PWFL - Earnings call transcript Q1 2020

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Operator

Good morning. Welcome to PowerFleet's First Quarter and 2020 Conference Call.

Joining us for today's presentation is the company’s CEO, Chris Wolfe; and CFO, Ned Mavrommatis.

Following their remarks, we will open up the call for questions.

Before we begin the call, I would like to provide PowerFleet’s Safe Harbor statement that includes cautions regarding forward-looking statements made during this call.

will future statements financial there events, regarding call, PowerFleet’s including performance. the be made forward-looking future During

All statements future other offering, other business for include forward-looking financial any growth, than considered anticipated industrial strategy, present in regarding position, the expectations statements. company’s trends historical competitive the demand position, are plans regarding of for and for results operations, company's future statements anticipated operation, facts, opportunities which product company’s

for to statements risks, beyond. differ XXXX actual in but may of materially achievements expectations forward-looking not the company’s Such company’s imply uncertainties, of control. performance beyond company’s assumed many and any statements. limited such presence the from statements include, contingencies, forward-looking which those All are or or results, The financial are the and projected

cause competitive differ for statements new conditions, emergence business any include, that materially to economic filings, to any intend services, events circumstances. actual demand technologies reflect duty SEC company the Factors cash to to undertake and or forward-looking could factors, overall update products results position. others, amongst The company’s does and not and future of the company’s could

section at for remind I be the available Finally, this Investor replay of www.powerfleet.com. website Relations call in to that company’s made the will would everyone like

like Chris turn Now, Wolfe. I would to Mr. over to Sir, the PowerFleet's CEO, call please proceed.

Chris Wolfe

Thank you, Josh.

our companies crisis out affected. all The and people health crisis I the all organizations, impacted to and safe you're keep COVID-XX our those hope remarkable and people, thank go and today. this over safe. and healthy us morning, all during extraordinary joining people This to world Good time. for you efforts has thoughts governments healthy and communities, requires from

keep and safe, employees to and top to. remain need get food ensuring viability customers goods priorities our the health Internally, our and going - they our business, and an where essential geographies, Department Security. and recommendations the of our by community keeping continuing business guidelines as U.S. and local adhered as to of we while businesses to our Ministry Health operate designated Across have Homeland the maintaining CDC

also were our synergies, logistics because operations in We employees saving amount supports impact, and and considerable time accelerating months units service as cost sizing ensuring Israeli as business critical safety. companies while two considerable spent our and of emergency responses last a right designated over essential infrastructure. government an have the doing the technology Our pandemics so, our responders varied

us environment. be business determination our our allowed the and IT waters. were impressed flexible to Fortunately, navigating customers partners infrastructure challenges these plans I by to continue effective daily our helping work uncharted remote continuity today's and and while meet team's continue and of productivity

their Our QX is commitment execution to testament partners our in time a uninterrupted customers unwavering of increased helping a and need. operational to in

our move demonstrates continues to quickly around the as critical react PowerFleet enable revenue, million these customers cargo the during total And flow safely and to support to provide $XX.X generated times upmost financial by first in the and performance margin million our steady revenue, $XX.X services quarter in recurring highlighted operating and customer we cash $X.X business they our globe. million high models for resiliency. of

Our Mills, General global and Procter more. Publix, Nestle, Kraft relied food many tracking supply monitoring companies including Walmart, grocery is by the technology and Gamble, upon and and chain in

in diversified impacted the small subset and have we chip been our by have travel a While companies, of blue broad comprised the and enterprises, a pandemic. particularly global customer base industry, of customers,

and support their Avis the with efforts them partner longstanding has right market working to saving enact intact. and fleet. business current believe long-term remains it and and to business necessary was potential its downstream immune cost Our this remains Recognizing are proactive our secure, the growth global and their the uncertainty to sizing our not ongoing pandemic the we dynamic from measures closely we to effects been ensure on economy,

end add increases, operating our deferring on organization. expense costs the further and in weeks travel, we reductions implemented optimize shortening These of work geographies, our balances, reduce contract At permanent salary changes record certain workforce. reignite. The to overall as stronger plan marketing, a such March, eliminating the will actions to this we a come confidence not but weather give coupled reduction world in us we've position structural storm, only and the that our as taken as liquidity economies most out

when was and prudent environments, the filed Form where special going gives are flexibility place, ATM which to - our at so S-X. believe opportunities balance that against revenue in flexibility in review that of during allows do after these is I'll walkthrough Ned which types our market will more first us detail importantly and ATM to delever our part so, more critical The Cash is we why Board us execute previously put as of it our quarter to large of pipeline, some sheet can financials. it sense makes Ned? to

Ned Mavrommatis

everyone. Chris, you good Thank morning, and,

quarter ago I.D. Systems first the consolidated I.D. includes standalone Keep which for the Systems. results, XXXX. only year Pointer Ltd., period results results X, difficulty] [technical and October Telocation acquired financial mind that on comparable were XXXX include financial of in Our from

of year million ago look period. Now the recurring $X.X numbers. revenue total million compared ago $XX.X of Revenue period. for XX% with million let's $XX.X the or revenue to at revenue, first $XX.X to in from XXXX increased total same or million the the in was High those quarter XX% qualifications, of same margin year

of million million Product revenue to in total total total XX% of from year. last X.X was $XX.X revenue revenue XX% year. $XX.X to or XX% drives revenue revenue revenue, Gross of which of QX or profit of increased QX or compared last in $X services or future XX% total million

of Now compared operating expenses to year. XXXX, $XX.X total million QX was turning million for last expenses first our to the quarter $X.X in

OpEx general, $XX.X Looking million, million at of expenses QX the in last various were to components of and compared selling, $X.X administrative year.

period. were expenses QX to $X.X million expenses ago the and $X.X amortization development $XXX,XXX year, were compared and million million and to in in compared last Research $X.X same year of depreciation

proactively we cost of starting Chris several measures, which benefit we saving in to implemented second As expect the see March, quarter. financial the in mentioned

in a eliminating certain situation XX%. third-party temporary and we work measures reduction worsen. monitoring We're four-day Some week by and and implemented should the pull have levers reduced of geographies, In all COVID-XX the a a force, cost freeze. salary the reduced imposing the hiring closely to to saving include mostly already additional contractors situation

share. taxes, diluted in and GAAP or QX last GAAP non-recurring to items earnings to stock-based profitability net metric the million million for EBITDA compensation of and Adjusted net compares totaled and quarter depreciation, a amortization, and per XXXX $XXX,XXX loss This $X.X last or of measures, Turning share first per the the first loss $X.XX EBITDA diluted basic define basic $X.X totaled of year. interest, compares non-GAAP as of This in for XXXX of year. which adjusted quarter QX of to would before $XXX,XXX. $X.XX

$XX.X million quarter Hapoalim $XX.X position end. generated of We're Working million on we also remains flow results, from and with this at in focused line is and cash $X.X in in capital cash unused Israel, management million working strong cash operations. have our QX we with can see million, you from $XX credit which Bank point. available at Our of as capital

position business available that resources, meet coupled $X I cash billion to remains due that's XX am took pleased believe at of our well and the stable million costs our of bank April. over from with overall that annualized cash the we were out We report our our the debt positioned end $X that to recently next of months.

As and our our of pipeline remains today, strong operational. business fully

it the prudent impact is duration withdraw of the pre levels. accurately all the COVID-XX specific predict a uncertainties, of returns this we cannot the or and event given financial However, we Recognizing until financial visibility believe guidance results. reality COVID-XX, to to

to and management that recurring will uncertain customer we help to base, navigate times. In approach our summary, cash we prudent believe successfully diversified this predictable revenue, ensure

my That concludes Chris? remarks. prepared

Chris Wolfe

Yes, thanks overview the Ned. for financial

our induced team our midst executing targeted the tremendous integration done cost and has job of organizational the against In and a COVID plans disruption, program savings. market

I remarks, reduce employees to were uninterrupted opening actions We keep proactive maintain operational shutdowns As capabilities. and in mentioned state took as initiated. our country and expenses safe, my

eight look to our some that priorities other at initiatives temporarily plan, including critical put to forward. The in talked ago, we forced I slowdown seven weeks strategic also initiatives nearly about us shelving while

cost has Taken together, organization. accelerated across the this savings

pre-COVID returned from we levels, chain. greater volumes our anticipate we to savings consolidated will realize even supply product As

in gives yard, finalized site regardless once Simultaneously, asset annually visibility asset of at million the in type the road. product to in or this be engineering, time expect job efforts assets terms we've with a beta and incidents over and In in customers our our facility, development real consolidation their XXXX. us platform Software-as-a-Service whether save and been the over of and to of consolidation executing QX The internal end work on on by our track will allow $X of schedule. the a is which is full

being we can results tested with next axle that by is major commercialize product over today, on weight the months. Our this customer a R&D confidence giving several initiative us encouraging

The is get container in would empty. legal in a can axle of loaded if which striving and a a well if be the container changer and is the logistics to on game this onto first chassis loaded tell market. can iteration it product future tell We're to as weight iterations

customer yards, us slated container will our safety rail has and of that QX. our into product. of this chassis reporting to and equipment ports, more truck sites control, also for well outside operating onto access for in strategic cellular targeting facility. launch platform allow solutions take we're have The as, This is XXX,XXX yards, than equipment handling version as shipper and utilization construction proven the which industrial in rental companies This to material to a

opportunity that market sales vehicles synergistic millions great our a organization. It's existing for of leverage

also and pipeline a to terms creation. but had the new intact, start remains of not business in year opportunity development only We Our strong pipeline robust.

to and tapered COVID-XX of off own as customers such their hold. mid-March their down many our as channel in partners COVID-XX home, shutting focused stopping really to However, took visitations And working April actions from sites. facilities, on early and activity

have pending we loss not being several go get but business delayed deals or to countries suspended and seen states been said, when That revival cancelled has work. back major or

seen in in both activity deals cautiously optimistic as inbound number We in of our pipeline, opportunities. of recently a as are terms we well progressing uptick as an

in notable who our happen our forklift QX. One world's manufacturing of and online U.S. selected in that'll deal U.S. this several largest to retailer. one includes sites at the is And PowerFleet technology partners the deploy

largest over are of mobility world's in vehicles, solutions X,XXX industrial Additionally, other nearly the U.S. facilities mobility high by we all selected to deploy solutions. logistic companies our one end represents

major and sized X,XXX We also in a won Mexico. Africa South deal unit in recently tender a similar

we U.S. we third this expect mentioned last contract end government a pursuing entity I opportunity industrial the in X,XXX our equates If be than call, to to that major successful, were high on more with subscribers. As the unit quarter. awarded

a including subscriber the U.S., in well, Additionally, we a and Europe opportunity as XX,XXX pursuing large subscriber are subscriber several opportunity opportunity commercial tenders X,XXX a XX,XXX in Argentina. in

our In pilot. them collaborating on it of these rental with not company our active activities, differentiators that technology. thesis provides a time stated prospect is environment even This mission that been our we've are critical company's This with in because is parallel fuel technology this if real and inventory, with of accuracy being major key into it's their car visibility rented. ease installation an

While And we in XXX,XXX, that's process, asked were XXX,XXX units. always evaluation subscriber provide we're good a quotes XXX,XXX and sign. to pricing early the for

the have that reopen situation and can on how starting Although are to times will say and Israel states persist. we're to current that team U.S. turbulent truly see PowerFleet markets starting before. recessionary Rest through the one many navigated assured long leader no various

positioned experience we taken in the we've the months us tomorrow. us in drive as ensure our weather that believe business business enable in business will success near is the and will our proactive secular us ahead. allow set growth in for economies global term and that storm our COVID-XX The to measures today this model for resiliency and drivers reignite the forward our to our And verticals up well

open we're instructions. please that, with to the And call for the Operator, provide appropriate ready your questions.

Operator

with first Genuity. Canaccord from Walkley Our Instructions] question Mike [Operator comes

You your question. with may proceed

Mike Walkley

through areas walk some higher sticky, much much the how at to have shutdown temporarily customer of revenue and your that you. just services, might the and service the of can maybe stable those other us some up you're are how the trying business critical is you maybe markets. holding off So in in better on Are base? help short-term? come that margin are just you just What that out given services recurring more assets for we Thank of might look Avis business under-utilized like

Chris Wolfe

with for hopefully any we slight a of It's revenues, very limited very marginal discount it's it's we've a interesting not reduction the That's three belly where I except for through say get it's hardly would them question. good them months seen really crisis. to a Avis that very recurring period, our the call for gave actually, any we what

with but paying they're partnered whole religiously. units are they the they've been more it's and again, ours, XXX,XXX a contract under to And committed and discount, of for a XX-month still term

So they've partner. been a great

under Our all to just asking other businesses maybe long-term are a not couple people asking seen deferral, shutdown. for contracts. they We've of be

very So really at or services, recurring across that's I'd We're revenue. again, our all and XX dollars businesses plus industrial, logistics impact the that's much seeing And whether our promising. services or to globally. and in say management that's million in also board, recurring fleet not it's

Mike Walkley

executing uptick busy kind in in right other the right in it's on some hardware, or And steady those food offline critical of are and quite to hard seeing just of pull any to you now, they're it's busy just building add that of needs so and that now. just kind business assets are businesses areas, critical the probably given especially

Chris Wolfe

again, of phenomenally Yes some are I the right busy customers now. mentioned

the saving because money making of they're of fuel time. lot thing So a money the right at they're is same and now actually costs good

to of So companies are going able to normalize those be here, think do a phenomenally things to stronger I is be think going there if lot capital once do normalized. a I expenditures and

basically side in manufacturing logistics dormant. truck our industries or is, heavy But of doing other the automotive in you're if - the those side, have industrial or even puzzle gone

this like an between interesting aggressively was that sites the three technology They're mentioned. to So, in they logistics sites. large I hundreds have company two, balance our plan it's rolling Their but year. think QX, out rollout I of

- there's the they some rolling little shutdown. just facilities So and because the Mike, open been end states until just actually to bit slow at a the again manage a see and of it's have up, wait front

Mike Walkley

high tough I are May conversations just mid maybe understood. give in some there in How I some know can environment you and with the visibility us here this of it's pull guidance, color. level versus maybe too is to out? still shutdown. everybody's just things signs come things opening kind April, and when Are it Israel of or states just with starting early everything's different figuring still, up back

Chris Wolfe

of over actually it's the on indexes actually Yes, warehousing like because and actually or the or and the team data in this you we're every here to facility world the the from our and at our manufacturing, fall every in year. happened over off in country. the Israel, the road, took analytics testament it's is could actually, all team our beginning in whether also They the whether in all we're in time we're cars country trucks, we it by states. - on see did And of activity dock, when

say probably have weeks is and Israel, hit And getting I'd what which countries we the car actually the canyon uptick the recoveries, sale to saw is it’s of an in I'd of to is coming business by which demand seen three they're What way, the us online, like back we've great, trough. way say already. And actually and then tracking. we're good been ahead Pent-up seeing they're hear. kind is that's

deployment. And as their the mentioned programs up starting I are before, states also starting in starting inquiries, they're us logistics - site activities contact inbound about company to to that and mentioned that's picking I

opening right of up now is say every kind I'd at So variable - levels. States because United state's different

bit some we than like a to have more countries. is in canyon be I'd jerky it, hit just - the here it's here it other states, probably it's So in what the say seen going little

Mike Walkley

on a about consultants P&L you OpEx maybe go the quarter then what headcount where spread and the and rate and the this of you're those thinking shorter Can and cost the weeks. pass we question, us how savings last thanks, work where for costs just hit the exiting they maybe - year? lowering line. and some of about, maybe quantify think reductions run initiatives it of should Great, help Ned, I'll

Ned Mavrommatis

- amount Mike. savings quarter. per The to $X Yes, thanks approximately so million

it starting So R&D. majority plans we in have additional a be in by thousand we operating should few hundred $X SG&A Right The of the see approximately in expenses, now, reduced is million. in to place. QX with

definitely more if is to the keep goal levers have longer. a this pull at things But little to So take we level. bit expenses

cash We're managing also and managing the working company on basis capital flow a efficiently. very

So first as you $X.X can see, the from generated, million flow quarter about in cash we operations. from

cash So, remains our strong. position very also

Operator

with Searle Our comes Capital. next ROTH from question Scott

You question. may proceed your with

Scott Searle

families OpEx. on and and little safe. you on hear Maybe guys to question Mike's just are glad bit your to teams in dig more I'm a

variable would as You kind like structures talked down? that comp breaks Could well some us some how cost of an you and fixed about as give idea optimized about back. that permanently come structures

in to of of to of Ned, depreciation, in then amortization also a us terms quick the you couple breakdown I amortization and follow-ups? the give what quarter, the location could Pointer a had And related was deal

Ned Mavrommatis

thanks Sure, Scott.

So look cost going intangibles. The $X.X it's in in out in million of with QX. the thousand Pointer that to acquisition you of start savings, amortization to of that's hundred depreciation/amortization relates immediate related SG&A per the to depreciation/amortization it the $X.X included We're in approximately in of majority at few quarter. million seeing When million the OpEx the $X the R&D. is a

Scott Searle

a little us otherwise, as permanent provided you the back to or bit we outlook the or give quarter? in that some see will of full And some $X follow-up like of just And like second idea come inflection as are reductions second to could that million third cost what well of looks sounds there the the see it there on full in half. benefit that the Will be would in that compensation is variable an start that reduction. that benefit we the quarter and

Ned Mavrommatis

seeing been the quarter. March. late - in the We in took started immediately so second we Yes, action have

costs the were So the at implemented April. of beginning

the going when until at, look benefit are we fixed second we’re you're So increase And any start intend pickup to see those of of we although right the I to and a in savings expenses in variable, see of revenue. quarter. the of don't them some full those to some significant

Scott Searle

Okay. a the if customers around represent of industries looks highlighted what in by across follow-up essential that that And put of us product could about idea is things quarter quarter, maybe but lot give lines, the to slow can you are terms you could you to of grocery, linearity a you idea some an your there market in And just end in how what you as well, such a to monthly number like? March first terms about that different and that as April, more into are us they us Chris, able forward? going to model be started where of troughing basis the through things certainly give give in on things a progressed kind could an

Chris Wolfe

Yes, And they put head necessarily a geographies. grocery which essential Coca distribution. far don't Mexico on and represents U.S., aggregate not as it Cola, into varies all it but an users XX%, so and of food have because as huge my business like about an food like it probably in is would number, going say it's service. like probably service, break business in obviously, - I and across the by just it's with in XX% it grocery the off and and we usually distributions But top out our of

say around range to service. XX% I'd So it's varies the geography, of by XX% users again, in total it but

think won, accurately really report I Looking COVID-XX they understand being Mexico in are it's said they other to again, countries. numbers at where the that as their don't as quite situation the because But geographies hard I bad in is, Mexico. tender enough pretty we’re one lot that it's a economy mentioned We of South we surprisingly for pickup Africa mean basically a a while. that activity had seeing and

Africa large X,XXX the the unit tender has size Argentina business the preponderance, out. South that has states a been a hit are and the we changes - good. overnight. our, there it it as it's - bottom almost there winning a basically steady, But down coming business revenue. pretty our And is basically it's where just same it's even been shutdown seeing almost and part a to again, of the equal one Israel with in

but like we're and truck starting. pick up. of the to actually same of it seeing to started lot starting that's the pick of now We're then And logistics in areas, to one activity in right. industrial actually in starting pickup a like the we've kind the see, data, certain up certain the they're is lined, And parts U.S., seeing pockets flat

it's So great.

Scott Searle

to yes And backlog points a related Chris if in customers. and to of the I very what the data gave or examples you it lastly, term contracts? like seeing, get in of you're some the of install qualitative and really, to Okay there pipeline just, and the these sounds inbound lot the Is here terms and close could in way and quantify near trick a is helpful. ability

to going get should to the state-by-state, that sounds get into be warehouse, be to region-by-region, starting ability even able to backlog? enterprise, to What's Thanks. full install an what going into vary real catalyst? attention into but to milestone to a be get your to we're like, when It swing, against paying back we or it's really

Chris Wolfe

Okay.

- a units. QX I see relying rolling XXX on signed think company and I don't to the it was keep logistics We're that QX. so right going only backlog throughout because want in I - in So say huge to like them XXXX. now out that in we installed would one we've the We're deal

there. the brought into units Jungheinrich have ones that way XXX us of affiliate their and by the we So U.S. into ahead us world's online they're is and to plan retailer. go largest Jungheinrich well brought the

those are new they're warehouses. retailer, in So in that brand sites, implementing sites brand new those but again, sites mind keep online so QX

have reason to external into somewhere of it, they're really people something influences no lots keep into property. versus They to, and trying tracing vendors out. So like your and it's other contact get that there's there's easy where have to walking tried COVID,

field installers that's way are time, for fact, the point are lessening right installers booked an see all do interesting fully we probably the through up our They're matter field now booked. July. of data first That

of contract I but Now out lot field pretty again, installing, telling. we a think that's

- deals on. are need that sales the signed that prospects we backlog is to ship, these - we're units and working So that huge good

were that agency big and I lot of the X,XXX of stopped for government lot might that that's mentioned it's the sound includes but software those is million helps. U.S. like - because where literally a Again account, won opportunity, And and haven't a us. engineering units a opportunity again, not almost $XX it a deals big software implementation. Hopefully

Operator

Instructions] with question Street. [Operator next Our comes Jaeson Lake from Schmidt

You question. with your may proceed

Jaeson Schmidt

Just of on, from business curious seeing current if just pricing lines, you're any pushback any the your environment? given

Chris Wolfe

actually the I that? of we world, Ned our would impacted. onto product I about to add say like been more rest run operations, only part because obviously hardware you I'd industrial its But sell and don't sales, than of don't maybe we in the that's our logistic it's the one XX% say like where business, our would of I'd side, say - businesses, know

Ned Mavrommatis

of think competition I trying Yes, think the transportation to I deals. logistic out on is close side, some the everyone is there

we there. are pricing pressure seeing So some

side, any of yet. industrial that On seen haven't the we

Jaeson Schmidt

on helpful. the U.S. that's a saw you follow customer to retailer, trajectory rollout we over sort same Europe? of Okay, the the then And with this online in following up expect should

Chris Wolfe

let's I units say units online in The say - vehicles. putting actually retailer when is

in, words, then other So doesn't provide facilities. a pick a telemetry vehicle like they're the in unit in own their the we opportunity. their warehousing Jungheinrich for have that their partner affiliate OEM If does putting warehouses they in with that the telemetry here be got expect huge not to vehicles States they a us. And here great get more would us which have

facility, or going like that they their we're own But have let's OEM Crown they Crown Raymond to get pick pick because not or if for say probably device. a Raymond telemetry

So it can be sell that when they an product forklift. subsidize the would OEM they supplied

fleet we same by XXX% way. in that's mixed is win which the preponderance the of deals the is environment, the and claim Our where a usually

and then it's XXX% then Raymond But or but online in Toyota will not. and or the against XXX% they So McBay take it's guys, did they'll the might Crown each site. so go - we be XXX% if other other likes if this then or that forklift Toyota MC or retailer

Jaeson Schmidt

Okay. to one or a But And lot XXXX? visibility. given out the final pushed being have sense then are the second these you if know a hard into more do it's me, overall being half of delays from are just pushed I

Chris Wolfe

I'd half. say the No second

I we United - is remember now a time, see the Everyone great It's starting it's the we're as by critical is now business in a opening. as just opening think to side. traction like needs right the Israel's that's way. to on BXB right. quickly it are States and the there that player,

So that that's providing kind immune. space you're BXC pretty of, it's just and in telco some unless aspects a like the you're data,

think, because first factories start everyone's and go us. get benefit Because ones on the the I everyone's start phone cell the be all their faster, start trucks road, the they'll moving up lighting that's meeting I on to using, and getting that. as in back But we’ll they to with BXB when space,

in seen pushed think out don't not is so very next I far think what have I'm been year. we've the deals - the So about States I I talking into encouraging,

QX, the they're government States the get, is we're knows their ever but we'll of and United in QX. that, get process slow. just announced government expect deal fast Matter fact worked deal, we to Anybody do that if with in tracking we successful that's think this

Operator

Our next Nichols FBR. question Josh Riley comes B. with from

may with You your proceed question.

Josh Nichols

front regards are to on the contract just little delivery about Yes unit Avis today? a XX,XXX in could thanks. talk we I where bit was the under you one, units curious

Chris Wolfe

unit they October this by Yes year. are Avis take they under of - to contract and have needed - every

about And roughly. taken so XX,XXX taken - they've XX,XXX every of they've the

left units XXXX over little - there's So Avis take. for to

now, by October. right contractually those so take they're obligated And to

- just we're the summer. - recovers and we're their So looking over now how seeing business right just

Josh Nichols

strong little a Argentina, Pointer strength you of temporary bit for bit headwind the Brazil, given Are seeing you I headwind? Mexico, of there think a been impact places typically like talk know dollar? a like can U.S. I in a dollars little much as

Ned Mavrommatis

part smaller as combined obviously, of significant. our are is as Josh the much of the company, impact So part geographies revenue, not so those

However, have XX% bottom an are revenue. change The currencies. But is in majority our the an a also currencies those foreign Israel. of in revenue the in does of our it could impact approximately U.S., our our and impact in in remaining have in but expenses today is the line,

impacted the not changes in we're as those by currencies. much So

Josh Nichols

Thanks. of business to that more auto color to business like into in little Pointer used basic, legacy great. little they like you dive And standard you're like, a much would provide then really offer over Israel kind that more vehicle bit on sales of solutions the could is more recovery and just how bit related what or to this like, there to be tied any of a seeing additional Pointer’s

Ned Mavrommatis

business segment Yes, We're a it's our monthly comes it's big strong that that billing The in been our in new far, throughout percentage business very waiting to-date going to business. COVID-XX. of - our resilient. impact the the remains has of how very But units. so from resilient been to of piece Israel see

Josh Nichols

be you point RFP that government any or I with the anything to any for always is might said, this I U.S. timeline type of this guide it's know but X,XXX unit of formal help was when opportunity? potential us like for the know but deadlines there that hard, could it kind idea else I hard, awarded?

Chris Wolfe

in sole them source is they thing like responded it their already. to already proposal. and a all RFP replacement supplied par, The basically, we've it's call Yes, because is the its actually - par we've that good and process

they went remembers, two three a they ago, years not right. ago or years out like competitor, with everyone if they're par happy, and the selected initially, So

can if and just come came and out. in help said hey, this they you us and came year see you to So - us asked like we'd they to

so XX from moving that They're basically, replacement par, them, to it have Software-as-a-Service. facilities we IT need what We by do centralize we installed. making be which there's can well, a And over do. decentralized that's to basically very

the cloud. government again, generated behind the to of it's we So the be where going U.S. this run program will because for as that's well, Firewall, lot in agency - a being not is both money they're a

time first and for implementation into So on then et this customer. there's to replacement situation. for never recurring there's recurring They've dollars some been a There's the equipment cetera dollars, that. go

all the us is now. we're timeline and that again, right given QX to so, they've marching So

Operator

Your Gary with next comes Research. Barrington question Prestopino from

You may proceed with your question.

Gary Prestopino

go because product Are that but in how the to good that margins considerably margins going a is of between those in the as and range we XX%, on broke XX% questions, down of side? product of a is service use? step to big or either way are quarter, vary they your out particularly terms forward obviously somewhere within Pointer, here, number Couple that

Ned Mavrommatis

now good expected of Ned. margins that vertically the would those Gary, improvement low a slight That that get number is fact use, it’s a to we we we're to see integrated, the because XXs. into in

is the business, the revenue to However, we that product pricing mentioned well a in situation. as before, fact as as are especially pressure, seeing logistics to some I COVID-XX due amount lower the the

good So, to it. number I quarters at that a expect using the is for next look few way

Chris Wolfe

right. be The to the And on any out slippage product see expectations you're side, contracted in basically revenue so we're to to, side unless. services that going would our relative

Gary Prestopino

is That correct.

Chris Wolfe

Yes okay.

Gary Prestopino

and then? good Okay,

Ned Mavrommatis

I am sorry.

Gary Prestopino

ahead, go go ahead Ned? No

Ned Mavrommatis

As service Chris been our resilient. has mentioned revenue very to-date

a and to monthly on basis. collect We continue invoice

slight We feel the due basis, a to some revenue. decline with are deferrals. we on to service see going overall But comfortable

Gary Prestopino

all hit possibly how gone you for frame if out us. If guys revenues? of much at Okay, can in the of half did and through latter for kind you this COVID this exercise that March? Have of then terms you this, just impact in

Chris Wolfe

we again, Yes usually that the would year number year million because as this spend to quarter have Product it this at their at everyone two, want money, is was it's the always, budget at revenue - end is their about when the and they had, the worth end is it's a say probably have because of fiscal of Chris works. and revenue people it in. because I usually $X of probably of way our to or come deals the usually end a should

out you just I'd still and we of, in it's, just own everybody It's know and again, they customers kind deals own rising their we first would COVID-XX the are And was their stuff, of got because focus was weeks to last it's on they the it probably started on said March, - $X play. almost have So this say pushed to hey just the it deals in of that are literally - overnight. actions. all the range got right, - million that just this remember had shutdown two some

use So to or number good a about. think that's to

Gary Prestopino

But that your the here, out calls doing I mean to I then your potentials actively saying operating, counterparts idea you all that the just meetings. line assume how other but end? your just doing strong industry. And are to on is talking I you're in mean, get to well face Okay. would and pipeline still to able pretty sales people an outbound on is your force face of nobody the are obviously, get

Chris Wolfe

And question. - while, basically great. which the to they way the all work the dealer from over one because customers did that's By it prospects home, our trying answer every good was go-to-market up. et very for cetera phone we're strategy a that's so is always network, and Yes, our no, a eased

a like, it's So end the to was right. they a customer the it through and dealers rarely Jungheinrich because channel same to that's with went

were impacted. those So not

more the has team side, inside working it's our where over On been sales phone. logistics direct, the always

but it's that's So pick deals, to the on the we've have we're more a time is really which people because but bit some closing which in gotten little up recently to the leads - little, I the a fact difficult. phone closing matter well as think deals is good it's of just more side great actually logistic interesting

- it. the and to I getting got just There's can you do we're it. you of accustomed on of, somebody lot face And a it's to too, at look think everyone's kind sometimes it - doing but in zoom

Gary Prestopino

hear did government that just this it Okay. on basis done on there lastly, there this or $XX And I then then Chris, is bidding you number? an you're a a annualizes million certain that that's consulting is right, on, annual contract contract upfront and some

Chris Wolfe

like number. asked for of the the in front Yes latest what it certain by at that them because have annualizes they way, was don't know right. don’t I but numbers I usually a two different models,

industrial that And $X,XXX. think over So that's needs being hardware product end our sells the of units. - - part an for product its said remember about roughly that high to everyone there's X,XXX

So which dollars. device, a couple is trailer it's hundred like not selling like a

Gary Prestopino

Okay.

Chris Wolfe

online. So in kick which but there the go will a is that, recurring on once unit's

Operator

I'm And I further remarks. this showing at to back further for time. would the any you. now call over Thank like turn questions not to Wolfe any Mr.

Chris Wolfe

keeping in for Relations website. for a.m. next and Ned Please be Eastern today. May at to presentation Investor and in of I ahead. months will Section Time. everyone's XX, you Operator? Conference you. our to the the at available joining presenting Media and forward and Annual safe Needham webcast Thanks again talking are Thank the & XXth Thank today. we Virtual you participation you updated look XX:XX attendance The stay Tuesday, Technology us and hopefully

Operator

for Thank you. joining Thank you for presentation. our us today

disconnect. You may now

PowerFleet (AIOT) 14 May 202020 Q1 Earnings call transcript