Ituran Location and Control Ltd. Presents Results for the Fourth Quarter and Full Year 2010
Record Full Year Revenues of $148 Million (+22% YoY) and EPS of $1.00 (+16% YoY)
AZOUR, Israel, March 1, 2011 /PRNewswire-FirstCall/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the fourth quarter and full year ended December 31, 2010.
Highlights of the Fourth Quarter
- A 42 thousand year-over-year increase in net subscribers to
a record of 604 thousand as of December 31, 2010;
- Gross margin at 48.7% and operating margin at 20.8%;
- EBITDA of $12.9 million or 31.7% of revenues;
- Generated $9.6 million in operating cash flow; ended the
quarter with $60.9 million in net cash (including marketable
securities and deposits for short and long term);
Fourth Quarter 2010 Results
Revenues for the fourth quarter of 2010 reached $40.7 million, representing 21% growth over revenues of $33.7 million in the fourth quarter of 2009. 71% of revenues were from location based service subscription fees and 29% from product revenues.
Revenues from subscription fees grew by 10% over the same period last year. The increase in subscription fees was mainly due to the increase in the subscriber base, which grew to 604,000 as of December 31, 2010, as compared with 562,000 at the end of December 31, 2009. Product revenues grew 57% compared with the same period last year. This increase was driven primarily by increased sales in Israel, as well as expanding the program of charging for installations and unrecovered customer equipment in Brazil.
Gross profit for the fourth quarter of 2010 was $19.8 million (48.7% of revenues) compared with $17.1 million (50.9% of revenues) in the fourth quarter of last year. The decrease is mainly due to the change in revenue mix between location-based services and equipment sales.
Operating profit for the fourth quarter of 2010 was $8.5 million (20.8% of revenues) compared with an operating profit of $6.9 million (20.6% of revenues) in the fourth quarter of 2009.
EBITDA for the quarter was $12.9 million (31.7% of revenues) compared to an EBITDA of $10.7 million (31.8% of revenues) in the fourth quarter of last year.
Financial expense for the fourth quarter of 2010 was $0.3 million compared with a financial income of $0.7 million in the fourth quarter of 2009.
Following arbitration between Ituran and ST as reported in 2009, the purchaser of Telematics in 2007, and in accordance with the milestones in the sale agreement of Telematics, Ituran has increased the provision in its balance sheet which related to Telematic's milestones from $3.5 million to $4.4 million.
Excluding the above effect, the net profit in the fourth quarter of 2010 would have been $6.5 million (15.9% of revenues). Reported net profit was $5.8 million in the fourth quarter of 2010 (14.2% of revenues), compared with a net profit of $5.5 million (16.4% of revenues), as reported in the fourth quarter of 2009.
Excluding the above-mentioned increase in provision, fully diluted earnings per share in the fourth quarter of 2010 would have been $0.31. Reported fully diluted earnings per share in the fourth quarter of 2010 was $0.28, compared with fully diluted earnings per share of $0.26 in the fourth quarter of 2009.
Cash flow from operations during the quarter was $9.6 million.
Full Year Results
Revenues for 2010 reached $147.8 million. This is an increase of 22% over revenues of $121.4 million in 2009.
Gross profit in 2010 reached $72.5 (49.0% of revenues), compared with $60.6 million (49.9% of revenues) in 2009.
Operating profit for 2010 was US$30.6 million (20.7% of revenues) compared with an operating profit of US$24.4 million (20.1% of revenues) in 2009.
EBITDA for the year was $46.6 million (31.5% of revenues) compared to an EBITDA of $36.9 million (30.4% of revenues) last year.
Excluding the effect of the arbitration with ST, the net profit in 2010 would have been $21.7 million (14.7% of revenues). Reported net profit was $21.0 million in 2010 (14.2% of revenues), compared with a net profit of $18.2 million (15.0% of revenues), as reported in 2009. Fully diluted earnings per share in 2010 was $1.00, compared with fully diluted earnings per share of $0.87 in 2009.
Cash flow from operations for the year was $33.4 million.
As of December 31, 2010, the Company had net cash, including marketable securities and deposits for short and long term, of $60.9 million or $2.90 per share. This is compared with US$54.0 million or $2.57 per share as at September 30, 2010, and $78.1 million as of December 31, 2009.
Dividend
The Board of Directors announced a dividend amounting $21 million, or 100% of the net profit for 2010. Starting in November 2009, the Board of Directors approved a new dividend policy, providing for an annual dividend distribution in an amount not less than 50% of the Company's net profit.
The dividend's record date is March 23, 2011, and the dividend will be paid on April 6, 2011, net of taxes and levies, at the rate of 20%.
Eyal Sheratzky, Co-CEO of Ituran said, "The fourth quarter caps a very strong year for Ituran. We continued to generate growing revenues, profit and cash, and we are very happy to again distribute a large dividend and share our success with all our shareholders. In fact, since our Nasdaq IPO in 2005, we have declared almost $100 million in dividends to shareholders which we believe, for a company of our size, is very significant. Brazil continued to grow throughout the year and our business in Israel saw a solid resumption to growth as strength in the local economy has led to increased car sales. We remain very pleased with the performance of our business, and we are targeting continued double-digit growth in 2011 over 2010."
Conference Call Information
The Company will also be hosting a conference call later today, March 1, 2011 at 10am ET. 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: 1-888-668-9141
ISRAEL Dial-in Number: 03-918-0609
CANADA Dial-in Number: 1-866-485-2399
INTERNATIONAL Dial-in Number: +972-3-918-0609
At: 10:00am Eastern Time, 7:00am Pacific
Time, 5:00pm 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 provides location-based services, consisting predominantly of stolen vehicle recovery and tracking services, as well as wireless communications products used in connection with its location-based services and various other applications. Ituran offers mobile asset location, Stolen Vehicle Recovery, management & control services for vehicles, cargo and personal security. Ituran's subscriber base has been growing significantly since the Company's inception to over 604,000 subscribers distributed globally. Established in 1995, Ituran has over 1,300 employees worldwide, provides its location based services and has a market leading position in Israel, Brazil, Argentina and the United States.
CONSOLIDATED BALANCE SHEETS
US dollars
December 31 ,
(in thousands) 2010 2009
------------------
Current assets
Cash and cash equivalents 46,674 60,813
Deposit in escrow 5,238 5,227
Investments in trading marketable securities 1,509 4,213
Accounts receivable (net of allowance for doubtful
accounts) 31,161 24,906
Other current assets 9,604 6,136
Inventories 8,501 7,924 (*)
------- -------
102,687 109,219
------- -------
Long-term investments and debit balances
Deposit in escrow 7,858 7,840
Investments in affiliated company 220 205
Investments in other company 86 80
Other assets 2,426 1,742
Loan to former employee 558 558
Deferred income taxes 4,934 5,653
Funds in respect of employee rights upon retirement 4,498 3,606
------- -------
20,580 19,684
------- -------
Property and equipment, net 46,148 42,262 (*)
------- -------
Intangible assets, net 4,402 5,064
------- -------
Goodwill 10,079 9,639
------- -------
------- -------
------- -------
Total assets 183,896 185,868
------- -------
------- -------
(*) Reclassified
CONSOLIDATED BALANCE SHEETS
US dollars
December 31,
(in thousands) 2010 2009
------------------
Current liabilities
Credit from banking institutions 98 6
Accounts payable 13,087 13,459
Deferred revenues 4,614 5,486
Other current liabilities 18,227 17,443
------- -------
36,026 36,394
------- -------
Long-term liabilities
Long term loans 233 -
Liability for employee rights upon retirement 6,472 5,457
Provision for contingencies 5,324 3,071
Deferred income taxes 1,046 1,209
------- -------
13,075 9,737
------- -------
Capital Notes 5,894 5,894
------- -------
shareholders' equity 124,509 130,126
Non -controlling interest 4,392 3,717
------- -------
Total shareholders' equity 128,901 133,843
------- -------
------- -------
Total liabilities and shareholders' equity 183,896 185,868
------- -------
------- -------
CONSOLIDATED STATEMENTS OF INCOME
US dollars US dollars
Year ended Three month period
(in thousands December 31, ended December 31,
except per share data) 2010 2009 2010 2009
-------------------------------------
Revenues:
Location-based services 108,101 91,574 28,780 26,061
Wireless communications
products 39,724 29,807 11,965 7,613
------- ------- ------- -------
147,825 121,381 40,745 33,674
------- ------- ------- -------
Cost of revenues:
Location-based services 40,977 33,377 11,029 9,611
Wireless communications
products 34,354 27,445 9,881 6,928
------- ------- ------- -------
75,331 60,822 20,910 16,539
------- ------- ------- -------
Gross profit 72,494 60,559 19,835 17,135
Research and development
expenses 481 372 148 97
Selling and marketing
expenses 8,675 7,684 2,174 2,205
General and administrative
expenses 32,703 27,213 9,075 7,673
Other expenses (income), net 55 908 (29) 235
------- ------- ------- -------
Operating income 30,580 24,382 8,467 6,925
Other expenses (944) - (944) -
Financing income (expenses)
, net 139 1,604 (320) 660
------- ------- ------- -------
Income before taxes on
income 29,775 25,986 7,203 7,585
------- ------- ------- -------
Taxes on income (7,686) (7,139) (1,142) (1,804)
Share in gains (losses) of
affiliated
companies, net (3) 13 (1) (3)
------- ------- ------- -------
Net income for the year 22,086 18,860 6,060 5,778
Less :Net income
attributable
To non controlling interest (1,071) (668) (287) (247)
------- ------- ------- -------
Net income attributable to
company
Shareholders 21,015 18,192 5,773 5,531
------- ------- ------- -------
Earnings per share:
Basic 1.00 0.87 0.28 0.26
------- ------- ------- -------
Diluted 1.00 0.87 0.28 0.26
------- ------- ------- -------
Weighted average number of
shares outstanding (in
thousands):
Basic 20,968 20,968 20,968 20,968
------- ------- ------- -------
Diluted 20,977 20,977 20,977 20,977
------- ------- ------- -------
CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars US dollars
Year ended Three months
period ended
December31, December 31 ,
(in thousands) 2010 2009 2010 2009
--------------------------------
Cash flows from operating activities
Net income for the period 22,086 18,860 6,060 5,778
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation amortization and
impairment of goodwill 15,876 12,530 4,363 3,771
Exchange differences on principal of
deposit and loan, net 834 28 453 (40)
Gains in respect of trading marketable
securities - (1,421) - (25)
Increase in liability for employee
rights upon retirement 667 676 9 192
Share in losses (gains) of affiliated
companies, net 3 (13) 1 3
Deferred income taxes 824 988 225 307
Capital loses (gains) on sale of
property and equipment, net (299) (2) (320) 8
Decrease (increase) in accounts
receivable (4,669) 722 270 (660)
Decrease in other current assets (1,287) (1,716) 96 132
Decrease in inventories 129 646 (366) 291
Increase (decrease) in accounts payable (1,229) 1,734 (2,130) 1,304
Increase (decrease) in deferred
revenues (1,221) 631 (453) (420)
Increase in other current liabilities
and provision for contingencies 1,733 4,063 1,401 1,821
------ ------ ------ ------
Net cash provided by operating
activities 33,477 37,726 9,609 12,462
------ ------ ------ ------
Cash flows from investing activities
Increase in funds in respect of
employee rights upon
retirement, net of withdrawals (662) (794) (123) (205)
Capital expenditures (18,641) (15,698) (4,032) (4,765)
Intangible assets expenditures (85) - (85) -
Deposit (52) (389) (7) (26)
Proceeds from sale of property and
equipment 1,286 106 582 48
Investment in available for sale
marketable securities - (182) - -
Investment in trading marketable
securities (2,664) (34,467) (1,338) -
Sale of trading marketable securities 5,552 60,600 1,338 -
Sale of available for sale marketable
securities - 3,886 - 244
------ ------ ------ ------
Net cash provide by (used in)
investment activities (15,266) 13,062 (3,665) (4,704)
------ ------ ------ ------
Cash flows from financing activities
Short-term credit from banking
institutions ,net 46 (316) (670) (188)
Receipt of long term loans from banking
institutions 297 - 132 -
Repayment of long term loans (18) (12) -
Acquisition of non controlling interest (2,223) - -
Dividend paid to non-controlling
interest - (169) - -
Dividend paid (31,621) (3566) - -
------ ------ ------ ------
Net cash used in financing activities (33,519) (4,051) (550) (188)
------ ------ ------ ------
Effect of exchange rate changes on cash
and cash equivalents 1,199 1,565 1,066 (14)
------ ------ ------ ------
------ ------ ------ ------
Net Increase (decrease) in cash and
cash equivalents (14,139) 48,302 6,460 7,556
Balance of cash and cash equivalents at
beginning of period 60,813 12,511 40,214 53,257
------ ------ ------ ------
Balance of cash and cash equivalents at
end of period 46,674 60,813 46,674 60,813
------ ------ ------ ------
------ ------ ------ ------
Company Contact International Investor Relations
Udi Mizrahi Ehud Helft & Kenny Green
[email protected] [email protected]
VP Finance, Ituran CCG Investor Relations
(Israel) +972-3-557-1348 (US) +1-646-201-9246
SOURCE Ituran Location and Control Ltd
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