Sienna Resources

Ituran Presents Its First Quarter 2023 Results

24 May 2023
  • 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

This email address is being protected from spambots. You need JavaScript enabled to view it.

Deputy CEO & VP Finance, Ituran

(Israel) +972 3 557 1348

International Investor Relations

Ehud Helft

This email address is being protected from spambots. You need JavaScript enabled to view it.

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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