Ituran Location and Control Ltd. Presents Record Results for the First Quarter 2018
Ituran Location and Control Ltd. Presents Record Results for the First Quarter 2018
Record revenue of $63.1m, net profit of $11.3m & record EBITDA of $19.2m
AZOUR, Israel, May 23, 2018 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN) (TASE: ITRN), today announced its consolidated financial results for the first quarter ended March 31, 2018.
Highlights of the First Quarter of 2018
-- Net subscribers adds in the quarter amounted to 21,000;
-- Record revenue of $63.1 million, up 12.5% year-over-year;
-- Gross margins of 49.9% and operating margins at 24.6%;
-- Record EBITDA of $19.2 million or 30.4% of revenues;
-- Generated $7.5 million in operating cash flow;
-- Dividend of $5 million declared for the quarter;
First Quarter 2018 Results
Revenues for the first quarter of 2018 were $63.1 million, representing an increase of 12.5% from revenues of $56.1 million in the first quarter of 2017. 72% of revenues were from location based service subscription fees and 28% were from product revenues.
Revenues from subscription fees increased by 15% over the same period last year. The growth was driven primarily by the increase in the subscriber base, which expanded from 1,082,000 as of March 31, 2017, to 1,181,000 as of March 31, 2018.
Product revenues increased by 7% compared with the same period last year. Product revenues can be volatile between quarters. The main contribution to growth was the higher product sales in Israel.
Gross profit for the first quarter of 2018 was $31.5 million (49.9% of revenues), an increase of 12% compared with $28.1 million (50.1% of revenues) in the first quarter of 2017.
The gross margin in the quarter on subscription fees improved to 68.4% compared with 66.1% in the same period last year. The gross margin in the quarter on products was 1.2% compared with 11.2% in the same period last year. The lower margin on products during the quarter was due to the product mix
Operating profit for the first quarter of 2018 was $15.5 million (24.6% of revenues), an increase of 13% compared with an operating profit of $13.8 million (24.6% of revenues) in the first quarter of 2017.
Taxes in the quarter amounted to $4.7 million compared with taxes of $4.6 million in the first quarter of last year.
During the quarter, share in affiliates, net was an income of $687 thousand versus an income of $4 million in the same quarter of last year. It is noted that in the first quarter of 2017, the share in affiliates included a capital gain following an investment round in one of Ituran's early stage holdings.
EBITDA for the quarter was a record $19.2 million (30.4% of revenues), an increase of 13% compared to an EBITDA of $17.0 million (30.4% of revenues) in the first quarter of 2017.
Net profit was $11.3 million in the first quarter of 2018 (17.9% of revenues) or fully diluted EPS of $0.54, compared with a net profit of $13.0 million (23.2% of revenues) or fully diluted EPS of $0.62 in the first quarter of 2017. The higher net profit in the first quarter of 2017 was due to the above-mentioned capital gain in that period.
Cash flow from operations for the quarter was $7.5 million.
As of March 31, 2018, the Company had net cash, including marketable securities, of $38.2 million or $1.82 per share, compared with $40.4 million or $1.93 per share as of December 31, 2017.
Dividend
For the first quarter of 2018, a dividend of $5.0 million was declared in line with the Company's stated current policy of issuing at least $5 million on a quarterly basis.
Management Comment
Eyal Sheratzky, Co-CEO of Ituran said, "We are very pleased with our first quarter 2018 results. Our results come on the back of solid business performance across our main regions. Our IRT joint venture continues to gain traction and operations there are expanding. Overall, our results and performance represent a very good start to 2018, which positions us well for continued strong growth and improvement in profitability throughout the coming year."
Conference Call Information
The Company will also be hosting a conference call later today, May 23, 2018 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: 1 888 668 9141
ISRAEL Dial-in Number: 03 918 0609
CANADA Dial-in Number: 1 888 604 5839
INTERNATIONAL Dial-in Number: +972 3 918 0609
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 is also the founder of the Tel-Aviv based DRIVE startup incubator to promote the development of smart mobility technology.
Ituran's subscriber base has been growing significantly since the Company's inception to well over 1 million subscribers using its location based services with a market leading position in Israel and Brazil. Established in 1995, Ituran has over 1,700 employees worldwide, with offices in Israel, Brazil, Argentina, India, Canada and the United States.
For more information, please visit Ituran's website, at: www.ituran.com
CONSOLIDATED BALANCE SHEETS
US dollars
----------
March 31, December 31,
(in thousands) 2018 2017
------------- ---- ----
Current assets
Cash and cash
equivalents 34,734 36,906
Investments in
marketable
securities 3,460 3,559
Accounts receivable
(net of allowance
for doubtful
accounts) 44,621 41,009
Other current
assets 45,109 41,394
Inventories 14,623 14,244
------ ------
142,547 137,112
Long-term
investments and
other assets
Investments in
affiliated
companies 12,388 14,839
Investments in
other companies 1,937 1,382
Other non-current
assets 916 939
Deferred income
taxes 7,742 8,398
Funds in respect of
employee rights
upon retirement 9,146 9,627
----- -----
32,129 35,185
Property and
equipment, net 40,421 39,047
Intangible assets,
net 50 38
Goodwill 3,726 3,777
_______ _______
Total assets 218,873 215,159
======= =======
CONSOLIDATED BALANCE SHEETS
US dollars
----------
March 31, December 31,
(in thousands) 2018 2017
------------- ---- ----
Current liabilities
Credit from banking
institutions 3 48
Accounts payable 22,760 23,264
Deferred revenues 14,561 12,796
Other current liabilities 29,494 29,644
------ ------
66,818 65,752
Long-term liabilities
Liability for employee
rights upon retirement 13,750 14,062
Provision for
contingencies 397 400
Deferred revenues 2,994 1,241
Others non-current 484 475
--- ---
17,625 16,178
Stockholders' equity 126,976 125,790
Non-controlling interests 7,454 7,439
_______ _______
Total equity 134,430 133,229
_______ _______
Total liabilities and
equity 218,873 215,159
======= =======
CONSOLIDATED STATEMENTS OF INCOME
US dollars
----------
Three month period
ended March 31,
(in thousands except per share data) 2018 2017
----------------------------------- ---- ----
Revenues:
Location-based services 45,699 39,739
Wireless communications products 17,379 16,315
------ ------
63,078 56,054
Cost of revenues:
Location-based services 14,453 13,491
Wireless communications products 17,168 14,482
------ ------
31,621 27,973
------ ------
Gross profit 31,457 28,081
Research and development expenses 1,160 782
Selling and marketing expenses 2,852 2,828
General and administrative expenses 11,878 10,762
Other expenses (income), net 26 (88)
--- ---
Operating income 15,541 13,797
Financing income, net 276 489
--- ---
Income before income tax 15,817 14,286
Income tax expenses (4,657) (4,576)
Share in gains of affiliated companies
,net 687 4,000
Net income for the period 11,847 13,710
Less: Net income attributable to non-
controlling interest (566) (723)
---- ----
Net income attributable to the Company 11,281 12,987
====== ======
Basic and diluted earnings per share
attributable to Company's
stockholders 0.54 0.62
==== ====
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) 2018 2017
------------- ---- ----
Cash flows from operating activities
Net income for the period 11,847 13,710
Adjustments to reconcile net income
to net cash from operating
activities:
Depreciation amortization and
impairment of goodwill 3,623 3,228
Gain in respect of trading
marketable securities (196) (30)
Increase (decrease) in liability for
employee rights upon retirement (128) 296
Share in gains of affiliated
companies, net (687) (4,000)
Deferred income taxes 1,512 111
Capital losses (gains) on sale of
property and equipment, net 52 (30)
Increase in accounts receivable (4,117) (3,215)
Increase in other current assets (4,199) (4,136)
Increase in inventories (570) (865)
Increase (decrease) in accounts
payable 382 (1,143)
Increase (decrease) in deferred
revenues (336) 1,085
Increase(decrease) in other current
liabilities 353 (1,872)
--- ------
Net cash provided by operating
activities 7,536 3,139
Cash flows from investment
activities
Increase (decrease) in funds in
respect of employee rights upon
retirement, net of withdrawals 358 (119)
Capital expenditures (6,618) (2,756)
Investments in (proceedings from)
affiliated companies 2,145 (1,158)
Investments in marketable securities (2,294) (1,428)
Sale of marketable securities 2,344 1,179
Deposit (91) 2
Proceeds from sale of property and
equipment 203 66
--- ---
Net cash used in investment
activities (3,953) (4,214)
Cash flows from financing activities
Short term credit from banking
institutions, net (41) 399
Dividend paid (5,032) (4,193)
Dividend paid to non-controlling
interest (425) (713)
---- ----
Net cash used in financing
activities (5,498) (4,507)
Effect of exchange rate changes on
cash and cash equivalents (257) 1,105
---- -----
Net decrease in cash and cash
equivalents (2,172) (4,477)
Balance of cash and cash equivalents
at beginning of the period 36,906 31,087
------ ------
Balance of cash and cash equivalents
at end of the period 34,734 26,610
====== ======
Supplementary information on investing activities not involving cash flows:
In February 2018, the Company declared a dividend in an amount of US$ 5 million. The dividend was paid in April 2018.
Company Contact
Udi Mizrahi
udi_m@ituran.com
VP Finance, Ituran
(Israel) +972-3-557-1348
International Investor Relations
Ehud Helft
ituran@gkir.com
GK Investor & Public Relations
(US) +1-646-201-9246
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SOURCE Ituran Location and Control Ltd.
