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
[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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