EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
 
Exhibit 99.1
 
 
 
ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES

ITURAN LOCATION AND CONTROL LTD. PRESENTS
RESULTS FOR THE SECOND QUARTER 2016

Record Revenues of $49 million in the quarter; Subscribers reach over 1 million

AZOUR, Israel – August 11, 2016 – Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the second quarter ended June 30, 2016.

Highlights of the Second Quarter
· Strong net subscribers adds in the quarter amounting to 27 thousand, reaching 1,012,000 subscribers;
· Revenue of $49.3 million, up 12% year-over-year;
· Gross margins of 51.7%;
· Operating profit of $12.0 million (margin of 24.3%), up 19% year-over-year;
· Generated $9.6 million in operating cash flow;
· Dividend of $3.8 million declared for the quarter;

Second Quarter 2016 Results
Revenues for the second quarter of 2016 were $49.3 million, representing an increase of 12% from revenues of $43.8 million in the second quarter of 2015. The significant strengthening of the US Dollar versus the Brazilian Real and the Argentinean Peso, compared with the level during the second quarter of 2015 reduced the overall revenue level in US Dollars. Excluding the exchange rate impact, the increase in revenues would have been 23% over the second quarter of last year. 72% of revenues were from location based service subscription fees and 28% from product revenues.

Revenues from subscription fees increased 10% over the same period last year. In local currency terms, subscription fees increased 24%, primarily due to the growth in the subscriber base which expanded from 879,000 as of June 30, 2015, to 1,012,000 as of June 30, 2016.

Product revenues increased by 19% compared with the same period last year. There is almost no impact from the year-over-year changes in exchange rates to the product revenues.

Gross profit for the second quarter of 2016 was $25.5 million (51.7% of revenues), an increase of 15% compared with $22.2 million (50.8% of revenues) in the second quarter of 2015. The gross margin on subscription fees was 65.8% and the gross margin on products was 16.0%. The weakening of the Brazilian Real and the Argentinean Peso versus the US Dollar had a negative impact on the margin.

Operating profit for the second quarter of 2016 was $12.0 million (24.3% of revenues), an increase of 19% compared with an operating profit of $10.0 million (22.9% of revenues) in the second quarter of 2015. Excluding the impact of the change in exchange rates over the period, the operating profit would have increased 36% over the second quarter of 2015.



 
ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES
 
EBITDA for the quarter was $14.8 million (30.1% of revenues), an increase of 17% compared to an EBITDA of $12.7 million (29.0% of revenues) in the second quarter of 2015. Excluding the impact of the change in exchange rates over the period, the EBITDA would have increased by 24% over the second quarter of last year.

Net profit was US$7.6 million in the second quarter of 2016 (15.5% of revenues) or fully diluted EPS of US$0.36, an increase of 31% compared with a net profit of US$5.8 million (13.3% of revenues) or fully diluted EPS of US$0.28 in the second quarter of 2015. Excluding the impact of the change in exchange rates over the period, the net profit would have increased 52% over the second quarter of last year.

Cash flow from operations for the quarter was $9.6 million.

As of June 30, 2016, the Company had net cash, including marketable securities, of $25.8 million or $1.23  per share. This is compared with $27.2 million or $1.30 per share as at March 31, 2016.

Dividend
For the second quarter of 2016, a dividend of $3.8 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, “We are very pleased with our record results and we are especially pleased to surpass the 1 million subscriber milestone. With regard to IRT, our jointly owned JV providing the telematic services for a leading car manufacturer in both Brazil and Argentina, we are pleased with its progress so far and it is moving ahead in accordance with our plan. Furthermore, we are constantly adding value-added services for our subscribers, making our product offering ever more attractive. These include advanced fleet management services, driver behavior intelligence, as well as other connected car services. I remain optimistic with regard to our future in 2016 and beyond.”

Conference Call Information

The Company will also be hosting a conference call later today, August 11, 2016 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 0610
CANADA Dial-in Number: 1 888 604 5839
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.

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ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES
 
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 1 million subscribers distributed globally. Established in 1995, Ituran has over 1,500 employees worldwide, provides its location based services and has a market leading position in Israel, Brazil, Argentina and the United States.

Company Contact   International Investor Relations
Udi Mizrahi
udi m@ituran.com
VP Finance, Ituran
(Israel) +972 3 557 1348
  
Ehud Helft / Gavriel Frohwein
ituran@gkir.com
GK  Investor Relations
(US) +1 646 688 3559
 
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ITURAN LOCATION AND CONTROL LTD.
 
Consolidated Interim Financial Statements
as of June 30, 2016
 
 
ITURAN LOCATION AND CONTROL LTD.
 
Consolidated Financial Statements
as of June 30, 2016
 
Table of Contents
 
 
Page
Consolidated Interim Financial Statements:
  
2-3
4
5-6
 
ITURAN LOCATION AND CONTROL LTD.
 
 CONSOLIDATED BALANCE SHEETS
 
   
US dollars
  
   
June 30,
    
December 31,
  
(in thousands)
  
2016
    
2015
  
             
Current assets
            
Cash and cash equivalents
    
25,448
      
27,016
  
Investment in marketable securities
    
371
      
2,035
  
Accounts receivable (net of allowance for doubtful accounts)
    
34,821
      
27,436
  
Other current assets
    
31,573
      
22,437
  
Inventories
    
13,072
      
12,781
  
     
105,285
      
91,705
  
                 
Long-term investments and other assets
                
Investments in affiliated companies
    
7,694
      
4,705
  
Investments in other company
    
85
      
78
  
Other non-current assets
    
1,319
      
1,166
  
Deferred income taxes
    
2,376
      
2,279
  
Funds in respect of employee rights upon retirement
    
7,501
      
7,174
  
     
18,975
      
15,402
  
                 
Property and equipment, net
    
33,511
      
31,514
  
                 
Intangible assets, net
    
25
      
26
  
                 
Goodwill
    
3,405
      
3,356
  
     
 
      
 
  
Total assets
    
161,201
      
142,003
  


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ITURAN LOCATION AND CONTROL LTD.
 
CONSOLIDATED BALANCE SHEETS

   

US dollars
  
   
June 30,
    
December 31,
  
(in thousands)
  
2016
    
2015
  
             
Current liabilities
            
Credit from banking institutions
    
9
      
155
  
Accounts payable
    
13,555
      
10,466
  
Deferred revenues
    
11,665
      
9,210
  
Other current liabilities
    
23,276
      
21,750
  
     
48,505
      
41,581
  
                 
Long-term liabilities
                
Liability for employee rights upon retirement
    
11,469
      
10,637
  
Provision for contingencies
    
449
      
622
  
Deferred revenues
    
1,014
      
973
  
Other non-current liabilities
    
451
      
369
  
   
13,383
      
12,601
  
   
 
      
 
  
Stockholders’ equity
    
94,420
      
83,698
  
Non-controlling interests
    
4,893
      
4,123
  
Total equity
    
99,313
      
87,821
  
     
 
      
 
  
Total liabilities and equity
    
161,201
      
142,003
  


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ITURAN LOCATION AND CONTROL LTD.

CONSOLIDATED STATEMENTS OF INCOME

   
US dollars
    
US dollars
  
   
Six month period
 ended June 30,
    
Three month period
 ended June 30,
  
(in thousands except per share data)
  
2016
    
2015
    
2016
    
2015
  
             
Revenues:
                        
Location-based services
    
67,507
      
64,093
      
35,352
      
32,145
  
Wireless communications products
    
28,946
      
23,921
      
13,902
      
11,669
  
     
96,453
      
88,014
      
49,254
      
43,814
  
                                 
Cost of revenues:
                                
Location-based services
    
23,327
      
23,146
      
12,106
      
11,845
  
Wireless communications products
    
23,871
      
19,269
      
11,683
      
9,732
  
     
47,198
      
42,415
      
23,789
      
21,577
  
                                 
Gross profit
    
49,255
      
45,599
      
25,465
      
22,237
  
Research and development expenses
    
1,401
      
1,085
      
726
      
595
  
Selling and marketing expenses
    
4,934
      
4,625
      
2,556
      
2,229
  
General and administrative expenses
    
19,525
      
19,365
      
10,254
      
9,402
  
Other income, net
    
(66
)
    
(14
)
    
(23
)
    
(2
)
Operating income
    
23,461
      
20,538
      
11,952
      
10,013
  
Financing income (exspenses), net
    
838
      
208
      
770
      
(263
)
Income before income tax
    
24,299
      
20,746
      
12,722
      
9,750
  
Income tax expense
    
(7,052
)
    
(6,439
)
    
(3,837
)
    
(3,100
)
Share in losses of affiliated companies, net
    
(1,307
)
    
(844
)
    
(615
)
    
(537
)
Net income for the period
    
15,940
      
13,463
      
8,270
      
6,113
  
Less: Net income attributable to non-controlling interests
    
(1,208
)
    
(834
)
    
(637
)
    
(295
)
Net income attributable to the Company
    
14,732
      
12,629
      
7,633
      
5,818
  
                                 
Basic and diluted earnings per share attributable to Company’s stockholders
    
0.70
      
0.60
      
0.36
      
0.28
  
                                 
Basic and diluted weighted average number of shares outstanding
    
20,968
      
20,968
      
20,968
      
20,968
  


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ITURAN LOCATION AND CONTROL LTD.
 
STATEMENTS OF CASH FLOWS
 
   
US dollars
    
US dollars
  
   
Six month period
 ended June 30,
    
Three month period
 ended June 30,
  
(in thousands)
  
2016
    
2015
    
2016
    
2015
  
             
Cash flows from operating activities
                        
                         
Net income for the period
    
15,940
      
13,463
      
8,270
      
6,113
  
                                 
Adjustments to reconcile net income to net cash from operating activities:
                                
                                 
Depreciation and amortization
    
5,507
      
5,383
      
2,896
      
2,710
  
Losses (gains) in respect of trading marketable securities
    
(68
)
    
(204
)
    
(34
)
    
(115
)
Increase )decrease) in liability for employee rights upon retirement
    
713
      
290
      
342
      
(91
)
Share in losses of affiliated companies, net
    
1,307
      
844
      
615
      
537
  
Deferred income taxes
    
(1,744
)
    
(346
)
    
(1,052
)
    
(341
)
Capital losses (gains) on sale of property and equipment, net
    
(17
)
    
(7
)
    
(7
)
    
(2
)
Decrease (increase) in accounts receivable
    
(7,078
)
    
(867
)
    
(509
)
    
567
  
Decrease (increase) in other current assets
    
(5,309
)
    
(671
)
    
(2,079
)
    
1,007
  
Decrease (increase) in inventories
    
(148
)
    
388
      
(180
)
    
(272
)
Decrease(increase)  in accounts payable
    
2,906
      
854
      
426
      
(12
)
Increase (decrease) in deferred revenues
    
2,382
      
128
      
1,027
      
524
  
Increase (decrease) in other current liabilities
    
675
      
150
      
(73
)
    
53
  
Net cash provided by operating activities
    
15,066
      
19,405
      
9,642
      
10,678
  
     
 
      
 
      
 
      
 
  
Cash flows from investment activities
                                
                                 
Increase in funds in respect of employee rights upon retirement, net of withdrawals
    
(247
)
    
(487
)
    
(24
)
    
(224
)
Capital expenditures
    
(4,900
)
    
(12,969
)
    
(2,689
)
    
(6,132
)
Investment in marketable securities
    
(344
)
    
-
      
-
      
-
  
Investment in affiliated companies
    
(3,924
)
    
(1,783
)
    
(2,516
)
    
(513
)
Sale of marketable securities
    
1,858
      
-
      
-
      
-
  
Deposit
    
52
      
(239
)
    
115
      
(79
)
Proceeds from sale of property and equipment
    
99
      
687
      
9
      
188
  
Net cash used in investment activities
    
(7,406
)
    
(14,791
)
    
(5,105
)
    
(6,760
)
     
 
            
 
        
Cash flows from financing activities
                                
                                 
Short term credit from banking institutions, net
    
(146
)
    
6
      
6
      
6
  
Dividend paid
    
(9,749
)
    
(11,343
)
    
(6,629
)
    
(6,920
)
Dividend paid to non-controlling interests
    
(617
)
    
(536
)
    
-
      
-
  
Net cash provided by (used in) financing activities
    
(10,512
)
    
(11,873
)
    
(6,623
)
    
(6,914
)
     
 
      
 
      
 
      
 
  
Effect of exchange rate changes on cash and cash equivalents
    
1,284
      
(171
)
    
722
      
1,076
  
           
 
      
 
        
Net increase(decrease)  in cash and cash equivalents
    
(1,568
)
    
(7,430
)
    
(1,364
)
    
(1,920
)
Balance of cash and cash equivalents at beginning of  period
    
27,016
      
38,418
      
26,812
      
32,908
  
Balance of cash and cash equivalents at end of the period
    
25,448
      
30,988
      
25,448
      
30,988
  
 
Supplementary information on investing activities not involving cash flows:

In May 2016, the Company declared a dividend in an amount of US$ 3.6 million.  The dividend was paid in July 2016.
During the six month period ended June 30, 2016, the Company purchased property and equipment in an amount of US$ 66 thousand using a directly related liability.
 
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