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Published: 2021-08-23 06:30:30 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 2021

AZOUR, Israel – August 23, 2021 – Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the second quarter of 2021.

Highlights of the Second Quarter of 2021
•
Growth in both aftermarket and OEM subscribers: net increase in aftermarket of 23,000 and net increase in OEM of 1,000;
•
Revenues of $67.5 million, an increase of 27% year-over-year;
•
Net income of $9.1 million, versus last year’s $6.3 million net loss;
•
EBITDA of $18.2 million, up 30% year-over-year (excluding last year’s impairment);
•
Generated $19.0 million in quarterly operating cash flow;
•
Declared dividend of $3 million; Renewed share buy-back program;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “We are very pleased with our results, especially with the above-average growth in our after-market subscriber base. While the pandemic continues to impact many of the countries we operate in, we are pleased with our solid performance, demonstrating that even in the hardest of times, Ituran has a strong enough business base to successfully overcome all the challenges it has been faced with. As the global recovery moves to a more solid footing with the associated recovery in global car sales, Ituran is exceptionally well-positioned across all its geographies to capitalize on the ongoing recovery and renewed growth.”

Continued Sheratzky, “In June, one of our early-stage mobility technology holdings, Bringg, a company we seeded in 2014, raised capital from leading venture capital investors. We are very proud that in only seven years, this company, of which  Ituran remains the largest shareholder with 17%, has grown to its current valuation of $1 billion and it is still valued at close to zero on our balance sheet. Ituran prides itself on its ability to correctly read market trends and invest into disruptive mobility technologies. Our investment in Bringg is a successful element of this strategy and has become a strong value-add to Ituran and its shareholders.”

Added Sheratzky, “Our continued profitability and ongoing cash generation, enables us to share the fruits of our ongoing success with our shareholders. Beyond the regular dividend payment of at least $3 million per quarter, the Board of Directors also renewed our share buy- back program of which $19 million remains and which will commence in the coming days. We believe that the ability to buy back Ituran shares, depending on market conditions, is another  tool in our arsenal that will contribute to shareholder value."


Second Quarter 2021 Results

Revenues for the second quarter of 2021 were $67.5 million, an increase of 27% compared with revenues of $53.3 million in the second quarter of 2020.

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

Revenues from subscription fees were $46.9 million, an increase of 7% over second quarter 2020 revenues.

The subscriber base amounted to 1,812,000 as of June 30, 2021.

This represents an increase of 24,000 net over that of the end of the prior quarter. During the quarter, there was an increase of 23,000 in the aftermarket subscriber base and an increase of 1,000 in the OEM subscriber base.

Product revenues were $20.5 million, an increase of 114% compared with that of the second quarter of 2020. Product revenues in the second quarter of 2020 were impacted due to the Covid-related economic shutdowns throughout the world.

Gross profit for the quarter was $30.8 million (45.7% of revenues), an 11% increase compared with gross profit of $27.7 million (51.9% of revenues) in the second quarter of 2020.

The gross margin in the quarter on subscription revenues was 54.8%, compared with 58.5% in the second quarter of 2020. The gross margin on subscription revenue in the second quarter of last year was unusually high due to short-term cost reduction made by the Company to mute the impact of the Covid shutdowns, and current levels represent the more typical level of subscription gross margin.

The gross margin on products was 24.8% in the quarter, compared with 21.8% in the second quarter of 2020.

Operating income for the quarter was $13.8 million (20.4% of revenues), compared with an operating loss of $4.9 million in the second quarter of last year. In the second quarter of last year, it is noted that there was an impairment charge of $14.2 million. Excluding that charge, operating income in the current quarter grew by 48% compared with operating income in the second quarter of 2020 amounting to $9.3 million (17.5% of revenues).

EBITDA for the quarter was $18.2 million (26.9% of revenues), compared with an EBITDA loss of $0.3 million in the second quarter of last year. Excluding the above-mentioned impairment charge last year, current EBITDA represents an increase of 30% versus EBITDA of $13.9 million (26.1% of revenues) in the second quarter of last year.

Financial expense for the quarter was $1.0 million compared with a financial income of $1.5 million in the second quarter of last year, which last year mainly related to the Saver-One increase in value in its market capitalisation.

Net income for the second quarter of 2021 was $9.1 million (13.5% of revenues) or earnings per share of $0.44, compared with a loss of $6.3 million or loss per share of $0.30. Excluding the above-mentioned impairment charge last year, current net income represents an increase of 28% compared to a net income of $7.1 million and earnings per share of $0.34 in the second quarter of 2020.

Cash flow from operations for the second quarter of 2021 was $19.0 million.

As of June 30, 2021, the Company had cash, including marketable securities, of $71.8 million and debt of $38.5 million, amounting to a net cash of $33.3 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 second 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 a decision to continue executing the $19 million remainder of a $25 million share buy-back program that was first announced in 2019. The buy back program will commence on August 25, 2021.

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 23, 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) +1 646 201 9246
 
 ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of June 30, 2021


ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of June 30, 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
  
   
June 30,
    
December 31,
  
(in thousands)
  
2021
    
2020
  
   
(unaudited)
        
             
Current assets
            
Cash and cash equivalents
    
65,576
      
72,183
  
Investments in marketable securities
    
6,217
      
6,663
  
Accounts receivable (net of allowance for doubtful accounts)
    
45,864
      
39,343
  
Other current assets
    
38,578
      
38,624
  
Inventories
    
21,170
      
22,622
  
     
177,405
      
179,435
  
                 
Non- Current investments and other assets
                
Investments in affiliated companies
    
1,042
      
908
  
Investments in other companies
    
1,529
      
1,263
  
Other non-current assets
    
3,340
      
2,953
  
Deferred income taxes
    
12,659
      
11,910
  
Funds in respect of employee rights upon retirement
    
14,877
      
13,558
  
     
33,447
      
30,592
  
                 
Property and equipment, net
    
37,164
      
37,653
  
                 
Operating lease right-of-use assets, net
    
4,258
      
5,548
  
                 
Intangible assets, net
    
18,013
      
19,382
  
                 
Goodwill
    
39,806
      
39,862
  
                 
Total assets
    
310,093
      
312,472
  

- 2 -

ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

   
US dollars
  
   
June 30,
    
December 31,
  
(in thousands)
  
2021
    
2020
  
   
(unaudited)
        
Current liabilities
            
Credit from banking institutions
    
17,590
      
20,388
  
Accounts payable
    
21,387
      
19,716
  
Deferred revenues
    
26,053
      
24,351
  
Obligation to purchase non-controlling interests
    
11,002
      
10,595
  
Other current liabilities
    
41,200
      
37,677
  
     
117,232
      
112,727
  
                 
Non- Current liabilities
                
Long term loan
    
20,938
      
34,068
  
Liability for employee rights upon retirement
    
20,646
      
19,715
  
Deferred income taxes
    
2,230
      
2,494
  
Deferred revenues
    
8,751
      
8,536
  
Others non-current liabilities
    
2,324
      
2,341
  
Operating lease liabilities, non-current
    
1,639
      
2,692
  
     
56,528
      
69,846
  
                 
Stockholders’ equity
    
132,280
      
127,192
  
Non-controlling interests
    
4,053
      
2,707
  
Total equity
    
136,333
      
129,899
  
                 
Total liabilities and equity
    
310,093
      
312,472
  

- 3 -

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)
  
2021
    
2020
    
2021
    
2020
  
   
(unaudited)
    
(unaudited)
  
Revenues:
                        
Telematics services
    
92,562
      
92,707
      
46,943
      
43,731
  
Telematics products
    
42,265
      
28,978
      
20,519
      
9,580
  
     
134,827
      
121,685
      
67,462
      
53,311
  
                                 
Cost of revenues:
                                
Telematics services
    
41,990
      
40,501
      
21,220
      
18,159
  
Telematics products
    
31,652
      
22,558
      
15,421
      
7,495
  
     
73,642
      
63,059
      
36,641
      
25,654
  
                                 
Gross profit
    
61,185
      
58,626
      
30,821
      
27,657
  
Research and development expenses
    
6,841
      
7,305
      
3,295
      
3,419
  
Selling and marketing expenses
    
5,880
      
5,899
      
2,923
      
2,840
  
General and administrative expenses
    
22,005
      
25,999
      
10,907
      
12,076
  
Impairment of goodwill
    
-
      
10,508
      
-
      
10,508
  
Impairment of intangible assets and other expenses (income), net
    
(86
)
    
3,700
      
(74
)
    
3,673
  
Operating income (loss)
    
26,545
      
5,215
      
13,770
      
(4,859
)
Other income (expense), net
    
(3
)
    
3
      
-
      
13
  
Financing income (expense), net
    
(1,982
)
    
863
      
(989
)
    
1,517
  
Income (loss) before income tax
    
24,560
      
6,081
      
12,781
      
(3,329
)
Income tax expenses
    
(5,718
)
    
(4,817
)
    
(2,905
)
    
(2,891
)
Share in gains (losses) of affiliated companies ,net
    
(21
)
    
(887
)
    
(10
)
    
16
  
Net income (loss) for the period
    
18,821
      
377
      
9,866
      
(6,204
)
Less: Net income attributable to non-controlling interest
    
(1,452
)
    
(343
)
    
(758
)
    
(129
)
Net income (loss) attributable to the Company
    
17,369
      
34
      
9,108
      
(6,333
)
                                 
Basic and diluted earnings (losses) per share attributable to Company’s stockholders
    
0.83
      
0.01
      
0.44
      
(0.30
)
                                 
Basic and diluted weighted average number of shares outstanding (in thousands)
    
20,813
      
20,813
      
20,813
      
20,813
  

- 4 -

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)
  
2021
    
2020
    
2021
    
2020
  
   
(unaudited)
    
(unaudited)
  
Cash flows from operating activities
                        
Net income (loss) for the period
    
18,821
      
377
      
9,866
      
(6,204
)
                                 
Adjustments to reconcile net income to net cash from operating activities:
                                
Depreciation and amortization
    
8,735
      
9,826
      
4,383
      
4,603
  
Interest and exchange rate differences on loans, net
    
4
      
(542
)
    
33
      
56
  
Loss (gain) in respect of trading marketable securities
    
365
      
(16
)
    
(116
)
    
(106
)
Gain in respect of investments in other companies
    
-
      
(1,524
)
    
-
      
(1,524
)
Increase in liability for employee rights upon retirement
    
1,178
      
895
      
716
      
61
  
Share in losses (gains) of affiliated companies, net
    
21
      
887
      
10
      
(16
)
Deferred income taxes
    
(882
)
    
(369
)
    
39
      
(1,167
)
Capital loss (gain) on sale of property and equipment, net
    
(53
)
    
87
      
(49
)
    
27
  
Decrease (increase) in accounts receivable
    
(6,533
)
    
3,487
      
(945
)
    
7,978
  
Decrease in other current assets
    
1,032
      
2,949
      
1,552
      
3,477
  
Decrease (increase) in inventories
    
1,229
      
229
      
(431
)
    
607
  
Increase (decrease) in accounts payable
    
1,008
      
(2,245
)
    
1,964
      
(2,435
)
Increase (decrease) in deferred revenues
    
1,863
      
(3,710
)
    
42
      
(2,307
)
Increase in other current and non-current liabilities
    
743
      
6,178
      
1,264
      
2,798
  
Impairment of goodwill
    
-
      
10,508
      
-
      
10,508
  
Impairment of other intangible assets
    
-
      
3,661
      
-
      
3,661
  
Increase (decrease) in obligation for purchase non-controlling interests
    
686
      
(698
)
    
686
      
(749
)
Net cash provided by operating activities
    
28,217
      
29,980
      
19,014
      
19,268
  
                                 
Cash flows from investment activities
                                
Increase in funds in respect of employee rights upon retirement, net of withdrawals
    
(1,504
)
    
(363
)
    
(765
)
    
(255
)
Capital expenditures
    
(6,819
)
    
(5,579
)
    
(4,102
)
    
(2,128
)
Return from (investments in) affiliated and other companies
    
(420
)
    
(492
)
    
(138
)
    
4
  
Investments in long term deposit
    
(79
)
    
(35
)
    
-
      
(13
)
Proceeds from sale of property and equipment
    
628
      
196
      
407
      
30
  
Net cash used in investment activities
    
(8,194
)
    
(6,273
)
    
(4,598
)
    
(2,362
)
                                 
Cash flows from financing activities
                                
Short term credit from banking institutions, net
    
(83
)
    
2,660
      
(34
)
    
-
  
Repayment of long term loan
    
(14,982
)
    
(8,802
)
    
(4,211
)
    
(4,517
)
Purchase of shares from minority shareholders
    
-
      
(750
)
    
-
      
(750
)
Dividend paid
    
(10,100
)
    
(9,967
)
    
(10,100
)
    
(4,917
)
Dividend paid to non-controlling interest
    
(385
)
    
-
      
(356
)
    
-
  
Net cash used in financing activities
    
(25,550
)
    
(16,859
)
    
(14,701
)
    
(10,184
)
                                 
Effect of exchange rate changes on cash and cash equivalents
    
(1,080
)
    
(4,030
)
    
1,728
      
202
  
                                 
Net increase (decrease) in cash and cash equivalents
    
(6,607
)
    
2,818
      
1,443
      
6,924
  
Balance of cash and cash equivalents at beginning of the period
    
72,183
      
53,964
      
64,133
      
49,858
  
Balance of cash and cash equivalents at end of the period
    
65,576
      
56,782
      
65,576
      
56,782
  

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

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