Ituran Location and Control Ltd. Presents Record Results for the Third Quarter 2017
AZOUR, Israel, Nov. 15, 2017 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the third quarter ended September 30, 2017.
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Highlights of the third quarter of 2017
-- Net subscribers adds in the quarter amounted to 25 thousand; -- Record revenue of $61.6 million, up 17% year-over-year; -- Gross margins of 49.6% and operating margins at 22.6%; -- Net profit of $10.5 million, up 29% year-over-year; -- Generated $11.9 million in operating cash flow; -- Dividend of $5 million declared for the quarter;
Third Quarter 2017 Results
Revenues for the third quarter of 2017 were $61.6 million, representing an increase of 17% from revenues of $52.8 million in the third quarter of 2016. 71% of revenues were from location based service subscription fees and 29% were from product revenues.
Revenues from subscription fees increased by 18% over the same period last year. The growth was driven primarily due to the increase in the subscriber base, which expanded from 1,035,000 as of September 30, 2016, to 1,137,000 as of September 30, 2017.
Product revenues increased by 14% compared with the same period last year.
Gross profit for the third quarter of 2017 was $30.5 million (49.6% of revenues), an increase of 16% compared with $26.4 million (50.0% of revenues) in the third quarter of 2016. The gross margin in the quarter on subscription fees improved to 66.7% compared with 65.7% in the same period last year. The gross margin in the quarter on products was 7.2% compared with 12.7% in the same period last year. The lower margin on products during the quarter was due to the mix of product sales in the quarter.
Operating profit for the third quarter of 2017 was $13.9 million (22.6% of revenues), an increase of 20% compared with an operating profit of $11.6 million (21.9% of revenues) in the third quarter of 2016.
EBITDA for the quarter was $17.4 million (28.3% of revenues), an increase of 19% compared to an EBITDA of $14.6 million (27.7% of revenues) in the third quarter of 2016.
Net profit was $10.5 million in the third quarter of 2017 (17.1% of revenues) or fully diluted EPS of $0.50, an increase of 29% compared with a net profit of $8.2 million (15.4% of revenues) or fully diluted EPS of $0.39 in the third quarter of 2016.
Cash flow from operations for the quarter was $11.9 million.
As of September 30, 2017, the Company had net cash, including marketable securities, of $35.2 million or $1.68 per share. This is compared with $31.5 million or $1.50 per share as at December 31, 2016.
Dividend
For the third 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, "We presented another solid quarter with record revenue up 17% and net profit up 29% over last year. The ongoing expansion in our subscriber base is the primary driver of our revenue growth, and we see ongoing demand and interest in our services and solutions. In Brazil in particular, IRT also continues to perform well and is increasingly contributing to our profit. In India, we have started working closely with Lumax Technologies. We see strong potential in this untapped region for telematic services, which gives Ituran access to a phenomenal market with over 200 million registered cars. As we have shown in Brazil, we can successfully enter new markets, leveraging our technology and building a long-term growth engine, with the goal of ultimately establishing ourselves as market leaders."
Conference Call Information
The Company will also be hosting a conference call later today, November 15, 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 0664
CANADA Dial-in Number: 1 888 604 5839
INTERNATIONAL Dial-in Number: +972 3 918 0664
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, India and the United States.
CONDENSED CONSOLIDATED BALANCE SHEETS US dollars ---------- September 30, December 31, (in thousands) 2017 2016 ----------- ---- ---- Current assets Cash and cash equivalents 31,821 31,087 Investments in marketable securities 3,540 398 Accounts receivable (net of allowance for doubtful accounts) 45,283 33,865 Other current assets 45,554 35,522 Inventories 15,087 14,351 ------ ------ 141,285 115,223 ------- Long-term investments and other assets Investments in affiliated companies 13,690 11,975 Investments in other company 1,183 85 Other non- current assets 1,718 1,515 Deferred income taxes 2,345 2,280 Funds in respect of employee rights upon retirement 9,216 7,868 ----- ----- 28,152 23,723 ------ Property and equipment, net 38,722 35,644 ------ Intangible assets, net 23 23 --- Goodwill 3,717 3,406 ----- Total assets 211,899 178,019 -------
CONDENSED CONSOLIDATED BALANCE SHEETS (cont.) US dollars ---------- September 30, December 31, (in thousands) 2017 2016 ----------- ---- ---- Current liabilities Credit from banking institutions 145 3 Accounts payable 22,410 18,624 Deferred revenues 13,431 10,762 Other current liabilities 29,562 26,738 ------ ------ 65,548 56,127 Long-term liabilities Liability for employee rights upon retirement 13,651 11,751 Provision for contingencies 418 435 Deferred revenues 1,557 1,034 Others non- current 496 501 --- --- 16,122 13,721 Stockholders' equity 122,907 102,229 Non- controlling interests 7,322 5,942 ----- ----- Total equity 130,229 108,171 Total liabilities and equity 211,899 178,019 ======= =======
CONDENSED 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) 2017 2016 2017 2016 -------------------- ---- ---- ---- ---- Revenues: Location-based services 125,284 104,673 43,847 37,166 Wireless communications products 51,951 44,540 17,743 15,594 ------ ------ ------ ------ 177,235 149,213 61,590 52,760 Cost of revenues: Location-based services 41,889 36,066 14,584 12,739 Wireless communications products 46,539 37,488 16,462 13,617 ------ ------ ------ ------ 88,428 73,554 31,046 26,356 ------ ------ ------ ------ Gross profit 88,807 75,659 30,544 26,404 Research and development expenses 2,444 2,082 676 681 Selling and marketing expenses 9,551 7,471 3,273 2,537 General and administrative expenses 35,096 30,113 12,705 10,588 Other expenses (income), net (146) 973 (3) 1,039 ---- --- --- ----- Operating income 41,862 35,020 13,893 11,559 Financing income (expenses), net 1,091 1,246 250 408 ----- ----- --- --- Income before income tax 42,953 36,266 14,143 11,967 Income tax expenses (12,388) (10,945) (3,944) (3,893) Share in gains (losses) of affiliated companies ,net 5,487 (554) 998 753 ----- ---- --- --- Net income for the period 36,052 24,767 11,197 8,827 Less: Net income attributable to non- controlling interest (2,082) (1,885) (667) (677) ------ ------ ---- ---- Net income attributable to the Company 33,970 22,882 10,530 8,150 ====== ====== ====== ===== Basic and diluted earnings per share attributable to 1.62 1.09 0.50 0.39 Company's stockholders Basic and diluted weighted average number of shares 20,968 20,968 20,968 20,968 outstanding (in thousands)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- US dollars US dollars ---------- ---------- Nine month period Three month period ended September 30, ended September 30, (in thousands) 2017 2016 2017 2016 ------------- ---- ---- ---- ---- Cash flows from operating activities Net income for the period 36,052 24,767 11,197 8,827 Adjustments to reconcile net income to net cash from operating activities: Depreciation amortization and impairment of goodwill 9,982 8,570 3,515 3,063 Losses (gain) in respect of trading marketable securities (201) (95) (134) (27) Increase (decrease) in liability for employee rights upon retirement 827 960 339 247 Share in losses (gains) of affiliated companies, net (5,487) 554 (998) (753) Deferred income taxes (268) (836) (488) 908 Capital gains on sale of property and equipment, net (57) (18) 4 (1) Decrease (increase) in accounts receivable (8,908) (7,470) (3,391) (392) Decrease (increase) in other current assets (8,194) (9,080) (2,383) (3,771) Decrease (increase) in inventories 545 (726) 2,009 (578) Increase (decrease) in accounts payable 1,667 4,836 180 1,930 Increase (decrease) in deferred revenues 2,686 1,657 450 (725) Increase (decrease) in other current liabilities 535 3,988 1,603 3,313 --- ----- ----- ----- Net cash provided by operating activities 29,179 27,107 11,903 12,041 Cash flows from investment activities Increase in funds in respect of employee rights upon retirement, net of withdrawals (619) (582) (256) (335) Capital expenditures (10,796) (9,049) (4,047) (4,149) Investments in affiliated companies (97) (7,181) - (3,257) Investments in other companies (1,061) - - - Investment in marketable securities (6,607) (2,076) (3,418) (1,732) Sale of marketable securities 3,424 3,615 1,305 1,757 Deposit 132 16 94 (36) Proceeds from loans to affiliated companies 4,305 - 3,743 - Proceeds from sale of property and equipment 305 133 124 34 --- --- --- --- Net cash used in investment activities (11,014) (15,124) (2,455) (7,718) Cash flows from financing activities Short term credit from banking institutions, net 125 (152) 132 (6) Dividend paid (17,613) (13,314) (5,032) (3,565) Dividend paid to non-controlling interest (1,172) (940) (420) (323) ------ ---- ---- ---- Net cash provided by (used in) financing activities (18,660) (14,406) (5,320) (3,894) Effect of exchange rate changes on cash and cash equivalents 1,229 1,039 577 (245) ----- ----- --- ---- Net increase (decrease) in cash and cash equivalents 734 (1,384) 4,705 184 Balance of cash and cash equivalents at beginning of the period 31,087 27,016 27,116 25,448 ------ ------ ------ ------ Balance of cash and cash equivalents at end of the period 31,821 25,632 31,821 25,632 ====== ====== ====== ======
Supplementary information on financing and investing activities not involving cash flows:
In August 2017, the Company declared a dividend in an amount of US$ 5 million. The dividend was paid in October 2017.
Company Contact International Investor Relations Udi Mizrahi Ehud Helft / Gavriel Frohwein udi_m@ituran.com ituran@gkir.com VP Finance, Ituran GK Investor Relations (Israel) +972 3 557 1348 (US) +1 646 688 3559 ------------------------
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