Ituran Location and Control Ltd. Presents Results for the Full Year & Fourth Quarter 2017

Dienstag, 27.02.2018 12:30 von PR Newswire

PR Newswire

AZOUR, Israel, Feb. 27, 2018 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the fourth quarter and full year ended December 31, 2017.

Highlights of 2017

  • Net subscribers adds amounted to 103,000, with 1,160,000 subscribers at year-end;
  • Revenue of $238.5 million, up 20% year-over-year;
  • Gross margins of 50.0% and operating margins of 23.7%;
  • EBITDA of $70.1 million (29.4% of revenues);
  • Generated $43.9 million in operating cash flow;
  • Total dividends of $20 million declared to shareholders for 2017;
  • Ended 2017 with $40.4 million in net cash (including marketable securities);

Highlights of the Fourth Quarter of 2017

  • Net subscribers adds in the quarter amounted to 23,000;
  • Revenue of $61.3 million, up 22% year-over-year;
  • Gross margins of 49.8% and operating margins at 23.9%;
  • EBITDA of $18.2 million or 29.7% of revenues;
  • Generated $14.7 million in operating cash flow;
  • Dividend of $5 million declared for the quarter;

Fourth Quarter 2017 Results

Revenues for the fourth quarter of 2017 were $61.3 million, representing an increase of 22% from revenues of $50.4 million in the fourth quarter of 2016. 73% of revenues were from location based service subscription fees and 27% were from product revenues.

Revenues from subscription fees increased by 19% over the same period last year. The growth was driven primarily by the increase in the subscriber base, which expanded from 1,057,000 as of December 31, 2016, to 1,160,000 as of December 31, 2017.

Product revenues increased by 29% compared with the same period last year. While product revenues can be volatile between quarters, the main contribution to growth was the higher product sales in Israel.

Gross profit for the fourth quarter of 2017 was $30.6 million (49.8% of revenues), an increase of 16% compared with $26.4 million (52.4% of revenues) in the fourth quarter of 2016.

The gross margin in the quarter on subscription fees improved to 67.0% compared with 65.5% in the same period last year. The gross margin in the quarter on products was 4.5%

compared with 14.9% in the same period last year. The lower margin on products during the quarter was due to the mix of product sales in the quarter.

Operating profit for the fourth quarter of 2017 was $14.7 million (23.9% of revenues), an increase of 13% compared with an operating profit of $13.0 million (25.8% of revenues) in the fourth quarter of 2016.

Taxes in the quarter amounted to $5.3 million compared with taxes of $3.9 million in the fourth quarter of last year. The increase was due to tax assessments in Brazil and Israel of past year's liabilities.

During the quarter, share in affiliates, net was an income of $3.0 million versus an income of $0.1 million in the same quarter of last year. The majority was due to a capital gain amounting to $2.3 million from an investment round at Bringg, one of Ituran's early stage mobility technology companies, which was offset partially by Ituran's share in Bringg's results.

EBITDA for the quarter was a record $18.2 million (29.7% of revenues), an increase of 13% compared to an EBITDA of $16.0 million (31.9% of revenues) in the fourth quarter of 2016.

Net profit was $9.8 million in the fourth quarter of 2017 (16.0% of revenues) or fully diluted EPS of $0.47, an increase of 6% compared with a net profit of $9.3 million (18.4% of revenues) or fully diluted EPS of $0.44 in the fourth quarter of 2016.

Cash flow from operations for the quarter was $14.7 million.

Full Year Results

Revenues for 2017 reached a record $238.5 million, an increase of 20% compared with revenues of $199.6 million in 2016. The subscriber base grew by 103,000 or 10%, net during 2017. 71% of revenues were from location based service subscription fees and 29% from product revenues.

Revenues from subscription fees increased by 20% over those of last year, driven primarily by the increase in the subscriber base. Product revenues increased by 19% over those of last year.

Gross profit for 2017 was $119.4 million (50.0% of revenues), an increase of 17% compared with $102.0 million (51.1% of revenues) in 2016.

The gross margin in the year on subscription fees improved to 66.7% compared with 65.5% in the same period last year. The gross margin in the quarter on products was 9.0% compared with 15.6% in the same period last year. The generally lower margin on products in 2017 was due to the product mix sold in Israel. 

Operating profit for 2017 was a record $56.5 million (23.7% of revenues), an increase of 18% compared with an operating profit of $48.0 million (24.1% of revenues) in 2016.

EBITDA for the year was a record $70.1 million (29.4% of revenues), an increase of 17% compared to an EBITDA of $59.6 million (29.9% of revenues) in 2016.

Share in affiliates, net was an income of $8.5 million in 2017, compared with a loss of $0.4 million last year. This included capital gains due to Ituran's investment in Bringg in the amount of $4.6 million which was offset partially by Ituran's share in Bringg's results. The balance of the contribution to share in affiliates was primarily due to Ituran's joint venture in Brazil and Argentina, Ituran Road Track.

Net income in 2017 was $43.8 million (18.4% of revenues) or fully diluted earnings per share of $2.09. This is an increase of 36% compared with a net income in 2016 of $32.1 million (16.1% of revenues) or fully diluted earnings per share of $1.53.

Cash flow from operations for 2017 was a record $43.9 million.

As of December 31, 2017, the Company had net cash, including marketable securities, of $40.4 million or $1.93 per share. This is compared with $31.5 million or $1.50 per share as at December 31, 2016.

Dividend

For the fourth quarter of 2017, a dividend of $5.0 million was declared in line with the Company's stated current policy of issuing at least $5 million on a quarterly basis.

For the full year of 2017, the total dividend declared including that of the fourth quarter of 2017, was $20 million, representing 46% of the full year net income.

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, "We are pleased with our fourth quarter results ending the strongest year in our history with record revenue and profit. Our growth has been driven primarily by the ongoing growth in our subscriber base which looks to Ituran for its high quality connected car and stolen vehicle recovery services. Our IRT joint venture also continues to perform well and made an increasingly positive contribution to our profit during the year."

Continued Mr. Sheratzky, "Another highlight of 2017 was the investments into one of our early stage technology holdings, Bringg, which led us to record to a $4.6 million in capital gains in 2017. Earlier in the year, we founded the Tel-Aviv based DRIVE startup incubator and innovation center to promote the development of smart mobility technology, together with leading car companies, Mayer, Hertz, Honda and Volvo. We see transportation and mobility technology as the next frontier of major technological advancement in the coming decade, and we aim to position Ituran as central player in this sphere. We look forward to continued strong growth and increasing profitability in 2018 and beyond."

Conference Call Information

The Company will also be hosting a conference call later today, February 27, 2018 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: 1 888 668 9141
ISRAEL Dial-in Number: 03 918 0609
CANADA Dial-in Number: 1 888 604 5839
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.

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 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 well over 1 million subscribers using its location based services with a market leading position in Israel and Brazil. Established in 1995, Ituran has over 1,700 employees worldwide, with offices in Israel, Brazil, Argentina, 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

Ehud Helft

udi_m@ituran.com

ituran@gkir.com

VP Finance, Ituran

GK Investor & Public Relations

(Israel) +972 3 557 1348

(US) +1 646 201 9246

 

 

CONSOLIDATED BALANCE SHEETS




US dollars


December 31,

(in thousands)

2017

2016




Current assets



Cash and cash equivalents

36,906

31,087

Investment in marketable securities

3,559

398

Accounts receivable (net of allowance for doubtful accounts)

41,009

33,865

Other current assets

47,932

35,522

Inventories

14,244

14,351


143,650

115,223




Long-term investments and debit balances



Investments in affiliated companies

14,839

11,975

Investments in other companies

1,382

85

Other non-current assets

939

1,515

Deferred income taxes

1,860

2,280

Funds in respect of employee rights upon retirement

9,627

7,868


28,647

23,723




Property and equipment, net

39,047

35,644




Intangible assets, net

38

23




Goodwill

3,777

3,406













Total assets

215,159

178,019

 

 

CONSOLIDATED BALANCE SHEETS




US dollars


December 31,

(in thousands)

2017

2016




Current liabilities



Credit from banking institutions

48

3

Accounts payable

23,264

18,624

Deferred revenues

12,796

10,762

Other current liabilities

29,644

26,738


65,752

56,127




Long-term liabilities



Liability for employee rights upon retirement

14,062

11,751

Provision for contingencies

400

435

Deferred revenues

1,241

1,034

Other non-current liabilities

475

501


16,178

13,721




Equity:



Stockholders' equity

125,790

102,229

Non - controlling interest

7,439

5,942

Total equity

133,229

108,171



















Total liabilities and shareholders' equity

215,159

178,019

 

 

CONSOLIDATED STATEMENTS OF INCOME





US dollars

US dollars


Year ended

Three months period

(in thousands

December 31,

ended December 31,

except per share data)

2017

2016

2017

2016






Revenues:





Location-based services

169,752

141,940

44,468

37,267

Wireless communications products

68,773

57,634

16,822

13,094


238,525

199,574

61,290

50,361

Cost of revenues:





Location-based services

56,572

48,916

14,683

12,850

Wireless communications products

62,569

48,627

16,030

11,139


119,141

97,543

30,713

23,989






Gross profit

119,384

102,031

30,577

26,372

Research and development expenses

3,160

2,895

716

813

Selling and marketing expenses

12,246

10,074

2,695

2,603

General and administrative expenses

47,590

40,228

12,494

10,115

Other expenses (income), net

(147)

836

(1)

(137)

Operating income

56,535

47,998

14,673

12,978

Financing income (expenses), net

(989)

2,056

(2,080)

810

Income before income taxes

55,546

50,054

12,593

13,788

Income tax expenses

(17,705)

(14,877)

(5,317)

(3,932)

Share in gains (losses) of affiliated
company, net

8,520

(449)

3,033

105

Net income for the period

46,361

34,728

10,309

9,961

Less: Net income attributable to non-
     controlling interest

(2,567)

(2,589)

(485)

(704)

Net income attributable to the  company

43,794

32,139

9,824

9,257






Basic and diluted earnings per share 
     attributable to Company's stockholders

2.09

1.53

0.47

0.44






Basic and diluted weighted average 
     Number of shares outstanding (in 
     thousands)

20,968

20,968

20,968

20,968

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS





US dollars

US dollars


Year ended

Three months period


December 31,

ended December 31 ,

(in thousands)

2017

2016

2017

2016

Cash flows from operating activities





Net income for the period

46,361

34,728

10,309

9,961

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





Depreciation, amortization and impairment of goodwill

13,519

11,635

3,537

3,065

Loss (gains) in respect of trading marketable securities

(397)

(115)

(196)

(20)

Increase in liability for employee rights upon retirement

1,025

890

198

(70)

Share in losses (gains) of affiliated company, net

(8,520)

449

(3,033)

(105)

Deferred income taxes

(516)

(1,114)

(248)

(278)

Capital (gain) losses  on sale of property and equipment, net

(1)

(52)

56

(34)

Decrease (increase) in accounts receivable

(4,769)

(4,552)

4,139

2,918

increase in other current and non-current assets

(11,517)

(5,033)

(3,323)

4,047

Decrease (increase) in inventories

1,632

(1,424)

1,087

(698)

Increase in accounts payable

3,751

5,884

2,084

1,048

Increase (decrease) in deferred revenues

2,238

(1,122)

(448)

(2,779)

Increase (decrease) in other current and non-current liabilities

1,101

1,298

566

(2,690)

Net cash provided by operating activities

43,907

41,472

14,728

14,365






Cash flows from investment activities





Increase in funds in respect of employee rights upon





retirement, net of withdrawals

(844)

(644)

(225)

(62)

Capital expenditures

(16,159)

(13,645)

(5,363)

(4,596)

Investment in marketable securities

(8,623)

(3,154)

(2,016)

(1,078)

Investments in affiliated companies

(900)

(8,920)

(803)

(1,739)

Investments in other companies

(1,274)

-

(213)

-

Repayment of  loans from affiliated companies

6,982

1,512

2,677

1,512

Proceed from long term deposit

450

16

318

-

Sale of marketable securities

5,368

4,633

1,944

1,018

Proceeds from sale of property and equipment

315

342

10

209

Net cash used in investment activities

(14,685)

(19,860)

(3,671)

(4,736)






Cash flows from financing activities





Short term credit from banking institutions, net

23

(152)

(102)

-

Dividend paid

(22,645)

(17,088)

(5,032)

(3,774)

Dividend paid to non-controlling interest

(1,644)

(994)

(472)

(54)

Net cash provided by (used in)  in financing activities

(24,266)

(18,234)

(5,606)

(3,828)

Effect of exchange rate changes on cash and cash equivalents

863

693

(366)

(346)

Net Increase (decrease) in cash and cash equivalents

5,819

4,071

5,085

5,455

Balance of cash and cash equivalents at beginning of period

31,087

27,016

31,821

25,632

Balance of cash and cash equivalents at end of period

36,906

31,087

36,906

31,087

 

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

During the years 2017 and 2016, the company purchased property and equipment in an amount of US$ 373 thousand and US$ 224 thousand, respectively, using a directly related liability.

In November 2017, the Company declared a dividend in an amount of US$ 5 million. The dividend was paid in January 2018.

 

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SOURCE Ituran Location and Control Ltd

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