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Ituran Location And Control Ltd. Presents Results For The Second Quarter 2012

AZOUR, Israel, August 15, 2012 /PRNewswire/ --

Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the quarter ended June 30, 2012.

Highlights of the Second Quarter of 2012
  • An 11 thousand quarterly increase in net subscribers to a record of 639 thousand as of June 30, 2012;
  • Gross margin at 49.1% and operating margin at 18.9%;
  • EBITDA of $10.5 million or 28.1% of revenues;
  • Generated $12.4 million in operating cash flow; ended the quarter with $22.9 million in net cash and equivalents;
  • Dividend of $5.1 million declared for the quarter;

Second Quarter 2012 Results

Revenues for the second quarter of 2012 were $37.6 million, representing a 8.7% decline from revenues of $41.1 million in the second quarter of 2011. 75% of revenues were from location based service subscription fees and 25% from product revenues.

Revenues from subscription fees were $28.1 million, a decline of 10.9% over the same period last year. The decrease in subscription fees was due to the weakening of the Brazilian Real,  Israeli Shekel and Argentinean Peso against the US dollar. In local currency terms, subscription revenues grew by 4% compared with the second quarter of last year due to the increase in the subscriber base, which expanded from 615,000 as of June 30, 2011, to 639,000 as of June 30, 2012.

Product revenues were $9.4 million, a decline of 1.6% compared with the same period last year. This was due to the above-mentioned currency effects. In local currency terms, product revenues grew by 6% over the same period last year.

Gross profit for the second quarter of 2012 was $18.4 million (49.1% of revenues), a decrease of 7.7% compared with $20.0 million (48.5% of revenues) in the second quarter of last year.

Operating profit for the second quarter of 2012 was $7.1 million (18.9% of revenues), a decrease of 18.8% compared with an operating profit of $8.7 million (21.2% of revenues) in the second quarter of 2011. The decrease in operating profit compared with last year was due to the above-mentioned currency effect and a one-time expense relating to the arbitration verdict with Telematics at the amount of approximately $0.5 million.

EBITDA for the quarter was $10.5 million (28.1% of revenues), a decrease of 18.8% compared to an EBITDA of $13.0 million (31.5% of revenues) in the second quarter of 2011.

Financial income in the second quarter of 2012 was $809 thousand compared with a financial income of $339 thousand in the second quarter of 2011.

Other income in the quarter amounted to $6.7 million relating to the settlement with Leonardo.

Net profit was $10.1 million in the second quarter of 2012 (27% of revenues), compared with a net profit of $6.6 million (16.0% of revenues), as reported in the second quarter of 2011. During the quarter, the above-mentioned settlement with Leonardo contributed approximately $5 million to the net income.

Fully diluted EPS in the second quarter of 2012 was US$0.48, compared with fully diluted EPS of US$0.31 in the second quarter of 2011.

Cash flow from operations during the quarter was $12.4 million.

As of June 30, 2012, the Company had net cash, including marketable securities and deposits for short and long term, of $22.9 million or $1.09 per share. This is compared with $43.0 million or $2.04 per share as at March 31, 2012. During the quarter, the Company paid out $28.1 million in dividends, relating to the results of the full year of 2011 and for the first quarter of 2012.

For the second quarter, a dividend of $5.1 million was declared in line with the Company's stated policy of issuing at least 50% of net profits in a dividend, on a quarterly basis.

Eyal Sheratzky, Co-CEO of Ituran  said, "We are very pleased that the growth rate in our subscriber base in Brazil finally returned back to its long-term growth rate and we believe this is a positive sign for the coming quarters. Looking ahead, we now expect to increasingly benefit from the changes we made last year, which aimed at lowering the long-term churn rate and increase the average amount of time a subscriber will stay with us. We also continued to generate strong cash flow and we continue to share the rewards of our success with our shareholders, distributing $5.1 million in dividends for our performance in the quarter."

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