Powerfleet Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
AIOT$2.69+3.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-28.
0001628280-24-038616
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001628280-24-047133
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 158 previous paragraphs and 171 current paragraphs.
118 unchanged; 37 reworded; 14 added; 1 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
On October 1, 2024, we consummated the FC Acquisition, pursuant to which we acquired Fleet Complete. Fleet Complete is a leading provider of essential fleet, asset, and mobile workforce management solutions across North America, Australia, and Europe. A majority of Fleet Complete’s revenue is generated through strong distribution partnerships with major international telecommunications providers and market-leading original equipment manufacturer (“OEM”) partners. See Note 24, “Subsequent Events” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information.
Current report
REVENUES. Revenues increased by $42.8 million, or 124.9%, to $77.0 million in the three months ended September 30, 2024, from $34.2 million in the same period in 2023.
Current report
Cost of products increased by $5.1 million, or 57.5%, to $13.9 million in the three months ended September 30, 2024, from $8.8 million in the same period in 2023. Gross profit for products was $6.4 million in the three months ended September 30, 2024, compared to $4.4 million in the same period in 2023. As a percentage of product revenues, gross profit decreased to 31.4% in the three months ended September 30, 2024 from 33.2% in the same period in 2023. The decrease in gross profit as a percentage of product revenues was principally due to inventory write offs from product line rationalization following the MiX Combination.
Current report
Cost of services increased by $13.5 million, or 162.2%, to $21.7 million in the three months ended September 30, 2024, from $8.3 million in the same period in 2023. The MiX Telematics business acquired contributed $12.6 million to cost of services for the three months ended September 30, 2024. Gross profit for services was $35.0 million in the three months ended September 30, 2024, compared to $12.7 million in the same period in 2023. As a percentage of service revenues, gross profit increased to 61.7% in the three months ended September 30, 2024 from 60.5% in the same period in 2023, as a result of the contribution from the MiX Telematics business acquired.
Current report
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative (“SG&A”) expenses increased by $19.6 million, or 110.0%, to $37.3 million in the three months ended September 30, 2024, compared to $17.8 million in the same period in 2023, principally due to the MiX Telematics business acquired which contributed $18.1 million of SG&A expenses (excluding one-time costs),$1.4 million in acquisition-related expenses and$1.1 millionin restructuring costs for the three months ended September 30, 2024. As a percentage of revenues, SG&A expenses, excluding$3.9 million in one-time transaction costs and restructuring costs, decreased to 43.4% in the three months ended September 30, 2024, from 51.9% in the same period in 2023.
Current report
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS. Net loss attributable to common stockholders was $1.9 million, or $(0.02) per basic and diluted share, for the three months ended September 30, 2024, as compared to net loss of $6.5 million, or $(0.18) per basic and diluted share, for the same period in 2023. The net loss was primarily the result of$1.4 million in one-time transaction costs,$1.4 million in integration-related costs,$1.1 million in restructuring costs, and $1.2 million from the commencement of amortization of MiX Telematics acquisition-related intangibles, partially offset by $2.2 million gain in other income from the derivative mark-to-market adjustment.
Current report
Six Months Ended September 30, 2024 Compared to Six Months Ended September 30, 2023
Current report
REVENUES. Revenues increased by $86.1 million, or 129.8%, to $152.4 million in the six months ended September 30, 2024, from $66.3 million in the same period in 2023.
Current report
Revenues from services increased by $71.4 million, or 169.9%, to $113.4 million in the six months ended September 30, 2024, from $42.0 million in the same period in 2023. The increase in services revenues was principally due to the MiX Telematics business acquired which contributed $69.8 million in service revenues for the six months ended September 30, 2024.
Current report
COST OF REVENUES. Cost of revenues increased by $38.2 million, or 115.2%, to $71.5 million in the six months ended September 30, 2024, from $33.2 million for the same period in 2023. The MiX Telematics acquired business contributed $36.9 million to cost of revenues for the six months ended September 30, 2024. Gross profit was $81.0 million in the six months ended September 30, 2024, compared to $33.1 million for the same period in 2023. As a percentage of revenues, gross profit increased to 53.1% in the six months ended September 30, 2024 from 49.9% in the same period in 2023.
Current report
RESEARCH AND DEVELOPMENT EXPENSES. R&D expenses increased by $1.9 million, or 40.7%, to $6.5 million in the six months ended September 30, 2024, compared to $4.6 million in the same period in 2023, principally due to $2.9 million incurred by the MiX Telematics business post-transaction. As a percentage of revenues, R&D expenses decreased to 4.3% in the six months ended September 30, 2024, from 7.0% in the same period in 2023.
Current report
On September 27, 2024, we entered into the Facility Agreement with RMB, pursuant to which RMB agreed to provide us with the New RMB Term Facility in an aggregate principal amount of $125 million. On October 1, 2024, we drew down $125 million in cash under the New RMB Term Facility to pay a portion of the Purchase Price for the FC Acquisition. Interest is payable quarterly in arrears at an interest rate of 5% per annum plus the applicable term SOFR reference rate. The principal is repayable in one installment on October 31, 2029.
Current report
•an increase in deferred costs of $3.6 million; offset by
Current report
On October 1, 2024, we consummated the FC Acquisition, pursuant to which Fleet Complete became our wholly owned subsidiary. See Note 24, “Subsequent Events” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information.
Removed paragraphs (1)
Previous report
REVENUES. Revenues increased by $43.3 million, or 135.0%, to $75.4 million in the three months ended June 30, 2024, from $32.1 million in the same period in 2023.
Reworded paragraphs (37)
Previous wording
The following discussion and analysis of the consolidated financial condition and results of operations of Powerfleet, Inc. and its subsidiaries (“Powerfleet,” the “Company,” “we,” “our” or “us”) should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing in Part I, Item 1 of this report. In the following discussions, most percentages and dollar amounts have been rounded to aid presentation, and, accordingly, all amounts are approximations. Amounts throughout this discussion and analysis for our unaudited interim condensed consolidated statements for the three months ended June 30, 2023 have been restated to reflect the impact of the restatement as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Annual Report”).
Current wording
The following discussion and analysis of the consolidated financial condition and results of operations of Powerfleet, Inc. and its subsidiaries (“Powerfleet,” the “Company,” “we,” “our” or “us”) should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing in Part I, Item 1 of this report. In the following discussions, most percentages and dollar amounts have been rounded to aid presentation, and, accordingly, all amounts are approximations. Amounts throughout this discussion and analysis for our unaudited interim condensed consolidated statements for the three- and six-month periods ended September 30, 2023 have been restated to reflect the impact of the restatement as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Annual Report”).
Previous wording
There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report. Important factors that could cause our actual results to differ materially from those expressed as forward-looking statements herein include, but are not limited, to: the ability to recognize the anticipated benefit of the acquisition of MiX Telematics; the possibility that we may not be able to integrate successfully the business, operations and employees of MiX Telematics; the ability of our supply chain to deliver certain key components; changes in technology or products, which may be more difficult or costly, or less effective, than anticipated; our ability to secure our information technology systems against breaches; the effects of competition from a wide variety of local, regional, national and other providers of wireless solutions; our ability to navigate the international political, economic and geographic landscape; future economic and business conditions, including the conflict between Israel and Hamas; the failure of the markets for our products to continue to develop; our inability to adequately protect our intellectual property; changes in laws and regulations or changes in generally accepted accounting policies, rules and practices; and other risks detailed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), including our Transition Report on Form 10-KT for the period ended March 31, 2024 (the “Form 10-KT”).
Current wording
There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report. Important factors that could cause our actual results to differ materially from those expressed as forward-looking statements herein include, but are not limited, to: the ability to recognize the anticipated benefit of the MiX Combination and the FC Acquisition; the possibility that we may not be able to integrate successfully the businesses, operations and employees of MiX Telematics and Fleet Complete; the ability of our supply chain to deliver certain key components; changes in technology or products, which may be more difficult or costly, or less effective, than anticipated; our ability to secure our information technology systems against breaches; the effects of competition from a wide variety of local, regional, national and other providers of wireless solutions; our ability to navigate the international political, economic and geographic landscape; future economic and business conditions, including the conflict between Israel and Hamas; the failure of the markets for our products to continue to develop; our inability to adequately protect our intellectual property; changes in laws and regulations or changes in generally accepted accounting policies, rules and practices; and other risks detailed from time to time in our filings with the Securities and
Previous wording
The consolidated financial statements as of and for the three months ended June 30, 2024 include the financial results of MiX Telematics and its subsidiaries from the closing date of the MiX Combination. See Note 3, “Acquisition” in Part I, Item 1, “Financial Statements” for additional information. No operating results for MiX Telematics are included in the comparative period for the three months ended June 30, 2023.
Current wording
The consolidated financial statements as of and for the three- and six-month periods ended September 30, 2024 include the financial results of MiX Telematics and its subsidiaries from the closing date of the MiX Combination. See Note 3, “Acquisition” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information. No operating results for MiX Telematics are included in the comparative period for the three- and six-month periods ended September 30, 2023.
Previous wording
On May 8, 2024, our Board of Directors approved a change in our fiscal year end from December 31 to March 31 in order to better align our reporting calendar with the April 2, 2024 close of the MiX Combination and MiX Telematics’ historical March 31 fiscal year end. This decision was already being considered by Powerfleet executives before the MiX Combination, as part of a broader finance transformation initiative, which includes shifting and outsourcing back-office functions (including central corporate accounting) from the United States to a more cost-effective solution in South Africa. The decision was also driven by align the fiscal year with the close of the MiX Combination for investors and align the timing of audit work with the winter months in South Africa to help attract and retain accounting talent.
Current wording
On May 8, 2024, our Board of Directors approved a change in our fiscal year end from December 31 to March 31 in order to better align our reporting calendar with the April 2, 2024 close of the MiX Combination and MiX Telematics’ historical March 31 fiscal year end. This decision was already being considered by Powerfleet executives before the MiX Combination, as part of a broader finance transformation initiative, which includes shifting and outsourcing back-office functions (including central corporate accounting) from the United States to a more cost-effective solution in South Africa. The decision was also driven by aligning the fiscal year with the close of the MiX Combination for investors and aligning the timing of audit work with the winter months in South Africa to help attract and retain accounting talent.
Previous wording
Our Powerfleet for Vehicles solutions are designed both to enhance the vehicle fleet management process, whether it’s a rental car, a private fleet, or automotive original equipment manufacturer (“OEM”) partners. We achieve this by providing critical information that can be used to increase revenues, reduce costs and improve customer service.
Current wording
Our Powerfleet for Vehicles solutions are designed both to enhance the vehicle fleet management process, whether it’s a rental car, a private fleet, or automotive OEM partners. We achieve this by providing critical information that can be used to increase revenues, reduce costs and improve customer service.
Previous wording
Our patented technologies are a proven solution for organizations that must monitor and analyze their assets to improve safety, increase efficiency, reduce costs, and drive profitability. Our offerings are sold under theglobal brands Powerfleet, Pointer, Cellocator, and MiX by Powerfleet.
Current wording
Our patented technologies are a proven solution for organizations that must monitor and analyze their assets to improve safety, increase efficiency, reduce costs, and drive profitability. Our offerings are sold under theglobal brands Powerfleet, Pointer, Cellocator, MiX by Powerfleet, and Fleet Complete.
Previous wording
We have an established history of IoT device development and innovation creating devices that can withstand harsh and rugged environments. With 49 patents and patent applications and over 25 years’ experience, we believe we are well positioned to evolve our offerings for even greater value to customers through our cloud-based applications for unified operations.
Current wording
We have an established history of IoT device development and innovation creating devices that can withstand harsh and rugged environments. With 51 patents and patent applications and over 25 years’ experience, we believe we are well positioned to evolve our offerings for even greater value to customers through our cloud-based applications for unified operations.
Previous wording
Improve Safety: Our applications are designed to provide asset and operator management, monitoring, and visibility for safer environments. Our solutions allow our customers to monitor their fleet of vehicles on various parameters, including but not limited to, vehicle location, speed, engine fault codes, driver behavior, eco-driving, and ancillary sensors and can receive reports and alerts, either automatically or upon request wirelessly via the internet, email, mobile phone or an SMS. In addition, our dash camera provides critical video capture that can be used to help exonerate drivers when in accidents or help bolster training and coaching programs of employees. We also offer preventative solutions such as safety warning products to alert vehicle operators of objects or pedestrians in their pathway to prevent accidents, injuries, and damage.
Current wording
Improve Safety: Our applications are designed to provide asset and operator management, monitoring, and visibility for safer environments. Our solutions allow our customers to monitor their fleet of vehicles on various parameters, including but not limited to, vehicle location, speed, engine fault codes, driver behavior, eco-driving, and ancillary sensors and can receive reports and alerts, either automatically or upon request wirelessly via the internet, email, mobile phone or an SMS. In addition, our dash camera provides critical video capture that can be used to help exonerate drivers when in accidents or help bolster training and coaching programs of employees. We also offer preventative solutions such as safety warning products to alert vehicle operators of objects or pedestrians in their pathway to prevent accidents, injuries, and damage. Our analytics platform features dashboards with KPIs and can help managers identify patterns, trends and outliers that can be used as flags for interventions.
Previous wording
Our objective is to become a leading global provider of IoT SaaS solutions for high-value enterprise assets to drive optimized operations and create safer environments. During the quarter ended March 31, 2023, we began to consolidate and augment many of our existing capabilities on a single customer software platform branded as “Unity.” We have designed our Unity platform to enable rapid and deep integration with IoT devices and third-party business systems to a highly scalable data pipeline that powers artificial intelligence-driven insights to help companies save lives, time, and money. Unity is an increasingly important initiative to meet our objective of becoming a leading global provider of IoT SaaS solutions for high-value enterprise assets to drive optimized operations and create safer environments. To achieve this goal, we intend to prove value, retain and grow business with existing customers and pursue opportunities with new customers by:
Current wording
As a leading global provider of IoT SaaS solutions for high-value enterprise assets, our objective is to drive optimized operations and create safer environments. During the quarter ended March 31, 2023, we began to consolidate and augment many of our existing capabilities on a single customer software platform branded as “Unity.” We have designed our Unity platform to enable rapid and deep integration with IoT devices and third-party business systems to a highly scalable data pipeline that powers artificial intelligence-driven insights to help companies save lives, time, and money. Unity is an increasingly important initiative to meet our objective of becoming a leading global provider of IoT SaaS solutions for high-value enterprise assets to drive optimized operations and create safer environments. To achieve this goal, we intend to prove value, retain and grow business with existing customers and pursue opportunities with new customers by:
Previous wording
•expanding our customer base, achieving wider market penetration and educating customers with mixed assets in their organization about our other applications, including new solutions available post the business combination with MiX Telematics;
Current wording
•expanding our customer base, achieving wider market penetration and educating customers with mixed assets in their organization about our other applications, including new solutions available as a result of our transactions with MiX Telematics and Fleet Complete;
Previous wording
We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of $177.1 million as of June 30, 2024.
Current wording
We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of $179.0 million as of September 30, 2024.
Previous wording
Management believes our cash and cash equivalents and restricted cash of $31.4 million as of June 30, 2024 in conjunction with the debt proceeds from our lenders, plus cash generated from the execution of our strategic plan over the next 12 months, are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these condensed consolidated financial statements (August 28, 2024) and service our outstanding obligations.
Current wording
Management believes our cash and cash equivalents and restricted cash of $89.0 million ($61.9 million of proceeds from the Private Placement, net of costs to issue common stock, was held in restricted cash at September 30, 2024, and subsequently used for the FC Acquisition on October 1, 2024) as of September 30, 2024 in conjunction with the debt proceeds from our lenders, plus cash generated from the execution of our strategic plan over the next 12 months, are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these condensed consolidated financial statements (November 12, 2024) and service our outstanding obligations.
Previous wording
For the three-month period ended June 30, 2024, there were no significant changes to our critical accounting policies as identified in the Form 10-KT.
Current wording
For the three- and six-month periods ended September 30, 2024, there were no significant changes to our critical accounting policies as identified in the Form 10-KT.
Previous wording
Revenues from products increased by $7.7 million, or 69.1%, to $18.7 million in the three months ended June 30, 2024 from $11.1 million in the same period in 2023. The increase in product revenues was primarily due to the MiX Telematics business acquired which contributed $8.8 million in product revenues for the three months ended June 30, 2024, offset by lower demand from logistics customers in North America.
Current wording
Revenues from products increased by $7.1 million, or 53.4%, to $20.3 million in the three months ended September 30, 2024, from $13.2 million in the same period in 2023. The increase in product revenues was primarily due to the MiX Telematics business acquired which contributed $8.9 million in product revenues for the three months ended September 30, 2024, offset by lower demand from logistics customers in North America.
Previous wording
Revenues from services increased by $35.7 million, or 169.9%, to $56.7 million in the three months ended June 30, 2024 from $21.0 million in the same period in 2023. The increase in services revenues was principally due tothe MiX Telematics business acquired which contributed $34.9 million in service revenues for the three months ended June 30, 2024.
Current wording
Revenues from services increased by $35.7 million, or 170.0%, to $56.7 million in the three months ended September 30, 2024 from $21.0 million in the same period in 2023. The increase in services revenues was principally due to the MiX Telematics business acquired which contributed $34.9 million in service revenues for the three months ended September 30, 2024.
Previous wording
COST OF REVENUES. Cost of revenues increased by $19.7 million, or 122.6%, to $35.8 million in the three months ended June 30, 2024, from $16.1 million for the same period in 2023. The MiX Telematics business acquired contributed $19.4 million to cost of revenues for the three months ended June 30, 2024. Gross profit was $39.6 million in the three months ended June 30, 2024, compared to $16.0 million for the same period in 2023. As a percentage of revenues, gross profit increased to 52.6% in the three months ended June 30, 2024 from 49.9% in the same period in 2023.
Current wording
COST OF REVENUES. Cost of revenues increased by $18.5 million, or 108.2%, to $35.7 million in the three months ended September 30, 2024, from $17.1 million for the same period in 2023. The MiX Telematics business acquired contributed $17.5 million to cost of revenues for the three months ended September 30, 2024. Gross profit was $41.3 million in the three months ended September 30, 2024, compared to $17.1 million for the same period in 2023. As a percentage of revenues, gross profit increased to 53.7% in the three months ended September 30, 2024 from 50.0% in the same period in 2023.
Previous wording
RESEARCH AND DEVELOPMENT EXPENSES. Research and development (“R&D”) expenses increased by $0.9 million, or 39.6%, to $3.1 million in the three months ended June 30, 2024, compared to $2.2 million in the same period in 2023, principally due to$1.4 million incurred by the MiX Telematics business post acquisition. As a percentage of revenues, R&D expenses decreased to 4.1% in the three months ended June 30, 2024, from 6.9% in the same period in 2023.
Current wording
RESEARCH AND DEVELOPMENT EXPENSES. Research and development (“R&D”) expenses increased by $1.0 million, or 41.6%, to $3.4 million in the three months ended September 30, 2024, compared to $2.4 million in the same period in 2023, principally due to $1.5 million incurred by the MiX Telematics business post-transaction. As a percentage of revenues, R&D expenses decreased to 4.5% in the three months ended September 30, 2024, from 7.1% in the same period in 2023.
Previous wording
Cost of products increased by $4.2 million, or 49.1%, to $12.8 million in the three months ended June 30, 2024, from $8.6 million in the same period in 2023. Gross profit for products was $6.0 million in the three months ended June 30, 2024, compared to $2.5 million in the same period in 2023. As a percentage of product revenues, gross profit increased to 32.0% in the three months ended June 30, 2024 from 22.9% in the same period in 2023. The increase in gross profit as a percentage of product revenues wasprincipally due to a larger proportion of sales being driven by higher margin product lines including in warehouse solutions.
Current wording
Cost of products increased by $9.3 million, or 53.4%, to $26.7 million in the six months ended September 30, 2024, from $17.4 million in the same period in 2023. Gross profit for products was $12.4 million in the six months ended September 30, 2024, compared to $6.9 million in the same period in 2023. As a percentage of product revenues, gross profit increased to 31.6% in the six months ended September 30, 2024 from 28.5% in the same period in 2023. The increase in gross profit as a percentage of product revenues was principally due to a larger proportion of sales being driven by higher margin product lines including in warehouse solutions.
Previous wording
Cost of services increased by $15.5 million, or 206.1%, to $23.0 million in the three months ended June 30, 2024, from $7.5 million in the same period in 2023. Gross profit for services was $33.7 million in the three months ended June 30, 2024, compared to $13.5 million in the same period in 2023. As a percentage of service revenues, gross profit decreased to 59.4% in the three months ended June 30, 2024 from 64.2% in the same period in 2023. The decrease in gross profit as a percentage of revenues was mainly due tothe commencement of amortization of MiX Telematics acquisition-related intangibles of $3.0 million, consisting of $2.1 million from customer relationships, $0.7 million from developed technology and $0.2 million from trade names.
Current wording
Cost of services increased by $29.0 million, or 183.1%, to $44.8 million in the six months ended September 30, 2024, from $15.8 million in the same period in 2023. The MiX Telematics acquired business contributed $24.9 million to cost of services for the six months ended September 30, 2024. Gross profit for services was $68.6 million in the six months ended September 30, 2024, compared to $26.2 million in the same period in 2023. As a percentage of service revenues, gross profit decreased to 60.5% in the six months ended September 30, 2024 from 62.4% in the same period in 2023. The decrease in gross profit as a percentage of revenues was mainly due to the commencement of amortization of MiX Telematics acquisition-related intangibles.
Previous wording
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative (“SG&A”) expenses increased by $37.6 million, or 218.5%, to $54.8 million in the three months ended June 30, 2024, compared to $17.2 million in the same period in 2023, principally due tothe MiX Telematics business acquired which contributed $17.3 million of SG&A expenses (excluding one-time costs), $14.5 million in acquisition-related expenses, $4.7 million in accelerated stock-based compensation costs and a $0.8 million increase in restructuring costsfor the three months ended June 30, 2024. As a percentage of revenues, SG&A expenses, excluding $20.4 million in one-time transaction, restructuring and accelerated stock-based compensation costs, decreased to 45.6% in the three months ended June 30, 2024, from 53.6% in the same period in 2023.
Current wording
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A expenses increased by $57.1 million, or 163.4%, to $92.1 million in the six months ended September 30, 2024, compared to $35.0 million in the same period in 2023, principally due to the MiX Telematics business acquired which contributed $35.4 million of SG&A expenses (excluding one-time costs), $17.3 million in acquisition-related expenses, $4.7 million in accelerated stock-based compensation costs and $2.3 million in restructuring costs for the six months ended September 30, 2024. As a percentage of revenues, SG&A expenses, excluding $24.3 million in one-time transaction, restructuring and accelerated stock-based compensation costs, decreased to 44.5% in the six months ended September 30, 2024, from 52.7% in the same period in 2023.
Previous wording
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS. Net loss attributable to common stockholders was $22.3 million, or $(0.21) per basic and diluted share, for the three months ended June 30, 2024, as compared to net loss of $6.2 million, or $(0.17) per basic and diluted share, for the same period in 2023. The net loss was primarily the result of the increased SG&A expenses, including$20.4 million in one-time transaction, restructuring and accelerated stock-based compensation costs.
Current wording
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS. Net loss attributable to common stockholders was $24.2 million, or $(0.23) per basic and diluted share, for the six months ended September 30, 2024, as compared to net loss of $12.7 million, or $(0.36) per basic and diluted share, for the same period in 2023. The net loss was primarily the result of $15.6 million in one-time transaction costs, $1.7 million inintegration-related costs, $2.3 million in restructuring costs, $4.7 million in accelerated stock-based compensation costs and $4.2 million from the commencement of amortization of MiX Telematics acquisition-related intangibles, partially offset by $2.2 million gain in other income from the derivative mark-to-market adjustment.
Previous wording
We define adjusted EBITDA as net loss attributable to common stockholders before non-controlling interest, preferred stock dividend and accretion, interest expense (net), income tax benefit/expense, depreciation and amortization, stock-based compensation, foreign currency gains/losses, restructuring-related expenses, gain on bargain purchase (Movingdots), acquisition-related expenses and severance-related expenses.
Current wording
We define adjusted EBITDA as net loss attributable to common stockholders before non-controlling interest, preferred stock dividend and accretion, interest expense (net), income tax expense, depreciation and amortization, stock-based compensation, foreign currency gains/losses, restructuring-related expenses, gain on bargain purchase (Movingdots), derivative mark-to market adjustment and acquisition-related expenses.
Previous wording
On March 18, 2024, Powerfleet Israel drew down $30 million in cash under the Hapoalim Term Facilities and used the proceeds to prepay approximately $11.2 million, representing the remaining outstanding balance, of the term loans extended to Powerfleet Israel under the Prior Credit Agreement and distributed the remaining proceeds to us. The proceeds of the Hapoalim Revolving Facilities may be used by Pointer for general corporate purposes, including working capital and capital expenditures.
Current wording
On March 18, 2024, Powerfleet Israel drew down $30 million in cash under the Hapoalim Term Facilities and used the proceeds to prepay approximately $11.2 million, representing the remaining outstanding balance, of the term loans extended to Powerfleet Israel under the Prior Credit Agreement and distributed the remaining proceeds to us. The proceeds of the Hapoalim Revolving Facilities may be used by Pointer for general corporate purposes, including working capital and capital expenditures. As of September 30, 2024, Powerfleet Israel had utilized approximately $12.1 million under the Hapoalim Revolving Facilities.
Previous wording
The RMB General Facility is repayable on demand and has a term of 365 days from the available date. Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the available date or (b) April 2, 2025, unless extended by agreement between MiX Telematics and RMB. Interest rate for the RMB General Facility is calculated at South African prime rate minus 0.75% per annum and will be calculated on the daily outstanding balance, compounded monthly in arrears and repaid quarterly. As of June 30, 2024, MiX Telematics had not borrowed anything under the RMB General Facility. The RMB General Facility was utilized in August 2024 to settle the Committed Facility
Current wording
The RMB General Facility is repayable on demand and has a term of 365 days from the Available Date (as defined therein). Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date or (b) April 2, 2025, unless extended by agreement between MiX Telematics and RMB. Interest rate for the RMB General Facility is calculated at South African prime rate minus 0.75% per annum and will be calculated on the daily outstanding balance, compounded monthly in arrears and repaid quarterly. As of September 30, 2024, $19,728 of the RMB General Facility was utilized.
Previous wording
MiX Telematics also has the CFC Overdraft Facility with Standard Bank. The CFC Overdraft Facility entitles MiX Telematics to utilize a maximum amount of R70.0 million (the equivalent of $3.8 million as of June 30, 2024). The CFC Overdraft Facility bears interest at the South African prime interest rate less 1.2% per annum. As of June 30, 2024, $0.6 million ofthe CFC Overdraft Facility was utilized.
Current wording
MiX Telematics also has the CFC Overdraft Facility with Standard Bank. The CFC Overdraft Facility entitles MiX Telematics to utilize a maximum amount of R70.0 million (the equivalent of $4.1 million as of September 30, 2024). The CFC Overdraft Facility bears interest at the South African prime interest rate less 1.2% per annum. As of September 30, 2024, the CFC Overdraft Facility was not utilized.
Previous wording
As of June 30, 2024, we had cash and cash equivalents (including restricted cash) of $31.4 million and working capital of $25.0 million compared to cash and cash equivalents (including restricted cash) of $109.7 million and working capital of $126.2 million as of March 31, 2024. Our primary sources of cash are cash flows from sales of products and services, our holdings of cash, cash equivalents and proceeds from the sale of our capital stock and borrowings under our credit facilities. $85 million in borrowings from RMB that was held in restricted cash at March 31, 2024 was used as the primary source of funds to redeem all outstanding shares of the Series A Preferred Stock on the April 2, 2024 close date of the MiX Combination. The MiX Combination is also expected to be a source of positive cash flow. To date, we have not generated sufficient cash flow solely from operating activities to fund our operations.
Current wording
As of September 30, 2024, we had cash and cash equivalents (including restricted cash) of $89.0 million and working capital of $81.2 million compared to cash and cash equivalents (including restricted cash) of $109.7 million and working capital of $126.2 million as of March 31, 2024. Our primary sources of cash are cash flows from sales of products and services, our holdings of cash, cash equivalents and proceeds from the sale of our capital stock and borrowings under our credit facilities. $61.9 million of proceeds from the Private Placement, net of costs to issue common stock, was held in restricted cash at September 30, 2024, which was used for the FC Acquisition on October 1, 2024. The FC Acquisition is also expected to be a source of positive cash flow, together with the MiX Combination completed on April 2, 2024. To date, we have not generated sufficient cash flow solely from operating activities to fund our operations.
Previous wording
During the three months ended June 30, 2024, net cash used in operating activities was $7.6 million, compared to net cash used in operating activities of $0.5 million for the same period in 2023. The net cash used in operating activities for the three-months ended June 30, 2024 primarily included non-cash charges of $5.9 million for stock-based compensation, $10.3 million for depreciation and amortization expense, $2.0 million for bad debts expense, $0.9 million for shares issued for transaction bonuses related to the MiX Combination and $0.8 million for ROU asset amortization. Changes in operating assets and liabilities included:
Current wording
During thesix months ended September 30, 2024, net cash used in operating activities was $10.8 million, compared to net cash used in operating activities of $2.1 million for the same period in 2023. The net cash used in operating activities for thesix months ended September 30, 2024 primarily included non-cash charges of $7.3 million for stock-based compensation, $19.4 million for depreciation and amortization expense, $4.4 million for bad debts expense, $0.9 million for shares issued for transaction bonuses related to the MiX Combination and $1.5 million for ROU asset amortization. Changes in operating assets and liabilities included:
Previous wording
•an increase in accounts receivables of $7.0 million;
Current wording
•an increase in accounts receivables of $12.6 million;
Previous wording
•an increase in prepaid expenses and other assets of $1.5 million; and
Current wording
•an increase in prepaid expenses and other assets of $3.0 million;
Previous wording
•an increase in accounts payable of $5.0 million.
Current wording
•an decrease in accounts payable of $0.1 million;
Previous wording
•a decrease in lease liabilities of $0.9 million; offset by
Current wording
•a decrease in lease liabilities of $1.9 million; and
Previous wording
•an increase in inventory, net of reserve of $0.6 million;
Current wording
•a decrease in inventory, net of reserve of $1.0 million.
Previous wording
Net cash provided by investing activities for thethree months ended June 30, 2024 was $19.6 million, compared to net cash used in investing activities of$2.0 million for the same period in 2023. The net cash provided by investing activities was primarily due to $27.5 million in net cash assumed from the MiX Combination, partially offset by $5.6 million for the purchase of fixed assets and $2.3 million for capitalized software development costs. In contrast, the net cash used in investing activities of $2.0 million in the same period in 2023 was primarily for the purchase of fixed assets of $1.0 million and $1.0 million for capitalized software development costs.
Current wording
Net cash provided by investing activities for thesix months ended September 30, 2024 was $12.9 million, compared to net cash used in investing activities of$3.5 million for the same period in 2023. The net cash provided by investing activities was primarily due to $27.5 million in net cash assumed from the MiX Combination, partially offset by $10.5 million for the purchase of fixed assets and $4.7 million for capitalized software development costs. The net cash used in investing activities of $3.5 million in the same period in 2023 was primarily for the purchase of fixed assets of $1.4 million and $2.0 million for capitalized software development costs.
Previous wording
During thethree months ended June 30, 2024, net cash used in financing activities was $89.5 million, compared to$0.3 million from financing activities for the same period in 2023. The increase in net cash used in financing activities was primarily due to the repayment of Series A Preferred Stock of $90.3 million following the MiX Combination.
Current wording
During thesix months ended September 30, 2024, net cash used in financing activities was $22.3 million, compared to a neutral position from financing activities for the same period in 2023. The cash used in financing activities was primarily due to the repayment of Series A Preferred Stock of $90.3 million following the MiX Combination, partially offset by $61.9 million received from the Private Placement, less costs, related to the FC Acquisition and $10.0 million received from short-term bank debt.
Previous wording
Inflation and other macroeconomic conditions in the U.S. have resulted in higher costs of raw materials, freight, and labor, which has impacted our operating costs. In addition, we operate in several emerging market economies that are particularly vulnerable to the impact of inflationary pressures that could materially and adversely impact our operations in the foreseeable future.
Current wording
Inflation and other macroeconomic conditions in the United States have resulted in higher costs of raw materials, freight, and labor, which has impacted our operating costs. In addition, we operate in several emerging market economies that are particularly vulnerable to the impact of inflationary pressures that could materially and adversely impact our operations in the foreseeable future.
Previous wording
On April 2, 2024, we consummated the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary. See Note 3, “Acquisition,” in Part I, Item 1, “Financial Statements” for additional information.
Current wording
On April 2, 2024, we consummated the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary. See Note 3, “Acquisition,” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information.
Previous wording
The Company is subject to recently issued accounting standards, accounting guidance and disclosure requirements. For a description of these new accounting standards, see Note 23 to our consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is included herein.
Current wording
The Company is subject to recently issued accounting standards, accounting guidance and disclosure requirements. For a description of these new accounting standards, see Note 23 to our consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Exchange Commission (the “SEC”), including our Transition Report on Form 10-KT for the period ended March 31, 2024 (the “Form 10-KT”).
Current report — wording carried from elsewhere
Revenues from products increased by $14.7 million, or 60.5%, to $39.0 million in the six months ended September 30, 2024, from $24.3 million in the same period in 2023. The increase in product revenues was primarily due to the MiX Telematics business acquired which contributed $17.7 million in product revenues for the six months ended September 30, 2024, offset by lower demand from logistics customers in North America.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Our analytics platform features dashboards with KPIs and can help managers identify patterns, trends and outliers that can be used as flags for interventions.
Previous report — wording carried elsewhere
Pointer is required to pay a credit allocation fee in NIS, with respect to Hapoalim Facility C, and a non-utilization fee in U.S. dollars, with respect to Hapoalim Facility D, in each case, equal to 0.5% per annum on undrawn and uncancelled amounts of the Hapoalim Revolving Facilities during the period commencing on March 18, 2024 and ending on the last day of the applicable availability period of such Hapoalim Revolving Facilities.