EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
 
Exhibit 99.1


 
ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES

ITURAN LOCATION AND CONTROL LTD. PRESENTS
RECORD RESULTS FOR THE FIRST QUARTER 2017

Record quarterly results: revenue of $57m, net profit of $13m & EBITDA of $17m

AZOUR, Israel – May 17, 2017 – Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the first quarter ended March 31, 2017.

Highlights of the First Quarter of 2017
·
Net subscribers adds in the quarter amounting to 25 thousand;
·
Revenue of $57.1 million, up 21% year-over-year;
·
Gross margins of 49.2% and operating margins at 24.2%;
·
Net profit of $13 million, up 83% year-over-year; EBITDA of $17.0 million or 29.8% of revenues;
·
Generated $3.1 million in operating cash flow;
·
Dividend of $5 million declared for the quarter;

First Quarter 2017 Results
Revenues for the first quarter of 2017 were $57.1 million, representing an increase of 21% from revenues of $47.2 million in the first quarter of 2016. 70% of revenues were from location based service subscription fees and 30% were from product revenues.

Revenues from subscription fees increased by 24% over the same period last year. The growth was driven primarily due to the increase in the subscriber base, which expanded from 985,000 as of March 31, 2016, to 1,082,000 as of March 31, 2017.

Product revenues increased by 15% compared with the same period last year.

Gross profit for the first quarter of 2017 was $28.1 million (49.2% of revenues), an increase of 18% compared with $23.8 million (50.4% of revenues) in the first quarter of 2016. The gross margin in the quarter on subscription fees improved to 66.1% compared with 65.1% in the same period last year. The gross margin in the quarter on products was 10.6% compared with 19.0% in the same period last year. The lower margin on products was due to the specific mix of product sales in the first quarter.

Operating profit for the first quarter of 2017 was a record $13.8 million (24.2% of revenues), an increase of 20% compared with an operating profit of $11.5 million (24.4% of revenues) in the first quarter of 2016.

During the quarter, share in affiliates, net was an income of $4 million versus a loss of $0.7 million in the same quarter of last year.  The majority was due to a capital gain from an investment round at Bringg, one of Ituran's early stage mobility technology companies and Ituran's joint venture in Brazil, Ituran Road Track, made a positive contribution.

EBITDA for the quarter was a record $17.0 million (29.8% of revenues), an increase of 21% compared to an EBITDA of $14.1 million (29.9% of revenues) in the first quarter of 2016.

 
ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES
 
Net profit was a record $13.0 million in the first quarter of 2017 (22.8% of revenues) or fully diluted EPS of $0.62, an increase of 83% compared with a net profit of $7.1 million (15.0% of revenues) or fully diluted EPS of $0.34 in the first quarter of 2016.

Cash flow from operations for the quarter was $3.1 million.

As of March 31, 2017, the Company had net cash, including marketable securities, of $26.9 million or $1.28 per share. This is compared with $31.5 million or $1.50 per share as at December 31, 2016.

Dividend
For the first quarter of 2017, a dividend of $5 million was declared in line with the Company's stated current policy of issuing at least $5 million as a dividend on a quarterly basis.

Management Comment
Eyal Sheratzky, Co-CEO of Ituran said, "Our first quarter 2017 results represent an excellent start to 2017 with very strong revenue growth, driven primarily by the solid growth in our subscriber base, which has returned to the higher-end of our typical range. Our end-markets in Israel and Brazil continue to demonstrate strength through ongoing demand and interest in our products and solutions."

Continued Mr. Sheratzky, "In the first quarter, we generated a capital gain from one of our early stage technology holdings, Bringg. We are also one of the founders of the DRIVE startup incubator and innovation center in Tel Aviv to promote the development of smart mobility technology, together with Mayer, Hertz, Honda and Volvo. We see mobility technology as the next frontier of major technological advancement in the coming decade, and we intend to cement ourselves in a central role in this sphere. We are very excited in what the future holds for Ituran."

2

ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIE
 
Conference Call Information

The Company will also be hosting a conference call later today, May 17, 2017 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: 1 888 604 5839
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.

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. Its products and applications are used by customers in over 20 countries.

Ituran's subscriber base has been growing significantly since the Company's inception to over 1 million subscribers using its location based services with a market leading position in Israel and Brazil. Established in 1995, Ituran has over 1,500 employees worldwide, with offices 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 / Gavriel Frohwein
ituran@gkir.com
GK  Investor Relations
(US) +1 646 688 3559
 
3
 
ITURAN LOCATION AND CONTROL LTD.
 
Consolidated Interim Financial Statements
as of March 31, 2017
 
 
ITURAN LOCATION AND CONTROL LTD.
 
Consolidated Financial Statements
as of March 31, 2017
 
Table of Contents
 
 
Page
   
Consolidated Financial Statements:
  
2-3
4
5
 
 
CONSOLIDATED BALANCE SHEETS
   
US dollars
  
   
March 31,
    
December 31,
  
(in thousands)
  
2017
    
2016
  
             
Current assets
            
Cash and cash equivalents
    
26,610
      
31,087
  
Investments in marketable securities
    
695
      
398
  
Accounts receivable (net of allowance for doubtful accounts)
    
38,786
      
33,865
  
Other current assets
    
40,966
      
35,522
  
Inventories
    
16,057
      
14,351
  
     
123,114
      
115,223
  
                 
Long-term investments and other assets
                
Investments in affiliated companies
    
16,507
      
11,975
  
Investments in other companies
    
1,150
      
85
  
Other non-current assets
    
1,700
      
1,515
  
Deferred income taxes
    
2,130
      
2,280
  
Funds in respect of employee rights upon retirement
    
8,481
      
7,868
  
     
29,968
      
23,723
  
                 
Property and equipment, net
    
36,365
      
35,644
  
                 
Intangible assets, net
    
23
      
23
  
                 
Goodwill
    
3,606
      
3,406
  
                 
Total assets
    
193,076
      
178,019
  


- 2 -
 
CONSOLIDATED BALANCE SHEETS
 
   
US dollars
  
   
March 31,
    
December 31,
  
(in thousands)
  
2017
    
2016
  
             
Current liabilities
            
Credit from banking institutions
    
413
      
3
  
Accounts payable
    
18,018
      
18,624
  
Deferred revenues
    
12,075
      
10,762
  
Other current liabilities
    
30,328
      
26,738
  
     
60,834
      
56,127
  
                 
Long-term liabilities
                
Liability for employee rights upon retirement
    
12,758
      
11,751
  
Provision for contingencies
    
447
      
435
  
Deferred revenues
    
1,221
      
1,034
  
Others non-current
    
590
      
501
  
     
15,016
      
13,721
  
                 
Stockholders' equity
    
110,974
      
102,229
  
Non-controlling interests
    
6,252
      
5,942
  
Total equity
    
117,226
      
108,171
  
     
 
      
 
  
Total liabilities and equity
    
193,076
      
178,019
  

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CONSOLIDATED STATEMENTS OF INCOME

   
US dollars
  
   
Three month period
 ended March 31,
  
(in thousands except per share data)
  
2017
    
2016
  
       
Revenues:
            
Location-based services
    
39,739
      
32,155
  
Wireless communications products
    
17,372
      
15,044
  
     
57,111
      
47,199
  
                 
Cost of revenues:
                
Location-based services
    
13,491
      
11,221
  
Wireless communications products
    
15,539
      
12,188
  
     
29,030
      
23,409
  
                 
Gross profit
    
28,081
      
23,790
  
Research and development expenses
    
782
      
675
  
Selling and marketing expenses
    
2,828
      
2,378
  
General and administrative expenses
    
10,762
      
9,271
  
Other  income, net
    
(88
)
    
(43
)
Operating income
    
13,797
      
11,509
  
Financing income, net
    
489
      
68
  
Income before income tax
    
14,286
      
11,577
  
Income tax expenses
    
(4,576
)
    
(3,215
)
Share in gains (losses) of affiliated companies ,net
    
4,000
      
(692
)
Net income for the period
    
13,710
      
7,670
  
Less: Net income attributable to non-controlling interest
    
(723
)
    
(571
)
Net income attributable to the Company
    
12,987
      
7,099
  
                 
Basic and diluted earnings per share attributable to Company's stockholders
    
0.62
      
0.34
  
                 
Basic and diluted weighted average number of shares outstanding (in thousands)
    
20,968
      
20,968
  

- 4 -

 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
US dollars
  
   
Three month period
 ended March 31,
  
(in thousands)
  
2017
    
2016
  
       
Cash flows from operating activities
            
Net income for the period
    
13,710
      
7,670
  
Adjustments to reconcile net income to net cash from operating activities:
                
Depreciation amortization and impairment of goodwill
    
3,228
      
2,611
  
Gain in respect of trading marketable securities
    
(30
)
    
(34
)
Increase in liability for employee rights upon retirement
    
296
      
371
  
Share in losses (gains) of affiliated companies, net
    
(4,000
)
    
692
  
Deferred income taxes
    
111
      
(692
)
Capital gains on sale of property and equipment, net
    
(30
)
    
(10
)
Increase in accounts receivable
    
(3,215
)
    
(6,569
)
Increase in other current assets
    
(4,136
)
    
(3,230
)
Decrease (increase)  in inventories
    
(865
)
    
32
  
Increase (decrease)  in accounts payable
    
(1,143
)
    
2,480
  
Increase in deferred revenues
    
1,085
      
1,355
  
Increase(decrease)  in other current liabilities
    
(1,872
)
    
748
  
Net cash provided by operating activities
    
3,139
      
5,424
  
                 
Cash flows from investment activities
                
Increase in funds in respect of employee rights upon retirement, net of withdrawals
    
(119
)
    
(223
)
Capital expenditures
    
(2,756
)
    
(2,211
)
Investments in affiliated companies
    
(1,158
)
    
(1,408
)
Investments in marketable securities
    
(1,428
)
    
(344
)
Sale of marketable securities
    
1,179
      
1,858
  
Deposit
    
2
      
(63
)
Proceeds from sale of property and equipment
    
66
      
90
  
Net cash used in investment activities
    
(4,214
)
    
(2,301
)
           
 
  
Cash flows from financing activities
                
Short term credit from banking institutions, net
    
399
      
(152
)
Dividend paid
    
(4,193
)
    
(3,120
)
Dividend paid to non-controlling interest
    
(713
)
    
(617
)
Net cash used in financing activities
    
(4,507
)
    
(3,889
)
           
 
  
Effect of exchange rate changes on cash and cash equivalents
    
1,105
      
562
  
     
 
      
 
  
Net decrease  in cash and cash equivalents
    
(4,477
)
    
(204
)
Balance of cash and cash equivalents at beginning of the period
    
31,087
      
27,016
  
Balance of cash and cash equivalents at end of the period
    
26,610
      
26,812
  

Supplementary information on investing activities not involving cash flows:
In February 2017, the Company declared a dividend in an amount of US$ 8.5 million. The dividend will be paid in April 2017.
 
 
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