Try our mobile app

Published: 2023-02-28 06:32:21 ET
<<<  go to ITRN company page
EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1
ITURAN PRESENTS RECORD SUBSCRIBER GROWTH, RECORD
REVENUE & RECORD EBITDA IN ITS FULL YEAR 2022 RESULTS

Subscriber-adds in Q4 of 46,000 and 185,000 for FY 2022
Expects recent strong subscriber growth to contribute to accelerated growth in 2023

AZOUR, Israel – February 28, 2023 – Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the fourth quarter and full year of 2022.

Highlights of full year 2022
•
Number of subscribers reached 2,066,000 at year-end adding a record 185,000 over the year; Surpassed the milestone of 2 million subscribers;
•
Record revenue of $293.1 million, an increase of 8% year-over-year;
•
Net income of $37.1, an increase of 8% year-over-year;
•
Record EBITDA of $78.9 million, an increase of 9% year-over-year;
•
Generated $45.1 million in full year operating cash flow;
•
Year-end net cash and marketable securities of $16.0 million;
•
Returns to shareholders: issued $12 million in dividends and bought back shares in the amount of $8.4 million during the year;

Highlights of the fourth quarter of 2022
•
46,000 net subscriber growth: net increase in aftermarket of 44,000 and net increase in OEM of 2,000;
•
Revenues of $74.9 million, an increase of 7% year-over-year;
•
Net income was $9.6 million, similar to that of last year;
•
EBITDA of $20.6 million, up 9% year-over-year;
•
Generated $15.9 million in quarterly operating cash flow;
•
Declared dividend of $3 million and continued share buy-back program totaling $3 million in the quarter;

Subscriber Growth Forecast in 2023

Management’s expectations for the growth rate of the global after-market subscriber base in 2023 at between 180,000 to 200,000, net new subscribers-adds.

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “2022 was a good year for Ituran and sets us exceptionally well for 2023 and beyond. We expect that 2023 is the year that we will increasingly enjoy the fruits of efforts over the past two years which led us to approximately doubling the quarterly net-adds and growth in our subscriber base. This has been a culmination of our adding new and attractive products and services, focused on bringing strong value and meeting our customer’s needs as well as harvesting the synergies of our 2 million-plus subscriber base across all our geographies.”

Continued Mr. Sheratzky, “We are very happy with the 2022 financial results, showing continued growth, and record revenue and record EBITDA. We also demonstrated our highest subscriber gross margin since 2018, demonstrating that the operating leverage in our business is now becoming more apparent. The strong growth in our subscriber base is also beginning to be expressed in our subscriber revenue growth, which in local currencies showed a 11% year-over-year growth, and as our subscriber revenues grow, the inherent operating leverage in our model will enable the gross margin to continue to trend upwards.  Looking ahead, we are excited for the year ahead, and expect the positive trends that started in 2022 to continue into 2023 and beyond.”

Fourth quarter 2022 Results

Revenues for the fourth quarter of 2022 were $74.9 million, an increase of 7% compared with revenues of $70.4 million in the fourth quarter of 2021.

72% of revenues were from location-based service subscription fees and 28% were from product revenues.

Revenues from subscription fees were $53.9 million, an increase of 10% over fourth quarter 2021 revenues. In local currency terms, subscription revenues grew by 14% compared with that of the fourth quarter of last year.

The subscriber base amounted to 2,066,000 as of December 31, 2022. This represents an increase of 46,000 net over that of the end of the prior quarter, and an increase of 185,000 year-over-year. During the quarter, there was an increase of 44,000 in the aftermarket subscriber base and a increase of 2,000 in the OEM subscriber base.

Product revenues were $21.1 million, a decrease of 2% compared with that of the fourth quarter of 2021. While decreasing in US dollar terms, in local currency terms, product revenues increased by 4%, compared with that of the fourth quarter of last year.

Gross profit for the quarter was $35.9 million (47.8% of revenues), a 6% increase compared with gross profit of $33.8 million (48.1% of revenues) in the fourth quarter of last year.

The gross margin in the quarter on subscription revenues was 57.9%, compared with 56.9% in the fourth quarter of last year. The gross margin on products was 22.0% in the quarter, compared with 28.2% in the fourth quarter of last year.

Operating income for the quarter was $15.3 million (20.4% of revenues), an increase of 8% compared with an operating income of $14.2 million (20.2% of revenues) in the fourth quarter of last year.

EBITDA for the quarter was $20.6 million (27.4% of revenues), an increase of 9% compared with an EBITDA of $18.9 million (26.9% of revenues) in the fourth quarter of last year.  

Financial expense for the quarter was $1.3 million compared with a financial expense of $0.8 million in the fourth quarter of last year.

Net income for the fourth quarter of 2022 was $9.6 million (12.8% of revenues) or diluted earnings per share of $0.47, at the similar level of $9.6 million (13.6% of revenues) or diluted earnings per share of $0.46 in the fourth quarter of last year.

Cash flow from operations for the fourth quarter of 2022 was $15.9 million.

Full Year 2022 Results

Revenues for 2022 was a record $293.1 million, an 8% increase over the $270.9 million reported in 2021.  In local currency terms, revenue grew by 10% compared with that of 2021.

72% of revenues were from location-based service subscription fees and 28% were from product revenues.

Revenues from subscription fees were $209.6 million, representing an increase of 10% over 2021. In local currency terms, subscription revenue grew by 11% compared with that of 2021.

Product revenues were $83.5 million, representing an increase of 3% compared with 2021. In local currency terms, product revenue grew by 6% compared with that of 2021.

Gross profit for the year was $137.6 million (46.9% of revenues). This represents an increase of 8% compared with gross profit of $127.8 million (47.2% of revenues) in 2021. The gross margin in the year on subscription revenues was 57.0%, compared with 56.0% in 2021. The gross margin on products was 21.7%, compared with 26.6% in 2021.

Operating profit for 2022 was $58.8 million (20.1% of revenues) an increase of 8% compared with operating profit of $54.6 million (20.2% of revenues) in 2021.

EBITDA for 2022 was a record $78.9 million (26.9% of revenues), an increase of 9% compared to $72.7 million (26.8% of revenues) in 2021.

Net income in 2022 was $37.1 million (12.7% of revenues) or fully diluted earnings per share of $1.82, an increase of 8% compared with net income of $34.3 million (12.6% of revenues) or fully diluted earnings per share of $1.65 in 2021.

Cash flow from operations for the year was $45.1 million.

As of December 31, 2022, the Company had cash, including marketable securities, of $28.2 million and debt of $12.2 million, amounting to a net cash of $16.0 million. This is compared with cash, including marketable securities, of $54.7 million and debt of $31.4 million, amounting to a net cash of $23.3 million, as of December 31, 2021.

Dividend

For the fourth quarter of 2022, a dividend of $3 million was declared.

Buy Back

On August 23, 2021, 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. Share repurchases, were funded by available cash and repurchases of Ituran's ordinary shares under SEC Rule10b-18 terms.

In the fourth quarter, under the renewed program, Ituran purchased 131,000 shares for a total of $3.0 million. During 2022, a total of 357,000 were purchased, totaling $8.4 million.

Conference Call Information

The Company will also be hosting a conference call later today, February 28, 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 2,800 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
udi_m@ituran.com
Deputy CEO & VP Finance, Ituran
(Israel) +972 3 557 1348
  
Ehud Helft
ituran@ekgir.com
EK Global  Investor Relations
(US) +1 212 378 8040
 
  ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of December 31, 2022

ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of December 31, 2022

Table of Contents
 
 
Page
   
Condensed Consolidated Interim Financial Statements:
  
2-3
4
5
 
=======================
=============

ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

   
US dollars
  
   
December 31,
  
(In thousands)
  
2022
    
2021
  
             
Current assets
            
             
Cash and cash equivalents
    
27,850
      
50,306
  
Investments in marketable securities
    
316
      
4,405
  
Accounts receivable (net of allowance for doubtful accounts)
    
45,821
      
43,916
  
Other current assets
    
48,156
      
36,979
  
Inventories
    
28,509
      
27,128
  
     
150,652
      
162,734
  
                 
Long-term investments and other assets
                
Investments in affiliated companies
    
1,188
      
885
  
Investments in other companies
    
1,779
      
1,866
  
Other non-current assets
    
3,129
      
3,146
  
Deferred income taxes
    
11,400
      
11,091
  
Funds in respect of employee rights upon retirement
    
15,146
      
16,205
  
     
32,642
      
33,193
  
                 
Property and equipment, net
    
45,598
      
35,652
  
                 
Operating lease right-of-use assets, net
    
9,552
      
4,690
  
                 
Intangible assets, net
    
12,620
      
16,753
  
                 
Goodwill
    
39,510
      
39,999
  
                 
Total assets
    
290,574
      
293,021
  

- 2 -
ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

   
US dollars
  
   
December 31,
  
(In thousands)
  
2022
    
2021
  
             
Current liabilities
            
Credit from banking institutions
    
12,190
      
18,257
  
Accounts payable
    
21,937
      
21,275
  
Deferred revenues
    
21,783
      
24,333
  
Other current liabilities
    
37,373
      
40,767
  
     
93,283
      
104,632
  
                 
Long-term liabilities
                
Long term loan
    
-
      
13,169
  
Liability for employee rights upon retirement
    
21,224
      
22,476
  
Deferred income taxes
    
1,534
      
1,952
  
Deferred revenues
    
13,036
      
8,902
  
Operating lease liabilities, non-current
    
6,567
      
1,750
  
Others non-current liabilities
    
2,071
      
2,337
  
     
44,432
      
50,586
  
Stockholders’ equity
    
145,797
      
132,460
  
Non-controlling interests
    
7,062
      
5,343
  
Total equity
    
152,859
      
137,803
  
                 
Total liabilities and equity
    
290,574
      
293,021
  

- 3 -
ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

   
US dollars
    
US dollars
  
(in thousands
  
Year ended
December 31,
    
Three months period
ended December 31,
  
except per share data)
  
2022
    
2021
    
2022
    
2021
  
                         
Revenues:
                        
Telematics services
    
209,558
      
189,649
      
53,887
      
48,776
  
Telematics products
    
83,514
      
81,235
      
21,061
      
21,580
  
     
293,072
      
270,884
      
74,948
      
70,356
  
                                 
Cost of revenues:
                                
Telematics services
    
90,129
      
83,427
      
22,674
      
21,043
  
Telematics products
    
65,381
      
59,619
      
16,421
      
15,501
  
     
155,510
      
143,046
      
39,095
      
36,544
  
                                 
Gross profit
    
137,562
      
127,838
      
35,853
      
33,812
  
Research and development expenses
    
16,848
      
14,099
      
4,616
      
3,931
  
Selling and marketing expenses
    
13,327
      
13,262
      
3,302
      
3,415
  
General and administrative expenses
    
48,705
      
46,118
      
12,574
      
12,393
  
Other expenses (income), net
    
(92
)
    
(256
)
    
57
      
(104
)
Operating income
    
58,774
      
54,615
      
15,304
      
14,177
  
Other expenses, net
    
-
      
(109
)
    
-
      
(106
)
Financing income (expenses), net
    
(5,944
)
    
(5,538
)
    
(1,292
)
    
(822
)
Income before income tax
    
52,830
      
48,968
      
14,012
      
13,249
  
Income tax expenses
    
(12,745
)
    
(11,854
)
    
(3,747
)
    
(2,799
)
Share in gains (losses) of affiliated companies, net
    
(585
)
    
(102
)
    
(173
)
    
(63
)
Net income for the period
    
39,500
      
37,012
      
10,092
      
10,387
  
Less: Net income attributable to non-controlling interest
    
(2,397
)
    
(2,756
)
    
(520
)
    
(812
)
Net income attributable to the Company
    
37,103
      
34,256
      
9,572
      
9,575
  
                                 
Basic and diluted earnings per share attributable to Company’s stockholders
    
1.82
      
1.65
      
0.47
      
0.46
  
                                 
Basic and diluted weighted average number of shares outstanding (in thousands)
    
20,418
      
20,769
      
20,242
      
20,651
  

- 4 -
ITURAN LOCATION AND CONTROL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

   
US dollars
    
US dollars
  
   
Year ended
December 31,
    
Three months period
ended December 31,
  
(in thousands)
  
2022
    
2021
    
2022
    
2021
  
Cash flows from operating activities
                        
Net income for the period
    
39,500
      
37,012
      
10,092
      
10,387
  
Adjustments to reconcile net income to net cash from operating activities:
                                
Depreciation and amortization
    
20,134
      
18,096
      
5,263
      
4,767
  
Interest and exchange rate differences on loans
    
-
      
(47
)
    
-
      
(47
)
Loss (gain) in respect of marketable securities and other investments
    
3,860
      
2,387
      
20
      
(222
)
Increase (decrease) in liability for employee rights upon retirement
    
1,243
      
2,069
      
(58
)
    
501
  
Share in losses of affiliated company, net
    
585
      
102
      
173
      
63
  
Deferred income taxes
    
(737
)
    
(443
)
    
(622
)
    
351
  
Capital losses (gain) on sale of property and equipment, net
    
(224
)
    
(166
)
    
80
      
(75
)
Decrease (increase) in accounts receivable
    
(5,104
)
    
(3,994
)
    
(812
)
    
2,997
  
Decrease (increase) in other current and non-current assets
    
(11,055
)
    
1,047
      
(832
)
    
(1,961
)
Decrease (increase) in inventories
    
(5,835
)
    
(3,841
)
    
2,975
      
247
  
Increase (decrease) in accounts payable
    
1,419
      
1,776
      
(1,157
)
    
(49
)
Increase (decrease) in deferred revenues
    
2,169
      
318
      
1,162
      
(181
)
Increase in obligation for purchase non-controlling interests
    
-
      
967
      
-
      
281
  
Increase (decrease) in other current and non-current liabilities
    
(837
)
    
507
      
(370
)
    
(1,017
)
Net cash provided by operating activities
    
45,118
      
55,790
      
15,914
      
16,042
  
                                 
Cash flows from investment activities
                                
Increase in funds in respect of employee rights upon
                                
retirement, net of withdrawals
    
(868
)
    
(2,097
)
    
(320
)
    
(240
)
Capital expenditures
    
(26,505
)
    
(16,626
)
    
(7,747
)
    
(5,380
)
Investments in affiliated and other companies, net
    
(1,076
)
    
(675
)
    
(386
)
    
(255
)
Proceed from (repayment of) long term deposit
    
147
      
(48
)
    
60
      
68
  
Investment in marketable securities
    
(103
)
    
-
      
-
      
-
  
Proceeds from sale of property and equipment
    
1,051
      
922
      
203
      
225
  
Net cash used in investment activities
    
(27,354
)
    
(18,524
)
    
(8,190
)
    
(5,582
)
                                 
Cash flows from financing activities
                                
Repayment of long-term credit
    
(16,269
)
    
(23,576
)
    
(3,976
)
    
(4,403
)
Short term credit from banking institutions, net
    
(181
)
    
(197
)
    
(33
)
    
(48
)
Settlement of obligation to purchase non-controlling interests
    
-
      
(11,281
)
    
-
      
(11,281
)
Dividend paid
    
(11,465
)
    
(15,809
)
    
(2,844
)
    
(2,905
)
Dividend paid to non-controlling interests
    
-
      
(522
)
    
-
      
(98
)
Acquisition of company shares
    
(8,445
)
    
(7,281
)
    
(2,999
)
    
(5,411
)
Net cash used in financing activities
    
(36,360
)
    
(58,666
)
    
(9,852
)
    
(24,146
)
Effect of exchange rate changes on cash and cash equivalents
    
(3,860
)
    
(477
)
    
(90
)
    
1,045
  
Net decrease in cash and cash equivalents
    
(22,456
)
    
(21,877
)
    
(2,218
)
    
(12,641
)
Balance of cash and cash equivalents at beginning of period
    
50,306
      
72,183
      
30,068
      
62,947
  
Balance of cash and cash equivalents at end of period
    
27,850
      
50,306
      
27,850
      
50,306
  

Supplementary information on financing and investing activities not involving cash flows:
In November 2022, the Company declared a dividend in an amount of US$ 3 million. The dividend was paid in January 2023.

- 5 -