Ituran Location and Control Ltd. Presents Record Results for the First Quarter 2017

AZOUR, Israel, May 17, 2017 /PRNewswire/ — Ituran Location and Control Ltd. (NASDAQ: ITRN; TASE: ITRN), today announced its consolidated financial results for the first quarter ended March 31, 2017.

Highlights of the First Quarter of 2017

  • Net subscribers adds in the quarter amounting to 25 thousand;
  • Revenue of $57.1 million, up 21% year-over-year;
  • Gross margins of 49.2% and operating margins at 24.2%;
  • Net profit of $13 million, up 83% year-over-year; EBITDA of $17.0 million or 29.8% of revenues;
  • Generated $3.1 million in operating cash flow;
  • Dividend of $5 million declared for the quarter;


First Quarter 2017 Results

Revenues for the first quarter of 2017 were $57.1 million, representing an increase of 21% from revenues of $47.2 million in the first quarter of 2016. 70% of revenues were from location based service subscription fees and 30% were from product revenues.

Revenues from subscription fees increased by 24% over the same period last year. The growth was driven primarily due to the increase in the subscriber base, which expanded from 985,000 as of March 31, 2016, to 1,082,000 as of March 31, 2017.

Product revenues increased by 15% compared with the same period last year.

Gross profit for the first quarter of 2017 was $28.1 million (49.2% of revenues), an increase of 18% compared with $23.8 million (50.4% of revenues) in the first quarter of 2016. The gross margin in the quarter on subscription fees improved to 66.1% compared with 65.1% in the same period last year. The gross margin in the quarter on products was 10.6% compared with 19.0% in the same period last year. The lower margin on products was due to the specific mix of product sales in the first quarter. 

Operating profit for the first quarter of 2017 was a record $13.8 million (24.2% of revenues), an increase of 20% compared with an operating profit of $11.5 million (24.4% of revenues) in the first quarter of 2016.   

During the quarter, share in affiliates, net was an income of $4 million versus a loss of $0.7 million in the same quarter of last year.  The majority was due to a capital gain from an investment round at Bringg, one of Ituran’s early stage mobility technology companies and Ituran’s joint venture in Brazil, Ituran Road Track, made a positive contribution.

EBITDA for the quarter was a record $17.0 million (29.8% of revenues), an increase of 21% compared to an EBITDA of $14.1 million (29.9% of revenues) in the first quarter of 2016.

Net profit was a record $13.0 million in the first quarter of 2017 (22.8% of revenues) or fully diluted EPS of $0.62, an increase of 83% compared with a net profit of $7.1 million (15.0% of revenues) or fully diluted EPS of $0.34 in the first quarter of 2016.

Cash flow from operations for the quarter was $3.1 million.

As of March 31, 2017, the Company had net cash, including marketable securities, of $26.9 million or $1.28 per share. This is compared with $31.5 million or $1.50 per share as at December 31, 2016.

Dividend

For the first quarter of 2017, a dividend of $5 million was declared in line with the Company’s stated current policy of issuing at least $5 million as a dividend on a quarterly basis.

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “Our first quarter 2017 results represent an excellent start to 2017 with very strong revenue growth, driven primarily by the solid growth in our subscriber base, which has returned to the higher-end of our typical range. Our end-markets in Israel and Brazil continue to demonstrate strength through ongoing demand and interest in our products and solutions.”

Continued Mr. Sheratzky, “In the first quarter, we generated a capital gain from one of our early stage technology holdings, Bringg. We are also one of the founders of the DRIVE startup incubator and innovation center in Tel Aviv to promote the development of smart mobility technology, together with Mayer, Hertz, Honda and Volvo. We see mobility technology as the next frontier of major technological advancement in the coming decade, and we intend to cement ourselves in a central role in this sphere. We are very excited in what the future holds for Ituran.”

Conference Call Information

The Company will also be hosting a conference call later today, May 17, 2017 at 9am Eastern Time. 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 0644
CANADA Dial-in Number: 1 888 604 5839
INTERNATIONAL Dial-in Number:  +972 3 918 0644
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 is a leader in the emerging mobility technology field, providing value-added location-based services, including a full suite of services for the connected-car. Ituran offers Stolen Vehicle Recovery, fleet management as well as mobile asset location, management & control services for vehicles, cargo and personal security. Its products and applications are used by customers in over 20 countries.

Ituran’s subscriber base has been growing significantly since the Company’s inception to over 1 million subscribers using its location based services with a market leading position in Israel and Brazil. Established in 1995, Ituran has over 1,500 employees worldwide, with offices in Israel, Brazil, Argentina and the United States.

CONSOLIDATED BALANCE SHEETS 

US dollars

March 31,

December 31,

(in thousands)

2017

2016

Current assets

Cash and cash equivalents

26,610

31,087

Investments in marketable securities 

695

398

Accounts receivable (net of allowance for doubtful accounts)

38,786

33,865

Other current assets

40,966

35,522

Inventories

16,057

14,351

123,114

115,223

Long-term investments and other assets

Investments in affiliated companies

16,507

11,975

Investments in other companies

1,150

85

Other non-current assets

1,700

1,515

Deferred income taxes

2,130

2,280

Funds in respect of employee rights upon retirement

8,481

7,868

29,968

23,723

Property and equipment, net

36,365

35,644

Intangible assets, net

23

23

Goodwill

3,606

3,406

Total assets

193,076

178,019

CONSOLIDATED BALANCE SHEETS 

US dollars

March 31,

December 31,

(in thousands)

2017

2016

Current liabilities

Credit from banking institutions

413

3

Accounts payable

18,018

18,624

Deferred revenues

12,075

10,762

Other current liabilities

30,328

26,738

60,834

56,127

Long-term liabilities

Liability for employee rights upon retirement

12,758

11,751

Provision for contingencies

447

435

Deferred revenues

1,221

1,034

Others non-current

590

501

15,016

13,721

Stockholders’ equity

110,974

102,229

Non-controlling interests

6,252

5,942

Total equity

117,226

108,171

Total liabilities and equity

193,076

178,019

CONSOLIDATED STATEMENTS OF INCOME

US dollars

Three month period

ended March 31,

(in thousands except per share data)

2017

2016

Revenues:

Location-based services

39,739

32,155

Wireless communications products

17,372

15,044

57,111

47,199

Cost of revenues:

Location-based services

13,491

11,221

Wireless communications products

15,539

12,188

29,030

23,409

Gross profit

28,081

23,790

Research and development expenses

782

675

Selling and marketing expenses

2,828

2,378

General and administrative expenses

10,762

9,271

Other income, net

(88)

(43)

Operating income

13,797

11,509

Financing income, net

489

68

Income before income tax

14,286

11,577

Income tax expenses

(4,576)

(3,215)

Share in gains (losses) of affiliated companies ,net

4,000

(692)

Net income for the period

13,710

7,670

Less: Net income attributable to non-controlling interest

(723)

(571)

Net income attributable to the Company

12,987

7,099

Basic and diluted earnings per share attributable to Company’s stockholders

0.62

0.34

Basic and diluted weighted average number of shares outstanding (in thousands)

20,968

20,968

CONSOLIDATED STATEMENTS OF CASH FLOWS

US dollars

Three month period

ended March 31,

(in thousands)

2017

2016

Cash flows from operating activities

Net income for the period

13,710

7,670

Adjustments to reconcile net income to net cash from operating activities:

Depreciation amortization and impairment of goodwill 

3,228

2,611

Gain in respect of trading marketable securities

(30)

(34)

Increase in liability for employee rights upon retirement

296

371

Share in losses (gains) of affiliated companies, net

(4,000)

692

Deferred income taxes

111

(692)

Capital gains on sale of property and equipment, net

(30)

(10)

Increase in accounts receivable

(3,215)

(6,569)

Increase in other current assets

(4,136)

(3,230)

Decrease (increase) in inventories

(865)

32

Increase (decrease) in accounts payable

(1,143)

2,480

Increase in deferred revenues

1,085

1,355

Increase(decrease) in other current liabilities

(1,872)

748

Net cash provided by operating activities

3,139

5,424

Cash flows from investment activities

Increase in funds in respect of employee rights upon retirement, net of withdrawals

(119)

(223)

Capital expenditures

(2,756)

(2,211)

Investments in affiliated companies

(1,158)

(1,408)

Investments in marketable securities

(1,428)

(344)

Sale of marketable securities

1,179

1,858

Deposit 

2

(63)

Proceeds from sale of property and equipment

66

90

Net cash used in investment activities

(4,214)

(2,301)

Cash flows from financing activities

Short term credit from banking institutions, net

399

(152)

Dividend paid 

(4,193)

(3,120)

Dividend paid to non-controlling interest

(713)

(617)

Net cash used in financing activities

(4,507)

(3,889)

Effect of exchange rate changes on cash and cash equivalents

1,105

562

Net decrease in cash and cash equivalents

(4,477)

(204)

Balance of cash and cash equivalents at beginning of the period

31,087

27,016

Balance of cash and cash equivalents at end of the period

26,610

26,812

Supplementary information on investing activities not involving cash flows:

In February 2017, the Company declared a dividend in an amount of US$ 8.5 million. The dividend will be paid in April 2017.

Company Contact

Udi Mizrahi

udi_m@ituran.com

VP Finance, Ituran

(Israel) +972-3-557-1348

International Investor Relations

Ehud Helft / Gavriel Frohwein

ituran@gkir.com  

GK  Investor Relations

(US) +1-646-688-3559 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ituran-location-and-control-ltd-presents-record-results-for-the-first-quarter-2017-300459143.html

SOURCE Ituran Location and Control Ltd

Related Links

https://ituran.com