Ituran Location and Control Ltd. Presents Results for the Third Quarter 2011 Record revenue of $41.7 million and record net income of $6.6 million

AZOUR, Israel, November 16, 2011 /PRNewswire/ --

?Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the third quarter ended September 30, 2011.

Highlights of the Quarter

  • Record revenues of $41.7 million, growing 12% year-over-year
  • Gross margin at 50.2% and operating margin at 22.3%;
  • EBITDA of $13.6 million or 32.7% of revenues;
  • Net income of $6.6 million, growing 17% year-over-year
  • Generated $9.2 million in operating cash flow;

Third Quarter 2011 Results

Revenues for the third quarter of 2011 reached $41.7 million, representing a 12% growth over revenues of $37.1 million in the third quarter of 2010. 72.2% of revenues were from location based service subscription fees and 27.8% from product revenues.

Revenues from subscription fees grew by 5.4% over the same period last year. The increase in subscription fees was mainly due to the increase in the subscriber base, which amounted to 619,000 as of September 30, 2011, as compared with 594,000 at the end of September 30, 2010. Product revenues grew 35% compared with the same period last year. This increase was driven primarily by increased sales of products, in particular from Mapa.

Gross profit for the third quarter of 2011 was $20.9 million (50.2% of revenues), an increase of 15% compared with $18.2 million (49.0% of revenues) in the third quarter of 2010.

Operating profit for the third quarter of 2011 was $9.3 million (22.3% of revenues), an increase of 23% compared with an operating profit of $7.6 million (20.5% of revenues) in the third quarter of 2010.

EBITDA for the quarter was $13.6 million (32.7% of revenues), an increase of 17% compared to an EBITDA of $11.6 million (31.3% of revenues) in the third quarter of 2010.

Financial income in the third quarter of 2011 was $0.9 million compared with a financial income of $0.4 million in the third quarter of 2010.

Net income was US$6.6 million in the third quarter of 2011 (15.9% of revenues), growing 17% compared with a net profit of US$5.7 million (15.4% of revenues), as reported in the third quarter of 2010. Fully diluted EPS in the third quarter of 2011 was US$0.32, compared with fully diluted EPS of US$0.27 in the third quarter of 2010.

Cash flow from operations during the quarter was $9.2 million.

As of September 30, 2011, the Company had net cash, including marketable securities and deposits for short and long term, of $56.9 million or $2.71 per share, compared with US$53.6 million or $2.56 per share as at June 30, 2011. Note that due to the recent Leonardo litigation and ST arbitration which had been accounted for in the financial statements in 2010, but as of 30/09/11 has not yet been paid, an amount totaling approximately $26 million is expected to be paid out in the coming months.

Eyal Sheratzky, Co-CEO of Ituran said, "We are very pleased with our results, reporting our highest ever revenue level and net income. During the quarter, our business continued to perform well in all regions. We believe that already by the next quarter and as we move through 2012, our subscriber base will return to its former average growth rate. Overall, our business continues its stable growth, realizing the rewards of our past efforts."

Conference Call Information

The Company will also be hosting a conference call later today, November 16, 2011 at 10am ET, 5pm Israel. 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: 03-918-0687
CANADA Dial-in Number: 1-866-485-2399
INTERNATIONAL Dial-in Number:  +972-3-918-0687

At: 10:00am Eastern Time, 7:00am Pacific Time, 5:00pm 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 619,000 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 INTERIMBALANCE SHEETS

                                                       US dollars
                                            September 30,     December 31,
    (in thousands)                                  2011             2010
 
    Current assets
    Cash and cash equivalents                     43,739           46,674
    Deposit in escrow                              4,651            5,238
    Investments in marketable securities           1,464            1,509
    Accounts receivable (net of allowance for
    doubtful accounts)                            29,034           31,161
    Other current assets                          12,757           12,770
    Inventories                                    9,332            8,501
                                                 100,977          105,853
 
    Long-term investments and other assets
    Deposit in escrow                              7,875            7,858
    Investments in affiliated company                216              220
    Investments in other companies                    82               86
    Other non-current assets                       2,360            3,709
    Loan to former employee                          357              558
    Deferred income taxes                          5,938            4,934
    Funds in respect of employee rights upon
    retirement                                     4,711            4,498
                                                  21,539           21,863
 
    Property and equipment, net                   42,725           46,147
 
    Intangible assets, net                         3,635            4,402
 
    Goodwill                                       9,539           10,079
 
    Total assets                                 178,415          188,344


CONSOLIDATED INTERIM BALANCE SHEETS

                                                          US dollars
                                               September 30,     December 31,
    (in thousands)                                     2011             2010
 
    Current liabilities
    Credit from banking institutions                    658               98
    Accounts payable                                 11,805           13,087
    Deferred revenues                                 7,759            6,714
    Litigation obligation                            21,130           21,852
    Other current liabilities                        17,205           17,482
                                                     58,557           59,233
 
    Long-term liabilities
    Long term loans                                     190              233
    Liability for employee rights upon
    retirement                                        6,869            6,472
    Other current liabilities                           938               -
    Provision for contingencies                       3,954            5,324
    Deferred revenues                                   863              873
    Deferred income taxes                               860            1,046
                                                     13,674           13,948
 
    Shareholders' equity                            101,774          110,771
    Non - controlling interest                        4,410            4,392
    Total equity                                    106,184          115,163
 
    Total liabilities and equity                    178,415          188,344
 



CONSOLIDATED INTERIM STATEMENTS OF INCOME

                                   US dollars                 US dollars
                                   Nine month                Three month
    (in thousands except per      period ended               period ended
    share data)                   September 30,              September 30,
                                2011        2010          2011        2010
 
    Revenues:
                                                                       
    Location-based services   91,968      81,418(*)     30,080      28,526(*)
    Wireless communications                                             
    products                  31,223      25,662(*)     11,585       8,550(*)
                             123,191     107,080        41,665      37,076
 
    Cost of revenues:
                                                                       
    Location-based services   37,678      32,363(*)     12,276      11,781(*)
    Wireless communications                                             
    products                  24,745      22,058(*)      8,474       7,140(*)
                              62,423      54,421        20,750      18,921
 
    Gross profit              60,768      52,659        20,915      18,155
    Research and development
    expenses                     480         333           196         111
    Selling and marketing
    expenses                   6,387       6,501         2,223       2,206
    General and
    administrative expenses   27,065      23,628         9,204       8,246
    Other expenses (income),
    net                         (13)           3          (13)        -
    Operating income          26,849      22,194         9,305       7,592
    Other expenses             (806)        (81)         (847)         -
    Financing income
    (expenses) ,net            1,429         459           851         388
    Income before income tax  27,472      22,572         9,309       7,980
    Income tax               (6,996)     (6,544)       (2,433)     (2,103)
                              20,476      16,028         6,876       5,877
    Share in income (losses)
    of affiliated companies,
    net                            -         (2)             -           -
    Net income for the
    period                    20,476      16,026         6,876       5,877
    Less: Net income
    attributable to non-
    controlling interest       (782)       (784)         (241)       (184)
    Net income for the
    period attributable
 
    to the company            19,694      15,242         6,635       5,693
 
    Basic and diluted
    earning per share
    attributable to
    company's shareholders      0.94        0.73          0.32        0.27
 
    Basic and diluted
    weighted average number
    of shares outstanding:
    Basic                     20,968      20,968        20,968      20,968
 
    Diluted                   20,968      20,977        20,968      20,977
 


(*)  Reclassified

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

                                      US dollars             US dollars
                                    Nine months period    Three months period
    (in thousands)                 ended September 30,    ended September 30,
                                    2011         2010        2011        2010
    Cash flows from operating
    activities
    Net income for the period     20,476       16,026       6,876       5,877
    Adjustments to reconcile net
    income to net cash from
    operating activities:
    Depreciation , amortization
    and impairment of goodwill    13,109       11,513       4,305       3,998
    Exchange differences on
    principal of deposit and
    loan, net                      (453)          381       (968)         745
    Gain in respect of trading
    marketable securities              -            -          19           -
    Increase in liability for
    employee rights upon
    retirement                       681          658         199         216
    Share in losses of
    affiliated companies, net          -            2           -           -
    Deferred income taxes        (1,366)          599       (800)         357
    Capital loses (gains) on
    sale of property and
    equipment, net                  (24)           21           6           -
    Decrease (increase) in
    accounts receivable              759      (4,939)         600     (2,246)
    Decrease (increase) in other
    current assets                    65      (1,383)         364       (416)
    Decrease (increase) in
    inventories                  (1,204)          495     (2,026)         125
    Increase (decrease) in
    accounts payable                (707)         901         173         428
    Increase (decrease) in
    deferred revenues               1,368       (768)           3       (302)
    Increase in other current
    liabilities                       292         332         246         935
    Litigation obligation             237           -         237           -
    Net cash provided by
    operating activities           33,233      23,838       9,234       9,717
    Cash flows from investment
    activities
    Increase in funds in respect
    of employee rights upon
    retirement, net of
    withdrawals                     (411)       (539)       (109)       (193)
    Capital expenditures         (13,339)    (14,609)     (2,354)     (5,305)
    Intangible assets
    expenditures                     (58)                    (58)           -
    Deposit in escrow                 603                       -           -
    Deposit                           410        (45)        (52)        (13)
    Proceeds from sale of
    property and equipment            549         704         323         225
    Investment in marketable
    securities                          -     (1,326)           -           -
    Sale of marketable
    securities                          -       4,214           -           -
    Net cash used in investment
    activities                   (12,246)    (11,601)     (2,250)     (5,286)
    Cash flows from financing
    activities
    Short-term credit from
    banking institutions, net         563         716         599         534
    Receipt of Long term loans
    from banking institutions           -         165           -           -
    Repayment of long terms
    loans                            (35)         (6)        (12)         (6)
    Acquisition of non
    controlling interest                -     (2,223)           -     (2,223)
    Dividend paid                (21,782)    (31,621)           -           -
    Dividend paid to Non
    controlling interest            (506)           -       (506)           -
    Net cash provided (used in)
    financing activities         (21,760)    (32,969)          81     (1,695)
    Effect of exchange rate
    changes on cash and cash
    equivalents                   (2,162)         133     (3,132)       1,705
 
    Net increase (decrease) in
    cash and cash equivalents     (2,935)    (20,599)       3,933       4,441
    Balance of cash and cash
    equivalents at beginning of
    period                         46,674      60,813      39,806      35,773
    Balance of cash and cash
    equivalents at end of period   43,739      40,214      43,739      40,214
 


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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