v2.4.0.8
Document And Entity Information
12 Months Ended
Dec. 31, 2016
Document Information [Line Items]  
Entity Registrant Name Pointer Telocation Ltd
Entity Central Index Key 0000920532
Current Fiscal Year End Date --12-31
Entity Filer Category Non-accelerated Filer
Trading Symbol PNTR
Document Period End Date Dec. 31, 2016
Document Type 20-F
Amendment Flag false
Document Fiscal Period Focus FY
Document Fiscal Year Focus 2016
Entity Common Stock, Shares Outstanding 7,873,919
Entity Voluntary Filers No
Entity Well-known Seasoned Issuer No
Entity Current Reporting Status Yes
v2.4.0.8
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
CURRENT ASSETS:    
Cash and cash equivalents $ 6,066 $ 7,252
Trade receivables (net of allowance for doubtful accounts of $ 1,281 and $ 1,053 at December 31, 2016 and 2015, respectively) 11,464 9,494
Other accounts receivable and prepaid expenses (Note 3) 2,504 1,596
Inventories (Note 4) 5,242 4,697
Current assets of discontinued operation (Note 18) 0 11,616
Total current assets 25,276 34,655
LONG-TERM ASSETS:    
Long-term loan to related party 831 0
Long-term accounts receivable 564 490
Severance pay fund (Note 2r) 2,878 2,740
Property and equipment, net (Note 5) 5,614 3,278
Other intangible assets, net (Note 6) 2,178 443
Goodwill (Note 7) 38,107 31,388
Deferred tax asset (Note 17) 1,433 3,086
Long term assets of discontinued operation (Note 19) 0 27,358
Total long-term assets 51,605 68,783
Total assets 76,881 103,438
CURRENT LIABILITIES:    
Short-term bank credit and current maturities of long-term loans (Note 8) 4,836 4,820
Trade payables 7,116 4,651
Deferred revenues and customer advances 1,037 671
Other accounts payable and accrued expenses (Note 9) 6,839 5,168
Current liabilities of discontinued operation (Note 18) 0 15,142
Total current liabilities 19,828 30,452
LONG-TERM LIABILITIES:    
Long-term loans from banks (Note 10) 10,182 8,385
Deferred taxes and other long-term liabilities (Note 11) 976 258
Accrued severance pay (Note 2r) 3,206 3,345
Long term liabilities of discontinued operation (Note 18) 0 5,963
Total long term liabilities 14,364 17,951
COMMITMENTS AND CONTINGENT LIABILITIES (Note 12)      
Pointer Telocation Ltd’s shareholders’ equity:    
Share capital (Note 13) - Ordinary shares of NIS 3 par value - Authorized: 16,000,000 shares at December 31, 2016 and 2015; Issued and outstanding: 7,873,919 and 7,784,644 shares at December 31, 2016 and 2015, respectively 5,837 5,770
Additional paid-in capital 128,438 128,410
Accumulated other comprehensive loss (5,633) (6,254)
Accumulated deficit (86,115) (71,822)
Total Pointer Telocation Ltd’s shareholders’ equity 42,527 56,104
Non-controlling interest 162 (1,069)
Total equity 42,689 55,035
Total liabilities and equity $ 76,881 $ 103,438
v2.4.0.8
CONSOLIDATED BALANCE SHEETS (Parenthetical)
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2016
USD ($)
Dec. 31, 2016
ILS
Dec. 31, 2015
USD ($)
Dec. 31, 2015
ILS
Allowance for Doubtful Accounts Receivable, Current $ 1,281   $ 1,053  
Ordinary shares, Par or Stated Value Per Share (in dollars per share)   3   3
Ordinary shares, Shares Authorized 16,000,000 16,000,000 16,000,000 16,000,000
Ordinary shares, Shares, Issued 7,873,919 7,873,919 7,784,644 7,784,644
Ordinary shares, Shares, Outstanding 7,873,919 7,873,919 7,784,644 7,784,644
v2.4.0.8
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Revenues (Note 17c):      
Products $ 22,784 $ 22,266 $ 27,747
Services 41,569 38,301 38,458
Total revenues 64,353 [1] 60,567 [1] 66,205 [1]
Cost of revenues:      
Products 13,904 13,435 16,267
Services 18,672 17,879 18,850
Total cost of revenues 32,576 31,314 35,117
Gross profit 31,777 29,253 31,088
Operating expenses:      
Research and development 3,669 3,409 3,390
Selling and marketing 11,774 10,468 9,331
General and administrative 9,004 8,580 9,550
Other general and administrative expenses (Note 1b) 0 0 376
Other income (Note 1g) 0 0 (288)
Amortization of intangible assets 473 538 994
Acquisition related costs 609 0 0
Impairment of intangible and tangible assets 0 917 158
Total operating expenses 25,529 23,912 23,511
Operating income 6,248 5,341 7,577
Financial expenses, net (Note 19a) 1,046 729 2,163
Other expenses , net (Note 19b) 9 10 203
Income before taxes on income 5,193 4,602 5,211
Tax expenses (income), (Note 15) 1,845 1,131 (8,849)
Income from continuing operations 3,348 3,471 14,060
Income (loss) from discontinued operation, net 154 327 (1,320)
Net income 3,502 3,798 12,740
Other comprehensive income:      
Currency translation adjustments of foreign operations 1,311 (3,423) (4,292)
Total comprehensive income 4,813 375 8,448
Profit (loss) from continuing operations attributable to:      
Pointer Telocation Ltd’s shareholders 3,324 3,546 14,275
Non-controlling interests 24 (75) (215)
Net income 3,348 3,471 14,060
Profit (loss) from discontinued operations attributable to:      
Pointer Telocation Ltd's shareholders 120 399 (822)
Non-controlling interests 34 (72) (498)
Total $ 154 $ 327 $ (1,320)
Basic net earnings (loss):      
Earnings from continuing operations $ 0.43 $ 0.45 $ 1.92
Earnings (loss) from discontinued operations $ 0.02 $ 0.05 $ (0.11)
Diluted net earnings (loss):      
Earnings (loss) from continuing operations $ 0.43 $ 0.44 $ 1.85
Earnings (loss) from discontinued operations $ 0.02 $ 0.06 $ (0.11)
[1] Revenues are attributed to geographic areas based on the location of the end customers.
v2.4.0.8
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $)
In Thousands, except Share data
Total
Share Capital [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income [Member]
Accumulated Deficit [Member]
Noncontrolling Interest [Member]
Balance at Dec. 31, 2013 $ 42,639 $ 3,878 $ 120,996 $ 1,456 $ (89,220) $ 5,529
Balance (in shares) at Dec. 31, 2013   5,565,558        
Issuance of share capital 21,442 1,827 19,615 0 0 0
Issuance of share capital (in shares)   2,123,006        
Stock-based compensation expenses 375 0 375 0 0 0
Acquisition of non-controlling interests (19,108) 0 (11,368) 0 0 (7,740)
Acquisition of non-controlling interests (in shares)   0        
Other comprehensive income (4,292) 0 0 (4,365) 0 73
Net loss attributable to Non - controlling interest (713) 0 0 0 0 (713)
Net income attributable to Pointer shareholders 13,453 0 0 0 13,453 0
Balance at Dec. 31, 2014 53,796 5,705 129,618 (2,909) (75,767) (2,851)
Balance (in shares) at Dec. 31, 2014   7,688,564        
Issuance of shares in respect of Stock-based compensation 14 3 11 0 0 0
Issuance of shares in respect of Stock-based compensation (in shares)   14,999        
Stock-based compensation expenses 309 0 309 0 0 0
Acquisition of non-controlling interests 541 62 (1,528) 0 0 2,007
Acquisition of non-controlling interests (in shares)   81,081        
Other comprehensive income (3,423) 0 0 (3,345) 0 (78)
Net loss attributable to Non - controlling interest (147) 0 0 0 0 (147)
Net income attributable to Pointer shareholders 3,945 0 0 0 3,945 0
Balance at Dec. 31, 2015 55,035 5,770 128,410 (6,254) (71,822) (1,069)
Balance (in shares) at Dec. 31, 2015   7,784,644        
Issuance of shares in respect of Stock-based compensation 98 67 31 0 0 0
Issuance of shares in respect of Stock-based compensation (in shares)   89,275        
Stock-based compensation expenses 320 0 320 0 0 0
Transanction with shareholders 0 0 (323) 323 0 0
Distribution of a subsidiary as a divided in kind (17,577) 0 0 (213) (17,737) 373
Other comprehensive income 1,311 0 0 511 0 800
Net loss attributable to Non - controlling interest 58 0 0 0 0 58
Net income attributable to Pointer shareholders 3,444 0 0 0 3,444 0
Balance at Dec. 31, 2016 $ 42,689 $ 5,837 $ 128,438 $ (5,633) $ (86,115) $ 162
Balance (in shares) at Dec. 31, 2016   7,873,919        
v2.4.0.8
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Payments of Stock Issuance Costs $ 383
v2.4.0.8
Accumulated other comprehensive income - Equity Adjustments (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Accumulated foreign currency translation differences $ 0 $ (6,254)
Accumulated other comprehensive income $ (5,633) $ (6,254)
v2.4.0.8
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Cash flows from operating activities:      
Net income $ 3,502 $ 3,798 $ 12,740
Adjustments required to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 3,258 3,959 4,767
Impairment of tangible and intangible assets 0 917 1,122
Gain from a bargain purchase 0 0 (288)
Accrued interest and exchange rate changes of debenture and long-term loans 29 (888) 17
Accrued severance pay, net 20 17 56
Gain from sale of property and equipment, net (232) (143) (95)
Stock-based compensation 320 309 375
Decrease in restricted cash 0 62 19
Increase in trade receivables, net (3,489) (236) (1,141)
Increase in other accounts receivable and prepaid expenses (942) (469) (21)
Decrease (increase) in inventories (1,063) 658 (462)
Decrease (increase) Deferred income taxes 1,774 1,080 (9,120)
Decrease (increase) in long-term accounts receivable 99 (91) 126
Increase (decrease) in trade payables 3,346 1,277 (654)
Increase (decrease) in other accounts payable and accrued expenses 2,455 (1,448) (1,845)
Net cash provided by operating activities 9,077 8,802 5,596
Cash flows from investing activities:      
Purchase of property and equipment (4,129) (3,616) (4,458)
Purchase of other intangible assets (115) 0 0
Proceeds from sale of property and equipment 648 1,266 1,529
Acquisition of subsidiary (a) (8,531) 0 (688)
Proceeds from sale of investments in previously consolidated subsidiaries (c) 0 0 (41)
Net cash used in investing activities (12,127) (2,350) (3,658)
Cash flows from financing activities:      
Receipt of long-term loans from banks 6,263 14,934 12,577
Repayment of long-term loans from banks (4,976) (19,503) (8,986)
Repayment of long-term loans from shareholders 0 0 (301)
Repurchase of shares from non-controlling interests 0 0 (7,740)
Proceeds from issuance of shares and exercise of options, net of issuance costs 98 15 10,074
Distribution as a dividend in kind of previously consolidated subsidiary (b) (1,870) 0 0
Short-term bank credit, net 716 (915) (1,640)
Net cash provided (used) in financing activities 231 (5,469) 3,984
Effect of exchange rate on cash and cash equivalents (462) (193) (714)
Increase (decrease) in cash and cash equivalents (3,281) 790 5,208
Cash and cash equivalents at the beginning of the year 9,347 8,557 3,349
Cash and cash equivalents at the end of the period- continuing operations 6,066 7,252 8,548
Cash and cash equivalents at the end of the period- discontinued operation 0 2,095 9
Cash and cash equivalents at the end of the year $ 6,066 $ 9,347 $ 8,557
v2.4.0.8
CONSOLIDATED STATEMENTS OF CASH FLOWS - Additional Cash Flow Elements (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
(a) Acquisition of subsidiary:      
Working capital (Cash and cash equivalent excluded) $ (334) $ 0 $ (221)
Property and equipment (1,239) 0 (565)
Intangible assets (2,098) 0 (190)
Goodwill (6,070) 0 288
Deferred taxes 714 0 0
Payables for acquisition of investments in subsidiaries 496 0 0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net (8,531) 0 (688)
(b) Distribution as a dividend in kind of previously consolidated subsidiary:      
Working capital (excluding cash and cash equivalents) (5,443) 0 0
Property and equipment 7,048 0 0
Goodwill and other intangible assets 15,883 0 0
Other long term liabilities (1,781) 0 0
Non-controlling interest 373 0 0
Accumulated other comprehensive loss (213) 0 0
Dividend in kind (17,737) 0 0
Distributions Paid In Kind Subsidiary (1,870) 0 0
(c) Proceeds from sale of investments in previously consolidated subsidiaries:      
Working capital (excluding cash and cash equivalents) 0 0 18
Property and equipment 0 0 30
Long term loans from banks and others 0 0 (5)
Non-controlling interests 0 0 125
Loss from sale of subsidiaries 0 0 (209)
Proceeds From Sale Of Subsidiaries 0 0 (41)
(d) Non-cash investing activity:      
Purchase of property and equipment 48 378 45
Issuance of shares in respect of acquisition of non-controlling interests in subsidiary 0 0 11,368
(e) Supplemental disclosure of cash flow activity:      
Interest 567 640 2,604
Income taxes $ 20 $ 27 $ 367
v2.4.0.8
GENERAL
12 Months Ended
Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
NOTE 1:-
GENERAL
 
a.
Pointer Telocation Ltd. (“the Company”) was incorporated in Israel and commenced operations in July 1991. The Company conducts its operations through two main segments. Through its Cellocator segment, the Company designs, develops and produces leading mobile resource management products, including asset tracking, fleet management, and security products, for sale to third party operators providing mobile resource management services and to our MRM segment. Through its MRM segment, the Company acts as an operator by bundling its products together with a range of services, including stolen vehicle retrieval services and fleet management services.
 
The Company provides services, for the most part, in Israel, Argentina, Mexico, South Africa and Brazil, through its local subsidiaries and affiliates. The Company sells its products worldwide through direct sell, its local subsidiaries and affiliates to independent operators provide similar services in Latin America, Europe and other countries utilizing the Company’s technology and operational know-how. The Company’s shares are traded on the NASDAQ Capital Market.
 
b.
As of January 14th, 2014 The Company held 54.48% of the share capital of Shagrir Systems Ltd. (“Shagrir”).  On January 15th, 2014 the Company acquired the 45.5% remaining interest in Shagrir. In consideration for the acquired interest in Shagrir: (i) the Company paid an aggregate of $7.8 million using credit facilities from banking institutions and (ii) issued 994,357 Ordinary Shares to Shagrir’s selling shareholders.
 
Shagrir is engaged in the field of road side assistance (“RSA”), towing services and stolen vehicle recovery in Israel.
 
On May 15, 2009, the Company’s subsidiary Shagrir acquired ownership of 51% of the ordinary shares of Car2go Ltd., which is engaged in car sharing and motor vehicle rental.
 
During 2012, Shagrir’s ownership increased to 62.3%.
 
In 2014, following the annual goodwill impairment test in accordance with ASC 350 “Intangibles - Goodwill and Others”, the Company fully impaired the goodwill attributed to Car2Go at the amount of $528. These amounts were recorded in the 2014 Consolidated Statement of Operation under the discontinued operation. The material assumptions used for the income approach for 2014 were 5 years of projected net cash flows, a discount rate of 14% and a long-term growth rate of 3%
 
On April 9, 2014, Shagrir signed an agreement with car 2 go according to which Shagrir provided Car2go a convertible loan totaling NIS 3 million (“the loan principal”). The loan principal is linked to the Israeli CPI and bears annual interest of 7% to be calculated on a compounded interest basis. The loan principal, the interest and the linkage (as defined below) will be repaid by Car2go starting from the end of two years from the date of receiving the loan provided that Shagrir has not repaid the loan or converted the loan into equity prior to the maturity dates specified below.
 
On December 30, 2014, Shagrir sold the RSA operation, assets and liabilities into a new wholly owned subsidiary, Shagrir Group Vehicle Services Ltd (“Shagrir Group”). Following this transaction, Shagrir, with its remaining assets (primarily Fleet Management and Stolen Vehicle Recovery services), was merged into the company effective as of December 31, 2014 (the “Reorganization”) following the merger Shagrir was liquidated.
 
Following the transaction Shagrir recorded expenses related to the transaction in the amount of $683 (out of which $200 was paid till December 31, 2014 and the balance was paid during 2015). As a result of the Reorganization, Shagrir concluded that certain ERP systems will not be used and that certain motor vehicles will be sold and therefore were classified as held for sale. As a result, the Company recorded an impairment charge in the amount of $594 related to the ERP system and the motor vehicles.
 
Following the merger of Shagrir into the company, the company recorded tax income in the amount of $8,831 due to decrease in valuation allowance related to carry forward losses of the company that are more likely than not to be offset against future income and other temporary differences. See also Note 15.
 
In July 2015, Shagrir sold the 62.31% of Car2Go’s issued share capital that it held to Shagrir Group, as well as convertible shareholder loans provided by the company to Car2Go in the total amount of NIS 11.35 million and Shagrir Group assumed the Company’s guarantees provided to secure Car2Go’s obligations and undertakings, including its guarantee provided to secure Car2Go’s credit line in the amount of approximately NIS 1.3 million and the company’s guarantee provided to secure Car2Go’s obligations and undertakings towards Pacific Vehicle and Transportation Ltd. in the amount of approximately NIS 11.37 million in consideration. Since Car2go is Shagrir’s subsidiary, the results of Car2go until the date of the spinoff are included in the Company’s results as discontinued operations.
 
On June 8, 2016 Pointer spun off its Israeli subsidiary, Shagrir Group Vehicle Services Ltd., through which Pointer carried out its road side assistance (RSA) activities and listed Shagrir’s shares for trade on the Tel Aviv Stock Exchange. The results of Shagrir until that date are included in Pointer’s results as discontinued operations. See also Note 18.
 
c.
The Company holds 93% of the share capital of Argentina SA’s (formerly: Tracsat S.A.) (“Pointer Argentina”). Pointer Argentina is the operator of the Company’s systems and products that provides fleet management and stolen vehicle recovery services in Buenos Aires, Argentina.
 
d.
The Company holds 100% of the share capital of Pointer Recuperation de Mexico S.A. de C.V. (“Pointer Mexico”). After the company completed in 2015 the acquisition of Pointer Mexico by acquiring the 26% of the issued share capital of Pointer Mexico that the company did not previously own, from Pointer Recuperacion de Mexico, S. de R.L. de C.V. (the “Pointer Mexico Sellers”), in consideration for the issuance of 81,081 of the company ordinary shares to the Pointer Mexico Sellers.
 
Pointer Mexico provides fleet management and stolen vehicle recovery services to its customers in Mexico as well as distributing the Company’s products.
 
e.
In August 2008 the Company incorporated a company in Brazil by the name of Pointer do Brasil Comercial S.A. (“Pointer Brazil”). Pointer Brazil provides location, tracking and fleet management vehicles services to its customers in Brazil. As of October 13th, 2013 Company held 48.8% of the share capital in Pointer Brazil.
 
In March 2014, Pointer Brazil changed its legal form from corporation to Limited Liability Company (LLC), and its trading name from Pointer do Brasil Comercial S.A. to Pointer do Brasil Comercial Ltda., according to its article of association duly registered and properly approved by its shareholders.
 
In July 2013, the Company incorporated a wholly-owned subsidiary in Brazil at the name of Pointer do Brasil Participações Ltda. (“Pointer Brazil Holdings”).
 
On October 14, 2013, the Company acquired the remaining 51.2% of the issued share capital of Pointer Brazil from Bracco do Brasil Empreendimentos e Participações Ltda. 
 
(“Bracco”) through Pointer Brazil Holdings. Following the completion of the transaction, the Company holds 100% of the issued share capital of Pointer Brazil.
 
In May 2014, Pointer Brazil was merged with Pointer Brazil Holdings. As a result of this merger, The Company holds directly 100% of the issued share capital of Pointer Brazil.
 
In 2015, following the annual goodwill impairment test in accordance with ASC 350 “Intangibles - Goodwill and Others”, the Company impaired the goodwill attributed to Brazil at the amount of $ 758. These amounts were recorded in the 2015 Consolidated Statement of Operation under the captions “Impairment of intangible and tangible assets”. The material assumptions used for the income approach for 2015 were 5 years of projected net cash flows, a discount rate of 25% and a long-term growth rate of 7.1% During 2016 there was no impairment.
 
f.
In October 2008, the Company established a wholly-owned subsidiary in the United States, Pointer Telocation Inc.
  
g.
On September 9, 2014, the Company acquired a 100% interest in Global Telematics S.A. Proprietary Limited (“Global Telematics”), a provider of commercial fleet management and vehicle tracking solutions in South Africa.
 
The acquisition-date fair value of the consideration transferred totaled to $ 1 million in cash.
 
The acquisition was accounted for under the purchase method of accounting as determined by ASC Topic 805, “Business Combinations”. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition
 
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:
 
Working capital, net
 
$
221
 
Property and equipment
 
 
565
 
Other intangible assets
 
 
190
 
Gain from a bargain purchase
 
 
(288)
 
 
 
 
 
 
 
 
$
688
 
 
The excess of the net tangible and identifiable intangible assets over the purchase price paid was recorded as a gain. The gain has been recognized in the consolidated statement of comprehensive income as other income.
 
h.
In May 2012, the Company established a wholly-owned subsidiary in India, Pointer Telocation India Private Limited.
 
i.
On September 12, 2013, a shareholders meeting of the Company approved a compensation Policy for the Company’s directors and officers. The Compensation Policy includes, among other issues prescribed by the Israeli Companies Law, a framework for establishing the terms of office and employment of the office holders, and guidelines with respect to the structure of the variable pay of office holders. The Compensation Policy includes a compensation, bonus and benefits strategy for office holders which is designed in order to reward performance, maintain a reasonable wage structure throughout the organization and to reinforce a culture in order to promote the long-term success of the Company.
 
j.
On October 7, 2016, the Brazilian subsidiary acquired a 100% interest in Cielo Telecom Ltd. (“Cielo”), a fleet management services company based in South Brazil.
   
The acquisition-date fair value of the consideration transferred totaled to $ 8.5 million in cash.
 
The acquisition was accounted for under the purchase method of accounting as determined by ASC Topic 805, “Business Combinations”. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition.
 
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:
 
Working capital, net
 
 
334
 
Property and equipment
 
 
1,239
 
Other intangible assets
 
 
2,100
 
Goodwill
 
 
6,068
 
Deferred taxes
 
 
(714)
 
Payables for acquisition of investments in subsidiaries
 
 
(496)
 
 
 
 
 
 
 
 
 
 
 
 
 
$
8,531
 
 
Unaudited pro forma condensed results of operations:
 
The following represents the unaudited pro forma condensed results of operations for the years ended December 31, 2015 and 2016, assuming that the acquisitions of Ceilo occurred on January 1, 2015. The pro forma information is not necessarily indicative of the results of operations that would have actually occurred had the acquisitions been consummated on those dates, nor does it purport to represent the results of operations for future periods.
 
 
 
Year ended
December 31,
 
 
 
2016
 
2015
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
Revenues
 
$
67,468
 
$
64,516
 
 
 
 
 
 
 
 
 
Net income attributable to Pointer shareholders’ from continuing operations
 
$
3,820
 
$
4,206
 
 
 
 
 
 
 
 
 
Basic income per share
 
$
0.49
 
$
0.53
 
 
 
 
 
 
 
 
 
Diluted income per share
 
$
0.48
 
$
0.53
 
v2.4.0.8
SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 2016
Accounting Policies [Abstract]  
Significant Accounting Policies [Text Block]
NOTE 2:-
SIGNIFICANT ACCOUNTING POLICIES
 
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).
 
a.
Use of estimates:
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant assumptions are employed in estimates used in determining values of intangible assets, tax assets and tax liabilities, warranty costs and stock-based compensation costs. Actual results could differ from those estimates.
 
b.
Financial statements in U.S. dollars:
 
The majority of the Company’s revenues is generated in or linked to U.S. dollars (“dollar”). In addition, a substantial portion of the Company’s costs is incurred in dollars. The Company’s management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, the functional and reporting currency of the Company is the dollar.
 
For those subsidiaries whose functional currency has been determined to be their local currency (For Pointer Argentina- the Argentinean peso; for Pointer Mexico- the Mexican peso; for Pointer Inc. the dollar; for Pointer do Brazil Comercial Ltda., for Pointer Brazil Holdings and Cielo Telecom Ltda. the Brazilian Real), assets and liabilities are translated at year-end exchange rates and statement of operations items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component, other comprehensive income (loss), in shareholders’ equity (deficiency).
 
Transactions and balances of the Company and certain subsidiaries, which are denominated in other currencies, have been remeasured into dollars in accordance with principles set forth in ASC 830, “Foreign Currency Matters”. All exchange gains and losses from the remeasurements mentioned above, are reflected in the statement of operations as financial expenses or income, as appropriate.
 
c.
Principles of consolidation:
 
The consolidated financial statements include the accounts of the Company and its subsidiaries.
 
Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company have been eliminated upon consolidation.
 
Changes in the parent’s ownership interest in a subsidiary with no change of control are treated as equity transactions, rather than step acquisitions or dilution gains or losses. Losses of partially owned consolidated subsidiaries shall be continued to be allocated to the non-controlling interests even when their investment was already reduced to zero.
 
d.
Cash equivalents:
 
Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired.
 
e.
Inventories:
 
Inventories are stated at the lower of cost or market value. Cost is determined using the “moving average” cost method. Inventory consists of raw materials, work in process and finished products. Inventory write-offs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, and for market prices lower than cost. In 2016, 2015 and 2014, the Company and its subsidiaries wrote off approximately $147, $113 and $86, respectively. The write-offs are included in cost of revenues.
 
f.
Property and equipment:
 
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates:
 
 
 
%
 
 
 
 
 
Installed products
 
20-33
 
Computers and electronic equipment
 
10 - 33 (mainly 33)
 
Office furniture and equipment
 
6 - 15
 
Motor vehicles
 
15 - 20 (mainly 20)
 
Network installation
 
10 - 33
 
Buildings
 
6.67
 
Leasehold improvements
 
Over the term of the lease including the option term
 
 
g.
Goodwill:
 
Goodwill reflects the excess of the purchase price of the acquired activities over the fair value of net assets acquired. Pursuant to ASC 350, “Intangibles - Goodwill and Other”, goodwill is not amortized but rather tested for impairment at least annually, at the reporting unit level.
 
The Company identified several reporting units based on the guidance of ASC 350.
 
ASC 350 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for impairment, while the second phase (if necessary) measures impairment.
 
Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. In such case, the second phase is then performed, and the Company measures impairment by comparing the carrying amount of the reporting unit’s goodwill to the implied fair value of that goodwill. An impairment loss is recognized in an amount equal to the excess.
 
In September 2011, the FASB amended the guidance on the annual testing of goodwill for impairment. The amended guidance will allow companies to assess qualitative factors to determine if it is more likely than not that goodwill might be impaired and whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards. The company didn’t apply the qualitative option .
 
Regarding goodwill impairment in 2015 and 2014, see note 1b and Note 1e. No impairment losses were identified in the year 2016.
 
h.
Identifiable intangible assets:
 
Intangible assets consist of the following: a brand name, customers’ related intangibles, developed technology and acquired patents. Intangible assets are amortized over their useful life using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up. Intangible assets are stated at amortized cost.
 
The customers’ related intangibles are amortized over a five- to nine-year period.
 
Backlog is amortized over a three-year period.
 
Non-competition agreement is amortized over a three-year period.
 
Brand name is amortized over a ten-year period.
 
Customer related intangibles are amortized based on the accelerated method. For customer related intangibles in respect with the Brazil transaction during 2013 and the transaction during 2016, the Company used the straight line method, the differences from the accelerated method were immaterial.
 
The other intangibles are amortized based on straight line method over the periods above mentioned.
 
i.
Impairment of long-lived assets:
 
The Company’s long lived assets are reviewed for impairment in accordance with ASC 360-10-35, “Property, Plant, and Equipment- Subsequent Measurement” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
 
Impairment losses have been identified as of December 31, 2014 in the amount of $292 regarding ERP and $302 regarding motor vehicle. (See also Note 1b)
 
No impairment losses were identified in 2016 and 2015.
 
j.
Provision for warranty:
 
The Company and its subsidiaries generally grant a one-year to three-year warranty for their products. The Company and its subsidiaries estimate the costs that may be incurred under its basic limited warranty and records a liability in the amount of such costs at the time which product revenue is recognized. Factors that affect the warranty liability include the number of installed units, historical and anticipated rates of warranty claims and cost per claim. The Company and its subsidiaries periodically assess the adequacy of its recorded warranty liabilities and adjust the amounts as necessary. Changes in the Company’s and its subsidiaries’ product liabilities which are included in other accounts payable and accrued expenses and other long term liabilities’ captions in the Balance Sheet during 2016 and 2015 are as follows:
 
 
 
Year ended
 
 
 
December 31,
 
 
 
2016
 
2015
 
 
 
 
 
 
 
Balance, beginning of the year
 
$
544
 
$
615
 
Warranties issued during the year
 
 
422
 
 
431
 
Settlements made during the year
 
 
(182)
 
 
(110)
 
Expirations
 
 
(180)
 
 
(392)
 
 
 
 
 
 
 
 
 
Balance end of year
 
$
604
 
$
544
 
 
k.
Revenue recognition:
 
The Company and its subsidiaries generate revenues from the provision of services, subscriber fees and sales of systems and products, mainly in respect of road-side assistance services, automobile repair and towing services, stolen vehicle recovery, fleet management and other value added services. To a lesser extent, revenues are also derived from technical support services. The Company and its subsidiaries sell the systems primarily through their direct sales force and indirectly through resellers. Sales consummated by the Company’s sales forces and sales to resellers are considered sales to end-users.
 
Revenues from the sale of systems and products are recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition” (“SAB No. 104”), when delivery has occurred, persuasive evidence of an agreement exists, the vendor’s fee is fixed or determinable, no further obligation exists and collectability is reasonably assured.
 
Service revenues including subscriber fees are recognized as services are performed, over the term of the agreement.
 
Deferred revenue includes amounts received under maintenance and support contracts, and amounts received from customers but not yet recognized as revenues.
 
In accordance with ASC 605-25, “Multiple-Element Arrangements”, revenue from certain arrangements may include multiple elements within a single contract. The Company’s accounting policy complies with the requirements set forth in ASC 605-25, relating to the separation of multiple deliverables into individual accounting units with determinable fair values. The Company considers the sale of products and subscriber fees to be separate units of accounting.
 
When a sales arrangement contains multiple elements, such as hardware and services, the Company allocates revenue to each element based on a selling price hierarchy. The selling price for each deliverable is based on its vendor specific objective evidence (“VSOE”), if available, third party evidence (“TPE”) if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE nor TPE is available.
 
The company uses ESP to allocate the elements.
 
Revenues from stolen vehicle recovery services are recognized upon success, when the related stolen vehicle is recovered, and such recovery is approved by the customer or ratably over the term of the agreement.
 
Revenues generated from technical support services, installation and de-installation are recognized when such services are rendered.
 
Generally, the Company does not grant rights of return. The Company follows ASC 605-15-25 “sales of product when right of return exists”. Based on the Company’s experience, no provision for returns was recorded.
 
l.
Research and development costs:
 
Research and development costs are charged to expenses as incurred.
 
m.
Advertising expenses:
 
Advertising expenses are charged to the statement of operations as incurred. Advertising expenses for the years ended December 31, 2016, 2015 and 2014 were $577, $ 1,214 and $  856, respectively.
 
n.
Income taxes:
 
The Company accounts for income taxes and uncertain tax positions in accordance with ASC 740, “Income Taxes”. This guidance prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to amounts that are more likely than not to be realized.
 
The Company established reserves for uncertain tax positions based on the evaluation of whether or not the Company’s uncertain tax position is “more likely than not” to be sustained upon examination. As of December 31, 2016, the Company did not have any liability for uncertain tax positions. The Company’s policy is to recognize, if any, tax related interest as interest expenses and penalties as general and administrative expenses. For the year ended December 31, 2016, the Company did not have any interest and penalties associated with tax positions.
 
In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. The Company had early adopted this standard in the fourth quarter of 2015 on a retrospective basis. Prior years have been retrospectively adjusted.
 
o.
Basic and diluted net earnings per share:
 
Basic and diluted net earnings per share are computed based on the weighted average number of ordinary shares outstanding during the year. Diluted net earnings (loss) per share further include the dilutive effect of stock options outstanding during the year, in accordance with ASC 260, “Earnings Per Share”. Part of the Company’s outstanding stock options and warrants has been excluded from the calculation of the diluted earnings (loss) per share because such securities are anti-dilutive. The total weighted average number of pointer shares related to the outstanding options and warrants excluded from the calculations of diluted earnings (loss) per share was 202,000, 64,000 and 0 and for the years ended December 31, 2016, 2015 and 2014, respectively.
 
p.
Accounting for stock-based compensation:
 
The Company applies ASC 718, “Compensation - Stock Compensation”. In accordance with ASC 718, all grants of employee equity based stock options are recognized in the financial statements based on their grant date fair values. The fair value of graded vesting options, as measured at the date of grant, is charged to expenses, based on the accelerated attribution method over the requisite service period of each of the awards, net of estimated forfeitures.
 
As required by ASC 718, forfeitures are estimated at the time of grant, based on actual historical pre-vesting forfeitures, and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates.
 
During the years ended December 31, 2016, 2015 and 2014, the Company recognized stock-based compensation expenses related to employee stock options in the amounts of $320, $309 and $375, respectively.
 
According to ASC 718, a change in any of the terms or conditions of the Company’s stock options is accounted for as a modification. Therefore, if the terms of an award are modified, the Company calculates incremental compensation costs as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors existing at the modification date. For vested options, the Company recognizes any incremental compensation cost immediately in the period the modification occurs, whereas for unvested options, the Company recognizes, over the new requisite service period, any incremental compensation cost due to the modification and any remaining unrecognized compensation cost for the original award over its term.
 
q.
Data related to options to purchase the Company shares:
 
1.
The fair value of the Company’s stock options granted to employees and directors for the years ended December 31, 2016, 2015 and 2014 was estimated using the Black-Scholes-Merton option-pricing model, with the following weighted average assumptions:
 
 
 
Year ended
 
 
 
December 31,
 
 
 
2016
 
2015
 
2014
 
 
 
 
 
 
 
 
 
Risk free interest rate
 
0.8%-1.00%
 
1.29%-1.62%
 
1.49%-2.39%
 
Dividend yield
 
0%
 
0%
 
0%
 
Expected volatility
 
55.81%-60.84%
 
51.47%-49.78%
 
50.14%-57.89%
 
Expected term (in years)
 
4.00-5.50
 
4.00-5.50
 
3.92-5.5
 
Forfeiture rate
 
2%
 
2%
 
2%
 
 
The Black-Scholes-Merton option-pricing model requires a number of assumptions, of which the most significant are expected stock price volatility and the expected option term. Expected volatility was calculated based upon actual historical stock price movements. The expected option term represents the period that the Company’s stock options are expected to be outstanding and was determined for plain vanilla options, based on the simplified method permitted by SAB 107 and extended by SAB 110 as the average of the vesting period and the contractual term.
 
The Company adopted SAB 110 and continues to apply the simplified method until enough historical experience is available to provide a reasonable estimate of the expected term for stock option grants. In a few limited cases the Company did not use the simplified method in measuring the fair value of modified awards, either when the options were deeply out of the money immediately before the modification or when the Company accelerated the vesting and extended the exercise period after an employee’s resignation. Since in both instances the entire remaining contractual term of the options was relatively short, we assumed that the expected life to be the entire remaining contractual term.
 
The risk-free interest rate is based on the yield from U.S. Treasury bill with accordance to the expected term of the options.
 
The Company has historically not paid dividends and has no foreseeable plans to pay dividends and therefore uses an expected dividend yield of zero in the option pricing model. The Company is required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest.
 
r.
Severance pay:
 
The liability of the Company and its subsidiaries in Israel for severance pay is calculated pursuant to Israel’s Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of balance sheet date and are presented on an undiscounted basis (the “Shut Down Method”). Employees are entitled to one month’s salary for each year of employment, or a portion thereof. The liability for the Company and its subsidiaries in Israel is fully provided by monthly deposits with insurance policies and by accrual. The value of these policies is recorded as an asset in the Company’s balance sheet.
 
The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel’s Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrendered value of these policies, and includes profits or losses accumulated to balance sheet date.
 
Some of the company’s employees are subject to Section 14 of the Severance Pay Law and the General Approval of the Labor Minister dated June 30, 1998, issued in accordance to the said Section 14, mandating that upon termination of such employees’ employment, all the amounts accrued in their insurance policies shall be released to them. The severance pay liabilities and deposits covered by these plans are not reflected in the balance sheet as the severance pay risks have been irrevocably transferred to the severance funds.
 
Severance pay expenses for the years ended December 31, 2016, 2015 and 2014 were $303, $292 and $441, respectively.
 
s.
Concentrations of credit risk:
 
Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents, trade receivables, trade payables and derivatives.
 
The Company’s cash and cash equivalents are invested primarily in deposits with major banks worldwide, mainly in Israel. Generally, these deposits may be redeemed upon demand and, therefore, bear low risk. Management believes that the financial institutions that hold the Company’s investments have a high credit rating.
 
The Company’s trade receivables include amounts billed to clients located mainly in Israel, Latin America and Europe. Management periodically evaluates the collectability of its trade receivables to reflect the amounts estimated to be collectible. An allowance is determined in respect of specific debts whose collection, in management’s opinion, is doubtful. In 2016, 2015 and 2014, the Company recorded expenses in respect of such debts in the amount of $511, $98 and $340, respectively. As for major customers, see Note 17d.
 
Changes in the allowance for doubtful accounts during 2016 and 2015 are as follows:
 
 
 
Year ended
 
 
 
December 31,
 
 
 
2016
 
2015
 
 
 
 
 
 
 
Balance at beginning of the year
 
$
1,053
 
$
1,186
 
 
 
 
 
 
 
 
 
Deductions during the year
 
 
(339)
 
 
(94)
 
Charged to expenses
 
 
511
 
 
98
 
Foreign currency translation adjustment
 
 
56
 
 
(137)
 
 
 
 
 
 
 
 
 
Balance at end of year
 
$
1,281
 
$
1,053
 
 
The Company entered into foreign exchange forward contracts (“derivative instruments”) intended to protect against the revaluation in value of forecasted non-dollar currency cash flows. These derivative instruments are designed to effectively hedge the Company’s non-dollar currency exposure (see Note 2u below).
 
t.
Fair value measurements:
 
The following methods and assumptions were used by the Company and its subsidiaries in estimating fair value disclosures for financial instruments:
 
The carrying amounts reported in the balance sheet for cash and cash equivalents, trade receivables, other accounts receivable, short-term bank credit, trade payables and other accounts payable approximate their fair values due to the short-term maturities of such instruments.
 
Amounts recorded for long-term loans approximate fair values. The fair value was estimated using discounted cash flow analysis, based on the Company’s incremental borrowing rates for similar type of borrowing arrangements.
 
The Company accounts for certain assets and liabilities at fair value under ASC 820, “Fair Value Measurements and Disclosures”. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
 
Level 1 -
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
 
Level 2 -
Significant other observable inputs based on market data obtained from sources independent of the reporting entity;
 
Level 3 -
Unobservable inputs which are supported by little or no market activity (for example cash flow modeling inputs based on assumptions).
 
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy.
 
Assets and Liabilities that are measured at Fair Value on a Nonrecurring Basis subsequent to their initial recognition:
 
During 2014, such measurements of fair value related solely to an impairment loss of goodwill reducing its carrying amount from $528 to a fair value of $0 and impairment loss of $528. The impairment loss presented in the discontinued operations. The Company used an income approach for measuring the fair value of the goodwill. See Note 2g and 2i for significant assumptions. As the fair value was measured using significant unobservable assumptions, the goodwill was classified as level 3 in ASC 820 fair value hierarchy.
 
During 2015, such measurements of fair value related solely to an impairment loss of goodwill reducing its carrying amount in $758. The Company used an income approach for measuring the fair value of the goodwill. See Note 2g and 2i for significant assumptions. As the fair value was measured using significant unobservable assumptions, the goodwill was classified as level 3 in ASC 820 fair value hierarchy.
 
During 2016, there were no impairment losses regarding goodwill.
 
u.
Derivatives and hedging activities:
 
ASC 815, “Derivatives and Hedging” requires the Company to recognize all of its derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.
 
For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income and reclassified into earnings in the line item associated with the hedged transaction in the period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized immediately in financial income/expense in the statement of operations.
 
v.
Equity affiliates
 
The Company recognizes investment in equity affiliates under ASC 323, “Investments – Equity Method and Joint Ventures”. The Company recognizes its proportionate share of the income of equity affiliates. Losses of equity affiliates are recognized to the extent of our investment, advances, financial guarantees and other commitments to provide financial support to the investee. Any losses in excess of this amount are deferred and reduce the amount of future earnings of the equity investee recognized by the Company.
 
w.
Discontinued operations
 
Under ASC 205, “Presentation of Financial Statements - Discontinued Operation” when a component of an entity, as defined in ASC 205, has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on its disposal are classified as discontinued operations and the assets and liabilities of such component are classified as assets and liabilities attributed to discontinued operations; that is, provided that the operations, assets and liabilities and cash flows of the component have been eliminated from the Company’s consolidated operations and the Company will no longer have any significant continuing involvement in the operations of the component.
 
x.
Accounting Standards still not effective:
 
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which will replace the existing guidance in ASC 840, “Leases.” The updated standard aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. This ASU is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods; early adoption is permitted and modified retrospective application is required. The company in the process of evaluating this guidance to determine the impact it will have on its financial statements.
 
In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, which will replace existing revenue recognition guidance. The new standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. To achieve that core principle, an entity must identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the entity satisfies the performance obligation. In July 2015, the FASB decided to delay the effective date of the new standard by one year; as a result, the new standard will be effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption will be permitted, but no earlier than 2017 for calendar year-end entities. The standard allows for two transition methods - retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial adoption. The Company has not yet determined its method of transition. The Company does not expect the new standard to have a material impact on the recognition of revenue from product sales. However, the Company continues to evaluate the impact that this guidance will have on its financial statements in connection with collaboration and license agreements. 
 
In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016.
v2.4.0.8
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
12 Months Ended
Dec. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Other Current Assets [Text Block]
NOTE 3:-
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
 
 
 
December 31,
 
 
 
2016
 
2015
 
 
 
 
 
 
 
Government authorities
 
$
583
 
$
325
 
Employees
 
 
35
 
 
30
 
Prepaid expenses
 
 
1,677
 
 
1,137
 
Others
 
 
209
 
 
104
 
 
 
 
 
 
 
 
 
 
 
$
2,504
 
$
1,596
 
v2.4.0.8
INVENTORIES
12 Months Ended
Dec. 31, 2016
Inventory Disclosure [Abstract]  
Inventory Disclosure [Text Block]
NOTE 4:-
INVENTORIES
 
 
 
December 31,
 
 
 
2016
 
2015
 
 
 
 
 
 
 
Raw materials
 
$
2,510
 
$
2,284
 
Work in process
 
 
89
 
 
24
 
Finished goods
 
 
2,643
 
 
2,389
 
 
 
 
 
 
 
 
 
 
 
$
5,242
 
$
4,697
 
v2.4.0.8
PROPERTY AND EQUIPMENT
12 Months Ended
Dec. 31, 2016
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Disclosure [Text Block]
NOTE 5:-
PROPERTY AND EQUIPMENT
 
a.
Composition:
 
 
 
December 31,
 
 
 
2016
 
2015
 
Cost:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Installed products
 
$
9,323
 
$
5,743
 
Computers and electronic equipment
 
 
5,550
 
 
4,468
 
Office furniture and equipment
 
 
1,205
 
 
882
 
Motor vehicles
 
 
339
 
 
203
 
Network installation
 
 
3,839
 
 
3,829
 
Leasehold improvements
 
 
670
 
 
571
 
 
 
 
 
 
 
 
 
 
 
 
20,926
 
 
15,696
 
 
 
 
 
 
 
 
 
Accumulated depreciation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Installed products
 
 
5,912
 
 
4,173
 
Computers and electronic equipment
 
 
3,981
 
 
3,186
 
Office furniture and equipment
 
 
994
 
 
776
 
Motor vehicles
 
 
175
 
 
93
 
Network installation
 
 
3,826
 
 
3,773
 
Leasehold improvements
 
 
424
 
 
417
 
 
 
 
 
 
 
 
 
 
 
 
15,312
 
 
12,418
 
 
 
 
 
 
 
 
 
Depreciated cost
 
$
5,614
 
$
3,278
 
 
b.
Depreciation expenses for the years ended December 31, 2016, 2015 and 2014 were $2,133, $1,674 and $1,726, respectively.
 
c.
No Impairment losses recorded for the years ended December 31, 2016, 2015 and 2014.
v2.4.0.8
OTHER INTANGIBLE ASSETS, NET
12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets Disclosure [Text Block]
NOTE 6:-
OTHER INTANGIBLE ASSETS, NET
 
a.
Other intangible assets, net:
 
 
 
December 31,
 
 
 
2016
 
2015
 
Cost:
 
 
 
 
 
 
 
Patents
 
$
639
 
$
639
 
Developed technology
 
 
4,978
 
 
4,890
 
Customer related intangible
 
 
7,891
 
 
6,473
 
Others
 
 
874
 
 
677
 
Brand name
 
 
2,793
 
 
2,273
 
 
 
 
 
 
 
 
 
 
 
 
17,175
 
 
14,952
 
Accumulated amortization:
 
 
 
 
 
 
 
Patents
 
 
639
 
 
639
 
Developed technology (see note 2h)
 
 
4,901
 
 
4,890
 
Customer related intangible
 
 
6,534
 
 
6,261
 
Others
 
 
650
 
 
632
 
Brand name
 
 
2,273
 
 
2,087
 
 
 
 
 
 
 
 
 
 
 
 
14,997
 
 
14,509
 
 
 
 
 
 
 
 
 
Amortized cost
 
$
2,178
 
$
443
 
 
b.
Amortization expenses for the years ended December 31, 2016, 2015 and 2014 were $473, $538 and $994, respectively.
 
c.
Estimated amortization expenses for the years ending:
 
December 31,
 
 
 
 
 
 
 
2017
 
$
438
 
2018
 
 
411
 
2019
 
 
340
 
2020
 
 
327
 
2021 and after
 
 
662
 
 
 
 
 
 
 
 
$
2,178
 
v2.4.0.8
GOODWILL
12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill Disclosure [Text Block]
NOTE 7:-
GOODWILL
 
The changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015 are as follows:
 
 
 
December 31,
 
 
 
2016
 
2015
 
 
 
 
 
 
 
Goodwill, beginning of the year
 
$
31,388
 
$
33,524
 
Additions in respect of acquisitions
 
 
6,070
 
 
-
 
Impairment of Goodwill (see notes 1e and 2g)
 
 
-
 
 
(758)
 
Foreign currency translation adjustments
 
 
649
 
 
(1,378)
 
 
 
 
 
 
 
 
 
Goodwill, end of year
 
$
38,107
 
$
31,388
 
 
The carrying value of goodwill by reporting unit as of 31 December, 2016 is as follows:
 
Reporting unit
 
2016
 
 
 
 
 
Cellocator
 
$
2,534
 
SVR (*)
 
 
27,219
 
Pointer brazil
 
 
2,373
 
Cielo brazil
 
 
5,981
 
 
 
 
 
 
 
 
$
38,107
 
 
The carrying value of goodwill by reporting unit as of 31 December 2015 is as follows:
 
Reporting unit
 
2015
 
 
 
 
 
Cellocator
 
$
2,534
 
SVR (*)
 
 
26,873
 
Pointer brazil
 
 
1,981
 
 
 
 
 
 
 
 
$
31,388
 
 
(*) SVR in Israel.
 
The material assumptions used for the income approach for 2016 were:
 
 
 
Cellocator
 
SVR
 
Pointer brazil
 
Cielo
 
 
 
 
 
 
 
 
 
 
 
Discount rate
 
 
16
%
 
14
%
 
22
%
21
%
Growth rate
 
 
3
%
 
2
%
 
6.5
%
6.5
%
Years of projected cash flows
 
 
5
 
 
5
 
 
5
 
5
 
v2.4.0.8
SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOANS FROM BANKS, SHAREHOLDERS AND OTHERS
12 Months Ended
Dec. 31, 2016
Debt Disclosure [Abstract]  
Short-term Bank Credit And Long-term Loans From Banks, Shareholders and Others [Text Block]
NOTE 8:-  
SHORT-TERM BANK CREDIT AND CURRENT MATURITIES OF LONG-TERM LOANS FROM BANKS, SHAREHOLDERS AND OTHERS
 
Classified by currency, linkage terms and annual interest rates, the credit and loans are as follows:
 
 
Interest rate
 
December 31,
 
 
2016
 
2015
 
2016
 
2015
 
 
%
 
 
 
 
 
 
Current maturities of long-term loans from banks, shareholders and others:
 
 
 
 
 
 
 
 
 
 
 
 
In, or linked to Dollars
 
Libor+2%
 
 
Libor+2%
 
 
4,497
 
 
4,790
 
In other currencies
 
16%-17%
 
 
16%-17%
 
 
339
 
 
30
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
4,836
 
$
4,820
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unutilized credit lines
 
 
 
 
 
 
$
8,714
 
$
9,067
 
v2.4.0.8
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
12 Months Ended
Dec. 31, 2016
Accounts Payable and Accrued Liabilities [Abstract]  
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block]
NOTE 9:-
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 
 
 
December 31,
 
 
 
2016
 
2015
 
 
 
 
 
 
 
Employees and payroll accruals
 
$
3,477
 
$
3,039
 
Government authorities
 
 
817
 
 
373
 
Provision for warranty
 
 
391
 
 
341
 
Accrued expenses
 
 
2,100
 
 
1,345
 
Related party
 
 
53
 
 
53
 
Others
 
 
1
 
 
17
 
 
 
 
 
 
 
 
 
 
 
$
6,839
 
$
5,168
 
v2.4.0.8
LONG-TERM LOANS FROM BANKS
12 Months Ended
Dec. 31, 2016
Debt Disclosure [Abstract]  
Long-term Debt [Text Block]
NOTE 10:-
LONG-TERM LOANS FROM BANKS
 
a.
Composition:
 
 
Interest rate
 
December 31,
 
 
2016
 
2015
 
2016
 
2015
 
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In, or linked to Dollars (see c below )
 
3.71%
 
 
3.71%
 
$
14,356
 
$
13,145
 
In other currencies
 
10%-17%
 
 
10%
 
 
662
 
 
60
 
 
 
 
 
 
 
 
$
15,018
 
$
13,205
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less - current maturities
 
 
 
 
 
 
 
4,836
 
 
4,820