Ituran Location and Control Ltd. Presents Results for the Third Quarter 2012
Revenues of $36.8 million and EPS of $0.25
AZOUR, Israel, November 19, 2012 /PRNewswire/ --
Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the quarter ended September 30, 2012.
Highlights of the Third Quarter of 2012
- A 14 thousand quarterly increase in net subscribers to a record of 653 thousand subscribers as of September 30, 2012, the highest net growth in subscribers in 10 quarters
- Gross margin at 50.3% and operating margin at 20.1%;
- Excluding currency effects and a one-time income related to Mapa in the third quarter of last year, operating profit grew in excess of 15% over last year;
- EBITDA of $10.6 million or 28.9% of revenues;
- Generated $7.2 million in operating cash flow; ended the quarter with $28.0 million in net cash and equivalents;
- Dividend of $2.6 million declared for the quarter.
Third Quarter 2012 Results
Revenues for the third quarter of 2012 were $36.8 million, representing a 11.7% decline from revenues of $41.7 million in the third quarter of 2011. 76.4% of revenues were from location based service subscription fees and 23.6% from product revenues.
Revenues from subscription fees were $28.1 million, a decrease of 6.6% over the same period last year. The decrease in subscription fees was due to the weakening of the Brazilian Real, Israeli Shekel and Argentinean Peso against the US dollar. In local currency terms, subscription revenues grew by 9.0% compared with the third quarter of last year due to the increase in the subscriber base, which expanded from 619,000 as of September 30, 2011, to 653,000 as of September 30, 2012. The growth primarily came from an increase in subscribers in Brazil, following the strategic changes management put in place in past quarters.
Product revenues were $8.7 million, a decline of 25% compared with the same period last year. The decline was partially due to the above-mentioned currency effects. In addition, in the third quarter of 2011, the Company made a large one time license sale of data from Mapa in the amount of approximately $2.5 million.
Gross profit for the third quarter of 2012 was $18.5 million (50.3% of revenues), a decrease of 11.5% compared with $20.9 million (50.2% of revenues) in the third quarter of last year. The decrease is attributed to the above mentioned decline in revenues.
Operating profit for the third quarter of 2012 was $7.4 million (20.1% of revenues), a decrease of 21% compared with an operating profit of $9.3 million (22.3% of revenues) in the third quarter of 2011. The decrease in operating profit compared with last year was due to the abovementioned currency effect and the sale of license data by Mapa which boosted the operating income in the third quarter of last year. Excluding these two effects, operating profit in the third quarter of 2012 would have exceeded operating profit in the third quarter of 2011 by approximately $1.5 million.
EBITDA for the quarter was $10.6 million (28.9% of revenues), a decrease of 21.8% compared to an EBITDA of $13.6 million (32.7% of revenues) in the third quarter of 2011.
Financial income in the third quarter of 2012 was $196 thousand compared with a financial income of $851 thousand in the third quarter of 2011.
Net profit was $5.2 million in the third quarter of 2012 (14.2% of revenues), compared with a net profit of $6.6 million (15.9% of revenues), as reported in the third quarter of 2011.
Fully diluted EPS in the third quarter of 2012 was US$0.25, compared with fully diluted EPS of US$0.32 in the third quarter of 2011.
Cash flow from operations during the quarter was $7.2 million.
As of September 30, 2012, the Company had net cash, including marketable securities and deposits for short and long term, of $28.0 million or $1.33 per share. This is compared with $22.9 million or $1.09 per share as at June 30, 2012.
For the third quarter of 2012, a dividend of $2.6 million was declared in line with the Company's stated policy of issuing at least 50% of net profits in a dividend, on a quarterly basis.
Eyal Sheratzky, Co-CEO of Ituran, said, "Overall we are very pleased with the results of the third quarter. In particular, the general trend of improving margins towards the top end of our historical range is a good sign, as well as the growth rate in the subscriber base which has returned in line with our targets. The net adds in the subscriber base, the majority of which were in Brazil, are now at a level which we are content with. On a local currency basis, our subscriber revenues grew strongly compared with last year, driven by this growth in our subscriber base. All these improvements are the fruits of efforts and due to the changes we implemented in the past few quarters."
Conference Call Information
The Company will also be hosting a conference call later today, November 19, 2012 at 9am 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: 1-888-407-2553
ISRAEL Dial-in Number: 03-918-0610
CANADA Dial-in Number: 1-866-485-2399
INTERNATIONAL Dial-in Number: +972-3-918-0610
At: 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.
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 653,000 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
September 30, December 31,
(in thousands) 2012 2011
Current assets
Cash and cash equivalents 23,692 35,270
Investments in marketable securities - 68
Accounts receivable (net of allowance for
doubtful accounts) 27,171 25,294
Loan to former employee - 340
Other current assets 23,169 15,165
Inventories 13,275 10,881
_______ _______
87,307 87,018
------------ ------------
Long-term investments and other assets
Deposit in escrow 4,927 4,888
Investments in affiliated company 156 207
Investments in other company 78 80
Other non-current assets 1,684 2,216
Deferred income taxes 5,391 5,568
Funds in respect of employee rights upon
retirement 5,129 4,741
_______ _______
17,365 17,700
------------ ------------
Property and equipment, net 32,874 40,870
------------ ------------
Intangible assets, net 2,621 3,355
------------ ------------
Goodwill 8,314 8,514
------------ ------------
_______ _______
Total assets 148,481 157,457
_______ _______
_______ _______
CONSOLIDATED BALANCE SHEETS
US Dollars
September 30, December 31,
(in thousands) 2012 2011
Current liabilities
Credit from banking institutions 514 390
Accounts payable 10,204 9,319
Deferred revenues 8,836 7,869
Other current liabilities 26,383 20,966
_______ _______
45,937 38,544
---------- ----------
Long-term liabilities
Long term loans 57 173
Liability for employee rights upon
retirement 7,408 6,865
Provision for contingencies 4,509 4,250
Other non-current liabilities 642 753
Deferred revenues 754 728
Deferred income taxes 650 792
_______ _______
14,020 13,561
----------- -----------
Stockholders' equity 84,676 101,194
----------- -----------
Non-controlling interests 3,848 4,158
----------- -----------
_______ _______
Total equity 88,524 105,352
----------- -----------
_______ _______
Total liabilities and equity 148,481 157,457
_______ _______
_______ _______
CONSOLIDATED STATEMENTS OF INCOME
US Dollars US Dollars
Nine-month period Three-month period
ended September 30, ended September 30,
(in thousands except per
share data) 2012 2011 2012 2011
Revenues:
Location-based services 85,437 91,968 28,102 30,080
Wireless communications
products 26,654 31,223 8,703 11,585
_______ _______ _______ _______
112,091 123,191 36,805 41,665
----------- ----------- ----------- -----------
Cost of revenues:
Location-based services 33,294 37,678 10,660 12,276
Wireless communications
products 23,474 24,745 7,624 8,474
_______ _______ _______ _______
56,768 62,423 18,284 20,750
----------- ----------- ----------- -----------
_______ _______ _______ _______
Gross profit 55,323 60,768 18,521 20,915
Research and development
expenses 500 480 160 196
Selling and marketing
expenses 6,473 6,387 2,104 2,223
General and administrative
expenses 25,442 27,065 8,314 9,204
Other expenses, net 985 (13) 560 (13)
_______ _______ _______ _______
Operating income 21,923 26,849 7,383 9,305
Other income (expenses),
net 6,755 (806) - (847)
Financing income, net 1,015 1,429 196 851
_______ _______ _______ _______
Income before income tax 29,693 27,472 7,579 9,309
Income tax expense (8,364) (6,996) (2,121) (2,433)
Share in losses of
affiliated companies, net (29) - (15) -
_______ _______ _______ _______
Net income for the period 21,300 20,476 5,443 6,876
Less: Net income
attributable to
non-controlling interests (830) (782) (217) (241)
_______ _______ _______ _______
Net income attributable to
the Company 20,470 19,694 5,226 6,635
_______ _______ _______ _______
_______ _______ _______ _______
Basic and diluted earnings
per share attributable to
Company's stockholders 0.98 0.94 0.25 0.32
_______ _______ _______ _______
_______ _______ _______ _______
Basic and diluted weighted
average number of shares
outstanding 20,968 20,968 20,968 20,968
_______ _______ _______ _______
_______ _______ _______ _______
CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars US dollars
Nine month period Three month period
ended September 30, ended September 30,
(in thousands except per
share data) 2012 2011 2012 2011
Cash flows from operating
activities
Net income for the period 21,300 20,476 5,443 6,876
Adjustments to reconcile
net income to net cash
from operating activities:
Depreciation and
amortization 10,520 13,109 3,262 4,305
Exchange differences on
principal of deposit and
loans, net (178) (453) 5 (968)
Losses (gains) in respect
of trading marketable
securities (2) - - 19
Increase in liability for
employee rights upon
retirement 703 681 44 199
Share in losses of
affiliated companies, net 29 - 15 -
Deferred income taxes 281 (1,366) 433 (800)
Capital losses (gains)
sale of property and
equipment, net 21 (24) 26 6
Decrease (increase) in
accounts receivable (2,465) 759 777 600
Decrease (increase) in
other current assets (6,772) 65 (613) 364
Decrease (increase) in
inventories (2,647) (1,204) (880) (2,026)
Increase (decrease) in
accounts payable 584 (707) (2,131) 173
Increase (decrease) in
deferred revenues 1,193 1,368 540 3
Increase (decrease) in
other current liabilities 987 292 312 246
Litigation obligation - 237 - 237
_______ _______ _______ _______
Net cash provided by
operating activities 23,554 33,233 7,233 9,234
----------- ----------- ----------- -----------
Cash flows from investment
activities
Increase in funds in
respect of employee rights
upon retirement,
net of withdrawals (498) (411) (132) (109)
Capital expenditures (4,822) (13,339) (1,064) (2,354)
Intangible expenditures - (58) - (58)
Deposit in escrow - 603 - -
Deposit (281) 410 (256) (52)
Proceeds from sale of
property and equipment 276 549 115 323
Repayment of loan to a
former employee 355 - - -
Sale of marketable
securities 70 - - -
_______ _______ _______ _______
Net cash used in
investment activities (4,900) (12,246) (1,337) (2,250)
----------- ----------- ----------- -----------
Cash flows from financing
activities
Short term credit from
banking institutions, net 53 563 (362) 599
Repayment of long term
loans (33) (35) (11) (12)
Dividend paid to
non-controlling interests (1,019) (506) (619) (506)
Dividend paid (28,116) (21,782) - -
_______ _______ _______ _______
Net cash provided by (used
in) financing activities (29,115) (21,760) (992) 81
----------- ----------- ----------- -----------
Effect of exchange rate
changes on cash and cash
equivalents (1,117) (2,162) (189) (3,132)
----------- ----------- ----------- -----------
_______ _______ _______ _______
Net increase in cash and
cash equivalents (11,578) (2,935) 4,715 3,933
Balance of cash and cash
equivalents at beginning
of period 35,270 46,674 18,977 39,806
_______ _______ _______ _______
Balance of cash and cash
equivalents at end of the
period 23,692 43,739 23,692 43,739
_______ _______ _______ _______
_______ _______ _______ _______
Company Contact
Udi Mizrahi
[email protected]
VP Finance, Ituran
(Israel) +972-3-557-1348
International Investor Relations
Ehud Helft & Kenny Green
[email protected]
CCG Investor Relations
(US) +1-646-201-9246
SOURCE Ituran Location and Control Ltd
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