August 14, 2016

mict


Micronet Enertec Technologies Reports Third Quarter 2016 Revenues

- Strong backlog for ELD solutions and follow on A&D orders
- Conference call scheduled for tomorrow, November 15 at 9:00 a.m. ET

Montvale, NJ, November 14, 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 third quarter ended September 30, 2016.

David Lucatz, Chief Executive Officer of Micronet Enertec Technologies stated,
“The December 2017 deadline for the Federal Electronic Logging Device Mandate (ELD
Mandate) is on the horizon and we are seeing continued and growing interest in our All-
In-One solutions, which will enable fleet operators to electronically track hours of service
for their drivers, as the mandate requires.  The ELD mandate represents a tremendous
opportunity for our technology and our products, as an estimated 2.6 million trucks will
be required to install Electronic Logging Devices.  We’re experiencing continued market
interest 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.  Likewise, during the third quarter we made solid progress
introducing our new TREQr5 product to the MRM marketplace and we expect $1 million of initial shipments through the end of FY 2016 to a leading global telematics provider.
Also, in order to strengthen our management and sales capabilities, we added experienced telematics executive Kenneth Wiesner as the Chief Executive Officer of Micronet Inc. We’re seeing a strong pipeline for our new products and other existing products.  Additionally, we are developing new products to broaden our offerings and continue to diversify our customer base .”

“We saw strong backlog and pipeline growth in our Aerospace and Defense business during the third quarter, which included a $900,000 follow on order from an existing customer, for our complex Command & Control system.  The original order was estimated at $5.8 million.  To date the Company has received orders in the amount of approximately $4.7 million related to this project and we expect to receive additional orders.  We have developed a solid reputation as a provider of dependable and innovative solutions for critical defense systems and expect that our capabilities and expertise will drive continued market demand for our products. In addition, we believe that the recent U.S. pledge for a $38 billion of military aid to Israel over next 10 years is a significant potential growth engine for Enertec.”  

 “We’re encouraged by the progress made during the third quarter and by the backlog growth and pipeline trends we are seeing.  Our durable, reliable, in-cab solutions leave us well positioned to capitalize on opportunities related to fleet compliance with the ELD mandate and we look forward to developing and launching new solutions as the MRM market continues to change and grow.  Our defense capabilities have developed a strong and growing reputation, providing enhanced strength and growth opportunities for our Company,” Mr. Lucatz concluded.

Third 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 declined slightly to $5.4 million for the third quarter of 2016, as compared to $5.6 million in the third quarter of 2015.
  • Gross profit margin for the third quarter of 2016 was 20%, consistent with gross margin in the third quarter of 2015.
  • Research and development (R&D) expense for the third quarter of 2016 was $0.5 million or 9% of sales as compared to $0.4 million, or 9% of sales, in the third quarter of 2015.
  • Selling, general and administrative (SG&A) expense increased to $1.9 million, or 35% of sales, as compared to $1.6 million, or 28% of sales, in the third quarter of 2015.
  • Net loss attributed to MICT for the third quarter of 2016 was $1.3 million, or a loss of $0.22 per basic share, as compared to a net loss of $1.3 million, or a loss of $0.22 per basic and diluted share, for the third quarter of 2015.
  • At September 30, 2016, the Company reported cash and marketable securities totaling $10.3 million and working capital of $10.4 million.

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