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Ituran Location and Control Ltd. Presents Results for the Third Quarter 2012
Nov 19, 2012 (05:11 AM EST)


Revenues of $36.8 million and EPS of $0.25

AZOUR, Israel, November 19, 2012 /PRNewswire/ --

Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the quarter ended September 30, 2012.

Highlights of the Third Quarter of 2012

  • A 14 thousand quarterly increase in net subscribers to a record of 653 thousand subscribers as of September 30, 2012, the highest net growth in subscribers in 10 quarters
  • Gross margin at 50.3% and operating margin at 20.1%;
  • Excluding currency effects and a one-time income related to Mapa in the third quarter of last year, operating profit grew in excess of 15% over last year;
  • EBITDA of $10.6 million or 28.9% of revenues;
  • Generated $7.2 million in operating cash flow; ended the quarter with $28.0 million in net cash and equivalents;
  • Dividend of $2.6 million declared for the quarter.

Third Quarter 2012 Results

Revenues for the third quarter of 2012 were $36.8 million, representing a 11.7% decline from revenues of $41.7 million in the third quarter of 2011. 76.4% of revenues were from location based service subscription fees and 23.6% from product revenues.

Revenues from subscription fees were $28.1 million, a decrease of 6.6% 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 9.0% compared with the third quarter of last year due to the increase in the subscriber base, which expanded from 619,000 as of September 30, 2011, to 653,000 as of September 30, 2012. The growth primarily came from an increase in subscribers in Brazil, following the strategic changes management put in place in past quarters.  

Product revenues were $8.7 million, a decline of 25% compared with the same period last year. The decline was partially due to the above-mentioned currency effects. In addition, in the third quarter of 2011, the Company made a large one time license sale of data from Mapa in the amount of approximately $2.5 million.

Gross profit for the third quarter of 2012 was $18.5 million (50.3% of revenues), a decrease of 11.5% compared with $20.9 million (50.2% of revenues) in the third quarter of last year. The decrease is attributed to the above mentioned decline in revenues.

Operating profit for the third quarter of 2012 was $7.4 million (20.1% of revenues), a decrease of 21% compared with an operating profit of $9.3 million (22.3% of revenues) in the third quarter of 2011. The decrease in operating profit compared with last year was due to the abovementioned currency effect and the sale of license data by Mapa which boosted the operating income in the third quarter of last year. Excluding these two effects, operating profit in the third quarter of 2012 would have exceeded operating profit in the third quarter of 2011 by approximately $1.5 million.  

EBITDA for the quarter was $10.6 million (28.9% of revenues), a decrease of 21.8% compared to an EBITDA of $13.6 million (32.7% of revenues) in the third quarter of 2011.

Financial income in the third quarter of 2012 was $196 thousand compared with a financial income of $851 thousand in the third quarter of 2011.

Net profit was $5.2 million in the third quarter of 2012 (14.2% of revenues), compared with a net profit of $6.6 million (15.9% of revenues), as reported in the third quarter of 2011.

Fully diluted EPS in the third quarter of 2012 was US$0.25, compared with fully diluted EPS of US$0.32 in the third quarter of 2011.

Cash flow from operations during the quarter was $7.2 million.

As of September 30, 2012, the Company had net cash, including marketable securities and deposits for short and long term, of $28.0 million or $1.33 per share. This is compared with $22.9 million or $1.09 per share as at June 30, 2012.

For the third quarter of 2012, a dividend of $2.6 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, "Overall we are very pleased with the results of the third quarter. In particular, the general trend of improving margins towards the top end of our historical range is a good sign, as well as the growth rate in the subscriber base which has returned in line with our targets. The net adds in the subscriber base, the majority of which were in Brazil, are now at a level which we are content with. On a local currency basis, our subscriber revenues grew strongly compared with last year, driven by this growth in our subscriber base. All these improvements are the fruits of efforts and due to the changes we implemented in the past few quarters."

Conference Call Information

The Company will also be hosting a conference call later today, November 19, 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: 1-888-407-2553

ISRAEL Dial-in Number: 03-918-0610

CANADA Dial-in Number: 1-866-485-2399

INTERNATIONAL Dial-in Number: +972-3-918-0610

At: 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 653,000 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
                                               September 30,    December 31,
    (in thousands)                                     2012         2011
 
    Current assets
    Cash and cash equivalents                        23,692       35,270
    Investments in marketable securities                 -            68
    Accounts receivable (net of allowance for
    doubtful accounts)                               27,171       25,294
    Loan to former employee                               -          340
    Other current assets                             23,169       15,165
    Inventories                                      13,275       10,881
                                                     _______      _______
                                                     87,307       87,018
                                                   ------------ ------------
 
    Long-term investments and other assets
    Deposit in escrow                                4,927        4,888
    Investments in affiliated company                  156          207
    Investments in other company                        78           80
    Other non-current assets                         1,684        2,216
    Deferred income taxes                            5,391        5,568
    Funds in respect of employee rights upon
    retirement                                       5,129        4,741
                                                    _______      _______
                                                    17,365       17,700
                                                  ------------ ------------
 
    Property and equipment, net                     32,874       40,870
                                                  ------------ ------------
 
    Intangible assets, net                           2,621        3,355
                                                  ------------ ------------
 
    Goodwill                                         8,314        8,514
                                                  ------------ ------------
 
                                                   _______      _______
    Total assets                                   148,481      157,457
                                                   _______      _______
                                                   _______      _______


 

CONSOLIDATED BALANCE SHEETS

                                                      US Dollars
                                            September 30,   December 31,
    (in thousands)                                  2012         2011
 
    Current liabilities
    Credit from banking institutions                 514          390
    Accounts payable                              10,204        9,319
    Deferred revenues                              8,836        7,869
    Other current liabilities                     26,383       20,966
                                                  _______      _______
                                                  45,937       38,544
                                                ----------   ----------
 
    Long-term liabilities
    Long term loans                                   57          173
    Liability for employee rights upon 
    retirement                                     7,408        6,865
    Provision for contingencies                    4,509        4,250
    Other non-current liabilities                    642          753
    Deferred revenues                                754          728
    Deferred income taxes                            650          792
                                                  _______      _______
                                                  14,020       13,561
                                                -----------  -----------
 
    Stockholders' equity                          84,676      101,194
                                                -----------  -----------
    Non-controlling interests                      3,848        4,158
                                                -----------  -----------
                                                  _______      _______
    Total equity                                  88,524      105,352
                                                -----------  -----------
 
                                                  _______      _______
    Total liabilities and equity                  148,481     157,457
                                                  _______      _______
                                                  _______      _______


 

CONSOLIDATED STATEMENTS OF INCOME

                                       US Dollars                 US Dollars
                                    Nine-month period          Three-month period
                                   ended September 30,         ended September 30,
    (in thousands except per
    share data)                     2012          2011          2012          2011
 
    Revenues:
    Location-based services       85,437        91,968        28,102        30,080
    Wireless communications
    products                      26,654        31,223         8,703        11,585
                                 _______       _______        _______      _______
                                 112,091       123,191        36,805        41,665
                               -----------   -----------   -----------   -----------
 
    Cost of revenues:
    Location-based services       33,294        37,678        10,660        12,276
    Wireless communications
    products                      23,474        24,745         7,624         8,474
                                 _______       _______       _______       _______
                                  56,768        62,423        18,284        20,750
                               -----------   -----------   -----------   -----------
                                 _______       _______        _______      _______
 
    Gross profit                  55,323        60,768        18,521        20,915
    Research and development
    expenses                         500           480           160           196
    Selling and marketing
    expenses                       6,473         6,387         2,104         2,223
    General and administrative
    expenses                      25,442        27,065         8,314         9,204
    Other expenses, net              985          (13)           560          (13)
                                 _______       _______       _______       _______
    Operating income              21,923        26,849         7,383         9,305
    Other income (expenses),
    net                            6,755         (806)            -          (847)
    Financing income, net          1,015         1,429           196           851
                                 _______       _______       _______       _______
    Income before income tax      29,693        27,472         7,579         9,309
    Income tax expense           (8,364)       (6,996)       (2,121)       (2,433)
    Share in losses of
    affiliated companies, net       (29)          -             (15)           -
                                 _______       _______       _______       _______
    Net income for the period     21,300        20,476         5,443         6,876
    Less: Net income
    attributable to
    non-controlling interests      (830)         (782)         (217)         (241)
                                 _______       _______       _______       _______
    Net income attributable to
    the Company                   20,470        19,694         5,226         6,635
                                 _______       _______       _______       _______
                                 _______       _______       _______       _______
  
    Basic and diluted earnings
    per share attributable to
    Company's stockholders          0.98          0.94          0.25          0.32
                                 _______       _______       _______       _______
                                 _______       _______       _______       _______
 
    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
                                     Nine month period        Three month period
                                    ended September 30,       ended September 30,
    (in thousands except per
    share data)                      2012        2011          2012         2011
 
    Cash flows from operating
     activities
    Net income for the period      21,300       20,476        5,443         6,876
    Adjustments to reconcile
     net income to net cash
     from operating activities:

    Depreciation and
     amortization                  10,520       13,109        3,262         4,305
    Exchange differences on
     principal of deposit and
     loans, net                     (178)        (453)            5         (968)
    Losses (gains) in respect  
     of trading marketable
     securities                       (2)          -            -              19
    Increase in liability for
     employee rights upon
     retirement                       703          681           44           199
    Share in losses of
     affiliated companies, net         29          -             15            -
    Deferred income taxes             281      (1,366)          433         (800)
    Capital losses (gains) 
     sale of property and
     equipment, net                    21         (24)           26             6
    Decrease (increase) in
     accounts receivable          (2,465)          759          777           600
    Decrease (increase) in
     other current assets         (6,772)           65        (613)           364
    Decrease (increase) in 
     inventories                  (2,647)      (1,204)        (880)       (2,026)
    Increase (decrease) in  
     accounts payable                 584        (707)      (2,131)           173
    Increase (decrease) in
     deferred revenues              1,193        1,368          540             3
    Increase (decrease) in
     other current liabilities        987          292          312           246
    Litigation obligation             -            237         -              237
                                  _______      _______      _______       _______
    Net cash provided by  
     operating activities          23,554       33,233        7,233         9,234
                               -----------  -----------  -----------   -----------
    Cash flows from investment
     activities
    Increase in funds in
     respect of employee rights
     upon retirement,
     net of withdrawals             (498)        (411)        (132)         (109)
    Capital expenditures          (4,822)     (13,339)      (1,064)       (2,354)
    Intangible expenditures           -           (58)          -            (58)
    Deposit in escrow                 -            603          -             -
    Deposit                         (281)          410        (256)          (52)
    Proceeds from sale of
     property and equipment           276          549          115           323
    Repayment of loan to a
     former employee                  355          -            -             -
    Sale of marketable
    securities                         70          -            -             -
                                  _______      _______      _______       _______
    Net cash used in    
     investment activities        (4,900)     (12,246)      (1,337)       (2,250)
                                -----------  -----------  -----------   -----------
    Cash flows from financing
     activities
    Short term credit from
     banking institutions, net         53          563        (362)          599
    Repayment of long term
     loans                           (33)         (35)         (11)         (12)
    Dividend paid to
     non-controlling interests    (1,019)        (506)        (619)        (506)
    Dividend paid                (28,116)     (21,782)          -            -
                                  _______      _______      _______      _______
    Net cash provided by (used  
     in) financing activities    (29,115)     (21,760)        (992)           81
                                -----------  -----------  -----------  -----------
    Effect of exchange rate
     changes on cash and cash
     equivalents                  (1,117)      (2,162)        (189)      (3,132)
                                -----------  -----------  -----------  -----------
                                  _______      _______      _______      _______
    Net increase in cash and
     cash equivalents            (11,578)      (2,935)        4,715        3,933
    Balance of cash and cash
     equivalents at beginning
     of period                     35,270       46,674       18,977       39,806
                                  _______      _______      _______      _______
    Balance of cash and cash
     equivalents at end of the
     period                        23,692       43,739       23,692       43,739
                                  _______      _______      _______      _______
                                  _______      _______      _______      _______


 

Company Contact
Udi Mizrahi
udi_m@ituran.com
VP Finance, Ituran
(Israel) +972-3-557-1348    

International Investor Relations
Ehud Helft & Kenny Green
ituran@ccgisrael.com
CCG Investor Relations
(US) +1-646-201-9246  

SOURCE Ituran Location and Control Ltd