SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community

TMC NEWS

TMCNET eNEWSLETTER SIGNUP

Ituran Location and Control Ltd. Presents Results for the Third Quarter 2018
[November 26, 2018]

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


AZOUR, Israel, Nov. 26, 2018 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the third quarter ended September 30, 2018.

Highlights of the third quarter of 2018

  • Closed acquisition of the majority stake in Road Track Holdings in mid-September with minimal impact on the financial results of the quarter;
  • Revenue of $53.4 million and operating profit of $13.7 million (margin of 25.7%)
  • Net profit of $26.1 million (including one-time income of $13.8 million);
  • EBITDA of $17.0 million (31.8% of revenue); in local currency terms, EBITDA grew by 13%;
  • Dividend of $5 million declared for the quarter;

Third Quarter 2018 Results

The closing of the acquisition of Road Track Holdings on September 13, 2018, brought slightly over half a million subscribers and the subscriber base reached 1,752,000 subscribers as of September 30, 2018 compared with 1,137,000 subscribers as of September 30, 2017. Because the acquisition happened toward the end of the third quarter, there was minimal impact on the consolidated profit and loss statement for the quarter.

Revenues for the third quarter of 2018 were $53.4 million, compared with revenues of $60.6 million in the third quarter of 2017. 73% of revenues were from location based service subscription fees and 27% were from product revenues.

The significant strengthening of the US dollar versus the Brazilian real and the Argentinean peso during the third quarter versus the prior quarter as well as the third quarter of 2017 reduced the overall revenue level in US dollars and impacted the growth rate of the revenues in US dollar terms.

Revenues from subscription fees were $39.1 million, compared with $43.8 million in the third quarter last year. Excluding the exchange rate impact, the revenues from subscription fees would have grown by 3.4% year-over-year.

Revenue from products were $14.3 million compared with $16.8 million in the third quarter of last year. The New Year holiday season in Israel fell fully in the third quarter of 2018, while it was divided between the third and fourth quarter of last year, leading to less days of sales in Israel and lower product revenue during the current quarter. In addition, the above mentioned exchange rate volatility also impacted the product revenues. In local currency terms, product revenues would have declined by 13% year-over-year.  

Gross profit for the third quarter of 2018 was $28.9 million (54.1% of revenues), compared with $30.5 million (50.4% of revenues) in the third quarter of 2017.

The gross margin on subscription fees were 65.3% compared with 66.7% in the same period last year. The gross margin on product sales were 23.4% compared with 7.6% in the same period last year. The change in gross margin was mainly due to the product sales mix sold during the quarter.

Operating profit for the third quarter of 2018 was $13.7 million (25.7% of revenues), compared with an operating profit of $13.9 million (22.9% of revenues) in the third quarter of 2017. Excluding the impact of the change in exchange rates over the period, the operating profit would have increased 15% over the third quarter of 2017.

During the quarter, Ituran had a one-time other income of $13.8 million. This was related to an accounting gain from an acquisition following the gain of control of Ituran's joint venture with Road Track Holdings in Brazil and Argentina, which under GAAP rules, is accounted for at market value and was therefore revalued. The total gain is net of transaction related expenses.

During the quarter, share in affiliates, net was an income of $1.6 million versus an income of $1.0 million in the same quarter of last year.

EBITDA for the quarter was $17.0 million (31.8% of revenues), compared to an EBITDA of $17.4 million (28.7% of revenues) in the third quarter of 2017. Excluding the impact of the change in exchange rates over the period, the EBITDA would have increased by 13%.

Net profit was $26.1 million in the third quarter of 2018 (48.8% of revenues) or fully diluted EPS of $1.24. This is compared with a net profit of $10.5 million (17.4% of revenues) or fully diluted EPS of $0.50 in the third quarter of 2017.

Cash flow from operations for the quarter was $14.8 million.

As of September 30, 2018, the Company had cash, including marketable securities, of $57.4 million. The company also had short and long-term debt of $84.9 million. On a net basis, the net debt of the company was $27.5 million, compared with net cash of $40.4 million as of December 31, 2017.

Ituran consolidated non-GAAP Pro-Forma Financials

On September 13, 2018, Ituran closed its acquisition of 81.3% of Road Track Holdings. In order to aid investor's understanding of how to model Ituran following the acquisition, the consolidated non-GAAP pro-forma financials of Ituran and Road Track Holdings for the first nine months of 2018 are included in the table below.





US$ millions

Actual

results

(9 months ended

September 30, 2018)

Non-GAAP

Pro-forma results

(9 months ended

September 30, 2018)

Non-GAAP pro-forma at
constant currency ex-rates

(based on average

2017 exchange rates)

Revenue

174.2

270.4

286.8

EBIT

44.1

59.2

65.9

Net profit

49.3*

41.9

46.6


*Please note that the actual net profit in the table above includes a $13.8 million one-time income while the non-GAAP pro-forma does not include this.

Dividend

For the third 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, "Ituran continues to grow and is performing well. Again, significant local currency weakness versus the dollar had an impact on our financials. As the solid improvement in our margins indicates, the health of the underlying business is strong and allows us to continually grow profitably for the long-term, independent of the short-term volatility."

Continued Mr. Sheratzky, "We closed the third quarter consolidating Road Track, a company we had been working with closely for five years in Brazil and Argentina. Ituran is now a Company on a completely new scale adding significant operations throughout Latin America. While the impact on our P&L was not significant in the current quarter, we ended the quarter with over 1.7 million subscribers. In only a few weeks since the close, we are already working on leveraging the synergies, given our new scale in the telematics market in Latin America. We look forward to our continued growth and expansion for the foreseeable future."

Conference Call Information

The Company will also be hosting a conference call later today, November 26, 2018 at 10 am 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 0610
CANADA Dial-in Number: 1 888 604 5839
INTERNATIONAL Dial-in Number:  +972 3 918 0610
At:
10:00am Eastern Time, 7:00am Pacific Time, 5:00pm 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 well over 1.7 million subscribers using its location based services with a market leading position in Israel and Latin America. Established in 1995, Ituran has over 3,400 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

 

ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS



US dollars


September 30,

December 31,

(in thousands)

2018

2017







Current assets



Cash and cash equivalents

55,743

36,906

Investments in marketable securities

1,674

3,559

Accounts receivable (net of allowance for doubtful accounts)

62,782

41,009

Other current assets

45,591

41,394

Inventories

35,066

14,244


200,856

137,112

Long-term investments and other assets



Investments in affiliated companies

4,088

14,839

Investments in other company

2,400

1,382

Other non-current assets

2,998

939

Deferred income taxes

14,550

8,398

Funds in respect of employee rights upon retirement

9,588

9,627


33,624

35,185




Property and equipment, net

52,607

39,047

Intangible assets, net

29,389

38

Goodwill

70,875

3,777




Total assets

387,351

215,159

 

 

ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)



US dollars


September 30,

December 31,

(in thousands)

2018

2017




Current liabilities



Credit from banking institutions

8,022

48

Accounts payable

27,990

23,264

Deferred revenues

42,135

12,796

Other current liabilities

38,236

29,644


116,383

65,752




Long-term liabilities



Long term loan

76,895

-

Liability for employee rights upon retirement                             

15,020

14,062

Provision for contingencies

326

400

Deferred income taxes

3,079

-

Deferred revenues

7,030

1,241

Others non-current

390

475


102,740

16,178







Stockholders' equity

155,130

125,790

Non-controlling interests

13,098

7,439

Total equity

168,228

133,229










Total liabilities and equity

387,351

215,159

 

 

ITURAN LOCATION AND CONTROL LTD.

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)

2018

2017

2018

2017






Revenues:





Location-based services

126,315

125,284

39,126

43,847

Wireless communications products

47,855

48,774

14,250

16,764


174,170

174,058

53,376

60,611






Cost of revenues:





Location-based services

41,408

41,889

13,569

14,584

Wireless communications products

43,485

43,362

10,914

15,483


84,893

85,251

24,483

30,067






Gross profit

89,277

88,807

28,893

30,544

Research and development expenses

3,727

2,444

1,628

676

Selling and marketing expenses

8,423

9,551

2,941

3,273

General and administrative expenses

33,385

35,096

10,795

12,705

Other income, net

(308)

(146)

(190)

(3)

Operating income

44,050

41,862

13,719

13,893

Other income, net

13,833

-

13,833

-

Financing income, net

2,134

1,091

1,566

250

Income before income tax

60,017

42,953

29,118

14,143

Income tax expenses

(12,416)

(12,388)

(3,906)

(3,944)

Share in gains of affiliated companies ,net

3,868

5,487

1,644

998

Net income for the period

51,469

36,052

26,856

11,197

Less: Net income attributable to non-controlling interest

(2,124)

(2,082)

(805)

(667)

Net income attributable to the Company

49,345

33,970

26,051

10,530






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

2.35

1.62

1.24

0.50






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

20,982

20,968

21,010

20,968

 

 

ITURAN LOCATION AND CONTROL LTD.

RECONCILIATION OF NON-GAAP RESULTS



US dollars

US dollars


Nine months ended

Three months ended

(in thousands

September 30,

September 30,

except per share data)

2018

2017

2018

2017






GAAP Revenues:

174,170

174,058

53,376

60,611

Valuation adjustment on acquired deferred                       

-

-

-

-

revenue





Non –GAAP revenue

174,170

174,058

53,376

60,611






GAAP gross profit

89,277

88,807

28,893

30,544

Valuation adjustment on acquired deferred

-

-

-

-

revenue





Non –GAAP gross profit

89,277

88,807

28,893

30,544






GAAP operating income

44,050

41,862

13,719

13,893

Operation profit adjustments





Amortization of other intangible assets

310

-

310

-

Non-GAAP operating income

44,360

41,862

14,029

13,893






GAAP net income attributable to





         the company's shareholders

49,345

33,970

26,051

10,530

Operation income adjustment 

310

-

310

-

Other income, net

(13,833)

-

(13,833)

-

Non-GAAP net income attributable to

         sapiens' shareholders

35,822

33,970

12,528

10,530






 

 

ITURAN LOCATION AND CONTROL LTD.


Summary of NON –GAAP Financial Information





US dollars

US dollars


Nine months ended

Three months ended

(in thousands

 September 30,

September 30,

except per share data)

2018

2017

2018

2017











revenue

174,170

174,058

53,376

60,611

Gross profit

89,277

88,807

28,893

30,544

Operation income

44,360

41,862

14,029

13,893

Net income to shareholders

35,822

33,970

12,528

10,530

Adjusted EBITDA

54,016

51,844

16,996

17,408






Basic and diluted earnings per share

1.71

1.62

0.60

0.50
















Adjusted EBITDA Calculation











US dollars

US dollars


Nine months ended

Three months ended

(in thousands

September 30,

September 30,

except per share data)

2018

2017

2018

2017






GAAP operation profit:

44,050

41,862

13,719

13,893

Non –GAAP adjustments 










Amortization of other intangible assets                             

310

-

310

-






Non –GAAP operating profit

44,360

41,862

14,029

13,893






Depreciation

9,656

9,982

2,967

3,515

Adjusted EBITDA

54,016

51,844

16,996

17,408

 

 

ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



US dollars

US dollars


Nine month period

Three month period


ended September 30,

ended September 30,

(in thousands)

2018

2017

2018

2017




Cash flows from operating activities





Net income for the period

51,469

36,052

26,856

11,197






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










Depreciation and amortization

9,966

9,982

3,277

3,515

Losses (gain) in respect of trading marketable securities

(321)

(201)

20

(134)

Increase in liability for employee rights upon retirement

290

827

363

339

Share in gains of affiliated companies, net

(3,868)

(5,487)

(1,644)

(998)

Deferred income taxes

1,411

(268)

(408)

(488)

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

107

(57)

38

4

Capital gains on Acquisition of non-controlling interests

(14,677)

-

(14,677)

-

Decrease (increase) in accounts receivable

(2,131)

(8,908)

3,623

(3,391)

Decrease in other current assets

(5,265)

(8,194)

(1,286)

(2,383)

Decrease (increase) in inventories

(2,852)

545

(2,867)

2,009

Increase in accounts payable

191

1,667

2,054

180

Increase (decrease) in deferred revenues

(2,065)

2,686

(138)

450

Increase (decrease) in other current liabilities

2,465

535

(389)

1,603

Net cash provided by operating activities

34,720

29,179

14,822

11,903






Cash flows from investment activities





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

(372)

(619)

(525)

(256)

Capital expenditures

(15,311)

(10,796)

(5,329)

(4,047)

Acquisitions of a subsidiary – Appendix A

(68,969)

-

(68,969)

-

Investments in affiliated companies

(1,250)

(97)

-

-

Investments in other companies

(1,097)

(1,061)

(200)

-

Investment in marketable securities

(22,618)

(6,607)

(243)

(3,418)

Sale of marketable securities

24,046

3,424

-

1,305

Deposit

(175)

132

30

94

Proceeds from loans to affiliated companies

7,317

4,305

4,055

3,743

Proceeds from sale of property and equipment

341

305

125

124

Net cash used in investment activities

(78,088)

(11,014)

(71,056)

(2,455)






Cash flows from financing activities





Short term credit from banking institutions, net

(34)

125

(1)

132

Receipt of long-term credit from banking institutions

81,695

-

81,695

-

Dividend paid

(15,097)

(17,613)

(5,030)

(5,032)

Dividend paid to non-controlling interest

(1,517)

(1,172)

(545)

(420)

Net cash provided by (used in) financing activities

65,047

(18,660)

76,119

(5,320)






Effect of exchange rate changes on cash and cash equivalents

(2,842)

1,229

(248)

577






Net increase in cash and cash equivalents

18,837

734

19,637

4,705

Balance of cash and cash equivalents at beginning of the period

36,906

31,087

36,106

27,116

Balance of cash and cash equivalents at end of the period

55,743

31,821

55,743

31,821


Supplementary information on financing and investing activities not involving cash flows:

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

 

 

Appendix A -   Acquisitions of a subsidiary




US dollars


Nine and three


months ended


 September 30,

(in thousands)

2018



Working capital (excluding cash and cash equivalents), net    

(858)

Related parties

2,855

Intangible assets, net

29,610

Property and equipment , net

13,766

Liability for employee rights upon retirement

(1,337)

Goodwill

67,067

Consideration paid by issues of treasury stock   

(12,038)

Deferred income taxes

4,700

Other non-current assets

2,132

Previous investments in acquired companies

(24,734)

Deferred revenues

(6,514)

Non-controlling interests

(5,680)



Net cash used to pay for the Acquisition 

68,969

 

 

Company Contact                

International Investor Relations

Udi Mizrahi

udi_m@ituran.com

VP Finance, Ituran

(Israel) +972 3 557 1348

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-third-quarter-2018-300755021.html

SOURCE Ituran Location and Control Ltd.


[ Back To TMCnet.com's Homepage ]







Technology Marketing Corporation

35 Nutmeg Drive Suite 340, Trumbull, Connecticut 06611 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments: tmc@tmcnet.com.
Comments about this site: webmaster@tmcnet.com.

STAY CURRENT YOUR WAY

© 2018 Technology Marketing Corporation. All rights reserved | Privacy Policy