AZOUR, Israel, August 16, 2017 /PRNewswire/ -- Ituran Location
and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the second quarter ended
June 30, 2017.
Highlights of the Second Quarter of 2017
- Net subscribers adds in the quarter amounting to 30 thousand;
- Revenue of $58.5 million, up 19% year-over-year;
- Gross margins of 51.6% and operating margins at 24.2%;
- Net profit of $10.4 million, up 37% year-over-year;
- Generated $14.1 million in operating cash flow;
- Dividend of $5 million declared for the quarter;
Second Quarter 201 7 Results
Revenues for the second quarter of 2017 were $58.5. million, representing an increase of 19%
from revenues of $49.3 million in the second quarter of 2016. 71% of revenues were from location
based service subscription fees and 29% were from product revenues.
Revenues from subscription fees increased by 18% over the same period last year. The growth was driven primarily due to the
increase in the subscriber base, which expanded from 1,012,000 as of June 30, 2016, to 1,112,000 as
of June 30, 2017.
Product revenues increased by 21% compared with the same period last year.
Gross profit for the second quarter of 2017 was $30.2 million (51.6% of revenues), an increase
of 19% compared with $25.5 million (51.7% of revenues) in the second quarter of 2016. The gross
margin in the quarter on subscription fees improved to 66.9% compared with 65.8% in the same period last year. The gross margin
in the quarter on products was 13.6% compared with 16.0% in the same period last year. The lower margin on products was due to
the mix of product sales in the quarter.
Operating profit for the second quarter of 2017 was a record $14.2 million (24.2% of revenues),
an increase of 19% compared with an operating profit of $12.0 million (24.3% of revenues) in the
second quarter of 2016.
During the quarter, share in affiliates, net was an income of $0.5 million versus a loss of
$0.6 million in the same quarter of last year. The improvement was due to a positive
contribution from Ituran's joint venture in Brazil, Ituran Road Track.
EBITDA for the quarter was a record $17.4 million (29.7% of revenues), an increase of 17%
compared to an EBITDA of $14.8 million (30.1% of revenues) in the second quarter of 2016.
Net profit was a record $10.4 million in the second quarter of 2017 (17.9% of revenues) or fully
diluted EPS of $0.50, an increase of 37% compared with a net profit of $7.6
million (15.5% of revenues) or fully diluted EPS of $0.36 in the second quarter of 2016.
Cash flow from operations for the quarter was $14.1 million.
As of June 30, 2017, the Company had net cash, including marketable securities, of $28.6 million or $1.36 per share. This is compared with $31.5 million or $1.50 per share as at December 31,
2016.
Dividend
For the second quarter of 2017, a dividend of $5 million was declared in line with the Company's
stated current policy of issuing at least $5 million as a dividend on a quarterly basis.
Management Comment
Eyal Sheratzky, Co-CEO of Ituran said, "Our second quarter 2017 results were at record levels in most respects.
We demonstrated particularly strong subscriber growth above the higher-end of our typical range. The ongoing expansion in our
subscriber base drove a strong increase in subscription revenues in the quarter. Out growth is built on ongoing demand and
interest in our services and solutions. In Brazil in particular, we saw a strong return to
growth. Our JV in Brazil, IRT also continues to perform well and positively contributed to our
results."
Added Mr. Sheratzky, "We recently signed joint venture agreement with a large automotive supplier, Lumax Technologies,
in order to expand sales into the Indian market. This new joint-venture agreement, gives Ituran access to a phenomenal market
with over 200 million registered cars, where the telematics industry is still in its infancy. As we have shown in Brazil, we can successfully enter new markets, leveraging our technology and building a long-term growth
engine, with the goal of ultimately establishing ourselves as market leaders."
Conference Call Information
The Company will also be hosting a conference call later today, August 16, 2017 at
9am Eastern Time. On the call, management will review and discuss the results, and will be
available to answer investor questions.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls a few minutes
before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international
dial-in number.
US Dial-in Number: 1 888 281 1167
ISRAEL Dial-in Number: 03 918 0644
CANADA Dial-in Number: 1 888 604 5839
INTERNATIONAL Dial-in Number: +972 3 918 0644
at: 9:00am Eastern Time, 6:00am Pacific Time,
4:00pm Israel Time
For those unable to listen to the live call, a replay of the call will be available from the day after the call in the
investor relations section of Ituran's website.
Certain statements in this press release are "forward-looking statements" within the meaning of the Securities Act of 1933,
as amended. These forward-looking statements include, but are not limited to, our plans, objectives, expectations and
intentions and other statements contained in this report that are not historical facts as well as statements identified by words
such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates" or words of similar meaning. These
statements are based on our current beliefs or expectations and are inherently subject to significant uncertainties and changes
in circumstances, many of which are beyond our control. Actual results may differ materially from these expectations due to
changes in global political, economic, business, competitive, market and regulatory factors.
About Ituran
Ituran is a leader in the emerging mobility technology field, providing value-added location-based services, including a full
suite of services for the connected-car. Ituran offers Stolen Vehicle Recovery, fleet management as well as mobile asset
location, management & control services for vehicles, cargo and personal security. Its products and applications are used by
customers in over 20 countries.
Ituran's subscriber base has been growing significantly since the Company's inception to over 1 million subscribers using its
location based services with a market leading position in Israel and Brazil. Established in 1995, Ituran has over 1,500 employees worldwide, with offices in Israel, Brazil, Argentina, India and the United States.
|
ITURAN LOCATION AND CONTROL LTD.
|
|
CONSOLIDATED BALANCE SHEETS
|
|
US dollars
|
|
June 30,
|
December 31,
|
|
(in thousands)
|
2017
|
2016
|
|
|
|
|
Current assets
|
|
|
|
Cash and cash equivalents
|
27,116
|
31,087
|
|
Investment in marketable securities
|
1,456
|
398
|
|
Accounts receivable (net of allowance for doubtful accounts)
|
41,636
|
33,865
|
|
Other current assets
|
41,100
|
35,522
|
|
Inventories
|
17,267
|
14,351
|
|
|
|
|
128,575
|
115,223
|
|
|
|
|
|
|
|
Long-term investments and other assets
|
|
|
|
Investments in affiliated companies
|
16,553
|
11,975
|
|
Investments in other companies
|
1,195
|
85
|
|
Other non-current assets
|
1,928
|
1,515
|
|
Deferred income taxes
|
2,171
|
2,280
|
|
Funds in respect of employee rights upon retirement
|
9,061
|
7,868
|
|
30,908
|
23,723
|
|
|
|
|
Property and equipment, net
|
36,682
|
35,644
|
|
|
|
|
Intangible assets, net
|
23
|
23
|
|
|
|
|
Goodwill
|
3,746
|
3,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
199,934
|
178,019
|
|
ITURAN LOCATION AND CONTROL LTD.
|
|
CONSOLIDATED BALANCE SHEETS
|
|
US dollars
|
|
June 30,
|
December 31,
|
|
(in thousands)
|
2017
|
2016
|
|
|
|
|
Current liabilities
|
|
|
|
Credit from banking institutions
|
3
|
3
|
|
Accounts payable
|
20,529
|
18,624
|
|
Deferred revenues
|
12,613
|
10,762
|
|
Other current liabilities
|
27,594
|
26,738
|
|
60,739
|
56,127
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
Liability for employee rights upon retirement
|
13,406
|
11,751
|
|
Provision for contingencies
|
432
|
435
|
|
Deferred revenues
|
1,462
|
1,034
|
|
Other non-current liabilities
|
577
|
501
|
|
15,877
|
13,721
|
|
|
|
|
Stockholders' equity
|
116,266
|
102,229
|
|
Non-controlling interests
|
7,052
|
5,942
|
|
Total equity
|
123,318
|
108,171
|
|
|
|
|
|
|
|
Total liabilities and equity
|
199,934
|
178,019
|
|
ITURAN LOCATION AND CONTROL LTD.
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
US dollars
|
US dollars
|
|
Six month period
ended June 30 ,
|
Three month period
ended June 30 ,
|
|
(in thousands except per share data)
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
Revenues:
|
|
|
|
|
|
Location-based services
|
81,437
|
67,507
|
41,698
|
35,352
|
|
Wireless communications products
|
34,208
|
28,946
|
16,836
|
13,902
|
|
115,645
|
96,453
|
58,534
|
49,254
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
Location-based services
|
27,305
|
23,327
|
13,814
|
12,106
|
|
Wireless communications products
|
30,077
|
23,871
|
14,538
|
11,683
|
|
57,382
|
47,198
|
28,352
|
23,789
|
|
|
|
|
|
|
Gross profit
|
58,263
|
49,255
|
30,182
|
25,465
|
|
Research and development expenses
|
1,768
|
1,401
|
986
|
726
|
|
Selling and marketing expenses
|
6,278
|
4,934
|
3,450
|
2,556
|
|
General and administrative expenses
|
22,391
|
19,525
|
11,629
|
10,254
|
|
Other income, net
|
(143)
|
(66)
|
(55)
|
(23)
|
|
Operating income
|
27,969
|
23,461
|
14,172
|
11,952
|
|
Financing income, net
|
841
|
838
|
352
|
770
|
|
Income before income tax
|
28,810
|
24,299
|
14,524
|
12,722
|
|
Income tax expense
|
(8,444)
|
(7,052)
|
(3,868)
|
(3,837)
|
|
Share in gains (losses) of affiliated companies, net
|
4,489
|
(1,307)
|
489
|
(615)
|
|
Net income for the period
|
24,855
|
15,940
|
11,145
|
8,270
|
|
Less: Net income attributable to non-controlling interests
|
(1,415)
|
(1,208)
|
(692)
|
(637)
|
|
Net income attributable to the Company
|
23,440
|
14,732
|
10,453
|
7,633
|
|
|
|
|
|
|
Basic and diluted earnings per share
attributable to Company's stockholders
|
1.12
|
0.70
|
0.50
|
0.36
|
|
|
|
|
|
|
Basic and diluted weighted average number
of shares outstanding
|
20,968
|
20,968
|
20,968
|
20,968
|
|
ITURAN LOCATION AND CONTROL LTD.
|
|
STATEMENTS OF CASH FLOWS
|
|
|
US dollars
|
US dollars
|
|
Six month period
ended June 30 ,
|
Three month period
ended June 30 ,
|
|
(in thousands)
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
Net income for the period
|
24,855
|
15,940
|
11,145
|
8,270
|
|
Adjustments to reconcile net income to net cash from operating
activities:
|
|
|
|
|
|
Depreciation and amortization
|
6,467
|
5,507
|
3,239
|
2,896
|
|
Gains in respect of trading marketable securities
|
(67)
|
(68)
|
(37)
|
(34)
|
|
Increase in liability for employee rights upon retirement
|
488
|
713
|
192
|
342
|
|
Share in losses (gains) of affiliated companies, net
|
(4,489)
|
1,307
|
(489)
|
615
|
|
Deferred income taxes
|
220
|
(1,744)
|
109
|
(1,052)
|
|
Capital gains on sale of property and equipment, net
|
(61)
|
(17)
|
(31)
|
(7)
|
|
Increase in accounts receivable
|
(5,517)
|
(7,078)
|
(2,302)
|
(509)
|
|
Increase in other current assets
|
(5,811)
|
(5,309)
|
(1,675)
|
(2,079)
|
|
Increase in inventories
|
(1,464)
|
(148)
|
(599)
|
(180)
|
|
Decrease in accounts payable
|
1,487
|
2,906
|
2,630
|
426
|
|
Increase in deferred revenues
|
2,236
|
2,382
|
1,151
|
1,027
|
|
Increase (decrease) in other current liabilities
|
(1,068)
|
675
|
804
|
(73)
|
|
|
|
|
|
|
Net cash provided by operating activities
|
17,276
|
15,066
|
14,137
|
9,642
|
|
|
|
|
|
|
Cash flows from investment activities
|
|
|
|
|
|
Increase in funds in respect of employee rights upon retirement, net of
withdrawals
|
(363)
|
(247)
|
(244)
|
(24)
|
|
Capital expenditures
|
(6,749)
|
(4,900)
|
(3,993)
|
(2,689)
|
|
Investment in marketable securities
|
(3,189)
|
(344)
|
(1,761)
|
-
|
|
Investment in affiliated companies
|
(97)
|
(3,924)
|
-
|
(2,516)
|
|
Sale of marketable securities
|
2,119
|
1,858
|
940
|
-
|
|
Investment in other companies
|
(1,061)
|
-
|
-
|
-
|
|
Deposit
|
38
|
52
|
36
|
115
|
|
Proceeds from loans to affiliated companies
|
562
|
-
|
562
|
-
|
|
Proceeds from sale of property and equipment
|
181
|
99
|
115
|
9
|
|
|
|
Net cash used in investment activities
|
(8,559)
|
(7,406)
|
(4,345)
|
(5,105)
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
Short term credit from banking institutions, net
|
(7)
|
(146)
|
(406)
|
6
|
|
Dividend paid
|
(12,581)
|
(9,749)
|
(8,388)
|
(6,629)
|
|
Dividend paid to non-controlling interests
|
(752)
|
(617)
|
(39)
|
-
|
|
|
|
|
|
|
Net cash used in financing activities
|
(13,340)
|
(10,512)
|
(8,833)
|
(6,623)
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
652
|
1,284
|
(453)
|
722
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
(3,971)
|
(1,568)
|
506
|
(1,364)
|
|
Balance of cash and cash equivalents at beginning of
period
|
31,087
|
27,016
|
26,610
|
26,812
|
|
|
|
|
|
|
Balance of cash and cash equivalents at end of the period
|
27,116
|
25,448
|
27,116
|
25,448
|
Supplementary information on investing activities not involving cash flows:
In May 2017, the Company declared a dividend in an amount of US$ 5 million. The dividend
was paid in July 2017.
|
Company Contact:
|
International Investor Relations
|
|
Udi Mizrahi
|
Ehud Helft / Gavriel Frohwein
|
|
udi_m@ituran.com
|
ituran@gkir.com
|
|
VP Finance, Ituran
|
GK Investor Relations
|
|
(Israel) +972-557-1348
|
(US) +1-646-688-3559
|
|
|
View original content:http://www.prnewswire.com/news-releases/ituran-location-and-control-ltd-presents-record-results-for-the-second-quarter-2017-300505181.html
SOURCE Ituran Location and Control Ltd