Ituran Location and Control Ltd. Presents Results for the Second Quarter 2012 Revenues of $37.6 Million and EPS of $0.48

AZOUR, Israel, August 15, 2012 /PRNewswire/ --

Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the quarter ended June 30, 2012.

Highlights of the Second Quarter of 2012

  • An 11 thousand quarterly increase in net subscribers to a record of 639 thousand as of June 30, 2012;
  • Gross margin at 49.1% and operating margin at 18.9%;
  • EBITDA of $10.5 million or 28.1% of revenues;
  • Generated $12.4 million in operating cash flow; ended the quarter with $22.9 million in net cash and equivalents;
  • Dividend of $5.1 million declared for the quarter;

Second Quarter 2012 Results

Revenues for the second quarter of 2012 were $37.6 million, representing a 8.7% decline from revenues of $41.1 million in the second quarter of 2011. 75% of revenues were from location based service subscription fees and 25% from product revenues.

Revenues from subscription fees were $28.1 million, a decline of 10.9% over the same period last year. The decrease in subscription fees was due to the weakening of the Brazilian Real,  Israeli Shekel and Argentinean Peso against the US dollar. In local currency terms, subscription revenues grew by 4% compared with the second quarter of last year due to the increase in the subscriber base, which expanded from 615,000 as of June 30, 2011, to 639,000 as of June 30, 2012.

Product revenues were $9.4 million, a decline of 1.6% compared with the same period last year. This was due to the above-mentioned currency effects. In local currency terms, product revenues grew by 6% over the same period last year.

Gross profit for the second quarter of 2012 was $18.4 million (49.1% of revenues), a decrease of 7.7% compared with $20.0 million (48.5% of revenues) in the second quarter of last year.

Operating profit for the second quarter of 2012 was $7.1 million (18.9% of revenues), a decrease of 18.8% compared with an operating profit of $8.7 million (21.2% of revenues) in the second quarter of 2011. The decrease in operating profit compared with last year was due to the above-mentioned currency effect and a one-time expense relating to the arbitration verdict with Telematics at the amount of approximately $0.5 million.

EBITDA for the quarter was $10.5 million (28.1% of revenues), a decrease of 18.8% compared to an EBITDA of $13.0 million (31.5% of revenues) in the second quarter of 2011.

Financial income in the second quarter of 2012 was $809 thousand compared with a financial income of $339 thousand in the second quarter of 2011.

Other income in the quarter amounted to $6.7 million relating to the settlement with Leonardo.

Net profit was $10.1 million in the second quarter of 2012 (27% of revenues), compared with a net profit of $6.6 million (16.0% of revenues), as reported in the second quarter of 2011. During the quarter, the above-mentioned settlement with Leonardo contributed approximately $5 million to the net income.

Fully diluted EPS in the second quarter of 2012 was US$0.48, compared with fully diluted EPS of US$0.31 in the second quarter of 2011.

Cash flow from operations during the quarter was $12.4 million.

As of June 30, 2012, the Company had net cash, including marketable securities and deposits for short and long term, of $22.9 million or $1.09 per share. This is compared with $43.0 million or $2.04 per share as at March 31, 2012. During the quarter, the Company paid out $28.1 million in dividends, relating to the results of the full year of 2011 and for the first quarter of 2012.

For the second quarter, a dividend of $5.1 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.

Eyal Sheratzky, Co-CEO of Ituran said, "We are very pleased that the growth rate in our subscriber base in Brazil finally returned back to its long-term growth rate and we believe this is a positive sign for the coming quarters. Looking ahead, we now expect to increasingly benefit from the changes we made last year, which aimed at lowering the long-term churn rate and increase the average amount of time a subscriber will stay with us. We also continued to generate strong cash flow and we continue to share the rewards of our success with our shareholders, distributing $5.1 million in dividends for our performance in the quarter."

Conference Call Information

The Company will also be hosting a conference call later today, August 15, 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: 1-888-281-1167
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 639,000 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.

                            CONSOLIDATED BALANCE SHEETS

                                                        US dollars
                                                    (except share data)
                                                   June 30,   December 31,
    (in thousands)                                   2012         2011
 
    Current assets
    Cash and cash equivalents                        18,977       35,270
    Investments in marketable securities                  -           68
    Accounts receivable (net of allowance for
    doubtful accounts)                               27,878       25,294
    Loan to former employee                               -          340
    Other current assets                             22,620       15,165
    Inventories                                      12,365       10,881
                                                    _______      _______
                                                     81,840       87,018
                                                    ------------ ----------
 
    Long-term investments and other assets
    Deposit in escrow                                 4,915        4,888
    Investments in affiliated company                   170          207
    Investments in other company                         78           80
    Other non-current assets                          1,596        2,216
    Deferred income taxes                             5,383        5,568
    Funds in respect of employee rights upon
    retirement                                        4,984        4,741
                                                    _______      _______
                                                     17,126       17,700
                                                    ------------ ----------
 
    Property and equipment, net                      34,924       40,870
                                                    ------------ ----------
 
    Intangible assets, net                            2,781        3,355
                                                    ------------ ----------
 
    Goodwill                                          8,291        8,514
                                                    ------------ ----------
 
                                                    _______      _______
    Total assets                                    144,962      157,457
                                                    _______      _______
                                                    _______      _______



                            CONSOLIDATED BALANCE SHEETS
                                                        US dollars
                                                   (except share data)
                                                  June 30,   December 31,
    (in thousands)                                  2012         2011
 
    Current liabilities
    Credit from banking institutions                 796          390
    Accounts payable                              11,934        9,319
    Deferred revenues                              8,334        7,869
    Other current liabilities                     21,040       20,966
                                                  _______     _______
                                                  42,104       38,544
                                                  ----------  --------
 
    Long-term liabilities
    Long term loans                                  147          173
    Liability for employee rights upon retirement  7,346        6,865
    Provision for contingencies                    4,135        4,250
    Other non-current liabilities                    787          753
    Deferred revenues                                692          728
    Deferred income taxes                            690          792
                                                  _______     _______
                                                  13,797       13,561
                                                  ----------- ---------
 
    Stockholders' equity                          84,819      101,194
                                                  ----------- ---------
    Non-controlling interests                      4,242        4,158
                                                  ----------- ---------
                                                  _______     _______
    Total equity                                  89,061      105,352
                                                  ----------- ---------
                                                  _______     _______
    Total liabilities and equity                 144,962      157,457
                                                  _______     _______
                                                  _______     _______



                         CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                                    US dollars              US dollars
                                (except share data)     (except share data)
                                 Six month period       Three month period
                                  ended June 30,          ended June 30,
    (in thousands except per
    share data)                  2012        2011        2012        2011
 
    Revenues:
    Location-based services    57,335      61,888      28,120      31,550
    Wireless communications
    products                   17,951      19,638       9,431       9,587
                               _______     _______     _______     _______
                               75,286      81,526      37,551      41,137
                               ----------- ----------- ----------- ---------
 
    Cost of revenues:
    Location-based services    22,634      25,402      11,156      13,191
    Wireless communications
    products                   15,850      16,271       7,972       7,992
                               _______     _______     _______     _______
                               38,484      41,673      19,128      21,183
                               ----------- ----------- ----------- ---------
                               _______     _______     _______     _______
 
    Gross profit               36,802      39,853      18,423      19,954
    Research and development
    expenses                      340         284         157         145
    Selling and marketing
    expenses                    4,369       4,164       2,228       2,286
    General and administrative
    expenses                   17,128      17,861       8,513       8,797
    Other (income) expenses,
    net                           425           -         442           -
                               _______     _______     _______     _______
    Operating income           14,540      17,544       7,083       8,726
    Other income, net           6,755          41       6,755          41
    Financing income, net         819         578         809         339
                               _______     _______     _______     _______
    Income before income tax   22,114      18,163      14,647       9,106
    Income tax expense         (6,243)     (4,563)     (4,051)     (2,281)
    Share in losses of
    affiliated companies, net     (14)          -           -           -
                               _______     _______     _______     _______
    Net income for the period  15,857      13,600      10,596       6,825
    Less: Net income
    attributable to
    non-controlling interests    (613)       (541)       (452)       (244)
                               _______     _______     _______     _______
    Net income attributable to
    the Company                15,244      13,059      10,144       6,581
                               _______     _______     _______     _______
                               _______     _______     _______     _______
 
    Basic and diluted earnings
    per share attributable to
    Company's stockholders
    (Note 3)                     0.73        0.62        0.48        0.31
                               _______     _______     _______     _______
                               _______     _______     _______     _______
 
    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
                                  Six month period       Three month period
                                   ended June 30,          ended June 30,
    (in thousands except per
    share data)                   2012        2011        2012        2011
 
    Cash flows from operating
    activities
    Net income for the period    15,857      13,600      10,596      6,825
    Adjustments to reconcile
    net income to net cash
    from operating activities:
    Depreciation and
    amortization                  7,258       8,804       3,448      4,250
    Exchange differences on
    principal of deposit and
    loans, net                     (183)        515        (309)       260
    Losses (gains) in respect
    of trading marketable
    securities                       (2)        (19)          2         (7)
    Increase in liability for
    employee rights upon
    retirement                      659         482         407        328
    Share in losses of
    affiliated companies, net        14           -           -          -
    Deferred income taxes          (152)       (566)       (770)      (192)
    Capital losses (gains) on
    sale of property and
    equipment, net                   (5)        (30)          2        (30)
    Decrease (increase) in
    accounts receivable          (3,242)        159      (1,017)     1,813
    Decrease (increase) in
    other current assets         (6,159)       (299)     (4,105)     1,971
    Decrease (increase) in
    inventories                  (1,767)        822        (524)         6
    Increase (decrease) in
    accounts payable              2,715        (880)      1,619       (714)
    Increase (decrease) in
    deferred revenues               653       1,365        (313)       228
    Increase (decrease) in
    other current liabilities       675          46       3,365       (791)
                                 _______     _______     _______     _______
    Net cash provided by
    operating activities         16,321      23,999      12,401     13,947
                               ----------- ----------- ----------- ---------
    Cash flows from investment
    activities
    Increase in funds in
    respect of employee rights
    upon retirement, net of
    withdrawals                    (366)       (302)       (175)      (186)
    Capital expenditures         (3,758)    (10,985)     (2,760)    (5,370)
    Deposit in escrow                 -         603           -          -
    Deposit                         (25)        462         (50)       318
    Proceeds from sale of
    property and equipment          161         226          52        206
    Repayment of loan to a
    former employee                 355           -           -          -
    Sale of marketable
    securities                       70           -          70          -
                                _______     _______     _______    _______
    Net cash used in
    investment activities        (3,563)     (9,996)     (2,863)    (5,032)
                               ----------- ----------- ----------- ---------
    Cash flows from financing
    activities
    Short term credit from
    banking institutions, net       415         (36)         17        (26)
    Repayment of long term
    loans                           (22)        (23)        (11)       (18)
    Dividend paid to
    non-controlling interests      (400)          -        (132)         -
    Dividend paid               (28,116)    (21,782)    (28,116)   (21,782)
                                _______     _______     _______    _______
    Net cash provided by (used
    in) financing activities    (28,123)    (21,841)    (28,242)    21,826)
                               ----------- ----------- ----------- ---------
    Effect of exchange rate
    changes on cash and cash
    equivalents                    (928)        970      (1,265)       315
                               ----------- ----------- ----------- ---------
                                _______     _______     _______     _______
    Net increase in cash and
    cash equivalents            (16,293)     (6,868)    (19,969)    12,596)
    Balance of cash and cash
    equivalents at beginning
    of period                    35,270      46,674      38,946     52,402
                                _______     _______     _______     _______
    Balance of cash and cash
    equivalents at end of the
    period                       18,977      39,806      18,977     39,806
                                _______     _______     _______     _______
                                _______     _______     _______     _______




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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