Growth in subscriber revenue from continued
subscriber growth leading to record EBITDA
Net subscriber growth in Q3 2023 of
48,000
AZOUR, Israel, Nov. 27,
2023 /PRNewswire/ -- Ituran Location and Control Ltd.
(NASDAQ: ITRN), today announced its consolidated financial results
for the third quarter of 2023.
Highlights of the Third Quarter of 2023
- Strong net subscriber growth of 48,000: a net increase in
aftermarket of 45,000 and a net increase in OEM of 3,000;
- Revenue of $81.1 million, a 12%
improvement year-over-year;
- Net income grew to $12.5 million,
an increase of 24% year-over-year;
- EBITDA reached $22.5 million, a
15% increase year-over-year;
- Operating cash flow was reported at $20.5 million;
- The Company declared a dividend of $5
million and the share buyback in the quarter was
$1.9 million, reflecting the
company's robust financial position.
Management Comment
Eyal Sheratzky, Co-CEO of Ituran said, "We are pleased
with our third quarter results. The accelerated subscriber growth
we have seen in recent quarters continued in the third quarter and
contributed to our highest ever level of subscriber revenues. In
the fourth quarter, we expect subscriber growth of between 30,000
and 35,000, which is somewhat impacted by a lack of new car sales
in Israel specifically, because of
the war that started near the start of the fourth quarter. However,
our well-over 2 million global subscriber base, which are
consistently using our services on an ongoing monthly basis,
provides us with continued long-term stability and growth, as well
as significant resilience. We look forward to continued solid
performance for the foreseeable future."
Continued Mr. Sheratzky, "We are very pleased to share
the fruits of our ongoing profitable growth and reward our loyal
shareholders for their long-term support of our company. We
therefore increased our regular dividend payout starting from this
quarter to $5 million."
Third Quarter 2023 Results
Revenue for the third quarter of 2023 was $81.1 million, a 12% increase compared with
revenues of $72.7 million in the
third quarter of 2022. In local currency terms, third quarter
revenues grew by 13% compared with that of the third quarter of
last year.
74% of revenues were from location-based service subscription
fees and 26% were from product revenues.
Revenues from subscription fees were a record $60.2 million, an increase of 13% over the third
quarter 2022 revenues. In local currency terms, third quarter
subscription fee revenue grew by 14% compared with that of the
third quarter of last year.
The subscriber base amounted to 2,210,000 as of September 30, 2023. This represents an increase
of 48,000 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 3,000 net in the OEM subscriber base.
Product revenues were $20.9
million, an increase of 7% compared with that of the third
quarter of last year.
Gross profit for the quarter was $39.4 million (48.6% of revenues), a 14% increase
compared with gross profit of $34.6
million (47.6% of revenues) in the third quarter of last
year.
The gross margin in the quarter on subscription revenues was
58.5%, compared with 57.2% in the third quarter of last year. The
gross margin on products was 20.3% in the quarter, compared with
21.5% in the third quarter of last year.
Operating income for the quarter was $16.9 million, or 20.8% of revenues, reflecting a
15% increase year-over-year. In local currency terms, third quarter
operating income grew at the same level at 15% year-over-year.
EBITDA for the quarter was $22.5
million (27.8% of revenues), an increase of 15% compared
with EBITDA of $19.6 million (27.0%
of revenues) in the third quarter of last year. In local currency
terms, third quarter EBITDA grew by 14% compared with that of the
third quarter of last year.
Financial expenses for the quarter were $0.1 million, compared with financial expenses of
$0.7 million in the third quarter of
last year.
Net income for the third quarter of 2023 was $12.5 million (15.4% of revenues) or diluted
earnings per share of $0.63, an
increase of 24% compared to $10.1
million (13.9% of revenues) or diluted earnings per share of
$0.49 in the third quarter of last
year. In local currency terms, third quarter net income grew at the
same level of 24% year-over-year.
Cash flow from operations for the third quarter of 2023
was $20.5 million.
On the balance sheet, as of September 30, 2023, the Company had cash,
including marketable securities, of $40.0
million and debt of $2.0
million, amounting to a net cash position of $38.0million. 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
The Board of Directors declared that starting from the third
quarter of 2023, the Company would return to its former dividend
policy which had been in place and continued until the fourth
quarter of 2019, prior to the Corona shutdown. The former dividend
policy, and dividend policy going forward from the current quarter,
calls for the issuance of a $5.0
million dividend per quarter. This represents a 67% increase
from the more recent policy of a $3.0
million dividend per quarter.
Buy Back
On August 23, 2022, Ituran
announced that its Board of Directors made the decision to continue
executing on the $25 million share
buy-back program that was originally announced in 2019 and on
February 23, 2023, the Board of
Directors made the decision to increase the buy-back program by a
further $10 million. As of
September 30, 2023, there is
remaining under the buy-back program $6.7
million. Share repurchases are funded by available cash and
repurchases of Ituran's ordinary shares under SEC Rule10b-18
terms.
In the third quarter, under the program, Ituran purchased 73,000
shares for a total of $1.9
million.
Conference Call Information
The Company will also be hosting a conference call later
today, November 27, 2023 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 0609
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, 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
|
|
September 30,
|
|
December 31,
|
|
(in thousands)
|
2023
|
|
2022
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash
equivalents
|
39,879
|
|
27,850
|
|
Investments in
marketable securities
|
144
|
|
316
|
|
Accounts receivable
(net of allowance for doubtful accounts)
|
45,481
|
|
45,821
|
|
Other current
assets
|
51,888
|
|
48,156
|
|
Inventories
|
26,125
|
|
28,509
|
|
163,517
|
|
150,652
|
|
|
|
|
|
Non- Current investments and other
assets
|
|
|
|
|
Investments in
affiliated companies
|
602
|
|
1,188
|
|
Investments in other
companies
|
1,780
|
|
1,779
|
|
Other non-current
assets
|
3,967
|
|
3,129
|
|
Deferred income
taxes
|
12,828
|
|
11,400
|
|
Funds in respect of
employee rights upon retirement
|
15,790
|
|
15,146
|
|
34,967
|
|
32,642
|
|
|
|
|
|
Property and equipment, net
|
41,589
|
|
45,598
|
|
|
|
|
|
Operating lease right-of-use assets,
net
|
6,991
|
|
9,905
|
|
|
|
|
|
Intangible assets, net
|
10,852
|
|
12,620
|
|
|
|
|
|
Goodwill
|
39,213
|
|
39,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
297,129
|
|
290,927
|
CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)
|
US dollars
|
|
September 30,
|
|
December 31,
|
|
(in thousands)
|
2023
|
|
2022
|
|
(unaudited)
|
|
|
|
Current liabilities
|
|
|
|
|
Credit from banking
institutions
|
1,729
|
|
11,845
|
|
Accounts
payable
|
18,802
|
|
21,937
|
|
Deferred
revenues
|
25,139
|
|
21,783
|
|
Other current
liabilities
|
39,015
|
|
37,407
|
|
84,685
|
|
92,972
|
|
|
|
|
|
Non- Current liabilities
|
|
|
|
|
Long term
loan
|
263
|
|
345
|
|
Liability for employee
rights upon retirement
|
21,819
|
|
21,224
|
|
Deferred income
taxes
|
1,255
|
|
1,534
|
|
Deferred
revenues
|
13,899
|
|
13,036
|
|
Others non-current
liabilities
|
1,896
|
|
2,071
|
|
Operating lease
liabilities, non-current
|
4,538
|
|
6,886
|
|
43,670
|
|
45,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
163,701
|
|
145,797
|
|
Non-controlling interests
|
5,073
|
|
7,062
|
|
Total equity
|
168,774
|
|
152,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
297,129
|
|
290,927
|
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
|
US dollars
|
|
US dollars
|
|
Nine months period
ended September 30,
|
|
Three months period
ended September 30,
|
|
(in thousands except per share
data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Telematics
services
|
175,115
|
|
155,671
|
|
60,152
|
|
53,131
|
|
Telematics
products
|
67,055
|
|
62,453
|
|
20,901
|
|
19,533
|
|
242,170
|
|
218,124
|
|
81,053
|
|
72,664
|
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
Telematics
services
|
73,627
|
|
67,455
|
|
24,985
|
|
22,716
|
|
Telematics
products
|
53,782
|
|
48,960
|
|
16,658
|
|
15,333
|
|
127,409
|
|
116,415
|
|
41,643
|
|
38,049
|
|
|
|
|
|
|
|
|
|
Gross profit
|
114,761
|
|
101,709
|
|
39,410
|
|
34,615
|
|
Research and
development expenses
|
12,746
|
|
12,232
|
|
4,392
|
|
4,101
|
|
Selling and marketing
expenses
|
10,108
|
|
10,025
|
|
3,502
|
|
3,445
|
|
General and
administrative expenses
|
42,330
|
|
36,131
|
|
14,614
|
|
12,433
|
|
Other expense (income),
net
|
127
|
|
(149)
|
|
9
|
|
(31)
|
|
Operating
income
|
49,450
|
|
43,470
|
|
16,893
|
|
14,667
|
|
Other expense,
net
|
(3)
|
|
-
|
|
-
|
|
-
|
|
Financing income
(expense), net
|
101
|
|
(4,652)
|
|
(53)
|
|
(714)
|
|
Income before income
tax
|
49,548
|
|
38,818
|
|
16,840
|
|
13,953
|
|
Income tax
expenses
|
(10,821)
|
|
(8,998)
|
|
(3,601)
|
|
(3,080)
|
|
Share in losses of
affiliated companies, net
|
(822)
|
|
(412)
|
|
(195)
|
|
(291)
|
|
Net income for the
period
|
37,905
|
|
29,408
|
|
13,044
|
|
10,582
|
|
Less: Net income
attributable to non-controlling interest
|
(1,787)
|
|
(1,877)
|
|
(530)
|
|
(518)
|
|
Net income attributable
to the Company
|
36,118
|
|
27,531
|
|
12,514
|
|
10,064
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per share attributable to Company's
stockholders
|
1.80
|
|
1.35
|
|
0.63
|
|
0.49
|
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted average number of shares outstanding (in
thousands)
|
20,096
|
|
20,435
|
|
19,912
|
|
20,347
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
US dollars
|
|
US dollars
|
|
Nine months period
ended September 30,
|
|
Three months period
ended September 30,
|
|
(in thousands)
|
2023
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
Net income for the
period
|
37,905
|
|
29,408
|
|
13,044
|
|
10,582
|
|
Adjustments to reconcile net income to net cash from
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
15,661
|
|
14,871
|
|
5,610
|
|
4,978
|
|
Losses in respect of
trading marketable securities
|
57
|
|
3,840
|
|
110
|
|
68
|
|
Increase in liability
for employee rights upon retirement
|
2,281
|
|
1,301
|
|
691
|
|
229
|
|
Share in losses of
affiliated companies, net
|
822
|
|
412
|
|
195
|
|
291
|
|
Deferred income
taxes
|
(1,695)
|
|
(115)
|
|
(301)
|
|
(257)
|
|
Capital loss (gain) on
sale of property and equipment, net
|
35
|
|
(304)
|
|
(11)
|
|
(9)
|
|
Decrease (increase) in
accounts receivable
|
(1,795)
|
|
(4,292)
|
|
1,157
|
|
759
|
|
Decrease (increase) in
other current assets
|
(4,109)
|
|
(10,223)
|
|
2,866
|
|
(3,972)
|
|
Decrease (increase) in
inventories
|
901
|
|
(8,810)
|
|
1,510
|
|
(4,814)
|
|
Increase (decrease) in
accounts payable
|
(2,953)
|
|
2,576
|
|
(3,892)
|
|
2,319
|
|
Increase
(decrease) in deferred
revenues
|
4,768
|
|
1,007
|
|
(459)
|
|
465
|
|
Increase
(decrease) in other current and
non-current liabilities
|
3,561
|
|
(467)
|
|
17
|
|
761
|
|
Net cash provided by
operating activities
|
55,439
|
|
29,204
|
|
20,537
|
|
11,400
|
|
Cash flows from investment
activities
|
|
|
|
|
|
|
|
|
Increase in funds in
respect of employee rights upon retirement, net of
withdrawals
|
(1,933)
|
|
(548)
|
|
(773)
|
|
(175)
|
|
Capital
expenditures
|
(10,193)
|
|
(18,758)
|
|
(3,911)
|
|
(4,040)
|
|
Investments in
affiliated and other companies
|
(556)
|
|
(690)
|
|
51
|
|
(90)
|
|
Investment in (sale
of) marketable securities
|
99
|
|
(103)
|
|
-
|
|
-
|
|
Proceeds from
(Investments in) deposits
|
(140)
|
|
87
|
|
(95)
|
|
(43)
|
|
Proceeds from sale of
property and equipment
|
144
|
|
848
|
|
86
|
|
65
|
|
Net cash used in
investment activities
|
(12,579)
|
|
(19,164)
|
|
(4,642)
|
|
(4,283)
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
Short term credit from
banking institutions, net
|
1,486
|
|
(148)
|
|
1,301
|
|
(49)
|
|
Repayment of long-term
loan
|
(11,488)
|
|
(12,293)
|
|
(3,581)
|
|
(4,070)
|
|
Dividend
paid
|
(8,618)
|
|
(8,621)
|
|
(3,001)
|
|
(2,855)
|
|
Dividend paid to
non-controlling interest
|
(3,327)
|
|
-
|
|
(1,640)
|
|
-
|
|
Acquisition of company
shares purchased by a wholly owned subsidiary
|
(6,613)
|
|
(5,446)
|
|
(1,896)
|
|
(2,000)
|
|
Net cash used in
financing activities
|
(28,560)
|
|
(26,508)
|
|
(8,817)
|
|
(8,974)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(2,271)
|
|
(3,770)
|
|
(1,404)
|
|
(746)
|
|
Net decrease in cash
and cash equivalents
|
12,029
|
|
(20,238)
|
|
5,674
|
|
(2,603)
|
|
Balance of cash and
cash equivalents at beginning of the period
|
27,850
|
|
50,306
|
|
34,205
|
|
32,671
|
|
Balance of cash and
cash equivalents at end of the period
|
39,879
|
|
30,068
|
|
39,879
|
|
30,068
|
|
|
|
|
|
|
|
|
|
|
In August 2023, the Company
declared a dividend in an amount of US$ 3 million. The
dividend was paid in October
2023.
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SOURCE Ituran Location and Control Ltd.