AZOUR, Israel, May 21, 2019 /PRNewswire/ -- Ituran Location and Control Ltd. ITRN ITRN, today announced its consolidated financial results for the first quarter ended March 31, 2019.
Highlights of the first quarter of 2019
- Revenue of $73.6 million, up 17% year-over-year;
- Adjusted EBITDA of $20.9 million (27.9% of revenues), up 9% year-over-year
- Generated $14.9 million in quarterly operating cash flow;
- Dividend of $5 million declared for the quarter;
- Board of Directors approves share buy-back of up to $25 million;
Management Comment
Eyal Sheratzky, Co-CEO of Ituran said, "As we move through 2019, Ituran is a company on a new scale with significantly greater potential. The process of consolidating and combining Road Track with Ituran continues and we are working on building the top-line synergies in many of our regions. We look forward to reaping the rewards from our already highly successful and growing business over the coming quarters and years."
Mr. Sheratzky added, "Today the board declared a share buy-back of up to $25 million. We believe that the ability to buy back our own shares, depending on market conditions, is a tool that will contribute to shareholder value over the long term."
The results below also include consolidated non-GAAP financial results of Ituran, which exclude revenues and costs related to the purchase price allocation. For further details with regard to the reconciliation between the non-GAAP and GAAP results please see the financial tables with the press release.
First quarter 2019 Results
Revenues for the first quarter of 2019 were $73.6 million. Non-GAAP revenues for the quarter were $74.6 million representing an increase of 18% compared with revenues of $63.1 million in the first quarter of 2018.
The significantly higher average level of the US dollar exchange rate versus the Brazilian real, the Argentinean peso and the Israeli shekel, during the quarter versus the same period last year reduced the overall revenue level in US dollar terms and had a negative impact on the reported year-over-year revenue growth rate. In local currency terms, first quarter revenue grew 32% year over year.
72% of revenues were from location based service subscription fees and 28% were from product revenues.
Non-GAAP revenues from subscription fees increased 19% over the same period last year. In local currency terms, subscription fees grew 36% over the same period last year. The subscriber base amounted to 1,782,000 as of March 31, 2019.
Product revenues increased 18% compared with the same period last year.
Gross profit for the quarter was $34.6 million (47.1% of revenues). Non-GAAP gross profit for the quarter was $35.9 million (48.1% of revenues). This represents an increase of 14% compared with gross profit of $31.5 million (49.9% of revenues) in the first quarter of 2018.
The non-GAAP gross margin in the quarter on subscription fees was 58.4% compared with 64.8% in the same period last year. The lower margin was due to the lower average gross margin on the recently acquired subscribers.
The non-GAAP gross margin in the quarter on products was 20.9% compared with 10.7% in the same period last year. The higher gross margin in the current quarter was due to the product mix sold during the quarter.
Operating profit for the quarter was $13.5 million (18.3% of revenues). Non-GAAP operating profit for the quarter was $16.2 million (21.6% of revenues) which represents an increase of 4%, compared with operating profit of $15.5 million (24.6% of revenues) in the first quarter of 2018. In local currency terms, the year-over-year increase was 23%.
Adjusted EBITDA for the quarter was $20.9 million (27.9% of revenues), an increase of 9% compared to $19.2 million (30.4% of revenues) in the first quarter of 2018. In local currency terms, the increase was 29% year-over-year.
Net income in the first quarter of 2019 was $8.1 million (10.9% of revenues) or fully diluted earnings per share of $0.38. Net income on a non-GAAP basis in the first quarter of 2019 was $10.7 million (14.3% of revenues) or fully diluted earnings per share of $0.50. This represents a decline of 5% compared with a net income of $11.3 million (17.9% of revenues) or fully diluted earnings per share of $0.54 in the first quarter of 2018. In local currency terms the year-over-year increase in net income was 14%.
Cash flow from operations for the quarter was $14.9 million.
As of March 31, 2019, the Company had cash, including marketable securities, of $54.5 million and debt of $73.6 million, amounting to a net debt of $19.1 million or $0.89 per share. This is compared with cash, including marketable securities, of $53.3 million and debt of $73.2 million, amounting to a net debt of $19.9 million, or $0.93 per share, as of December 31, 2018.
Dividend
For the first quarter of 2019, 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.
Share Buy Back
The board of directors approved a share buyback program under which the Company will be able to repurchase Ituran shares in an amount up to $25 million by December 31, 2020.
Conference Call Information
The Company will also be hosting a conference call later today, May 21, 2019 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 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 over 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
CONDENSED CONSOLIDATED BALANCE SHEETS
| ||||
US dollars | ||||
March 31, | Decmber 31, | |||
(in thousands) | 2019 | 2018 | ||
(unaudited) | ||||
Current assets | ||||
Cash and cash equivalents | 53,049 | 51,398 | ||
Investments in marketable securities | 1,486 | 1,897 | ||
Accounts receivable (net of allowance for doubtful accounts) | 50,192 | 54,261 | ||
Other current assets | 52,036 | 52,983 | ||
Inventories | 27,489 | 28,367 | ||
184,252 | 188,906 | |||
Non- Current investments and other assets | ||||
Investments in affiliated companies | 4,158 | 4,872 | ||
Investments in other companies | 2,884 | 2,772 | ||
Other non-current assets | 4,004 | 3,222 | ||
Deferred income taxes | 11,849 | 12,127 | ||
Funds in respect of employee rights upon retirement | 10,141 | 9,497 | ||
33,036 | 32,490 | |||
Property and equipment, net | 51,696 | 50,460 | ||
Operating lease right-of-use assets, net | 7,736 | - | ||
Intangible assets, net | 39,108 | 39,040 | ||
Goodwill | 63,007 | 62,896 | ||
Total assets | 378,835 | 373,792 | ||
CONDENSED CONSOLIDATED BALANCE SHEETS (cont.) | ||||
US dollars | ||||
March 31, | December 31 | |||
(in thousands) | 2019 | 2018 | ||
(unaudited) | ||||
Current liabilities | ||||
Credit from banking institutions | 13,319 | 10,559 | ||
Accounts payable | 22,535 | 23,987 | ||
Deferred revenues | 31,790 | 37,671 | ||
Operating lease liabilities, current | 2,975 | - | ||
Other current liabilities | 30,209 | 32,475 | ||
100,828 | 104,692 | |||
Non- Current liabilities | ||||
Long term loan | 60,314 | 62,622 | ||
Liability for employee rights upon retirement | 15,766 | 14,801 | ||
Provision for contingencies | 186 | 201 | ||
Deferred income taxes | 6,064 | 6,458 | ||
Deferred revenues | 11,896 | 8,221 | ||
Others non-current liabilities | 298 | 325 | ||
Operating lease liabilities, non-current | 4,761 | - | ||
Obligation to purchase non-controlling interests | 16,567 | 16,272 | ||
115,852 | 108,900 | |||
Stockholders' equity | 156,015 | 153,693 | ||
Non-controlling interests | 6,140 | 6,507 | ||
Total equity | 162,155 | 160,200 | ||
Total liabilities and equity | 378,835 | 373,792 | ||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| |||||
US dollars | |||||
(in thousands except per share data) | Three months period | ||||
2019 | 2018 | ||||
(unaudited) | |||||
Revenues: | |||||
Telematics services | 53,159 | 45,699 | |||
Telematics products | 20,445 | 17,379 | |||
73,604 | 63,078 | ||||
Cost of revenues: | |||||
Telematics services | 22,577 | 16,081 | |||
Telematics products | 16,390 | 15,540 | |||
38,967 | 31,621 | ||||
Gross profit | 34,637 | 31,457 | |||
Research and development expenses | 3,751 | 1,160 | |||
Selling and marketing expenses | 2,930 | 2,852 | |||
General and administrative expenses | 14,446 | 11,878 | |||
Other expenses, net | 4 | 26 | |||
Operating income | 13,506 | 15,541 | |||
Other expenses, net | (73) | - | |||
Financing income (expenses), net | (1,015) | 276 | |||
Income before income tax | 12,418 | 15,817 | |||
Income tax expenses | (3,497) | (4,657) | |||
Share in gains (losses) of affiliated companies ,net | (868) | 687 | |||
Net income for the period | 8,053 | 11,847 | |||
Less: Net loss (income) attributable to non-controlling interest | 4 | (566) | |||
Net income attributable to the Company | 8,057 | 11,281 | |||
Basic and diluted earnings per share attributable to Company's stockholders | 0.38 | 0.54 | |||
Basic and diluted weighted average number of shares outstanding (in thousands) | 21,342 | 20,968 | |||
RECONCILIATION OF NON-GAAP RESULTS
| ||||||
US dollars | ||||||
Three months period | ||||||
(in thousands) | 2019 | 2018 | ||||
(unaudited) | ||||||
GAAP Revenues | 73,604 | 63,078 | ||||
Valuation adjustment on acquired deferred revenue | 1,019 | - | ||||
Non –GAAP revenue | 74,623 | 63,078 | ||||
GAAP gross profit | 34,637 | 31,457 | ||||
Gross profit adjustment | 1,239 | - | ||||
Non –GAAP gross profit | 35,876 | 31,457 | ||||
GAAP operating income | 13,506 | 15,541 | ||||
Other profit adjustments | 1,546 | - | ||||
Amortization | 1,100 | - | ||||
Non-GAAP operating income | 16,152 | 15,541 | ||||
Depreciation and amortization | 4,699 | 3,623 | ||||
Adjusted EBITDA | 20,851 | 19,164 | ||||
Net income attribute to the company's shareholders | 8,057 | 11,281 | ||||
Operation income adjustment | 2,646 | - | ||||
Non-GAAP net income attributable to Iturans' shareholders | 10,703 | 11,281 | ||||
Summary of NON –GAAP Financial Information
| ||||
US dollars | ||||
(in thousands | Three months period | |||
except per share data) | 2019 | 2018 | ||
(unaudited) | ||||
revenue | 74,623 | 63,078 | ||
Gross profit | 35,876 | 31,457 | ||
Operation income | 16,152 | 15,541 | ||
Net income attribute to shareholders | 10,703 | 11,281 | ||
Adjusted EBITDA | 20,851 | 19,164 | ||
Basic and diluted earnings per share | 0.50 | 0.54 | ||
CONSOLIDATED STATEMENTS OF CASH FLOWS
| ||||
US dollars | ||||
Three months period | ||||
(in thousands) | 2019 | 2018 | ||
(unaudited) | ||||
Cash flows from operating activities | ||||
Net income for the period | 8,053 | 11,847 | ||
Adjustments to reconcile net income to net cash from operating activities: | ||||
Depreciation and amortization | 6,115 | 3,623 | ||
Interest on long term credit | (13) | - | ||
Loss (gains) in respect of trading marketable securities | 28 | (196) | ||
Increase (decrease) in liability for employee rights upon retirement, net | 274 | (128) | ||
Share in losses (gains) of affiliated company, net | 868 | (687) | ||
Deferred income taxes | 84 | 1,512 | ||
Capital losses from sale of property and equipment, net | 6 | 52 | ||
Decrease (increase) in accounts receivable | 4,929 | (4,117) | ||
increase in other current and non-current assets | (301) | (4,199) | ||
Decrease (increase) in inventories | 1,292 | (570) | ||
Operating lease right-of-use assets | 1,193 | - | ||
Increase (decrease) in accounts payable | (1,596) | 382 | ||
Decrease in deferred revenues | (2,548) | (336) | ||
Increase (decrease) in other current and non-current liabilities | (2,778) | 353 | ||
Operating lease liabilities | (1,193) | - | ||
Increase in obligasion for purechase non-controling interests | 494 | - | ||
Net cash provided by operating activities | 14,907 | 7,536 | ||
Cash flows from investment activities | ||||
Increase in funds in respect of employee rights upon | ||||
retirement, net of withdrawals | (75) | 358 | ||
Capital expenditures | (6,930) | (6,618) | ||
Investments in other companies | (13) | - | ||
Repayment of loans from affiliated companies | - | 2,145 | ||
Proceed from long term deposit | (78) | (91) | ||
Sale of marketable securities,net | 384 | 50 | ||
Proceeds from sale of property and equipment | 27 | 203 | ||
Net cash used in investment activities | (6,685) | (3,953) | ||
Cash flows from financing activities | ||||
Short term credit from banking institutions, net | (1,818) | (41) | ||
Dividend paid | (4,909) | (5,032) | ||
Dividend paid to non-controlling interest | (538) | (425) | ||
Net cash used in in financing activities | (7,265) | (5,498) | ||
Effect of exchange rate changes on cash and cash equivalents | 694 | (257) | ||
Net Increase (decrease) in cash and cash equivalents | 1,651 | (2,172) | ||
Balance of cash and cash equivalents at beginning of period | 51,398 | 36,906 | ||
Balance of cash and cash equivalents at end of period | 53,049 | 34,734 | ||
Supplementary information on financing and investing activities not involving cash flows: In March 2019, the Company declared a dividend in the amount of US$ 5 million. The dividend was paid in April 2019
Company Contact Udi Mizrahi Deputy CEO &VP Finance, Ituran | International Investor Relations Ehud Helft GK Investor & Public Relations (US) +1 646 201 9246 |
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SOURCE Ituran Location and Control Ltd
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