EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1

Exhibit 99.1
ITURAN LOCATION AND CONTROL LTD. PRESENTS
RESULTS FOR THE THIRD QUARTER OF 2021

AZOUR, Israel – November 16, 2021 – Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the third quarter of 2021.

Highlights of the third quarter of 2021
25,000 net subscriber growth: net increase in aftermarket of 21,000 and net increase in OEM of 4,000;
Revenues of $65.7 million, an increase of 9% year-over-year;
Net income was $7.3 million, compared with $9.3 million last year;
Adjusted net income (excluding the non-cash financial impact related to SaverOne’s change in public market value)  was $9.6 million versus $6.0 million last year;
EBITDA of $18.5 million, up 23% year-over-year;
Generated $11.5 million in quarterly operating cash flow;
Declared dividend of $3 million; Continued share buy-back program totaling $1.9 million;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “We are very pleased with our results, especially with the continued strong growth in our after-market subscriber base and the return to growth in the OEM base. Furthermore, the strong operating leverage in our business model enabled us to bring a 9% increase in revenue to a 23% increase in EBITDA.”

Continued Mr. Sheratzky, “As the global recovery continues, we see a solid recovery in car sales in our markets which is leading to increased demand for our services. In particular, the Corona slowdown created many new opportunities for us, one of which we identified was the second-hand car market. We are providing our services to some key financing providers in Latin America, allowing them to reduce the loan risk by tracking the car and the driver behaviour. We see this as a growth engine that could significantly accelerate our subscriber growth in the second half of 2022 and beyond.  More generally, we continue to focus on enhancing our growth by adding additional offerings and services, in particular, by taking advantage of the synergies across all our geographies. Looking ahead, our recent above-average subscriber-base growth throughout 2021 positions us exceptionally well to maintain our profitable growth in 2022 and beyond.”

Third quarter 2021 Results

Revenues for the third quarter of 2021 were $65.7 million, an increase of 9% compared with revenues of $60.3 million in the third quarter of 2020.

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


Revenues from subscription fees were $48.3 million, an increase of 9% over third quarter 2020 revenues.

The subscriber base amounted to 1,837,000 as of September 30, 2021. This represents an increase of 25,000 net over that of the end of the prior quarter, and an increase of 85,000 since the end of the third quarter of last year. During the quarter, there was both an increase of 21,000 in the aftermarket subscriber base and an increase of 4,000 in the OEM subscriber base.

Product revenues were $17.4 million, an increase of 10% compared with that of the third quarter of 2020.

Gross profit for the quarter was $31.9 million (48.5% of revenues), a 16% increase compared with gross profit of $27.4 million (45.4% of revenues) in the third quarter of 2020.

The gross margin in the quarter on subscription revenues was 55.8%, compared with 54.9% in the third quarter of 2020. The gross margin on products was 28.3% in the quarter, compared with 18.6% in the third quarter of 2020.

Operating income for the quarter was $13.9 million (21.1% of revenues), an increase of 32% compared with an operating income of $10.5 million (17.5% of revenues) in the third quarter of last year.

EBITDA for the quarter was $18.5 million (28.1% of revenues), an increase of 23% compared with an EBITDA of $15.0 million (24.9% of revenues) in the third quarter of last year.  

Financial expense for the quarter was $2.7 million compared with a financial income of $2.8 million income in the third quarter of last year. The financial expenses were impacted significantly by the change in market capitalisation on the Tel Aviv Stock Exchange of Saver-One, one of Ituran’s early-stage mobility investments.

Net income for the third quarter of 2021 was $7.3 million (11.1% of revenues) or diluted earnings per share of $0.35, compared with $9.3 million (15.4% of revenues) or diluted earnings per share of $0.45.

Adjusted net income for the third quarter of 2021, which excludes the non-cash financial impact related to Saver One was $9.6 million (or 14.6% of revenues) or diluted earnings per share of $0.46 compared with $6.0 million (or 10.0% of revenues) or diluted earnings per share of $0.29.

Cash flow from operations for the third quarter of 2021 was $11.5 million.

As of September 30, 2021, the Company had cash, including marketable securities, of $67.0 million and debt of $34.6 million, amounting to a net cash of $32.4 million. This is compared with cash, including marketable securities, of $78.8 million and debt of $54.5 million, amounting to a net cash of $24.3 million, as of December 31, 2020.


Dividend

For the third quarter of 2021, a dividend of $3.0 million was declared. This is in line with the Board’s current policy of issuing at least $3 million on a quarterly basis.

Buy Back

On August 4, 2021, Ituran announced that it Board of Directors made the decision to continue executing on the $19 million remainder of a $25 million share buy-back program that was first announced in 2019. The buy back program commenced on August 25, 2021. The share repurchases, if any, are funded by available cash and repurchases of Ituran's ordinary shares under SEC Rule10b-18 terms.

Under the renewed program, Ituran purchased 71,000 shares for a total of $1.9 million until the end of September 30, 2021.

Conference Call Information

The Company will also be hosting a conference call later today, November 16, 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 0609
INTERNATIONAL Dial-in Number:  +972 3 918 0609
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) +1 212 378 8040
 


 
 ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of September 30, 2021



ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of September 30, 2021

Table of Contents
 
 
Page
Condensed Consolidated Interim Financial Statements:
 
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4
5
 
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ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

   
US dollars
 
   
September 30,
   
December 31,
 
(in thousands)
 
2021
   
2020
 
   
(unaudited)
       
             
Current assets
           
Cash and cash equivalents
   
62,947
     
72,183
 
Investments in marketable securities
   
4,015
     
6,663
 
Accounts receivable (net of allowance for doubtful accounts)
   
45,972
     
39,343
 
Other current assets
   
35,668
     
38,624
 
Inventories
   
26,334
     
22,622
 
     
174,936
     
179,435
 
                 
Non- Current investments and other assets
               
Investments in affiliated companies
   
1,043
     
908
 
Investments in other companies
   
1,543
     
1,263
 
Other non-current assets
   
3,353
     
2,953
 
Deferred income taxes
   
12,135
     
11,910
 
Funds in respect of employee rights upon retirement
   
15,374
     
13,558
 
     
33,448
     
30,592
 
                 
Property and equipment, net
   
34,739
     
37,653
 
                 
Operating lease right-of-use assets, net
   
3,476
     
5,548
 
                 
Intangible assets, net
   
16,811
     
19,382
 
                 
Goodwill
   
39,844
     
39,862
 
                 
Total assets
   
303,254
     
312,472
 

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ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

   
US dollars
 
   
September 30,
   
December 31,
 
(in thousands)
 
2021
   
2020
 
   
(unaudited)
       
Current liabilities
           
Credit from banking institutions
   
17,659
     
20,388
 
Accounts payable
   
21,441
     
19,716
 
Deferred revenues
   
24,640
     
24,351
 
Obligation to purchase non-controlling interests
   
11,000
     
10,595
 
Other current liabilities
   
40,740
     
37,677
 
     
115,480
     
112,727
 
                 
Non- Current liabilities
               
Long term loan
   
16,911
     
34,068
 
Liability for employee rights upon retirement
   
21,221
     
19,715
 
Deferred income taxes
   
2,091
     
2,494
 
Deferred revenues
   
8,603
     
8,536
 
Others non-current liabilities
   
2,355
     
2,341
 
Operating lease liabilities, non-current
   
1,169
     
2,692
 
     
52,350
     
69,846
 
                 
Stockholders’ equity
   
130,837
     
127,192
 
Non-controlling interests
   
4,587
     
2,707
 
Total equity
   
135,424
     
129,899
 
                 
Total liabilities and equity
   
303,254
     
312,472
 

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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)
 
2021
   
2020
   
2021
   
2020
 
   
(unaudited)
   
(unaudited)
 
Revenues:
                       
Telematics services
   
140,873
     
137,185
     
48,311
     
44,478
 
Telematics products
   
59,655
     
44,829
     
17,390
     
15,851
 
     
200,528
     
182,014
     
65,701
     
60,329
 
                                 
Cost of revenues:
                               
Telematics services
   
63,354
     
60,553
     
21,364
     
20,052
 
Telematics products
   
44,118
     
35,458
     
12,466
     
12,900
 
     
107,472
     
96,011
     
33,830
     
32,952
 
                                 
Gross profit
   
93,056
     
86,003
     
31,871
     
27,377
 
Research and development expenses
   
10,168
     
9,959
     
3,327
     
2,654
 
Selling and marketing expenses
   
8,877
     
8,428
     
2,997
     
2,529
 
General and administrative expenses
   
33,725
     
37,635
     
11,720
     
11,636
 
Impairment of goodwill
   
-
     
10,508
     
-
     
-
 
Impairment of intangible assets and other expenses (income), net
   
(152
)
   
3,712
     
(66
)
   
12
 
Operating income
   
40,438
     
15,761
     
13,893
     
10,546
 
Other income (expense), net
   
(3
)
   
5
     
-
     
2
 
Financing income (expense), net
   
(4,716
)
   
3,651
     
(2,734
)
   
2,788
 
Income before income tax
   
35,719
     
19,417
     
11,159
     
13,336
 
Income tax expenses
   
(9,055
)
   
(8,595
)
   
(3,337
)
   
(3,778
)
Share in gains (losses) of affiliated companies ,net
   
(39
)
   
(858
)
   
(18
)
   
29
 
Net income for the period
   
26,625
     
9,964
     
7,804
     
9,587
 
Less: Net income attributable to non-controlling interest
   
(1,944
)
   
(663
)
   
(492
)
   
(320
)
Net income attributable to the Company
   
24,681
     
9,301
     
7,312
     
9,267
 
                                 
Basic and diluted earnings per share attributable to Company’s stockholders
   
1.19
     
0.45
     
0.35
     
0.45
 
                                 
Basic and diluted weighted average number of shares outstanding (in thousands)
   
20,809
     
20,813
     
20,799
     
20,813
 

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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)
 
2021
   
2020
   
2021
   
2020
 
   
(unaudited)
   
(unaudited)
 
Cash flows from operating activities
                       
Net income for the period
   
26,625
     
9,964
     
7,804
     
9,587
 
                                 
Adjustments to reconcile net income to net cash from operating activities:
                               
                                 
Depreciation and amortization
   
13,329
     
14,310
     
4,594
     
4,484
 
Interest and exchange rate differences on loans
   
-
     
(423
)
   
(4
)
   
119
 
Losses (gain) in respect of trading marketable securities
   
2,609
     
(11
)
   
2,244
     
5
 
Gain in respect of investments in other companies
   
-
     
(4,948
)
   
-
     
(3,424
)
Increase in liability for employee rights upon retirement
   
1,568
     
1,350
     
390
     
455
 
Share in losses (gains) of affiliated companies, net
   
39
     
858
     
18
     
(29
)
Deferred income taxes
   
(794
)
   
(1,244
)
   
88
     
(875
)
Capital loss (gain) on sale of property and equipment, net
   
(91
)
   
118
     
(38
)
   
31
 
Decrease (increase) in accounts receivable
   
(6,991
)
   
1,505
     
(458
)
   
(1,982
)
Decrease in other current assets
   
3,008
     
4,647
     
1,976
     
1,698
 
Decrease (increase) in inventories
   
(4,088
)
   
1,825
     
(5,317
)
   
1,596
 
Increase in accounts payable
   
1,825
     
198
     
817
     
2,443
 
Decrease (increase) in deferred revenues
   
499
     
(5,521
)
   
(1,364
)
   
(1,811
)
Increase in other current and non-current liabilities
   
1,524
     
7,453
     
781
     
1,275
 
Impairment of goodwill
   
-
     
10,508
     
-
     
-
 
Impairment of other intangible assets
   
-
     
3,661
     
-
     
-
 
Increase (decrease) in obligation for purchase non-controlling interests
   
686
     
(680
)
   
-
     
18
 
Net cash provided by operating activities
   
39,748
     
43,570
     
11,531
     
13,590
 
                                 
Cash flows from investment activities
                               
Increase in funds in respect of employee rights upon retirement, net of withdrawals
   
(1,857
)
   
(790
)
   
(353
)
   
(427
)
Capital expenditures
   
(11,246
)
   
(7,506
)
   
(4,427
)
   
(1,927
)
Investments in affiliated and other companies
   
(420
)
   
(545
)
   
-
     
(53
)
Sale of marketable securities, net
   
-
     
269
     
-
     
269
 
Proceeds from (Investments in) deposits
   
(116
)
   
(43
)
   
(37
)
   
(8
)
Proceeds from sale of property and equipment
   
697
     
223
     
69
     
27
 
Net cash used in investment activities
   
(12,942
)
   
(8,392
)
   
(4,748
)
   
(2,119
)
                                 
Cash flows from financing activities
                               
Short term credit from banking institutions, net
   
(149
)
   
2,614
     
(66
)
   
(46
)
Repayment of long term loan
   
(19,173
)
   
(13,353
)
   
(4,191
)
   
(4,551
)
Purchase of shares from minority shareholders
   
-
     
(750
)
   
-
     
-
 
Dividend paid
   
(12,904
)
   
(9,967
)
   
(2,804
)
   
-
 
Dividend paid to non-controlling interest
   
(424
)
   
(1,461
)
   
(39
)
   
(1,461
)
Acquisition of company shares purchased by a wholly owned subsidiary
   
(1,870
)
   
-
     
(1,870
)
   
-
 
Net cash used in financing activities
   
(34,520
)
   
(22,917
)
   
(8,970
)
   
(6,058
)
                                 
Effect of exchange rate changes on cash and cash equivalents
   
(1,522
)
   
(4,389
)
   
(442
)
   
(359
)
                                 
Net increase (decrease) in cash and cash equivalents
   
(9,236
)
   
7,872
     
(2,629
)
   
5,054
 
Balance of cash and cash equivalents at beginning of the period
   
72,183
     
53,964
     
65,576
     
56,782
 
Balance of cash and cash equivalents at end of the period
   
62,947
     
61,836
     
62,947
     
61,836
 

In August 2021, the Company declared a dividend in an amount of US$ 3 million. The dividend was paid in October 2021.

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