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, Which develops computer kits and terminals for managing fleets of vehicles and field workers, reports receiving a first order from an international truck manufacturer, for the company’s smart-tab (black box) and smart-tab (hard dedicated tablets) products.
This order is part of an agreement that is being signed for a period of 3 years for the purchase of the company’s flagship products with a European car giant. The truck manufacturer has an option to extend the agreement on similar terms for a period of two additional years. The Company estimates that this framework agreement has significant potential for increasing the Company’s revenues.
This agreement will be Micronet’s first strategic contract with a carmaker, which supports a new trend of carmakers to provide telematics services themselves. The European company is one of the 3 largest truck manufacturers in Europe, with a significant market share in the field of heavy transport trucks in Europe.
Eli Avivi, CEO of Micronet: “We are pleased to announce a first order and a strategic agreement in the final stages that is of great significance to Micronet. We anticipate that sales will begin in the first quarter of 2021. The agreement is an important expression of confidence in the company’s flagship products from a leading international truck manufacturer. We believe that there is a change in the approach of the major automakers who are interested in producing a longer revenue tail in front of their customers and that they intend to offer additional services for longer engagement periods. Such a change in attitude is an opportunity for Micronet Solutions, which is at a strategic juncture, as more manufacturers want to equip their vehicle fleets with advanced technological solutions. We believe that this agreement may lead to further similar agreements. ”
As of March, Micronet has taken a series of streamlining measures as needed to address the company’s business results affected by, among other things, the spread of the corona virus which caused uncertainty and a freeze on the production capabilities of some of the company’s suppliers for some time. U.S. Federal Communications and EU Approval for Enhanced SmartCam Camera Product Marketing, Micronet has begun operating in the target markets for marketing this innovative product, which will be piloted by a leading U.S. telematics solutions provider.
One way or another, Micronet is in a very problematic financial situation. Is the agreement the one that will save the company? In the last quarter, the company reported a 69% decrease in revenue to only NIS 1.65 million due to loss of customers, delays in launching new products, high inventory levels of the company’s products with its customers and increasing competition for its products.
Micronet is a loss, and reported in the second quarter of 2020 a loss of about NIS 4 million, and about NIS 540,000 in cash that was used for current operations. At the end of the quarter, the company has NIS 4 million in cash cash against current liabilities of NIS 14 million. In 2019, the company burned about NIS 3 million from current operations and about NIS 2 million from investment activities, ie a cash burning rate of about NIS 5 million a year.
The amount of the agreement is unknown, but it will probably be significant for a company that is on a downward trend. With the low cash position, and with the publication of new details about the deal, it is inevitable that the company will go public.
The share has been traded in recent years around the price of 550 agorot per share, which reflects a market value of about NIS 20 million, a market value of a stock exchange skeleton without activity. The company’s products are a combination of a smart camera, along with a black box and tablet, which allow tracking of vehicle and driver data, most of the products will be launched by the company during 2020. According to the company, the trucking company with which Micronte signed “produced tens of thousands of trucks in 2019 “.
If the company does succeed in selling thousands of products a year to the same international trucking company, this could be a significant milestone for Micronet. In the market in which the company operates is CalAmp (NYSE: CAMP) valued at $ 267 million, and the giants Samsung and Garmin (NYSE: GRMN) are also developing products in the field. As a result of the announcement, the stock jumps over 20%
The company is engaged in the development, production, marketing and sale of technological solutions and mobile computer systems for managing vehicle fleets. Main applications: control of the vehicle fleet and improving efficiency, saving on fuel expenses, driver safety and improving driving, preventive maintenance and compliance with standards and regulations.
The SmarTab (SmarTab8) is a dedicated device that includes full telematics capabilities, powerful processing capabilities, an open system and a tablet user interface. The SmartHub is a black car box for monitoring vehicle, driver and location data as part of the telematics services. The smart-dad device is one of the few black boxes that works as an open system, which allows you to add features, capabilities and services easily and quickly even when the device is already installed in the vehicle and is in the field
*The article has been translated based on the content of Source link by https://www.bizportal.co.il/capitalmarket/news/article/784739
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