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
RECORD RESULTS FOR THE SECOND QUARTER 2017

Added 30,000 subscribers in the quarter leading to record revenue of $58.5 million

AZOUR, Israel – August 16, 2017 – Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the second quarter ended June 30, 2017.

Highlights of the Second Quarter of 2017
·
Net subscribers adds in the quarter amounting to 30 thousand;
·
Revenue of $58.5 million, up 19% year-over-year;
·
Gross margins of 51.6% and operating margins at 24.2%;
·
Net profit of $10.4 million, up 37% year-over-year;
·
Generated $14.1 million in operating cash flow;
·
Dividend of $5 million declared for the quarter;

Second Quarter 2017 Results
Revenues for the second quarter of 2017 were $58.5. million, representing an increase of 19% from revenues of $49.3 million in the second 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 1,012,000 as of June 30, 2016, to 1,112,000 as of June 30, 2017.

Product revenues increased by 21% compared with the same period last year.

Gross profit for the second quarter of 2017 was $30.2 million (51.6% of revenues), an increase of 19% compared with $25.5 million (51.7% of revenues) in the second quarter of 2016. The gross margin in the quarter on subscription fees improved to 66.9% compared with 65.8% in the same period last year. The gross margin in the quarter on products was 13.6% compared with 16.0% in the same period last year. The lower margin on products was due to the mix of product sales in the quarter.

Operating profit for the second quarter of 2017 was a record $14.2 million (24.2% of revenues), an increase of 19% compared with an operating profit of $12.0 million (24.3% of revenues) in the second quarter of 2016.

During the quarter, share in affiliates, net was an income of $0.5 million versus a loss of $0.6 million in the same quarter of last year.  The improvement was due to a positive contribution from Ituran's joint venture in Brazil, Ituran Road Track.

EBITDA for the quarter was a record $17.4 million (29.7% of revenues), an increase of 17% compared to an EBITDA of $14.8 million (30.1% of revenues) in the second quarter of 2016.

Net profit was a record $10.4 million in the second quarter of 2017 (17.9% of revenues) or fully diluted EPS of $0.50, an increase of 37% compared with a net profit of $7.6 million (15.5% of revenues) or fully diluted EPS of $0.36 in the second quarter of 2016.

 
ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES

Cash flow from operations for the quarter was $14.1 million.

As of June 30, 2017, the Company had net cash, including marketable securities, of $28.6 million or $1.36 per share. This is compared with $31.5 million or $1.50 per share as at December 31, 2016.

Dividend
For the second 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 second quarter 2017 results were at record levels in most respects. We demonstrated particularly strong subscriber growth above the higher-end of our typical range. The ongoing expansion in our subscriber base drove a strong increase in subscription revenues in the quarter. Out growth is built on ongoing demand and interest in our services and solutions. In Brazil in particular, we saw a strong return to growth. Our JV in Brazil, IRT also continues to perform well and positively contributed to our results."

Added Mr. Sheratzky, "We recently signed joint venture agreement with a large automotive supplier, Lumax Technologies, in order to expand sales into the Indian market. This new joint-venture agreement, gives Ituran access to a phenomenal market with over 200 million registered cars, where the telematics industry is still in its infancy. 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, August 16, 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: 1 888 281 1167
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.
 
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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 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.

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, 2017

 
 
ITURAN LOCATION AND CONTROL LTD.
 
Consolidated Financial Statements
as of June 30, 2017
Table of Contents
 
 
Page
Consolidated Interim Financial Statements:
  
2-3
4
5
 
 
ITURAN LOCATION AND CONTROL LTD.
 CONSOLIDATED BALANCE SHEETS
 
   
US dollars
  
   
June 30,
    
December 31,
  
(in thousands)
  
2017
    
2016
  
             
Current assets
            
Cash and cash equivalents
    
27,116
      
31,087
  
Investment in marketable securities
    
1,456
      
398
  
Accounts receivable (net of allowance for doubtful accounts)
    
41,636
      
33,865
  
Other current assets
    
41,100
      
35,522
  
Inventories
    
17,267
      
14,351
  
     
128,575
      
115,223
  
                 
Long-term investments and other assets
                
Investments in affiliated companies
    
16,553
      
11,975
  
Investments in other companies
    
1,195
      
85
  
Other non-current assets
    
1,928
      
1,515
  
Deferred income taxes
    
2,171
      
2,280
  
Funds in respect of employee rights upon retirement
    
9,061
      
7,868
  
     
30,908
      
23,723
  
                 
Property and equipment, net
    
36,682
      
35,644
  
                 
Intangible assets, net
    
23
      
23
  
                 
Goodwill
    
3,746
      
3,406
  
                 
Total assets
    
199,934
      
178,019
  
 
- 2 -

ITURAN LOCATION AND CONTROL LTD.
CONSOLIDATED BALANCE SHEETS

   

US dollars
  
   
June 30,
    
December 31,
  
(in thousands)
  
2017
    
2016
  
             
Current liabilities
            
Credit from banking institutions
    
3
      
3
  
Accounts payable
    
20,529
      
18,624
  
Deferred revenues
    
12,613
      
10,762
  
Other current liabilities
    
27,594
      
26,738
  
     
60,739
      
56,127
  
                 
Long-term liabilities
                
Liability for employee rights upon retirement
    
13,406
      
11,751
  
Provision for contingencies
    
432
      
435
  
Deferred revenues
    
1,462
      
1,034
  
Other non-current liabilities
    
577
      
501
  
     
15,877
      
13,721
  
                 
Stockholders' equity
    
116,266
      
102,229
  
Non-controlling interests
    
7,052
      
5,942
  
Total equity
    
123,318
      
108,171
  
                 
Total liabilities and equity
    
199,934
      
178,019
  


- 3 -
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)
  
2017
    
2016
    
2017
    
2016
  
             
Revenues:
                        
Location-based services
    
81,437
      
67,507
      
41,698
      
35,352
  
Wireless communications products
    
34,208
      
28,946
      
16,836
      
13,902
  
     
115,645
      
96,453
      
58,534
      
49,254
  
                                 
Cost of revenues:
                                
Location-based services
    
27,305
      
23,327
      
13,814
      
12,106
  
Wireless communications products
    
30,077
      
23,871
      
14,538
      
11,683
  
     
57,382
      
47,198
      
28,352
      
23,789
  
                                 
Gross profit
    
58,263
      
49,255
      
30,182
      
25,465
  
Research and development expenses
    
1,768
      
1,401
      
986
      
726
  
Selling and marketing expenses
    
6,278
      
4,934
      
3,450
      
2,556
  
General and administrative expenses
    
22,391
      
19,525
      
11,629
      
10,254
  
Other income, net
    
(143
)
    
(66
)
    
(55
)
    
(23
)
Operating income
    
27,969
      
23,461
      
14,172
      
11,952
  
Financing income, net
    
841
      
838
      
352
      
770
  
Income before income tax
    
28,810
      
24,299
      
14,524
      
12,722
  
Income tax expense
    
(8,444
)
    
(7,052
)
    
(3,868
)
    
(3,837
)
Share in gains (losses) of affiliated companies, net
    
4,489
      
(1,307
)
    
489
      
(615
)
Net income for the period
    
24,855
      
15,940
      
11,145
      
8,270
  
Less: Net income attributable to non-controlling interests
    
(1,415
)
    
(1,208
)
    
(692
)
    
(637
)
Net income attributable to the Company
    
23,440
      
14,732
      
10,453
      
7,633
  
                                 
Basic and diluted earnings per share attributable to Company's stockholders
    
1.12
      
0.70
      
0.50
      
0.36
  
                                 
Basic and diluted weighted average number of shares outstanding
    
20,968
      
20,968
      
20,968
      
20,968
  
 
- 4 -
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)
  
2017
    
2016
    
2017
    
2016
  
             
Cash flows from operating activities
                        
Net income for the period
    
24,855
      
15,940
      
11,145
      
8,270
  
Adjustments to reconcile net income to net cash from operating activities:
                                
Depreciation and amortization
    
6,467
      
5,507
      
3,239
      
2,896
  
Gains in respect of trading marketable securities
    
(67
)
    
(68
)
    
(37
)
    
(34
)
Increase in liability for employee rights upon retirement
    
488
      
713
      
192
      
342
  
Share in losses (gains) of affiliated companies, net
    
(4,489
)
    
1,307
      
(489
)
    
615
  
Deferred income taxes
    
220
      
(1,744
)
    
109
      
(1,052
)
Capital gains on sale of property and equipment, net
    
(61
)
    
(17
)
    
(31
)
    
(7
)
Increase in accounts receivable
    
(5,517
)
    
(7,078
)
    
(2,302
)
    
(509
)
Increase in other current assets
    
(5,811
)
    
(5,309
)
    
(1,675
)
    
(2,079
)
Increase in inventories
    
(1,464
)
    
(148
)
    
(599
)
    
(180
)
Decrease in accounts payable
    
1,487
      
2,906
      
2,630
      
426
  
Increase in deferred revenues
    
2,236
      
2,382
      
1,151
      
1,027
  
Increase (decrease) in other current liabilities
    
(1,068
)
    
675
      
804
      
(73
)
Net cash provided by operating activities
    
17,276
      
15,066
      
14,137
      
9,642
  
                                 
Cash flows from investment activities
                                
Increase in funds in respect of employee rights upon retirement, net of withdrawals
    
(363
)
    
(247
)
    
(244
)
    
(24
)
Capital expenditures
    
(6,749
)
    
(4,900
)
    
(3,993
)
    
(2,689
)
Investment in marketable securities
    
(3,189
)
    
(344
)
    
(1,761
)
    
-
  
Investment in affiliated companies
    
(97
)
    
(3,924
)
    
-
      
(2,516
)
Sale of marketable securities
    
2,119
      
1,858
      
940
      
-
  
Investment in other companies
    
(1,061
)
    
-
      
-
      
-
  
Deposit
    
38
      
52
      
36
      
115
  
Proceeds from loans to affiliated companies
    
562
      
-
      
562
      
-
  
Proceeds from sale of property and equipment
    
181
      
99
      
115
      
9
  
Net cash used in investment activities
    
(8,559
)
    
(7,406
)
    
(4,345
)
    
(5,105
)
                                 
Cash flows from financing activities
                                
Short term credit from banking institutions, net
    
(7
)
    
(146
)
    
(406
)
    
6
  
Dividend paid
    
(12,581
)
    
(9,749
)
    
(8,388
)
    
(6,629
)
Dividend paid to non-controlling interests
    
(752
)
    
(617
)
    
(39
)
    
-
  
Net cash used in financing activities
    
(13,340
)
    
(10,512
)
    
(8,833
)
    
(6,623
)
                                 
Effect of exchange rate changes on cash and cash equivalents
    
652
      
1,284
      
(453
)
    
722
  
                                 
Net increase (decrease) in cash and cash equivalents
    
(3,971
)
    
(1,568
)
    
506
      
(1,364
)
Balance of cash and cash equivalents at beginning of  period
    
31,087
      
27,016
      
26,610
      
26,812
  
Balance of cash and cash equivalents at end of the period
    
27,116
      
25,448
      
27,116
      
25,448
  
 
Supplementary information on investing activities not involving cash flows:

In May 2017, the Company declared a dividend in an amount of US$ 5 million. The dividend was paid in July 2017.
 
 
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