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 THIRD QUARTER 2017

Added 25,000 subscribers in the quarter leading to record revenue of $61.6 million

AZOUR, Israel – November 15, 2017 – Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the third quarter ended September 30, 2017.

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.
 
 
ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES
 
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.

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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
 

3
 
ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Interim Financial Statements
as of September 30, 2017
 
ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Interim Financial Statements
as of September 30, 2017
 
Table of Contents
 
 
Page
   
Condensed Consolidated Interim Financial Statements:
  
2-3
4
5
 
ITURAN LOCATION AND CONTROL LTD.
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
  


- 2 -
ITURAN LOCATION AND CONTROL LTD.
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
  


- 3 -

ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

   
US dollars
    
US dollars
  
   
Nine month period
 ended September 30,
    
Three month period
 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 Company’s stockholders
    
1.62
      
1.09
      
0.50
      
0.39
  
                                 
Basic and diluted weighted average number of shares outstanding (in thousands)
    
20,968
      
20,968
      
20,968
      
20,968
  


- 4 -
 
ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
US dollars
    
US dollars
  
   
Nine month period
 ended September 30,
    
Three month period
 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.
 
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