(MENAFNEditorial) -- Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the third quarter ended September 30, 2016.
Highlights of the Third Quarter
Net subscribers adds in the quarter amounting to 23,000, reaching 1,035,000 subscribers; Revenue of $52.8 million, up 20% year-over-year; Gross margin of 50.0% and operating margin of 21.9%; excluding a one-time expense, operating margin was 24.2%; Net income of $8.2 million, up 32% year-over-year; Generated $12.0 million in operating cash flow; Dividend of $4.1 million declared for the quarter; Third Quarter 2016 Results
Revenues for the third quarter of 2016 were $52.8 million, representing an increase of 20% from revenues of $43.8 million in the third quarter of 2015. 70% of revenues were from location based service subscription fees and 30% were from product revenues.
Revenues from subscription fees increased by 18% over the same period last year. The growth was driven primarily due to the increase in the subscriber base, which expanded from 915,000 as of September 30, 2015, to 1,035,000 as of September 30, 2016.
Product revenues increased by 27% compared with the same period last year. The main contribution to growth was due to sales in Israel.
Gross profit for the third quarter of 2016 was $26.4 million (50.0% of revenues), an increase of 20% compared with $22.0 million (50.2% of revenues) in the third quarter of 2015. The gross margin in the quarter on subscription fees was 65.7% compared with 62.6% in the same period last year. The gross margin in the quarter on products was 12.7% compared with 18.5% in the same period last year.
Other Expenses were $1.0 million which included a one-time $1.2 million expense related to the repurchase, by the Company, of a former employee's options in Ituran Brazil.
Operating profit for the third quarter of 2016 was $11.6 million (21.9% of revenues), an increase of 18% compared with an operating profit of $9.8 million (22.4% of revenues) in the third quarter of 2015. Excluding the above-mentioned one-time expense, the operating profit would have been $12.8 million (24.2% of revenues), representing an increase of 30%.
During the quarter, share in affiliates, net was an income of $753 thousand versus a loss of $638 thousand in the same quarter of last year. The change was due to a capital gain of $1.2 million, resulting from a dilutive event at an affiliate.
EBITDA for the quarter was $14.6 million (27.7% of revenues), an increase of 17% compared to an EBITDA of $12.5 million (28.6% of revenues) in the third quarter of 2015. Excluding the above-mentioned one-time expense, EBITDA for the quarter would have been $15.8 million (29.9% of revenues), representing an increase of 26%.
Net profit was $8.2 million in the third quarter of 2016 (15.4% of revenues) or fully diluted EPS of $0.39, an increase of 32% compared with a net profit of $6.2 million (14.1% of revenues) or fully diluted EPS of $0.29 in the third quarter of 2015.
Cash flow from operations for the quarter was $12.0 million.
As of September 30, 2016, the Company had net cash, including marketable securities, of $26.0 million or $1.24 per share. This is compared with $25.8 million or $1.23 per share as at June 30, 2016.
Dividend
For the third quarter of 2016, a dividend of $4.1 million was declared in line with the Company's stated policy of issuing at least 50% of net profits in a dividend, on a quarterly basis.
Eyal Sheratzky, Co-CEO of Ituran said, "We are pleased with our results and our strong performance to date in 2016. As our subscriber base continues to grow, having surpassed 1 million subscribers last quarter, we increasingly enjoy the operating leverage inherent in our business, and our subscriber gross margin has now surpassed 65% throughout 2016. I look forward to continued growth as we move into 2017 and beyond."
Conference Call Information
The Company will also be hosting a conference call later today, November 15, 2016 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: 1 866 860 9642
ISRAEL Dial-in Number: 03 918 0687
CANADA Dial-in Number: 1 888 604 5839
INTERNATIONAL Dial-in Number: +972 3 918 0687
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 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 985,000 subscribers distributed globally. Established in 1995, Ituran has over 1,500 employees worldwide, provides its location based services and has a market leading position in Israel, Brazil, Argentina and the United States.
CONDENSED CONSOLIDATED BALANCE SHEETS
US dollars
September 30,
December 31,
(in thousands)
2016
2015
Current Assets
Cash and cash equivalents
25,632
27,016
Investments in marketable securities
390
2,035
Accounts receivable (net of allowance for doubtful accounts)
35,862
27,436
Other current assets
34,367
22,437
Inventories
13,953
12,781
110,204
91,705
Long-term investments and other assets
Investments in affiliated companies
11,661
4,705
Investments in other company
87
78
Other non-current assets
1,350
1,166
Deferred income taxes
2,332
2,279
Funds in respect of employee rights upon retirement
8,006
7,174
23,436
15,402
Property and equipment, net
34,505
31,514
Intangible assets, net
25
26
Goodwill
3,484
3,356
Total assets
171,654
142,003
CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)
US dollars
September 30,
December 31,
(in thousands)
2016
2015
Current liabilities
Credit from banking institutions
3
155
Accounts payable
15,589
10,466
Deferred revenues
11,218
9,210
Other current liabilities
27,247
21,750
54,057
41,581
Long-term liabilities
Liability for employee rights upon retirement
11,968
10,637
Provision for contingencies
443
622
Deferred revenues
977
973
Others non-current
555
369
13,943
12,601
Stockholders' equity
98,305
83,698
Non-controlling interests
5,349
4,123
Total equity
103,654
87,821
Total liabilities and equity
171,654
142,003
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
US dollars
US dollars
Nine month period
ended September 30,
Three month period
ended September 30,
(in thousands except per share data)
2016
2015
2016
2015
Revenues:
Location-based services
104,673
95,595
37,166
31,502
Wireless communications products
44,540
36,242
15,594
12,321
149,213
131,837
52,760
43,823
Cost of revenues:
Location-based services
36,066
34,926
12,739
11,780
Wireless communications products
37,488
29,308
13,617
10,039
73,554
64,234
26,356
21,819
Gross profit
75,659
67,603
26,404
22,004
Research and development expenses
2,082
1,699
681
614
Selling and marketing expenses
7,471
6,912
2,537
2,287
General and administrative expenses
30,113
28,675
10,588
9,310
Other income, net
973
(17)
1,039
(3)
Operating income
35,020
30,334
11,559
9,796
Financing income (expenses), net
1,246
774
408
566
Income before income tax
36,266
31,108
11,967
10,362
Income tax expenses
(10,945)
(9,657)
(3,893)
(3,218)
Share in gains (losses) of affiliated companies ,net
(554)
(1,482)
753
(638)
Net income for the period
24,767
19,969
8,827
6,506
Less: Net income attributable to non-controlling interest
(1,885)
(1,180)
(677)
(346)
Net income attributable to the Company
22,882
18,789
8,150
6,160
Basic and diluted earnings per share attributable to Company's stockholders
1.09
0.90
0.39
0.29
Basic and diluted weighted average number of shares outstanding (in thousands)
20,968
20,968
20,968
20,968
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars
US dollars
Nine month period
ended September 30,
Three month period
ended September 30,
(in thousands)
2016
2015
2016
2015
Cash flows from operating activities
Net income for the period
24,767
19,969
8,827
6,506
Adjustments to reconcile net income to net cash from operating activities:
Depreciation amortization and impairment of goodwill
8,570
8,122
3,063
2,739
Losses (gain) in respect of trading marketable securities
(95)
(428)
(27)
(224)
Increase (decrease) in liability for employee rights upon retirement
960
502
247
212
Share in losses (gains) of affiliated companies, net
554
1,482
(753)
638
Deferred income taxes
(836)
940
908
1,286
Capital gains on sale of property and equipment, net
(18)
(10)
(1)
(3)
Decrease (increase) in accounts receivable
(7,470)
(84)
(392)
783
Decrease (increase) in other current assets
(9,080)
(85)
(3,771)
586
Decrease (increase) in inventories
(726)
251
(578)
(137)
Increase (decrease) in accounts payable
4,836
(1,092)
1,930
(1,946)
Increase (decrease) in deferred revenues
1,657
(864)
(725)
(992)
Increase (decrease) in other current liabilities
3,988
(462)
3,313
(612)
Net cash provided by operating activities
27,107
28,241
12,041
8,836
Cash flows from investment activities
Increase in funds in respect of employee rights upon retirement, net of withdrawals
(582)
(575)
(335)
(88)
Capital expenditures
(9,049)
(15,132)
(4,149)
(2,163)
Investments in affiliated companies
(7,181)
(4,639)
(3,257)
(2,856)
Investment in marketable securities
(2,076)
-
(1,732)
-
Sale of marketable securities
3,615
-
1,757
-
Deposit
16
(321)
(36)
(82)
Proceeds from sale of property and equipment
133
683
34
(4)
Net cash used in investment activities
(15,124)
(19,984)
(7,718)
(5,193)
Cash flows from financing activities
Short term credit from banking institutions, net
(152)
447
(6)
441
Dividend paid
(13,314)
(14,729)
(3,565)
(3,386)
Dividend paid to non-controlling interest
(940)
(1,224)
(323)
(688)
Net cash provided by (used in) financing activities
(14,406)
(15,506)
(3,894)
(3,633)
Effect of exchange rate changes on cash and cash equivalents
1,039
(1,735)
(245)
(1,564)
Net increase (decrease) in cash and cash equivalents
(1,384)
(8,984)
184
(1,554)
Balance of cash and cash equivalents at beginning of the period
27,016
38,418
25,448
30,988
Balance of cash and cash equivalents at end of the period
25,632
29,434
25,632
29,434
Supplementary information on financing and investing activities not involving cash flows:
In August 2016, the Company declared a dividend in an amount of US$3.8 million. The dividend was paid in October 2016.
Company Contact
Udi Mizrahi
VP Finance, Ituran
(Israel) +972 3 557 1348
International Investor Relations
Ehud Helft
GK Investor Relations
(US) +1 646 201 9246
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ituran-location-and-control-ltd-presents-results-for-the-third-quarter-2016-300363077.html
SOURCE Ituran Location and Control Ltd
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