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Published: 2022-08-29 06:40:11 ET
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EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1
ITURAN LOCATION AND CONTROL LTD. PRESENTS
RESULTS FOR THE SECOND QUARTER OF 2022

AZOUR, Israel – August 29, 2022 – Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the second quarter of 2022.

Highlights of the Second Quarter of 2022
•
Growth in total subscribers to approximately 1,972,000: net increase in aftermarket of 50,000 and net decrease in OEM of 2,000;
•
Revenues of $73.4 million, an increase of 9% year-over-year;
•
Net income of $8.7 million compared with $9.1 million in the second quarter of last year;
•
EBITDA of $19.4 million, compared with $18.2 million in the second quarter of last year, up 7% year-over-year;
•
Generated $10.9 million in quarterly operating cash flow;
•
Declared dividend of $3.0 million; purchased $3.4 million under share buy-back program;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “We are very pleased with the results of the second quarter, especially at a time when component supply chains remained tight and new car sales remain constrained. In particular, the above-average growth in our after-market subscriber base has continued for the second quarter this year and we have so far added 91,000 subscribers in 2022- well on target to reach or even surpass the top-end of our expected range of between 140,000-160,000 for the year.”

Continued Mr. Sheratzky, “The strong growth in our subscriber base is beginning to be expressed in our subscriber revenue growth, which despite currency headwinds, showed a growth of 11% year-over-year. We also demonstrated a 130 basis-point improvement in the subscriber gross margin, demonstrating that the operating leverage in our business is beginning to become more apparent.”

Added Mr. Sheratzky, “Our continued profitability and ongoing cash generation, enable us to share the fruits of our ongoing success with our shareholders. Beyond the regular dividend payment of $3 million per quarter, we purchased $3.4 million in shares under our share buy-back program. Both our dividend and share buy-back programs are expressions of our ongoing focus on generating shareholder value."

Second Quarter 2022 Results

Revenues for the second quarter of 2022 were $73.4 million, an increase of 9% compared with revenues of $67.5 million in the second quarter of 2021. 71% of revenues were from location-based service subscription fees and 29% were from product revenues.

Revenues from subscription fees were $52.3 million, an increase of 11% over second quarter 2021 revenues.

The subscriber base amounted to 1,972,000 as of June 30, 2022. This represents an increase of 48,000 net over that of the end of the prior quarter. During the quarter, there was an increase of 50,000 in the aftermarket subscriber base and a decrease of 2,000 in the OEM subscriber base.

Product revenues were $21.1 million, an increase of 3% compared with that of the second quarter of 2021.

Gross profit for the quarter was $33.8 million (46.1% of revenues), an 9% increase compared with gross profit of $31.1 million (46.2% of revenues) in the second quarter of 2021.

The gross margin in the quarter on subscription revenues improved to 56.8%, compared with 55.5% in the second quarter of 2021.

The gross margin on products was 19.6% in the quarter, compared with 24.8% in the second quarter of 2021. The product margin was impacted by the higher components’ prices up until the beginning of the year, due to the ongoing global shortage of component as well as the product sales mix sold in the quarter. As the shortage of components has began to ease, we expect improvement in our product gross margins toward the end of the year

Operating income for the quarter was $14.4 million (19.7% of revenues), compared with $13.8 million (20.4% of revenue) in the second quarter of last year.

EBITDA for the quarter was $19.4 million (26.5% of revenues), compared with $18.2 (26.9% of revenues) million in the second quarter of last year.

Financial expense for the quarter was $1.4 million compared with a financial expense of $1.0 million in the second quarter of last year.

Net income for the second quarter of 2022 was $8.7 million (11.9% of revenues) or earnings per share of $0.43, compared with a $9.1 million (13.5% of revenues)  or earnings per share of $0.44.

Cash flow from operations for the second quarter of 2022 was $10.9 million.

As of June 30, 2022, the Company had cash, including marketable securities, of $33.2  million and debt of $20.1 million, amounting to a net cash of $13.1 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.
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Dividend

For the second quarter of 2022, a dividend of $3.0 million was declared. This is in line with the Board’s current policy of issuing at least $3 million on a quarterly basis.

Buy Back

On August 4, 2021, Ituran announced that its Board of Directors decided to continue executing the $19 million remainder of a $25 million share buy-back program that was first announced in 2019. Under the current buy-back program, 146,589 shares amounting to $3.4 million was purchased in the second quarter and approximately $8 remains under the current program.

The share repurchases, if any, will be funded by available cash and repurchases of Ituran's ordinary shares will be made based on SEC Rule10b-18 terms.

Conference Call Information

The Company will also be hosting a conference call later today, August 29, 2022 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.

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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 approaching 2 million subscribers using its location based services with a market leading position in Israel and Latin America. Established in 1995, Ituran has approximately 3,000 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
 
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 ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of June 30, 2022
5
ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of June 30, 2022
Table of Contents
 
 
Page
   
Condensed Consolidated Interim Financial Statements:
  
7-8
9
10
 
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ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

   
US dollars
  
   
June 30,
    
December 31,
  
(in thousands)
  
2022
    
2021
  
   
(unaudited)
        
Current assets
            
Cash and cash equivalents
    
32,671
      
50,306
  
Investments in marketable securities
    
496
      
4,405
  
Accounts receivable (net of allowance for doubtful accounts)
    
45,837
      
43,916
  
Other current assets
    
42,655
      
36,979
  
Inventories
    
29,154
      
27,128
  
     
150,813
      
162,734
  
Non- Current investments and other assets
                
Investments in affiliated companies
    
1,330
      
885
  
Investments in other companies
    
1,658
      
1,866
  
Other non-current assets
    
3,465
      
3,146
  
Deferred income taxes
    
10,868
      
11,091
  
Funds in respect of employee rights upon retirement
    
14,739
      
16,205
  
     
32,060
      
33,193
  
Property and equipment, net
    
40,263
      
35,652
  
                 
Operating lease right-of-use assets, net
    
10,815
      
4,690
  
                 
Intangible assets, net
    
14,535
      
16,753
  
                 
Goodwill
    
39,530
      
39,999
  
                 
Total assets
    
288,016
      
293,021
  
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ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

   
US dollars
  
   
June 30,
    
December 31,
  
(in thousands)
  
2022
    
2021
  
   
(unaudited)
        
Current liabilities
            
Credit from banking institutions
    
16,219
      
18,257
  
Accounts payable
    
20,890
      
21,275
  
Deferred revenues
    
21,480
      
24,333
  
Other current liabilities
    
37,241
      
40,767
  
     
95,830
      
104,632
  
Non- Current liabilities
                
Long term loan
    
3,901
      
13,169
  
Liability for employee rights upon retirement
    
21,171
      
22,476
  
Deferred income taxes
    
1,863
      
1,952
  
Deferred revenues
    
11,741
      
8,902
  
Others non-current liabilities
    
2,182
      
2,337
  
Operating lease liabilities, non-current
    
7,681
      
1,750
  
     
48,539
      
50,586
  
                 
Stockholders’ equity
    
137,590
      
132,460
  
Non-controlling interests
    
6,057
      
5,343
  
Total equity
    
143,647
      
137,803
  
                 
Total liabilities and equity
    
288,016
      
293,021
  

8
ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

   
US dollars
    
US dollars
  
   
Six month period
ended June 30,
    
Three month period
ended June 30,
  
(in thousands except per share data)
  
2022
    
2021
    
2022
    
2021
  
   
(unaudited)
    
(unaudited)
  
Revenues:
                        
Telematics services
    
102,540
      
92,562
      
52,314
      
46,943
  
Telematics products
    
42,920
      
42,265
      
21,074
      
20,519
  
     
145,460
      
134,827
      
73,388
      
67,462
  
Cost of revenues:
                                
Telematics services
    
44,739
      
41,370
      
22,607
      
20,899
  
Telematics products
    
33,627
      
31,652
      
16,950
      
15,421
  
     
78,366
      
73,022
      
39,557
      
36,320
  
                                 
Gross profit
    
67,094
      
61,805
      
33,831
      
31,142
  
Research and development expenses
    
8,131
      
6,841
      
3,991
      
3,295
  
Selling and marketing expenses
    
6,580
      
6,500
      
3,456
      
3,244
  
General and administrative expenses
    
23,698
      
22,005
      
11,986
      
10,907
  
Other income, net
    
(118
)
    
(86
)
    
(39
)
    
(74
)
Operating income
    
28,803
      
26,545
      
14,437
      
13,770
  
Other expense, net
    
-
      
(3
)
    
-
      
-
  
Financing expense, net
    
(3,938
)
    
(1,982
)
    
(1,373
)
    
(989
)
Income before income tax
    
24,865
      
24,560
      
13,064
      
12,781
  
Income tax expenses
    
(5,918
)
    
(5,718
)
    
(3,454
)
    
(2,905
)
Share in losses of affiliated companies ,net
    
(121
)
    
(21
)
    
(78
)
    
(10
)
Net income for the period
    
18,826
      
18,821
      
9,532
      
9,866
  
Less: Net income attributable to non-controlling interest
    
(1,359
)
    
(1,452
)
    
(794
)
    
(758
)
Net income attributable to the Company
    
17,467
      
17,369
      
8,738
      
9,108
  
                                 
Basic and diluted earnings per share attributable to Company’s stockholders
    
0.85
      
0.83
      
0.43
      
0.44
  
                                 
Basic and diluted weighted average number of shares outstanding (in thousands)
    
20,497
      
20,813
      
20,460
      
20,813
  

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ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

   
US dollars
    
US dollars
  
   
Six month period
ended June 30,
    
Three month period
ended June 30,
  
(in thousands)
  
2022
    
2021
    
2022
    
2021
  
   
(unaudited)
    
(unaudited)
  
Cash flows from operating activities
                        
Net income (loss) for the period
    
18,826
      
18,821
      
9,532
      
9,866
  
Adjustments to reconcile net income to net cash from operating activities:
                                
Depreciation and amortization
    
9,893
      
8,735
      
4,986
      
4,383
  
Interest and exchange rate differences on loans, net
    
-
      
4
      
-
      
33
  
Loss (gain) in respect of trading marketable securities
    
3,772
      
365
      
1,422
      
(116
)
Increase in liability for employee rights upon retirement
    
1,072
      
1,178
      
154
      
716
  
Share in losses of affiliated companies, net
    
121
      
21
      
78
      
10
  
Deferred income taxes
    
142
      
(882
)
    
(15
)
    
39
  
Capital gain on sale of property and equipment, net
    
(295
)
    
(53
)
    
(233
)
    
(49
)
Increase in accounts receivable
    
(5,051
)
    
(6,533
)
    
(1,366
)
    
(945
)
Decrease (increase) in other current assets
    
(6,251
)
    
1,032
      
(3,225
)
    
1,552
  
Decrease (increase) in inventories
    
(3,995
)
    
1,229
      
755
      
(431
)
Increase (decrease) in accounts payable
    
255
      
1,008
      
(956
)
    
1,964
  
Increase (decrease) in deferred revenues
    
541
      
1,863
      
(1,305
)
    
42
  
Increase (decrease) in other current and non-current liabilities
    
(1,228
)
    
743
      
1,025
      
1,264
  
Increase in obligation for purchase non-controlling interests
    
-
      
686
      
-
      
686
  
Net cash provided by operating activities
    
17,802
      
28,217
      
10,852
      
19,014
  
                                 
Cash flows from investment activities
                                
Decrease (increase) in funds in respect of employee rights upon retirement, net of withdrawals
    
(373
)
    
(1,504
)
    
19
      
(765
)
Capital expenditures
    
(14,718
)
    
(6,819
)
    
(8,596
)
    
(4,102
)
Investments in affiliated and other companies
    
(600
)
    
(420
)
    
(223
)
    
(138
)
Repayment of (Investments in) long term deposit
    
130
      
(79
)
    
152
      
-
  
Investment in marketable securities
    
(103
)
    
-
      
(103
)
    
-
  
Proceeds from sale of property and equipment
    
783
      
628
      
573
      
407
  
Net cash used in investment activities
    
(14,881
)
    
(8,194
)
    
(8,178
)
    
(4,598
)
                                 
Cash flows from financing activities
                                
Short term credit from banking institutions, net
    
(99
)
    
(83
)
    
(50
)
    
(34
)
Repayment of long term loan
    
(8,223
)
    
(14,982
)
    
(4,046
)
    
(4,211
)
Dividend paid
    
(5,766
)
    
(10,100
)
    
(2,875
)
    
(10,100
)
Purchase of treasury shares
    
(3,446
)
    
-
      
(3,446
)
    
-
  
Dividend paid to non-controlling interest
    
-
      
(385
)
    
-
      
(356
)
Net cash used in financing activities
    
(17,534
)
    
(25,550
)
    
(10,417
)
    
(14,701
)
                                 
Effect of exchange rate changes on cash and cash equivalents
    
(3,022
)
    
(1,080
)
    
(2,840
)
    
1,728
  
Net increase (decrease) in cash and cash equivalents
    
(17,635
)
    
(6,607
)
    
(10,583
)
    
1,443
  
Balance of cash and cash equivalents at beginning of the period
    
50,306
      
72,183
      
43,254
      
64,133
  
Balance of cash and cash equivalents at end of the period
    
32,671
      
65,576
      
32,671
      
65,576
  

In May 2022, the Company declared a dividend in an amount of US$ 3 million. The dividend was paid in July 2022.

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