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

MONTVALE, N.J., May 15, 2018

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

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

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

Q1 2018 Financial Highlights

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

A reconciliation of GAAP to non-GAAP net loss and loss per share is provided in the table at the end of this press release.

Conference Call