Try our mobile app

Published: 2022-03-07 06:30:08 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 IN ITS
RESULTS FOR THE FOURTH QUARTER & FULL YEAR OF 2021

44,000 net subscriber adds & double-digit revenue and EBITDA growth for Q4 & FY 2021

AZOUR, Israel – March 7, 2022 – Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the fourth quarter of 2021.

Highlights of full year 2021

•
Number of subscribers reached 1,881,000 at year-end;
•
Revenue of $270.9 million, an increase of 10% year-over-year;
•
EBITDA of $72.7 million, an increase of 56% year-over-year;
•
Generated $55.8 million in full year operating cash flow;
•
Year-end net cash and marketable securities of $23.3 million;

Highlights of the fourth quarter of 2021

•
44,000 net subscriber growth: net increase in aftermarket of 50,000 and net decrease in OEM of 6,000;
•
Revenues of $70.4 million, an increase of 11% year-over-year;
•
Net income was $9.6 million, an increase of 40% year-over-year;
•
EBITDA of $18.9 million, up 14% year-over-year;
•
Generated $16.0 million in quarterly operating cash flow;
•
Declared dividend of $3 million and continued share buy-back program totaling $5.41 million in the quarter;

Subscriber Growth Forecast in 2022

Management increases its subscriber base growth expectations to between 140,000 to 160,000, net over full year 2022.

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “We are very pleased with our results and solid end to a strong year of growth in our subscriber base. While our traditional business continued to perform well, the acceleration in our subscriber growth was driven by the strong headway we made with our new growth engines, including UBI, finance customers, car rental companies, and growth in the United States.”

Continued Mr. Sheratzky, “We continue to focus on enhancing our growth via the addition of new offerings and services, penetrating new market segments while taking advantage of the synergies across all our geographies. Looking ahead, our well-above average subscriber-base growth throughout 2021 positions us exceptionally well to build on our profitable growth in 2022 and beyond.”


Fourth quarter 2021 Results

Revenues for the fourth quarter of 2021 were $70.4 million, an increase of 11% compared with revenues of $63.6 million in the fourth quarter of 2020.

69% of revenues were from location-based service subscription fees and 31% were from product revenues.

Revenues from subscription fees were $48.8 million, an increase of 7% over fourth quarter 2020 revenues.

The subscriber base amounted to 1,881,000 as of December 31, 2021. This represents an increase of 44,000 net over that of the end of the prior quarter, and an increase of 113,000 year-over-year. During the quarter, there was an increase of 50,000 in the aftermarket subscriber base and a decrease of 6,000 in the OEM subscriber base.

Product revenues were $21.6 million, an increase of 21% compared with that of the fourth quarter of 2020.

Gross profit for the quarter was $33.4 million (47.5% of revenues), a 13% increase compared with gross profit of $29.5 million (46.4% of revenues) in the fourth quarter of 2020.

The gross margin in the quarter on subscription revenues was 56.1%, compared with 54.5% in the fourth quarter of 2020. The gross margin on products was 28.2% in the quarter, compared with 25.6% in the fourth quarter of 2020.

Operating income for the quarter was $14.2 million (20.2% of revenues), an increase of 17% compared with an operating income of $12.1 million (19.0% of revenues) in the fourth quarter of last year.

EBITDA for the quarter was $18.9 million (26.9% of revenues), an increase of 14% compared with an EBITDA of $16.6 million (26.1% of revenues) in the fourth quarter of last year.  

Financial expense for the quarter was $0.8 million compared with a financial expense of $2.2 million in the fourth quarter of last year.

Net income for the fourth quarter of 2021 was $9.6 million (13.6% of revenues) or diluted earnings per share of $0.46, compared with $6.8 million (10.7% of revenues) or diluted earnings per share of $0.33.

Cash flow from operations for the fourth quarter of 2021 was $16.0 million.


Full Year 2021 Results

Revenues for 2021 was $270.9 million, 10% above the $245.6 million reported in 2020.

70% of revenues were from location-based service subscription fees and 30% were from product revenues.

Revenues from subscription fees were $189.6 million, representing an increase of 4% over the same period last year.

Product revenues were $81.2 million, representing an increase of 30% compared with the same period last year.

Gross profit for the year was $126.5 million (46.7% of revenues). This represents an increase of 9% compared with gross profit of $115.5 million (47.0% of revenues) in 2020. The gross margin in the year on subscription revenues was 55.3%, compared with 55.5% in 2020. The gross margin on products was 26.6%, compared with 22.2% in 2020.

Operating profit for 2021 was $54.6 million (20.2% of revenues) an increase of 96% compared with operating profit of $27.8 million (11.3% of revenues) in 2020. In 2020, there was an impairment charge of $14.2 million. Excluding the impairment charge, in 2021, the operating profit increased by 30%.

EBITDA for 2021 was $72.7 million (26.8% of revenues), an increase of 56% compared to $46.7 million (19.0% of revenues) in 2020.

Net income in 2021 was $34.3 million (12.6% of revenues) or fully diluted earnings per share of $1.65, an increase of 113% compared with net income of $16.1 million (6.6% of revenues) or fully diluted earnings per share of $0.77 in 2020.  In 2020, there was an impairment charge of $13.5 million. Excluding the impairment charge, in 2021, the net profit increased by 16%.

Cash flow from operations for the year was $55.8 million.

As of December 31, 2021, the Company had cash, including marketable securities, of $54.7 million and debt of $31.4 million, amounting to a net cash of $23.3 million. This is compared with cash, including marketable securities, of $78.8 million and debt of $54.5 million, amounting to a net cash of $24.3 million, as of December 31, 2020.

Dividend

For the fourth quarter of 2021, 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 it 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. The buy back program commenced on August 25, 2021. 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 208,000 shares for a total of $5.4 million. During 2021, a total of 280,000 were purchased, totaling $7.3 million.

Conference Call Information

The Company will also be hosting a conference call later today, March 7, 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.


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@gkir.com
GK  Investor & Public Relations
(US) +1 212 378 8040
 

 
  ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of December 31, 2021


ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of December 31, 2021

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)
  
2021
    
2020
  
       
Current assets
      
Cash and cash equivalents
    
50,306
      
72,183
  
Investments in marketable securities
    
4,405
      
6,663
  
Accounts receivable (net of allowance for doubtful accounts)
    
43,916
      
39,343
  
Other current assets
    
36,979
      
38,624
  
Inventories
    
27,128
      
22,622
  
     
162,734
      
179,435
  
                 
Long-term investments and other assets
                
Investments in affiliated companies
    
885
      
908
  
Investments in other companies
    
1,866
      
1,263
  
Other non-current assets
    
3,146
      
2,953
  
Deferred income taxes
    
11,091
      
11,360
  
Funds in respect of employee rights upon retirement
    
16,205
      
13,558
  
     
33,193
      
30,042
  
                 
Property and equipment, net
    
35,652
      
37,653
  
                 
Operating lease right-of-use assets, net
    
4,690
      
5,548
  
                 
Intangible assets, net
    
16,753
      
19,932
  
                 
 Goodwill
    
39,999
      
39,862
  
                 
Total assets
    
293,021
      
312,472
  

2
ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

   
US dollars
  
   
December 31,
  
(In thousands)
  
2021
    
2020
  
             
Current liabilities
            
Credit from banking institutions
    
18,257
      
20,388
  
Accounts payable
    
21,275
      
19,716
  
Deferred revenues
    
24,333
      
24,351
  
Obligation to purchase non-controlling interests
    
-
      
10,595
  
Other current liabilities
    
40,767
      
37,677
  
     
104,632
      
112,727
  
Long-term liabilities
                
Long term loan
    
13,169
      
34,068
  
Liability for employee rights upon retirement
    
22,476
      
19,715
  
Deferred income taxes
    
1,952
      
2,494
  
Deferred revenues
    
8,902
      
8,536
  
Operating lease liabilities, non-current
    
1,750
      
2,692
  
Others non-current liabilities
    
2,337
      
2,341
  
     
50,586
      
69,846
  
                 
Stockholders’ equity
    
132,460
      
127,192
  
Non-controlling interests
    
5,343
      
2,707
  
Total equity
    
137,803
      
129,899
  
                 
Total liabilities and equity
    
293,021
      
312,472
  

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)
  
2021
    
2020
    
2021
    
2020
  
                         
Revenues:
                        
Telematics services
    
189,649
      
182,944
      
48,776
      
45,759
  
Telematics products
    
81,235
      
62,683
      
21,580
      
17,854
  
     
270,884
      
245,627
      
70,356
      
63,613
  
                                 
Cost of revenues:
                                
Telematics services
    
84,783
      
81,365
      
21,429
      
20,812
  
Telematics products
    
59,619
      
48,747
      
15,501
      
13,289
  
     
144,402
      
130,112
      
36,930
      
34,101
  
                                 
Gross profit
    
126,482
      
115,515
      
33,426
      
29,512
  
Research and development expenses
    
14,099
      
12,767
      
3,931
      
2,808
  
Selling and marketing expenses
    
11,906
      
11,014
      
3,029
      
2,586
  
General and administrative expenses
    
46,118
      
49,705
      
12,393
      
12,070
  
Impairment of goodwill
    
-
      
10,508
      
-
      
-
  
Impairment of intangible assets and other expenses (income), net
    
(256
)
    
3,690
      
(104
)
    
(22
)
Operating income
    
54,615
      
27,831
      
14,177
      
12,070
  
Other expenses, net
    
(109
)
    
(272
)
    
(106
)
    
(277
)
Financing income (expenses), net
    
(5,538
)
    
1,480
      
(822
)
    
(2,171
)
Income before income tax
    
48,968
      
29,039
      
13,249
      
9,622
  
Income tax expenses
    
(11,854
)
    
(10,856
)
    
(2,799
)
    
(2,261
)
Share in gains (losses) of affiliated companies, net
    
(102
)
    
(842
)
    
(63
)
    
16
  
Net income for the period
    
37,012
      
17,341
      
10,387
      
7,377
  
Less: Net income attributable to non-controlling interest
    
(2,756
)
    
(1,218
)
    
(812
)
    
(555
)
Net income attributable to the Company
    
34,256
      
16,123
      
9,575
      
6,822
  
                                 
Basic and diluted earnings per share attributable to Company’s stockholders
    
1.65
      
0.77
      
0.46
      
0.33
  
                                 
Basic and diluted weighted average number of shares outstanding (in thousands)
    
20,769
      
20,813
      
20,651
      
20,813
  


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)
  
2021
    
2020
    
2021
    
2020
  
Cash flows from operating activities
                        
Net income for the period
    
37,012
      
17,341
      
10,387
      
7,377
  
Adjustments to reconcile net income to net cash from operating activities:
                                
Depreciation and amortization
    
18,096
      
18,831
      
4,767
      
4,521
  
Interest and exchange rate differences on loans
    
(47
)
    
(266
)
    
(47
)
    
157
  
Loss (gain) in respect of marketable securities and other investments
    
2,387
      
(4,101
)
    
(222
)
    
858
  
Increase in liability for employee rights upon retirement
    
2,069
      
1,445
      
501
      
95
  
Share in losses in (gains of) affiliated company, net
    
102
      
842
      
63
      
(16
)
Deferred income taxes
    
(443
)
    
(2,158
)
    
351
      
(914
)
Capital losses (gain) on sale of property and equipment, net
    
(166
)
    
199
      
(75
)
    
81
  
Decrease (increase) in accounts receivable
    
(3,994
)
    
4,496
      
2,997
      
2,991
  
Decrease (increase) in other current and non-current assets
    
1,047
      
3,064
      
(1,961
)
    
(1,583
)
Decrease (increase) in inventories
    
(3,841
)
    
3,120
      
247
      
1,295
  
Increase (decrease) in accounts payable
    
1,776
      
(658
)
    
(49
)
    
(856
)
Increase (decrease) in deferred revenues
    
318
      
(5,367
)
    
(181
)
    
154
  
Increase (decrease) in obligation for purchase non-controlling interests
    
967
      
(848
)
    
281
      
(168
)
Impairment of goodwill
    
-
      
10,508
      
-
      
-
  
Impairment of other intangible assets
    
-
      
3,661
      
-
      
-
  
Increase (decrease) in other current and non-current liabilities
    
507
      
9,959
      
(1,017
)
    
2,506
  
Net cash provided by operating activities
    
55,790
      
60,068
      
16,042
      
16,498
  
                                 
Cash flows from investment activities
                                
Increase in funds in respect of employee rights upon
                                
retirement, net of withdrawals
    
(2,097
)
    
(1,148
)
    
(240
)
    
(358
)
Capital expenditures
    
(16,626
)
    
(10,234
)
    
(5,380
)
    
(2,728
)
Investments in affiliated and other companies, net
    
(675
)
    
(557
)
    
(255
)
    
(12
)
Proceed from (repayment of) long term deposit
    
(48
)
    
(32
)
    
68
      
11
  
Sale of marketable securities
    
-
      
269
      
-
      
-
  
Proceeds from sale of property and equipment
    
922
      
223
      
225
      
-
  
Net cash used in investment activities
    
(18,524
)
    
(11,479
)
    
(5,582
)
    
(3,087
)
                                 
Cash flows from financing activities
                                
Repayment of long-term credit
    
(23,576
)
    
(18,157
)
    
(4,403
)
    
(4,804
)
Short term credit from banking institutions, net
    
(197
)
    
1,186
      
(48
)
    
(1,428
)
Settlement of obligation to purchase non-controlling interests
    
(11,281
)
    
-
      
(11,281
)
    
-
  
Purchase of shares from non-controlling interests
    
-
      
(750
)
    
-
      
-
  
Dividend paid
    
(15,809
)
    
(9,967
)
    
(2,905
)
    
-
  
Dividend paid to non-controlling interests
    
(522
)
    
(1,761
)
    
(98
)
    
(300
)
Acquisition of company shares
    
(7,281
)
    
-
      
(5,411
)
    
-
  
Net cash used in financing activities
    
(58,666
)
    
(29,449
)
    
(24,146
)
    
(6,532
)
Effect of exchange rate changes on cash and cash equivalents
    
(477
)
    
(921
)
    
1,045
      
3,468
  
Net Increase (decrease) in cash and cash equivalents
    
(21,877
)
    
18,219
      
(12,641
)
    
10,347
  
Balance of cash and cash equivalents at beginning of period
    
72,183
      
53,964
      
62,947
      
61,836
  
Balance of cash and cash equivalents at end of period
    
50,306
      
72,183
      
50,306
      
72,183
  

Supplementary information on financing and investing activities not involving cash flows:

In November 2021, the Company declared a dividend in an amount of US$ 3 million. The dividend was paid in January 2022.


5