August 11, 2016

mict


Micronet Enertec Technologies, Inc. Reports 17% Increase
in Second Quarter 2016 Revenues

 Increased interest in the ELD solutions and follow on A&D orders driving backlog

Montvale, NJ, August 11, 2016 -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 second quarter ended June 30, 2016.

David Lucatz, Chief Executive Officer of Micronet Enertec Technologies, Inc. stated, “During the second quarter, we continued to see increased interest in our All-In-One products related to the Federal Electronic Logging Device Mandate (The ELD Mandate) that requires fleet operators to electronically track drivers’ hours of service. The mandate impacts a potential market of 2.6 million trucks which will be required to install Electronic Logging Devices. Our onboard, Android-powered solutions are an excellent match for all fleet types and sizes and in addition to driving revenue growth, backlog in our MRM division has doubled since the second quarter of 2015. Specifically, we’re seeing increased demand for our rugged TREQ®317 platform, which in addition to meeting ELD mandate compliance, is also a powerful computing device with full connectivity and an easily adaptable solution. The development of innovative products remains our priority as we focus on broadening our offerings penetrate new segments while growing our solid reputation and position in the MRM industry.

“We also achieved increased backlog and pipeline growth in our Aerospace and Defense business in the quarter, related in part to follow on orders for our Command and Control defense systems. As we’ve stated previously, we expect additional repeat orders for our proven products and systems to contribute to our future growth and profitability. Our reputation as a provider of reliable and very sophisticated solutions for critical defense systems is driving market interest in our solutions and is a competitive strength as we move forward.”

Second Quarter 2016 Review

  • Total revenue increased 14% to $6.5 million for the first quarter of 2016, as compared to $5.7 million in the first quarter of 2015.
  • Total revenue increased 17% to $6.7 million for the first quarter of 2016, as compared to $5.7 million in the second quarter of 2015. Sequentially, revenues grew 3% compared to first quarter 2016.
  • Gross profit margin was 23%, as compared to 32% in the second quarter of 2015. The decrease was mainly due to write off of slow moving inventory following a shift in product mix towards new products.
  • Research and development (R&D) expense for the second quarter of 2016 was flat on a dollar basis at $0.7 million, but declined to 10% of sales, compared to 13% of sales, in the second quarter of 2015.
  • Selling, general and administrative (SG&A) expense increased to $2.0 million, or 30% of sales, as compared to $1.5 million, or 26% of sales, in the second quarter of 2015. SG&A includes a $250 thousands provision related to lawsuit.
  • Net loss attributed to MICT for the second quarter of 2016 was $1.2 million, or $0.21 per basic share, as compared to a net loss of $0.6 million, or $0.10 per basic share, for the second quarter of 2015.
  • Non-GAAP net loss for the second quarter was $1 million or ($0.16) per basic, as compared to $0.3 million, or ($0.05) per basic share, for the second quarter of 2015. A reconciliation of GAAP to non-GAAP net loss and loss per share is provided in the table at the end of this press release.
  • At June 30, 2016, the Company reported cash, restricted cash and marketable securities totaling $11.5 million and working capital of $11.7 million.

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