PowerFleet, Inc. (NASDAQ:PWFL) Q4 2023 Earnings Call Transcript

Page 2 of 2

And then I think secondly, the other thing that from a MiX perspective the customers have the ability to absorb is the in-warehouse solution. So, where we’re focusing on safety and sustainability, the folks that are usually responsible for that in an organization are both responsible for it in the warehouse and over the road. So, this gives the ability to go and sell to new people in on the organization and do broader propositions. And I think it’s something that the MiX team are excited about that they didn’t have that strong capability and therefore that was a bit of a gap. On the flip side, we also have some key MiX technologies that the PowerFleet customer base have been wanting and desiring. So, there’s a bidirectional move. So, obviously, the PowerFleet customers can benefit from that MiX technology again within the same period of time.

Matt Pfau: Great. And then – and David, just wanted to follow up on the comments around the impact to top-line growth from the integration efforts. How long should we expect that to continue? Is that something beyond Q1 and then in any way to sort of quantify how you’re thinking about that impact?

David Wilson: Yes, so again, the businesses are growing nicely, both on their side and our side. So, we’re not expecting there to be sort of a pullback in terms of how we’re performing there. Obviously, Israel is a headwind, so we have to work our way around that. So, we do have those types of things. And as Steve said in his earlier comments, the logistics here in the US, there’s certainly some sort of headwinds in terms of that piece of the market. But I think the essence of what we’re calling out here is if we really focused on top-line, we would do better just because where we put our attention, we generally get to move the dial and we look to put our attention to the dials that are going to create the most amount of value.

And I’d say over the next two quarters, it really is about getting this thing up and running. We have a massive focus in terms of expanding EBITDA through the benefits in terms of efficiencies from a cost standpoint. So, we’re going to put our minds and our efforts to work there, but obviously, we can keep more than one plate spinning at a single point in time. So, we’ll be looking to be effective across all fronts, but we’re going to prioritize those things that matter the most.

Steve Towe: Yes, and I’ll just add to that, this is a big undertaking that – and a brave undertaking that the two companies are doing. And the industry and broader industries are littered with integrations and combinations that fail. What we are highly confident about is we have a team with a track record of doing this really, really well. I think even from Investor Day time, people saw the similar cultures of the teams and the teams are actively working together. What we want to do is make sure we land into a very, very strong operating rhythm fast. We’ve come out and made some bold statements in terms of projections over a two-year period. And the key parts of moving that forward is, A, getting everybody aligned internally so that we can then focus externally as soon as soon as possible and we don’t get that distraction.

The ability for us to realize those EBITDA expansion programs, I think gives us everything we’re going to need to propel top-line growth. But we’re going to make sure we don’t dilute efforts on both of those by trying to do too much in one go. So, that first six-month period is very much something that is key to us winning the hearts and minds internally and externally. I think we have a great plan to do that. And then once we’re through that initial period, then we can start to put our foot on the accelerator.

Matt Pfau: Okay, perfect. Appreciate you taking my questions.

Operator: We have reached the end of the question-and-answer session, and I will now turn a call over to Steve for closing remarks.

Steve Towe: Thank you. I would like to say a sincere thank you once again for the trust and confidence shown by our shareholders and the outstanding contribution from so many of our colleagues in both the PowerFleet and MiX organizations that have allowed us to be able to complete a highly strategic and complex transaction so effectively and seamlessly. We look forward very much to new beginnings for the evolved and highly energized PowerFleet family, and we look to continue to update our shareholders along the way. Thank you, everyone. Have a great day. We’ll speak again soon.

Operator: Thank you for joining us today for our presentation. You may now disconnect.

Follow Powerfleet Inc.

Page 2 of 2