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Ituran Location and Control Ltd. Presents Record Results for the Third Quarter 2017
[November 15, 2017]

Ituran Location and Control Ltd. Presents Record Results for the Third Quarter 2017


AZOUR, Israel, Nov. 15, 2017 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the third quarter ended September 30, 2017.

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Highlights of the third quarter of 2017

  • Net subscribers adds in the quarter amounted to 25 thousand;
  • Record revenue of $61.6 million, up 17% year-over-year;
  • Gross margins of 49.6% and operating margins at 22.6%;
  • Net profit of $10.5 million, up 29% year-over-year;
  • Generated $11.9 million in operating cash flow;
  • Dividend of $5 million declared for the quarter;

Third Quarter 2017 Results
Revenues for the third quarter of 2017 were $61.6 million, representing an increase of 17% from revenues of $52.8 million in the third 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 1,035,000 as of September 30, 2016, to 1,137,000 as of September 30, 2017.

Product revenues increased by 14% compared with the same period last year.

Gross profit for the third quarter of 2017 was $30.5 million (49.6% of revenues), an increase of 16% compared with $26.4 million (50.0% of revenues) in the third quarter of 2016. The gross margin in the quarter on subscription fees improved to 66.7% compared with 65.7% in the same period last year. The gross margin in the quarter on products was 7.2% compared with 12.7% in the same period last year. The lower margin on products during the quarter was due to the mix of product sales in the quarter.

Operating profit for the third quarter of 2017 was $13.9 million (22.6% of revenues), an increase of 20% compared with an operating profit of $11.6 million (21.9% of revenues) in the third quarter of 2016.

EBITDA for the quarter was $17.4 million (28.3% of revenues), an increase of 19% compared to an EBITDA of $14.6 million (27.7% of revenues) in the third quarter of 2016.

Net profit was $10.5 million in the third quarter of 2017 (17.1% of revenues) or fully diluted EPS of $0.50, an increase of 29% compared with a net profit of $8.2 million (15.4% of revenues) or fully diluted EPS of $0.39 in the third quarter of 2016.

Cash flow from operations for the quarter was $11.9 million.

As of September 30, 2017, the Company had net cash, including marketable securities, of $35.2 million or $1.68 per share. This is compared with $31.5 million or $1.50 per share as at December 31, 2016.

Dividend
For the third 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, "We presented another solid quarter with record revenue up 17% and net profit up 29% over last year. The ongoing expansion in our subscriber base is the primary driver of our revenue growth, and we see ongoing demand and interest in our services and solutions. In Brazil in particular, IRT also continues to perform well and is increasingly contributing to our profit. In India, we have started working closely with Lumax Technologies. We see strong potential in this untapped region for telematic services, which gives Ituran access to a phenomenal market with over 200 million registered cars. 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, November 15, 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: 1 888 407 2553
ISRAEL Dial-in Number: 03 918 0664
CANADA Dial-in Number: 1 888 604 5839
INTERNATIONAL Dial-in Number:  +972 3 918 0664
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.

 





CONDENSED CONSOLIDATED BALANCE SHEETS




US dollars


September 30,

December 31,

(in thousands)

2017

2016




Current assets



Cash and cash equivalents

31,821

31,087

Investments in marketable securities

3,540

398

Accounts receivable (net of allowance for doubtful accounts)

45,283

33,865

Other current assets

45,554

35,522

Inventories

15,087

14,351


141,285

115,223




Long-term investments and other assets



Investments in affiliated companies

13,690

11,975

Investments in other company

1,183

85

Other non-current assets

1,718

1,515

Deferred income taxes

2,345

2,280

Funds in respect of employee rights upon retirement

9,216

7,868


28,152

23,723




Property and equipment, net

38,722

35,644




Intangible assets, net

23

23




Goodwill

3,717

3,406







Total assets

211,899

178,019


 

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)




US dollars


September 30,

December 31,

(in thousands)

2017

2016

Current liabilities



Credit from banking institutions

145

3

Accounts payable

22,410

18,624

Deferred revenues

13,431

10,762

Other current liabilities

29,562

26,738


65,548

56,127




Long-term liabilities



Liability for employee rights upon retirement

13,651

11,751

Provision for contingencies

418

435

Deferred revenues

1,557

1,034

Others non-current

496

501


16,122

13,721







Stockholders' equity

122,907

102,229

Non-controlling interests

7,322

5,942

Total equity

130,229

108,171













Total liabilities and equity

211,899

178,019

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME





US dollars

US dollars


Nine month period

Three month period


ended September 30,

ended September 30,

(in thousands except per share data)

2017

2016

2017

2016

Revenues:





Location-based services

125,284

104,673

43,847

37,166

Wireless communications products

51,951

44,540

17,743

15,594


177,235

149,213

61,590

52,760






Cost of revenues:





Location-based services

41,889

36,066

14,584

12,739

Wireless communications products

46,539

37,488

16,462

13,617


88,428

73,554

31,046

26,356






Gross profit

88,807

75,659

30,544

26,404

Research and development expenses

2,444

2,082

676

681

Selling and marketing expenses

9,551

7,471

3,273

2,537

General and administrative expenses

35,096

30,113

12,705

10,588

Other expenses (income), net

(146)

973

(3)

1,039

Operating income

41,862

35,020

13,893

11,559

Financing income (expenses), net

1,091

1,246

250

408

Income before income tax

42,953

36,266

14,143

11,967

Income tax expenses

(12,388)

(10,945)

(3,944)

(3,893)

Share in gains (losses) of affiliated companies ,net

5,487

(554)

998

753

Net income for the period

36,052

24,767

11,197

8,827

Less: Net income attributable to non-controlling interest

(2,082)

(1,885)

(667)

(677)

Net income attributable to the Company

33,970

22,882

10,530

8,150






Basic and diluted earnings per share attributable to
     Company's stockholders

1.62

1.09

0.50

0.39






Basic and diluted weighted average number of shares
     outstanding (in thousands)

20,968

20,968

20,968

20,968

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS






US dollars

US dollars


Nine month period

Three month period


ended September 30,

ended September 30,

(in thousands)

2017

2016

2017

2016




Cash flows from operating activities





Net income for the period

36,052

24,767

11,197

8,827

Adjustments to reconcile net income to net cash from
     operating activities:





Depreciation amortization and impairment of goodwill

9,982

8,570

3,515

3,063

Losses (gain) in respect of trading marketable securities

(201)

(95)

(134)

(27)

Increase (decrease) in liability for employee rights upon retirement

827

960

339

247

Share in losses (gains) of affiliated companies, net

(5,487)

554

(998)

(753)

Deferred income taxes

(268)

(836)

(488)

908

Capital gains on sale of property and equipment, net

(57)

(18)

4

(1)

Decrease (increase) in accounts receivable

(8,908)

(7,470)

(3,391)

(392)

Decrease (increase) in other current assets

(8,194)

(9,080)

(2,383)

(3,771)

Decrease (increase) in inventories

545

(726)

2,009

(578)

Increase (decrease) in accounts payable

1,667

4,836

180

1,930

Increase (decrease) in deferred revenues

2,686

1,657

450

(725)

Increase (decrease) in other current liabilities

535

3,988

1,603

3,313

Net cash provided by operating activities

29,179

27,107

11,903

12,041

Cash flows from investment activities





Increase in funds in respect of employee rights upon retirement, net of withdrawals

(619)

(582)

(256)

(335)

Capital expenditures

(10,796)

(9,049)

(4,047)

(4,149)

Investments in affiliated companies

(97)

(7,181)

-

(3,257)

Investments in other companies

(1,061)

-

-

-

Investment in marketable securities

(6,607)

(2,076)

(3,418)

(1,732)

Sale of marketable securities

3,424

3,615

1,305

1,757

Deposit

132

16

94

(36)

Proceeds from loans to affiliated companies

4,305

-

3,743

-

Proceeds from sale of property and equipment

305

133

124

34

Net cash used in investment activities

(11,014)

(15,124)

(2,455)

(7,718)

Cash flows from financing activities





Short term credit from banking institutions, net

125

(152)

132

(6)

Dividend paid

(17,613)

(13,314)

(5,032)

(3,565)

Dividend paid to non-controlling interest

(1,172)

(940)

(420)

(323)

Net cash provided by (used in) financing activities

(18,660)

(14,406)

(5,320)

(3,894)

Effect of exchange rate changes on cash and cash equivalents

1,229

1,039

577

(245)

Net increase (decrease)  in cash and cash equivalents

734

(1,384)

4,705

184

Balance of cash and cash equivalents at beginning of the period

31,087

27,016

27,116

25,448

Balance of cash and cash equivalents at end of the period

31,821

25,632

31,821

25,632

 

Supplementary information on financing and investing activities not involving cash flows:
In August 2017, the Company declared a dividend in an amount of US$ 5 million. The dividend was paid in October 2017.

 

Company Contact

Udi Mizrahi

[email protected]

VP Finance, Ituran

(Israel) +972 3 557 1348

International Investor Relations

Ehud Helft / Gavriel Frohwein

[email protected] 

GK Investor Relations

(US) +1 646 688 3559

 

 

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SOURCE Ituran Location and Control Ltd


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