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Ituran Location and Control Ltd. Presents Record Results for the First Quarter 2018
[May 23, 2018]

Ituran Location and Control Ltd. Presents Record Results for the First Quarter 2018


AZOUR, Israel, May 23, 2018 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN) (TASE: ITRN), today announced its consolidated financial results for the first quarter ended March 31, 2018.

Highlights of the First Quarter of 2018

  • Net subscribers adds in the quarter amounted to 21,000;
  • Record revenue of $63.1 million, up 12.5% year-over-year;
  • Gross margins of 49.9% and operating margins at 24.6%;
  • Record EBITDA of $19.2 million or 30.4% of revenues;
  • Generated $7.5 million in operating cash flow;
  • Dividend of $5 million declared for the quarter;

First Quarter 2018 Results

Revenues for the first quarter of 2018 were $63.1 million, representing an increase of 12.5% from revenues of $56.1 million in the first quarter of 2017. 72% of revenues were from location based service subscription fees and 28% were from product revenues.

Revenues from subscription fees increased by 15% over the same period last year. The growth was driven primarily by the increase in the subscriber base, which expanded from 1,082,000 as of March 31, 2017, to 1,181,000 as of March 31, 2018.

Product revenues increased by 7% compared with the same period last year. Product revenues can be volatile between quarters. The main contribution to growth was the higher product sales in Israel.

Gross profit for the first quarter of 2018 was $31.5 million (49.9% of revenues), an increase of 12% compared with $28.1 million (50.1% of revenues) in the first quarter of 2017.

The gross margin in the quarter on subscription fees improved to 68.4% compared with 66.1% in the same period last year. The gross margin in the quarter on products was 1.2% compared with 11.2% in the same period last year. The lower margin on products during the quarter was due to the product mix

Operating profit for the first quarter of 2018 was $15.5 million (24.6% of revenues), an increase of 13% compared with an operating profit of $13.8 million (24.6% of revenues) in the first quarter of 2017.

Taxes in the quarter amounted to $4.7 million compared with taxes of $4.6 million in the first quarter of last year.

During the quarter, share in affiliates, net was an income of $687 thousand versus an income of $4 million in the same quarter of last year. It is noted that in the first quarter of 2017, the share in affiliates included a capital gain following an investment round in one of Ituran's early stage holdings.

EBITDA for the quarter was a record $19.2 million (30.4% of revenues), an increase of 13% compared to an EBITDA of $17.0 million (30.4% of revenues) in the first quarter of 2017.

Net profit was $11.3 million in the first quarter of 2018 (17.9% of revenues) or fully diluted EPS of $0.54, compared with a net profit of $13.0 million (23.2% of revenues) or fully diluted EPS of $0.62 in the first quarter of 2017. The higher net profit in the first quarter of 2017 was due to the above-mentioned capital gain in that period.

Cash flow from operations for the quarter was $7.5 million.

As of March 31, 2018, the Company had net cash, including marketable securities, of $38.2 million or $1.82 per share, compared with $40.4 million or $1.93 per share as of December 31, 2017.

Dividend

For the first quarter of 2018, a dividend of $5.0 million was declared in line with the Company's stated current policy of issuing at least $5 million on a quarterly basis.

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, "We are very pleased with our first quarter 2018 results. Our results come on the back of solid business performance across our main regions. Our IRT joint venture continues to gain traction and operations there are expanding. Overall, our results and performance represent a very good start to 2018, which positions us well for continued strong growth and improvement in profitability throughout the coming year."

Conference Call Information

The Company will also be hosting a conference call later today, May 23, 2018 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: 1 888 668 9141 

ISRAEL Dial-in Number: 03 918 0609

CANADA Dial-in Number: 1 888 604 5839

INTERNATIONAL Dial-in Number:  +972 3 918 0609

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 is also the founder of the Tel-Aviv based DRIVE startup incubator to promote the development of smart mobility technology.

Ituran's subscriber base has been growing significantly since the Company's inception to well over 1 million subscribers using its location based services with a market leading position in Israel and Brazil. Established in 1995, Ituran has over 1,700 employees worldwide, with offices in Israel, Brazil, Argentina, India, Canada and the United States.

For more information, please visit Ituran's website, at: www.ituran.com

 

 





CONSOLIDATED BALANCE SHEETS




US dollars


March 31,


December 31,

(in thousands)

2018


2017





Current assets




Cash and cash equivalents

34,734


36,906

Investments in marketable securities

3,460


3,559

Accounts receivable (net of allowance for doubtful accounts)

44,621


41,009

Other current assets

45,109


41,394

Inventories

14,623


14,244


142,547


137,112









Long-term investments and other assets




Investments in affiliated companies

12,388


14,839

Investments in other companies

1,937


1,382

Other non-current assets

916


939

Deferred income taxes

7,742


8,398

Funds in respect of employee rights upon retirement

9,146


9,627


32,129


35,185









Property and equipment, net

40,421


39,047









Intangible assets, net

50


38









Goodwill

3,726


3,777






























_______


_______

Total assets

218,873


215,159






 

 

CONSOLIDATED BALANCE SHEETS




US dollars


March 31,


December 31,

(in thousands)

2018


2017





Current liabilities




Credit from banking institutions

3


48

Accounts payable

22,760


23,264

Deferred revenues

14,561


12,796

Other current liabilities

29,494


29,644


66,818


65,752









Long-term liabilities




Liability for employee rights upon retirement

13,750


14,062

Provision for contingencies

397


400

Deferred revenues

2,994


1,241

Others non-current

484


475


17,625


16,178





















Stockholders' equity

126,976


125,790





Non-controlling interests

7,454


7,439


_______


_______

Total equity

134,430


133,229










_______


_______

Total liabilities and equity

218,873


215,159





 

CONSOLIDATED STATEMENTS OF INCOME




US dollars


Three month period
ended March 31
,

(in thousands except per share data)

2018


2017




Revenues:




Location-based services

45,699


39,739

Wireless communications products

17,379


16,315


63,078


56,054









Cost of revenues:




Location-based services

14,453


13,491

Wireless communications products

17,168


14,482


31,621


27,973









Gross profit

31,457


28,081

Research and development expenses

1,160


782

Selling and marketing expenses

2,852


2,828

General and administrative expenses

11,878


10,762

Other expenses (income), net

26


(88)

Operating income

15,541


13,797

Financing income, net

276


489

Income before income tax

15,817


14,286

Income tax expenses

(4,657)


(4,576)

Share in gains of affiliated companies ,net

687


4,000





Net income for the period

11,847


13,710


Less: Net income attributable to non-controlling interest

(566)


(723)





Net income attributable to the Company

11,281


12,987













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

0.54


0.62













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

20,968


20,968






 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS




US dollars


Three month period
ended March 31
,

(in thousands)

2018


2017




Cash flows from operating activities




Net income for the period

11,847


13,710

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




Depreciation amortization and impairment of goodwill

3,623


3,228

Gain in respect of trading marketable securities

(196)


(30)

Increase (decrease) in liability for employee rights upon retirement

(128)


296

Share in gains of affiliated companies, net

(687)


(4,000)

Deferred income taxes

1,512


111

Capital losses (gains) on sale of property and equipment, net

52


(30)

Increase in accounts receivable

(4,117)


(3,215)

Increase in other current assets

(4,199)


(4,136)

Increase  in inventories

(570)


(865)

Increase (decrease)  in accounts payable

382


(1,143)

Increase (decrease)  in deferred revenues

(336)


1,085

Increase(decrease)  in other current liabilities

353


(1,872)

Net cash provided by operating activities

7,536


3,139





Cash flows from investment activities




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

358


(119)

Capital expenditures

(6,618)


(2,756)

Investments in (proceedings from) affiliated companies

2,145


(1,158)

Investments in marketable securities

(2,294)


(1,428)

Sale of marketable securities

2,344


1,179

Deposit

(91)


2

Proceeds from sale of property and equipment

203


66

Net cash used in investment activities

(3,953)


(4,214)





Cash flows from financing activities




Short term credit from banking institutions, net

(41)


399

Dividend paid

(5,032)


(4,193)

Dividend paid to non-controlling interest

(425)


(713)

Net cash used in financing activities

(5,498)


(4,507)





Effect of exchange rate changes on cash and cash equivalents

(257)


1,105

Net decrease  in cash and cash equivalents

(2,172)


(4,477)

Balance of cash and cash equivalents at beginning of the period

36,906


31,087

Balance of cash and cash equivalents at end of the period

34,734


26,610





 

Supplementary information on investing activities not involving cash flows:

In February 2018, the Company declared a dividend in an amount of US$ 5 million. The dividend was paid in April 2018.

Company Contact
Udi Mizrahi
udi_m@ituran.com  
VP Finance, Ituran
(Israel) +972-3-557-1348

International Investor Relations
Ehud Helft
ituran@gkir.com  
GK  Investor & Public Relations
(US) +1-646-201-9246

Cision View original content:http://www.prnewswire.com/news-releases/ituran-location-and-control-ltd-presents-record-results-for-the-first-quarter-2018-300653455.html

SOURCE Ituran Location and Control Ltd.


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