Ituran Location and Control Ltd. Presents Results for the First Quarter 2012 Revenues of $37.7 million and EPS of $0.24

AZOUR, Israel, May 30, 2012 /PRNewswire/ --

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

Highlights of the First quarter

  • A 5 thousand increase in net subscribers in the quarter, to a record of 628 thousand as of March 31, 2012;
  • Gross margin at 48.7% and operating margin at 19.7%;
  • EBITDA of $11.3 million or 29.8% of revenues;
  • Generated $3.9 million in operating cash flow; ended the quarter with $43.0 million in net cash (including marketable securities and deposits for short and long term);
  • Dividend of $2.6 million declared for the quarter;

First quarter 2012 Results

Revenues for the first quarter of 2012 were $37.7 million, representing a 6.6% decline from revenues of $40.4 million in the first quarter of 2011. 77% of revenues were from location based service subscription fees and 23% from product revenues.

Revenues from subscription fees declined 4% over the same period last year. The decrease in subscription fees was mainly due to the weakening of the various currencies in which the Company operates against the US dollar, as well a decrease in revenues from Mapa. Excluding currency impacts, revenues from subscriptions would have increased due to the growth in the subscriber base, which expanded from 615,000 as of March 31, 2011, to 628,000 as of March 31, 2012.

Product revenues declined by 15% compared with the same period last year. This decline was mainly due to a reduction in sales in Israel. This was primarily due to the product mix sold in the quarter and lower selling prices.

Gross profit for the first quarter of 2012 was $18.4 million (48.7% of revenues), a decrease of 8% compared with $19.9 million (49.3% of revenues) in the first quarter of last year.

Operating profit for the first quarter of 2012 was $7.5 million (19.7% of revenues), a decrease of 15% compared with an operating profit of $8.8 million (21.8% of revenues) in the first quarter of 2011. The decrease in operating profit was primarily due to the strengthening of the US dollar versus the Brazilian Real and Israeli Shekel, as well as lower operating profit from Mapa.

EBITDA for the quarter was $11.3 million (29.8% of revenues), a decrease of 16% compared to an EBITDA of $13.4 million (33.1% of revenues) in the first quarter of 2011.

Financial income in the first quarter of 2012 was $10 thousand compared with a financial income of $0.2 million in the first quarter of 2011.

Net profit was US$5.1 million in the first quarter of 2012 (13.5% of revenues), compared with a net profit of US$6.5 million (16.0% of revenues), as reported in the first quarter of 2011.

Fully diluted EPS in the first quarter of 2012 was US$0.24, compared with fully diluted EPS of US$0.31 in the first quarter of 2011.

Cash flow from operations during the quarter was $3.9 million.

As of March 31, 2012, the Company had net cash, including marketable securities and deposits for short and long term, of $43.0 million or $2.04 per share. This is compared with $39.7 million or $1.89 per share as at December 31, 2011.

For the first quarter, a dividend of $2.6 million or 12 cents per share was declared in line with the Company's stated policy of issuing at least 50% of net profits in a dividend, on a quarterly basis.

The dividend's record date is June 12, 2012, and the dividend will be paid on June 27, 2012, net of taxes and levies, at the rate of 25%.  

Eyal Sheratzky, Co-CEO of Ituran said, "While we continued to grow our subscriber base, our first quarter was affected by currency fluctuations compared with last year and lower sales at Mapa. We see continued growth potential, especially in Brazil. We believe that in the second quarter, the growth rate in our subscriber base in Brazil will improve back to the long-term growth rates that we have seen there in the past. We recently signed a an agreement with General Motors Brazil as we published on April 9th, in preparation for the new regulation 245 which is expected to come into force later this year. Overall, we continue to share the rewards of our success with our shareholders, recently distributing $25.8 million for our performance in 2011 and a further $3 million for the first quarter of 2012."

Conference Call Information

The Company will also be hosting a conference call later today, May 30, 2012 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: 03-918-0650

CANADA Dial-in Number: +1-866-485-2399

INTERNATIONAL Dial-in Number:  +972-3-918-0650

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 628,000 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.



                                                             US dollars
                                                         (except share data)
                                                       March 31,  December 31,
    (in thousands)                                        2012        2011
    Current assets
    Cash and cash equivalents                          38,946       35,270
    Investments in marketable securities                   74           68
    Accounts receivable (net of allowance for doubtful
    accounts)                                          28,241       25,294
    Loan to former employee                                 -          340
    Other current assets                               18,479       15,165
    Inventories                                        12,434       10,881
                                                       _______      _______
                                                       98,174       87,018
                                                       ---------- ----------
    Long-term investments and other assets
    Deposit in escrow                                   4,903        4,888
    Investments in affiliated company                     199          207
    Investments in other company                           82           80
    Other non-current assets                            1,922        2,216
    Deferred income taxes                               5,553        5,568
    Funds in respect of employee rights upon
    retirement                                          5,067        4,741
                                                       _______      _______
                                                       17,726       17,700
                                                       ---------- ----------
    Property and equipment, net                        38,464       40,870
                                                       ---------- ----------
    Intangible assets, net                              3,113        3,355
                                                       ---------- ----------
    Goodwill                                            8,755        8,514
                                                       ---------- ----------
                                                       _______      _______
    Total assets                                      166,232      157,457
                                                       _______      _______
                                                       _______      _______


                                                         US dollars
                                                    (except share data)
                                                   March 31,  December 31,
    (in thousands)                                   2012         2011
    Current liabilities
    Credit from banking institutions                 800           390
    Accounts payable                              10,681         9,319
    Deferred revenues                              9,090         7,869
    Other current liabilities                     44,237        20,966
                                                  _______      _______
                                                  64,808        38,544
                                                  ----------  ----------
    Long-term liabilities
    Long term loans                                  167           173
    Liability for employee rights upon retirement  7,313         6,865
    Provision for contingencies                    4,703         4,250
    Other non-current liabilities                    934           753
    Deferred revenues                                718           728
    Deferred income taxes                            772           792
                                                  _______      _______
                                                  14,607        13,561
                                                  ----------- -----------
    Stockholders' equity                          82,656       101,194
    Non-controlling interests                      4,161         4,158
                                                  _______      _______
    Total equity                                  86,817       105,352
                                                  ----------- -----------
                                                  _______      _______
    Total liabilities and equity                 166,232       157,457
                                                  _______      _______
                                                  _______      _______


                                                              US dollars
                                                          (except share data)
                                                          Three month period
                                                            ended March 31,
    (in thousands except per share data)                    2012       2011
    Location-based services                               29,215     30,338
    Wireless communications products                       8,520     10,051
                                                         _______    _______
                                                          37,735     40,389
                                                         ---------- ----------
    Cost of revenues:
    Location-based services                               11,478     12,211
    Wireless communications products                       7,878      8,279
                                                         _______    _______
                                                          19,356     20,490
                                                         ---------- ----------
                                                         _______    _______
    Gross profit                                          18,379     19,899
    Research and development expenses                        183        139
    Selling and marketing expenses                         2,141      1,878
    General and administrative expenses                    8,615      9,064
    Other income, net                                        (17)         -
                                                         _______    _______
    Operating income                                       7,457      8,818
    Financing income, net                                     10        239
                                                         _______    _______
    Income before income tax                               7,467      9,057
    Income tax                                            (2,192)    (2,282)
    Share in losses of affiliated companies, net             (14)       -
                                                         _______    _______
    Net income for the period                              5,261      6,775
    Less: Net income attributable to non-controlling
    interest                                                (161)      (297)
                                                         _______    _______
    Net income attributable to the Company                 5,100      6,478
                                                         _______    _______
                                                         _______    _______
    Basic and diluted earnings per share attributable to
    Company's stockholders
                                                            0.24       0.31
                                                         _______    _______
                                                         _______    _______    Weighted average number of shares outstanding (in
    Basic                                                 20,968     20,968
    Diluted                                               20,968     20,977


                                                             US dollars
                                                         Three month period
                                                           ended March 31,
    (in thousands)                                        2012        2011
    Cash flows from operating activities
    Net income for the period                           5,261        6,775
    Adjustments to reconcile net income to net cash
    from operating activities:
    Depreciation and amortization                       3,810        4,554
    Exchange differences on principal of deposit and 
    loans, net                                            126          255
    Gains in respect of trading marketable securities      (4)         (12)
    Increase in liability for employee rights upon
    retirement                                            252          154
    Share in losses of affiliated companies, net           14            -
    Deferred income taxes                                 618         (374)
    Capital gains on sale of property and equipment,
    net                                                    (7)           -
    Increase in accounts receivable                    (2,225)      (1,654)
    Increase in other current assets                   (2,054)      (2,270)
    Decrease (increase) in inventories                 (1,243)         816
    Increase (decrease) in accounts payable             1,096         (166)
    Increase in deferred revenues                         966        1,137
    Increase (decrease) in other current liabilities   (2,690)         837
                                                       _______      _______
    Net cash provided by operating activities           3,920       10,052
                                                       ----------- -----------
    Cash flows from investment activities
    Increase in funds in respect of employee rights
    upon retirement, net of withdrawals                  (191)        (116)
    Capital expenditures                                 (998)      (5,615)
    Deposit in escrow                                       -          603
    Deposit                                                25          144
    Proceeds from sale of property and equipment          109           20
    Repayment of loan to a former employee                355            -
                                                       _______      _______
    Net cash used in investment activities               (700)      (4,964)
                                                       ----------- -----------
    Cash flows from financing activities
    Short term credit from banking institutions, net      398          (10)
    Repayment of long term loans                          (11)          (5)

    Dividend paid to non-controlling interest            (268)           -
                                                       _______      _______
    Net cash provided by (used in) financing 
    activities                                            119          (15)
                                                       ----------- -----------
    Effect of exchange rate changes on cash and cash
    equivalents                                           337          655
                                                       ----------- -----------
                                                       _______      _______
    Net increase in cash and cash equivalents           3,676        5,728
    Balance of cash and cash equivalents at beginning
    of the period                                      35,270       46,674
                                                       _______      _______
    Balance of cash and cash equivalents at end of the
    period                                             38,946       52,402
                                                       _______     _______
                                                       _______     _______


Company Contact                
Udi Mizrahi                         
VP Finance, Ituran             
(Israel) +972-3-557-1348       

International Investor Relations
Ehud Helft & Kenny Green
CCG Investor Relations
(US) +1-646-201-9246

SOURCE Ituran Location & control LTD.

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