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Ituran Location and Control Ltd. Presents Results for the First Quarter of 2019
[May 21, 2019]

Ituran Location and Control Ltd. Presents Results for the First Quarter of 2019


AZOUR, Israel, May 21, 2019 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN) (TASE: ITRN), today announced its consolidated financial results for the first quarter ended March 31, 2019.

Highlights of the first quarter of 2019

  • Revenue of $73.6 million, up 17% year-over-year;
  • Adjusted EBITDA of $20.9 million (27.9% of revenues), up 9% year-over-year
  • Generated $14.9 million in quarterly operating cash flow;
  • Dividend of $5 million declared for the quarter;
  • Board of Directors approves share buy-back of up to $25 million;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, "As we move through 2019, Ituran is a company on a new scale with significantly greater potential. The process of consolidating and combining Road Track with Ituran continues and we are working on building the top-line synergies in many of our regions. We look forward to reaping the rewards from our already highly successful and growing business over the coming quarters and years."

Mr. Sheratzky added, "Today the board declared a share buy-back of up to $25 million. We believe that the ability to buy back our own shares, depending on market conditions, is a tool that will contribute to shareholder value over the long term."

The results below also include consolidated non-GAAP financial results of Ituran, which exclude revenues and costs related to the purchase price allocation. For further details with regard to the reconciliation between the non-GAAP and GAAP results please see the financial tables with the press release.

First quarter 2019 Results

Revenues for the first quarter of 2019 were $73.6 million. Non-GAAP revenues for the quarter were $74.6 million representing an increase of 18% compared with revenues of $63.1 million in the first quarter of 2018.

The significantly higher average level of the US dollar exchange rate versus the Brazilian real, the Argentinean peso and the Israeli shekel, during the quarter versus the same period last year reduced the overall revenue level in US dollar terms and had a negative impact on the reported year-over-year revenue growth rate. In local currency terms, first quarter revenue grew 32% year over year.

72% of revenues were from location based service subscription fees and 28% were from product revenues.

Non-GAAP revenues from subscription fees increased 19% over the same period last year. In local currency terms, subscription fees grew 36% over the same period last year. The subscriber base amounted to 1,782,000 as of March 31, 2019.

Product revenues increased 18% compared with the same period last year.

Gross profit for the quarter was $34.6 million (47.1% of revenues). Non-GAAP gross profit for the quarter was $35.9 million (48.1% of revenues). This represents an increase of 14% compared with gross profit of $31.5 million (49.9% of revenues) in the first quarter of 2018.

The non-GAAP gross margin in the quarter on subscription fees was 58.4% compared with 64.8% in the same period last year. The lower margin was due to the lower average gross margin on the recently acquired subscribers.

The non-GAAP gross margin in the quarter on products was 20.9% compared with 10.7% in the same period last year. The higher gross margin in the current quarter was due to the product mix sold during the quarter.

Operating profit for the quarter was $13.5 million (18.3% of revenues). Non-GAAP operating profit for the quarter was $16.2 million (21.6% of revenues) which represents an increase of 4%, compared with operating profit of $15.5 million (24.6% of revenues) in the first quarter of 2018. In local currency terms, the year-over-year increase was 23%.

Adjusted EBITDA for the quarter was $20.9 million (27.9% of revenues), an increase of 9% compared to $19.2 million (30.4% of revenues) in the first quarter of 2018. In local currency terms, the increase was 29% year-over-year.

Net income in the first quarter of 2019 was $8.1 million (10.9% of revenues) or fully diluted earnings per share of $0.38. Net income on a non-GAAP basis in the first quarter of 2019 was $10.7 million (14.3% of revenues) or fully diluted earnings per share of $0.50. This represents a decline of 5% compared with a net income of $11.3 million (17.9% of revenues) or fully diluted earnings per share of $0.54 in the first quarter of 2018. In local currency terms the year-over-year increase in net income was 14%. 

Cash flow from operations for the quarter was $14.9 million.

As of March 31, 2019, the Company had cash, including marketable securities, of $54.5 million and debt of $73.6 million, amounting to a net debt of $19.1 million or $0.89 per share. This is compared with cash, including marketable securities, of $53.3 million and debt of $73.2 million, amounting to a net debt of $19.9 million, or $0.93 per share, as of December 31, 2018.

Dividend
For the first quarter of 2019, 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.

Share Buy Back
The board of directors approved a share buyback program under which the Company will be able to repurchase Ituran shares in an amount up to $25 million by December 31, 2020.

Conference Call Information

The Company will also be hosting a conference call later today, May 21, 2019 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 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 for the retail, insurance industry and car manufacturers. Ituran is the largest OEM telematics provider in Latin America. 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 approaching 2 million subscribers using its location based services with a market leading position in Israel and Latin America. Established in 1995, Ituran has over 3,000 employees worldwide, with offices in Israel, Brazil, Argentina, Mexico, Ecuador, Columbia, India, Canada and the United States.

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

 

 





CONDENSED CONSOLIDATED BALANCE SHEETS

 


US dollars


 March 31,

Decmber 31,

(in thousands)

2019

2018


(unaudited)








Current assets



Cash and cash equivalents

53,049

51,398

Investments in marketable securities

1,486

1,897

Accounts receivable (net of allowance for doubtful accounts)

50,192

54,261

Other current assets

52,036

52,983

Inventories

27,489

28,367


184,252

188,906




Non- Current investments and other assets



Investments in affiliated companies

4,158

4,872

Investments in other companies

2,884

2,772

Other non-current assets

4,004

3,222

Deferred income taxes

11,849

12,127

Funds in respect of employee rights upon retirement

10,141

9,497


33,036

32,490




Property and equipment, net

51,696

50,460




Operating lease right-of-use assets, net

7,736

-




Intangible assets, net

39,108

39,040




Goodwill

63,007

62,896










Total assets


378,835


373,792


 

 

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)


US dollars


March 31,

December 31

(in thousands)

2019

2018


(unaudited)


Current liabilities



Credit from banking institutions

13,319

10,559

Accounts payable

22,535

23,987

Deferred revenues

31,790

37,671

Operating lease liabilities, current

2,975

-

Other current liabilities

30,209

32,475


100,828

104,692




Non- Current liabilities



Long term loan

60,314

62,622

Liability for employee rights upon retirement

15,766

14,801

Provision for contingencies

186

201

Deferred income taxes

6,064

6,458

Deferred revenues

11,896

8,221

Others non-current liabilities

298

325

Operating lease liabilities, non-current

4,761

-

Obligation to purchase non-controlling interests

16,567

16,272


115,852

108,900




Stockholders' equity

156,015

153,693

Non-controlling interests

6,140

6,507

Total equity

162,155

160,200










Total liabilities and equity


378,835


373,792

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 


US dollars

(in thousands except per share data)

Three months period
ended March 31 ,





2019

2018


(unaudited)

Revenues:



Telematics services

53,159

45,699

Telematics products

20,445

17,379


73,604

63,078

Cost of revenues:



Telematics services

22,577

16,081

Telematics products

16,390

15,540


38,967

31,621




Gross profit

34,637

31,457

Research and development expenses

3,751

1,160

Selling and marketing expenses

2,930

2,852

General and administrative expenses

14,446

11,878

Other expenses, net

4

26

Operating income

13,506

15,541

Other expenses, net

(73)

-

Financing income (expenses), net

(1,015)

276

Income before income tax

12,418

15,817

Income tax expenses

(3,497)

(4,657)

Share in gains (losses) of affiliated companies ,net

(868)

687

Net income for the period

8,053

11,847

Less: Net loss (income) attributable to non-controlling interest

4

(566)

Net income attributable to the Company


8,057


11,281




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


0.38


0.54




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


21,342


20,968

 

 

RECONCILIATION OF NON-GAAP RESULTS

 



US dollars



Three months period
ended March 31 ,

(in thousands)



2019

2018




(unaudited)






GAAP Revenues



73,604

63,078

Valuation adjustment on acquired deferred revenue



1,019

-

Non –GAAP revenue



74,623

63,078











GAAP gross profit



34,637

31,457

Gross profit adjustment



1,239

-

Non –GAAP gross profit



35,876

31,457











GAAP operating income



13,506

15,541

Other  profit adjustments



1,546

-

Amortization



1,100

-

    Non-GAAP operating income




16,152


15,541






Depreciation and amortization



4,699

3,623

Adjusted EBITDA



20,851

19,164











Net income attribute to the company's shareholders



8,057

11,281

Operation income adjustment  



2,646

-

Non-GAAP net income attributable to Iturans' shareholders        




10,703


11,281






 

 

Summary of NON –GAAP Financial Information

 



US dollars

(in thousands


Three months period
ended March 31 ,

except per share data)



2019

2018




(unaudited)






revenue



74,623

63,078

Gross profit



35,876

31,457

Operation income



16,152

15,541

Net income attribute to shareholders



10,703

11,281

Adjusted EBITDA



20,851

19,164






Basic and diluted earnings per share



0.50

0.54






 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 



US dollars



Three months period
ended March 31 ,

(in thousands)



2019

2018




(unaudited)

Cash flows from operating activities





Net income for the period



8,053

11,847

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




Depreciation and  amortization



6,115

3,623

Interest on long term credit



(13)

-

Loss (gains) in respect of trading marketable securities



28

(196)

Increase (decrease) in liability for employee rights upon retirement, net



274

(128)

Share in losses (gains) of affiliated company, net



868

(687)

Deferred income taxes



84

1,512

Capital losses  from sale of property and equipment, net



6

52

Decrease (increase) in accounts receivable



4,929

(4,117)

increase in other current and non-current assets



(301)

(4,199)

Decrease (increase) in inventories



1,292

(570)

Operating lease right-of-use assets



1,193

-

Increase (decrease) in accounts payable



(1,596)

382

Decrease in deferred revenues



(2,548)

(336)

Increase (decrease) in other current and non-current liabilities



(2,778)

353

Operating lease liabilities



(1,193)

-

Increase in obligasion for purechase non-controling interests



494

-

Net cash provided by operating activities



14,907

7,536






Cash flows from investment activities





Increase in funds in respect of employee rights upon





retirement, net of withdrawals



(75)

358

Capital expenditures



(6,930)

(6,618)

Investments in other companies



(13)

-

Repayment of  loans from affiliated companies



-

2,145

Proceed from long term deposit



(78)

(91)

Sale of marketable securities,net



384

50

Proceeds from sale of property and equipment



27

203

Net cash used in investment activities



(6,685)

(3,953)






Cash flows from financing activities





Short term credit from banking institutions, net



(1,818)

(41)

Dividend paid



(4,909)

(5,032)

Dividend paid to non-controlling interest



(538)

(425)

Net cash used in  in financing activities



(7,265)

(5,498)






Effect of exchange rate changes on cash and cash equivalents



694

(257)






Net Increase (decrease) in cash and cash equivalents



1,651

(2,172)

Balance of cash and cash equivalents at beginning of period



51,398

36,906






Balance of cash and cash equivalents at end of period



53,049

34,734

 

Supplementary information on financing and investing activities not involving cash flows: In March 2019, the Company declared a dividend in the amount of US$ 5 million.  The dividend was paid in April 2019

Company Contact

Udi Mizrahi

udi_m@ituran.com

Deputy CEO &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-results-for-the-first-quarter-of-2019-300853872.html

SOURCE Ituran Location and Control Ltd


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