Ituran Location and Control Ltd. Presents Results for the Fourth Quarter and Full Year of 2009
Full Year 2009 Earnings Per Share Reached a Record $0.87, a YoY Growth of 22%
AZOUR, Israel, February 17, 2010 /PRNewswire-FirstCall/ -- 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, 2009.
Highlights of the Quarter
- An 13,000 increase in net subscribers to a record of 562,000
as of December 31, 2009;
- Gross margin surpasses 50% for the first time in Ituran's
history;
- Record quarterly EBITDA at $10.7 million;
- Generated strong operating cash flow of $12.5 million; ended
the quarter with $78.1 million in net cash;
- Announced dividend for 2009 of $32.8 million or $1.50 per share.
Fourth quarter Results
Revenues for the fourth quarter of 2009 reached US$33.7 million. This is 15% above revenues of US$29.4 million in the fourth quarter of 2008. 77.4% of revenues were from location based service subscription fees and 22.6% from product revenues.
Revenues from subscription fees grew by 25% over the same period last year. The increase in subscription fees was mainly due to the increase in the subscriber base, which grew to 562,000 as of the end 2009, compared with 511,000 at the end of 2008, and as a result of the strength of the Brazilian Real versus the US Dollar. Product revenues were $1 million below those of the same period last year, due to lower sales of products in Israel and the full switch to leasing rather selling the equipment in Brazil.
Gross profit for the fourth quarter of 2009 was US$ 17.1 million (50.9% of revenues) compared with US$14.1 million (48.1% of revenues) in the fourth quarter of last year.
Operating profit for the fourth quarter of 2009 was US$6.9 million (20.6% of revenues) compared with an operating profit of US$5.2 million (17.6% of revenues) in the fourth quarter of 2008.
Financial income for the fourth quarter of 2009 was US$0.7 million compared with US$5.3 million in the fourth of quarter 2008. The high level of financial income in the fourth quarter of 2008 was due exchange rate changes affecting the value of Ituran's cash holdings.
EBITDA for the quarter was $10.7 million (31.8% of revenues) compared to an EBITDA of $8 million (27.1% of revenues) in the fourth quarter of last year.
Net profit was US$5.5 million in the fourth quarter of 2009 (16.4% of revenues), compared with a net profit of US$5.9 million (20.0% of revenues), as reported in the fourth quarter of 2008. Fully diluted EPS in the fourth quarter of 2009 was US$0.26, compared with fully diluted EPS of US$0.28 in the fourth quarter of 2008, and fully diluted EPS of US$0.22 in the prior quarter.
Cash flow from operations during the quarter was $12.5 million.
Full Year Results
Revenues for 2009 reached US$121.4 million. This is 8.5% below revenues of US$132.6 million in 2008. The main reason for reduction compared with 2008 was due to negative exchange rate differences and lower product sales in Israel.
Operating profit for 2009 was US$24.4 million (20.1% of revenues) compared with an operating profit of US$25.7 million (19.3% of revenues) in 2008. Excluding the above-mentioned exchange rate changes the operating profit would have increased by a further $1.8 million in 2009.
EBITDA for the year was $36.9 million (30.4% of revenues) compared to an EBITDA of $35.8 million (27.0% of revenues) last year. Excluding the above-mentioned exchange rate changes the EBITDA would have increased to $40.7 million in 2009.
Net profit was US$18.2 million in 2009 (15% of revenues), compared with a net profit of US$14.9 million (11.2% of revenues), as reported in 2008. Fully diluted EPS in 2009 was US$0.87, compared with fully diluted EPS of US$0.69 in 2008.
Cash flow from operations for the year was US$37.7 million.
As of December 31, 2009, the Company had a net cash position, including marketable securities and deposits, of US$78.1 million or $3.72 per share. This is compared with US$70.6 million on September 30, 2009, and US$55.3 million as of December 31, 2008.
Dividend
The Board of Directors announced the issue of a dividend amounting $32.8 million, or 180% of net profit, for 2009. In November, the Board of Directors approved an increase in the dividend policy, providing for an annual dividend distribution in an amount not less than 50% of the Company's, net profit, whereby the annual dividend policy has historically been to issue approximately 25%.
The dividend's record date is March 23, 2010, and the dividend will be paid on April 7, 2010, net of taxes and levies, at the rate of 20%.
Eyal Sheratzky, Co-CEO of Ituran said, "I'm pleased to say we ended quite a difficult year for the global economy with record profits, record cash generation and we subsequently declared a strong dividend, amounting to $32.8 million. The increase in our dividend follows the decision of the Board to issue at least half of our net profits on a yearly basis. Our high level of cash generation, combined with our strong cash position ending 2009, has allowed us to issue a significantly higher dividend for the year. Even after the issuance of this dividend, we will still maintain a strong balance sheet, with working capital and cash that will allow us to execute on all our strategic plans."
Continued Mr. Sheratzky, "We start 2010 very well positioned with an ability for achieving continued growth and performance, driven by our momentum in Brazil- a region in which we are a market leader. At the same time, our business in Israel is stable and cash generating. Our results and continually improving margins, demonstrate the inherent operating leverage within our business model whereby we can grow our revenues with a small associated incremental increase in expenses, leading to increased profitability. We look forward to continuing our growth into 2010, a year in which we see a lot of potential for Ituran."
Conference Call Information
The Company will also be hosting a conference call later today, February 17, 2009 at 9am EST. 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 at least 10 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
CANADA Dial-in Number: 1-866-485-2399
ISRAEL Dial-in Number: 03-918-0644
INTERNATIONAL Dial-in Number: +972-3-918-0644
At: 9am Eastern Time, 6am Pacific Time, 4pm
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 562,000 subscribers distributed globally. Established in 1995, Ituran has over 1200 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
December 31 ,
(in thousands) 2009 2008
Current assets
Cash and cash equivalents 60,813 12,511
Deposit in escrow 13,067 12,998
Investments in trading marketable securities 4,213 30,159
Accounts receivable (net of allowance for doubtful
accounts) 24,906 26,729
Other current assets 6,136 5,487
Inventories 11,096 11,659
_______ _______
120,231 99,543
------- -------
Long-term investments and debit balances
Investments in affiliated company 205 180
Investments in other company 80 80
Available for sale marketable securities - 2,988
Other assets 1,742 1,443
Minority share in losses of a subsidiary 29 -
Loan to former employee 558 558
Deferred income taxes 5,653 6,544
Funds in respect of employee rights upon retirement 3,606 2,792
_______ _______
11,873 14,585
------- -------
Property and equipment, net 39,090 27,074
------- -------
Intangible assets, net 4,887 6,967
------- -------
Goodwill 9,816 9,730
------- -------
_______ _______
_______ _______
Total assets 185,897 157,899
_______ _______
_______ _______
CONSOLIDATED BALANCE SHEETS
US dollars
December 31,
(in thousands) 2009 2008
Current liabilities
Credit from banking institutions 6 320
Accounts payable 13,459 11,642
Deferred revenues 5,486 4,821
Other current liabilities 17,443 14,888 (*)
_______ _______
36,394 31,671
------- -------
Long-term liabilities
Liability for employee rights upon retirement 5,457 4,747
Provision for contingencies 3,071 1,445 (*)
Deferred income taxes 1,209 1,463
_______ _______
9,737 7,655
------- -------
Minority interest 3,746 3,124
------- -------
Capital Notes 5,894 5,894
------- -------
Total shareholders' equity 130,126 109,555
------- -------
_______ _______
Total liabilities and shareholders' equity 185,897 157,899
_______ _______
_______ _______
(*) Reclassified
CONSOLIDATED STATEMENTS OF INCOME
US dollars US dollars
Three month
Year ended period ended
(in thousands December 31, December 31,
except per share data) 2009 2008 2009 2008
Revenues:
Location-based services 91,574 86,051 26,061 20,801
Wireless communications
products 29,807 46,565 7,613 8,603
________ ________ ________ ________
121,381 132,616 33,674 29,404
-------- -------- -------- --------
Cost of revenues:
Location-based services 33,377 31,386 9,611 7,813
Wireless communications
products 27,445 37,611 6,928 7,454
________ ________ ________ ________
60,822 68,997 16,539 15,267
-------- -------- -------- --------
________ ________ ________ ________
Gross profit 60,559 63,619 17,135 14,137
Research and development
expenses 372 408 97 101
Selling and marketing
expenses 7,684 9,628 2,205 2,146
General and
administrative expenses 27,213 27,505 7,673 6,703
Other expenses (income),
net 908 418 235 -
________ ________ ________ ________
Operating income 24,382 25,660 6,925 5,187
Other expenses - (1,617) - (1,617)
Financing income
(expenses) , net 1,604 (166) 660 5,267
________ ________ ________ ________
Income before taxes on
income 25,986 23,877 7,585 8,837
Taxes on income (7,139) (7,896) (1,804) (2,789)
________ ________ ________ ________
18,847 15,981 5,781 6,048
Share in gains (losses)
of affiliated companies,
net 13 (25) (3) (3)
Minority interests in
income of subsidiaries (668) (1,074) (247) (162)
________ ________ ________ ________
Net income for the
period 18,192 14,882 5,531 5,883
________ ________ ________ ________
________ ________ ________ ________
Earnings per share:
Basic 0.87 0.69 0.26 0.28
________ ________ ________ ________
________ ________ ________ ________
Diluted 0.87 0.69 0.26 0.28
________ ________ ________ ________
________ ________ ________ ________
Weighted average number
of shares outstanding
(in thousands):
Basic 20,968 21,431 20,968 20,968
________ ________ ________ ________
________ ________ ________ ________
Diluted 20,977 21,440 20,977 20,977
________ ________ ________ ________
________ ________ ________ ________
CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars US dollars
Year ended Three months period
December 31, ended December 31,
(in thousands) 2009 2008 2009 2008
Cash flows from operating
activities
Net income for the period 18,192 14,882 5,531 5,883
Adjustments to reconcile net
income to net cash from
operating activities:
Depreciation and amortization 12,530 10,115 3,771 2,783
Exchange differences on
principal of deposit and
loan, net 28 73 (40) 1
Gains in respect of
marketable securities (1,421) (2,108) (25) (2,024)
Other Investment write off - 1,617 - 1,617
Increase in liability for
employee rights upon
retirement 676 615 192 101
Share in losses (gains) of
affiliated companies, net (13) 25 3 3
Deferred income taxes 665 (1,533) 307 (371)
Capital loses (gains) on sale
of property and equipment,
net (2) (3) 8 11
Minority interests in profits
of subsidiaries, net 668 1,074 247 162
Decrease (increase) in
accounts receivable 1,045 1,218 (660) 2,768
Increase in other current
assets (1,716) (1,938) 132 (1,080)
increase in inventories 646 1,752 291 595
Increase (decrease) in
accounts payable 1,734 (1,208) 1,304 (1,644)
Increase (decrease) in
deferred revenues 631 (1,047) (420) (672)
Increase in other current
liabilities and provision for
contingencies 4,063 3,722 1,821 896
________ ________ ________ ________
Net cash provided by
operating activities 37,726 27,256 12,462 9,029
-------- -------- -------- --------
Cash flows from investing
activities
Increase in funds in respect
of employee rights upon
retirement, net of
withdrawals (794) (250) (205) 150
Capital expenditures (15,698) (16,947) (4,765) (5,553)
Deposit in escrow - (12,998) - -
Deposit (389) (369) (26) -
Proceeds from sale of
property and equipment 106 233 48 23
Investment in available for
sale marketable securities (182) (3,397) - (3,397)
Investment in trading
marketable securities (34,467) (33,211) - (31,431)
Sale of trading marketable
securities 60,600 13,420 - 1,396
Sale of available for sale
marketable securities 3,886 - 244 -
Investment in subsidiary - (354) - -
Proceeds from sale of
subsidiary - 58,720 - -
======== ======== ======== ========
Net cash provide by (used in
investment activities 13,062 4,847 (4,704) (38,812)
-------- -------- -------- --------
Cash flows from financing
activities
Short-term credit from
banking institutions, net (316) (2) (188) (8,256)
Dividend paid (3,566) (29,140) - -
Dividend paid to minority
interest of a subsidiary (169) - - -
Purchase of company's shares - (24,154) - (67)
________ ________ ________ ________
Net cash used in financing
activities (4,051) (53,296) (188) (8,323)
-------- -------- -------- --------
Effect of exchange rate
changes on cash and cash
equivalents 1,565 5,035 (14) (2,656)
-------- -------- -------- --------
________ ________ ________ ________
Net Increase (decrease) in
cash and cash equivalents 48,302 (16,158) 7,556 (40,762)
Balance of cash and cash
equivalents at beginning of
period 12,511 28,669 53,257 53,273
________ ________ ________ ________
Balance of cash and cash
equivalents at end of period 60,813 12,511 60,813 12,511
________ ________ ________ ________
________ ________ ________ ________
Company Contact:
Udi Mizrahi,
[email protected] ,
VP Finance, Ituran,
(Israel) +972-3-557-1348 ;
International Investor Relations:
Ehud Helft & Kenny Green,
[email protected] ,
CCG Investor Relations,
(US) +1-646-201-9246.
SOURCE Ituran Location and Control Ltd
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