Net subscriber growth in Q1 2023 of
49,000
Expects current strong subscriber net adds
to contribute to accelerated revenue growth in 2023
AZOUR, Israel, May 24, 2023
/PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ:
ITRN), today announced its consolidated financial results for the
first quarter of 2023.
Highlights of the first quarter of 2023
- Net subscriber growth at 49,000: net increase in aftermarket of
44,000 and net increase in OEM of 5,000;
- Revenues of $79.5 million, an
increase of 10% year-over-year;
- Net income of $11.4 million, an
increase of 30% year-over-year;
- EBITDA of $20.8 million, up 8%
year-over-year;
- Generated $17.4 million in
quarterly operating cash flow;
- Declared dividend of $3 million
and continued share buy-back program totaling $1.2 million in the quarter;
Management Comment
Eyal Sheratzky, Co-CEO of Ituran said, "We are very
pleased with the results of the first quarter of 2023. The year has
begun on a strong note and the accelerated subscriber growth we
witnessed last year is starting to make its mark on our financial
results. We experienced record subscriber revenues in the quarter
with record subscriber gross margins and also saw our highest
quarterly net income and EBITDA in over four years. Our success
stems from introducing valuable new products and services that
cater to our customer's mobility needs, while leveraging the
synergies of our 2 million-plus ongoing subscribers across all the
regions in which we operate."
"We are seeing an increase in interest in Latin America from car manufacturers, as well
as from financing firms. We are increasingly optimistic for the
upcoming quarters and expect that the positive trends we are
currently experiencing will continue through 2023 and
beyond."
First Quarter 2023 Results
Revenues for the first quarter of 2023 were $79.5 million, an increase of 10.3% compared with
revenues of $72.1 million in the
first quarter of 2022.
70% of revenues were from location-based service subscription
fees and 30% were from product revenues.
Revenues from subscription fees were $55.8 million, an increase of 11% over first
quarter 2022 revenues.
The subscriber base amounted to 2,115,000 as of
March 31, 2023. This represents an
increase of 49,000 net over that of the end of the prior quarter,
and a net increase of 191,000 year-over-year. During the quarter,
there was an increase of 44,000 net in the aftermarket subscriber
base and an increase of 5,000 net in the OEM subscriber base.
Product revenues were $23.7
million, an increase of 8% compared with that of the first
quarter of last year.
Gross profit for the quarter was $36.7 million (46.2% of revenues), a 10% increase
compared with gross profit of $33.3
million (46.2% of revenues) in the first quarter of last
year.
The gross margin in the quarter on subscription revenues was
58.1%, compared with 55.9% in the first quarter of last year. The
gross margin on products was 18.2% in the quarter, compared with
23.7% in the first quarter of last year.
Operating income for the quarter was $15.9 million (20.0% of revenues), an increase of
11% compared with an operating income of $14.4 million (19.9% of revenues) in the first
quarter of last year.
EBITDA for the quarter was $20.8
million (26.2% of revenues), an increase of 8% compared with
an EBITDA of $19.3 million (26.7% of
revenues) in the first quarter of last year.
Financial expenses for the quarter were $0.2 million compared with financial expenses of
$2.6 million in the first quarter of
last year. In the first quarter of last year there was a large
financial loss due to the devaluation of SaverOne, an early stage
public company in which Ituran holds equity.
Net income for the first quarter of 2023 was $11.4 million (14.3% of revenues) or diluted
earnings per share of $0.56, compared
to $8.7 million (12.1% of revenues)
or diluted earnings per share of $0.43 in the first quarter of last year.
Cash flow from operations for the first quarter of 2023
was $17.4 million.
On the balance sheet, as of March
31, 2023, the Company had cash, including marketable
securities, of $33.5 million and debt
of $9.2 million, amounting to a net
cash of $24.3 million. This is
compared with cash, including marketable securities, of
$28.2 million and debt of
$12.2 million, amounting to a net
cash of $16.0 million, as of
December 31, 2022.
Dividend
For the first quarter of 2023, a dividend of $3 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 first announced in 2019. On February 23, 2023, the Board of Directors made
the decision to increase the buy back by a further $10 million.
In the first quarter, under the program, Ituran purchased 54,000
shares for a total of $1.2 million.
There is remaining under the buy back program approximately
$12 million, as of March 31, 2023.
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, May 24,
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 industry 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
|
|
March 31,
|
|
December 31,
|
(in thousands)
|
2023
|
|
2022
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
Cash and cash
equivalents
|
33,276
|
|
27,850
|
Investments in
marketable securities
|
209
|
|
316
|
Accounts receivable
(net of allowance for doubtful accounts)
|
47,990
|
|
45,821
|
Other current
assets
|
52,382
|
|
48,156
|
Inventories
|
27,963
|
|
28,509
|
|
161,820
|
|
150,652
|
|
|
|
|
Non- Current investments and other
assets
|
|
|
|
Investments in
affiliated companies
|
1,143
|
|
1,188
|
Investments in other
companies
|
1,730
|
|
1,779
|
Other non-current
assets
|
3,789
|
|
3,129
|
Deferred income
taxes
|
12,051
|
|
11,400
|
Funds in respect of
employee rights upon retirement
|
15,118
|
|
15,146
|
|
33,831
|
|
32,642
|
|
|
|
|
Property and equipment, net
|
42,969
|
|
45,598
|
|
|
|
|
Operating lease right-of-use assets,
net
|
8,678
|
|
9,905
|
|
|
|
|
Intangible assets, net
|
11,853
|
|
12,620
|
|
|
|
|
Goodwill
|
39,411
|
|
39,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
298,562
|
|
290,927
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (cont.)
|
|
|
US dollars
|
|
March 31,
|
|
December 31,
|
(in thousands)
|
2023
|
|
2022
|
|
(unaudited)
|
|
|
Current liabilities
|
|
|
|
Credit from banking
institutions
|
8,901
|
|
11,845
|
Accounts
payable
|
23,903
|
|
21,937
|
Deferred
revenues
|
23,105
|
|
21,783
|
Other current
liabilities
|
38,719
|
|
37,407
|
|
94,628
|
|
92,972
|
|
|
|
|
Non- Current liabilities
|
|
|
|
Long term
loan
|
281
|
|
345
|
Liability for employee
rights upon retirement
|
21,541
|
|
21,224
|
Deferred income
taxes
|
1,534
|
|
1,534
|
Deferred
revenues
|
14,283
|
|
13,036
|
Others non-current
liabilities
|
2,110
|
|
2,071
|
Operating lease
liabilities, non-current
|
5,847
|
|
6,886
|
|
45,596
|
|
45,096
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
152,539
|
|
145,797
|
Non-controlling interests
|
5,799
|
|
7,062
|
Total equity
|
158,338
|
|
152,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
298,562
|
|
290,927
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
US dollars
|
(in thousands
|
|
Three months period
ended March 31 ,
|
except per share data)
|
|
2023
|
|
2022
|
|
|
(unaudited)
|
Revenues:
|
|
|
|
|
Telematics
services
|
|
55,777
|
|
50,226
|
Telematics
products
|
|
23,695
|
|
21,846
|
|
|
79,472
|
|
72,072
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
Telematics
services
|
|
23,392
|
|
22,132
|
Telematics
products
|
|
19,391
|
|
16,677
|
|
|
42,783
|
|
38,809
|
|
|
|
|
|
Gross profit
|
|
36,689
|
|
33,263
|
Research and
development expenses
|
|
4,138
|
|
4,140
|
Selling and marketing
expenses
|
|
3,323
|
|
3,124
|
General and
administrative expenses
|
|
13,273
|
|
11,712
|
Other income
(expenses), net
|
|
43
|
|
(79)
|
Operating
income
|
|
15,912
|
|
14,366
|
Other income,
net
|
|
21
|
|
-
|
Financing expenses,
net
|
|
(195)
|
|
(2,565)
|
Income before income
tax
|
|
15,738
|
|
11,801
|
Income tax
expenses
|
|
(3,419)
|
|
(2,464)
|
Share in losses of
affiliated companies ,net
|
|
(366)
|
|
(43)
|
Net income for the
period
|
|
11,953
|
|
9,294
|
Less: Net income
attributable to non-controlling interest
|
|
(598)
|
|
(565)
|
Net income attributable
to the Company
|
|
11,355
|
|
8,729
|
|
|
|
|
|
Basic and diluted
earnings per share attributable to Company's
stockholders
|
|
0.56
|
|
0.43
|
|
|
|
|
|
Basic and diluted
weighted average number of shares outstanding (in
thousands)
|
|
20,314
|
|
20,534
|
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
|
|
|
US dollars
|
|
|
Three months period
ended March 31 ,
|
(in thousands)
|
|
2023
|
|
2022
|
|
|
(unaudited)
|
Cash flows from operating
activities
|
|
|
|
|
Net income for the
period
|
|
11,953
|
|
9,294
|
Adjustments to reconcile net income to net cash from
operating activities:
|
|
|
|
Depreciation and
amortization
|
|
4,905
|
|
4,907
|
Loss in respect of
trading marketable securities
|
|
1
|
|
2,350
|
Increase in liability
for employee rights upon retirement, net
|
|
861
|
|
918
|
Share in losses of
affiliated company, net
|
|
366
|
|
43
|
Deferred income
taxes
|
|
(603)
|
|
157
|
Capital gain from sale
of property and equipment, net
|
|
(7)
|
|
(62)
|
Increase in accounts
receivable
|
|
(2,780)
|
|
(3,685)
|
Increase in other
current and non-current assets
|
|
(4,576)
|
|
(3,026)
|
Increase in
inventories
|
|
(159)
|
|
(4,750)
|
Increase in accounts
payable
|
|
3,665
|
|
1,211
|
Increase in deferred
revenues
|
|
2,729
|
|
1,846
|
Increase (decrease) in
other current and non-current liabilities
|
|
1,040
|
|
(2,253)
|
Net cash provided by
operating activities
|
|
17,395
|
|
6,950
|
|
|
|
|
|
Cash flows from investment
activities
|
|
|
|
|
Increase in funds in
respect of employee rights upon
|
|
|
|
|
retirement, net of
withdrawals
|
|
(383)
|
|
(392)
|
Capital
expenditures
|
|
(2,903)
|
|
(6,122)
|
Investments in
affiliated and other companies
|
|
(295)
|
|
(377)
|
Investment in long
term deposit
|
|
-
|
|
(22)
|
Sale of investment in
marketable securities
|
|
99
|
|
-
|
Proceeds from sale of
property and equipment
|
|
18
|
|
210
|
Net cash used in
investment activities
|
|
(3,464)
|
|
(6,703)
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
Short term credit from
banking institutions, net
|
|
1,139
|
|
(49)
|
Repayment of long term
loan
|
|
(4,142)
|
|
(4,177)
|
Dividend
paid
|
|
(2,797)
|
|
(2,891)
|
Dividend paid to
non-controlling interest
|
|
(795)
|
|
-
|
Acquisition of company
shares
|
|
(1,200)
|
|
-
|
Net cash used in
in financing activities
|
|
(7,795)
|
|
(7,117)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(710)
|
|
(182)
|
Net increase (decrease)
in cash and cash equivalents
|
|
5,426
|
|
(7,052)
|
Balance of cash and
cash equivalents at beginning of period
|
|
27,850
|
|
50,306
|
Balance of cash and
cash equivalents at end of period
|
|
33,276
|
|
43,254
|
Supplementary information on financing and investing
activities not involving cash flows:
In March 2023, the Company
declared a dividend in the amount of US$ 3
million. The dividend was paid in April 2023
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SOURCE Ituran Location and Control Ltd.