EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1
ITURAN LOCATION AND CONTROL LTD. PRESENTS
RESULTS FOR THE FOURTH QUARTER & FULL YEAR OF 2020

AZOUR, Israel – March 3, 2021 – Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the fourth quarter and full year of 2020.

Highlights of full year 2020
•
Number of subscribers reached 1,768,000 at year-end;
•
Revenue of $245.6 million;
•
Adjusted EBITDA of $60.8 million;
•
Generated $60.1 million in full year operating cash flow;
•
Year-end net cash and marketable securities of $24.3 million;

Highlights of the fourth quarter of 2020
•
Improved results versus the prior quarter, as the Company continues to successfully overcome some of the impacts of the  Covid-19 pandemic;
•
Net increase in aftermarket subscribers of 21,000 and net decrease in OEM subscribers of 5,000;
•
Revenue of $63.6 million, up 5.4% sequentially;
•
Adjusted EBITDA of $16.6 million, up 10% sequentially;
•
Generated $16.5 million in quarterly operating cash flow;
•
Declared dividend of $10 million;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “We are very happy with the continued improvement in our results which outperformed our expectations, particularly the sequential growth in revenue and EBITDA. We are also pleased with our highest-ever full year operating cash flow of $60 million. This is despite a difficult year for everyone, demonstrating the resilience and stability of our business even in the toughest of times.  Our improving financial performance into the fourth quarter as well as our after-market net subscriber growth of 21,000, a growth rate we typically expect in normal times, demonstrate that Ituran is well on the way to recovery. We expect the positive trend to continue in the quarters ahead.”

Mr. Sheratzky continued, “Given the improvements in our business and the strong cash generation, the Board decided to renew our dividend payments, while maintaining a level of conservatism, as long as the pandemic impact continues globally. We look forward to sharing the ongoing fruits of our success with our shareholders.”

Mr. Sheratzky concluded, “I am confident that Ituran is emerging from this period in a much stronger position with a platform for long-term sustainable and profitable growth for the years ahead.”

Fourth Quarter 2020 Results

Revenues for the fourth quarter of 2020 were $63.6 million, a decrease of 3% compared with revenues of $65.5 million in the fourth quarter of 2019.

The revenue level was impacted by the continuing Covid-19 pandemic on new car sales in the regions in which Ituran operates. Furthermore, the higher average level of the US dollar exchange rate versus the Brazilian real during the quarter compared with the same period last year, reduced the overall revenue level in US dollar terms. In local currency terms, fourth quarter revenue increased by 2.6% year-over-year.

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

Revenues from subscription fees were $45.8 million, a decrease of 8% over fourth quarter 2019 revenues. In local currency terms, subscription fees were at the same level as that of the fourth quarter last year.

The subscriber base amounted to 1,768,000 as of December 31, 2020. This represents an increase of 16,000 net over that of the end of the prior quarter. During the quarter, there was an increase of 21,000 in the aftermarket subscriber base and a decline of 5,000 in the OEM subscriber base.

Product revenues were $17.9 million, an increase of 12.7% compared with that of the fourth quarter of 2019.

Gross profit for the quarter was $29.5 million (46.4% of revenues), a 3% decrease compared with gross profit of $30.5 million (46.6% of revenues) in the fourth quarter of 2019.

The gross margin in the quarter on subscription revenues was 54.5%, compared with 54.4% in the fourth quarter of 2019. The gross margin on products was 25.6%, compared with 22.2% in the fourth quarter of 2019.

Operating income for the quarter was $12.1 million (19.0% of revenues) compared with an operating loss of $16.4 million, in the fourth quarter of last year.

It is noted that fourth quarter 2019 operating expenses included an impairment loss of $26.2 million related to the acquisition of Road Track Holdings. Excluding this impairment loss, the operating profit in the fourth quarter of 2019 was $9.8 million (15.0% of revenues) and compared with this figure, operating income in the fourth quarter of 2020 grew by 23%.

In local currency terms and excluding last year’s fourth quarter impairment, the operating income would have grown by 33%.

EBITDA for the quarter was $16.6 million (26.1% of revenues) compared with an EBITDA loss of $10.7 million in the fourth quarter of last year. Excluding the above-mentioned fourth quarter 2019 impairment, EBITDA for that quarter was $15.5 million (24.0% of revenues). Therefore EBITDA for the current quarter grew by 7%. In local currency terms, the EBITDA would have increased by 17% year over year.

Financial expense for the quarter was $2.2 million compared with a financial income of $3.3 million in the fourth quarter of last year. The financial expense in the quarter was impacted by non-cash expenses, primarily due to exchange rate changes on Ituran’s US dollar cash holdings in Israel as well as the change in market value of SaverOne, while the financial income last year was as a result of the change in obligation to purchase the non-controlling interest of Road Track in the fourth quarter of 2019.

Net income for the fourth quarter of 2020 was $6.8 million (10.7% of revenues) or earnings per share of $0.33. This is compared to a net loss of $15.3 million and loss per share of $0.73 in the fourth quarter of 2019.

Cash flow from operations for the fourth quarter of 2020 was $16.5 million.

Full Year 2020 Results

Revenues for 2020 was $245.6 million, 12% below the $279.3 million reported in 2019.

The higher average level of the US dollar exchange rate versus the Brazilian real during the 2020 versus 2019 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, revenue decreased by 6% year over year.

74% of revenues were from location-based service subscription fees and 26% were from product revenues.

Revenues from subscription fees were $182.9 million, representing a decrease of 11% over the same period last year. In local currency terms, subscription fees were at a similar level to those of 2019.

Product revenues were $62.7 million, representing a decrease of 16% compared with the same period last year.

Gross profit for the year was $115.5 million (47.0% of revenues). This represents a decrease of 11% compared with gross profit of $130.5 million (46.7% of revenues) in 2019. The gross margin in the year on subscription revenues was 55.5%, compared with 56.0% in 2019. The gross margin on products was 22.2%, compared with 21.4% in 2019.

Operating profit for 2020 was $27.8 million (11.3% of revenues) an increase of 23% compared with operating profit of $22.7 million (8.1% of revenues) in 2019. In local currency terms, the operating profit increased by 38% year-over-year.  Excluding the impairments in both 2019 and 2020, the operating profit in local currency terms decreased by 7%.

EBITDA for 2020 was $46.7 million (19.0% of revenues), an increase of 3% compared to $45.5 million (16.3% of revenues) in 2019. In local currency terms, the EBITDA increased by 16% year-over-year. Excluding the impairments in both 2019 and 2020, the adjusted EBITDA in local currency terms decreased by 7% .

Net income in 2020 was $16.1 million (6.6% of revenues) or fully diluted earnings per share of $0.77, compared with net income of $6.9 million (2.5% of revenues) or fully diluted earnings per share of $0.33 in 2019.

Cash flow from operations for the year was $60.1 million.

As of December 31, 2020, the Company had cash, including marketable securities, of $78.8 million and debt of $54.5 million, amounting to a net cash of $24.3 million. This is compared with cash, including marketable securities, of $54.3 million and debt of $67.9 million, amounting to a net debt of $13.6 million, as of December 31, 2019.

Dividend

For the fourth quarter of 2020, a dividend of $10.0 million was declared.

The Board decided to restart dividend payments to shareholders and resumed a new policy of issuing at least $3 million on a quarterly basis.

Conference Call Information

The Company will also be hosting a conference call later today, March 3, 2021 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: 1 866 860 9642
ISRAEL Dial-in Number: 03 918 0610
CANADA Dial-in Number: 1 866 485 2399
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.

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, as well as factors related to the global COVID-19 pandemic.

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 approximately 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 December 31, 2020

ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of December 31, 2020

Table of Contents
 
 
Page
   
Condensed Consolidated Interim Financial Statements:
  
   
2-3
   
4
   
5
 
=======================
=============

ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS

   
US dollars
  
   
December 31,
  
(in thousands)
  
2020
    
2019
  
             
Current assets
      
       
Cash and cash equivalents
    
72,183
      
53,964
  
Investments in marketable securities
    
6,663
      
358
  
Accounts receivable (net of allowance for doubtful accounts)
    
39,343
      
45,090
  
Other current assets
    
38,624
      
49,201
  
Inventories
    
22,622
      
25,537
  
                 
     
179,435
      
174,150
  
                 
Long-term investments and other assets
                
Investments in affiliated companies
    
908
      
1,666
  
Investments in other companies
    
1,263
      
3,260
  
Other non-current assets
    
2,953
      
3,365
  
Deferred income taxes
    
11,910
      
10,385
  
Funds in respect of employee rights upon retirement
    
13,558
      
11,476
  
                 
     
30,592
      
30,152
  
                 
Property and equipment, net
    
37,653
      
48,866
  
                 
Operating lease right-of-use assets, net
    
5,548
      
12,626
  
                 
Intangible assets, net
    
19,382
      
23,355
  
                 
Goodwill
    
39,862
      
50,086
  
                 
Total assets
    
312,472
      
339,235
  

- 2 -
ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

   
US dollars
  
   
December 31,
  
(in thousands)
  
2020
    
2019
  
             
Current liabilities
            
Credit from banking institutions
    
20,388
      
18,110
  
Accounts payable
    
19,716
      
22,656
  
Deferred revenues
    
24,351
      
29,146
  
Obligation to purchase non-controlling interests
    
10,595
      
-
  
Other current liabilities
    
37,677
      
31,153
  
     
112,727
      
101,065
  
Long-term liabilities
                
Long term loan
    
34,068
      
49,803
  
Liability for employee rights upon retirement
    
19,715
      
17,000
  
Deferred income taxes
    
2,494
      
2,867
  
Deferred revenues
    
8,536
      
9,763
  
Operating lease liabilities, non-current
    
2,692
      
10,839
  
Others non-current liabilities
    
2,341
      
241
  
Obligation to purchase non-controlling interests
    
-
      
11,743
  
     
69,846
      
102,256
  
                 
Stockholders’ equity
    
127,192
      
129,330
  
Non-controlling interests
    
2,707
      
6,584
  
Total equity
    
129,899
      
135,914
  
                 
Total liabilities and equity
    
312,472
      
339,235
  

- 3 -
ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

   
US dollars
    
US dollars
  
(in thousands
  
Year ended
December 31,
    
Three months period
ended December 31 ,
  
except per share data)
  
2020
    
2019
    
2020
    
2019
  
                         
Revenues:
                        
Telematics services
    
182,944
      
204,728
      
45,759
      
49,642
  
Telematics products
    
62,683
      
74,604
      
17,854
      
15,849
  
     
245,627
      
279,332
      
63,613
      
65,491
  
                                 
Cost of revenues:
                                
Telematics services
    
81,365
      
90,158
      
20,812
      
22,661
  
Telematics products
    
48,747
      
58,656
      
13,289
      
12,338
  
     
130,112
      
148,814
      
34,101
      
34,999
  
                                 
Gross profit
    
115,515
      
130,518
      
29,512
      
30,492
  
Research and development expenses
    
12,767
      
13,913
      
2,808
      
3,578
  
Selling and marketing expenses
    
11,014
      
12,778
      
2,586
      
3,185
  
General and administrative expenses
    
49,705
      
55,166
      
12,070
      
14,011
  
Impairment of goodwill
    
10,508
      
12,292
      
-
      
12,292
  
Impairment of intangible assets and Other expenses (income), net
    
3,690
      
13,715
      
(22
)
    
13,787
  
Operating income (loss)
    
27,831
      
22,654
      
12,070
      
(16,361
)
Other income (expenses), net
    
(272
)
    
(26
)
    
(277
)
    
11
  
Financing income (expenses), net
    
1,480
      
576
      
(2,171
)
    
3,277
  
Income (loss) before income tax
    
29,039
      
23,204
      
9,622
      
(13,073
)
Income tax expenses
    
(10,856
)
    
(12,234
)
    
(2,261
)
    
(1,365
)
Share in gains (losses) of affiliated companies, net
    
(842
)
    
(3,203
)
    
16
      
(422
)
Net income (loss) for the period
    
17,341
      
7,767
      
7,377
      
(14,860
)
Less: Net income attributable to non-controlling interest
    
(1,218
)
    
(878
)
    
(555
)
    
(401
)
Net income (loss) attributable to the Company
    
16,123
      
6,889
      
6,822
      
(15,261
)
                                 
Basic and diluted earnings (loss) per share attributable to Company’s stockholders
    
0.77
      
0.33
      
0.33
      
(0.73
)
                                 
Basic and diluted weighted average number of shares outstanding (in thousands)
    
20,813
      
21,037
      
20,813
      
20,875
  

- 4 -
ITURAN LOCATION AND CONTROL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS

   
US dollars
    
US dollars
  
   
Year ended
December 31,
    
Three months period
ended December 31 ,
  
(in thousands)
  
2020
    
2019
    
2020
    
2019
  
Cash flows from operating activities
                        
Net income for the period
    
17,341
      
7,767
      
7,377
      
(14,860
)
Adjustments to reconcile net income to net cash from operating activities:
                                
Depreciation and amortization
    
18,831
      
22,843
      
4,521
      
5,633
  
Interest and exchange rate differences on loans
    
(266
)
    
26
      
157
      
3
  
Loss (gain) in respect of  marketable securities and other investments
    
(4,101
)
    
241
      
858
      
31
  
Increase (decrease) in liability for employee rights upon retirement
    
1,445
      
1,094
      
95
      
(200
)
Share in losses in (gains of) affiliated company, net
    
842
      
3,203
      
(16
)
    
422
  
Deferred income taxes
    
(2,158
)
    
(2,246
)
    
(914
)
    
(2,498
)
Capital losses  on sale of property and equipment, net
    
199
      
112
      
81
      
65
  
Decrease in accounts receivable
    
4,496
      
10,704
      
2,991
      
4,178
  
Decrease (increase) in other current and non-current assets
    
3,064
      
2,021
      
(1,583
)
    
906
  
Decrease in inventories
    
3,120
      
3,815
      
1,295
      
197
  
Increase (decrease) in accounts payable
    
(658
)
    
(1,125
)
    
(856
)
    
2,434
  
Increase (decrease) in deferred revenues
    
(5,367
)
    
(7,392
)
    
154
      
(302
)
Decrease in obligation for purchase non-controlling interests
    
(848
)
    
(3,215
)
    
(168
)
    
(4,182
)
Impairment of goodwill
    
10,508
      
12,292
      
-
      
12,292
  
Impairment of other intangible assets
    
3,661
      
13,862
      
-
      
13,862
  
Increase (decrease) in other current and non-current liabilities
    
9,959
      
(4,323
)
    
2,506
      
(982
)
                                 
Net cash provided by operating activities
    
60,068
      
59,679
      
16,498
      
16,999
  
                                 
Cash flows from investment activities
                                
Increase in funds in respect of employee rights upon retirement, net of withdrawals
    
(1,148
)
    
(1,191
)
    
(358
)
    
(74
)
Capital expenditures
    
(10,234
)
    
(18,310
)
    
(2,728
)
    
(4,652
)
Investments in affiliated and other companies
    
(557
)
    
(284
)
    
(12
)
    
(100
)
Proceed from (repayment of) long term deposit
    
(32
)
    
(16
)
    
11
      
67
  
Sale of (investment in) marketable securities
    
269
      
1,298
      
-
      
(156
)
Proceeds from sale of property and equipment
    
223
      
216
      
-
      
13
  
                                 
Net cash used in investment activities
    
(11,479
)
    
(18,287
)
    
(3,087
)
    
(4,902
)
                                 
Cash flows from financing activities
                                
Repayment of long term credit
    
(18,157
)
    
(8,938
)
    
(4,804
)
    
(4,502
)
Short term credit from banking institutions, net
    
1,186
      
(2,167
)
    
(1,428
)
    
(2,554
)
Purchase of shares from non-controlling interests
    
(750
)
    
-
      
-
      
-
  
Acquisition of company shares purchased by a wholly owned subsidiary
    
-
      
(6,001
)
    
-
      
(2,500
)
Dividend paid
    
(9,967
)
    
(19,848
)
    
-
      
(5,050
)
Dividend paid to non-controlling interests
    
(1,761
)
    
(1,973
)
    
(300
)
    
(416
)
                                 
Net cash  used in  in financing activities
    
(29,449
)
    
(38,927
)
    
(6,532
)
    
(15,022
)
                                 
Effect of exchange rate changes on cash and cash equivalents
    
(921
)
    
101
      
3,468
      
635
  
Net Increase (decrease) in cash and cash equivalents
    
18,219
      
2,566
      
10,347
      
(2,290
)
Balance of cash and cash equivalents at beginning of period
    
53,964
      
51,398
      
61,836
      
56,254
  
Balance of cash and cash equivalents at end of period
    
72,183
      
53,964
      
72,183
      
53,964
  

Supplementary information on financing and investing activities not involving cash flows:
During 2020, one of the Company's subsidiary declare a dividend that include an amount of US$ 3.4 million to non-controlling interests.

- 5 -