EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
 
Exhibit 99.1
 
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 – 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
 
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
 

 
 
ITURAN LOCATION AND CONTROL LTD.
 
Consolidated Interim Financial Statements
as of March 31, 2018
 
 
ITURAN LOCATION AND CONTROL LTD.
 
Consolidated Financial Statements
as of March 31, 2018
 
Table of Contents
 
 
Page
   
Consolidated Financial Statements:
  
2-3
4
5
 
 
 
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
  

2
 
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
  

 
3
 
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
  


4
 
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.
 
 
5