Else Nutrition

Ituran Presents Its Second Quarter 2023 Results

15 August 2023
  • Record revenue contributed from recent strong subscriber growth
  • Net subscriber growth in Q2 2023 of 47,000

AZOUR, Israel , Aug. 15, 2023 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the second quarter of 2023.

Highlights of the Second Quarter of 2023

  • Net subscriber growth of 47,000: net increase in aftermarket of 45,000 and net increase in OEM of 2,000;
  • Record revenue of $81.6 million, an increase of 11% year-over-year;
  • Net income of $12.2 million, an increase of 40% year-over-year;
  • EBITDA of $21.8 million, up 12% year-over-year;
  • Generated $17.5 million in quarterly operating cash flow;
  • Declared dividend of $3.0 million and continued share buy-back program totaling $3.5 million in the quarter;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, "We are very pleased with the results of the second quarter of 2023, especially with our highest level of quarterly revenue in our history and highest net income and EBITDA levels in over four years. The solid results are due to the accelerated subscriber growth we have seen in recent quarters which has contributed to our strong results. Furthermore, even given this strong growth, we have been able to continue to demonstrate very strong cash generation, reporting our highest ever operating cash flow in a six month period of almost $35 million."

"As our recent partnership with Santander Bank demonstrates, we are experiencing growing interest for our value-added telematic services from the car financing sector in Latin America. Our strong momentum adds to our optimism for continued growth in the coming quarters and we expect that the positive trends will continue through 2023 and beyond." 

Second Quarter 2023 Results

Revenues for the second quarter of 2023 were a record $81.6 million, an increase of 11% compared with revenues of $73.4 million in the second quarter of 2022. The appreciation of the US dollar over the past year, versus the local currencies in the various geographies in which Ituran operates impacted the revenues as reported in US dollars. In local currency terms, second quarter revenue grew by 15% compared with that of the second quarter of last year.

72% of revenues were from location-based service subscription fees and 28% were from product revenues.

Revenues from subscription fees were a record $59.2 million, an increase of 13% over the second quarter 2022 revenues. In local currency terms, second quarter subscription fee revenue grew by 17% compared with that of the second quarter of last year.

The subscriber base amounted to 2,162,000 as of June 30, 2023. This represents an increase of 47,000 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 2,000 net in the OEM subscriber base.

Product revenues were $22.5 million, an increase of 7% compared with that of the second quarter of last year.

Gross profit for the quarter was $38.7 million (47.4% of revenues), a 14% increase compared with gross profit of $33.8 million (46.1% of revenues) in the second quarter of last year.

The gross margin in the quarter on subscription revenues was 57.3%, compared with 56.8% in the second quarter of last year. The gross margin on products was 21.0% in the quarter, compared with 19.6% in the second quarter of last year.

Operating income for the quarter was $16.6 million (20.4% of revenues), an increase of 15% compared with an operating income of $14.4 million (19.7% of revenues) in the second quarter of last year. In local currency terms, second quarter operating income grew by 18% compared with that of the second quarter of last year.

EBITDA for the quarter was $21.8 million (26.7% of revenues), an increase of 12% compared with EBITDA of $19.4 million (26.5% of revenues) in the second quarter of last year. In local currency terms, second quarter EBITDA grew by 15% compared with that of the second quarter of last year.

Financial income for the quarter was $0.3 million, compared with financial expenses of $1.4 million in the second quarter of last year. In the second quarter of last year, there was a financial loss due to the devaluation of SaverOne, an early-stage public company in which Ituran holds equity.  

Net income for the second quarter of 2023 was $12.2 million (15.0% of revenues) or diluted earnings per share of $0.61, an increase of 40% compared to $8.7 million (11.9% of revenues) or diluted earnings per share of $0.43 in the second quarter of last year. In local currency terms, second quarter net income grew by 44% compared with that of the second quarter of last year.

Cash flow from operations for the second quarter of 2023 was $17.5 million.

On the balance sheet, as of June 30, 2023, the Company had cash, including marketable securities, of $34.5 million and debt of $4.5 million, amounting to a net cash position of $30.0 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

For the second quarter of 2023, a dividend of $3.0 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 announced in 2019. On February 23, 2023, the Board of Directors made the decision to increase the buy-back program by a further $10 million. As of June 30, 2023, there is remaining under the buy-back program $8.6 million.

In the second quarter, under the program, Ituran purchased 156,138 shares for a total of $3.5 million.

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, August 15, 2023 at 10am 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:
10:00am Eastern Time, 7:00am Pacific Time, 5:00pm 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

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

 

 June 30,   

December 31,

(in thousands)

2023

2022

 

(unaudited)

 
   
   

Current assets

  

Cash and cash equivalents

34,205

27,850

Investments in marketable securities

257

316

Accounts receivable (net of allowance for doubtful accounts)

47,909

45,821

Other current assets

56,056

48,156

Inventories

28,048

28,509

 

166,475

150,652

 

Non- Current investments and other assets

  

Investments in affiliated companies

763

1,188

Investments in other companies

1,839

1,779

Other non-current assets

3,762

3,129

Deferred income taxes

12,849

11,400

Funds in respect of employee rights upon retirement

15,537

15,146

 

34,750

32,642

 

Property and equipment, net

44,528

45,598

   

Operating lease right-of-use assets, net

7,994

9,905

   

Intangible assets, net

11,043

12,620

 

Goodwill

39,328

39,510

   
   
   

Total assets

304,118

290,927

 
   

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

 

US dollars

 

June 30,   

December 31,

(in thousands)

2023

2022

 

(unaudited)

 

Current liabilities

  

Credit from banking institutions

4,143

11,845

Accounts payable

23,224

21,937

Deferred revenues

25,466

21,783

Other current liabilities

40,846

37,407

 

93,679

92,972

   
 
   

Non- Current liabilities

  

Long term loan

309

345

Liability for employee rights upon retirement

21,799

21,224

Deferred income taxes

1,395

1,534

Deferred revenues

14,335

13,036

Others non-current liabilities

1,983

2,071

Operating lease liabilities, non-current

4,975

6,886

 

44,796

45,096

   
   

Stockholders' equity

159,303

145,797

Non-controlling interests

6,340

7,062

Total equity

165,643

152,859

   
   
   

Total liabilities and equity

304,118

290,927

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

 
 

US dollars

US dollars

 
 

Six month period
ended June 30
,

Three month period
ended June 30
,

 

(in thousands except per share data)

2023

2022

2023

2022

 
 

(unaudited)

 

(unaudited)

 

 

Revenues:

     

Telematics services

114,963

102,540

59,186

52,314

 

Telematics products

46,154

42,920

22,459

21,074

 
 

161,117

145,460

81,645

73,388

 
      
      

Cost of revenues:

     

Telematics services

48,642

44,739

25,250

22,607

 

Telematics products

37,124

33,627

17,733

16,950

 
 

85,766

78,366

42,983

39,557

 
      
      
      

Gross profit

75,351

67,094

38,662

33,831

 

Research and development expenses

8,354

8,131

4,216

3,991

 

Selling and marketing expenses

6,606

6,580

3,283

3,456

 

General and administrative expenses

27,716

23,698

14,443

11,986

 

Other income (expense), net

118

(118)

75

(39)

 

Operating income

32,557

28,803

16,645

14,437

 

Other expense, net

(3)

-

(24)

-

 

Financing income (expense), net

154

(3,938)

349

(1,373)

 

Income before income tax

32,708

24,865

16,970

13,064

 

Income tax expenses

(7,220)

(5,918)

(3,801)

(3,454)

 

Share in losses of affiliated companies, net

(627)

(121)

(261)

(78)

 

Net income for the period

24,861

18,826

12,908

9,532

 

Less: Net income attributable to non-controlling interest

(1,257)

(1,359)

(659)

(794)

 

Net income attributable to the Company

23,604

17,467

12,249

8,738

 

Basic and diluted earnings per share attributable to
Company's stockholders

1.17

0.85

0.61

0.43

 

Basic and diluted weighted average number of shares
outstanding (in thousands)

20,158

20,497

20,118

20,460

 
 
 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

US dollars

US dollars

 

Six month period
ended June 30
,

Three month period
ended June 30
,

(in thousands)

2023

2022

2023

2022

 

(unaudited)

(unaudited)

Cash flows from operating activities

    

Net income for the period

24,861

18,826

12,908

9,532

Adjustments to reconcile net income to net cash from
operating activities:

    

Depreciation and amortization

10,051

9,893

5,146

4,986

Loss (gain) in respect of trading marketable securities

(53)

3,772

(54)

1,422

Increase in liability for employee rights upon retirement

1,590

1,072

729

154

Share in losses of affiliated companies, net

627

121

261

78

Deferred income taxes

(1,394)

142

(791)

(15)

Capital loss (gain) on sale of property and equipment, net

46

(295)

53

(233)

Increase in accounts receivable

(2,952)

(5,051)

(172)

(1,366)

Increase in other current assets

(6,975)

(6,251)

(2,399)

(3,225)

Decrease (increase) in inventories

(609)

(3,995)

(450)

755

Increase (decrease) in accounts payable

939

255

(2,726)

(956)

Increase (decrease) in deferred revenues

5,227

541

2,498

(1,305)

Increase (decrease) in other current and non-current liabilities

3,544

(1,228)

2,504

1,025

Net cash provided by operating activities

34,902

17,802

17,507

10,852

     

Cash flows from investment activities

    

Decrease (increase) in funds in respect of employee rights upon
retirement, net of withdrawals

(1,160)

(373)

(777)

19

Capital expenditures

(6,282)

(14,718)

(3,379)

(8,596)

Investments in affiliated and other companies

(607)

(600)

(312)

(223)

Repayment of (Investments in) long term deposit

(45)

130

(45)

152

Sale of (investment in) marketable securities

99

(103)

 

(103)

Proceeds from sale of property and equipment

58

783

40

573

Net cash used in investment activities

(7,937)

(14,881)

(4,473)

(8,178)

     

Cash flows from financing activities

    

Short term credit from banking institutions, net

185

(99)

(954)

(50)

Repayment of long term loan

(7,907)

(8,223)

(3,765)

(4,046)

Dividend paid

(5,617)

(5,766)

(2,820)

(2,875)

Purchase of treasury shares

(4,717)

(3,446)

(3,517)

(3,446)

Dividend paid to non-controlling interest

(1,687)

-

(892)

-

Net cash used in financing activities

(19,743)

(17,534)

(11,948)

(10,417)

Effect of exchange rate changes on cash and cash equivalents

(867)

(3,022)

(157)

(2,840)

Net increase (decrease) in cash and cash equivalents

6,355

(17,635)

929

(10,583)

Balance of cash and cash equivalents at beginning of the period

27,850

50,306

33,276

43,254

Balance of cash and cash equivalents at end of the period

34,205

32,671

34,205

32,671

 

In May 2023, the Company declared a dividend in an amount of US$ 3 million. The dividend was paid in July 2023.

Logo: https://mma.prnewswire.com/media/1972820/Ituran_logo.jpg

Sign Up To Get Daily Green Stock News In Your Inbox

Please review our Disclaimer and Privacy Policy before subscribing.

STOCK QUOTE

FEATURED GREEN STOCK

UGE International

UGE International develops, owns, and operates commercial and community solar projects in the United States and strategic markets abroad. Our distributed energy solutions deliver cheaper, cleaner energy to businesses and consumers...

CLICK TO LEARN MORE

FEATURED GREEN STOCK

GreenPower Motor

GreenPower Motor designs, builds and distributes a full suite of high-floor and low-floor all-electric medium and heavy-duty vehicles, including transit buses, school buses, shuttles, cargo van, and a cab and chassis...

CLICK TO LEARN MORE

COPYRIGHT ©2022 GREEN STOCK NEWS