Ituran Location and Control Ltd. Presents Results for the Full Year & Fourth Quarter 2015

Record Subscriber Growth of 131k in 2015 with Revenue of $176m & EBITDA of $53m

Feb 24, 2016, 06:30 ET from Ituran Location and Control Ltd

AZOUR, Israel, Feb. 24, 2016 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the fourth quarter and full year ended December 31, 2015.

Highlights of 2015

  • Record net subscribers adds during 2015 amounted to 131 thousand, ending the year with 948 thousand subscribers;
  • Full year revenue reached $176 million;
  • Gross and operating margins of 51.2% and  23.1%, respectively;
  • EBITDA of $52.6 million or 30.0% of revenues;
  • Generated $35.9 million in operating cash flow;
  • Total dividends of $16 million issued to shareholders for 2015;
  • Ended 2015 with $28.9 million in net cash (including marketable securities);

Highlights of the Fourth Quarter

  • Strong net subscribers adds in the quarter amounting to 33 thousand;
  • Revenue of $43.8 million;
  • Gross margins of 50.9% and operating margins at 23.6%;
  • EBITDA of $14.2 million or 32.3% of revenues;
  • Generated $7.7 million in operating cash flow;
  • Dividend of $6.5 million declared for the quarter;

Fourth Quarter 2015 Results

Revenues for the fourth quarter of 2015 were $43.8 million, representing an increase of 1% from revenues of $43.5 million in the fourth quarter of 2014. The significant strengthening of the US Dollar versus the Brazilian Real, Argentinean Peso as well as the Israeli Shekel, compared with the level during the fourth quarter of 2014 reduced the overall revenue level in US Dollars. Excluding the exchange rate impact, the increase in revenues would have been 20% over the fourth quarter of last year. 73% of revenues were from location based service subscription fees and 27% from product revenues.

Revenues from subscription fees decreased 3% over the same period last year. In local currency terms, subscription fees increased 22%, primarily due to the growth in the subscriber base which expanded from 817,000 as of December 31, 2014, to 948,000 as of December 31, 2015.

Product revenues increased by 10% compared with the same period last year. In local currency terms, product revenues grew by 14% compared with product revenues reported in the fourth quarter of 2014.

Gross profit for the fourth quarter of 2015 was $22.3 million (50.9% of revenues), a decrease of 6% compared with $23.7 million (54.4% of revenues) in the fourth quarter of 2014. The decrease in the gross margin was mainly due to the weakening of the Brazilian Real and the Israeli Shekel versus the US Dollar. In addition, costs of service revenue increased due to the fast growth in subscribers in the past few quarters.

Operating profit for the fourth quarter of 2015 was $10.3 million (23.6% of revenues), an increase of 3% compared with an operating profit of $10.0 million (22.9% of revenues) in the fourth quarter of 2014. Excluding the impact of the change in exchange rates over the period, the operating profit would have increased 30% over the fourth quarter of 2014.

EBITDA for the quarter was $14.2 million (32.3% of revenues), an increase of 1% compared to an EBITDA of $14.1 million (32.3% of revenues) in the fourth quarter of 2014. Excluding the impact of the change in exchange rates over the period, the EBITDA would have increased 27% over the fourth quarter of last year.

Net profit was US$6.2 million in the fourth quarter of 2015 (14.1% of revenues) or fully diluted EPS of US$0.29. This is compared with a net profit of US$7.0 million (16.1% of revenues) or fully diluted EPS of US$0.33 in the fourth quarter of 2014. Excluding the impact of the change in exchange rates over the period, the net profit would have increased 15% over the fourth quarter of last year.

Cash flow from operations during the quarter was $7.7 million.

Full Year Results

Revenues for 2015 reached $175.6 million, a decrease of 4% compared with revenues of $182.1 million in 2014. The subscriber base grew by a record 131,000, net during 2015. Excluding the impact of the change in exchange rates over the past year, the revenues would have increased 15% over 2014.

Gross profit for 2015 was $89.9 million (51.2% of revenues), compared with $97.1 million (53.3% of revenues) in 2014.

Operating profit for 2015 was $40.6 million (23.1% of revenues) compared with an operating profit of $45.9 million (25.2% of revenues) in 2014. Excluding the impact of the change in exchange rates over the period, the operating profit would have increased 11% over last year.

EBITDA for the year was $52.6 million (30.0% of revenues) compared to an EBITDA of $58.1 million (31.9% of revenues) in 2014, a decrease of 9%.  Excluding the impact of the change in exchange rates over the past year, the EBITDA would have increased 14% over last year.

Share in the loss of affiliates, net was $2.4 million in 2015, compared with $0.4 million last year. The increase was due primarily to the investment in IRT, Ituran's joint venture providing Telematic services in Brazil. This business is expected to become accretive in 2017.

Net income in 2015 was $25.0 million (14.2% of revenues) or fully diluted earnings per share of $1.19. This is compared with a net income in 2014 of $30.4 million (16.7% of revenues) or fully diluted earnings per share of $1.45. Excluding the impact of the change in exchange rates over the period, the net profit would have increased 5% over the fourth quarter of last year.

Cash flow from operations for 2015 was $35.9 million.

As of December 31, 2015, the Company had net cash, including marketable securities, of $28.9 million or $1.38 per share. This is compared with $40.8 million or $1.94 per share as at December 31, 2014.

Dividend

For the fourth quarter of 2015, a dividend of $6.5 million 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.

For the full year of 2015, the dividend issued including that of the fourth quarter of 2015, was $16.0 million, representing 64% of the full year net income.

Eyal Sheratzky, Co-CEO of Ituran said, "Despite the currency headwinds which affected our financial results in 2015, we had an excellent year, showing strong growth in local currency terms in the main territories in which we operate. In particular, we grew our subscriber base by 131 thousand, net, since last year, which is well ahead of our previous average of between 60 and 80 thousand per year. This very fast growth has led us to increase operating expenses in 2015, and in the fourth quarter we already began to reap the fruits of our current accelerated subscriber growth."

Conference Call Information

The Company will also be hosting a conference call later today, February 24, 2016 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: 03-918-0610 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 948,000 subscribers distributed globally. Established in 1995, Ituran has over 1,500 employees worldwide, provides its location based services and has a market leading position in Israel, Brazil, Argentina and the United States.

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 Relations

(US) +1 646 201 9246 

 

 

CONSOLIDATED BALANCE SHEETS

US dollars

December 31,

(in thousands)

2015

2014

Current assets

Cash and cash equivalents

27,016

38,418

Investment in marketable securities

2,035

2,362

Accounts receivable (net of allowance for doubtful accounts)

27,436

27,960

Other current assets

22,437

22,318

Inventories

12,781

12,164

________

________

91,705

103,222

------------

------------

Long-term investments and debit balances

Investments in affiliated company

4,705

1,016

Investments in other company

78

79

Other non-current assets

1,166

2,091

Deferred income taxes

2,279

2,886

Funds in respect of employee rights upon retirement

7,174

6,642

________

________

15,402

12,714

------------

------------

Property and equipment, net

31,514

31,908

------------

------------

Intangible assets, net

26

452

------------

------------

Goodwill

3,356

4,041

------------

------------

Total assets

142,003

152,337

 

 

CONSOLIDATED BALANCE SHEETS

US dollars

December 31,

(in thousands)

2015

2014

Current liabilities

Credit from banking institutions

155

-

Accounts payable

10,466

11,658

Deferred revenues

9,210

9,401

Other current liabilities

21,750

25,253

________

________

41,581

46,312

------------

------------

Long-term liabilities

Liability for employee rights upon retirement

10,637

10,229

Provision for contingencies

622

-

Deferred revenues

973

1,063

Deferred income taxes

-

150

Other non-current liabilities

369

-

________

________

12,601

11,442

------------

------------

Equity:

Stockholders' equity

83,698

90,696

Non - controlling interest

4,123

3,887

________

________

Total equity

87,821

94,583

________

________

________

________

Total liabilities and shareholders' equity

142,003

152,337

 

 

CONSOLIDATED STATEMENTS OF INCOME

US dollars

US dollars

(in thousands

Year ended

December 31,

Three months period

ended December 31,

except per share data)

2015

2014

2015

2014

Revenues:

Location-based services

127,683

133,692

32,088

32,955

Wireless communications products

47,945

48,435

11,703

10,592

-----------

-----------

-----------

-----------

175,628

182,127

43,791

43,547

-----------

-----------

-----------

-----------

Cost of revenues:

Location-based services

46,823

46,852

11,897

11,325

Wireless communications products

38,924

38,142

9,616

8,531

________

________

________

________

85,747

84,994

21,513

19,856

Gross profit

89,881

97,133

22,278

23,691

Research and development expenses

2,401

2,526

702

631

Selling and marketing expenses

9,303

9,264

2,391

2,481

General and administrative expenses

37,801

38,617

9,126

9,667

Other expenses, net

(268)

856

(251)

919

-----------

-----------

-----------

-----------

Operating income

40,644

45,870

10,310

9,993

Financing income, net

1,189

1,704

415

489

________

________

________

________

Income before income taxes

41,833

47,574

10,725

10,482

Income tax expenses

(12,822)

(14,246)

(3,165)

(2,873)

Share in losses of affiliated company, net

(2,439)

(421)

(957)

(113)

________

________

________

________

Net income for the period

26,572

32,907

6,603

7,496

Less: Net income attributable to    non-controlling interest

(1,601)

(2,478)

(421)

(482)

________

________

________

________

Net income attributable to the   company

24,971

30,429

6,182

7,014

Basic and diluted earnings  per Share   of attributable  to company's Stockholders

1.19

1.45

0.29

0.33

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

December 31,

Three months period

ended December 31,

(in thousands)

2015

2014

2015

2014

Cash flows from operating activities

Net income for the period

26,572

32,907

6,603

7,496

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

Depreciation, amortization and impairment of goodwill

11,962

12,219

3,840

4,088

Gain from sale of subsidiary, net (Appendix A)

(951)

-

(951)

-

Exchange differences on principal of deposit and loans, net

-

(23)

-

-

Loss (gains) in respect of trading marketable securities

(666)

(133)

(238)

138

Increase in liability for employee rights upon retirement

717

1,655

215

361

Share in losses of affiliated company, net

2,439

421

957

113

Deferred income taxes

1,731

(737)

791

472

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

(31)

(270)

(21)

(251)

Decrease (increase) in accounts receivable

117

(1,864)

201

1,004

Decrease (increase) in other current and non-current assets

(2,695)

(4,749)

(2,610)

(3,979)

Decrease (increase) in inventories

(658)

783

(909)

(1,454)

Increase (decrease) in accounts payable

(1,176)

927

(84)

1,839

Increase (decrease) in deferred revenues

(246)

749

618

961

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

(1,201)

(4,154)

(739)

(3,601)

________

________

________

________

Net cash provided by operating activities

35,914

37,731

7,673

7,187

------------

------------

------------

------------

Cash flows from investment activities

Increase in funds in respect of employee rights upon retirement

Net of withdrawals

(804)

(708)

(229)

(168)

Capital expenditures

(18,724)

(14,976)

(3,986)

(5,611)

Investment in marketable securities

(11)

(2,771)

(11)

-

Investments in affiliated company

(5,966)

-

(1,327)

-

Subsidiary no longer consolidated (Appendix A)

(266)

-

(266)

-

Deposit in escrow

-

5,005

-

-

Sale of (investment in) deposit

(341)

(283)

(20)

(160)

Proceeds from sale of property and equipment

406

489

117

363

________

________

________

________

Net cash used in investment activities

(25,706)

(13,244)

(5,722)

(5,576)

------------

------------

------------

------------

Cash flows from financing activities

Short term credit from banking institutions, net

160

(38)

(287)

(2)

Acquisition of non-controlling interests

-

(500)

-

-

Dividend payment

(17,590)

(19,324)

(2,861)

(3,843)

Dividend payment to non-controlling interest

(1,229)

(2,564)

-

(502)

________

________

________

________

Net cash used in financing activities

(18,659)

(22,426)

(3,148)

(4,347)

------------

------------

------------

------------

Effect of exchange rate changes on cash and cash equivalents

(2,951)

(5,340)

(1,221)

(1,850)

------------

------------

------------

------------

Net Increase(decrease) in cash and cash equivalents

(11,402)

(3,279)

(2,418)

(4,586)

Balance of cash and cash equivalents at beginning of period

38,418

41,697

29,434

43,004

________

________

________

________

Balance of cash and cash equivalents at end of period

27,016

38,418

27,016

38,418

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Appendix A – Company no longer consolidated

US dollars

Year ended December 31,

(in thousands)

2015

Working capital (excluding cash and cash equivalents), net

1,215

Funds in respect of employee rights upon retirement

(250)

Property and equipment , net

(23)

Liability for employee rights upon retirement

275

Gain from sale of subsidiary

(951)

______

266

 

 

SOURCE Ituran Location and Control Ltd



RELATED LINKS

https://www.ituran.com