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

First Quarter Revenue of $44.2m; EBITDA of $13.2m; Subscriber growth of 28k

May 18, 2015, 06:30 ET from Ituran Location and Control Ltd.

AZOUR, Israel, May 18, 2015 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the first quarter ended March 31, 2015.

Highlights of the First Quarter

  • Record net subscribers adds in the quarter amounting to 28 thousand;
  • In local currencies, double digit year-over-year growth in all parameters;
  • Revenue of $44.2 million;
  • Gross margins of 52.9% and operating margins at 23.8%;
  • EBITDA of $13.2 million or 29.9% of revenues;
  • Generated $8.7 million in operating cash flow;
  • Dividend of $3.4 million declared for the quarter

First Quarter 2015 Results Revenues for the first quarter of 2015 were $44.2 million, representing a decline of 2.8% from revenues of $45.5 million in the first quarter of 2014. The significant weakening of the Brazilian Real, Israeli Shekel and Argentinean Peso versus the US Dollar over the period reduced the revenue level in US Dollars. Excluding the exchange rate impact, the increase in revenues would have been 11% over the first quarter of last year. 72% of revenues were from location based service subscription fees and 28% from product revenues.

Revenues from subscription fees declined 1% over the same period last year. This was despite strong growth in the subscriber base, which expanded from 758,000 as of March 31, 2014, to 845,000 as of March 31, 2015. Excluding the impact of the above-mentioned changes in the exchange rates over the period, the increase in revenues from services would have been 15% over the first quarter of last year.

Product revenues decreased by 8% 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 2% compared with product revenues reported in the first quarter in 2014.

Gross profit for the first quarter of 2015 was $23.4 million (52.9% of revenues), a decrease of 1.5% compared with $23.7 million (52.2% of revenues) in the first quarter of 2014.

Operating profit for the first quarter of 2015 was $10.5 million (23.8% of revenues), a decrease of 10% compared with an operating profit of $11.7 million (25.7% of revenues) in the first quarter of 2014. Excluding the impact of the change in exchange rates over the period, the operating profit would have increased by 9% over the first quarter of last year.

EBITDA for the quarter was $13.2 million (29.9% of revenues), a decrease of 8% compared to an EBITDA of $14.4 million (31.7% of revenues) in the first quarter of 2014. Excluding the impact of the change in exchange rates over the period, the EBITDA would have increased by 11% over the first quarter of last year.

Net profit was US$6.8 million in the first quarter of 2015 (15.4% of revenues) or fully diluted EPS of US$0.33. This is compared with a net profit of US$7.3 million (16.1% of revenues) or fully diluted EPS of US$0.35 in the first quarter of 2014.

Cash flow from operations during the quarter was $8.7 million.

As of March 31, 2015, the Company had net cash, including marketable securities, of $35.3 million or $1.68 per share. This is compared with $40.8 million or $1.94 per share as at December 31, 2014. During the quarter, Ituran paid out $4.4 million in a dividend payment to shareholders.

Dividend For the first quarter of 2015, a dividend of $3.4 million (50% of net profits) 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.

Management Comment Eyal Sheratzky, Co-CEO of Ituran said, "We are very pleased with our performance in the first quarter which is somewhat masked by the weakening of the local currencies in which we operate versus the Dollar. Our subscriber base grew at a fantastic pace, adding 28,000 in a quarter. This is an unprecedented rate for us and sets the stage for solid growth in revenue and margin improvement, due to our inherent operational leverage, for quarters to come. The strong increase in subscribers is primarily due to the expansion of our business in Brazil. Over the past few quarters, we have begun selling an increased range of solutions to a wider audience and we are now beginning to reap the fruits of this investment."

Conference Call Information

The Company will also be hosting a conference call later today, May 18, 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: 1 888 281 1167 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 845,000 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 

 

ITURAN LOCATION AND CONTROL LTD.

CONSOLIDATED BALANCE SHEETS

US dollars

March 31,

December 31,

(in thousands)

2015

2014

Current assets

Cash and cash equivalents

32,908

38,418

Investments in marketable securities

2,379

2,362

Accounts receivable (net of allowance for doubtful accounts)

28,755

27,960

Other current assets

23,566

22,318

Inventories

11,226

12,164

98,834

103,222

Long-term investments and other assets

Investments in affiliated companies

1,943

1,016

Investments in other company

77

79

Other non-current assets

1,768

2,091

Deferred income taxes

2,955

2,886

Funds in respect of employee rights upon retirement

6,753

6,642

13,496

12,714

Property and equipment, net

31,841

31,908

Intangible assets, net

405

452

Goodwill

3,948

4,041

Total assets

148,524

152,337

 

ITURAN LOCATION AND CONTROL LTD.

CONSOLIDATED BALANCE SHEETS

US dollars

March 31,

December 31,

(in thousands)

2015

2014

Current liabilities

Accounts payable

11,748

11,658

Deferred revenues

8,943

9,401

Other current liabilities

25,757

23,880

46,448

44,939

Long-term liabilities

Liability for employee rights upon retirement

10,376

10,229

Provision for contingencies

1,273

1,373

Deferred revenues

886

1,063

Deferred income taxes

136

150

Others

313

-

12,984

12,815

Stockholders' equity

85,325

90,696

Non-controlling interests

3,767

3,887

Total equity

89,092

94,583

Total liabilities and equity

148,524

152,337

 

ITURAN LOCATION AND CONTROL LTD.

CONSOLIDATED STATEMENTS OF INCOME

US dollars

Three month period ended March 31,

(in thousands except per share data)

2015

2014

Revenues:

Location-based services

31,948

32,180

Wireless communications products

12,252

13,280

44,200

45,460

Cost of revenues:

Location-based services

11,301

11,085

Wireless communications products

9,537

10,631

20,838

21,716

Gross profit

23,362

23,744

Research and development expenses

490

591

Selling and marketing expenses

2,396

2,285

General and administrative expenses

9,963

9,203

Other  income, net

(12)

(35)

Operating income

10,525

11,700

Financing income, net

471

125

Income before income tax

10,996

11,825

Income tax expenses

(3,339)

(3,920)

Share in losses of affiliated companies ,net

(307)

-

Net income for the period

7,350

7,905

Less: Net income attributable to non-controlling interest

(539)

(577)

Net income attributable to the Company

6,811

7,328

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

0.33

0.35

Basic and diluted weighted average number of shares outstanding (in thousands)

20,968

20,968

 

ITURAN LOCATION AND CONTROL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

US dollars

Three month period ended March 31,

(in thousands)

2015

2014

Cash flows from operating activities

Net income for the period

7,350

7,905

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

Depreciation amortization and impairment of goodwill

2,673

2,693

Exchange differences on principal of deposit and loans, net

-

(23)

Losses (gain) in respect of trading marketable securities

(89)

105

Increase in liability for employee rights upon retirement

381

520

Share in losses of affiliated companies, net

307

-

Others

170

-

Deferred income taxes

(5)

(472)

Capital gains on sale of property and equipment, net

(5)

(46)

Increase in accounts receivable

(1,434)

(4,195)

Increase in other current assets

(1,678)

(2,007)

Decrease  in inventories

660

2,639

Increase (decrease) in accounts payable

866

(419)

Increase(decrease)   in deferred revenues

(396)

928

Increase(decrease)  in other current liabilities

(73)

2,053

Net cash provided by operating activities

8,727

9,681

Cash flows from investment activities

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

(263)

(158)

Capital expenditures

(6,837)

(3,022)

Investments in affiliated companies

(1,270)

-

Investments in marketable securities

-

(2,783)

Deposit

(160)

(156)

Proceeds from sale of property and equipment

499

230

Net cash used in investment activities

(8,031)

(5,889)

Cash flows from financing activities

Short term credit from banking institutions, net

-

1,201

Dividend paid

(4,423)

(3,616)

Dividend paid to non-controlling interest

(536)

(736)

Net cash provided by (used in) financing activities

(4,959)

(3,151)

Effect of exchange rate changes on cash and cash equivalents

(1,247)

(986)

Net increase (decrease)  in cash and cash equivalents

(5,510)

(345)

Balance of cash and cash equivalents at beginning of the period

38,418

41,697

Balance of cash and cash equivalents at end of the period

32,908

41,352

Supplementary information on investing activities not involving cash flows:

In February 2015, the Company declared a dividend in an amount of US$ 7 million. The dividend will be paid in April 2015.

During the three month period ended March 31, 2015, the Company purchased property and equipment in an amount of US$ 509 thousand using a directly related liability.

 

SOURCE Ituran Location and Control Ltd.