Ituran Location and Control Ltd. Presents Results for the Second Quarter 2011
Revenues of $41.1 Million and Net Income of $6.6 Million
AZOUR, Israel, August 11, 2011 /PRNewswire/ --
Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the second quarter ended June 30, 2011.
Highlights of the Second Quarter
- Revenues of $41.1 million, growing 18% year-over-year
- Gross margin at 48.5% and operating margin at 21.2%;
- EBITDA of $13.0 million or 31.5% of revenues;
- Net income of $6.6 million, growing 38% year-over-year
- Generated $13.9 million in operating cash flow; ended the quarter with $53.6 million in net cash (including marketable securities, and short and long term deposits);
Second Quarter 2011 Results
Revenues for the second quarter of 2011 reached $41.1 million, representing an 18% growth over revenues of $35.0 million in the second quarter of 2010. 76.7% of revenues were from location based service subscription fees and 23.3% from product revenues.
Revenues from subscription fees grew by 18% over the same period last year. The increase in subscription fees was mainly due to the increase in the subscriber base, which amounted to 615,000 as of June 30, 2011, as compared with 587,000 at the end of June 30, 2010. Product revenues grew 15% compared with the same period last year. This increase was driven primarily by increased sales of products in Israel.
Gross profit for the second quarter of 2011 was $20.0 million (48.5% of revenues), an increase of 15% compared with $17.3 million (49.5% of revenues) in the second quarter of 2010.
Operating profit for the second quarter of 2011 was $8.7 million (21.2% of revenues), an increase of 19% compared with an operating profit of $7.3 million (21.0% of revenues) in the second quarter of 2010.
EBITDA for the quarter was $13.0 million (31.5% of revenues), an increase of 17.0% compared to an EBITDA of $11.1 million (31.7% of revenues) in the second quarter of 2010.
Financial income in the second quarter of 2011 was $0.3 million compared with a financial income of $0.2 million in the second quarter of 2010.
Net profit was US$6.6 million in the second quarter of 2011 (16% of revenues), compared with a net profit of US$4.8 million (13.6% of revenues), as reported in the second quarter of 2010. Fully diluted EPS in the second quarter of 2011 was US$0.31, compared with fully diluted EPS of US$0.23 in the second quarter of 2010.
Cash flow from operations during the quarter was $13.9 million.
As of June 30, 2011, the Company had net cash, including marketable securities and deposits for short and long term, of $53.6 million or $2.56 per share. This is compared with US$66.1 million or $3.15 per share as at March 31, 2010. The company distributed a dividend of $21.8 million to shareholders in the quarter.
Eyal Sheratzky, Co-CEO of Ituran, said, "During the quarter, our business performance remained solid, and we reported our highest quarterly operating cash flow. In Brazil, we recently increased the charge for installations to our service in order to reduce the overall churn and increase the average longevity of our subscriber base. In the short-term, this strategy has had the effect of reducing our net subscriber growth in Brazil which was expected, through increased churn in this quarter. We have also increased our sales to the private sector in Brazil, which we expect will enable us to increase our ARPU and grow our margins in the region. These actions have had a positive impact on our operating cash flow in the quarter, and we expect this effect to continue in future. Looking ahead, we believe the growth rate in subscribers will return to its normal run rate by the fourth quarter. Overall, our business continues its stable growth, realizing the rewards of our past efforts. We remain on track to showing double-digit revenue growth in 2011 over 2010."
Conference Call Information
The Company will also be hosting a conference call later today, August 11, 2011 at 10am ET, 5pm Israel. 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 0610
CANADA Dial-in Number: 1 866 485 2399
INTERNATIONAL Dial-in Number: +972 3 918 0610
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 615,000 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.
** Financial Tables to Follow **
ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES
CONSOLIDATED INTERIM BALANCE SHEETS
US dollars
June 30, December 31,
(in thousands) 2011 2010
Current assets
Cash and cash equivalents 39,806 46,674
Deposit in escrow 4,645 5,238
Investments in trading marketable securities 1,587 1,509
Accounts receivable (net of allowance for
doubtful accounts) 32,225 31,161
Other current assets 13,860 12,770
Inventories 8,013 8,501
100,136 105,853
Long-term investments and other assets
Deposit in Escrow 7,869 7,858
Investments in affiliated company 234 220
Investments in other companies 90 86
Other non current assets 3,063 3,709
Loan to former employee 558 558
Deferred income taxes 5,565 4,934
Funds in respect of employee rights upon
retirement 4,976 4,498
22,355 21,863
Property and equipment, net 51,096 46,147
Intangible assets, net 4,102 4,402
Goodwill 10,400 10,079
Total assets 188,089 188,344
ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES
CONSOLIDATED INTERIM BALANCE SHEETS
US dollars
June 30, December 31,
(in thousands) 2011 2010
Current liabilities
Credit from banking institutions 67 98
Accounts payable 12,721 13,087
Deferred revenues 7,921 6,714
Litigation obligation 22,710 21,852
Other current liabilities 17,878 17,482
61,297 59,233
Long-term liabilities
Long-term Loans 218 233
Liability for employee rights upon retirement 7,208 6,472
Other current liabilities 1,324 -
Provision for contingencies 4,550 5,324
Deferred revenues 1,329 873
Deferred income taxes 982 1,046
15,611 13,948
Shareholders' equity 106,271 110,771
Non-controlling interests 4,910 4,392
Total equity 111,181 115,163
Total liabilities and shareholders' equity 188,089 188,344
ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF INCOME
Six month Three month
Period ended June 30, Period ended June 30,
(in thousands except per
share data) 2011 2010 2011 2010
Revenues:
Location-based services 61,888 51,866 31,550 26,644(*)
Wireless communications
products 19,638 18,138 9,587 8,367(*)
81,526 70,004 41,137 35,011
Cost of revenues:
Location-based services 25,402 19,397 13,191 10,422(*)
Wireless communications
products 16,271 16,103 7,992 7,255(*)
41,673 35,500 21,183 17,677
Gross profit 39,853 34,504 19,954 17,334
Research and development
expenses 284 222 145 116
Selling and marketing expenses 4,164 4,295 2,286 2,078
General and administrative
expenses 17,861 15,382 8,797 7,808
Other expenses, net - 3 - -
Operating income 17,544 14,602 8,726 7,332
Other (expenses) income, net 41 (81) 41 (17)
Financing income , net 578 71 339 198
Income before income tax 18,163 14,592 9,106 7,513
Income Tax (4,563) (4,441) (2,281) (2,512)
Share in income (losses) of
affiliated companies, net - (2) - (14)
Net income for the period 13,600 10,149 6,825 4,987
Less : Net income
attributable to
Non-controlling interest (541) (600) (244) (238)
Net income attributable to
company 13,059 9,549 6,581 4,749
Earnings per share
attributable to company's
shareholders
Basic 0.62 0.46 0.31 0.23
Diluted 0.62 0.46 0.31 0.23
Weighted average number of
shares outstanding
Basic 20,968 20,968 20,968 20,968
Diluted 20,968 20,968 20,977 20,977
(*) Reclassified
ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
US dollars US dollars
Six months Three months
period ended period ended
June 30, June 30,
(in thousands) 2011 2010 2011 2010
Cash flows from operating activities
Net income for the period 13,600 10,149 6,825 4,987
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization and
impairment of Goodwill 8,804 7,515 4,250 3,792
Exchange differences on principal of
deposit and loan, net 515 (364) 260 (589)
Losses (gain) in respect of trading
marketable securities (19) - (7) 14
Increase in liability for employee
rights upon retirement 482 442 328 276
Share in losses (gains) of affiliated
companies, net - 2 - 14
Deferred income taxes (566) 242 (192) 68
Capital loses (gains) on sale of
property and equipment, net (30) 21 (30) 18
Decrease (increase) in accounts
receivable 159 (2,693) 1,813 (788)
Decrease (increase) in other current
assets (299) (967) 1,971 (257)
Decrease (increase) in inventories 822 370 6 (288)
Increase (decrease) in accounts
payable (880) 473 (714) 226
Increase (decrease) in deferred
revenues 1,365 (466) 228 (499)
Increase (decrease) in other current
liabilities 46 (603) (791) (378)
Net cash provided by operating
activities 23,999 14,121 13,947 6,596
Cash flows from investing activities
Increase in funds in respect of
employee rights upon retirement, net
of withdrawals (302) (346) (186) (229)
Capital expenditures (10,985) (9,304) (5,370) (4,051)
Deposit in escrow 603 (32) - (297)
Deposit 462 - 318 -
Proceeds from sale of property and
equipment 226 479 206 484
Investment in marketable securities - (1,326) - -
Sale of marketable securities - 4,214 - -
Net cash used in investment activities (9,996) (6,315) (5,032) (4,093)
Cash flows from financing activities
Short-term credit from banking
institutions, net (36) 182 (26) (326)
Receipt of long term loans from baking
institutions - 165 - 165
Repayment of long term loans (23) - (18) -
Dividend paid (21,782) (31,621) (21,782) (31,621)
Net cash used in financing activities (21,841) (31,274) (21,826) (31,782)
Effect of exchange rate changes on
cash and cash equivalents 970 (1,572) 315 (2,467)
Net increase (decrease) in cash and
cash equivalents (6,868) (25,040) (12,596) (31,746)
Balance of cash and cash equivalents
at beginning of period 46,674 60,813 52,402 67,519
Balance of cash and cash equivalents
at end of period 39,806 35,773 39,806 35,773
Company Contact
Udi Mizrahi
udi[email protected]
VP Finance, Ituran
(Israel) +972-3-557-1348
International Investor Relations
Ehud Helft & Kenny Green
ituran@ccgisrael.com
CCG Investor Relations
(US) +1-646-201-9246
SOURCE Ituran Location and Control Ltd
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