Record revenue contributed from recent
strong subscriber growth
Net subscriber growth in Q2 2023 of
47,000
AZOUR, Israel ,
Aug. 15,
2023 /PRNewswire/ -- Ituran Location and Control Ltd.
(NASDAQ: ITRN), today announced its consolidated financial results
for the second quarter of 2023.
Highlights of the Second Quarter of 2023
- Net subscriber growth of 47,000: net increase in aftermarket of
45,000 and net increase in OEM of 2,000;
- Record revenue of $81.6 million,
an increase of 11% year-over-year;
- Net income of $12.2 million, an
increase of 40% year-over-year;
- EBITDA of $21.8 million, up 12%
year-over-year;
- Generated $17.5 million in
quarterly operating cash flow;
- Declared dividend of $3.0 million
and continued share buy-back program totaling $3.5 million in the quarter;
Management Comment
Eyal Sheratzky, Co-CEO of Ituran said, "We are very
pleased with the results of the second quarter of 2023, especially
with our highest level of quarterly revenue in our history and
highest net income and EBITDA levels in over four years. The solid
results are due to the accelerated subscriber growth we have seen
in recent quarters which has contributed to our strong results.
Furthermore, even given this strong growth, we have been able to
continue to demonstrate very strong cash generation, reporting our
highest ever operating cash flow in a six month period of almost
$35 million."
"As our recent partnership with Santander Bank demonstrates, we are experiencing
growing interest for our value-added telematic services from the
car financing sector in Latin
America. Our strong momentum adds to our optimism for
continued growth in the coming quarters and we expect that the
positive trends will continue through 2023 and beyond."
Second Quarter 2023 Results
Revenues for the second quarter of 2023 were a
record $81.6 million, an increase of
11% compared with revenues of $73.4
million in the second quarter of 2022. The appreciation of
the US dollar over the past year, versus the local currencies in
the various geographies in which Ituran operates impacted the
revenues as reported in US dollars. In local currency terms, second
quarter revenue grew by 15% compared with that of the second
quarter of last year.
72% of revenues were from location-based service subscription
fees and 28% were from product revenues.
Revenues from subscription fees were a record $59.2 million, an increase of 13% over the second
quarter 2022 revenues. In local currency terms, second quarter
subscription fee revenue grew by 17% compared with that of the
second quarter of last year.
The subscriber base amounted to 2,162,000 as of June 30, 2023. This represents an increase of
47,000 net over that of the end of the prior quarter, and a net
increase of 190,000 year-over-year. During the quarter, there was
an increase of 45,000 net in the aftermarket subscriber base and an
increase of 2,000 net in the OEM subscriber base.
Product revenues were $22.5
million, an increase of 7% compared with that of the second
quarter of last year.
Gross profit for the quarter was $38.7 million (47.4% of revenues), a 14% increase
compared with gross profit of $33.8
million (46.1% of revenues) in the second quarter of last
year.
The gross margin in the quarter on subscription revenues was
57.3%, compared with 56.8% in the second quarter of last year. The
gross margin on products was 21.0% in the quarter, compared with
19.6% in the second quarter of last year.
Operating income for the quarter was $16.6 million (20.4% of revenues), an increase of
15% compared with an operating income of $14.4 million (19.7% of revenues) in the second
quarter of last year. In local currency terms, second quarter
operating income grew by 18% compared with that of the second
quarter of last year.
EBITDA for the quarter was $21.8
million (26.7% of revenues), an increase of 12% compared
with EBITDA of $19.4 million (26.5%
of revenues) in the second quarter of last year. In local currency
terms, second quarter EBITDA grew by 15% compared with that of the
second quarter of last year.
Financial income for the quarter was $0.3 million, compared with financial expenses of
$1.4 million in the second quarter of
last year. In the second quarter of last year, there was a
financial loss due to the devaluation of SaverOne, an early-stage
public company in which Ituran holds equity.
Net income for the second quarter of 2023 was
$12.2 million (15.0% of revenues) or
diluted earnings per share of $0.61,
an increase of 40% compared to $8.7
million (11.9% of revenues) or diluted earnings per share of
$0.43 in the second quarter of last
year. In local currency terms, second quarter net income grew by
44% compared with that of the second quarter of last year.
Cash flow from operations for the second quarter of 2023
was $17.5 million.
On the balance sheet, as of June
30, 2023, the Company had cash, including marketable
securities, of $34.5 million and debt
of $4.5 million, amounting to a net
cash position of $30.0 million. This
is compared with cash, including marketable securities, of
$28.2 million and debt of
$12.2 million, amounting to a net
cash position of $16.0 million, as of
the end of 2022.
Dividend
For the second quarter of 2023, a dividend of $3.0 million was declared.
Buy Back
On August 23, 2022, Ituran
announced that its Board of Directors made the decision to continue
executing on the $19 million
remainder of a $25 million share
buy-back program that was announced in 2019. On February 23, 2023, the Board of Directors made
the decision to increase the buy-back program by a further
$10 million. As of June 30, 2023, there is remaining under the
buy-back program $8.6 million.
In the second quarter, under the program, Ituran purchased
156,138 shares for a total of $3.5
million.
Share repurchases, were funded by available cash and repurchases
of Ituran's ordinary shares under SEC Rule10b-18 terms.
Conference Call Information
The Company will also be hosting a conference call later
today, August 15, 2023 at
10am 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:
10:00am Eastern Time, 7:00am Pacific Time, 5:00pm 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, financing industries
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 over 2 million subscribers using its
location-based services with a market leading position in
Israel and Latin America. Established in 1995, Ituran has
approximately 2,700 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
Udi Mizrahi
udi_m@ituran.com
Deputy CEO & VP
Finance, Ituran
(Israel) +972 3 557
1348
|
International
Investor Relations
Ehud Helft
ituran@ekgir.com
EK Global
Investor Relations
(US) +1 212 378
8040
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
US dollars
|
|
June 30,
|
December 31,
|
|
(in thousands)
|
2023
|
2022
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
Cash and cash
equivalents
|
34,205
|
27,850
|
|
Investments in
marketable securities
|
257
|
316
|
|
Accounts receivable
(net of allowance for doubtful accounts)
|
47,909
|
45,821
|
|
Other current
assets
|
56,056
|
48,156
|
|
Inventories
|
28,048
|
28,509
|
|
166,475
|
150,652
|
|
|
Non- Current investments and other
assets
|
|
|
|
Investments in
affiliated companies
|
763
|
1,188
|
|
Investments in other
companies
|
1,839
|
1,779
|
|
Other non-current
assets
|
3,762
|
3,129
|
|
Deferred income
taxes
|
12,849
|
11,400
|
|
Funds in respect of
employee rights upon retirement
|
15,537
|
15,146
|
|
34,750
|
32,642
|
|
|
Property and equipment, net
|
44,528
|
45,598
|
|
|
|
|
Operating lease right-of-use assets,
net
|
7,994
|
9,905
|
|
|
|
|
Intangible assets, net
|
11,043
|
12,620
|
|
|
Goodwill
|
39,328
|
39,510
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
304,118
|
290,927
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (cont.)
|
|
US dollars
|
|
June 30,
|
December 31,
|
|
(in thousands)
|
2023
|
2022
|
|
(unaudited)
|
|
|
Current liabilities
|
|
|
|
Credit from banking
institutions
|
4,143
|
11,845
|
|
Accounts
payable
|
23,224
|
21,937
|
|
Deferred
revenues
|
25,466
|
21,783
|
|
Other current
liabilities
|
40,846
|
37,407
|
|
93,679
|
92,972
|
|
|
|
|
|
|
|
|
Non- Current liabilities
|
|
|
|
Long term
loan
|
309
|
345
|
|
Liability for employee
rights upon retirement
|
21,799
|
21,224
|
|
Deferred income
taxes
|
1,395
|
1,534
|
|
Deferred
revenues
|
14,335
|
13,036
|
|
Others non-current
liabilities
|
1,983
|
2,071
|
|
Operating lease
liabilities, non-current
|
4,975
|
6,886
|
|
44,796
|
45,096
|
|
|
|
|
|
|
|
Stockholders' equity
|
159,303
|
145,797
|
|
Non-controlling interests
|
6,340
|
7,062
|
|
Total equity
|
165,643
|
152,859
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
304,118
|
290,927
|
|
|
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)
|
2023
|
2022
|
2023
|
2022
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
Revenues:
|
|
|
|
|
|
|
Telematics
services
|
114,963
|
102,540
|
59,186
|
52,314
|
|
|
Telematics
products
|
46,154
|
42,920
|
22,459
|
21,074
|
|
|
161,117
|
145,460
|
81,645
|
73,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
Telematics
services
|
48,642
|
44,739
|
25,250
|
22,607
|
|
|
Telematics
products
|
37,124
|
33,627
|
17,733
|
16,950
|
|
|
85,766
|
78,366
|
42,983
|
39,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
75,351
|
67,094
|
38,662
|
33,831
|
|
|
Research and
development expenses
|
8,354
|
8,131
|
4,216
|
3,991
|
|
|
Selling and marketing
expenses
|
6,606
|
6,580
|
3,283
|
3,456
|
|
|
General and
administrative expenses
|
27,716
|
23,698
|
14,443
|
11,986
|
|
|
Other income (expense),
net
|
118
|
(118)
|
75
|
(39)
|
|
|
Operating
income
|
32,557
|
28,803
|
16,645
|
14,437
|
|
|
Other expense,
net
|
(3)
|
-
|
(24)
|
-
|
|
|
Financing income
(expense), net
|
154
|
(3,938)
|
349
|
(1,373)
|
|
|
Income before income
tax
|
32,708
|
24,865
|
16,970
|
13,064
|
|
|
Income tax
expenses
|
(7,220)
|
(5,918)
|
(3,801)
|
(3,454)
|
|
|
Share in losses of
affiliated companies, net
|
(627)
|
(121)
|
(261)
|
(78)
|
|
|
Net income for the
period
|
24,861
|
18,826
|
12,908
|
9,532
|
|
|
Less: Net income
attributable to non-controlling interest
|
(1,257)
|
(1,359)
|
(659)
|
(794)
|
|
|
Net income attributable
to the Company
|
23,604
|
17,467
|
12,249
|
8,738
|
|
|
Basic and diluted
earnings per share attributable to
Company's stockholders
|
1.17
|
0.85
|
0.61
|
0.43
|
|
|
Basic and diluted
weighted average number of shares
outstanding (in thousands)
|
20,158
|
20,497
|
20,118
|
20,460
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
US dollars
|
US dollars
|
|
Six month period
ended June 30,
|
Three month period
ended June 30,
|
|
(in thousands)
|
2023
|
2022
|
2023
|
2022
|
|
(unaudited)
|
(unaudited)
|
|
Cash flows from operating
activities
|
|
|
|
|
|
Net income for the
period
|
24,861
|
18,826
|
12,908
|
9,532
|
|
Adjustments to reconcile net income to net cash
from
operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
10,051
|
9,893
|
5,146
|
4,986
|
|
Loss (gain) in respect
of trading marketable securities
|
(53)
|
3,772
|
(54)
|
1,422
|
|
Increase in liability
for employee rights upon retirement
|
1,590
|
1,072
|
729
|
154
|
|
Share in losses of
affiliated companies, net
|
627
|
121
|
261
|
78
|
|
Deferred income
taxes
|
(1,394)
|
142
|
(791)
|
(15)
|
|
Capital loss (gain) on
sale of property and equipment, net
|
46
|
(295)
|
53
|
(233)
|
|
Increase in accounts
receivable
|
(2,952)
|
(5,051)
|
(172)
|
(1,366)
|
|
Increase in other
current assets
|
(6,975)
|
(6,251)
|
(2,399)
|
(3,225)
|
|
Decrease (increase) in
inventories
|
(609)
|
(3,995)
|
(450)
|
755
|
|
Increase (decrease) in
accounts payable
|
939
|
255
|
(2,726)
|
(956)
|
|
Increase
(decrease) in deferred
revenues
|
5,227
|
541
|
2,498
|
(1,305)
|
|
Increase
(decrease) in other current and
non-current liabilities
|
3,544
|
(1,228)
|
2,504
|
1,025
|
|
Net cash provided by
operating activities
|
34,902
|
17,802
|
17,507
|
10,852
|
|
|
|
|
|
|
Cash flows from investment
activities
|
|
|
|
|
|
Decrease (increase) in
funds in respect of employee rights upon
retirement, net of withdrawals
|
(1,160)
|
(373)
|
(777)
|
19
|
|
Capital
expenditures
|
(6,282)
|
(14,718)
|
(3,379)
|
(8,596)
|
|
Investments in
affiliated and other companies
|
(607)
|
(600)
|
(312)
|
(223)
|
|
Repayment of
(Investments in) long term deposit
|
(45)
|
130
|
(45)
|
152
|
|
Sale of (investment
in) marketable securities
|
99
|
(103)
|
|
(103)
|
|
Proceeds from sale of
property and equipment
|
58
|
783
|
40
|
573
|
|
Net cash used in
investment activities
|
(7,937)
|
(14,881)
|
(4,473)
|
(8,178)
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
Short term credit from
banking institutions, net
|
185
|
(99)
|
(954)
|
(50)
|
|
Repayment of long term
loan
|
(7,907)
|
(8,223)
|
(3,765)
|
(4,046)
|
|
Dividend
paid
|
(5,617)
|
(5,766)
|
(2,820)
|
(2,875)
|
|
Purchase of treasury
shares
|
(4,717)
|
(3,446)
|
(3,517)
|
(3,446)
|
|
Dividend paid to
non-controlling interest
|
(1,687)
|
-
|
(892)
|
-
|
|
Net cash used in
financing activities
|
(19,743)
|
(17,534)
|
(11,948)
|
(10,417)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(867)
|
(3,022)
|
(157)
|
(2,840)
|
|
Net increase (decrease)
in cash and cash equivalents
|
6,355
|
(17,635)
|
929
|
(10,583)
|
|
Balance of cash and
cash equivalents at beginning of the period
|
27,850
|
50,306
|
33,276
|
43,254
|
|
Balance of cash and
cash equivalents at end of the period
|
34,205
|
32,671
|
34,205
|
32,671
|
|
|
In May 2023, the
Company declared a dividend in an amount of US$ 3 million. The
dividend was paid in July 2023.
|
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SOURCE Ituran Location and Control Ltd.