Ituran Location and Control Ltd Presents Results for the Third Quarter of 2010
Revenues Reach $37 Million, Growing 16% YoY
AZOUR, Israel, November 22, 2010 /PRNewswire-FirstCall/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the third quarter ended September 30, 2010.
Highlights of the Quarter
- A 45,000 year-over-year increase in net subscribers to a
record of 594,000 as of September 30, 2010;
- Gross margin at 49% and operating margin at 20.5%;
- EBITDA of $11.6 million or 31.3% of revenues;
- Generated $9.7 million in operating cash flow; ended the
quarter with $54.0 million in net cash (including marketable securities
and deposits for short and long term);
Third Quarter 2010 Results
Revenues for the third quarter of 2010 reached US$37.1 million, representing 16% growth over revenues of US$32.0 million in the third quarter of 2009. 74% of revenues were from location based service subscription fees and 26% from product revenues.
Revenues from subscription fees grew by 15% over the same period last year. The increase in subscription fees was mainly due to the increase in the subscriber base, which grew to 594,000 as of September 30, 2010, as compared with 549,000 at the end of September 30, 2009. Product revenues grew 20% compared with the same period last year. This increase was driven primarily by increased of sales in Israel.
Gross profit for the third quarter of 2010 was US$ 18.2 million (49.0% of revenues) compared with US$15.6 million (48.7% of revenues) in the third quarter of last year.
Operating profit for the third quarter of 2010 was US$7.6 million (20.5% of revenues) compared with an operating profit of US$6.5 million (20.2% of revenues) in the third quarter of 2009.
Financial income for the third quarter of 2010 was US$0.4 million compared with a financial expense of US$0.7 million in the third quarter of 2009.
EBITDA for the quarter was $11.6 million (31.3% of revenues) compared to an EBITDA of $9.7 million (30.2% of revenues) in the third quarter of last year.
Net profit was US$5.7 million in the third quarter of 2010 (15.4% of revenues), compared with a net profit of US$4.6 million (14.4% of revenues), as reported in the third quarter of 2009. Fully diluted EPS in the third quarter of 2010 was US$0.27, compared with fully diluted EPS of US$0.22 in the third quarter of 2009.
Cash flow from operations during the quarter was $9.7 million.
As of September 30, 2010, the Company had net cash, including marketable securities and deposits for short and long term, of US$54.0 million or $2.57 per share. This is compared with US$50.0 million or $2.38 per share as at June 30, 2010, and US$78.1 million as of December 31, 2009.
Eyal Sheratzky, Co-CEO of Ituran said, "The third quarter was another solid quarter in which we continued to grow our revenues and we generated a strong level of cash. Brazil continues its growth and we have a leading position in this market which should support our growth for a number of years ahead. In Israel, solid improvements in the economy has led to increased car sales, and our business there has regained its growth trajectory. Overall, we remain very pleased with the performance of our business and look forward to continued growth and increased profitability over the coming quarters."
Conference Call Information
The Company will also be hosting a conference call later today, November 22, 2010 at 10am 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: 1-888-407-2553
ISRAEL Dial-in Number: 03-918-0610
CANADA Dial-in Number: 1-866-485-2399
INTERNATIONAL Dial-in Number: +972-3-918-0610
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 594,000 subscribers distributed globally. Established in 1995, Ituran has over 1,400 employees worldwide, provides its location based services and has a market leading position in Israel, Brazil, Argentina and the United States.
* Financial Tables to Follow **
CONSOLIDATED INTERIM BALANCE SHEETS
US dollars
____________________________________________________________________
September 30, December 31,
____________________________________________________________________
(in thousands) 2010 2009
____________________________________________________________________
Current assets
Cash and cash equivalents 40,214 60,813
Deposit in escrow 5,236 5,227
Investments in trading marketable
securities 1,453 4,213
Accounts receivable (net of allowance for
doubtful accounts) 31,929 24,906
Other current assets 7,558 6,136
Inventories 10,934 11,096
_________ _________
97,324 112,391
--------- ---------
Long-term investments and other assets
Deposit in escrow 7,854 7,840
Investments in affiliated company 216 205
Investments in other companies 83 80
Other assets 2,126 1,742
Loan to former employee 558 558
Deferred income taxes 5,024 5,653
Funds in respect of employee rights upon
retirement 4,253 3,606
_________ _________
20,114 19,684
--------- ---------
Property and equipment, net 43,287 39,090
--------- ---------
Intangible assets, net 4,405 5,064
--------- ---------
Goodwill 11,374 9,639
--------- ---------
Total assets 176,504 185,868
--------- ---------
CONSOLIDATED INTERIM BALANCE SHEETS
US dollars
____________________________________________________________________
September 30, December 31,
____________________________________________________________________
(in thousands) 2010 2009
____________________________________________________________________
Current liabilities
Credit from banking institutions 750 6
Accounts payable 14,764 13,459
Deferred revenues 4,883 5,486
Other current liabilities 16,664 17,443
________ ________
37,061 36,394
-------- --------
Long-term liabilities
Long term loans 141 -
Liability for employee rights upon
retirement 6,279 5,457
Provision for contingencies 4,799 3,071
Deferred income taxes 1,062 1,209
________ ________
12,281 9,737
-------- --------
Capital Notes 5,894 5,894
-------- --------
Shareholders' equity 117,289 130,126
Non -controlling interest 3,979 3,717
________ ________
Total equity 121,268 133,843
-------- --------
________ ________
Total liabilities and shareholders'
equity 176,504 185,868
-------- --------
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,
_________________________________________________________________________
2010 2009 2010 2009
_________________________________________________________________________
Revenues:
Location-based services 79,321 65,513 27,455 23,985
Wireless communications
products 27,759 22,194 9,621 8,046
_______ ______ ______ ______
107,080 87,707 37,076 32,031
------- ------ ------ ------
Cost of revenues:
Location-based services 29,948 23,768 10,551 8,610
Wireless communications
products 24,473 20,517 8,370 7,832
_______ ______ ______ ______
54,421 44,285 18,921 16,442
_______ ______ ______ ______
Gross profit 52,659 43,422 18,155 15,589
Research and development
expenses 333 275 111 95
Selling and marketing
expenses 6,501 5,479 2,206 1,942
General and administrative
expenses 23,628 19,540 8,246 6,867
Other expenses, net 3 671 - 227
______ ______ _____ ______
Operating income 22,194 17,457 7,592 6,458
Other expenses (81) - - -
Financing income
(expenses) , net 459 944 388 (666)
______ ______ _____ ______
Income before taxes on
income 22,572 18,401 7,980 5,792
Taxes on income (6,544) (5,335) (2,103) (1,029)
______ ______ _____ ______
16,028 13,066 5,877 4,763
Share in gains (losses) of
affiliated companies, net (2) 16 - 1
______ ______ _____ ______
Net income for the period 16,026 13,082 5,877 4,764
Less: Net income
attributable to
non-controlling interest (784) (421) (184) (136)
Net income for the period
attributable
______ ______ _____ ______
to company shareholders 15,242 12,661 5,693 4,628
______ ______ _____ ______
Earnings per share:
attributable
to company shareholders
Basic 0.73 0.60 0.27 0.22
______ ______ _____ ______
Diluted 0.73 0.60 0.27 0.22
______ ______ _____ ______
Weighted average number of
shares outstanding (in
thousands):
Basic 20,968 20,968 20,968 20,968
______ ______ _____ ______
Diluted 20,977 20,977 20,977 20,977
______ ______ _____ ______
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
US dollars US dollars
_________________________________________________________________________
Nine month Three month
period ended period ended
September 30, September 30,
(in thousands) 2010 2009 2010 2009
_________________________________________________________________________
,
Cash flows from operating
activities
Net income for the period 16,026 13,082 5,877 4,764
Adjustments to reconcile net
income to net cash from
operating activities:
Depreciation , amortization
and impairment of goodwill 11,513 8,759 3,998 3,214
Exchange differences on
principal of deposit an
loan, net 381 68 745 516
Exchange differences on
principal of marketable
securities - (1,090) - (182)
Gain in respect of trading
marketable securities - (306) - (306)
Increase in liability for
employee rights upon
retirement 658 484 216 187
Share in losses (gains) of
affiliated companies, net 2 (16) - (1)
Deferred income taxes 599 358 357 914
Capital loses (gains) on
sale of property and
equipment, net 21 (10) - -
Decrease (increase) in
accounts receivable (4,939) 1,705 (2,246) (227)
Increase in other current
assets (1,383) (1,848) (416) (1,367)
Decrease in inventories 495 355 125 2,690
Increase (decrease) in
accounts payable 901 430 428 (1,315)
Increase (decrease) in
deferred revenues (768) 1,051 (302) 635
Increase in other current
liabilities and provision
for contingencies 332 2,242 935 2,972
______ ______ _____ ______
Net cash provided by
operating activities 23,838 25,264 9,717 12,494
------ ------ ----- ------
Cash flows from investing
activities
Increase in funds in respect
of employee rights upon
retirement, net of
withdrawals (539) (589) (193) (237)
Capital expenditures (14,609) (10,933) (5,305) (5,181)
Deposit (45) (363) (13) (102)
Proceeds from sale of
property and equipment 704 58 225 21
Investment in trading
marketable securities (1,326) (34,649) - (4,159)
Sale of marketable
securities 4,214 64,242 - 18,642
Acquisition of non
controlling interest (2,223) - (2,223) -
______ ______ _____ ______
Net cash used in investment
activities (13,824) 17,766 (7,509) 8,984
------ ------ ----- ------
Cash flows from financing
activities
Short-term credit from
banking institutions, net 716 (128) 534 (170)
Receipt of Long term loans
from banking institutions 165 -
Repayment of long terms
loans (6) - (6) -
Dividend paid (31,621) (3,566) - -
Dividend paid to Non
controlling interest - (169) - -
______ ______ _____ ______
Net cash used in financing
activities (30,746) (3,863) 528 (170)
------ ------ ----- ------
Effect of exchange rate
changes on cash and cash
equivalents 133 1,579 1,705 1,953
------ ------ ----- ------
Net increase (decrease) in
______ ______ _____ ______
cash and cash equivalents (20,599) 40,746 4,441 23,261
Balance of cash and cash
equivalents at beginning of
period 60,813 12,511 35,773 29,996
______ ______ _____ ______
Balance of cash and cash
equivalents at end of period 40,214 53,257 40,214 53,257
______ ______ _____ ______
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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