Dividend Policy increased by 60% to $8 million per quarter; Company
introduces full year 2024 EBITDA guidance of $90-95m and a
target to surpass $100m in EBITDA in
2025
AZOUR, Israel, Feb. 29,
2024 /PRNewswire/ -- Ituran Location and Control Ltd.
(NASDAQ: ITRN), today announced its consolidated financial results
for the fourth quarter and full year of 2023.
Highlights of Full Year 2023
- Number of subscribers reached 2,252,000 at year-end adding a
record 186,000 in 2023 in line with guidance;
- Record financial metrics across the board with revenue at
$320.0 million, an increase of 9%
year-over-year;
- Net income of $48.1 million, an
increase of 30% year-over-year;
- EBITDA of $87.0 million, an
increase of 10% year-over-year;
- Generated $77.2 million in full
year operating cash flow;
- Year-end net cash position and marketable securities of
$53.0 million;
- Returns to shareholders: declared a total of $19 million in dividends that relates to the
results throughout 2023 and bought back shares in the amount of
$6.6 million during the
year;
Highlights of the Fourth Quarter of 2023
- Net subscriber growth of 42,000 with a net increase in
aftermarket subscribers of 38,000 and a net increase in OEM
subscribers of 4,000;
- Revenue reached $77.8 million, a
4% increase year-over-year;
- Net income increased to $12.0
million, up by 26% year-over-year;
- EBITDA grew to $21.9 million, a
7% increase year-over-year;
- Operating cash flow of $21.8
million;
- The Board increased the dividend policy by 60% to $8 million, given the ongoing growing
profitability and strong operating cash flow.
Guidance for 2024
Overall, looking ahead to 2024, management's expectations are
for continued revenue growth and profitability.
Management expects to add approximately 35,000 to 40,000, net
new subscribers per quarter during 2024.
From a financial perspective, Ituran introduces EBITDA guidance.
2024 EBITDA expectations are between $90-95 million, and 2025 EBITDA is targeted to
surpass $100 million. It is noted
that these targets are based on current exchange rates and assumes
that the current global macro-economic situation and political
situation in Israel does not
significantly worsen.
Furthermore, the Board of Directors announced a significant
increase in the dividend policy, as detailed below.
Management Comment
Eyal Sheratzky, Co-CEO of Ituran, said, "We are very
pleased with our record results for 2023 across the board, capping
the year with a strong fourth quarter which demonstrates Ituran's
resilience and strength. This is especially true against the
background of significant global macro challenges in recent
quarters and in Israel in
particular, since October."
Continued Mr. Sheratzky, "We are very pleased with
Ituran's solid and growing profitability as well as the record cash
generation in our business throughout 2023. We are therefore very
happy to share these continuing fruits of our success and reward
our loyal shareholders for their long-term support of our company.
We announced a very significant increase in our regular quarterly
dividend payout to shareholders, totaling $8
million per quarter going forward. This is more than double
the regular quarterly dividend we paid since Q3 2021 and up 60%
compared with the updated dividend policy that we issued last
quarter. This is a testimony to the Board's confidence in our
abilities to continue our growth and profitability path for the
foreseeable future."
Fourth quarter 2023 Results
Revenue for the fourth quarter of 2023 was $77.8 million, a 4% increase compared with
revenues of $74.9 million in the
fourth quarter of 2022. Fourth quarter revenue was somewhat
impacted by the outbreak of war in Israel on October
7. Furthermore, the revenue as denominated in US dollar
terms, was impacted by the significant devaluation of the
Argentinean Peso as well as the temporary weakness in the Israeli
shekel against the US Dollar during the quarter. In local currency
terms, fourth quarter revenues grew by 6% compared with that of the
fourth quarter of last year.
76% of revenues were from location-based service subscription
fees and 24% were from product revenues.
Revenues from subscription fees were $59.4 million, an increase of 10% over the fourth
quarter 2022 revenues. In local currency terms, fourth quarter
subscription fee revenue grew by 12% compared with that of the
fourth quarter of last year.
The subscriber base expanded to 2,252,000 by the end of
December 2023, marking an increase of
42,000 from the previous quarter and 186,000 year-over-year. During
the quarter, there was an increase of 38,000 net in the aftermarket
subscriber base and an increase of 4,000 net in the OEM subscriber
base.
Product revenues were $18.4
million, a decrease of 13% year-over-year and in local
currency terms, product revenues decreased by 9% year-over-year.
Hardware installations and therefore product revenues, were paused
for a number of weeks following the outbreak of war in Israel on October
7, which was the main reason for the decline in product
revenues versus the fourth quarter of last year.
Gross profit for the quarter was $38.4 million (49.4% of revenues), a 7% increase
compared with gross profit of $35.9
million (47.8% of revenues) in the fourth quarter of last
year.
The gross margin in the quarter on subscription revenues was
57.8%, compared with 57.9% in the fourth quarter of last year. The
gross margin on products was 22.1% in the quarter, compared with
22.0% in the fourth quarter of last year.
Operating income for the quarter was $16.5 million (21.2% of revenues), representing
an 8% increase compared $15.3 million
(20.4% of revenue) in the fourth quarter of last year. In local
currency terms, fourth quarter operating income grew by 10%
year-over-year.
EBITDA for the quarter was $21.9
million (28.2% of revenues), an increase of 7% compared with
EBITDA of $20.6 million (27.4% of
revenues) in the fourth quarter of last year. In local currency
terms, fourth quarter EBITDA grew by 8% compared with that of the
fourth quarter of last year.
Financial expenses for the quarter were $1.7 million, compared with financial expenses of
$1.3 million in the fourth quarter of
last year. Financial expenses were impacted by the devaluation of
the Argentinian Peso as well as the temporary weakness of the
shekel in the quarter, as previously mentioned.
Net income for the fourth quarter of 2023 was
$12.0 million (15.4% of revenues) or
diluted earnings per share of $0.60,
an increase of 26% compared to $9.6
million (12.8% of revenues) or diluted earnings per share of
$0.47 in the fourth quarter of last
year. In local currency terms, fourth quarter net income grew by
28% year-over-year.
Cash flow from operations for the fourth quarter of 2023
was $21.8 million.
Full Year 2023 Results
Revenues for 2023 were a record $320.0 million, a 9% increase over the
$293.1 million reported in 2022. 73%
of revenues were from location-based service subscription fees and
27% were from product revenues.
Revenues from subscription fees were $234.5 million, representing an increase of 12%
over 2022. Product revenues were $85.4
million, representing an increase of 2% compared with
2022.
Gross profit for the year was $153.2 million (47.9% of revenues). This
represents an increase of 11% compared with gross profit of
$137.6 million (46.9% of revenues) in
2022. The gross margin in the year on subscription revenues was
57.9%, compared with 57.0% in 2022. The gross margin on products
was 20.3%, compared with 21.7% in 2022.
Operating profit for 2023 was $66.0 million (20.6% of revenues) an increase of
12% compared with operating profit of $58.8
million (20.1% of revenues) in 2022.
EBITDA for 2023 was $87.0
million (27.2% of revenues), an increase of 10% compared to
$78.9 million (26.9% of revenues) in
2022.
Net income in 2023 was $48.1
million (15.0% of revenues) or fully diluted earnings per
share of $2.40, an increase of 30%
compared with net income of $37.1
million (12.7% of revenues) or fully diluted earnings per
share of $1.82 in 2022.
Cash flow from operations for the year was $77.2 million.
On the balance sheet, as of December 31, 2023, the Company had cash,
including marketable securities, of $53.6
million and debt of $0.6
million, amounting to a net cash position of $53.0 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
The Board of Directors announced an increase in the dividend
policy starting from the fourth quarter of 2023. This follows the
Company's continuing strong profitability, ongoing positive cash
flow and strong balance sheet.
The Company increased the quarterly dividend to $8 million from $5
million in the prior quarter and from $3 million in the eight quarters prior to that.
This represents a 60% increase in the ongoing quarterly dividend
payment compared with that of the prior quarter and a 167% increase
over the dividend paid in the quarters prior to that.
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 December 31, 2023, there is
remaining under the buy-back program $6.7
million. During 2023, a total of $6.6
million in Ituran's shares were repurchased by the Company.
Share repurchases are 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, Thursday, February 29, 2024 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 2.2 million subscribers using its
location-based services with a market leading position in
Israel and Latin America. Established in 1995, Ituran has
approximately 2,800 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.
Logo:
https://mma.prnewswire.com/media/1972820/Ituran_logo.jpg
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
|
ITURAN LOCATION AND
CONTROL LTD.
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
US dollars
|
|
December 31,
|
|
(In thousands)
|
2023
|
2022
|
|
|
|
|
|
Current assets
|
|
|
|
Cash and cash
equivalents
|
53,434
|
27,850
|
|
Investments in
marketable securities
|
119
|
316
|
|
Accounts receivable
(net of allowance for doubtful accounts)
|
45,390
|
45,821
|
|
Other current
assets
|
52,724
|
48,156
|
|
Inventories
|
26,872
|
28,509
|
|
178,539
|
150,652
|
|
|
|
|
Long-term investments and other
assets
|
|
|
|
Investments in
affiliated companies
|
714
|
1,188
|
|
Investments in other
companies
|
2,213
|
1,779
|
|
Other non-current
assets
|
3,989
|
3,129
|
|
Deferred income
taxes
|
14,452
|
11,400
|
|
Funds in respect of
employee rights upon retirement
|
18,525
|
15,146
|
|
39,893
|
32,642
|
|
|
|
|
Property and equipment, net
|
41,955
|
45,598
|
|
|
|
|
Operating lease
right-of-use assets, net
|
8,071
|
9,905
|
|
|
|
|
Intangible assets, net
|
10,830
|
12,620
|
|
|
|
|
Goodwill
|
39,400
|
39,510
|
|
|
|
|
Total assets
|
318,688
|
290,927
|
|
ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)
|
|
|
|
US dollars
|
|
December 31,
|
|
(In thousands)
|
2023
|
2022
|
|
|
|
|
Current liabilities
|
|
|
|
Credit from banking
institutions
|
355
|
11,845
|
|
Accounts
payable
|
20,842
|
21,937
|
|
Deferred
revenues
|
27,117
|
21,783
|
|
Other current
liabilities
|
44,150
|
37,407
|
|
92,464
|
92,972
|
|
|
|
|
Long-term liabilities
|
|
|
|
Long term
loan
|
237
|
345
|
|
Liability for employee
rights upon retirement
|
24,562
|
21,224
|
|
Deferred income
taxes
|
1,116
|
1,534
|
|
Deferred
revenues
|
13,259
|
13,036
|
|
Operating lease
liabilities, non-current
|
4,774
|
6,886
|
|
Others non-current
liabilities
|
2,027
|
2,071
|
|
45,975
|
45,096
|
|
|
|
|
Stockholders' equity
|
174,454
|
145,797
|
|
Non-controlling interests
|
5,795
|
7,062
|
|
Total equity
|
180,249
|
152,859
|
|
|
|
|
Total liabilities and equity
|
318,688
|
290,927
|
|
ITURAN LOCATION AND
CONTROL LTD.
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
US dollars
|
US dollars
|
|
|
Year ended
|
Three months period
|
|
|
(in thousands
|
December 31,
|
ended December 31,
|
|
|
except per share data)
|
2023
|
2022
|
2023
|
2022
|
|
|
Revenues:
|
|
|
|
|
|
|
Telematics
services
|
234,541
|
209,558
|
59,426
|
53,887
|
|
|
Telematics
products
|
85,437
|
83,514
|
18,382
|
21,061
|
|
|
319,978
|
293,072
|
77,808
|
74,948
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
Telematics
services
|
98,707
|
90,129
|
25,080
|
22,674
|
|
|
Telematics
products
|
68,110
|
65,381
|
14,328
|
16,421
|
|
|
166,817
|
155,510
|
39,408
|
39,095
|
|
|
|
|
|
|
|
|
Gross profit
|
153,161
|
137,562
|
38,400
|
35,853
|
|
|
Research and
development expenses
|
16,986
|
16,848
|
4,240
|
4,616
|
|
|
Selling and marketing
expenses
|
13,643
|
13,327
|
3,535
|
3,302
|
|
|
General and
administrative expenses
|
56,635
|
48,705
|
14,305
|
12,574
|
|
|
Other expenses
(income), net
|
(58)
|
(92)
|
(185)
|
57
|
|
|
Operating
income
|
65,955
|
58,774
|
16,505
|
15,304
|
|
|
Other income,
net
|
2
|
-
|
5
|
-
|
|
|
Financing expenses,
net
|
(1,552)
|
(5,944)
|
(1,653)
|
(1,292)
|
|
|
Income before income
tax
|
64,405
|
52,830
|
14,857
|
14,012
|
|
|
Income tax
expenses
|
(13,355)
|
(12,745)
|
(2,534)
|
(3,747)
|
|
|
Share in profit
(losses) of affiliated companies, net
|
(706)
|
(585)
|
116
|
(173)
|
|
|
Net income for the
period
|
50,344
|
39,500
|
12,439
|
10,092
|
|
|
Less: Net income
attributable to non-controlling interest
|
(2,207)
|
(2,397)
|
(420)
|
(520)
|
|
|
Net income attributable
to the Company
|
48,137
|
37,103
|
12,019
|
9,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per share attributable to Company's
stockholders
|
2.40
|
1.82
|
0.60
|
0.47
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted average number of shares outstanding (in
thousands)
|
20,061
|
20,418
|
19,959
|
20,242
|
|
|
|
|
|
|
|
|
|
|
|
|
ITURAN LOCATION AND CONTROL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
US dollars
|
US dollars
|
|
Year ended
December 31,
|
Three months period
ended December 31,
|
|
(in thousands)
|
2023
|
2022
|
2023
|
2022
|
|
Cash flows from operating
activities
|
|
|
|
|
|
Net income for the
period
|
50,344
|
39,500
|
12,439
|
10,092
|
|
Adjustments to reconcile net income to net cash from
operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
21,068
|
20,134
|
5,407
|
5,263
|
|
Loss in respect of
marketable securities and other investments
|
89
|
3,860
|
32
|
20
|
|
Increase (decrease) in
liability for employee rights upon retirement
|
2,507
|
1,243
|
226
|
(58)
|
|
Share in losses
(profit) of affiliated company, net
|
706
|
585
|
(116)
|
173
|
|
Deferred income
taxes
|
(3,125)
|
(737)
|
(1,430)
|
(622)
|
|
Capital losses (gain)
on sale of property and equipment, net
|
89
|
(224)
|
54
|
80
|
|
Decrease (increase) in
accounts receivable
|
(26)
|
(5,104)
|
1,769
|
(812)
|
|
Decrease (increase) in
other current and non-current assets
|
(3,169)
|
(11,055)
|
940
|
(832)
|
|
Decrease (increase) in
inventories
|
1,102
|
(5,835)
|
201
|
2,975
|
|
Increase (decrease) in
accounts payable
|
(1,863)
|
1,419
|
1,090
|
(1,157)
|
|
Increase in deferred
revenues
|
5,703
|
2,169
|
935
|
1,162
|
|
Increase (decrease) in
other current and non-current liabilities
|
3,793
|
(837)
|
232
|
(370)
|
|
Net cash provided by
operating activities
|
77,218
|
45,118
|
21,779
|
15,914
|
|
|
|
|
|
|
Cash flows from investment
activities
|
|
|
|
|
|
Increase in funds in
respect of employee rights upon
|
|
|
|
|
|
retirement, net of
withdrawals
|
(2,384)
|
(868)
|
(451)
|
(320)
|
|
Capital
expenditures
|
(14,243)
|
(26,505)
|
(4,050)
|
(7,747)
|
|
Investments in
affiliated and other companies, net
|
(800)
|
(1,076)
|
(244)
|
(386)
|
|
Proceed from
(repayment of) long term deposit
|
(100)
|
147
|
40
|
60
|
|
Sale of (Investment
in) marketable securities
|
99
|
(103)
|
-
|
-
|
|
Proceeds from sale of
property and equipment
|
199
|
1,051
|
55
|
203
|
|
Net cash used in
investment activities
|
(17,229)
|
(27,354)
|
(4,650)
|
(8,190)
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
Repayment of long-term
credit
|
(11,732)
|
(16,450)
|
(244)
|
(4,009)
|
|
Short term credit from
banking institutions, net
|
299
|
-
|
(1,187)
|
-
|
|
Dividend
paid
|
(11,561)
|
(11,465)
|
(2,943)
|
(2,844)
|
|
Dividend paid to
non-controlling interests
|
(3,327)
|
-
|
-
|
-
|
|
Acquisition of company
shares
|
(6,613)
|
(8,445)
|
-
|
(2,999)
|
|
Net cash used in
financing activities
|
(32,934)
|
(36,360)
|
(4,374)
|
(9,852)
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(1,471)
|
(3,860)
|
800
|
(90)
|
|
|
|
|
|
|
Net change in cash and
cash equivalents
|
25,584
|
(22,456)
|
13,555
|
(2,218)
|
|
Balance of cash and
cash equivalents at beginning of period
|
27,850
|
50,306
|
39,879
|
30,068
|
|
Balance of cash and
cash equivalents at end of period
|
53,434
|
27,850
|
53,434
|
27,850
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
information on financing and investing activities not involving
cash flows:
In November 2023, the Company declared a dividend in an amount of
approximately US$ 5 million. The dividend was paid in January
2024.
|
View original
content:https://www.prnewswire.com/news-releases/ituran-presents-fourth-quarter--full-year-2023-results-302075719.html
SOURCE Ituran Location and Control Ltd.