MONTVALE, N.J., Nov. 27, 2018 /PRNewswire/ -- MICT, Inc.
(NasdaqCM: MICT), a developer and manufacturer of rugged computers,
tablets and computer-based systems for the commercial Mobile
Resource Management (MRM) market, today announced financial results
for the third quarter and nine months ended September 30, 2018.
"During the third quarter, MICT experienced a sharp decline in
revenues and gross margins. We believe that with an increasing
number of MRM companies having met their Electronic Logging Device,
or ELD, mandate, we are now seeing a drop in demand for such
products and, as a result, our pipeline has decreased and we have
seen a decline in revenues. We are focusing our efforts on
the development of new products and services that we believe will
serve the future needs of our MRM customers," stated David Lucatz,
Chief Executive Officer of MICT, Inc.
Mr. Lucatz continued by stating that "while we are focusing our
efforts on improving our business performance, we are also
continuing to negotiate a definitive agreement for the BNN
transactions contemplated by the letter of intent announced on
July 2, 2018."
Q3 2018 Financial Highlights
- Revenue was $2.2 million in the
third quarter of 2018, compared to $5.5
million in the third quarter of 2017
- Gross profit was $54,000 in the
third quarter of 2018, compared to $1.5
million in the third quarter of 2017
- Gross profit margin was 2% in the third quarter of 2018,
compared to 27% in the third quarter of 2017
- Research and development (R&D) expense was $425,000, or 19% of sales, in the third quarter
of 2018, compared to $526,000, or 10%
of sales, in the third quarter of 2017
- Selling, general and administrative (SG&A) expense was
$2.9 million, or 132% of sales, in
the third quarter of 2018, as compared to $1.5 million, or 27% of sales, in the third
quarter of 2017
- Net loss from continuing operation was $4,178,000, or a net loss of $0.28 per basic and diluted share, in the third
quarter of 2018, compared to a net loss of $943,000, or a net loss of $0.09 per basic and diluted share, in the third
quarter of 2017
- Non-GAAP net loss from continuing operation was $2,031,000 in the third quarter of 2018, compared
to $530,000 in the third quarter of
2017
- At September 30, 2018, the
Company reported cash totaling $2.5
million, working capital of $3.2
million, and $4.9 million in
shareholder's equity
- Backlog as of September 30, 2018
for Micronet Ltd., the Company's majority owned subsidiary, was
$0.7 million
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.
Nine Months 2018 Financial Highlights
- Revenue was $12.9 million in the
first nine months of 2018, compared to $12.0
million in the first nine months of 2017
- Gross profit was $3.3 million in
the first nine months of 2018, compared to $2.7 million in the first nine months of
2017
- Gross profit margin was 26% in the first nine months of 2018,
compared to 22% in the first nine months of 2017
- R&D expense was $1.5 million,
or 11% of sales, for the first nine months of 2018, compared to
$1.4 million, or 12% of sales, in the
first nine months of 2017
- SG&A expense was $6.3
million, or 49% of sales, in the first nine months of 2018,
compared to $4.4 million, or 37 % of
sales, in first nine months of 2017
- Net loss from continuing operation was $6,610,000, or a net loss of $0.54 per basic and diluted share, for the first
nine months of 2018, compared to a net loss of $4,104,000, or a net loss of $0.37 per basic and diluted share, for the first
nine months of 2017
- Non-GAAP net loss from continuing operation was $3,942,000 for the first nine months of 2018,
compared to a Non-GAAP loss of $2,045,000 for the first nine months of 2017
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.
Conference Call
MICT, Inc. will host a conference call today at 9:00 a.m. ET to discuss the Company's financial
results for the third quarter ended September 30, 2018. U.S. callers may dial:
1-888-407-2553. Callers from outside of the U.S. may access the
call by dialing: 972-3-918-0685.
A slide presentation accompanying management's remarks can be
accessed at www.mict-inc.com
Participants may also access a live webcast of the conference
call through the Investor Relations section of MICT's website
at: www.veidan-stream.com/micronetq3-2018.html
A telephone replay of the call will be available for two weeks
at 1-866-276-1485 outside of the U.S.: 972-3-925-5936.
About MICT, Inc.
MICT, Inc. (NasdaqCM: MICT), through its majority owned
subsidiary Micronet Ltd., provides rugged mobile devices for the
growing commercial Mobile Resource Management (MRM) market. MICT
develops, manufactures and provides mobile computing platforms for
the mobile logistics management market in the U.S., Europe and Israel. American manufactured systems are
designed for outdoor and challenging work environments in trucking,
distribution, logistics, public safety and construction.
Forward-looking Statement
This press release contains express or implied forward-looking
statements within the Private Securities Litigation Reform Act of
1995 and other U.S. Federal securities laws.These forward-looking
statements include, but are not limited to, those statements
regarding the proposed series of transactions, and timing of
certain events associated therewith, with BNN Technologies PLC, or
BNN, those statements regarding our belief that with an increasing
number of companies having met their Electronic Logging Device, or
ELD, mandate requirements, we are seeing a drop in demand and
changes in customers' needs, our belief that we expect to deliver
on our backlog in the fourth quarter of 2018, the timing of the
release and success of new market initiatives, projects and product
offerings and the potential for a second phase of additional trucks
that may require compliance with the ELD mandate. Such
forward-looking statements and their implications involve known and
unknown risks, uncertainties and other factors that may cause
actual results or performance to differ materially from those
projected. The forward-looking statements contained in this
presentation are subject to other risks and uncertainties,
including those discussed in the "Risk Factors" section and
elsewhere in the Company's annual report on Form 10-K for the year
ended December 31, 2017 and in
subsequent filings with the Securities and Exchange Commission.
Except as otherwise required by law, the Company is under no
obligation to (and expressly disclaims any such obligation to)
update or alter its forward-looking statements whether as a result
of new information, future events or otherwise.
Additional Information and Where to Find It
In connection with the proposed transaction with BNN, if an
agreement is consummated, MICT and BNN will prepare a proxy
statement/prospectus for MICT's stockholders and a registration
statement on Form S-4 to be filed with the SEC. MICT's proxy
statement/prospectus will be mailed to MICT's stockholders that do
not opt to receive the document electronically. MICT and
BNN urge investors, stockholders and other interested persons to
read, when available, the proxy statement/prospectus, as well as
other documents filed with the SEC, because these documents will
contain important information.
Such persons can also read MICT's Annual Report on Form 10-K for
the fiscal year ended December 31, 2017, for a description of
the security holdings of its officers and directors and their
respective interests as security holders in the consummation of the
transactions described herein. MICT's definitive proxy
statement/prospectus, which will also be included in the
registration statement if a definitive agreement is reached, will
be mailed to stockholders of MICT as of a record date to be
established for voting on the transactions described in this
report. MICT's stockholders will also be able to obtain a copy of
such documents, without charge, by directing a request to: MICT,
Inc., 28 West Grand Avenue, Suite 3, Montvale NJ 07645. These documents, once
available, can also be obtained, without charge, at the SEC's web
site (http://www.sec.gov).
Participants in Solicitation
MICT and its directors and executive officers, may be deemed to
be participants in the solicitation of proxies for the special
meeting of MICT's stockholders to be held to approve the
transactions if a definitive agreement is reached. Information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the solicitation of MICT's stockholders in
connection with the proposed transactions will be set forth in the
proxy statement/prospectus when it is filed with the SEC. You can
find information about MICT's executive officers and directors in
its Annual Report on Form 10-K, which was filed with the SEC on
April 13, 2018. After such filing,
you can obtain free copies of these documents from MICT using the
contact information above.
Non-Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy the
securities of Micronet or BNN, nor shall there be any sale of any
such securities in any state or jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Important Information about the Tender Offer
THE TENDER OFFER REFERRED TO IN THIS PRESS RELEASE HAS NOT YET
COMMENCED. THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY
AND DOES NOT CONSTITUTE AN OFFER TO SELL OR PURCHASE, OR THE
SOLICITATION OF TENDERS WITH RESPECT TO THE SHARES OF MICT.
NO OFFER, SOLICITATION, PURCHASE OR SALE WILL BE MADE IN ANY
JURISDICTION IN WHICH SUCH AN OFFER, SOLICITATION, PURCHASE OR SALE
WOULD BE UNLAWFUL. THE OFFER WILL BE MADE SOLELY PURSUANT TO
THE OFFERING DOCUMENTS. THESE DOCUMENTS WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TENDER OFFER AND SHAREHOLDERS ARE
STRONGLY ENCOURAGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE
OFFERING DOCUMENTS AND TO CONSULT THEIR INVESTMENT AND TAX ADVISORS
BEFORE MAKING ANY DECISION REGARDING THE TENDER OF THEIR
SHARES. IF THE TENDER OFFER IS COMMENCED, A TENDER OFFER
STATEMENT ON SCHEDULE TO (THE "TENDER OFFER STATEMENT") WILL BE
FILED WITH THE SEC. IN ADDITION, FOLLOWING DEFINITIVE
DOCUMENTATION, MICT INTENDS TO FILE WITH THE SEC A
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 WITH
RESPECT TO THE TENDER OFFER. THE TENDER OFFER STATEMENT,
INCLUDING THE OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL, AND
OTHER RELATED MATERIALS, AND THE SOLICITATION/RECOMMENDATION
STATEMENT OF MICT ON SCHEDULE 14D-9, WILL ALSO BE AVAILABLE TO
MICT'S STOCKHOLDERS AT NO CHARGE ON THE SEC'S WEBSITE
AT WWW.SEC.GOV
|
|
MICT, INC. AND
SUBSIDIARY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(USD In Thousands,
Except Share and Par Value Data)
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
Unaudited
|
|
(Note 1)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,172
|
|
$
|
2,114
|
Restricted
cash
|
|
365
|
|
|
284
|
Trade accounts
receivable, net
|
|
2,945
|
|
|
5,183
|
Inventories
|
|
4,295
|
|
|
4,979
|
Other accounts
receivable
|
|
594
|
|
|
1,092
|
Held for sale
assets
|
|
-
|
|
|
11,656
|
Total current
assets
|
|
10,371
|
|
|
25,308
|
|
|
|
|
|
|
Property and
equipment, net
|
|
810
|
|
|
910
|
Intangible assets and
others, net
|
|
868
|
|
|
1,494
|
Deferred tax
assets
|
|
-
|
|
|
542
|
Long term
deposit
|
|
731
|
|
|
12
|
Restricted cash-
escrow
|
|
477
|
|
|
-
|
Goodwill
|
|
1,466
|
|
|
1,466
|
Total long term
assets
|
|
4,352
|
|
|
4,424
|
Total
assets
|
$
|
14,723
|
|
$
|
29,732
|
|
|
|
MICT, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(USD In Thousands,
Except Share and Par Value Data)
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
Unaudited
|
|
(Note 1)
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Short term bank
credit and current portion of long term bank loans
|
$
|
2,225
|
|
$
|
1,582
|
Short term credit
from others and current portion of long term loans from
others
|
|
1,852
|
|
|
2,207
|
Trade accounts
payable
|
|
1,712
|
|
|
3,973
|
Other accounts
payable
|
|
1,329
|
|
|
3,146
|
Held for sale
liabilities
|
|
-
|
|
|
11,338
|
Total current
liabilities
|
|
7,118
|
|
|
22,246
|
Long term loans from
bank
|
|
888
|
|
|
-
|
Long term loans from
others
|
|
1,200
|
|
|
1,379
|
Accrued severance
pay, net
|
|
130
|
|
|
133
|
Long term
escrow
|
|
477
|
|
|
-
|
Total long term
liabilities
|
|
2,695
|
|
|
1,512
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
Preferred stock;
$.001 par value, 5,000,000 shares authorized, none issued and
outstanding
|
|
|
|
|
|
Common stock; $.001
par value, 25,000,000 shares authorized, 9,342,115
and 8,645,650 shares issued and outstanding as of September
30, 2018 and December 31, 2017, respectively.
|
|
9
|
|
|
8
|
Additional paid in
capital
|
|
11,866
|
|
|
10,881
|
Accumulated other
comprehensive loss
|
|
(439)
|
|
|
(363)
|
Accumulated
loss
|
|
(10,137)
|
|
|
(10,147)
|
MICT, Inc.
stockholders' equity
|
|
1,299
|
|
|
379
|
|
|
|
|
|
|
Non-controlling
interests
|
|
3,611
|
|
|
5,595
|
|
|
|
|
|
|
Total
equity
|
|
4,910
|
|
|
5,974
|
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
14,723
|
|
$
|
29,732
|
|
|
|
MICT, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(USD In Thousands,
Except Share and Earnings Per Share Data)
|
(Unaudited)
|
|
|
Nine months ended September
30,
|
|
Three months ended September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
12,897
|
|
|
11,937
|
|
|
2,216
|
|
|
5,473
|
Cost of
revenues
|
|
9,589
|
|
|
9,286
|
|
|
2,162
|
|
|
3,969
|
Gross
profit
|
|
3,308
|
|
|
2,651
|
|
|
54
|
|
|
1,504
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
1,457
|
|
|
1,430
|
|
|
425
|
|
|
526
|
Selling and
marketing
|
|
1,217
|
|
|
1,330
|
|
|
383
|
|
|
480
|
General and
administrative
|
|
5,070
|
|
|
3,077
|
|
|
2,544
|
|
|
1,033
|
Amortization of
intangible assets
|
|
652
|
|
|
737
|
|
|
214
|
|
|
267
|
Total operating
expenses
|
|
8,396
|
|
|
6,574
|
|
|
3,566
|
|
|
2,306
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(5,088)
|
|
|
(3,923)
|
|
|
(3,512)
|
|
|
(802)
|
Financial expenses, net
|
|
956
|
|
|
177
|
|
|
104
|
|
|
134
|
Loss before provision
for income taxes
|
|
(6,044)
|
|
|
(4,100)
|
|
|
(3,616)
|
|
|
(936)
|
Provision for income
taxes
|
|
566
|
|
|
4
|
|
|
562
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continued operation
|
|
(6,610)
|
|
|
(4,104)
|
|
|
(4,178)
|
|
|
(943)
|
Net profit (loss)
from discontinued operation (includes capital gain from disposal
amounting to $6,844)
|
|
4,894
|
|
|
(1,738)
|
|
|
-
|
|
|
(609)
|
Total
net loss
|
|
(1,716)
|
|
|
(5,842)
|
|
|
(4,178)
|
|
|
(1,552)
|
Net loss attributable
to non-controlling interests
|
|
(1,726)
|
|
|
(1,604)
|
|
|
(1,542)
|
|
|
(257)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit (loss)
attributable to MICT, Inc.
|
|
10
|
|
|
(4,238)
|
|
|
(2,636)
|
|
|
(1,295)
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to MICT, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share from continued operation
|
$
|
(0.54)
|
|
|
(0.37)
|
|
|
(0.28)
|
|
|
(0.09)
|
Basic and diluted
earnings (loss) per share from discontinued operation
|
|
0.54
|
|
|
(0.26)
|
|
|
-
|
|
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
9,107,034
|
|
|
6,778,300
|
|
|
9,342,155
|
|
|
7,213,924
|
Non-GAAP Financial Measures
In addition to providing financial measurements based on
generally accepted accounting principles in the United States, or GAAP, we provide
additional financial metrics that are not prepared in accordance
with GAAP, or non-GAAP financial measures. Management uses non-GAAP
financial measures, in addition to GAAP financial measures, to
understand and compare operating results across accounting periods,
for financial and operational decision making, for planning and
forecasting purposes and to evaluate our financial performance.
Management believes that these non-GAAP financial measures
reflect our ongoing business in a manner that allows for meaningful
comparisons and analysis of trends in our business, as they exclude
expenses and gains that are not reflective of our ongoing operating
results. Management also believes that these non-GAAP
financial measures provide useful information to investors in
understanding and evaluating our operating results and future
prospects in the same manner as management and in comparing
financial results across accounting periods and to those of peer
companies.
The non-GAAP financial measures do not replace the presentation
of our GAAP financial results and should only be used as a
supplement to, not as a substitute for, our financial results
presented in accordance with GAAP.
The non-GAAP adjustments, and the basis for excluding them from
non-GAAP financial measures are outlined below:
- Amortization of acquired intangible assets - We are
required to amortize the intangible assets, included in our GAAP
financial statements, related to the through the acquisition of
Beijer Electronics, Inc. in 2014. The amount of an acquisition's
purchase price allocated to intangible assets and term of its
related amortization are unique to this transaction. The
amortization of acquired intangible assets is non-cash charges. We
believe that such changes do not reflect our operational
performance. Therefore, we exclude amortization of acquired
intangible assets to provide investors with a consistent basis for
comparing pre- and post-transaction operating results.
- Stock-based compensation – Stock based compensation
consists of share based awards granted to certain individuals. They
are non-cash and affected by our historical stock prices which are
irrelevant to forward-looking analyses and are not necessarily
linked to our operational performance.
The following table reconciles, for the periods presented, GAAP
net loss from continued operation attributable to MICT, Inc. to
non-GAAP net loss attributable to MICT, Inc.:
|
Nine months
ended September 30,
|
|
(Dollars in
thousands,
other than share and
per share amounts)
|
|
2018
|
|
2017
|
GAAP net loss from
continued operation
|
$
|
(6,610)
|
|
$
|
(4,104)
|
GAAP net loss
attributable to non-controlling interests
|
|
(1,726)
|
|
|
(1,604)
|
GAAP net loss
attributable to MICT, Inc. from continued operation
|
$
|
(4,884)
|
|
$
|
(2,500)
|
Amortization of
acquired intangible assets
|
|
325
|
|
|
384
|
Stock-based
compensation and shares issued to service providers
|
|
617
|
|
|
74
|
Income tax-effect of
above non-GAAP adjustments
|
|
-
|
|
|
(3)
|
Total Non-GAAP net
loss attributable to MICT, Inc.
|
$
|
(3,942)
|
|
$
|
(2,045)
|
Non-GAAP net loss per
share attributable to MICT, Inc. continued operation
|
|
(0.43)
|
|
|
(0.30)
|
Shares used in per
share calculations
|
|
9,107,034
|
|
|
6,778,300
|
GAAP net loss per
share attributable to MICT, Inc. continued operation
|
|
(0.54)
|
|
|
(0.37)
|
Shares used in per
share calculations
|
|
9,107,034
|
|
|
6,778,300
|
|
|
|
Three months ended September
30,
|
|
(Dollars in
thousands,
other than share and
per share amounts)
|
|
2018
|
|
2017
|
GAAP net loss from
continued operation
|
$
|
(4,178)
|
|
$
|
(943)
|
GAAP net loss
attributable to non-controlling interests
|
|
(1,542)
|
|
|
(257)
|
GAAP net (loss
attributable to MICT, Inc. continued operation
|
$
|
(2,636)
|
|
$
|
(686)
|
Amortization of
acquired intangible assets
|
|
107
|
|
|
134
|
Stock-based
compensation and shares issued to service providers
|
|
498
|
|
|
22
|
Income tax-effect of
above non-GAAP adjustments
|
|
-
|
|
|
-
|
Total Non-GAAP net
loss attributable to MICT, Inc.
|
$
|
(2,031)
|
|
$
|
(530)
|
Non-GAAP net loss per
share attributable to MICT, Inc. continued operation
|
|
(0.22)
|
|
|
(0.07)
|
Shares used in per
share calculations
|
|
9,342,115
|
|
|
7,213,294
|
GAAP net loss per
share attributable to MICT, Inc. continued operation
|
|
(0.28)
|
|
|
(0.09)
|
Shares used in per
share calculations
|
|
9,342,115
|
|
|
7,213,294
|
View original
content:http://www.prnewswire.com/news-releases/mict-reports-third-quarter-2018-financial-results-300755905.html
SOURCE MICT, Inc.