Ituran Location and Control Ltd Presents Results for the Third Quarter of 2010
Revenues Reach $37 Million, Growing 16% YoY
AZOUR, Israel, November 22, 2010 /PRNewswire-FirstCall/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the third quarter ended September 30, 2010.
Highlights of the Quarter - A 45,000 year-over-year increase in net subscribers to a record of 594,000 as of September 30, 2010; - Gross margin at 49% and operating margin at 20.5%; - EBITDA of $11.6 million or 31.3% of revenues; - Generated $9.7 million in operating cash flow; ended the quarter with $54.0 million in net cash (including marketable securities and deposits for short and long term);
Third Quarter 2010 Results
Revenues for the third quarter of 2010 reached US$37.1 million, representing 16% growth over revenues of US$32.0 million in the third quarter of 2009. 74% of revenues were from location based service subscription fees and 26% from product revenues.
Revenues from subscription fees grew by 15% over the same period last year. The increase in subscription fees was mainly due to the increase in the subscriber base, which grew to 594,000 as of September 30, 2010, as compared with 549,000 at the end of September 30, 2009. Product revenues grew 20% compared with the same period last year. This increase was driven primarily by increased of sales in Israel.
Gross profit for the third quarter of 2010 was US$ 18.2 million (49.0% of revenues) compared with US$15.6 million (48.7% of revenues) in the third quarter of last year.
Operating profit for the third quarter of 2010 was US$7.6 million (20.5% of revenues) compared with an operating profit of US$6.5 million (20.2% of revenues) in the third quarter of 2009.
Financial income for the third quarter of 2010 was US$0.4 million compared with a financial expense of US$0.7 million in the third quarter of 2009.
EBITDA for the quarter was $11.6 million (31.3% of revenues) compared to an EBITDA of $9.7 million (30.2% of revenues) in the third quarter of last year.
Net profit was US$5.7 million in the third quarter of 2010 (15.4% of revenues), compared with a net profit of US$4.6 million (14.4% of revenues), as reported in the third quarter of 2009. Fully diluted EPS in the third quarter of 2010 was US$0.27, compared with fully diluted EPS of US$0.22 in the third quarter of 2009.
Cash flow from operations during the quarter was $9.7 million.
As of September 30, 2010, the Company had net cash, including marketable securities and deposits for short and long term, of US$54.0 million or $2.57 per share. This is compared with US$50.0 million or $2.38 per share as at June 30, 2010, and US$78.1 million as of December 31, 2009.
Eyal Sheratzky, Co-CEO of Ituran said, "The third quarter was another solid quarter in which we continued to grow our revenues and we generated a strong level of cash. Brazil continues its growth and we have a leading position in this market which should support our growth for a number of years ahead. In Israel, solid improvements in the economy has led to increased car sales, and our business there has regained its growth trajectory. Overall, we remain very pleased with the performance of our business and look forward to continued growth and increased profitability over the coming quarters."
Conference Call Information
The Company will also be hosting a conference call later today, November 22, 2010 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: 1-888-407-2553 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 594,000 subscribers distributed globally. Established in 1995, Ituran has over 1,400 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 ** CONSOLIDATED INTERIM BALANCE SHEETS US dollars ____________________________________________________________________ September 30, December 31, ____________________________________________________________________ (in thousands) 2010 2009 ____________________________________________________________________ Current assets Cash and cash equivalents 40,214 60,813 Deposit in escrow 5,236 5,227 Investments in trading marketable securities 1,453 4,213 Accounts receivable (net of allowance for doubtful accounts) 31,929 24,906 Other current assets 7,558 6,136 Inventories 10,934 11,096 _________ _________ 97,324 112,391 --------- --------- Long-term investments and other assets Deposit in escrow 7,854 7,840 Investments in affiliated company 216 205 Investments in other companies 83 80 Other assets 2,126 1,742 Loan to former employee 558 558 Deferred income taxes 5,024 5,653 Funds in respect of employee rights upon retirement 4,253 3,606 _________ _________ 20,114 19,684 --------- --------- Property and equipment, net 43,287 39,090 --------- --------- Intangible assets, net 4,405 5,064 --------- --------- Goodwill 11,374 9,639 --------- --------- Total assets 176,504 185,868 --------- --------- CONSOLIDATED INTERIM BALANCE SHEETS US dollars ____________________________________________________________________ September 30, December 31, ____________________________________________________________________ (in thousands) 2010 2009 ____________________________________________________________________ Current liabilities Credit from banking institutions 750 6 Accounts payable 14,764 13,459 Deferred revenues 4,883 5,486 Other current liabilities 16,664 17,443 ________ ________ 37,061 36,394 -------- -------- Long-term liabilities Long term loans 141 - Liability for employee rights upon retirement 6,279 5,457 Provision for contingencies 4,799 3,071 Deferred income taxes 1,062 1,209 ________ ________ 12,281 9,737 -------- -------- Capital Notes 5,894 5,894 -------- -------- Shareholders' equity 117,289 130,126 Non -controlling interest 3,979 3,717 ________ ________ Total equity 121,268 133,843 -------- -------- ________ ________ Total liabilities and shareholders' equity 176,504 185,868 -------- -------- CONSOLIDATED INTERIM STATEMENTS OF INCOME US dollars US dollars _________________________________________________________________________ Nine month Three month (in thousands except per period ended period ended share data) September 30, September 30, _________________________________________________________________________ 2010 2009 2010 2009 _________________________________________________________________________ Revenues: Location-based services 79,321 65,513 27,455 23,985 Wireless communications products 27,759 22,194 9,621 8,046 _______ ______ ______ ______ 107,080 87,707 37,076 32,031 ------- ------ ------ ------ Cost of revenues: Location-based services 29,948 23,768 10,551 8,610 Wireless communications products 24,473 20,517 8,370 7,832 _______ ______ ______ ______ 54,421 44,285 18,921 16,442 _______ ______ ______ ______ Gross profit 52,659 43,422 18,155 15,589 Research and development expenses 333 275 111 95 Selling and marketing expenses 6,501 5,479 2,206 1,942 General and administrative expenses 23,628 19,540 8,246 6,867 Other expenses, net 3 671 - 227 ______ ______ _____ ______ Operating income 22,194 17,457 7,592 6,458 Other expenses (81) - - - Financing income (expenses) , net 459 944 388 (666) ______ ______ _____ ______ Income before taxes on income 22,572 18,401 7,980 5,792 Taxes on income (6,544) (5,335) (2,103) (1,029) ______ ______ _____ ______ 16,028 13,066 5,877 4,763 Share in gains (losses) of affiliated companies, net (2) 16 - 1 ______ ______ _____ ______ Net income for the period 16,026 13,082 5,877 4,764 Less: Net income attributable to non-controlling interest (784) (421) (184) (136) Net income for the period attributable ______ ______ _____ ______ to company shareholders 15,242 12,661 5,693 4,628 ______ ______ _____ ______ Earnings per share: attributable to company shareholders Basic 0.73 0.60 0.27 0.22 ______ ______ _____ ______ Diluted 0.73 0.60 0.27 0.22 ______ ______ _____ ______ 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 INTERIM STATEMENTS OF CASH FLOWS US dollars US dollars _________________________________________________________________________ Nine month Three month period ended period ended September 30, September 30, (in thousands) 2010 2009 2010 2009 _________________________________________________________________________ , Cash flows from operating activities Net income for the period 16,026 13,082 5,877 4,764 Adjustments to reconcile net income to net cash from operating activities: Depreciation , amortization and impairment of goodwill 11,513 8,759 3,998 3,214 Exchange differences on principal of deposit an loan, net 381 68 745 516 Exchange differences on principal of marketable securities - (1,090) - (182) Gain in respect of trading marketable securities - (306) - (306) Increase in liability for employee rights upon retirement 658 484 216 187 Share in losses (gains) of affiliated companies, net 2 (16) - (1) Deferred income taxes 599 358 357 914 Capital loses (gains) on sale of property and equipment, net 21 (10) - - Decrease (increase) in accounts receivable (4,939) 1,705 (2,246) (227) Increase in other current assets (1,383) (1,848) (416) (1,367) Decrease in inventories 495 355 125 2,690 Increase (decrease) in accounts payable 901 430 428 (1,315) Increase (decrease) in deferred revenues (768) 1,051 (302) 635 Increase in other current liabilities and provision for contingencies 332 2,242 935 2,972 ______ ______ _____ ______ Net cash provided by operating activities 23,838 25,264 9,717 12,494 ------ ------ ----- ------ Cash flows from investing activities Increase in funds in respect of employee rights upon retirement, net of withdrawals (539) (589) (193) (237) Capital expenditures (14,609) (10,933) (5,305) (5,181) Deposit (45) (363) (13) (102) Proceeds from sale of property and equipment 704 58 225 21 Investment in trading marketable securities (1,326) (34,649) - (4,159) Sale of marketable securities 4,214 64,242 - 18,642 Acquisition of non controlling interest (2,223) - (2,223) - ______ ______ _____ ______ Net cash used in investment activities (13,824) 17,766 (7,509) 8,984 ------ ------ ----- ------ Cash flows from financing activities Short-term credit from banking institutions, net 716 (128) 534 (170) Receipt of Long term loans from banking institutions 165 - Repayment of long terms loans (6) - (6) - Dividend paid (31,621) (3,566) - - Dividend paid to Non controlling interest - (169) - - ______ ______ _____ ______ Net cash used in financing activities (30,746) (3,863) 528 (170) ------ ------ ----- ------ Effect of exchange rate changes on cash and cash equivalents 133 1,579 1,705 1,953 ------ ------ ----- ------ Net increase (decrease) in ______ ______ _____ ______ cash and cash equivalents (20,599) 40,746 4,441 23,261 Balance of cash and cash equivalents at beginning of period 60,813 12,511 35,773 29,996 ______ ______ _____ ______ Balance of cash and cash equivalents at end of period 40,214 53,257 40,214 53,257 ______ ______ _____ ______ 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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