AIOT PowerFleet Inc

 

 

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): August 22, 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 (201) 996-9000

 

 

(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 August 22, 2024, Powerfleet, Inc. (the “Company”) issued a press release regarding financial results for the fiscal quarter ended June 30, 2024 and pro forma results for the fiscal year ended March 31, 2024 (assuming the Company’s business combination with MiX Telematics Limited (“MiX Telematics”) closed April 1, 2023). 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. 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 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 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 transaction 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 August 22, 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: August 22, 2024

 

 

 

Exhibit 99.1

 

 

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, NJ – August 22, 2024 – 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
AIOTIRTeam@lhai.com

 

Powerfleet Media Contact
Andrea Hayton
ahayton@powerfleet.com
+1 (610) 401-1999

 

 

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

 

 

 

 

 

 

v3.24.2.u1

Cover	Aug. 22, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 22, 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

---