EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1
ITURAN LOCATION AND CONTROL LTD. PRESENTS
RESULTS FOR THE FIRST QUARTER OF 2019

Revenue of $73.6 million, Net Profit of $8.1 million & adjusted EBITDA of $20.9 million;
 
AZOUR, Israel – May 21, 2019 – Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the first quarter ended March 31, 2019.

Highlights of the first quarter of 2019
 
·
Revenue of $73.6 million, up 17% year-over-year;
 
·
Adjusted EBITDA of $20.9 million (27.9% of revenues), up 9% year-over-year
 
·
Generated $14.9 million in quarterly operating cash flow;
 
·
Dividend of $5 million declared for the quarter;
 
·
Board of Directors approves share buy-back of up to $25 million;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “As we move through 2019, Ituran is a company on a new scale with significantly greater potential. The process of consolidating and combining Road Track with Ituran continues and we are working on building the top-line synergies in many of our regions. We look forward to reaping the rewards from our already highly successful and growing business over the coming quarters and years.”

Mr. Sheratzky added, “Today the board declared a share buy-back of up to $25 million. We believe that the ability to buy back our own shares, depending on market conditions, is a tool that will contribute to shareholder value over the long term.”
 
The results below also include consolidated non-GAAP financial results of Ituran, which exclude revenues and costs related to the purchase price allocation. For further details with regard to the reconciliation between the non-GAAP and GAAP results please see the financial tables with the press release.

First quarter 2019 Results

Revenues for the first quarter of 2019 were $73.6 million. Non-GAAP revenues for the quarter were $74.6 million representing an increase of 18% compared with revenues of $63.1 million in the first quarter of 2018.

The significantly higher average level of the US dollar exchange rate versus the Brazilian real, the Argentinean peso and the Israeli shekel, during the quarter versus the same period last year reduced the overall revenue level in US dollar terms and had a negative impact on the reported year-over-year revenue growth rate. In local currency terms, first quarter revenue grew 32% year over year.

72% of revenues were from location based service subscription fees and 28% were from product revenues.

Non-GAAP revenues from subscription fees increased 19% over the same period last year. In local currency terms, subscription fees grew 36% over the same period last year. The subscriber base amounted to 1,782,000 as of March 31, 2019.

Product revenues increased 18% compared with the same period last year.

Gross profit for the quarter was $34.6 million (47.1% of revenues). Non-GAAP gross profit for the quarter was $35.9 million (48.1% of revenues). This represents an increase of 14% compared with gross profit of $31.5 million (49.9% of revenues) in the first quarter of 2018.

The non-GAAP gross margin in the quarter on subscription fees was 58.4% compared with 64.8% in the same period last year. The lower margin was due to the lower average gross margin on the recently acquired subscribers.

The non-GAAP gross margin in the quarter on products was 20.9% compared with 10.7% in the same period last year. The higher gross margin in the current quarter was due to the product mix sold during the quarter.

Operating profit for the quarter was $13.5 million (18.3% of revenues). Non-GAAP operating profit for the quarter was $16.2 million (21.6% of revenues) which represents an increase of 4%, compared with operating profit of $15.5 million (24.6% of revenues) in the first quarter of 2018. In local currency terms, the year-over-year increase was 23%.

Adjusted EBITDA for the quarter was $20.9 million (27.9% of revenues), an increase of 9% compared to $19.2 million (30.4% of revenues) in the first quarter of 2018. In local currency terms, the increase was 29% year-over-year.

Net income in the first quarter of 2019 was $8.1 million (10.9% of revenues) or fully diluted earnings per share of $0.38. Net income on a non-GAAP basis in the first quarter of 2019 was $10.7 million (14.3% of revenues) or fully diluted earnings per share of $0.50. This represents a decline of 5% compared with a net income of $11.3 million (17.9% of revenues) or fully diluted earnings per share of $0.54 in the first quarter of 2018. In local currency terms the year-over-year increase in net income was 14%.

Cash flow from operations for the quarter was $14.9 million.

As of March 31, 2019, the Company had cash, including marketable securities, of $54.5 million and debt of $73.6 million, amounting to a net debt of $19.1 million or $0.89 per share. This is compared with cash, including marketable securities, of $53.3 million and debt of $73.2 million, amounting to a net debt of $19.9 million, or $0.93 per share, as of December 31, 2018.
Dividend
For the first quarter of 2019, 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.

Share Buy Back
The board of directors approved a share buyback program under which the Company will be able to repurchase Ituran shares in an amount up to $25 million by December 31, 2020.

Conference Call Information

The Company will also be hosting a conference call later today, May 21, 2019 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 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.

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 for the retail, insurance industry and car manufacturers. Ituran is the largest OEM telematics provider in Latin America. 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 approaching 2 million subscribers using its location based services with a market leading position in Israel and Latin America. Established in 1995, Ituran has over 3,000 employees worldwide, with offices in Israel, Brazil, Argentina, Mexico, Ecuador, Columbia, India, Canada and the United States.

For more information, please visit Ituran’s website, at: www.ituran.com
 
Company Contact   International Investor Relations
Udi Mizrahi
udi_m@ituran.com
Deputy CEO &VP Finance, Ituran
(Israel) +972 3 557 1348
  
Ehud Helft
ituran@gkir.com
GK  Investor & Public Relations
(US) +1 646 201 9246
 
 ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of March 31, 2019
ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of March 31, 2019
 
Table of Contents
 
 
Page
   
Condensed Consolidated Interim Financial Statements:
  
2-3
4
5-6
7-8
 
=======================
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ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

   
US dollars
  
   
March 31,
    
Decmber 31,
  
(in thousands)
  
2019
    
2018
  
   
(unaudited)
        
Current assets            
             
Cash and cash equivalents
    
53,049
      
51,398
  
Investments in marketable securities
    
1,486
      
1,897
  
Accounts receivable (net of allowance for doubtful accounts)
    
50,192
      
54,261
  
Other current assets
    
52,036
      
52,983
  
Inventories
    
27,489
      
28,367
  
     
184,252
      
188,906
  
Non- Current investments and other assets
                
                 
Investments in affiliated companies
    
4,158
      
4,872
  
Investments in other companies
    
2,884
      
2,772
  
Other non-current assets
    
4,004
      
3,222
  
Deferred income taxes
    
11,849
      
12,127
  
Funds in respect of employee rights upon retirement
    
10,141
      
9,497
  
     
33,036
      
32,490
  
                 
Property and equipment, net
    
51,696
      
50,460
  
     
 
      
 
  
Operating lease right-of-use assets, net
    
7,736
      
-
  
     
 
      
 
  
Intangible assets, net
    
39,108
      
39,040
  
             
Goodwill
    
63,007
      
62,896
  
                 
Total assets
    
378,835
      
373,792
  
 
- 2 -

ITURAN LOCATION AND CONTROL LTD.
 
CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

   
US dollars
  
   
March 31,
    
December 31,
  
(in thousands)
  
2019
    
2018
  
   
(unaudited)
        
Current liabilities
            
Credit from banking institutions
    
13,319
      
10,559
  
Accounts payable
    
22,535
      
23,987
  
Deferred revenues
    
31,790
      
37,671
  
Operating lease liabilities, current
    
2,975
      
-
  
Other current liabilities
    
30,209
      
32,475
  
     
100,828
      
104,692
  
Non- Current liabilities
                
Long term loan
    
60,314
      
62,622
  
Liability for employee rights upon retirement
    
15,766
      
14,801
  
Provision for contingencies
    
186
      
201
  
Deferred income taxes
    
6,064
      
6,458
  
Deferred revenues
    
11,896
      
8,221
  
Others non-current liabilities
    
298
      
325
  
Operating lease liabilities, non-current
    
4,761
      
-
  
Obligation to purchase non-controlling interests
    
16,567
      
16,272
  
     
115,852
      
108,900
  
                 
Stockholders’ equity
    
156,015
      
153,693
  
Non-controlling interests
    
6,140
      
6,507
  
Total equity
    
162,155
      
160,200
  
     
 
      
 
  
Total liabilities and equity
    
378,835
      
373,792
  
 
- 3 -


ITURAN LOCATION AND CONTROL LTD.
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
   
US dollars
  
Three months period
 ended March 31,
  
(in thousands except per share data)
  
2019
    
2018
  
   
(unaudited)
  
Revenues:
            
Telematics services
    
53,159
      
45,699
  
Telematics products
    
20,445
      
17,379
  
     
73,604
      
63,078
  
Cost of revenues:
                
Telematics services
    
22,577
      
16,081
  
Telematics products
    
16,390
      
15,540
  
     
38,967
      
31,621
  
                 
Gross profit
    
34,637
      
31,457
  
Research and development expenses
    
3,751
      
1,160
  
Selling and marketing expenses
    
2,930
      
2,852
  
General and administrative expenses
    
14,446
      
11,878
  
Other expenses, net
    
4
      
26
  
Operating income
    
13,506
      
15,541
  
Other expenses, net
    
(73
)
    
-
  
Financing income (expenses), net
    
(1,015
)
    
276
  
Income before income tax
    
12,418
      
15,817
  
Income tax expenses
    
(3,497
)
    
(4,657
)
Share in gains (losses) of affiliated companies ,net
    
(868
)
    
687
  
Net income for the period
    
8,053
      
11,847
  
Less: Net loss (income) attributable to non-controlling interest
    
4
      
(566
)
Net income attributable to the Company
    
8,057
      
11,281
  
                 
Basic and diluted earnings per share attributable to Company’s stockholders
    
0.38
      
0.54
  
                 
Basic and diluted weighted average number of shares outstanding (in thousands)
    
21,342
      
20,968
  
 
- 4 -


ITURAN LOCATION AND CONTROL LTD.
 
RECONCILIATION OF NON-GAAP RESULTS
   
US dollars
  
   
Three months period
 ended March 31,
  
(in thousands)
  
2019
    
2018
  
   
(unaudited)
  
             
GAAP Revenues
    
73,604
      
63,078
  
Valuation adjustment on acquired deferred revenue
    
1,019
      
-
  
Non –GAAP revenue
    
74,623
      
63,078
  
                 
GAAP gross profit
    
34,637
      
31,457
  
Gross profit adjustment
    
1,239
      
-
  
Non –GAAP gross profit
    
35,876
      
31,457
  
                 
GAAP operating income
    
13,506
      
15,541
  
Other  profit adjustments
    
1,546
      
-
  
Amortization
    
1,100
      
-
  
    Non-GAAP operating income
    
16,152
      
15,541
  
                 
Depreciation and amortization
    
4,699
      
3,623
  
Adjusted EBITDA
    
20,851
      
19,164
  
                 
Net income attribute to the company's shareholders
    
8,057
      
11,281
  
Operation income adjustment
    
2,646
      
-
  
Non-GAAP net income attributable to Iturans' shareholders
    
10,703
      
11,281
  
 
- 5-


ITURAN LOCATION AND CONTROL LTD.
 
Summary of NON –GAAP Financial Information
   
US dollars
  
 
  
Three months period
 ended March 31,
  
(in thousands except per share data)
  
2019
    
2018
  
   
(unaudited)
  
             
revenue
    
74,623
      
63,078
  
Gross profit
    
35,876
      
31,457
  
Operation income
    
16,152
      
15,541
  
Net income attribute to shareholders
    
10,703
      
11,281
  
Adjusted EBITDA
    
20,851
      
19,164
  
                 
Basic and diluted earnings per share
    
0.50
      
0.54
  
 
- 6 -

ITURAN LOCATION AND CONTROL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

   
US dollars
  
   
Three months period
 ended March 31,
  
(in thousands)
  
2019
    
2018
  
   
(unaudited)
  
Cash flows from operating activities
            
Net income for the period
    
8,053
      
11,847
  
Adjustments to reconcile net income to net cash from operating activities:
                
Depreciation and  amortization
    
6,115
      
3,623
  
Interest on long term credit
    
(13
)
    
-
  
Loss (gains) in respect of trading marketable securities
    
28
      
(196
)
Increase (decrease) in liability for employee rights upon retirement, net
    
274
      
(128
)
Share in losses (gains) of affiliated company, net
    
868
      
(687
)
Deferred income taxes
    
84
      
1,512
  
Capital losses  from sale of property and equipment, net
    
6
      
52
  
Decrease (increase) in accounts receivable
    
4,929
      
(4,117
)
increase in other current and non-current assets
    
(301
)
    
(4,199
)
Decrease (increase) in inventories
    
1,292
      
(570
)
Operating lease right-of-use assets
    
1,193
      
-
  
Increase (decrease) in accounts payable
    
(1,596
)
    
382
  
Decrease in deferred revenues
    
(2,548
)
    
(336
)
Increase (decrease) in other current and non-current liabilities
    
(2,778
)
    
353
  
Operating lease liabilities
    
(1,193
)
    
-
  
Increase in obligasion for purechase non-controling interests
    
494
      
-
  
Net cash provided by operating activities
    
14,907
      
7,536
  
Increase in funds in respect of employee rights upon
                
retirement, net of withdrawals
    
(75
)
    
358
  
Capital expenditures
    
(6,930
)
    
(6,618
)
Investments in other companies
    
(13
)
    
-
  
Repayment of  loans from affiliated companies
    
-
      
2,145
  
Proceed from long term deposit
    
(78
)
    
(91
)
Sale of marketable securities,net
    
384
      
50
  
Proceeds from sale of property and equipment
    
27
      
203
  
Net cash used in investment activities
    
(6,685
)
    
(3,953
)
                 
Cash flows from financing activities
                
Short term credit from banking institutions, net
    
(1,818
)
    
(41
)
Dividend paid
    
(4,909
)
    
(5,032
)
Dividend paid to non-controlling interest
    
(538
)
    
(425
)
Net cash used in  in financing activities
    
(7,265
)
    
(5,498
)
Effect of exchange rate changes on cash and cash equivalents
    
694
      
(257
)
Net Increase (decrease) in cash and cash equivalents
    
1,651
      
(2,172
)
Balance of cash and cash equivalents at beginning of period
    
51,398
      
36,906
  
Balance of cash and cash equivalents at end of period
    
53,049
      
34,734
  
 
Supplementary information on financing and investing activities not involving cash flows:
In March 2019, the Company declared a dividend in the amount of US$ 5 million.  The dividend was paid in April 2019
 
- 7 -