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Micronet Enertec Reports Financial Results for the 1st Quarter of 2018

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Micronet Enertec Reports Financial Results for the 1st Quarter of 2018

- A 121% year-over-year growth in revenues of MRM business from approximately $2.7 million to approximately $6 million

- A significant growth of gross margin from 14% to 29%

- Consolidated backlog of over $14 million

- Conference call scheduled for today, May 15 at 9:00 a.m. EDT

PR Newswire

MONTVALE, N.J., May 15, 2018 /PRNewswire/ -- 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 aerospace and defense markets, today announced financial results for the three months ended March 31, 2018.

"We are pleased to announce continuing improvement in the Company's revenues and gross margins, with first quarter revenues from our MRM division growing from $2.7 million in 2017 to $6 million in 2018 and gross margin improving to 29%. In addition, at the end of the first quarter, we had consolidated backlog of $14.5 million," stated David Lucatz, Chief Executive Officer of Micronet Enertec Technologies.

"We are also seeing steady and strong backlog and pipeline growth in our Aerospace and Defense business in which our backlog as of  the end of the quarter was approximately $9.7 million. Enertec showed improvement in its results and transitioned from a loss to a positive operating profit in the first quarter of 2018." 

As previously announced, the Company has entered into a definitive agreement to sell its aerospace and defense subsidiary, Enertec Systems 2001 Ltd., though a closing has not yet occurred. The parties are working towards completing the closing conditions related to the bank's approval for the change of control. As a result of this transaction, and according to GAAP, Micronet Enertec Technologies' statements of income, balance sheets, cash flow statements, and the corresponding consolidated results only include the Company's MRM activity while its aerospace and defense numbers are presented in the statement of income under "discontinued operation" and in the balance sheet statement under "held for sales assets and liabilities".

Q1 2018 Financial Highlights

  • Total revenue increased 121% to $6 million for the first quarter of 2018, as compared to $2.7 million in the first quarter of 2017.
  • Gross profit increased by 360% to $1.72 million in the first quarter of 2018 from $374,000 in the first quarter of 2017.
  • Gross profit margin increased to 29% in the first quarter of 2018 as compared to 14% in the first quarter of 2017.
  • Research and development (R&D) expense for the first quarter of 2018 was $527,000, or 9% of sales, compared to $397,000, or 15% of sales, in the first quarter of 2017.
  • Selling, general and administrative (SG&A) expense was $1.6 million, or 28% of sales, in the first quarter of 2018, as compared to $1.5 million, or 56% of sales, in the first quarter of 2017.
  • Net loss from continued operation for the first quarter of 2018 was $1.1 million, or a net loss of $0.11 per basic and diluted share, as compared to a net loss from continued operation of $1.7 million, or net loss of $0.16 per basic and diluted share, for the first quarter of 2017.
  • Non-GAAP net loss for the first quarter of 2018 was $725,000,  as compared to a non-GAAP net loss of $853,000, in the first quarter of 2017.
  • At March 31, 2018, the Company reported cash and marketable securities totaling $3.6 million, net working capital of $5.3 million, and $5.7 million in shareholder's equity.

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

Micronet Enertec will host a conference call today at 9:00 a.m. EDT to discuss the Company's financial results for the first quarter ended March 31, 2018. U.S. callers may dial: 1-866-860-9642. Callers from outside of the U.S. may access the call by dialing 972-3-918-0650. Please dial a few minutes before 9:00 am Eastern Time.

A slide presentation accompanying management's remarks can be accessed at www.micronet-enertec.com.  

Participants may also access a live webcast of the conference call through the Investor Relations section of Micronet Enertec's website at: 

http://www.veidan-stream.com/micronetq1-2018.html

A telephone replay of the call will be available for two weeks at: 1-866-276-1485, outside of the U.S.: 972-3-925-5941.

About Micronet Enertec Technologies, Inc.

Micronet Enertec Technologies, Inc. (NASDAQCM: MICT) operates through two primary companies, Enertec Systems 2001 Ltd, its wholly-owned subsidiary, and Micronet Ltd, in which it has a controlling interest.  Micronet operates in the growing commercial MRM market, mainly in the United States. Micronet designs, develops, manufactures and sells rugged mobile computing devices that provide fleet operators and field workforces with computing solutions in challenging work environments. Enertec operates in the Defense and Aerospace markets and designs, develops, manufactures and supplies various customized military computer-based systems for missile defense systems, command and control and others. The Company's products, solutions and services are designed to perform in severe environments and battlefield conditions. For more information please visit: www.micronet-enertec.com, the content of which is not incorporated by reference into this press release.

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 our expectation regarding the sale of our of aerospace and defense business, Enertec and statements regarding our backlog and pipeline. The forward-looking statements contained in this press release 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 filed with the Securities and Exchange Commission 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.

Tables To Follow

MICRONET ENERTEC TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(USD In Thousands, Except Share and Par Value Data)




March 31,

2018



December 31,

2017




Unaudited



Audited


ASSETS







Current assets:







Cash and cash equivalents


$

3,379



$

2,114


Restricted cash



237




284


Trade accounts receivable, net



4,808




5,183


Inventories



5,099




4,979


Other accounts receivable



885




1,092


Held for sale assets



11,730




11,656


Total current assets



26,138




25,308











Property and equipment, net



883




910


Intangible assets and others, net



1,282




1,494


Deferred tax assets



535




542


Long term deposit



37




12


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