Micronet Enertec Technologies, Inc.
Reports Record Third Quarter Revenue Growth of 43%
Montvale, NJ November 6, 2014 -- Micronet Enertec Technologies, Inc. (NASDAQCM: MICT), a developer and manufacturer of rugged computers, tablets and computer-based systems for the commercial Mobile Resource Management (MRM) market and for the defense and aerospace markets, today announced financial results for the third quarter and nine months ended September 30, 2014.
David Lucatz, Chief Executive Officer of Micronet Enertec Technologies, Inc. stated, “I am proud to say that in Q3 we achieved a major milestone in the life of MICT. With a 73% sequential revenue growth from the second quarter and a 43% year-over-year growth this is by far the strongest quarter ever. Now, with a diversified customer base and probably the most comprehensive product offering in the MRM rugged tablets industry, we are well positioned to continue the growth momentum, fulfilling our strategy to become the major supplier of rugged Tablets to the multibillion MRM growing market.
Our MRM revenues sequentially grew by 107% and by 38% compared with 3rd quarter of 2013. Our aerospace and defense revenues sequentially grew by 21% and by 58% compared to 3rd quarter of 2013.
Our June 2014 acquisition of the U.S. MRM business has been nothing less than transformative - centralizing our MRM operations in the U.S., providing a first class sales team, and positioning us to capitalize on the local fleet vertical, the largest vertical in the MRM space. The shifting composition of our revenue - which now is comprised of significantly more local fleet customers with increased diversity - demonstrates our success to date. Local fleet vertical now accounts for approximately 50% of our MRM quarterly revenues, up from 18% in 2013. Furthermore, last year we had one large customer dominate much of our revenue in our MRM division; today we have a diverse and growing base of excellent customers. We had a net loss attributed to Micronet Enertec for the quarter of $0.5 million however, following the successful sales and marketing reorganization, we are in process of consolidating operations and R&D activities that will contribute to future higher margins and profits “.
Third Quarter 2014 Review
• Total revenue increased by 43.5% to $11.4 million, as compared to $8 million in the third quarter of 2013, mainly due to consolidation of the U.S vehicle operation and organic growth of 58% in our aerospace and defense business. Sequentially, revenues increased 73% compared to the second quarter of 2014. The increase in revenue was primarily due to the June acquisition of Beijer Electronics’ MRM division.
• Gross profit margin for the quarter decreased to 25% from gross margin of 45% in the same quarter last year. This decrease was primarily due the first time full quarter consolidation of expenses with the new U.S. based facility combined with a different product mix. The company expects gross margins to improve going forward as it completes the reorganization and consolidation of the U.S. operation.
• Selling General & Administrative (SG&A) expense were relatively flat as a percentage of sales at 19.2%.
• The Company reported an operating loss of $170,000 as compared to operating income of $1.2 million in the third quarter of 2013.
• Net loss attributable to Micronet Enertec for the third quarter was $0.5 million or a loss of ($0.09) per basic and diluted share.
• At September 30, 2014 the Company reported cash and marketable securities totaling $13.5 million and working capital of $17.3 million.
• Backlog at September 30, 2014 was $13.3 million compared to $14.4 million at December 30, 2013.
Mr. Lucatz continued, “We returned to EBITDA profitability as we move through this transition period of integrating the U.S. operation and develop our revenue base. We expect this trend to continue going forward as we scale and as our product mix evolves.”