exhibit_99-1.htm

Exhibit 99.1

ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES

ITURAN LOCATION AND CONTROL LTD. PRESENTS

RESULTS FOR THE SECOND QUARTER 2014

Record Revenue of $46.6m; Record operating profit of $12.1m

AZOUR, Israel – August 11, 2014 – Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the second quarter ended June 30, 2014.

Highlights of the Second Quarter

·	Net subscribers adds in the quarter amounting to 17 thousand, to a record of 775 thousand as of June 30, 2014;

·	Record gross margins at 53.3%;

·	Record operating margin at 25.9%;

·	EBITDA of $14.6 million or 31.4% of revenues;

·	Generated $8.0 million in operating cash flow; ended the quarter with $44.0 million in net cash (including marketable securities);

·	Dividend of $4.0 million declared for the quarter;

Second Quarter 2014 Results

Revenues for the second quarter of 2014 were $46.6 million, representing an 8% growth from revenues of $43.2 million in the second quarter of 2013. 73% of revenues were from location based service subscription fees and 27% from product revenues.

Revenues from subscription fees increased 7% over the same period last year. The increase in subscription fees was primarily due to the growth in the subscriber base, which expanded from 702,000 as of June 30, 2013, to 775,000 as of June 30, 2014.

Product revenues increased by 12% compared with the same period last year.

Gross profit for the second quarter of 2014 was $24.8 million (53.3% of revenues), an increase of 13% compared with $22.0 million (50.9% of revenues) in the second quarter of 2013.

Operating profit for the second quarter of 2014 was $12.1 million (25.9% of revenues), an increase of 19% compared with an operating profit of $10.2 million (23.5% of revenues) in the second quarter of 2013.

EBITDA for the quarter was $14.6 million (31.4% of revenues), an increase of 7% compared to an EBITDA of $13.7 million (31.7% of revenues) in the second quarter of 2013.

Net profit was US$7.4 million in the second quarter of 2014 (15.9% of revenues) or fully diluted EPS of US$0.35. This is compared with a net profit of US$6.7 million (15.6% of revenues) or fully diluted EPS of US$0.32 in the second quarter of 2013.

Cash flow from operations during the quarter was $8.0 million.

ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES

As of June 30, 2014, the Company had net cash, including marketable securities, of $44.0 million or $2.10 per share. This is compared with $47.4 million or $2.26 per share as at March 30, 2014.

Dividend

For the second quarter of 2014, a dividend of $4.0 million was declared in line with the Company’s stated policy of issuing at least 50% of net profits in a dividend, on a quarterly basis.

Eyal Sheratzky, Co-CEO of Ituran said, “We are pleased with our second quarter 2014 results. Our results continue to benefit from the strong operating leverage inherent in our business model. As the revenue from our subscriber base continues to grow, we increasingly benefit through improving margins. We look forward to maintaining the growth trend and continue to improve our margins as we move through 2014. ”

Conference Call Information

The Company will also be hosting a conference call later today, August 11, 2014 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: 1 888 407 2553

ISRAEL Dial-in Number: 03 918 0644

CANADA Dial-in Number: 1 866 485 2399

INTERNATIONAL Dial-in Number: +972 3 918 0644

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.

ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES

About Ituran

Ituran provides location-based services, consisting predominantly of stolen vehicle recovery and tracking services, as well as wireless communications products used in connection with its location-based services and various other applications. Ituran offers mobile asset location, Stolen Vehicle Recovery, management & control services for vehicles, cargo and personal security. Ituran’s subscriber base has been growing significantly since the Company’s inception to over 775,000 subscribers distributed globally. Established in 1995, Ituran has over 1,300 employees worldwide, provides its location based services and has a market leading position in Israel, Brazil, Argentina and the United States.

Company Contact		International Investor Relations
Udi Mizrahi udi_m@ituran.com VP Finance, Ituran (Israel) +972 3 557 1348		Ehud Helft & Kenny Green ituran@gkir.com GK Investor Relations (US) +1 646 201 9246

ITURAN LOCATION AND CONTROL LTD.

Consolidated Interim Financial Statements

as of June 30, 2014

ITURAN LOCATION AND CONTROL LTD.

Consolidated Financial Statements

as of June 30, 2014

Table of Contents

	Page
Consolidated Interim Financial Statements:
Balance Sheets	2-3
Statements of Income	4
Statements of Cash Flows	5

ITURAN LOCATION AND CONTROL LTD.

CONSOLIDATED BALANCE SHEETS

	US dollars (except share data)
	June 30,		December 31,
(in thousands)	2014		2013

Current assets
Cash and cash equivalents		41,767		41,697
Deposit in escrow		-		4,982
Investment in marketable securities		2,266		-
Accounts receivable (net of allowance for doubtful accounts)		34,718		29,239
Other current assets		21,289		18,437
Inventories		12,112		14,506
		112,152		108,861

Long-term investments and other assets
Investments in affiliated company		1,234		1,423
Investments in other company		89		88
Other non-current assets		1,104		1,022
Deferred income taxes		3,445		3,781
Funds in respect of employee rights upon retirement		7,010		6,649
		12,882		12,963

Property and equipment, net		36,782		32,546

Intangible assets, net		647		739

Goodwill		5,485		5,433

Total assets		167,948		160,542

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ITURAN LOCATION AND CONTROL LTD.

CONSOLIDATED BALANCE SHEETS

	US dollars (except share data)
	June 30,		December 31,
(in thousands)	2014		2013

Current liabilities

Credit from banking institutions		1		38
Accounts payable		13,722		11,436
Deferred revenues		10,036		9,852
Other current liabilities		33,276		30,276
		57,035		51,602
Long-term liabilities

Liability for employee rights upon retirement		10,634		9,607
Provision for contingencies		618		2,599
Deferred revenues		977		1,033
Deferred income taxes		194		216
		12,423		13,455

Stockholders’ equity		94,096		90,918
Non-controlling interests		4,394		4,567
Total equity		98,490		95,485

Total liabilities and equity		167,948		160,542

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ITURAN LOCATION AND CONTROL LTD.

CONSOLIDATED STATEMENTS OF INCOME

	US dollars (except share data)						US dollars (except share data)
	Six month period ended June 30,						Three month period ended June 30,
(in thousands except per share data)	2014			2013			2014			2013

Revenues:
Location-based services		66,295			63,422			34,115			32,029
Wireless communications products		25,795			20,732			12,515			11,150
		92,090			84,154			46,630			43,179

Cost of revenues:
Location-based services		23,227			22,425			12,142			11,317
Wireless communications products		20,281			17,903			9,650			9,443
		43,508			40,328			21,792			20,760

Gross profit		48,582			43,826			24,838			22,419
Research and development expenses		1,245			1,167			654			577
Selling and marketing expenses		4,437			4,972			2,152			2,582
General and administrative expenses		19,198			17,348			9,995			8,638
Other expenses, net		(54	)		922			(19	)		466
Operating income		23,756			19,417			12,056			10,156
Financing income, net		(44	)		240			(169	)		179
Income before income tax		23,712			19,657			11,887			10,335
Income tax expense		(7,478	)		(6,234	)		(3,558	)		(3,150	)
Share in losses of affiliated companies, net		(201	)		(1	)		(201	)		(1	)
Net income for the period		16,033			13,422			8,128			7,184
Less: Net income attributable to non-controlling interests		(1,295	)		(690	)		(718	)		(454	)
Net income attributable to the Company		14,738			12,732			7,410			6,730

Basic and diluted earnings per share attributable to Company’s stockholders		0.70			0.61			0.35			0.32

Basic and diluted weighted average number of shares outstanding		20,968			20,968			20,968			20,968

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ITURAN LOCATION AND CONTROL LTD.

STATEMENTS OF CASH FLOWS

	US dollars						US dollars
	Six month period ended June 30,						Three month period ended June 30,
(in thousands except per share data)	2014			2013			2014			2013

Cash flows from operating activities

Net income for the period		16,033			13,422			8,128			7,184

Adjustments to reconcile net income to net cash from operating activities:

Depreciation and amortization		5,268			6,694			2,575			3,531
Losses (gains) in respect of trading marketable securities		88			-			(17	)		-
Exchange differences on principal of deposit and loans, net		(23	)		130			-			33
Increase in liability for employee rights upon retirement		935			728			416			238
Share in losses of affiliated companies, net		201			1			201			1
Deferred income taxes		(898	)		(452	)		(426	)		(63	)
Capital losses (gains) on sale of property and equipment, net		20			9			66			(5	)
Decrease (increase) in accounts receivable		(5,198	)		(3,871	)		(1,003	)		665
Decrease (increase) in other current assets		(707	)		1,174			1,300			952
Decrease (increase) in inventories		2,533			2,484			(106	)		(188	)
Decrease in accounts payable		(1,121	)		(1,158	)		(702	)		899
Increase (decrease) in deferred revenues		24			518			(904	)		(870	)
Increase (decrease) in other current liabilities		518			1,094			(1,535	)		(478	)
Net cash provided by operating activities		17,673			20,773			7,993			11,899

Cash flows from investment activities

Increase in funds in respect of employee rights upon retirement, net of withdrawals		(297	)		(329	)		(139	)		(187	)
Capital expenditures		(6,527	)		(5,660	)		(3,505	)		(3,091	)
Investment in marketable securities		(2,771	)		-			12			-
Deposit in escrow		5,005			-			5,005			-
Deposit		(156	)		313			-			91
Proceeds from sale of property and equipment		628			223			398			79
Net cash used in investment activities		(4,118	)		(5,453	)		1,771			(3,108	)

Cash flows from financing activities

Short term credit from banking institutions, net		(39	)		(21	)		(1,240	)		(289	)
Repayment of long term loans		-			(114	)		-			(103	)
Dividend paid		(11,459	)		(9,585	)		(7,843	)		(7,015	)
Dividend paid to non-controlling interests		(1,505	)		(541	)		(769	)		(541	)
Net cash provided by (used in) financing activities		(13,003	)		(10,261	)		(9,852	)		(7,948	)
Effect of exchange rate changes on cash and cash equivalents		(482	)		(857	)		504			(1,030	)

Net increase in cash and cash equivalents		70			4,202			415			(187	)
Balance of cash and cash equivalents at beginning of period		41,697			29,453			41,352			33,842
Balance of cash and cash equivalents at end of the period		41,767			33,655			41,767			33,655

Supplementary information on investing activities not involving cash flows:

In May 2014, the Company declared a dividend in an amount of US$ 4 million. The dividend was paid in July 2014.

During the six month period ended June 30, 2014, the Company purchased property and equipment in an amount of US$ 3,384 thousand using a directly related liability.

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