Continued strong profitability and reiterates guidance; Declares an $8 million dividend for the third quarter of 2024
AZOUR, Israel, Nov. 21, 2024 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN) today announced its consolidated financial results for the third quarter 2024.
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Highlights of the third quarter of 2024
Number of subscribers reached 2,369,000, adding a net 40,000 in the third quarter.
Revenue of $83.5 million, an increase of 3% year-over-year.
Net income increased to $13.7 million, up by 9% year-over-year.
EBITDA grew to $23.3 million, a 4% increase year-over-year.
Operating cash flow of $17.2 million.
The Board declared a dividend of $8 million or $0.39 per share, in line with the Company's dividend policy.
Guidance for 2024
Management reiterates its expectations for continued revenue and profit growth, and expects to continue to add approximately 35,000 to 40,000, net new subscribers in the fourth quarter of 2024.
From a financial perspective, full-year 2024 EBITDA expectations continue to be between $90-95 million and 2025 EBITDA is targeted to surpass $100 million.
The guidance assumes that the exchange rates in the geographies in which Ituran operate do not worsen against the US dollar, and the current global macro-economic situation and the political situation in Israel do not materially deteriorate.
Management Comment
Eyal Sheratzky, Co-CEO of Ituran said, "In the third quarter, we presented another solid quarter of results and financial performance and showed growth in the subscriber base at the top end of our expected range. Ituran's business remains fundamentally strong across all regions with growth in the financial metrics especially when measured in local currency terms, though the strengthening dollar against local currencies in the quarter prevented these growth rates from being reflected fully in our financial results. We continue to see strong demand for our broad location-based products and telematic services and traction from our new initiatives."
Third quarter 2024 Results
Revenues for the third quarter of 2024 were $83.5 million, a 3% increase compared with revenues of $81.1 million in the third quarter of 2023.
It is noted that the strengthening of the US dollar in the third quarter versus the various local currencies in which Ituran operates, impacted the revenues when translated into US dollars. In local currencies, revenues grew by 7% year-over-year.
71% of revenues were from location-based service subscription fees and 29% were from product revenues.
Revenues from subscription fees were $59.6 million, a decrease of 1% over the third quarter 2023 revenues. In local currencies, subscription revenues grew by 4% year-over-year.
The subscriber base expanded to 2,369,000 by the end of September 2024, marking an increase of 40,000 from the previous quarter.
Product revenues were $23.9 million, an increase of 14% year-over-year. In local currencies, product revenue grew by 15% year-over-year.
Gross profit for the quarter was $40.2 million (48.1% of revenues), a 2% increase compared with gross profit of $39.4 million (48.6% of revenues) in the third quarter of last year. In local currencies, gross profit grew by 5% year-over-year.
The gross margin in the quarter on subscription revenues improved to 58.8%, compared to 58.5% in the third quarter of last year. The gross margin on products was 21.5% in the quarter, an improvement compared with 20.3% in the third quarter of last year. The variance in the gross margin on products between quarters was due to the change in product mix sold between the quarters.
Operating income for the quarter was $18.4 million (22.0% of revenues), representing a 9% increase compared to $16.9 million (20.8% of revenues) in the third quarter of last year. In local currencies, operating income grew 14% year-over-year.
EBITDA for the quarter was $23.3 million (27.9% of revenues), an increase of 4% compared with EBITDA of $22.5 million (27.8% of revenues) in the third quarter of last year. In local currencies, EBITDA grew 9% year-over-year.
Net income for the third quarter of 2024 was $13.7 million (16.4% of revenues) or diluted earnings per share of $0.69, an increase of 9% compared to $12.5 million (15.4% of revenues) or diluted earnings per share of $0.63 in the third quarter of last year. In local currencies, net income grew 14% year-over-year.
Cash flow from operations for the third quarter of 2024 was $17.2 million.
On the balance sheet, as of September 30, 2024, the Company had cash, including marketable securities, of $67.5 million and debt of $0.2 million, amounting to a net cash position of $67.3 million. This is compared with cash, including marketable securities, of $53.6 million and debt of $0.6 million, amounting to a net cash position of $53.0 million, as of year-end 2023.
Dividend
The Board of Directors declared a dividend for the quarter of $8 million, in line with the Company's dividend policy. This dividend is the same as that of the prior quarter and 60% increased over that of the year-ago quarter.
The current dividend takes into account the Company's continuing strong profitability, ongoing positive cash flow and strong balance sheet.
Conference Call Information
The Company will also be hosting a conference call later today, Thursday, November 21, 2024 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 2.3 million subscribers using its location-based services with a market leading position in Israel and Latin America. Established in 1995, Ituran has approximately 2,800 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
udi_m@ituran.com
Deputy CEO & VP Finance, Ituran
(Israel) +972 3 557 1348
International Investor Relations
Ehud Helft
ituran@ekgir.com
EK Global Investor Relations
(US) +1 212 378 8040
ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
US dollars
(In thousands)
September 30, 2024
December 31, 2023
(unaudited)
Current assets
Cash and cash equivalents
67,465
53,434
Investments in marketable securities
32
119
Accounts receivable (net of allowance for doubtful accounts)
47,876
45,390
Other current assets
51,193
52,724
Inventories
23,959
26,872
190,525
178,539
Long-term investments and other assets
Investments in affiliated companies
739
714
Investments in other companies
2,113
2,213
Other non-current assets
3,430
3,989
Deferred income taxes
13,785
14,452
Funds in respect of employee rights upon retirement
20,440
18,525
40,507
39,893
Property and equipment, net
34,332
41,955
Operating lease right of use assets, net
6,933
8,071
Intangible assets, net
9,108
10,830
Goodwill
39,265
39,400
Total assets
320,670
318,688
ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)
US dollars
September 30,
December 31,
(In thousands)
2024
2023
(unaudited)
Current liabilities
Credit from banking institutions
169
355
Accounts payable
17,247
20,842
Deferred revenues
24,114
27,117
Other current liabilities
45,240
44,150
86,770
92,464
Long-term liabilities
Loan from bank institution
-
237
Liability for employee rights upon retirement
26,190
24,562
Deferred income taxes
562
1,116
Deferred revenues
12,594
13,259
Operating lease liabilities, non-current
4,334
4,774
Others non-current liabilities
2,145
2,027
45,825
45,975
Stockholders' equity
182,959
174,454
Non-controlling interests
5,116
5,795
Total equity
188,075
180,249
Total liabilities and equity
320,670
318,688
ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
US dollars
US dollars
Nine months period ended September 30,
Three months period ended September 30,
(in thousands, except per share data)
2024
2023
2024
2023
(unaudited)
(unaudited)
Revenues:
Telematics services
180,943
175,115
59,591
60,152
Telematics products
72,431
67,055
23,888
20,901
253,374
242,170
83,479
81,053
Cost of revenues:
Telematics services
75,320
73,627
24,574
24,985
Telematics products
58,550
53,782
18,748
16,658
133,870
127,409
43,322
41,643
Gross profit
119,504
114,761
40,157
39,410
Research and development expenses
13,607
12,746
4,490
4,392
Selling and marketing expenses
11,291
10,108
4,019
3,502
General and administrative expenses
41,571
42,330
13,264
14,614
Other expenses (income), net
(99)
127
24
9
Operating income
53,134
49,450
18,360
16,893
Other expenses, net
-
(3)
-
-
Financing income (expenses), net
165
101
34
(53)
Income before income tax
53,299
49,548
18,394
16,840
Income tax expenses
(11,234)
(10,821)
(4,029)
(3,601)
Share in losses of affiliated companies, net
(301)
(822)
(179)
(195)
Net income for the period
41,764
37,905
14,186
13,044
Less: Net income attributable to non-controlling interest
(1,948)
(1,787)
(533)
(530)
Net income attributable to the Company
39,816
36,118
13,653
12,514
Basic and diluted earnings per share attributable to Company's shareholders
2.00
1.80
0.69
0.63
Basic and diluted weighted average number of shares outstanding (in thousands)
19,894
20,096
19,894
19,912
ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars
US dollars
Nine months period ended September 30,
Three months period ended September 30,
(in thousands)
2024
2023
2024
2023
(unaudited)
(unaudited)
Cash flows from operating activities
Net income for the period
41,764
37,905
14,186
13,044
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization
15,586
15,661
4,935
5,610
Loss in respect of marketable securities and other investments
85
57
50
110
Increase in liability for employee rights upon retirement
2,245
2,281
565
691
Share in losses of affiliated companies, net
301
822
179
195
Deferred income taxes
(1,340)
(1,695)
(104)
(301)
Capital loss (gain) on sale of property and equipment, net
14
35
109
(11)
Decrease (increase) in accounts receivable
(4,792)
(1,795)
1,752
1,157
Decrease (increase) in other current and non-current assets
(5,328)
(4,109)
(957)
2,866
Decrease in inventories
2,591
901
1,062
1,510
Decrease in accounts payable
(2,382)
(2,953)
(4,198)
(3,892)
Increase (decrease) in deferred revenues
186
4,768
(186)
(459)
Increase (decrease) in other current and non-current liabilities
2,645
3,561
(158)
17
Net cash provided by operating activities
51,575
55,439
17,235
20,537
Cash flows from investment activities
Increase in funds in respect of employee rights upon
retirement, net of withdrawals
(2,337)
(1,933)
(822)
(773)
Capital expenditures
(9,144)
(10,193)
(2,835)
(3,911)
Return from (investment in) affiliated and other companies, net
(2)
(556)
(59)
51
Investment in long-term deposit
(81)
(140)
(104)
(95)
Sale of marketable securities
-
99
-
-
Proceeds from sale of property and equipment
389
144
96
86
Net cash used in investment activities
(11,175)
(12,579)
(3,724)
(4,642)
Cash flows from financing activities
Repayment of long-term loan
-
(11,488)
-
(3,581)
Short term credit from banking institutions, net
(384)
1,486
(53)
1,301
Dividend paid
(20,291)
(8,618)
(7,758)
(3,001)
Dividend paid to non-controlling interests
(3,261)
(3,327)
(1,631)
(1,640)
Acquisition of company shares
-
(6,613)
-
(1,896)
Net cash used in financing activities
(23,936)
(28,560)
(9,442)
(8,817)
Effect of exchange rate changes on cash and cash equivalents
(2,433)
(2,271)
186
(1,404)
Net change in cash and cash equivalents
14,031
12,029
4,255
5,674
Balance of cash and cash equivalents at beginning of the period
53,434
27,850
63,210
34,205
Balance of cash and cash equivalents at end of the period
67,465
39,879
67,465
39,879
Supplementary information on financing activities not involving cash flows:
In August 2024, the Company declared a dividend in an amount of US$ 8 million. The dividend was paid in October 2024.
