Ituran Location and Control Ltd. Presents Results for the Second Quarter of 2009
AZOUR, Israel, August 12 -- Ituran Location and Control Ltd. , today announced its consolidated financial results for the second quarter ended June 30, 2009.
Highlights of the Quarter
- A 12,000 net subscriber increase to a record of 533,000 as of June 30, 2009
- Generated $5.1 million in operating cash flow
Second quarter Results
Revenues for the second quarter of 2009 reached US$28.4 million. This is 19% below revenues of US$35.2 million in the second quarter of 2008. Revenues grew by 4%, compared with revenues of $27.3 million in the prior quarter.
Gross profit for the second quarter of 2009 was US$ 14.1 million (49.5% of revenues) compared with US$16.5 million (46.9% of revenues) in the second quarter of last year. Operating profit for the second quarter of 2009 was US$6.0 million (21.1% of revenues) compared with an operating profit of US$6.8 million (19.3% of revenues) in the second quarter of 2008.
EBITDA for the quarter was $8.9 million (31.2% of revenues) compared to an EBITDA of $9.3 million (26.4% of revenues) in the second quarter of last year.
A financial expense of US$2.5 million was recorded as a result of the 6.5% depreciation of the US dollar against the Israeli shekel during the quarter, compared with the prior quarter. This, as previously explained, is due to the fact that most of the Company's cash is held in US dollars, while Ituran's functional currency in Israel is the Israeli Shekel. In the second quarter of 2008, Ituran had a financial expense of $2.3 million.
Net profit was US$2.4 million in the second quarter of 2009 (8.6% of revenues), compared with a net profit of US$2.5 million (7.1% of revenues), as reported in the second quarter of 2008. Fully diluted EPS in the second quarter of 2009 was US$0.12, compared with fully diluted EPS of US$0.12 in the second quarter of 2008.
Cash flow from operations during the quarter generated US$5.1 million.
As of June 30, 2009, the Company had a net cash position (including marketable securities) of US$57.7 million compared with US$55.3 million on December 31st, 2008.
Eyal Sheratzky, Co-CEO of Ituran said, "Our results are very much a demonstration of the robust and profitable platform that we have built and developed in the past few years. Our firmly established customer base through its recurring revenue stream is currently providing us with good stability and strong cash generation. Over the long term, we will continue to capitalize on the inherent long-term operating leverage in our business, built on our stable core business and a growing base of subscribers."
Conference Call Information
The Company will also be hosting a conference call later today, August 12th, 2009 at 8:30am ET. 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 at least 10 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: 1-866-229-7198
CANADA Dial-in Number: 1-888-604-5839
ISRAEL Dial-in Number: 03-918-0685
INTERNATIONAL Dial-in Number: +972-3-918-0685
At: 8:30am Eastern Time, 5:30am Pacific
Time, 3:30pm 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, at: http://www.ituran.com
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 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 533,000 subscribers distributed globally. Established in 1995, Ituran has approximately 1200 employees worldwide, provides its location based services and has a market leading position in Israel, Brazil, Argentina and the United States.
CONSOLIDATED INTERIM BALANCE SHEETS
US dollars
-----------------------
June 30, December 31,
(in thousands) 2009 2008
-----------------------
Current assets
Cash and cash equivalents 29,996 12,511
Deposit in escrow 13,041 12,998
Investments in trading marketable
securities 15,056 30,159
Accounts receivable (net of
allowance for doubtful accounts) 23,798 26,729
Other current assets 5,455 5,487
Inventories 13,646 11,659
---------- ----------
100,992 99,543
---------- ----------
Long-term investments and debit
balances
Investments in affiliated companies 199 180
Investments in other companies 78 80
Available for sale marketable
securities 3,038 2,988
Other current assets 2,071 1,443
Loan to former employee 558 558
Deferred income taxes 6,778 6,544
Funds in respect of employee rights
upon retirement 3,061 2,792
---------- ----------
15,783 14,585
---------- ----------
Property and equipment, net 30,957 27,074
---------- ----------
Intangible assets, net 5,732 6,967
---------- ----------
Goodwill 9,448 9,730
========== ==========
Total assets 162,912 157,899
========== ==========
CONSOLIDATED INTERIM BALANCE SHEETS
US dollars
----------------------
June 30, December
31,
(in thousands) 2009 2008
----------------------
Current liabilities
Credit from banking institutions 352 320
Accounts payable 13,039 11,642
Deferred revenues 5,093 4,821
Other current liabilities 15,115 16,333
---------- ----------
33,599 33,116
---------- ----------
Long-term liabilities
Liability for employee rights upon
retirement 4,902 4,747
Deferred income taxes 1,290 1,463
---------- ----------
6,192 6,210
---------- ----------
Minority interest 3,192 3,124
---------- ----------
Capital Notes 5,894 5,894
---------- ----------
Total shareholders' equity 114,035 109,555
---------- ----------
---------- ----------
Total liabilities and shareholders'
equity 162,912 157,899
========== ==========
CONSOLIDATED INTERIM STATEMENTS OF INCOME
Six month Three month
(in thousands Period ended June 30, Period ended June 30,
except per share data) 2009 2008 2009 2008
----------------------------------------------
Revenues:
Location-based services 41,528 41,671 21,394 21,843
Wireless communications
products 14,148 26,318 7,030 13,332
------- ------- ------- -------
55,676 67,989 28,424 35,175
------- ------- ------- -------
Cost of revenues:
Location-based services 15,612 15,459 8,016 8,268
Wireless communications
products 12,685 20,896 6,337 10,414
------- ------- ------- -------
28,297 36,355 14,353 18,682
======= ======= ======= =======
Gross profit 27,379 31,634 14,071 16,493
Research and
development expenses 180 200 90 94
Selling and marketing
expenses 3,537 5,060 1,833 2,419
General and
administrative expenses 12,673 13,268 6,162 7,186
Other expenses
(income), net (10) 23 - (12)
------- ------- ------- -------
Operating income 10,999 13,083 5,986 6,806
Financing income
(expenses) , net 1,610 (6,664) (2,544) (2,293)
------- ------- ------- -------
Income before taxes on
income 12,609 6,419 3,442 4,513
Taxes on income (4,306) (2,470) (944) (1,689)
------- ------- ------- -------
8,303 3,949 2,498 2,824
Share in gains (losses)
of affiliated
companies, net 15 (29) 15 (13)
Minority interests in
income of subsidiaries (285) (562) (75) (315)
------- ------- ------- -------
Net income for the
period 8,033 3,358 2,438 2,496
======= ======= ======= =======
Earnings per share:
Basic 0.38 0.15 0.12 0.12
======= ======= ======= =======
Diluted 0.38 0.15 0.12 0.12
======= ======= ======= =======
Weighted average number
of shares outstanding
(in thousands):
Basic 20,968 21,850 20,968 21,593
======= ======= ======= =======
Diluted 20,977 21,859 20,977 21,601
======= ======= ======= =======
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
US dollars US dollars
------------------------------------------
Six months period Three months period
ended June 30, ended June 30,
(in thousands) 2009 2008 2009 2008
------------------------------------------
Cash flows from operating
activities
Net income for the period 8,033 3,358 2,438 2,496
Adjustments to reconcile
net income to net cash from
operating activities:
Depreciation and
amortization 5,545 4,712 2,908 2,493
Exchange differences on
principal of deposit and
loan, net (448) 85 (397) 37
Exchange differences on
principal of marketable
securities (908) (92) 980 (49)
Increase in liability for
employee rights upon
retirement 297 345 220 234
Share in losses (gains) of
affiliated companies, net (15) 29 (15) 13
Deferred income taxes (556) 222 (241) 801
Capital loses (gains) on
sale of property and
equipment, net (10) 54 - 21
Minority interests in
profits of subsidiaries,
net 285 562 75 315
Decrease (increase) in
accounts receivable 1,932 (2,521) 2,178 1,112
Increase in other current
assets (481) (2,501) (705) (2,302)
Decrease (increase) in
inventories and contracts
in process, net (2,335) 305 (938) 1,251
Increase (decrease) in
accounts payable 1,745 1,447 (356) (506)
Increase (decrease) in
deferred revenues 416 (429) (96) (740)
Increase (decrease)
other current liabilities (730) 1,500 (967) 107
-------- -------- -------- --------
Net cash provided by
operating activities 12,770 7,076 5,084 5,283
-------- -------- -------- --------
Cash flows from investing
activities
Increase in funds in
respect of employee rights
upon retirement, net of
withdrawals (352) (263) (236) (196)
Capital expenditures (5,752) (7,448) (3,261) (4,697)
Deposit (261) (350) (98) (350)
Proceeds from sale of
property and equipment 37 164 11 32
Investment in marketable
securities (30,490) (1,760) (14,993) (87)
Sale of marketable
securities 45,600 12,010 15,500 10,358
Proceeds from sale of
subsidiary - 58,720 - -
-------- -------- -------- --------
Net cash used in investment
activities 8,782 61,073 (3,077) 5,060
-------- -------- -------- --------
Cash flows from financing
activities
Short-term credit from
banking institutions, net 42 13,242 (71) 2,425
Dividend paid (3,566) (29,223) (3,566) (29,223)
Dividend paid to minority
interest of a subsidiary (169) - (169) -
Purchase of shares from
treasury - (22,093) - (8,881)
-------- -------- -------- --------
Net cash used in financing
activities (3,693) (38,074) (3,806) (35,679)
-------- -------- -------- --------
Effect of exchange rate
changes on cash and cash
equivalents (374) 8,318 2,002 5,954
======== ======== ======== ========
Net increase (decrease) in
cash and cash equivalents 17,485 38,393 203 (19,382)
Balance of cash and cash
equivalents at beginning of
period 12,511 28,669 29,793 86,444
-------- -------- -------- --------
Balance of cash and cash
equivalents at end of
period 29,996 67,062 29,996 67,062
======== ======== ======== ========
Company Contact
Udi Mizrahi (udi_m@ituran.com),
VP Finance, Ituran,
(Israel) +972-3-557-1348;
International Investor Relations,
Ehud Helft,
Kenny Green,
info@gkir.com,
GK Investor Relations,
(US) +1-646-201-9246
Company Contact: Udi Mizrahi (udi_m@ituran.com), VP Finance, Ituran, (Israel) +972-3-557-1348; International Investor Relations: Ehud Helft, Kenny Green, info@gkir.com, GK Investor Relations, (US) +1-646-201-9246