EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1


ITURAN PRESENTS ITS FIRST QUARTER 2023 RESULTS

Net subscriber growth in Q1 2023 of 49,000
Expects current strong subscriber net adds to contribute to accelerated revenue growth in 2023

AZOUR, Israel – May 24, 2023 – Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the first quarter of 2023.

Highlights of the first quarter of 2023

•
Net subscriber growth of 49,000: net increase in aftermarket of 44,000 and net increase in OEM of 5,000;

•
Revenues of $79.5 million, an increase of 10% year-over-year;

•
Net income of $11.4 million, an increase of 30% year-over-year;

•
EBITDA of $20.8 million, up 8% year-over-year;

•
Generated $17.4 million in quarterly operating cash flow;

•
Declared dividend of $3 million and continued share buy-back program totaling $1.2 million in the quarter;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “We are very pleased with the results of the first quarter of 2023. The year has begun on a strong note and the accelerated subscriber growth we witnessed last year is starting to make its mark on our financial results. We experienced record subscriber revenues in the quarter with record subscriber gross margins and also saw our highest quarterly net income and EBITDA in over four years. Our success stems from introducing valuable new products and services that cater to our customer’s mobility needs, while leveraging the synergies of our 2 million-plus ongoing subscribers across all the regions in which we operate.”

“We are seeing an increase in interest in Latin America from car manufacturers, as well as from financing firms. We are increasingly optimistic for the upcoming quarters and expect that the positive trends we are currently experiencing will continue through 2023 and beyond.”

First Quarter 2023 Results

Revenues for the first quarter of 2023 were $79.5 million, an increase of 10.3% compared with revenues of $72.1 million in the first quarter of 2022.

70% of revenues were from location-based service subscription fees and 30% were from product revenues.

Revenues from subscription fees were $55.8 million, an increase of 11% over the first quarter 2022 revenues.

The subscriber base amounted to 2,115,000 as of March 31, 2023. This represents an increase of 49,000 net over that of the end of the prior quarter, and a net increase of 191,000 year-over-year. During the quarter, there was an increase of 44,000 net in the aftermarket subscriber base and an increase of 5,000 net in the OEM subscriber base.

Product revenues were $23.7 million, an increase of 8% compared with that of the first quarter of last year.

Gross profit for the quarter was $36.7 million (46.2% of revenues), a 10% increase compared with gross profit of $33.3 million (46.2% of revenues) in the first quarter of last year.

The gross margin in the quarter on subscription revenues was 58.1%, compared with 55.9% in the first quarter of last year. The gross margin on products was 18.2% in the quarter, compared with 23.7% in the first quarter of last year.

Operating income for the quarter was $15.9 million (20.0% of revenues), an increase of 11% compared with an operating income of $14.4 million (19.9% of revenues) in the first quarter of last year.

EBITDA for the quarter was $20.8 million (26.2% of revenues), an increase of 8% compared with an EBITDA of $19.3 million (26.7% of revenues) in the first quarter of last year.

Financial expenses for the quarter were $0.2 million compared with financial expenses of $2.6 million in the first quarter of last year. In the first quarter of last year there was a large financial loss due to the devaluation of SaverOne, an early stage public company in which Ituran holds equity.

Net income for the first quarter of 2023 was $11.4 million (14.3% of revenues) or diluted earnings per share of $0.56, compared to $8.7 million (12.1% of revenues) or diluted earnings per share of $0.43 in the first quarter of last year.

Cash flow from operations for the first quarter of 2023 was $17.4 million.

On the balance sheet, as of March 31, 2023, the Company had cash, including marketable securities, of $33.5 million and debt of $9.2 million, amounting to a net cash of $24.3 million. This is compared with cash, including marketable securities, of $28.2 million and debt of $12.2 million, amounting to a net cash of $16.0 million, as of December 31, 2022.

Dividend

For the first quarter of 2023, a dividend of $3 million was declared.

Buy Back

On August 23, 2022, Ituran announced that its 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. On February 23, 2023, the Board of Directors made the decision to increase the buy back by a further $10 million.

In the first quarter, under the program, Ituran purchased 54,000 shares for a total of $1.2 million. There is remaining under the buy back program approximately $12 million, as of March 31, 2023.

Share repurchases, were funded by available cash and repurchases of Ituran's ordinary shares under SEC Rule10b-18 terms.

Conference Call Information

The Company will also be hosting a conference call later today, May 24, 2023 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 over 2 million subscribers using its location-based services with a market leading position in Israel and Latin America. Established in 1995, Ituran has approximately 2,700 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
  Ehud Helft
udi_m@ituran.com
  ituran@ekgir.com
Deputy CEO & VP Finance, Ituran
  EK Global  Investor Relations
(Israel) +972 3 557 1348
  (US) +1 212 378 8040
 
 ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of March 31, 2023

ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of March 31, 2023

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

CONDENSED CONSOLIDATED BALANCE SHEETS

   
US dollars
  
   
March 31,
    
December 31,
  
(in thousands)
  
2023
    
2022
  
   
(unaudited)
        
             
Current assets
            
Cash and cash equivalents
    
33,276
      
27,850
  
Investments in marketable securities
    
209
      
316
  
Accounts receivable (net of allowance for doubtful accounts)
    
47,990
      
45,821
  
Other current assets
    
52,382
      
48,156
  
Inventories
    
27,963
      
28,509
  
   
   
 
     
161,820
      
150,652
  
     

     

 
Non- Current investments and other assets
                
Investments in affiliated companies
    
1,143
      
1,188
  
Investments in other companies
    
1,730
      
1,779
  
Other non-current assets
    
3,789
      
3,129
  
Deferred income taxes
    
12,051
      
11,400
  
Funds in respect of employee rights upon retirement
    
15,118
      
15,146
  
   
   
 
     
33,831
      
32,642
  
                 
Property and equipment, net
    
42,969
      
45,598
  
                 
Operating lease right-of-use assets, net
    
8,678
      
9,905
  
     

     
 
Intangible assets, net
    
11,853
      
12,620
  
                 
Goodwill
    
39,411
      
39,510
  
     

     
 
Total assets
    
298,562
      
290,927
  

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ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

   
US dollars
  
   
March 31,
    
December 31,
  
(in thousands)
  
2023
    
2022
  
   
(unaudited)
        
Current liabilities
            
Credit from banking institutions
    
8,901
      
11,845
  
Accounts payable
    
23,903
      
21,937
  
Deferred revenues
    
23,105
      
21,783
  
Other current liabilities
    
38,719
      
37,407
  
   
   
 
     
94,628
      
92,972
  
                 
Non- Current liabilities
                
Long term loan
    
281
      
345
  
Liability for employee rights upon retirement
    
21,541
      
21,224
  
Deferred income taxes
    
1,534
      
1,534
  
Deferred revenues
    
14,283
      
13,036
  
Others non-current liabilities
    
2,110
      
2,071
  
Operating lease liabilities, non-current
    
5,847
      
6,886
  
   
   

 
     
45,596
      
45,096
  
     

     
 
Stockholders’ equity
    
152,539
      
145,797
  
Non-controlling interests
    
5,799
      
7,062
  
     

     
 
Total equity
    
158,338
      
152,859
  
     

     
 
Total liabilities and equity
    
298,562
      
290,927
  

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ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

   
US dollars
  

 
Three months period
ended March 31,
  
(in thousands except per share data)
  
2023
    
2022
  
   
(unaudited)
  
Revenues:
            
Telematics services
    
55,777
      
50,226
  
Telematics products
    
23,695
      
21,846
  
     
79,472
      
72,072
  
                 
Cost of revenues:
                
Telematics services
    
23,392
      
22,132
  
Telematics products
    
19,391
      
16,677
  
     
42,783
      
38,809
  
                 
Gross profit
    
36,689
      
33,263
  
Research and development expenses
    
4,138
      
4,140
  
Selling and marketing expenses
    
3,323
      
3,124
  
General and administrative expenses
    
13,273
      
11,712
  
Other income (expenses), net
    
43
      
(79
)
Operating income
    
15,912
      
14,366
  
Other income, net
    
21
      
-
  
Financing expenses, net
    
(195
)
    
(2,565
)
Income before income tax
    
15,738
      
11,801
  
Income tax expenses
    
(3,419
)
    
(2,464
)
Share in losses of affiliated companies ,net
    
(366
)
    
(43
)
Net income for the period
    
11,953
      
9,294
  
Less: Net income attributable to non-controlling interest
    
(598
)
    
(565
)
Net income attributable to the Company
    
11,355
      
8,729
  
                 
Basic and diluted earnings per share attributable to Company’s stockholders
    
0.56
      
0.43
  
                 
Basic and diluted weighted average number of shares outstanding (in thousands)
    
20,314
      
20,534
  

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ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

   
US dollars
  
   
Three months period
ended March 31,
  
(in thousands)
  
2023
    
2022
  
   
(unaudited)
  
Cash flows from operating activities
            
Net income for the period
    
11,953
      
9,294
  
Adjustments to reconcile net income to net cash from operating activities:
                
Depreciation and  amortization
    
4,905
      
4,907
  
Loss in respect of trading marketable securities
    
1
      
2,350
  
Increase in liability for employee rights upon retirement, net
    
861
      
918
  
Share in losses of affiliated company, net
    
366
      
43
  
Deferred income taxes
    
(603
)
    
157
  
Capital gain from sale of property and equipment, net
    
(7
)
    
(62
)
Increase in accounts receivable
    
(2,780
)
    
(3,685
)
Increase in other current and non-current assets
    
(4,576
)
    
(3,026
)
Increase in inventories
    
(159
)
    
(4,750
)
Increase in accounts payable
    
3,665
      
1,211
  
Increase in deferred revenues
    
2,729
      
1,846
  
Increase (decrease) in other current and non-current liabilities
    
1,040
      
(2,253
)
Net cash provided by operating activities
    
17,395
      
6,950
  
                 
Cash flows from investment activities
                
 Increase in funds in respect of employee rights upon retirement, net of withdrawals
    
(383
)
    
(392
)
Capital expenditures
    
(2,903
)
    
(6,122
)
Investments in affiliated and other companies
    
(295
)
    
(377
)
Investment in long term deposit
    
-
      
(22
)
Sale of investment in marketable securities
    
99
      
-
  
Proceeds from sale of property and equipment
    
18
      
210
  
Net cash used in investment activities
    
(3,464
)
    
(6,703
)
                 
Cash flows from financing activities
                
Short term credit from banking institutions, net
    
1,139
      
(49
)
Repayment of long term loan
    
(4,142
)
    
(4,177
)
Dividend paid
    
(2,797
)
    
(2,891
)
Dividend paid to non-controlling interest
    
(795
)
    
-
  
Acquisition of company shares
    
(1,200
)
    
-
  
Net cash used in  in financing activities
    
(7,795
)
    
(7,117
)
Effect of exchange rate changes on cash and cash equivalents
    
(710
)
    
(182
)
Net increase (decrease) in cash and cash equivalents
    
5,426
      
(7,052
)
Balance of cash and cash equivalents at beginning of period
    
27,850
      
50,306
  
Balance of cash and cash equivalents at end of period
    
33,276
      
43,254
  

Supplementary information on financing and investing activities not involving cash flows:
In March 2023, the Company declared a dividend in the amount of US$ 3 million.  The dividend was paid in April 2023
 
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