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Published: 2021-11-16 06:30:10 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 THIRD QUARTER OF 2021

AZOUR, Israel – November 16, 2021 – Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the third quarter of 2021.

Highlights of the third quarter of 2021
•
25,000 net subscriber growth: net increase in aftermarket of 21,000 and net increase in OEM of 4,000;
•
Revenues of $65.7 million, an increase of 9% year-over-year;
•
Net income was $7.3 million, compared with $9.3 million last year;
•
Adjusted net income (excluding the non-cash financial impact related to SaverOne’s change in public market value)  was $9.6 million versus $6.0 million last year;
•
EBITDA of $18.5 million, up 23% year-over-year;
•
Generated $11.5 million in quarterly operating cash flow;
•
Declared dividend of $3 million; Continued share buy-back program totaling $1.9 million;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “We are very pleased with our results, especially with the continued strong growth in our after-market subscriber base and the return to growth in the OEM base. Furthermore, the strong operating leverage in our business model enabled us to bring a 9% increase in revenue to a 23% increase in EBITDA.”

Continued Mr. Sheratzky, “As the global recovery continues, we see a solid recovery in car sales in our markets which is leading to increased demand for our services. In particular, the Corona slowdown created many new opportunities for us, one of which we identified was the second-hand car market. We are providing our services to some key financing providers in Latin America, allowing them to reduce the loan risk by tracking the car and the driver behaviour. We see this as a growth engine that could significantly accelerate our subscriber growth in the second half of 2022 and beyond.  More generally, we continue to focus on enhancing our growth by adding additional offerings and services, in particular, by taking advantage of the synergies across all our geographies. Looking ahead, our recent above-average subscriber-base growth throughout 2021 positions us exceptionally well to maintain our profitable growth in 2022 and beyond.”

Third quarter 2021 Results

Revenues for the third quarter of 2021 were $65.7 million, an increase of 9% compared with revenues of $60.3 million in the third quarter of 2020.

74% of revenues were from location-based service subscription fees and 26% were from product revenues.

Revenues from subscription fees were $48.3 million, an increase of 9% over third quarter 2020 revenues.

The subscriber base amounted to 1,837,000 as of September 30, 2021. This represents an increase of 25,000 net over that of the end of the prior quarter, and an increase of 85,000 since the end of the third quarter of last year. During the quarter, there was both an increase of 21,000 in the aftermarket subscriber base and an increase of 4,000 in the OEM subscriber base.

Product revenues were $17.4 million, an increase of 10% compared with that of the third quarter of 2020.

Gross profit for the quarter was $31.9 million (48.5% of revenues), a 16% increase compared with gross profit of $27.4 million (45.4% of revenues) in the third quarter of 2020.

The gross margin in the quarter on subscription revenues was 55.8%, compared with 54.9% in the third quarter of 2020. The gross margin on products was 28.3% in the quarter, compared with 18.6% in the third quarter of 2020.

Operating income for the quarter was $13.9 million (21.1% of revenues), an increase of 32% compared with an operating income of $10.5 million (17.5% of revenues) in the third quarter of last year.

EBITDA for the quarter was $18.5 million (28.1% of revenues), an increase of 23% compared with an EBITDA of $15.0 million (24.9% of revenues) in the third quarter of last year.  

Financial expense for the quarter was $2.7 million compared with a financial income of $2.8 million income in the third quarter of last year. The financial expenses were impacted significantly by the change in market capitalisation on the Tel Aviv Stock Exchange of Saver-One, one of Ituran’s early-stage mobility investments.

Net income for the third quarter of 2021 was $7.3 million (11.1% of revenues) or diluted earnings per share of $0.35, compared with $9.3 million (15.4% of revenues) or diluted earnings per share of $0.45.

Adjusted net income for the third quarter of 2021, which excludes the non-cash financial impact related to Saver One was $9.6 million (or 14.6% of revenues) or diluted earnings per share of $0.46 compared with $6.0 million (or 10.0% of revenues) or diluted earnings per share of $0.29.

Cash flow from operations for the third quarter of 2021 was $11.5 million.

As of September 30, 2021, the Company had cash, including marketable securities, of $67.0 million and debt of $34.6 million, amounting to a net cash of $32.4 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 third 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. The share repurchases, if any, are funded by available cash and repurchases of Ituran's ordinary shares under SEC Rule10b-18 terms.

Under the renewed program, Ituran purchased 71,000 shares for a total of $1.9 million until the end of September 30, 2021.

Conference Call Information

The Company will also be hosting a conference call later today, November 16, 2021 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 September 30, 2021


ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of September 30, 2021

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

ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

   
US dollars
  
   
September 30,
    
December 31,
  
(in thousands)
  
2021
    
2020
  
   
(unaudited)
        
             
Current assets
            
Cash and cash equivalents
    
62,947
      
72,183
  
Investments in marketable securities
    
4,015
      
6,663
  
Accounts receivable (net of allowance for doubtful accounts)
    
45,972
      
39,343
  
Other current assets
    
35,668
      
38,624
  
Inventories
    
26,334
      
22,622
  
     
174,936
      
179,435
  
                 
Non- Current investments and other assets
                
Investments in affiliated companies
    
1,043
      
908
  
Investments in other companies
    
1,543
      
1,263
  
Other non-current assets
    
3,353
      
2,953
  
Deferred income taxes
    
12,135
      
11,910
  
Funds in respect of employee rights upon retirement
    
15,374
      
13,558
  
     
33,448
      
30,592
  
                 
Property and equipment, net
    
34,739
      
37,653
  
                 
Operating lease right-of-use assets, net
    
3,476
      
5,548
  
                 
Intangible assets, net
    
16,811
      
19,382
  
                 
Goodwill
    
39,844
      
39,862
  
                 
Total assets
    
303,254
      
312,472
  

- 2 -

ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

   
US dollars
  
   
September 30,
    
December 31,
  
(in thousands)
  
2021
    
2020
  
   
(unaudited)
        
Current liabilities
            
Credit from banking institutions
    
17,659
      
20,388
  
Accounts payable
    
21,441
      
19,716
  
Deferred revenues
    
24,640
      
24,351
  
Obligation to purchase non-controlling interests
    
11,000
      
10,595
  
Other current liabilities
    
40,740
      
37,677
  
     
115,480
      
112,727
  
                 
Non- Current liabilities
                
Long term loan
    
16,911
      
34,068
  
Liability for employee rights upon retirement
    
21,221
      
19,715
  
Deferred income taxes
    
2,091
      
2,494
  
Deferred revenues
    
8,603
      
8,536
  
Others non-current liabilities
    
2,355
      
2,341
  
Operating lease liabilities, non-current
    
1,169
      
2,692
  
     
52,350
      
69,846
  
                 
Stockholders’ equity
    
130,837
      
127,192
  
Non-controlling interests
    
4,587
      
2,707
  
Total equity
    
135,424
      
129,899
  
                 
Total liabilities and equity
    
303,254
      
312,472
  

- 3 -

ITURAN LOCATION AND CONTROL LTD.
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

   
US dollars
    
US dollars
  
   
Nine month period
ended September 30,
    
Three month period
ended September 30,
  
(in thousands except per share data)
  
2021
    
2020
    
2021
    
2020
  
   
(unaudited)
    
(unaudited)
  
Revenues:
                        
Telematics services
    
140,873
      
137,185
      
48,311
      
44,478
  
Telematics products
    
59,655
      
44,829
      
17,390
      
15,851
  
     
200,528
      
182,014
      
65,701
      
60,329
  
                                 
Cost of revenues:
                                
Telematics services
    
63,354
      
60,553
      
21,364
      
20,052
  
Telematics products
    
44,118
      
35,458
      
12,466
      
12,900
  
     
107,472
      
96,011
      
33,830
      
32,952
  
                                 
Gross profit
    
93,056
      
86,003
      
31,871
      
27,377
  
Research and development expenses
    
10,168
      
9,959
      
3,327
      
2,654
  
Selling and marketing expenses
    
8,877
      
8,428
      
2,997
      
2,529
  
General and administrative expenses
    
33,725
      
37,635
      
11,720
      
11,636
  
Impairment of goodwill
    
-
      
10,508
      
-
      
-
  
Impairment of intangible assets and other expenses (income), net
    
(152
)
    
3,712
      
(66
)
    
12
  
Operating income
    
40,438
      
15,761
      
13,893
      
10,546
  
Other income (expense), net
    
(3
)
    
5
      
-
      
2
  
Financing income (expense), net
    
(4,716
)
    
3,651
      
(2,734
)
    
2,788
  
Income before income tax
    
35,719
      
19,417
      
11,159
      
13,336
  
Income tax expenses
    
(9,055
)
    
(8,595
)
    
(3,337
)
    
(3,778
)
Share in gains (losses) of affiliated companies ,net
    
(39
)
    
(858
)
    
(18
)
    
29
  
Net income for the period
    
26,625
      
9,964
      
7,804
      
9,587
  
Less: Net income attributable to non-controlling interest
    
(1,944
)
    
(663
)
    
(492
)
    
(320
)
Net income attributable to the Company
    
24,681
      
9,301
      
7,312
      
9,267
  
                                 
Basic and diluted earnings per share attributable to Company’s stockholders
    
1.19
      
0.45
      
0.35
      
0.45
  
                                 
Basic and diluted weighted average number of shares outstanding (in thousands)
    
20,809
      
20,813
      
20,799
      
20,813
  

- 4 -
ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

   
US dollars
    
US dollars
  
   
Nine month period
ended September 30,
    
Three month period
ended September 30,
  
(in thousands)
  
2021
    
2020
    
2021
    
2020
  
   
(unaudited)
    
(unaudited)
  
Cash flows from operating activities
                        
Net income for the period
    
26,625
      
9,964
      
7,804
      
9,587
  
                                 
Adjustments to reconcile net income to net cash from operating activities:
                                
                                 
Depreciation and amortization
    
13,329
      
14,310
      
4,594
      
4,484
  
Interest and exchange rate differences on loans
    
-
      
(423
)
    
(4
)
    
119
  
Losses (gain) in respect of trading marketable securities
    
2,609
      
(11
)
    
2,244
      
5
  
Gain in respect of investments in other companies
    
-
      
(4,948
)
    
-
      
(3,424
)
Increase in liability for employee rights upon retirement
    
1,568
      
1,350
      
390
      
455
  
Share in losses (gains) of affiliated companies, net
    
39
      
858
      
18
      
(29
)
Deferred income taxes
    
(794
)
    
(1,244
)
    
88
      
(875
)
Capital loss (gain) on sale of property and equipment, net
    
(91
)
    
118
      
(38
)
    
31
  
Decrease (increase) in accounts receivable
    
(6,991
)
    
1,505
      
(458
)
    
(1,982
)
Decrease in other current assets
    
3,008
      
4,647
      
1,976
      
1,698
  
Decrease (increase) in inventories
    
(4,088
)
    
1,825
      
(5,317
)
    
1,596
  
Increase in accounts payable
    
1,825
      
198
      
817
      
2,443
  
Decrease (increase) in deferred revenues
    
499
      
(5,521
)
    
(1,364
)
    
(1,811
)
Increase in other current and non-current liabilities
    
1,524
      
7,453
      
781
      
1,275
  
Impairment of goodwill
    
-
      
10,508
      
-
      
-
  
Impairment of other intangible assets
    
-
      
3,661
      
-
      
-
  
Increase (decrease) in obligation for purchase non-controlling interests
    
686
      
(680
)
    
-
      
18
  
Net cash provided by operating activities
    
39,748
      
43,570
      
11,531
      
13,590
  
                                 
Cash flows from investment activities
                                
Increase in funds in respect of employee rights upon retirement, net of withdrawals
    
(1,857
)
    
(790
)
    
(353
)
    
(427
)
Capital expenditures
    
(11,246
)
    
(7,506
)
    
(4,427
)
    
(1,927
)
Investments in affiliated and other companies
    
(420
)
    
(545
)
    
-
      
(53
)
Sale of marketable securities, net
    
-
      
269
      
-
      
269
  
Proceeds from (Investments in) deposits
    
(116
)
    
(43
)
    
(37
)
    
(8
)
Proceeds from sale of property and equipment
    
697
      
223
      
69
      
27
  
Net cash used in investment activities
    
(12,942
)
    
(8,392
)
    
(4,748
)
    
(2,119
)
                                 
Cash flows from financing activities
                                
Short term credit from banking institutions, net
    
(149
)
    
2,614
      
(66
)
    
(46
)
Repayment of long term loan
    
(19,173
)
    
(13,353
)
    
(4,191
)
    
(4,551
)
Purchase of shares from minority shareholders
    
-
      
(750
)
    
-
      
-
  
Dividend paid
    
(12,904
)
    
(9,967
)
    
(2,804
)
    
-
  
Dividend paid to non-controlling interest
    
(424
)
    
(1,461
)
    
(39
)
    
(1,461
)
Acquisition of company shares purchased by a wholly owned subsidiary
    
(1,870
)
    
-
      
(1,870
)
    
-
  
Net cash used in financing activities
    
(34,520
)
    
(22,917
)
    
(8,970
)
    
(6,058
)
                                 
Effect of exchange rate changes on cash and cash equivalents
    
(1,522
)
    
(4,389
)
    
(442
)
    
(359
)
                                 
Net increase (decrease) in cash and cash equivalents
    
(9,236
)
    
7,872
      
(2,629
)
    
5,054
  
Balance of cash and cash equivalents at beginning of the period
    
72,183
      
53,964
      
65,576
      
56,782
  
Balance of cash and cash equivalents at end of the period
    
62,947
      
61,836
      
62,947
      
61,836
  

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

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