Ituran Location and Control Ltd. Presents Results for the Third Quarter of 2009

Published November 17th, 2009 - 03:40 GMT

Ituran Location and Control
Ltd. (NASDAQ: ITRN, TASE: ITRN), today
announced its consolidated financial results for the third quarter ended
September 30, 2009.

 

Highlights of the Quarter

    - A strong increase in net subscribers: a 16,000 increase to a
      record of 549,000 as of September 30, 2009;

    - Generated very strong operating cash flow of $12.5 million;
      ended the quarter with $70.6 million in net cash;

    - The Company won a tender for stolen vehicle recovery
      services for at least 50,000 vehicles installed over two years, with a
      leading Brazilian Insurance company, Sul America, and recently signed
      the agreement;

 


    Third quarter Results

 

    Revenues for the third quarter of 2009 reached US$32.0 million. This is
9% below revenues of US$35.2 million in the third quarter of 2008. Revenues
grew by 13%, compared with revenues of $28.4 million in the prior quarter.
75% of revenues were from location based service subscription fees and 25%
from product revenues.

 

    Subscription fees grew by $0.4 million compared with the same period last
year. This increase was reduced by approximately $3 million as a result of
currency differences compared with that of last year (excluding this affect,
the subscription fee would have grown by 15%). The increase in subscription
fees was due to the increase in the subscriber base, which stood at 495,000
at the third quarter of last year.

 

    Product revenues were $3.6 million below those of the same period last
year, due to lower sales of products in Israel, the full switch to leasing
rather selling the equipment in Brazil, and the relative strength of the US
Dollar versus the Israel Shekel, Brazilian Real and Argentinean Peso in the
current quarter, compared with that of a year ago.

 

    Gross profit for the third quarter of 2009 was US$ 15.4 million (48.0% of
revenues) compared with US$17.4 million (49.5% of revenues) in the third
quarter of last year.

 

    Operating profit for the third quarter of 2009 was US$6.5 million (20.2%
of revenues) compared with an operating profit of US$7.4 million (21.0% of
revenues) in the third quarter of 2008. The operating profit recorded in the
third quarter of 2008 was the highest in Ituran's history. Excluding the
above-mentioned currency effects, operational profit would have been higher
than that of the third quarter last year.

 

    EBITDA for the quarter was $9.7 million (30.2% of revenues) compared to
an EBITDA of $10.0 million (28.4% of revenues) in the third quarter of last
year.

 

    A financial expense of US$0.7 million was recorded, and was primarily as
a result of the depreciation of the US dollar against the Israeli shekel
during the quarter, compared with the prior quarter. As of the end of the
third quarter, the Company had transferred most of its cash holdings into
Israeli shekels, its operating currency, and therefore fluctuations between
currencies will have less effect on the financial income or expense, going
forward.

 

    Net profit was US$4.6 million in the third quarter of 2009 (14.4% of
revenues), compared with a net profit of US$5.6 million (16.0% of revenues),
as reported in the third quarter of 2008.

 

    Fully diluted EPS in the third quarter of 2009 was US$0.22, compared with
fully diluted EPS of US$0.27 in the third quarter of 2008, and fully diluted
EPS of US$0.12 in the prior quarter.

 

    Cash flow from operations during the quarter generated US$12.5 million.
Approximately US$4 million of this was primarily a one-time tax refund.

 

    As of September 30, 2009, the Company had a net cash position, including
marketable securities and deposits, of US$70.6 million or $3.36 per share.
This is compared with US$57.7 million or $2.75 per share on June 30, 2009.

 

    Eyal Sheratzky, Co-CEO of Ituran said, "As the global economy
stabilizes we are seeing acceleration in our progress, with strong sequential
growth in our net subscribers and strong cash generation. In particular, we
are seeing strong momentum in Brazil and the region has very much become the
leading growth engine of our business. We won a tender for stolen vehicle
recovery services, for at least 50,000 vehicles installed over two years with
a leading Brazilian Insurance company, Sul America, and recently signed the
agreement. This contract is a demonstration of our market leadership in
Brazil, and provides us with increased visibility into our long-term growth."

 

    Continued Mr. Sheratzky, "Our continued strong results are a
demonstration of the robust and profitable platform that we have built over
the past few years. Our firmly established and growing customer base through
its recurring revenue stream provides us with stability and strong cash
generation. Over the long term, we aim to continue capitalizing on the
inherent long-term operating leverage in our business, which is built on our
stable core business and a growing base of subscribers."

 

    Conference Call Information

 

    The Company will also be hosting a conference call later
today, November 17, 2009 at 10am EST. 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 at least 10 minutes
before the conference call commences. If you are unable to connect using the
toll-free numbers, please try the international dial-in number.

 


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