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
[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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