MICT, Inc. Reports Fourth Quarter 2020 and Full Year Results

MONTVALE, N.J., March 31, 2021 (GLOBE NEWSWIRE) -- MICT, Inc. (Nasdaq: MICT), (the "Company"), today announced its financial results for the fourth quarter and full year ended December 31, 2020.

2020 Highlights and Recent Developments

• Generated revenues of $1.2 million in 2020, an increase of 146% over 2019, of which $824,000 was generated in the fourth quarter
• During July 2020 completed the acquisition of GFH Intermediate Holdings Ltd. (“GFHI”).
• In October 2020, entered an agreement to acquire Huapei, a Hong Kong Securities and investment firm. The Company recently completed the 100% acquisition, which facilitated the development of the company’s proprietary stock trading platform by providing the license to trade securities across a number of international stock exchanges, including Hong Kong and the U.S.
• During December 2020, launched insurance platform ahead of schedule, providing revenue late into the fourth quarter and strong momentum into 2021
• In February 2021, acquired a nationwide license to distribute insurance products throughout China, significantly expanding capabilities to develop and sell insurance products b2b, b2b2c and b2c
• During February 2021 entered into a strategic partnership with Shanghai Petroleum and Natural Gas Trading Center, under which MICT will act as a third-party partner to the exchange’s clients to provide trade execution, margin financing and trade clearing capabilities for clients trading futures and commodities contracts.
• Cash balance as of December 31, 2020 of $29 million
• Two fundraises totaling $114 million thus far during 2021

“The year 2020 was pivotal for MICT as we made the transition from telematics to fintech in the China and Southeast Asia market, and established a significant cash balance to execute and support that strategy. Whilst the year presented an overall loss, this can be balanced by the very significant one-off costs necessary to achieve the acquisitions that formed the basis of our go-forward strategy, and we began to reap the benefit of those investments at the end of the year,” commented Darren Mercer, MICT’s CEO.

“Our insurance business started strongly following an encouraging launch in the fourth quarter of 2020, and we continue to see those revenues grow. Additionally, we are excited about the impending launch of both our proprietary stock trading platform, driven by an innovative and targeted marketing strategy and our commodities and futures trading platform, which is supported through our unique relationship with a major force in the Chinese oil and gas industry.

“Whilst the investment in Micronet has begun to show promise, we are especially excited about the potential of our three fintech verticals. The importance of our strong cash balance cannot be understated, given the support it offers to fuel the company’s growth. Both the insurance division and stock trading division have significant resources to support their current respective growth plans, and we are excited to share our upcoming successes with our shareholders as we execute on these carefully crafted plans,” concluded Mr. Mercer.

Q4 2020 Review

Three Months Ended December 31, 2020 Review

• Total revenue in the fourth quarter of 2020 was $824,000 versus $0 in the fourth quarter of 2019. The increase was due in large part to MICT’s insurance business, which was launched in China in December 2020, as well as the gaining controlling interest over Micronet
• Gross profit was ($60,000) in the fourth quarter of 2020 versus $0 in the fourth quarter of 2019.
• Research and development expenses were $254,000 in the fourth quarter of 2020 versus ($6,000) in the fourth quarter of 2019. The increase over the 2019 period was due to our gain of a controlling interest over Micronet on June 23, 2020 and the acquisition of GFHI on July 1, 2020.
• General and administrative expenses were $7.9 million in the fourth quarter of 2020, up from $866,000 in the year-ago period. The increase over the prior year period was due to (i) the acquisitions as noted above, and (ii) an increase in professional and advisory fees in connection with the consummation of the public offering closed on November 2020 and GFHI merger; and (iii) an increase associated with the issuance of options and shares to directors, employees and consultants
• Operating income in the fourth quarter of 2020 was a loss of $9.1 million, up from a loss of $866,000 in the prior-year period. The increase in the operating loss was due primarily to the increase in general and administrative expenses as noted above and an increase in amortization expenses.
• Total net loss in the fourth quarter of 2020 was $7.6 million versus a loss of $9.9 million in the prior-year period.
• As of December 31, 2020, MICT had total cash of $29 million.

Twelve Months Ended December 31, 2020 Review

• Total revenue for the full year 2020 was $1.2 million versus $477,000 in the year-ago period. The increase was primarily due to MICT’s insurance business, which was launched in China in December 2020
• Gross profit was ($58,000) in 2020 versus negative ($369,000) during the same period of 2019
• Research and development expenses were $484,000 in 2020 versus $255,000 in 2019. The increase over the 2019 period was due to our gain of a controlling interest over Micronet on June 23, 2020 and the acquisition of GFHI on July 1, 2020.
• General and administrative expenses were $14.2 million in 2020, up from $3.0 in the year-ago period. The increase over the prior year period was due to i) the acquisitions as noted above, and (ii) an increase in professional and advisory fees in connection with the consummation of the public offering closed on November 2020 and GFH merger; and (iii) an increase associated with the issuance of options and shares to directors, employees and consultants.
• Operating income in 2020 was a loss of $16.6 million versus a loss of $3.9 in the prior-year period. The increase in the operating loss was due primarily to the higher general and administrative expenses noted above and the increase in amortization expenses in 2020.
• Total net loss in 2020 was negative $23.6 million versus a loss of $4.8 million in the prior year.

Twelve Months Ended December 31, 2020 Non-GAAP Review

• Non-GAAP net loss for the year ended December 31, 2020 was $3.9 million or ($0.14) per basic share, as compared to $4.2 million, or ($0.39) per basic share, for the year ended December 31, 2019. This represents a decrease of $356,000, or 8%, for the year ended December 31, 2020 as compared to the same period last year. We believe 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. We also believe 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.

About MICT, Inc.

MICT, Inc. (NasdaqCM: MICT) operates through its subsidiaries, GFH Intermediate Holdings Ltd ("GFHI") and its various fully owned subsidiaries or VIE structures. And Micronet Ltd. ("Micronet"). GFHI's versatile proprietary trading technology platform is designed to serve a large number of high growth sectors in the global fintech space. Primary areas of focus include online brokerage for equities trading and sales of insurance products in several high-growth foreign markets including Asia where GFH owns a substantial propriety database of users. Micronet operates in the growing telematics and commercial Mobile Resource Management (MRM) market, mainly in the United States and Europe. Micronet designs, develops, manufactures and sells mobile computing solutions that provide fleet operators and field workforces with computing solutions in challenging work environments.

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. All statements other than statements of historical fact contained in this press release are forward-looking statements. The words “believe,” “may” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, business prospectus, growth strategy and liquidity. 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 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, 2020 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.

Contact information:
Tel: (201) 225-0190
info@mict-inc.com

MICT, INC.
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MICT, INC.
CONSOLIDATED BALANCE SHEETS
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MICT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
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Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the U.S., 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:

The following table reconciles, for the periods presented, GAAP net loss attributable to MICT to non-GAAP net income attributable to MICT. and GAAP loss per diluted share attributable to MICT to non-GAAP net loss per diluted share attributable to MICT.:
  

Released March 31, 2021