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

Stocks in this article: ITRN

AZOUR, Israel, November 19, 2012 /PRNewswire/ --

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

Highlights of the Third Quarter of 2012

  • A 14 thousand quarterly increase in net subscribers to a record of 653 thousand subscribers as of September 30, 2012, the highest net growth in subscribers in 10 quarters
  • Gross margin at 50.3% and operating margin at 20.1%;
  • Excluding currency effects and a one-time income related to Mapa in the third quarter of last year, operating profit grew in excess of 15% over last year;
  • EBITDA of $10.6 million or 28.9% of revenues;
  • Generated $7.2 million in operating cash flow; ended the quarter with $28.0 million in net cash and equivalents;
  • Dividend of $2.6 million declared for the quarter.

Third Quarter 2012 Results

Revenues for the third quarter of 2012 were $36.8 million, representing a 11.7% decline from revenues of $41.7 million in the third quarter of 2011. 76.4% of revenues were from location based service subscription fees and 23.6% from product revenues.

Revenues from subscription fees were $28.1 million, a decrease of 6.6% 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 9.0% compared with the third quarter of last year due to the increase in the subscriber base, which expanded from 619,000 as of September 30, 2011, to 653,000 as of September 30, 2012. The growth primarily came from an increase in subscribers in Brazil, following the strategic changes management put in place in past quarters.  

Product revenues were $8.7 million, a decline of 25% compared with the same period last year. The decline was partially due to the above-mentioned currency effects. In addition, in the third quarter of 2011, the Company made a large one time license sale of data from Mapa in the amount of approximately $2.5 million.

Gross profit for the third quarter of 2012 was $18.5 million (50.3% of revenues), a decrease of 11.5% compared with $20.9 million (50.2% of revenues) in the third quarter of last year. The decrease is attributed to the above mentioned decline in revenues.

Operating profit for the third quarter of 2012 was $7.4 million (20.1% of revenues), a decrease of 21% compared with an operating profit of $9.3 million (22.3% of revenues) in the third quarter of 2011. The decrease in operating profit compared with last year was due to the abovementioned currency effect and the sale of license data by Mapa which boosted the operating income in the third quarter of last year. Excluding these two effects, operating profit in the third quarter of 2012 would have exceeded operating profit in the third quarter of 2011 by approximately $1.5 million.  

EBITDA for the quarter was $10.6 million (28.9% of revenues), a decrease of 21.8% compared to an EBITDA of $13.6 million (32.7% of revenues) in the third quarter of 2011.

Financial income in the third quarter of 2012 was $196 thousand compared with a financial income of $851 thousand in the third quarter of 2011.

Net profit was $5.2 million in the third quarter of 2012 (14.2% of revenues), compared with a net profit of $6.6 million (15.9% of revenues), as reported in the third quarter of 2011.

Fully diluted EPS in the third quarter of 2012 was US$0.25, compared with fully diluted EPS of US$0.32 in the third quarter of 2011.

Cash flow from operations during the quarter was $7.2 million.

As of September 30, 2012, the Company had net cash, including marketable securities and deposits for short and long term, of $28.0 million or $1.33 per share. This is compared with $22.9 million or $1.09 per share as at June 30, 2012.

For the third quarter of 2012, a dividend of $2.6 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, "Overall we are very pleased with the results of the third quarter. In particular, the general trend of improving margins towards the top end of our historical range is a good sign, as well as the growth rate in the subscriber base which has returned in line with our targets. The net adds in the subscriber base, the majority of which were in Brazil, are now at a level which we are content with. On a local currency basis, our subscriber revenues grew strongly compared with last year, driven by this growth in our subscriber base. All these improvements are the fruits of efforts and due to the changes we implemented in the past few quarters."

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