Wrap Text
MiX Telematics announces financial results for third quarter of fiscal year 2014
MiX Telematics Limited
(Incorporated in the Republic of South Africa)
(Registration number 1995/013858/06)
JSE share code: MIX ISIN: ZAE000125316
NYSE share code: MIXT
(“MiX Telematics” or the “company” or the “Group”)
MIX TELEMATICS ANNOUNCES FINANCIAL RESULTS FOR THIRD QUARTER OF FISCAL YEAR 2014
MiX Telematics Announces Financial Results for Third Quarter of Fiscal Year 2014 References in this
announcement to “R” are to South African rand and references to “U.S. dollars” and “$” are to United States dollars.
Unless otherwise stated MiX Telematics has translated U.S. dollar amounts from South African rand at the exchange
rate of R10.4675 per $1.00, which was the R/$ exchange rate reported by the South African Reserve Bank as of
December 31, 2013.
Third Quarter Highlights:
- Total subscription revenue of R220 million ($21.0 million), grew 25% year over year
- Total vehicles under subscription increased by 26% year over year, bringing the total to over 428,500
subscribers at December 31, 2013
- Adjusted EBITDA of R66 million ($6.3 million), representing a 21% Adjusted EBITDA margin
- Company raises guidance for subscription revenue and reiterates guidance for total revenue,
Adjusted EBITDA and earnings per share, for the full 2014 fiscal year.
Midrand, South Africa, February 6, 2014 — MiX Telematics Limited (NYSE: MIXT, JSE: MIX), a leading global
provider of fleet and mobile asset management solutions delivered as Software-as-a-Service (‘’SaaS’’), today
announced financial results for its third quarter of fiscal year 2014, which ended December 31, 2013.
“We are pleased to report strong third quarter results, which were highlighted by 25% year over year growth in
subscription revenue. Our focus on selling fully-bundled deals is paying off as we had an increased number of
enterprise customers opt for the pure subscription structure rather than pay for the hardware up front,” said Stefan
Joselowitz, Chief Executive Officer of MiX Telematics. “Our enterprise fleet segment landed substantial deals in the
quarter, while our passenger vehicle segment continued to demonstrate strong growth. Of note, adoption of our
solutions in the bus and coach industry continues to expand. Our dominance in oil and gas was also in evidence
again this quarter as we added vehicles to existing customers’ fleets and secured several new deals, including a
significant deal with Lind Gas in Brazil. We continue to believe MiX Telematics is well positioned to be a prime
beneficiary of telematics market growth as we have already achieved meaningful scale, built a global distribution
network, and offer state-of-the-art solutions that yield a powerful return on investment for our customers.”
Financial Performance for the three months ended December 2013
Revenue: Total revenue was R309.8 million ($29.6 million), an increase of 3.8% compared to R298.6 million
($28.5 million) for the third quarter of fiscal year 2013. Subscription revenue was R219.8 million ($21.0 million), an
increase of 24.9% compared with R176.0 million ($16.8 million) for the third quarter of fiscal year 2013. This was
driven primarily by an increase of over 88,000 vehicles under subscription, an increase of 25.9% from December
2012 to December 2013. Hardware and other revenue was R90.0 million ($8.6 million), a decrease of 26.6%
compared to R122.6 million ($11.7 million) for the third quarter of fiscal year 2013. The decrease in hardware and
other revenue was due to a significant increase in the number of fully-bundled subscriptions in the third quarter of
fiscal 2014 as compared to the prior year period, as well as the ongoing decline of hardware prices.
Gross Margin: Gross profit was R206.3 million ($19.7 million), as compared to R186.6 million ($17.8 million) for the
third quarter of fiscal year 2013. Gross profit margin was 66.6%, compared to 62.5% for the third quarter of fiscal
year 2013. In the third quarter of fiscal 2014, subscription revenue, which generates a higher gross profit margin than
hardware and other revenue, amounted to 71.0% of total revenue compared to 59.0% in the third quarter of fiscal
2013.
Operating Margin: Operating profit was R38.4 million ($3.7 million), as compared to R42.9 million ($4.1 million) for
the third quarter of fiscal year 2013. Operating margin was 12.4%, compared to 14.4% for the third quarter of fiscal
year 2013. The third quarter of fiscal year 2014 included expected losses incurred by the start-up operation in Brazil
and additional investments in headcount. Furthermore, in line with the Group’s strategy to invest in future growth,
sales and marketing costs for the third quarter of fiscal 2014 increased by R3.8 million ($0.4 million) from the third
quarter of fiscal 2013.
Adjusted EBITDA: Adjusted EBITDA, a non-IFRS measure, was R65.5 million ($6.3 million) compared to
R69.2 million ($6.6 million) for the third quarter of fiscal year 2013. The Adjusted EBITDA margin for the third quarter
of fiscal year 2014 was 21.1%, compared to the 23.2% Adjusted EBITDA margin in the third quarter of fiscal year
2013 due primarily to the impact of the expected losses incurred by the start-up operation in Brazil, as well as
increased operating costs as a result of headcount and investments in sales and marketing activities.
Adjusted EBITDA is defined as profit for the period before income taxes, net interest income/(expense), depreciation
of property, plant and equipment including capitalized customer in-vehicle devices, amortization of intangible assets
including capitalized in-house development costs, share-based compensation costs, transaction costs arising from
the acquisition of a business, restructuring costs, profits/(losses) on the disposal or impairments of assets or
subsidiaries, certain non-recurring initial public offering costs, unrealized foreign exchange gains/(losses) and foreign
exchange gains/(losses) related to the cash proceeds raised through the initial public offering (“IPO”).
A reconciliation of Adjusted EBITDA and Adjusted EBITDA margin for the three months ended December 31, 2013
and 2012 is provided in the financial tables that accompany this release.
Profit for the period: Profit for the period was R44.6 million ($4.3 million), compared to R29.4 million ($2.8 million) in
the third quarter of fiscal year 2013. Profit for the period included a net foreign exchange gain of R24.4 million
($2.3 million). The net foreign exchange gain included R25.7 million ($2.5 million) relating to the IPO proceeds which
are maintained in U.S dollars and are therefore sensitive to R:$ exchange rate movements. Earnings per diluted
ordinary share were 6 South African cents, compared to 4 South African cents in the third quarter of fiscal year 2013.
The effective tax rate for the quarter was 29.5% in comparison to 28.8% in the third quarter of fiscal 2013.
On a U.S. dollar basis, and using the December 31, 2013 exchange rate of 10.4675 rands per U.S. dollar, and at a
ratio of 25 ordinary shares to one ADR, profit for the period was $4.3 million, or 13 U.S. cents per diluted American
Depositary Receipt.
Statement of Financial Position and Cash Flow: At December 31, 2013, MiX Telematics had R792.6 million ($75.7
million) of cash and cash equivalents, an increase from R767.8 ($73.3 million) in the second quarter of fiscal year
2014. MiX Telematics generated R50.1 million ($4.8 million) in net cash from operating activities for the three months
ended December 31, 2013 and invested R33.0 million ($3.1 million) in capital expenditures during the quarter, leading
to free cash flow of R17.1 million ($1.6 million) for the third quarter of fiscal year 2014, compared with free cash flow
of R44.5 million ($4.3 million) for the third quarter of fiscal year 2013. Free cash flow is determined as net cash
generated from operating activities less capital expenditure per investing activities.
Business Outlook
MiX Telematics has translated U.S. dollar amounts in this Business Outlook paragraph from South African rand at the
exchange rate of R11.1238 per $1.00, which was the R/$ exchange rate reported by the South African Reserve Bank
as of February 5, 2014.
Based on information as of today, February 6, 2014, the Company is issuing the following financial guidance for the
full 2014 fiscal year:
- Revenue - R1,270 million to R1,300 million ($114.2 million to $116.9 million), which would represent revenue
growth of 8% to 11% compared to fiscal year 2013.
- Subscription revenue - R841 million to R845 million ($75.6 million to $76.0 million), which would represent
subscription revenue growth of 22% to 23% compared to fiscal year 2013.
- Adjusted EBITDA - R270 million to R280 million ($24.3 million to $25.2 million).
- Earnings per diluted ordinary share of 15 to 16 South African cents based on 770 million diluted ordinary shares
in issue, an exchange rate of R11.1238 per $1 and based on an effective tax rate of 28% to 31%. At a ratio of 25
ordinary shares to one ADR, this equates to earnings per diluted ADR of 34 to 36 U.S. cents.
For the fourth quarter of fiscal year 2014 the Company expects subscription revenue to be in the range of
R220 million to R224 million ($19.8 million to $20.1 million) which would represent subscription revenue growth of
18% to 20% compared to the fourth quarter of fiscal year 2013.
The key assumptions used in deriving the forecast are as follows:
- Growth in subscription revenue and vehicles under subscription are based on expected growth rates related
to market conditions and takes into account growth rates achieved previously.
- Costs have been increased to take into account the Company's strategy of investing in sales and marketing
and development and also include costs necessary to operate as a U.S. listed company.
The forecast is the responsibility of the board of directors and has not been reviewed or reported on by the
Company’s external auditors. The Company’s policy is to give guidance on a quarterly basis, if necessary, and does
not update guidance between quarters.
The information disclosed in this “Business Outlook” paragraph complies with the disclosure requirements in terms
of paragraph 8.38 of the JSE Listings Requirements which deals with profit forecasts.
Quarterly Reporting Policy in respect of JSE Listings Requirements
Following the listing of the Company’s ADRs on the New York Stock Exchange, the company has adopted a quarterly
reporting policy. As a result of such quarterly reporting the company is, in terms of paragraph 3.4(b)(ix) of the JSE
Listings Requirements, not required to publish trading statements in terms of paragraph 3.4(b)(i) to (viii) of the JSE
Listings Requirements.
Conference Call Information
MiX Telematics management will also host a conference call and audio webcast at 8:00 a.m. (Eastern Standard
Time) and 3:00 p.m. (South African Time) on February 6, 2014 to discuss the Company's financial results and current
business outlook:
- The live webcast of the call will be available at the “Investor Information” page of the Company’s website,
http://investor.mixtelematics.com.
- To access the call, dial 1-888-523-1225 (from within the United States) or 0 800 999 558 (from within South
Africa) or 1-719-457-2697 (outside of the United States).
- A replay of this conference call will be available for a limited time at 1-877-870-5176 (within the United States)
or 1-858-384-5517 (within South Africa or outside of the United States). The replay conference ID is 7609565.
- A replay of the webcast will also be available for a limited time at http://investor.mixtelematics.com.
About MiX Telematics
MiX Telematics is a leading global provider of fleet and mobile asset management solutions delivered as SaaS to
customers in 112 countries. The Company’s products and services provide enterprise fleets, small fleets and
consumers with solutions for safety, efficiency, risk and security. MiX Telematics was founded in 1996 and has offices
in South Africa, the United Kingdom, the United States, Uganda, Brazil, Australia and the United Arab Emirates as
well as a network of more than 130 fleet partners worldwide. MiX Telematics shares are publicly traded on the
Johannesburg Stock Exchange (JSE: MIX) and MiX Telematics American Depositary Receipts are listed on the New
York Stock Exchange (NYSE: MIXT). For more information visit www.mixtelematics.com.
Forward-Looking Statements
This press release includes certain “forward-looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, including statements concerning our financial guidance for the fourth quarter of fiscal year 2014
and the full year of fiscal year 2014, our position to execute on our growth strategy, and our ability to expand our
leadership position. These forward-looking statements include, but are not limited to, plans, objectives, expectations
and intentions and other statements contained in this press release that are not historical facts and statements
identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of
similar meaning. These forward-looking statements reflect our current views about our plans, intentions,
expectations, strategies and prospects, which are based on the information currently available to us and on
assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects
as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the
plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ
materially from those described in the forward-looking statements and will be affected by a variety of risks and factors
that are beyond our control including, without limitation, the Company's ability to attract, sell to and retain customers;
the Company's anticipated growth strategies, including its ability to increase sales to existing customers, the
introduction of new solutions and international expansion; the Company's ability to adapt to rapid technological
change in its industry; competition from industry consolidation; loss of key personnel or the Company's failure to
attract, train and retain other highly qualified personnel; the Company's ability to integrate any businesses it acquires;
the Company's dependence on its network of dealers and distributors to sell its solutions; the Company's dependence
on key suppliers and vendors to manufacture its hardware; businesses may not continue to adopt fleet management
solutions; the Company's future business development, results of operations and financial condition; expected
changes in the Company's profitability and certain cost or expense items as a percentage of its revenue; changes in
the practices of insurance companies; the impact of laws and regulations relating to the Internet and data privacy; the
Company's ability to protect its intellectual property and proprietary technologies and address any infringement
claims; significant disruption in service on, or security breaches of, the Company's websites or computer systems; the
Company's dependence on third-party technology; fluctuations in the value of the South African rand; economic,
social, political, labour and other conditions and developments in South Africa and globally; the Company's ability to
issue securities and access the capital markets in the future; and other risks set forth under the caption “Risk Factors”
in the Company’s final prospectus related to its initial public offering filed pursuant to Rule 424b under the Securities
Act of 1933, as amended, with the Securities and Exchange Commission (the "SEC") on August 12, 2013, as updated
by the Company's filings that it makes with the SEC. The Company assumes no obligation to update any forward-
looking statements contained in this press release as a result of new information, future events or otherwise.
Non-IFRS financial measures
Adjusted EBITDA
To provide investors with additional information regarding the Company's financial results, the Company has
disclosed within this press release Adjusted EBITDA and Adjusted EBITDA margin, which are non-IFRS financial
measures. The Company presents in the financial tables that accompany this release a reconciliation of Adjusted
EBITDA to profit for the period and Adjusted EBITDA margin to profit for the period margin, the most directly
comparable financial measures presented in accordance with IFRS.
The Company has included Adjusted EBITDA and Adjusted EBITDA margin in this press release because they are
key measures that the Company's management and Board of Directors use to understand and evaluate its core
operating performance and trends; to prepare and approve its annual budget; and to develop short- and long-term
operational plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA and Adjusted
EBITDA margin can provide a useful measure for period-to-period comparisons of the Company's core business.
Accordingly, the Company believes that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to
investors and others in understanding and evaluating its operating results.
The Company's use of Adjusted EBITDA (and measures such as Adjusted EBITDA margin that are derived from it)
has limitations as an analytical tool, and investors should not consider this performance measure in isolation from, or
as a substitute for, analysis of the Company's results as reported under IFRS. Some of these limitations are:
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized
may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure
requirements for such replacements or for new capital expenditure requirements;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, the Company's working capital
needs;
- Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
- Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to the
Company;
- Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest
payments on the Company's debt or any losses on the extinguishment of its debt;
- Adjusted EBITDA does not include unrealized foreign currency transaction gains and losses;
- Adjusted EBITDA does not include certain non-recurring initial public offering costs; and
- other companies, including companies in the Company's industry, may calculate Adjusted EBITDA differently,
which reduces its usefulness as a comparative measure.
Because of these limitations, investors should consider Adjusted EBITDA and Adjusted EBITDA margin alongside
other financial performance measures, including operating profit, profit for the period, profit for the period margin and
the Company's other results.
Accounting policies
The statement of financial position, income statement and statements of cash flows included in this announcement
have been prepared in accordance with IFRS accounting policies. Other than the change in accounting policy in
respect of the inclusion of net foreign exchange gains/losses as a component of financing income/(costs), which is
fully explained in note 1 of the notes to the financial tables, the accounting policies are consistent in all material
respects with those applied in the preparation of the consolidated financial statements for the year ended March 31,
2013. None of the new or revised accounting standards adopted by the Company in fiscal 2014 have had a material
impact on the Company’s results.
Investor Contact:
Sheila Ennis
ICR for MiX Telematics
ir@mixtelematics.com
(855) 564-9835
6 February 2014
Sponsor
Java Capital
MiX TELEMATICS LIMITED
CONDENSED CONSOLIDATED INCOME STATEMENTS
South African rand United States dollar
Three months Three months Three months Three months
ended ended ended ended
Figures are in thousands unless otherwise stated December 31, December 31, December 31, December 31,
2013 2012 2013 2012
(Restated) (Restated)
Unaudited Unaudited Unaudited Unaudited
Revenue 309,823 298,599 29,599 28,526
Cost of sales (103,527) (112,035) (9,890) (10,703)
Gross profit 206,296 186,564 19 709 17,823
Other income/(expenses) - net 307 (965) 29 (92)
Operating expenses (168,199) (142,661) (16,068) (13,629)
- Sales and marketing (37,215) (33,390) (3,555) (3,190)
- Administration and other charges (130,984) (109,271) (12,513) (10,439)
Operating profit 38,404 42,938 3,670 4,102
Finance income/(costs) - net 24,921 (1,628) 2,381 (156)
- Finance income 1,225 350 117 33
- Finance costs (733) (901) (70) (86)
- Net foreign exchange gains/(losses) 24,429 (1,077) 2 334 (103)
Profit before taxation 63,325 41,310 6,051 3,946
Taxation (18,708) (11,896) (1 787) (1,136)
Profit for the period 44,617 29,414 4,264 2,810
Attributable to:
Shareholders of the parent 44,617 29,414 4,264 2,810
Non-controlling interests * - * -
44,617 29,414 4,264 2,810
Earnings per share
Basic (R/$) 0.06 0.04 0.01 0.00
Diluted (R/$) 0.06 0.04 0.01 0.00
Earnings per American Depositary Receipt
Basic (R/$) 1.44 1.12 0.14 0.11
Diluted (R/$) 1.38 1.09 0.13 0.11
Weighted average ordinary shares outstanding
Basic ('000) 773,046 659,460 773,046 659,460
Diluted ('000) 808,657 675,770 808,657 675,770
Weighted average American Depositary Receipt
Basic ('000) 30,922 26,378 30,922 26,378
Diluted ('000) 32,346 27,031 32,346 27,031
* Amounts less than $1,000/R1,000
South African rand amounts have been translated to U.S. dollars at the exchange rate of R10.4675 per $1.00, which was the R/$
exchange rate reported by the South African Reserve Bank as of December 31, 2013. The U.S. dollar figures may not compute as they
are rounded independently.
MiX TELEMATICS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
South African rand United States dollar
December March 31, December March 31,
Figures are in thousands unless otherwise stated 31, 2013 2013 31, 2013 2013
Unaudited Audited Unaudited Audited
ASSETS
Non-current assets
Property, plant and equipment 126,339 96,547 12,070 9,224
Intangible assets 679,707 645,736 64,935 61,690
Finance lease receivable 7,712 6,359 737 607
Deferred tax assets 20,524 13,868 1,961 1,324
Total non-current assets 834,282 762,510 79,703 72,845
Current assets
Inventory 59,104 38,927 5,646 3,719
Trade and other receivables 217,469 186,987 20,776 17,863
Finance lease receivable 6,915 3,604 660 343
Taxation 50 4,823 5 460
Restricted cash 10,863 8,235 1,038 787
Cash and cash equivalents 792,576 147,702 75,718 14,111
Total current assets 1,086,977 390,278 103,843 37,283
Total assets 1,921,259 1,152,788 183,546 110,128
EQUITY
Stated capital 1,417,414 790,491 135,411 75,519
Other reserves (63,150) (111,362) (6,033) (10,640)
Retained earnings 250,340 188,750 23,916 18,031
Equity attributable to shareholders of the parent 1,604,604 867,879 153,294 82,910
Non-controlling interest (5) (5) * *
Total equity 1,604,599 867,874 153,294 82,910
LIABILITIES
Non-current liabilities
Borrowings 2,778 - 265 -
Deferred tax liabilities 21,138 8,605 2,019 822
Provisions 3,048 283 291 27
Total non-current liabilities 26,964 8,888 2,575 849
Current liabilities
Trade and other payables 202,556 184,397 19,351 17,616
Borrowings 1,176 3,472 112 332
Taxation 10,232 10,691 978 1,021
Provisions 18,166 21,461 1,737 2,050
Bank overdraft 57,566 56,005 5,499 5,350
Total current liabilities 289,696 276,026 27,677 26,369
Total liabilities 316,660 284,914 30,252 27,218
Total equity and liabilities 1,921,259 1,152,788 183,546 110,128
* Amounts less than $1,000/R1,000
South African rand amounts have been translated to U.S. dollars at the exchange rate of R10.4675 per $1.00, which was the
R/$ exchange rate reported by the South African Reserve Bank as of December 31, 2013. The U.S. dollar figures may not
compute as they are rounded independently.
MiX TELEMATICS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
South African rand United States dollar
Three months Three months Three months Three months
ended ended ended ended
Figures are in thousands unless otherwise stated December 31, December 31, December 31, December 31,
2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited
Operating activities
Cash generated from operations 52,544 67,360 5,020 6,435
Net financing income/(costs) 221 (483) 21 (46)
Taxation paid (2,628) (705) (251) (67)
Net cash generated from operating activities 50,137 66,172 4,790 6,322
Cash flows from investing activities
Capital expenditure, net of government grant received (32,966) (21,645) (3,149) (2,068)
Proceeds on sale of property, plant and equipment and
intangible assets 795 - 76 -
Increase in restricted cash (1,228) (951) (117) (91)
Net cash used in investing activities (33,399) (22,596) (3,190) (2,159)
Cash flows from financing activities
Proceeds from issuance of ordinary shares 1,473 757 141 72
Share issue expenses incurred in anticipation of foreign
listing (11,498) - (1,098) -
Dividends paid to company's shareholders (2) (26,346) * (2,517)
Repayment of borrowings (68) (3,161) (6) (302)
Net cash used in financing activities (10,095) (28,750) (963) (2,747)
Net increase in cash and cash equivalents 6,643 14,826 637 1,416
Net cash and cash equivalents at the beginning of the period 703,286 3,940 67,188 376
Exchange gains on cash and cash equivalents 25,081 652 2,394 63
Net cash and cash equivalents at the end of the period 735,010 19,418 70,219 1,855
* Amounts less than $1,000/R1,000
South African rand amounts have been translated to U.S. dollars at the exchange rate of R10.4675 per $1.00, which was the R/$
exchange rate reported by the South African Reserve Bank as of December 31, 2013. The U.S. dollar figures may not compute as they
are rounded independently.
MiX TELEMATICS LIMITED
RECONCILIATION OF ADJUSTED EBITDA TO PROFIT FOR THE PERIOD
South African rand United States dollar
Three months Three months Three months Three months
ended ended ended ended
Figures are in thousands unless otherwise stated December 31, December 31, December 31, December 31,
2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited
Adjusted EBITDA 65,512 69,205 6,259 6,612
Add:
Net profit on sale of property,plant and equipment and
intangible assets 225 - 21 -
Less:
Depreciation (1) 13,413 9,815 1 281 938
Amortization (2) 12,140 13,754 1,159 1,314
Impairment (3) 414 - 39 -
Share-based compensation costs 1,191 1,061 114 101
Net loss on sale of property,plant and equipment and
intangible assets - 4 - *
Foreign currency translation reserve released due to
liquidation of intermediary subsidiary holding company - 2,018 - 194
Transaction costs arising from acquisition of a
business 45 9 4 1
Net realized foreign exchange gains/(losses) (4) 130 (394) 13 (38)
Operating profit 38,404 42,938 3,670 4,102
Add: Finance income/(costs) - net 24,921 (1 628) 2 381 (156)
Less: Taxation 18,708 11,896 1,787 1,136
Profit for the period 44,617 29,414 4,264 2,810
(1) Includes depreciation of property, plant and equipment (including in-vehicle devices).
(2) Includes amortization of intangible assets (including product development costs).
(3) Includes impairment of intangibles assets.
(4) As per our adjusted EBITDA definition, the profit measure is calculated before all unrealized foreign exchange gains/(losses)
and foreign exchange gains/(losses) related to the cash proceeds raised through the initial public offering of ADRs on the NYSE.
The remaining realized foreign exchange gains/(losses), which are included in adjusted EBITDA, have been included in the
reconciliation of adjusted EBITDA to operating profit.
* Amounts less than $1,000/R1,000
South African rand amounts have been translated to U.S. dollars at the exchange rate of R10.4675 per $1.00, which was the R/$
echange rate reported by the South African Reserve Bank as of December 31, 2013. The U.S. dollar figures may not compute as
they are rounded independently.
MiX TELEMATICS LIMITED
RECONCILIATION OF ADJUSTED EBITDA MARGIN TO PROFIT FOR THE PERIOD MARGIN
Three months Three months
ended ended
December 31, December 31,
2013 2012
Unaudited Unaudited
Adjusted EBITDA margin 21.1% 23.2%
Add:
Net profit on sale of property,plant and equipment and intangible
assets 0.1% -
Less:
Depreciation (1) 4.3% 3.3%
Amortization (2) 3.9% 4.6%
Impairment (3) 0.2% -
Share-based compensation costs 0.4% 0.3%
Net loss on sale of property,plant and equipment and intangible
assets - 0.0%
Foreign currency translation reserve released due to liquidation
of intermediary subsidiary holding company - 0.7%
Transaction costs arising from acquisition of a business 0.0% 0.0%
Net realized foreign exchange gains/(losses) (4) 0.0% -0.1%
Operating profit margin 12.4% 14.4%
Add: Finance income/(costs) - net 8.1% -0.5%
Less: Taxation 6.1% 4.0%
Profit for the period margin 14.4% 9.9%
(1) Includes depreciation of property, plant and equipment (including in-vehicle devices).
(2) Includes amortization of intangible assets (including product development costs).
(3) Includes impairment of intangibles assets.
(4) As per our adjusted EBITDA definition, the profit measure is calculated before all unrealized foreign exchange gains/(losses) and
foreign exchange gains/(losses) related to the cash proceeds raised through the initial public offering of ADRs on the NYSE. The
remaining realized foreign exchange gains/(losses), which are included in adjusted EBITDA, have been included in the reconciliation of
adjusted EBITDA to operating profit.
MiX TELEMATICS LIMITED
OTHER FINANCIAL AND OPERATING DATA
South African rand United States dollar
Three months Three months Three months Three months
ended ended ended ended
Figures are in thousands unless otherwise stated December 31, December 31, December 31, December 31,
2013 2012 2013 2012
Unaudited Unaudited Unaudited Unaudited
Subscription revenue 219,835 176,032 21,002 16,817
Adjusted EBITDA 65,512 69,205 6,259 6,612
Cash and cash equivalents 792,576 76,794 75,718 7,336
Net cash 731,056 19,418 69,842 1,855
Capital expenditure 32,966 21,645 3,149 2,068
Vehicles under subscription (number) 428,509 340,377 428,509 340,377
South African rand amounts have been translated to U.S. dollars at the exchange rate of R10.4675 per $1.00, which was the R/$
exchange rate reported by the South African Reserve Bank as of December 31, 2013. The U.S. dollar figures may not compute as
they are rounded independently.
Notes to condensed consolidated income statements, statements of financial position, statements of
cashflows and other financial and operating data
1. Reclassification
Net foreign exchange gains/(losses)
During the current reporting period, the Group changed its accounting policy in respect of the classification of foreign
exchange gains and losses in the income statement. Foreign exchange gains and losses, which were previously
classified as part of “Other income/(expenses) – net”, are now classified as part of “Finance income/(costs) - net”. The
change is considered a more relevant presentation of such items in the income statement since the majority of foreign
exchange gains and losses in 2014 relate to translation differences on foreign currency cash and cash equivalents
arising from the IPO proceeds.
The reclassification has been adopted retrospectively, and the comparative amounts for the 3 months ended
December 31, 2012 have been restated accordingly. The impact of the reclassification results in an increase of R1.1
million ($0.1 million) in "Operating profit" with a corresponding additional cost in "Finance income/(costs) - net" of
R1.1 million ($0.1 million) for the 3 months ended December 31, 2012. Profit before taxation and profit for the period
remain unchanged for the period.
2. Acquisition of proprietary software development business
During the current reporting period, the Group, through MiX Telematics International (Pty) Ltd, acquired a proprietary
software development business. The business acquired has developed customizable software which comprises of a
smartphone application and a Web-based user interface, and uses mobile and geographic information systems (GIS)
technologies for the effective management of in-field data collection, distribution and tracking which may be applied to
areas such as sales teams, research teams, meter readers and vehicle tracking and driver monitoring.
The acquisition was considered to be a business combination as defined by International Financial Reporting
Standards, and as a result has been accounted for under the requirements of IFRS 3. The group acquired the power
to control the operating and financial activities of the acquired business on December 19, 2013, and the assets
acquired and liabilities assumed have been recorded at their provisional fair values.
As per IFRS 3, the group has 12 months from the acquisition date to finalize the at acquisition date fair values of the
identified acquired assets and liabilities. From the acquisition date, no revenue has been recorded by the business
acquired, and the impact on profit before tax is considered to be insignificant by management.
The total consideration payable in respect of this acquisition was R7.6 million ($0.7 million). No portion of the
consideration had been paid at December 31, 2013.
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