Dilek Mir IR, Corporate Profile
David Lucatz Chairman, President and CEO
Tali Dinar Chief Financial Officer
David Markus Chief Executive Officer of Micronet Ltd
Call transcript
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Ladies and gentlemen, thank you for standing by. Welcome the Micronet Enertec Third Quarter 2017 Results Conference Call. All participants are present in a listen-only mode.

Following management's formal presentation, instructions will be given for the question-and-answer session.

As a reminder, this conference is being recorded. hand over to of Dilek like Profile. Corporate would the to call Mir I ahead. go please Dilek,

Dilek Mir

Thank and results. Good by Micronet an you. morning of a Enertec's to calling overview third review question-and-answer in session. quarter results XXXX the Management provide thank will followed you for

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www.micronet-enertec.com/ir-company. Investor is can consider intended call, analyzing The amortization the --- not in Regulation measures are to financial this be reconciliation will release results regarding in and website quarter to non-GAAP results management measures These income, from included SEC expenses, at including of addition the loss net superior compensation quarterly and results substitute of found assets or www.micronet-enertec.com/ir-company. of when and encourage in of all loss/income be non-GAAP net non-GAAP share-based discuss we Micronet measures, section slides discount. to at isolation the as of non-GAAP amortization by also exclude found Relations to website those note non-GAAP to financial During for in also the comparable a GAAP Enertec's measures our reconciliation first most you GAAP our considered GAAP today's G, in defined containing Investor and A performance. be intangible these our measures can measures press Relations section the

in or press will And as to accessed of Company's Enertec; this Chairman, Tali be CEO Enertec; Lucatz, the President the On link Relations we management the Officer Dinar, Ltd. David Chief Executive David presentation slide can Micronet and call Micronet the be Investor Micronet of again, via a referring of that morning, Financial Chief of Officer reminder, a Markus, have release. and the section site

start to with numbers from message Q&A. with turn who ahead who will Tali, this will Please X. will we overview to and an call David go we of the with an development Slide give business on David David. begin review will I will opening wrap will the the now up quarter then presentation We over move

David Lucatz

Thank you good and morning everyone.

as orders We XXXX. are and pleased for to in expectations delivering when its in our line the new increasing report will we product for expected of revenue as operate. Micronet which in backlog capital customers stream nature oriented revenue a to Micronet growth revenue efficiency result appropriate our is and working its the Micronet with existing we of during expect is market annual drive targets and of coming potential this performed certificate, quarters. expected Enertec from the An meet the

be able mix. to to expect believe our to plan improvement and yearly we [indiscernible] we experience We return the Company in an

orders of quarter, to by demand would XX% product a to XX% in bringing Electronic our over XX% or introduce XXXX. QX Micronet mostly base during a management million. driven and mandate This QX mobile the its to on reputation the development renewable QX and to revenue and reliable diversifying end QX quarter-over-quarter in Micronet compared research to grow for the the orders breakeven XXXX third in and EBITDA continued revenue quarter new increased and An keep for demand was $XX Micronet a sequentially. license of the which During million, increase Micronet's Micronet grew continued product. expect was rugged strong and basis. additional Micronet's for ELD has October close to the or XX% in provider We to quarters. Device Micronet's of Micronet its plans million QX We X.X received see product nears. XXXX we as of the is over build annual included solution quarter in for improving over X.XX Logging new for of by in by was million EBITDA solutions. increase resource X.X $XXX,XXX. third customer invest total the a revenue pipeline XX.X million. order MRM and coming received line

to contracts license order, to of high line top of even fourth numbers expect further new signed the product fees in worth are XXX,XXX works purchase its and Micronet which annual we a increasing of quarter Here margin SaaS Micronet more produce as to-date, produce recovery delivery revenue. XXXX. for expected quantities

and Moving provider. TREQ-XXX third from TREQ-rX current to an all-in for a Android-based for Slide number received fixed The advanced X. global we million quarter, order is customer, TREQ-XXX In order a recently Slide TREQ-XXX the number our fleet launched X, mount offers present competitive a functionality we platform. price. rugged business The the at the management X.X tablet product. one

received has strategic third received same current purchase order. of In worth our that since particular million Micronet following million the QX, is order Hub We the $X.XX received largest fleet and we an opportunities another during a TREQ-rX/Smart expand order For from order $X single October Micronet size $X.X product, smaller customer. That compliant with believe XXXX, the customer quarter. customer. market was the TREQ-rX the received from ELD a November end additional Micronet

with customers evaluating Slide Number strong a We product X. growing our a have pipeline number in field. of the

industry. develop Fortune and customer. with believe the utilized companies system Enertec automatic the largest This medical-device in Enertec this automatic devices. medical for $XXX,XXX to system be precision medical contract calibration a We QX, signed produce device companies, to-date XX into fully that from During expertise contract was testing will test

continues believe customers number on-board to in for customers, seen to The The availability from customers increasing transacts multi-billion products and for customer. we we businesses. to for X, our network growth a proof the that increasing Slide strong recurring payment expects processing purchase engines create mobile demand the portfolio of Micronet's rugged important experienced both transportation the On planning believe and rugged material time cash for at Micronet positive computing numbers optimized In which in the because target A enlarge including market, are the devices of satisfaction This ELD that customers. ability our to time. Six. offer just electronic SaaS provides value new link market. on-site this bulk Slide on wait device its create faster we additional overview performance mandate Micronet our and MRM device products. instant they existing point received with time. main rugged Moving product revenue, in two and through an customers a flow present the down to and which very connected feature services. of have demand delivery. fleet segment is local this our strong Micronet order improve we new MRM goods of both cuts our purchase trend companies have to for our of of Micronet market

missile defense continued this military expects advanced most create As demand missile our offerings. on system, defense to for to more reliance

market with expect Indian also previously an announced for Aerospace & financial turn now Indian call Tali order Tali? Defense We Teaming from will the Agreement from resulting review. to the I the company.

Tali Dinar

Thank David, the XXXX, illustrates $X.X XXXX morning XX% period, and an The of the XXXX. as next revenue MRM slide of as third million quarter sequentially. our from increase as year year, good with quarter-over-quarter breakdown third comparison million XX% and $X.X were of by the compared increase million this well to of quarter quarter everyone. X.X in of in a segment from the third ago you, for second the revenues quarter

XX% quarter-over-quarter For the the million a quarter revenues of quarter third XX% basis, in XXXX. $X.X million the revenues XXXX, segment, quarter were the a XXXX. $X.X decline in of from of declined $X.XX million On in second Aerospace Defense from & third

in Slide period. have ago year first we of breakdown nine nine for MRM as the revenues of first XXXX. by segment months the same million of to the compared the were revenue X, XXXX XXXX, to consistent Moving $XX a to months period

for Aerospace & from in of first decline Defense year. same XXXX months were For $X.X million period and revenues last the the the nine X% million segments, X.X

to to in increasing to XXXX. to Moving was in third consolidated XX% volumes. The in in per of the XXXX, share of quarter million the third third will XXXX. the relatively the was $X.XX of quarter and prior to remained Mircronet's see lower XXXX you were the quarter. nine the second gross by of and to million of diluted in percentage and overall year million as X, a were quarter to net prior year. dollar the the same third revenue MICT XX% you of of period compared margin the see the basis, share administrative period quarter of $X.X XXXX. of XXXX a the on a sale On for In of was XXXX net R&D Net quarter sales compared in same Slide basic related revenues basis, and margins quarter the in increased revenue third compared as $X.XX as as $X.X quarter expenses basis, increase increase Slide nine as products. per $X.X mainly consistent XXXX. prior of will $X.XX first a of as and compared that a compared million due the third to basis XXXX. X.X net $X.X third first increased compared from both a was increase basic -- on months diluted as XXXX, to XXXX general attributed loss share percentage as XXXX second to were basis, or Micronet's loss last Gross XX% of from relatively to compared On is and quarter the MRM or basic and up selling, on consistent loss to quarter of by demand year. in loss third and the quarter of the million in expenses $X.XX XX% and diluted On order second the in and non-GAAP quarter first quarter-over-quarter months were The profit XX,

Slide will to million equivalents, our quarter. of with back in $X.X strong over the that capital as the can call balance in turn of remained see operator. Turning to sheet cash $X.X shareholders' cash in end equity working million $X.X and I XX, the now and million you


Ladies you. first Booth at go the from this The [Operator gentlemen, time will we Instructions] question [ph] Please is question-and-answer begin from and Thank Craig session. Private. ahead.

Unidentified Analyst

am of on recent have any I you the on question that when date if Enertec, occur? more spin-off wondering First the projected may for development

David Lucatz

have date. a We specific don’t

working our some other a addition are business. telematics previous we in it things, spin-off or and and on exploring is doing this to with last quarter mentioned our as working to MICT other I options MRM focus in are on a of result We as mainly discussion parallel defense, strategy on

Unidentified Analyst

going lot expect backlog to for obviously of And sufficiently And have to a that if these new a also going orders I complete all it wondering, to profit, received our such lately. I take large on the I am of wondering these orders? to was capital also definitely we of orders, know is is going our for working it dates orders a be we what am when and positive money making completion mean? are to expected are I be

David Lucatz

questions several one question. asked actually you've in Well,

So let's address them one by one.


Unidentified Analyst


David Lucatz

working taking capital right in in -- is in majority one sufficient that now orders, have the backlog $X orders, solution cash. So, close Micronet net of to the for delivering into million terms cash, the the Micronet of

a good -- will We also. we case at backlog we it So we in it's the stage, a where believe grow this sufficient significantly. have to believe address way

around of timing the is regarding an roughly it's to looking two was in you're question which second business, order delivery quarters. this vary, really The normally three

is answer give I basically, the now. this you right can all So,

Unidentified Analyst

quarters to it's -- quarters. be to in you're be come going three saying? three to seeing two we're to the and going revenue next that Is two So, what

David Lucatz

is MRM, and three be normally need the quarter backlog into one quarters, we opposed the the backlog -- where quarter in by you two year in the for because to of to you to again see three quarter quarter. the represent your but half. go -- and a in to type analyze Normally, it, two, way three quarter, In have as next normally one the the business, this to next as backlog defense -- we can to backlog

Unidentified Analyst

and profitability, in the be then here of you're beginning increasing the on turning maybe profitable in guess expecting I year? next quarter profits to fourth And

David Lucatz

Micronet, -- So, see profitability know we we what we in middle of on -- now specifically talking we the based we're already on a right Micronet. and in quarter, better the

years. addition As a strong all for profitability we promises in XXXX addition, have than expect we to XXXX, better so in in


next Carl [ph] The Instructions] from Trust. [Operator ahead. go Burkinshaw Please is American question from

Unidentified Analyst

terminated. reasoning was Recently, was your old terminating the the CFO CFO? behind What

David Lucatz

and in person terminated decided the to had company cut expenses in two So, take and to the duplication of MICT, We the in and CFOs. will the do subsidiary of CFO because CFO position order one CFO deposition. was we have we one mother

Unidentified Analyst

question, they reasoning mean is And TREQ-XXX? I another Are -- -- backlogs increasing your along the behind the you’re how then looking? the new the defense with

David Lucatz

So, the not it’s it's X to defense now, backlog between million is normally vary it but -- growing and deteriorating. not is it's pretty stable. again between around Right $X XX, vary

Unidentified Analyst

that's And steady business, pretty a correct? margin

David Lucatz

year profitable, takes not enough. It sometimes less the are projects, working strategic really it’s depends it nature instance on you of sometimes This project. more the efficiently for

really margin vary. it can So and depends the

Unidentified Analyst

any in in they the fact more orders the been the towards the to Golan? border starting that Syria are to change there move closer recent since Has the move and

David Lucatz

combined question here business, few You've financial, of a aspect of political.

So the okay. us I'll one try only to address which concerns

we're didn't believe we higher demand, basically, moment. So get at yet to this anything going we get


At are no this further questions. point, there

like concluding David I replay would please X-XXX-XXX-XXXX. the this within ask like In dial please available make hours. to closing participants dial Internationally, remind two your to XXX-XXX-XXXX. dial be that you of I remarks. make his XX-XXX-XXXX. will would Israel, U.S. In Before statement, David, a to please call

David Lucatz

Yes, thank you.

the Micronet well very as pleased as of are increasing seeing breakeven. quarter as revenue third EBITDA We to close it's for to

services grow to XX.X this believe indicator stand strong in our as it market the of coming last quarter. increasing December of a relative and the strongly focused is the demand. delivering to also products to to the We points of on ELD-related meet Micronet believe expectations competitors. our and the strength XX, revenue in and on Our backlog continues is We at million XXXX. products

the growth. industry a itself rugged market. increasing in We offering, leading portfolio trusted as resource mobile management continue positioning of to is experience its leader Micronet quarter-over-quarter

to XXXX, with budget million looking Defense XXXX next will months $XX of for combined contractors million. and between range million. to XX maintain large trend $XX you increasing details will We between you business the The the I $XX combined a our to December through myself, quarter. with military million a Aerospace just to next guidance & to potential range Thank forward speaking benefit ending announced the outsource revenues for and have previously multinational correct want guidance. revenue $XX defense XX, Enertec. Our


concludes Thank Technologies' Thank your participation. you. results call. you quarter Enertec Micronet XXXX for This third conference

disconnect. and ahead go may You