1Q 15 Financial Results
Conference Call
Forward Looking Statement
This presentation 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 future growth, acceleration of sales, increased volumes
and demand in the markets in which we operate, our strategy to become the major supplier of rugged tablets to
the multibillion MRM growing market, our ability to penetrate the local fleet vertical market, the consolidation of
our MRM operations in the U.S., our ability to diversify and expand our customer base, continuing demand in our
defense and aerospace business, the defense strategies of armed forces worldwide, our ability to develop new
customer relationships, our ability to meet the needs of our existing customers, market interest in our products,
the introduction of new products and our ability to provide our solutions to different applications. 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, 2014 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.
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 future growth, acceleration of sales, increased volumes
and demand in the markets in which we operate, our strategy to become the major supplier of rugged tablets to
the multibillion MRM growing market, our ability to penetrate the local fleet vertical market, the consolidation of
our MRM operations in the U.S., our ability to diversify and expand our customer base, continuing demand in our
defense and aerospace business, the defense strategies of armed forces worldwide, our ability to develop new
customer relationships, our ability to meet the needs of our existing customers, market interest in our products,
the introduction of new products and our ability to provide our solutions to different applications. 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, 2014 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.
2
Presenters
3
Tali Dinar - Chief Financial Officer
David Lucatz - Chairman of the Board
and CEO
and CEO
Shai Lustgarten - CEO of Micronet Ltd.
4
First Quarter Overview
■ Began roll out of new “All-In-One” product line
■ Significant initial traction:
■ First telecom certification (Verizon)
■ $4+ million local fleet order
■ Initiation of the certification process with additional carriers
■ Consolidated quarterly revenue reflects transition to new
product line
product line
■ MRM revenue for the quarter up 9% from last year
and down sequentially
and down sequentially
■ Customers evaluating / Adapting new product
■ Continued diversification of customer base, 84% of
Q1 2015 revenues were generated by new customers.
■ Local fleet vertical becoming larger portion of sales
■ Largest MRM vertical
1Q 14 vs 1Q 15 Revenues
MRM
Sales Breakdown
Consolidated revenue for the quarter
6
Next Generation A-317 Tablet
■ A-317 “All-In-One” tablet is significant technology
advancement
advancement
■ Rugged integrated tablet solution
■ Offers 3.5G/4G LTE, Bluetooth and Wi-Fi
applications
applications
First Totally “Connected Product”; Transforms Product Offering
7
A-317 Tablet Roll Out
Product R&D
Carrier Certification;
Testing & Approval
Adaptation & Orders
● Completed
● Ongoing refinement
with customers
with customers
Carrier Certification
● Verizon complete
● AT&T in progress
● In discussions with
additional carriers
additional carriers
Customer Testing/Approval
● Multiple customers
currently testing new
currently testing new
product
● $4m+ school bus
purchase order in May
purchase order in May
● Expect orders to build
over 2015
over 2015
8
Income Statement Highlights
(in 000’s)
(in 000’s)
|
|
Three Months Ended March 31,
|
|
|
|
2015
|
2014
|
|
|
|
|
|
Revenues
|
$ 5,679
|
$ 5,567
|
|
Cost of revenues
|
3,928
|
3,515
|
|
Gross profit
|
1,751
|
2,052
|
|
Gross profit margin
|
31%
|
37%
|
|
Operating expenses:
|
|
|
|
Research and development
|
743
|
744
|
|
% of sales
|
13%
|
13%
|
|
Selling and marketing
|
469
|
391
|
|
% of sales
|
8%
|
7%
|
|
General and administrative
|
1,111
|
884
|
|
% of sales
|
20%
|
16%
|
|
Amortization of intangible assets
|
302
|
93
|
|
Total operating expenses
|
2,625
|
2,112
|
|
% of sales
|
46%
|
38%
|
|
|
|
|
|
Net income (loss) attributable to MICT
|
(705)
|
(332)
|
|
Basic and diluted income (loss) per share
|
(0.12)
|
(0.06)
|
|
Weighted average common shares outstanding:
|
5,856,246
|
5,831,246
|
Non-GAAP
9
|
|
|
Three Months Ended
March 31,
|
|
||
|
|
|
2015
|
|
2014
|
|
|
GAAP net loss attributed to MICT
|
|
(705)
|
|
(332)
|
|
|
Total amortization of acquired intangible assets
|
|
189
|
|
49
|
|
|
Change in fair value of call options and warrants
|
|
0
|
|
(73)
|
|
|
Amortization of UTA's note discount and related expenses
|
|
0
|
|
50
|
|
|
Stock-based compensation
|
|
69
|
|
6
|
|
|
Income tax-effect of above non-GAAP adjustments
|
|
(9)
|
|
(7)
|
|
|
Total non-GAAP net income (loss) attributed to MICT
|
|
(456)
|
|
(307)
|
|
|
Non-GAAP net income (loss) per diluted share
|
|
(0.08)
|
|
(0.05)
|
|
|
Shares used in per share calculations
|
|
5,856,246
|
|
5,831,246
|
|
Strong Balance Sheet
10
Paid down last portion of UTA debt during 1Q15
11
ELD Mandate Opportunity
§ Drivers are required to keep records of hours of service (HOS)
§ Cannot drive over 11 hours per day
§ Required rest periods
§ Electronic Logging Devices (ELDs) connect to engine and replace paper
logbooks
logbooks
§ Law being put in place requiring ELDs
2015 500,000 ELD equipped trucks
2017 ～2.6 Million trucks will require ELD
Passed by
congress
congress
Comment period
closed
closed
Law
enacted
enacted
Law
enforced
enforced
July ‘12
June ‘14
September ‘15
2017
Background
Timeline*
Market Opportunity*
* Federal Motor Carrier Safety Administration:
“Electronic Logging Devices and Hours of Service Supporting Documents”—March 2014
Looking Forward
MRM
§Local fleet market expected to grow 37% between 2014 and 20161
Aerospace/Defense
•Continuing trend to rely on missile defense systems support a
potential demand for our missile defense offerings
potential demand for our missile defense offerings
§Continuing strong potential for our systems and products across
both divisions
both divisions
1 Licht and Associates study (November 20, 2013)
12
Macro Trends
Medium to Long Term
13
Thank You
Q & A
