Ituran Location And Control Ltd. Presents Results For The Second Quarter 2015

Record subscriber growth at 34 thousand in the quarter

Aug 13, 2015, 06:00 ET from Ituran Location and Control Ltd.

AZOUR, Israel, Aug. 13, 2015 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the second quarter ended June 30, 2015.

Highlights of the Second Quarter

  • Record net subscribers adds in the quarter amounting to 34 thousand; total subscribers reached 879,000 as of June 30, 2015;
  • In local currencies, Ituran demonstrated year-over-year growth in revenue, operating profit and net profit;
  • Gross margins at 50.8% and operating margins at 22.9%;
  • EBITDA of $12.7 million or 29.0% of revenues;
  • Generated $10.7 million in operating cash flow; ended the quarter with $33.4 million in net cash (including marketable securities);
  • Dividend of $3.0 million declared for the quarter;

Second Quarter 2015 Results Revenues for the second quarter of 2015 were $43.8 million, representing an 6% decrease from revenues of $46.6 million in the second quarter of 2014. The significant weakening of the Brazilian Real, Israeli Shekel and Argentinean Peso versus the US Dollar compared with the second quarter of 2014 reduced the revenue level in US Dollars. Excluding the exchange rate impact, the increase in revenues would have been 12% over the second quarter of last year. 73% of revenues were from location based service subscription fees and 27% from product revenues.

Revenues from subscription fees decreased 6% over the same period last year. In local currency terms, subscription fees increased 16%, primarily due to the growth in the subscriber base which expanded from 775,000 as of June 30, 2014, to 879,000 as of June 30, 2015.

Product revenues decreased by 7% compared with the same period last year. This was due to the significant weakening of the various currencies in which Ituran sells its products, mainly the Israeli shekel, versus the US Dollar. In local currency terms, product revenues grew by 4.5% compared with product revenues reported in the second quarter in 2014.

Gross profit for the second quarter of 2015 was $22.2 million (50.8% of revenues), a decrease of 10.5% compared with $24.8 million (53.3% of revenues) in the second quarter of 2014.

Operating profit for the second quarter of 2015 was $10.0 million (22.9% of revenues), a decrease of 17% compared with an operating profit of $12.1 million (25.9% of revenues) in the second quarter of 2014. Excluding the impact of the change in exchange rates over the period, the operating profit would have increased by 8% over the second quarter of last year.

EBITDA for the quarter was $12.7 million (29.0% of revenues), a decrease of 13% compared to an EBITDA of $14.6 million (31.4% of revenues) in the second quarter of 2014. Excluding the impact of the change in exchange rates over the period, the EBITDA would have increased by 10% over the second quarter of last year.

Net profit was US$5.8 million in the second quarter of 2015 (13.3% of revenues) or fully diluted EPS of US$0.28. This is compared with a net profit of US$7.4 million (15.9% of revenues) or fully diluted EPS of US$0.35 in the second quarter of 2014.

Cash flow from operations during the quarter was $10.7 million.

As of June 30, 2015, the Company had net cash, including marketable securities, of $33.4 million or $1.59 per share. This is compared with $35.3 million or $1.68 per share as at March 31, 2015.

Dividend For the second quarter of 2015, a dividend of $3.0 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 with the exceptionally strong and record growth in our subscriber base which has accelerated over the past two quarters. While the currencies had a negative impact on our reported results in US Dollars, the underlying business remains as strong as ever, as reflected by the record growth in subscribers. Over the long term this bodes well, as the marginal cost of adding each new subscriber is minimal, which leads to overall strong operating leverage inherent to our business model. We look forward to continuing the growth trend in all our markets. "

Conference Call Information

The Company will also be hosting a conference call later today, August 13, 2015 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: 1 888 668 9141 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 879,000 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 & Public Relations

(US) +1 646 201 9246 

 

ITURAN LOCATION AND CONTROL LTD. CONSOLIDATED BALANCE SHEETS

 

US dollars

June 30,

December 31,

(in thousands)

2015

2014

Current assets

Cash and cash equivalents

30,988

38,418

Investment in marketable securities

2,422

2,362

Accounts receivable (net of allowance for doubtful accounts)

29,719

27,960

Other current assets

23,253

22,318

Inventories

12,163

12,164

98,545

103,222

Long-term investments and other assets

Investments in affiliated companies

2,139

1,016

Investments in other company

81

79

Other non-current assets

1,376

2,091

Deferred income taxes

3,280

2,886

Funds in respect of employee rights upon retirement

7,340

6,642

14,216

12,714

Property and equipment, net

37,070

31,908

Intangible assets, net

382

452

Goodwill

4,169

4,041

Total assets

154,382

152,337

 

ITURAN LOCATION AND CONTROL LTD. CONSOLIDATED BALANCE SHEETS

US dollars

June 30,

December 31,

(in thousands)

2015

2014

Current liabilities

Credit from banking institutions

6

-

Accounts payable

13,524

11,658

Deferred revenues

9,920

9,401

Other current liabilities

23,620

23,880

47,070

44,939

Long-term liabilities

Liability for employee rights upon retirement

10,845

10,229

Provision for contingencies

1,285

1,373

Deferred revenues

1,005

1,063

Deferred income taxes

132

150

Other

504

-

13,771

12,815

Stockholders' equity

89,794

90,696

Non-controlling interests

3,747

3,887

Total equity

93,541

94,583

Total liabilities and equity

154,382

152,337

 

ITURAN LOCATION AND CONTROL LTD. CONSOLIDATED STATEMENTS OF INCOME

US dollars

US dollars

Six month period ended June 30,

Three month period  ended June 30,

(in thousands except per share data)

2015

2014

2015

2014

Revenues:

Location-based services

64,093

66,295

32,145

34,115

Wireless communications products

23,921

25,795

11,669

12,515

88,014

92,090

43,814

46,630

Cost of revenues:

Location-based services

23,146

23,227

11,845

12,142

Wireless communications products

19,269

20,281

9,732

9,650

42,415

43,508

21,577

21,792

Gross profit

45,599

48,582

22,237

24,838

Research and development expenses

1,085

1,245

595

654

Selling and marketing expenses

4,625

4,437

2,229

2,152

General and administrative expenses

19,365

19,198

9,402

9,995

Other income, net

(14)

(54)

(2)

(19)

Operating income

20,538

23,756

10,013

12,056

Financing income (expenses), net

208

(44)

(263)

(169)

Income before income tax

20,746

23,712

9,750

11,887

Income tax expense

(6,439)

(7,478)

(3,100)

(3,558)

Share in losses of affiliated companies, net

(844)

(201)

(537)

(201)

Net income for the period

13,463

16,033

6,113

8,128

Less: Net income attributable to non-controlling interests

(834)

(1,295)

(295)

(718)

Net income attributable to the Company

12,629

14,738

5,818

7,410

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

0.60

0.70

0.28

0.35

Basic and diluted weighted average number of shares outstanding

20,968

20,968

20,968

20,968

 

ITURAN LOCATION AND CONTROL LTD. STATEMENTS OF CASH FLOWS

US dollars

US dollars

Six month period ended June 30,

Three month period ended June 30,

(in thousands)

2015

2014

2015

2014

Cash flows from operating activities

Net income for the period

13,463

16,033

6,113

8,128

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

Depreciation and amortization

5,383

5,268

2,710

2,575

Losses (gains) in respect of trading marketable securities

(204)

88

(115)

(17)

Exchange differences on principal of deposit and loans, net

-

(23)

-

-

Increase )decrease) in liability for employee rights upon retirement

290

935

(91)

416

Share in losses of affiliated companies, net

844

201

537

201

Deferred income taxes

(346)

(898)

(341)

(426)

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

(7)

20

(2)

66

Decrease (increase) in accounts receivable

(867)

(5,198)

567

(1,003)

Decrease (increase) in other current assets

(671)

(707)

1,007

1,300

Decrease (increase) in inventories

388

2,533

(272)

(106)

Decrease(increase)  in accounts payable

854

(1,121)

(12)

(702)

Increase (decrease) in deferred revenues

128

24

524

(904)

Increase (decrease) in other current liabilities

150

518

53

(1,535)

Net cash provided by operating activities

19,405

17,673

10,678

7,993

Cash flows from investment activities

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

(487)

(297)

(224)

(139)

Capital expenditures

(12,969)

(6,527)

(6,132)

(3,505)

Investment in marketable securities

-

(2,771)

-

12

Investment in affiliated companies

(1,783)

-

(513)

-

Deposit in escrow

-

5,005

-

5,005

Deposit

(239)

(156)

(79)

-

Proceeds from sale of property and equipment

687

628

188

398

Net cash used in investment activities

(14,791)

(4,118)

(6,760)

1,771

Cash flows from financing activities

Short term credit from banking institutions, net

6

(39)

6

(1,240)

Dividend paid

(11,343)

(11,459)

(6,920)

(7,843)

Dividend paid to non-controlling interests

(536)

(1,505)

-

(769)

Net cash provided by (used in) financing activities

(11,873)

(13,003)

(6,914)

(9,852)

Effect of exchange rate changes on cash and cash equivalents

(171)

(482)

1,076

503

Net increase(decrease)  in cash and cash equivalents

(7,430)

70

(1,920)

415

Balance of cash and cash equivalents at beginning of  period

38,418

41,697

32,908

41,352

Balance of cash and cash equivalents at end of the period

30,988

41,767

30,988

41,767

Supplementary information on investing activities not involving cash flows:

In May 2015, the Company declared a dividend in an amount of US$ 3.4 million. The dividend was paid in July 2015. During the six month period ended June 30, 2015, the Company purchased property and equipment in an amount of US$ 641 thousand using a directly related liability.

SOURCE Ituran Location and Control Ltd.