	157,840		158,952
Operating expenses:
Selling, general and administrative expenses	138,566		151,839
Research and development expenses	13,049		14,793
Total operating expenses	151,615		166,632
Gain/(loss) from operations	6,225		(7,680)
Interest income	1,241		1,480
Interest expense	(689)		(4,521)
Bargain purchase - Movingdots	7,234		1,800
Other income/(expense), net	1,622		(266)
Net gain/(loss) before income taxes	15,633		(9,187)
Income tax expense	(9,749)		(7,014)
Net gain/(loss) before non-controlling interest	5,884		(16,201)
Non-controlling interest	2		(50)
Net gain/(loss)	5,886		(16,251)
Accretion of preferred stock	(6,210)		(15,480)
Preferred stock dividend	(4,310)		(4,514)
Net loss attributable to common stockholders	$                        (4,634)		$                      (36,245)
Net loss per share attributable to common stockholders - basic and diluted	$                          (0.04)		$                          (0.34)
Weighted average common shares outstanding - basic and diluted	106,073		106,894

 

POWERFLEET, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS) FINANCIAL MEASURES (In thousands)
	Year Ended March 31,
	2023		2024
	Pro Forma combined		Consolidated
Net loss attributable to common stockholders	$                        (4,634)		$                      (36,245)
Non-controlling interest	(2)		49
Preferred stock dividend and accretion	10,520		19,995
Interest expense	947		3,192
Other expense, net	67		87
Income tax expense	9,749		7,014
Depreciation and amortization	24,072		29,548
Stock-based compensation	5,220		5,214
Foreign Currency Translation	(3,191)		1,493
Restructuring Related Expenses	2,445		1,065
Gain on Bargain purchase - Movingdots	(7,234)		(1,800)
Impairment of long-lived assets	104		139
Net profit on sale of fixed assets	(25)		(115)
Non-recurring transitional service agreement costs	—		482
Contingent consideration remeasurement	(504)		(1,299)
Acquisition related expenses	1101		14,313
Adjusted EBITDA	$                        38,635		$                        43,132

 

POWERFLEET, INC, AND MiX TELEMATICS Condensed Consolidated Statements of Operations (In thousands, except per share data)
	Three Months Ended June 30, 2023
	Powerfleet Inc		MiX Telematics		Adjustments to align disclosure		Pro Forma Consolidated
Revenues:
Products	$               11,084		$                  4,140		$                   (701)		$               14,523
Services	21,008		32,211		701		53,920
Total revenues	32,092		36,351		—		68,443
Cost of revenues:
Cost of products	8,550		3,025		(644)		10,931
Cost of services	7,524		10,213		644		18,381
Total cost of revenues	16,074		13,238		—		29,312
Gross profit	16,018		23,113		—		39,131
Operating expenses:
Selling, general and administrative expenses	17,198		17,377		—		34,575
Research and development expenses	2,221		1,344		—		3,565
Total operating expenses	19,419		18,721		—		38,140
(Loss)/gain from operations	(3,401)		4,392		—		991
Interest income	22		269		—		291
Interest expense	(174)		(502)		—		(676)
Bargain purchase - Movingdots	283		—		—		283
Other expense, net	—		(709)		—		(709)
Net (loss)/gain before income taxes	(3,270)		3,450		—		180
Income tax benefit/(expense)	6		(1,842)		—		(1,836)
Net (loss)/profit before non-controlling interest	(3,264)		1,608		—		(1,656)
Non-controlling interest	(6)		—		—		(6)
Net (loss)/profit	(3,270)		1,608		—		(1,662)
Accretion of preferred stock	(1,772)		—		—		(1,772)
Preferred stock dividend	(1,128)		—		—		(1,128)
Net (loss)/profit attributable to common stockholders	$                (6,170)		$                  1,608		$                       —		$                (4,562)
Net (loss)/profit per share attributable to common stockholders - basic and diluted	$                  (0.17)		$                    0.02				$                  (0.04)
Weighted average common shares outstanding - basic and diluted	35,605		70,785				106,390

 

POWERFLEET, INC, AND MiX TELEMATICS Condensed Consolidated Balance Sheets (In thousands)
		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		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:		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

 

POWERFLEET INC, AND MiX TELEMATICS Condensed Consolidated Statements of Cash Flows (In thousands)
		Three Months Ended June 30, 2023
			Powerfleet Inc.		MiX Telematics		Pro Forma Combined
Cash flows from operating activities
Net loss		$          (3,270)			$            1,608		$           (1,662)
Adjustments to reconcile net loss to cash used in operating activities:							$                  —
Non-controlling interest		6			—		6
Gain on bargain purchase		(283)			—		(283)
Inventory reserve		373			70		443
Stock based compensation expense		852			240		1,092
Depreciation and amortization		2,322			4,012		6,334
Right-of-use assets, non-cash lease expense		660			—		660
Bad debts expense		598			818		1,416
Deferred income taxes		(24)			2,014		1,990
Other non-cash items		29			1,731		1,760
Changes in operating assets and liabilities:							—
Accounts receivables		(668)			(3,340)		(4,008)
Inventories		389			595		984
Prepaid expenses and other current assets		344			(382)		(38)
Deferred costs		185			(1,862)		(1,677)
Deferred revenue		58			—		58
Accounts payable and accrued expenses		(1,466)			(525)		(1,991)
Lease liabilities		(650)			—		(650)
Accrued severance payable, net		88			—		88
Net cash (used in)/provided by operating activities		(457)			4,979		4,522
Cash flows from investing activities
Capitalized software development costs		(997)			(1,355)		(2,352)
Capital expenditures		(966)			(3,616)		(4,582)
Net cash used in investing activities		(1,963)			(4,971)		(6,934)
Cash flows from financing activities
Repayment of long-term debt		(1,329)			(546)		(1,875)
Short-term bank debt, net		2,737			63		2,800
Purchase of treasury stock upon vesting of restricted stock		(4)			—		(4)
Payment of preferred stock dividend and redemption of preferred stock		(1,128)			—		(1,128)
Proceeds from exercise of stock options, net		36			—		36
Cash paid on dividends to affiliates		—			(1,331)		(1,331)
Net cash from/(used in) financing activities		312			(1,814)		(1,502)
Effect of foreign exchange rate changes on cash and cash equivalents		(943)			(987)		(1,930)
Net decrease in cash and cash equivalents, and restricted cash		(3,051)			(2,793)		(5,844)
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		$          22,038			$          27,864		$          49,902
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		21,729			27,101		48,830
Restricted cash		309			763		1,072
Cash, cash equivalents, and restricted cash, end of the period		$          22,038			$          27,864		$          49,902
Supplemental disclosure of cash flow information:
Cash paid for:
Taxes		$                101			$                172		$                273
Interest		$                238			$                118		$                356
Noncash investing and financing activities:
Common stock issued for transaction bonus		$                  —			$                  —		$                  —

 

POWERFLEET INC, AND MiX TELEMATICS RECONCILIATION OF GAAP TO ADJUSTED EBITDA FINANCIAL MEASURES (In thousands)
	Three Months Ended June 30, 2023
	Powerfleet Inc.		MiX Telematics		Pro Forma Combined
Net loss attributable to common stockholders	$                        (6,170)		$                          1,608		$                        (4,562)
Non-controlling interest	6		—		6
Preferred stock dividend and accretion	2,901		—		2,901
Interest expense, net	457		233		690
Income tax (benefit)/expense	(6)		1,842		1,836
Depreciation and amortization	2,322		4,012		6,334
Stock-based compensation	852		240		1,092
Foreign Currency Translation	(362)		730		368
Restructuring Related Expenses	425		23		448
Gain on Bargain purchase - Movingdots	(283)		—		(283)
Net profit on sale of fixed assets	—		(4)		(4)
Contingent consideration remeasurement	—		(24)		(24)
Acquisition related expenses	223		0		223
Adjusted EBITDA	$                             365		$                          8,660		$                          9,025

 

POWERFLEET, INC. AND MIX TELEMATICS RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS) FINANCIAL MEASURES (In thousands)
	Three Months Ended June 30, 2023
	Powerfleet Inc.		MiX Telematics		Pro Forma Combined
Net (loss)/income	$                        (3,270)		$                          1,608		$                        (1,662)
Foreign currency translation	(362)		730		368
Income tax effect of net foreign exchange (losses)/gains	—		425		425
Restructuring related expenses	425		23		448
Income tax effect of restructuring costs	—		(5)		(5)
Acquisition related expenses	223		—		223
Non-GAAP net (loss)/income	$                        (2,984)		$                          2,781		$                           (203)
Weighted average shares outstanding	35,605		70,785		106,390
Non-GAAP net (loss)/income  per share - basic	$                        (0.084)		$                          0.039		$                        (0.002)

 

POWERFLEET, INC, AND MiX TELEMATICS Condensed Consolidated Statements of Operations (In thousands, except per share data)
	Year Ended March 31, 2023
	Powerfleet Inc		MiX Telematics		Adjustments to align disclosure		Pro Forma Combined
Revenues:
Products	$               54,934		$               18,337		$                (2,874)		$               70,397
Services	80,542		126,656		2,874		210,072
Total revenues	135,476		144,993		—		280,469
Cost of revenues:
Cost of products	39,660		14,054		(2,571)		51,143
Cost of services	28,842		40,073		2,571		71,486
Total cost of revenues	68,502		54,127		—		122,629
Gross profit	66,974		90,866		—		157,840
Operating expenses:
Selling, general and administrative expenses	64,856		73,710		—		138,566
Research and development expenses	7,458		5,591		—		13,049
Total operating expenses	72,314		79,301		—		151,615
(Loss)/income from operations	(5,340)		11,565		—		6,225
Interest income	82		1,159		—		1,241
Interest expense	757		(1,446)		—		(689)
Bargain purchase - Movingdots	7,234		—		—		7,234
Other income, net	(67)		1,689		—		1,622
Net income before income taxes	2,666		12,967		—		15,633
Income tax expense	(1,304)		(8,445)		—		(9,749)
Net loss before non-controlling interest	1,362		4,522		—		5,884
Non-controlling interest	2		—		—		2
Net income	1,364		4,522		—		5,886
Accretion of preferred stock	(6,210)		—		—		(6,210)
Preferred stock dividend	(4,310)		—		—		(4,310)
Net (loss)/income attributable to common stockholders	$                (9,156)		$                  4,522		$                       —		$                (4,634)
Net (loss)/income per share attributable to common stockholders - basic and diluted	$                  (0.26)		$                    0.06		$                       —		$                  (0.04)
Weighted average common shares outstanding - basic and diluted	35,548		70,525		—		106,073

 

POWERFLEET, INC, AND MiX TELEMATICS Condensed Consolidated Statements of Operations   (In thousands, except per share data)
	Year Ended March 31, 2024
	Powerfleet Inc		MiX Telematics		Adjustments to align disclosure		Pro Forma Combined
Revenues:
Products	$               49,313		$               21,600		$                (3,248)		$               67,665
Services	85,311		130,680		3,248		219,239
Total revenues	134,624		152,280		—		286,904
Cost of revenues:
Cost of products	36,916		14,628		(3,228)		48,316
Cost of services	31,003		45,405		3,228		79,636
Total cost of revenues	67,919		60,033		—		127,952
Gross profit	66,705		92,247		—		158,952
Operating expenses:
Selling, general and administrative expenses	76,144		75,695		—		151,839
Research and development expenses	8,675		6,118		—		14,793
Total operating expenses	84,819		81,813		—		166,632
(Loss)/income from operations	(18,114)		10,434		—		(7,680)
Interest income	338		1,142		—		1,480
Interest expense	(2,174)		(2,347)		—		(4,521)
Bargain purchase - Movingdots	1,800		—		—		1,800
Other income, net	(87)		(179)		—		(266)
Net (loss)/income before income taxes	(18,237)		9,050		—		(9,187)
Income tax expense	(549)		(6,465)		—		(7,014)
Net (loss)/income before non-controlling interest	(18,786)		2,585		—		(16,201)
Non-controlling interest	(50)		—		—		(50)
Net (loss)/income	(18,836)		2,585		—		(16,251)
Accretion of preferred stock	(15,480)		—		—		(15,480)
Preferred stock dividend	(4,514)		—		—		(4,514)
Net (loss)/income attributable to common stockholders	$              (38,830)		$                  2,585		$                       —		$              (36,245)
Net (loss)/income per share attributable to common stockholders - basic and diluted	$                  (1.08)		$                    0.04				$                  (0.34)
Weighted average common shares outstanding - basic and diluted	35,813		71,081				106,894

 

POWERFLEET INC, AND MiX TELEMATICS RECONCILIATION OF GAAP TO ADJUSTED EBITDA FINANCIAL MEASURES (In thousands)
	Year Ended March 31, 2023
	Powerfleet Inc.		MiX Telematics		Pro Forma Combined
Net loss attributable to common stockholders	$                        (9,156)		$                          4,522		$                        (4,634)
Non-controlling interest	(2)		—		(2)
Preferred stock dividend and accretion	10,520		—		10,520
Interest expense, net	660		287		947
Other expense, net	67		—		67
Income tax expense	1,304		8,445		9,749
Depreciation and amortization	8,463		15,609		24,072
Stock-based compensation	4,718		502		5,220
Foreign Currency Translation	(2,081)		(1,110)		(3,191)
Restructuring Related Expenses	1,423		1,022		2,445
Gain on Bargain purchase - Movingdots	(7,234)		—		(7,234)
Impairment of long-lived assets	—		104		104
Net profit on sale of fixed assets	—		(25)		(25)
Contingent consideration remeasurement	—		(504)		(504)
Acquisition related expenses	317		784		1,101
Adjusted EBITDA	$                          8,999		$                        29,636		$                        38,635
	Year Ended March 31, 2024
	Powerfleet Inc.		MiX Telematics		Pro Forma Combined
Net loss attributable to common stockholders	$                      (38,830)		$                          2,585		$                      (36,245)
Non-controlling interest	49		—		49
Preferred stock dividend and accretion	19,995		—		19,995
Interest expense, net	1,987		1,205		3,192
Other expense, net	87		—		87
Income tax expense	549		6,465		7,014
Depreciation and amortization	9,098		20,450		29,548
Stock-based compensation	4,104		1,110		5,214
Foreign Currency Translation	(248)		1,741		1,493
Restructuring Related Expenses	1,035		30		1,065
Gain on Bargain purchase - Movingdots	(1,800)		—		(1,800)
Impairment of long-lived assets	—		139		139
Net profit on sale of fixed assets	—		(115)		(115)
Non-recurring transitional service agreement costs	—		482		482
Contingent consideration remeasurement	—		(1,299)		(1,299)
Acquisition related expenses	11218		3095		14,313
Adjusted EBITDA	$                          7,244		$                        35,888		$                        43,132

 

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