2014

CORRECTION - Ituran Location and Control Ltd: Ituran Location and Control Ltd. Presents Results for the Fourth Quarter and Full Year 2012 Full Year Revenues of $150 million and EPS of $1.19

Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the quarter and year ended December 31, 2012.

Highlights of the Fourth Quarter of 2012

  • Revenues of $38.2 million growing 3.4% year-over-year; in local currency term revenues grew 8.5% year-over-year;
  • A 14 thousand quarterly increase in net subscribers to a record of 667 thousand subscribers as of December 31, 2012;
  • Gross margin at 49.3% and operating margin at 21.0%;
  • EBITDA of $12.2 million at 31.8% of revenues;
  • Operating profit of $8.0 million growing 15% compared with $7.0 million in the fourth quarter of 2011 (excluding the legal expenses related to ICMS in Brazil);
  • Generated $9 million in operating cash flow; ended the quarter with $34.2 million in net cash and equivalents;
  • Dividend of $7.0 million declared for the quarter;

Fourth Quarter 2012 Results

Revenues for the fourth quarter of 2012 were $38.2 million, representing a 3.4% growth from revenues of $37.0 million in the fourth quarter of 2011. 76.2% of revenues were from location based service subscription fees and 23.8% from product revenues.

Revenues from subscription fees were $29.1 million, an increase of 2.4% over the same period last year. In local currency terms, subscription revenues grew by 8.5% compared with the fourth quarter of last year due to the increase in the subscriber base, which expanded from 623,000 as of December 31, 2011, to 667,000 as of December 31, 2012.

Product revenues were $9.1 million, an increase of 6.6% compared with the same period last year.

Gross profit for the fourth quarter of 2012 was $18.8 million (49.3% of revenues), an increase of 0.9% compared with $18.7 million (50.5% of revenues) in the fourth quarter of last year.

Operating profit for the fourth quarter of 2012 was $8.0 million (21.0% of revenues), compared with an operating loss of $0.3 million  in the fourth quarter of 2011. In the fourth quarter of 2011, the Company made a provision for $7.3 million in legal expenses related to ICMS in Brazil.  

EBITDA for the quarter was $12.2 million (31.8% of revenues), compared to an EBITDA of $3.7 million (9.9% of revenues) in the fourth quarter of 2011.

Financial expense in the fourth quarter of 2012 was $28 thousand compared with a financial income of $671 thousand in the fourth quarter of 2011.

Net profit was $4.4 million in the fourth quarter of 2012 (11.5% of revenues), compared with a net profit of $1.6 million (4.3% of revenues), as reported in the fourth quarter of 2011.

Fully diluted EPS in the fourth quarter of 2012 was US$0.21, compared with fully diluted EPS of US$0.08 in the fourth quarter of 2011.

Cash flow from operations during the quarter was $9 million.

Full Year Results

Revenues for 2012 reached $150.3 million. This is an decrease of 6.1% over revenues of $160.2 million in 2011.In local currency terms, revenues grew by 4% compared with 2011, due to the increase in subscriber base.

Gross profit for 2012 was $74.2 (49.3% of revenues), compared with $79.4 million (49.6% of revenues) in 2011.

Operating profit for 2012 was $29.9 million (19.9% of revenues) compared with an operating profit of $26.6 million (16.6% of revenues) in 2011.

EBITDA for the year was $44.6 million (29.7% of revenues) compared to an EBITDA of $43.6 million (27.2% of revenues)  in 2011.  

Net income in 2012 was $24.9 million (16.6% of revenues) or fully diluted earnings per share of $1.19. This is compared with a net income in 2011 of $21.3 million (13.3% of revenues) or fully diluted earnings per share of $1.01.  

Cash flow from operations for 2012 was $32.5million. As of December 31, 2012, the Company had net cash, including marketable securities and deposits for short and long term, of $34.2 million or $1.63 per share. This is compared with $39.7 million or $1.89 per share as of December 31, 2011.

Dividend

For the fourth quarter of 2012, a dividend of $7.0 million was declared in line with the Company's stated policy of issuing at least 50% of net profits in a dividend, on  yearly basis. For the full year of 2012, Ituran has declared a cumulative $17.2 million in dividends, amounting to 69% of net income for 2012.

Eyal Sheratzky, Co-CEO of Ituran said, "Overall, we are happy with our performance in 2012. Following the changes we implemented in Brazil, the second half of 2012 has demonstrated that this strategy was successful. Our subscriber base is now growing at a rate in line with our long-term targets and our operating margins have been steadily improving throughout the year. In fact, these results make apparent the operating leverage in our model, which enables a large portion of our increase in revenue to fall straight to the operating profit line. Over 2012, we continued to share the fruits of our success and reward the support of our shareholders, distributing a total of $17.2 million. "

Conference Call Information

The Company will also be hosting a conference call later today, February 19, 2013 at 9am ET. 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: 03-918-0610
CANADA Dial-in Number: 1-866-485-2399
INTERNATIONAL Dial-in Number:  +972-3-918-0610

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 provides location-based services, consisting predominantly of stolen vehicle recovery and tracking services, as well as wireless communications products used in connection with its location-based services and various other applications. Ituran offers mobile asset location, Stolen Vehicle Recovery, management & control services for vehicles, cargo and personal security. Ituran's subscriber base has been growing significantly since the Company's inception to over 667,000 subscribers distributed globally. Established in 1995, Ituran has over 1,300 employees worldwide, provides its location based services and has a market leading position in Israel, Brazil, Argentina and the United States.

Financial Tables to Follow **

CONSOLIDATED BALANCE SHEETS

                                                        US dollars
                                                       December 31,
    (in thousands)                                  2012           2011

    Current assets
    Cash and cash equivalents                     29,453         35,270
    Investments in marketable securities               -             68
    Accounts receivable (net of allowance for
    doubtful accounts)                            26,190         25,294
    Loan to former employee                            -            340
    Other current assets                          15,399         15,165
    Inventories                                   14,747         10,881
                                                  ------         ------
                                                  85,789         87,018
                                                  ------         ------
    Long-term investments and debit balances
    Deposit in escrow                             4,939           4,888
    Investments in affiliated company               160             207
    Investments in other company                     82              80
    Other non-current assets                      1,890           2,216
    Deferred income taxes                         4,174           5,568
    Funds in respect of employee rights upon
    retirement                                    5,515           4,741
                                                 ------          ------
                                                 16,760          17,700
                                                 ------          ------
    Property and equipment, net                  34,156          40,870
                                                 ------          ------
    Intangible assets, net                        2,591           3,355
                                                 ------          ------
    Goodwill                                      8,043           8,514
                                                 ------          ------
    Total assets                                147,339         157,457
                                                -------         -------
                                                -------         -------


CONSOLIDATED BALANCE SHEETS

                                                       US dollars
                                                      December 31,
    (in thousands)                                   2012       2011

    Current liabilities
    Credit from banking institutions                221          390
    Accounts payable                              9,524        9,319
    Deferred revenues                             9,526        7,869
    Other current liabilities                    22,373       20,966
                                                 ------       ------
                                                 41,644       38,544
                                                 ------       ------
    Long-term liabilities
    Long term loans                                   -          173
    Liability for employee rights upon retirement 7,915        6,865
    Provision for contingencies                   3,864        4,250
    Other current liabilities                       460          753
    Deferred revenues                               806          728
    Deferred income taxes                           643          792
                                                 ------       ------
                                                 13,688       13,561
                                                 ------       ------
    Equity:

    Stockholders' equity                         88,027      101,194
    Non - controlling interest                    3,980        4,158
                                                 ------      -------
    Total equity                                 92,007      105,352
                                                 ------      -------
    Total liabilities and shareholders' equity  147,339      157,457
                                                 ======      =======


CONSOLIDATED STATEMENTS OF INCOME

                                  US dollars                 US dollars
                                  Year ended              Three month period
                                 December 31,              ended December 31,
    (in thousands
    except per share
    data)                            2012         2011       2012      2011

    Revenues:
    Location-based services       114,565      120,410     29,128    28,442
    Wireless communications
    products                       35,753       39,757      9,099     8,534
                                  -------      -------     ------    ------
                                  150,318      160,167     38,227    36,976
                                  -------      -------     ------    ------
    Cost of revenues:
    Location-based services        46,371     50,977(*)    11,650   11,967(*)
    Wireless communications
    products                       29,786     29,758(*)     7,739    6,345(*)
                                   ------     --------     ------    ------
                                   76,157      80,735      19,389    18,312
                                   ======     ========     ======    ======
    Gross profit                   74,161      79,432      18,838    18,664
    Research and development
    expenses                          669         631         169       151
    Selling and marketing
    expenses                        8,489       8,543       2,016     2,156
    General and administrative
    expenses                       33,439      34,984       7,997     7,919
    Other expenses (income),
    net                             1,617       8,691         632     8,704
                                   ------      ------      ------     ------
    Operating income               29,947      26,583       8,024      (266)
    Other (expenses) income         6,755        (819)          -       (13)
    Financing income
    (expenses) , net                  987       2,100         (28)      671
                                   ------      ------      ------     ------
    Income (loss) before
    income taxes                   37,689      27,864       7,996       392
    Income tax                    (11,690)     (5,655)     (3,326)    1,341
    Share in income (losses)
    of affiliated
    companies, net                    (39)        (23)        (10)      (23)
                                   ------      ------      ------     ------
    Net income (loss) for the
    period                         25,960      22,186       4,660     1,710
    Less :Net income
    attributable

    To non-controlling
    interest                       (1,080)       (908)       (250)     (126)
                                   ------      ------      ------     ------
    Net income attributable to
    the company                    24,880      21,278       4,410     1,584
                                   ======      ======      ======     ======
    Basic and diluted earnings
    per

    Share of attributable to
    company's

    Stockholders                     1.19        1.01        0.21      0.07
                                   ======      ======      ======    =======
    Basic and diluted weighted
    average

    Number of shares
    outstanding                    20,968      20,968      20,968    20,968
                                   ======      ======      ======    =======


CONSOLIDATED STATEMENTS OF CASH FLOWS

                                             US dollars           US dollars
                                             Year ended       Three months period
                                             December 31,      ended December 31,
    (in thousands)                          2012     2011      2012       2011

    Cash flows from operating
    activities
    Net income for the year               25,960   22,186     4,660      1,710
    Adjustments to reconcile net income
    to net cash from operating
    activities:
    Depreciation, amortization and
    impairment of goodwill                14,671   17,801     4,151      4,692
    Exchange differences on principal
    of deposit and loans, net                 55     (429)      233         24
    Gains in respect of trading
    marketable securities                     (2)     (27)        -        (27)
    Increase in liability for employee
    rights upon retirement                   888      854       185        173
    Share in losses of affiliated
    companies, net                            39       23        10         23
    Deferred income taxes                  4,075   (2,224)    2,789       (858)
    Capital losses on sale of property
    and equipment, net                        23       63         2         87
    Decrease (increase) in accounts
    receivable                              (300)   3,649     2,165      2,890
    Increase in other current assets      (7,974)  (1,784)   (1,202)    (1,849)
    increase in inventories               (3,609)  (2,985)     (962)    (1,781)
    Increase (decrease) in accounts
    payable                                 (372)    (180)     (956)       527
    Increase in deferred revenues          1,532    1,550       339        182
    Increase (decrease) in other
    current liabilities                   (2,445)   7,355    (2,427)     7,063
    Litigation obligation                      -        -         -       (237)

    Net cash (provided by)operating       ------   ------    ------    -------
    activities                            32,541   45,852     8,987     12,619
                                          ------   ------    ------    -------
    Cash flows from investment
    activities
    Increase in funds in respect of
    employee rights upon retirement,
    net of withdrawals                      (662)    (563)     (164)      (152)
    Capital expenditures                  (9,676) (16,161)   (4,854)    (2,822)
    Intangible assets expenditures             -      (74)        -        (16)
    Deposit in escrow                          -    8,223         -      7,620
    Deposit                                 (291)     384       (10)       (26)
    Proceeds from sale of property and
    equipment                                319      614        43         65
    Sale of marketable securities             70    1,418         -      1,418
    Repayment of loan to former
    employee                                 355        -         -          -
    Adjustment of proceeds received
    from sale of subsidiary                    -   (4,650)        -     (4,650)
    Net cash(provided by) investment      ------  --------  --------   --------
    activities                            (9,885) (10,809)   (4,985)     1,437
    Cash flows from financing             ------  --------  --------   --------
    activities
    Short term credit from banking
    institutions, net                       (310)     299      (363)      (264)
    Repayment of long term loans             (44)     (46)      (11)       (11)
    Dividend paid                        (33,308) (21,782)   (5,192)         -
    Dividend paid to non-controlling
    interest                              (1,141)    (767)     (122)      (261)
    Settlements of litigation
    obligation in connection with
    financial transaction                  7,462  (22,419)    7,462    (22,419)
    Net cash(provided by) financing       ------  --------    ------   --------
    activities                           (27,341) (44,715)    1,774    (22,955)
    Effect of exchange rate changes on   -------  --------    ------   --------
    cash and cash equivalents             (1,132) ( 1,732)      (15)       430
    Net Increase(decrease) in cash and   -------  --------    ------   --------
    cash equivalents                      (5,817) (11,404)    5,761     (8,469)
    Balance of cash and cash
    equivalents at beginning of year      35,270   46,674    23,692     43,739
    Balance of cash and cash              ------   ------    ------     ------
    equivalents at end of year            29,453   35,270    29,453     35,270
                                          ======   ======    ======     ======


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

International Investor Relations
Ehud Helft & Kenny Green
ituran@ccgisrael.com 
CCG Investor Relations
(US) +1-646-201-9246  

SOURCE Ituran Location and Control Ltd




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