MICT, Inc.
Q1 2019 Earnings Call Transcript

Published: 21 May 2019

[Operator:]

Thank you. Good morning and thank you for calling in to review MICT's First Quarter 2019 Results. Management will provide an overview of the results. Importantly, there is a slide presentation which management will use during their overview. This presentation can be found on the Investor Relations section of the Company's website at www.mict-inc.com under Events and Presentations. You may also access a PDF copy of the presentation by clicking the link in the Company's press release regarding these financial results issued this morning and then clicking a second link, labeled First Quarter 2019 Results. Callers accessing the PDF copy of the presentation will need to manually scroll through the slides as management goes through the presentation. I will now take a brief moment to read the Safe Harbor statement. During the course of this call, management will make expressed and 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 the fact that the Company continues to be engaged in the transactions contemplated by the acquisition agreement entered into among MICT, BNN, and ParagonEX Ltd. 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, 2018, filed with the Securities and Exchange Commission. No offer or solicitation

[Moran Amran:]

Thank you. Good morning, everyone. In the first quarter of 2019 we continue to be engaged in a transaction contemplated by the acquisition agreement MICT entered in December of 2018 among MICT, BNN, and ParagonEX Ltd. During the first quarter, MICT ownership interest in Micronet decreased to 33.88%, and it's voting right decreased to 39.53%, as a result of the public equity offering on the Tel Aviv Stock Exchange. Thus Micronet Ltd. closed on February 24, 2019. According to the U.S. GAAP, MICT no longer report consolidated Micronet Ltd.'s numbers effective March 1, 2019. As a result, the first quarter of 2019 that MICT is reporting today reflected consolidated Micronet Ltd.'s revenues for the months of January and February 2019 only. I would like to point out that under-development Israeli Security Laws, MICT is of the opinion that it maintained effective control of Micronet by virtue of it's high level of influence over Micronet. On Slide 6, we will review the first quarter 2019 financial results. Revenue was $477,000 in the first quarter of 2019, compared to $5.99 million in the first quarter of 2018. Gross loss was $369,000 representing 77% of revenues in the first quarter of 2019, compared to a gross profit of $1.72 million representing 29% of revenues in the first quarter of 2018. Research and development expense in the first quarter of 2019 was $261,000 or 55% of sales, as compared to $527,000 or 9% of sales in the first quarter of 2018. Selling, general and administrative expenses was $1.19 million in the first quarter of 2019, as compared to $1.67 million in the first quarter of 2018. Net loss was $910,000 in the first quarter of 2019, as compared to a net loss of $850,000 in the first quarter of 2018. The next slide illustrated revenue for the first quarter of 2019 as compared to the first quarter of 2018. Revenue was $477,000 in the first quarter of 2019, as compared to $5.99 million in the first quarter of 2018. Slide 8 provides more detailed breakdown of the numbers. Operating expense in the first quarter of 2019 were $1.47 million as compared to $2.41 million in the first quarter of 2018. Loss from operation were $1.83 million in the first quarter of 2019, as compared to $693,000 in the first quarter of 2018. We reported a $299,000 net profit from the deconsolidation of Micronet in the first quarter of 2019. Basic and dilution loss per share from discontinued operation in the first quarter of 2019 was $0.09 per share, as compared to $0.11 per share in the first quarter of 2018. Turning to Slide 9; on our balance sheet we have $347,000 in cash and cash equivalent, and $1.8 million deficit in working capital, and a deficit of $138,000 in shareholder equities as of March 31, 2019. MICT executive management team and board are committed to identify opportunities and implement in growth strategies in order to increase value for MICT shareholders. I would like to thank our dedicated employees. Thanks, and I look forward to speaking with you next quarter.

[End of Q&A:]

Thank you. This concludes MICT's first quarter 2019 results conference call. Thank you for your participation. You may go ahead and disconnect.