CW GA-BAMA – Your CW station in Georgia and AlabamaIturan Location and Control Ltd. Presents Results for the Fourth Quarter and Full Year 2011
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SOURCE Ituran Location & control LTD.
Record Full Year revenues of $160.2 million, EPS of $1.23 and operating cash flow of $45.9 million
AZOUR, Israel, February 22, 2012 /PRNewswire/ --
Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the fourth quarter and full year ended December 31, 2011.
Highlights of the Fourth Quarter
Fourth Quarter 2011 Results
Revenues for the fourth quarter of 2011 reached $37.0 million, representing a 9.3% decline compared with revenues of $40.7 million in the fourth quarter of 2010. 77% of revenues were from location based service subscription fees and 23% from product revenues.
Revenues from subscription fees declined by 1.2%, compared with the fourth quarter of last year. The decline was primarily due to the weakening of the Brazilian Real, the Argentinean Peso and the Israeli Shekel versus the US Dollar. The subscriber base grew by 19,000 to 623,000 as of December 31, 2011, as compared with 604,000 as of December 31, 2010. Product revenues declined by 29% as compared with the same period last year. The decline was primarily due to the above-mentioned currency effects, a decrease in the number of new cars sold in Israel in the fourth quarter of 2011 compared with 2010 and a decrease in sales of the Company's subsidiary ERM.
Gross profit for the fourth quarter of 2011 was $18.5 million (50.1% of revenues) compared with $20.0 million (49.1% of revenues) in the fourth quarter of 2010.
Operating profit for the fourth quarter of 2011 was $7.6 million (20.6% of revenues) compared with an operating profit of $8.6 million (21.0% of revenues) in the fourth quarter of 2010.
EBITDA for the fourth quarter of 2011was $11.5 million (31.2% of revenues) compared to an EBITDA of $12.9 million (31.7% of revenues) in the fourth quarter of 2010.
Financial income for the fourth quarter of 2011 was $0.7 million compared with a financial Expenses of $0.3 million in the fourth quarter of 2010.
Net income in the fourth quarter of 2011 was $6.1 million (16.4% of revenues) compared with a loss of $6.5 million in the fourth quarter of 2010. Fully diluted earnings per share in the fourth quarter of 2011 was $0.29, compared with a loss per share of $0.31 in the fourth quarter of 2010.
Cash flow generated from operations during the quarter was $12.6 million.
Full Year Results
Revenues for 2011 reached $160.2 million. This is an increase of 8.5% over revenues of $147.8 million in 2010. A part of the increase was due to currency fluctuations during the year.
Gross profit for 2011 was $79.3 (49.5% of revenues), compared with $72.7 million (49.1% of revenues) in 2010.
Operating profit for 2011 was $34.5 million (21.5% of revenues) compared with an operating profit of $30.7 million (20.7% of revenues) in 2010.
EBITDA for the year was $51.5 million (32.1% of revenues) compared to an EBITDA of $46.6 million (31.6% of revenues) in 2010.
Net income in 2011 was $25.8 million (16.1% of revenues) or fully diluted earnings per share of $1.23. This is compared with a reported net income in 2010 of $8.7 million (5.9% of revenues) which includes a $12.3 million effect for the Leonardo litigation. Excluding this effect, net income in 2010 would have been $21.0 million (14.2% of revenues), or fully diluted earnings per share of $1.00.
Cash flow from operations for 2011 was $45.9 million. As of December 31, 2011, the Company had net cash, including marketable securities and deposits for short and long term, of $39.7 million or $1.89 per share. This is compared with US$56.9 million or $2.71 per share as of September 30, 2011, and $60.9 million or $2.90 per share as of December 31, 2010.
As reported in the financial results press release for the third quarter of 2011, due to the recent Leonardo litigation and ST arbitration with regard to the sale of Telematics, an amount totaling approximately $27 million was paid out in the fourth quarter of 2011, reducing the Company's year-end cash position.
Dividend
The Board of Directors announced a dividend amounting to $25.8 million or $1.23 per share, which is 100% of the net profit for 2011. Based on an average share price during 2011 of $14.11, this represents a dividend yield of 8.7% for 2011.
The Board of Directors approved a change to the dividend policy, whereby starting from the first quarter of 2012, the dividend will be issued on a quarterly basis instead of on an annual basis, as it has been to date. The Board maintained the policy of issuing not less than 50% of the Company's quarterly net profit over the course of a year.
The dividend's record date is March 20, 2012, and the dividend will be paid on April 4, 2012, net of taxes and levies, at the rate of 25%.
Eyal Sheratzky, Co-CEO of Ituran, said: "The fourth quarter of 2011 completes a year of growth and improvement in our business. In 2011, we took some strategic steps in Brazil to improve our operations which will have the long-term effect of lowering the churn rate and increase the average amount of time a subscriber will stay with us. It already had a positive impact on our cash flow in the fourth quarter of 2011 and we expect it to improve our subscriber growth in 2012. Our business remains strong in all the geographies in which we operate, and we believe that in 2012 we will see the fruits of the efforts taken during the year and we expect our subscriber base to increase."
Conference Call Information
The Company will also be hosting a conference call later today, February 22, 2011 at 9am ET. 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: 1-888-281-1167
ISRAEL Dial-in Number: 03-918-0644
CANADA Dial-in Number: 1-866-485-2399
INTERNATIONAL Dial-in Number: +972-3-918-0644
At: 9:00am Eastern Time, 6:00am Pacific Time, 4:00pm 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.
About Ituran
Ituran provides location-based services, consisting predominantly of stolen vehicle recovery and tracking services, as well as wireless communications products used in connection with its location-based services and various other applications. Ituran offers mobile asset location, Stolen Vehicle Recovery, management & control services for vehicles, cargo and personal security. Ituran's subscriber base has been growing significantly since the Company's inception to over 623,000 subscribers distributed globally. Established in 1995, Ituran has over 1,300 employees worldwide, provides its location based services and has a market leading position in Israel, Brazil, Argentina and the United States.
CONSOLIDATED BALANCE SHEETS
US dollars
December 31,
(in thousands) 2011 2010
Current assets
Cash and cash equivalents 35,270 46,674
Deposit in escrow - 5,238
Investments in marketable securities 68 1,509
Accounts receivable (net of allowance for
doubtful accounts) 25,294 31,161
Loan to former employee 340 -
Other current assets 12,048 12,770
Inventories 10,881 8,501
83,901 105,853
Long-term investments and debit balances
Deposit in escrow 4,888 7,858
Investments in affiliated company 207 220
Investments in other company 80 86
Other non-current assets 2,216 3,709
Loan to former employee - 558
Deferred income taxes 5,568 4,934
Funds in respect of employee rights upon
retirement 4,741 4,498
17,700 21,863
Property and equipment, net 40,870 46,147
Intangible assets, net 3,355 4,402
Goodwill 9,234 10,079
Total assets 155,060 188,344
CONSOLIDATED BALANCE SHEETS
US dollars
December 31,
(in thousands) 2011 2010
Current liabilities
Credit from banking institutions 390 98
Accounts payable 9,319 10,506
Deferred revenues 7,869 6,714
Litigation obligation - 21,852
Other current liabilities 13,922 18,089
31,500 57,259
Long-term liabilities
Long term loans 173 233
Liability for employee rights upon retirement 6,865 6,472
Provision for contingencies 4,250 5,324
Other current liabilities 753 1,974
Deferred revenues 728 873
Deferred income taxes 792 1,046
13,561 15,922
shareholders' equity 105,711 110,771
Non - controlling interest 4,288 4,392
Total shareholders' equity 109,999 115,163
Total liabilities and shareholders' equity 155,060 188,344
CONSOLIDATED STATEMENTS OF INCOME
US dollars US dollars
Three month
period
Year ended ended December
(in thousands December 31, 31,
except per share data) 2011 2010 2011 2010
Revenues:
Location-based services 120,410 108,101 28,442 28,780
Wireless communications
products 39,757 39,724 8,534 11,965
160,167 147,825 36,976 40,745
Cost of revenues:
Location-based services 49,293 40,820 11,615 10,872
Wireless communications
products 31,578 34,354 6,833 9,881
80,871 75,174 18,448 20,753
Gross profit 79,296 72,651 18,528 19,992
Research and development
expenses 631 481 151 148
Selling and marketing expenses 8,543 8,675 2,156 2,174
General and administrative
expenses 35,711 31,671 8,646 8,043
Other expenses (income), net (77) 1,156 (64) 1,072
Operating income 34,488 30,668 7,639 8,555
Other expenses (819) (14,745) (13) (14,745)
Financing income (expenses) ,
net 2,100 139 671 (320)
Income (loss) before income
taxes 35,769 16,062 8,297 (6,510)
Income tax (8,950) (6,286) (1,954) 258
Share in income (losses) of
affiliated
companies, net (23) (3) (23) (1)
Net income (loss) for the
period 26,796 9,773 6,320 (6,253)
Less :Net income attributable
To non-controlling interest (1,038) (1,071) (256) (287)
Net income attributable to the
company 25,758 8,702 6,064 (6,540)
Basic and diluted earnings per
Share of attributable to
company's
Stockholders 1.23 0.42 0.29 (0.31)
Basic and diluted weighted
average
Number of shares outstanding 20,968 20,968 20,968 20,968
CONSOLIDATED STATEMENTS OF CASH FLOWS
US dollars US dollars
Year ended
Three months period
December 31, ended December 31 ,
(in thousands) 2011 2010 2011 2010
Cash flows from operating
activities
Net income (loss) for the period 26,796 9,773 6,320 (6,253)
Adjustments to reconcile net income
to net cash from operating
activities:
Depreciation amortization and
impairment of goodwill 17,032 15,875 3,923 4,362
Exchange differences on principal
of deposit and loan, net (429) 839 24 458
Gains in respect of marketable
securities (27) (5) (27) (5)
Increase in liability for employee
rights upon retirement 854 667 173 9
Share in losses of affiliated
companies, net 23 3 23 1
Deferred income taxes 449 (1,159) 1,815 (1,758)
Capital loses (gains) on sale of
property and equipment, net 63 (299) 87 (320)
Decrease (increase) in accounts
receivable 3,649 (4,669) 2,890 270
Decrease (increase) in other
current assets (1,252) (3,728) (1,317) (2,345)
Increase in inventories (2,985) (73) (1,781) (568)
Decrease in accounts payable (180) (3,810) 527 (4,711)
Increase in deferred revenues 1,550 1,752 182 2,520
Increase in other current
liabilities 309 3,568 (220) 3,236
Litigation obligation - 14,745 - 14,745
Net cash provided by operating
activities 45,852 33,479 12,619 9,641
Cash flows from investing
activities
Increase in funds in respect of
employee rights upon
retirement, net of withdrawals (563) (662) (152) (123)
Capital expenditures (16,161) (18,344) (2,822) (3,900)
Intangible assets expenditures (74) (90) (16) (90)
Deposit 384 (52) (26) (7)
Adjustment of proceeds received
from the sale of subsidiary (4,650) - (4,650) -
Proceeds from sale of property and
equipment 614 1,286 65 582
Investment in marketable securities - (2,664) - (1,338)
Sale of marketable securities 1,418 5,552 1,418 1,338
Deposit in escrow 8,223 - 7,620 -
Net cash provided by (used in)
investment activities (10,809) (14,974) 1,437 (3,538)
Cash flows from financing
activities
Short-term credit from banking
institutions ,net 299 46 (264) (670)
Repayment of long term loans (46) (18) (11) (12)
Settlement of litigation obligation
in connection with financial
transaction (22,419) - (22,419) -
Acquisition of non- controlling
interest - (2,250) - -
Dividend paid to non-controlling
interest (767) - (261) -
Dividend paid (21,782) (31,620) - -
Net cash used in financing
activities (44,715) (33,842) (22,955) (682)
Effect of exchange rate changes on
cash and cash equivalents (1,732) 1,198 430 1,039
Net Increase (decrease) in cash and
cash equivalents (11,404) (14,139) (8,469) 6,460
Balance of cash and cash
equivalents at beginning of period 46,674 60,813 43,739 40,214
Balance of cash and cash
equivalents at end of period 35,270 46,674 35,270 46,674
Company Contact International Investor Relations
Udi Mizrahi Ehud Helft & Kenny Green
udi_m@ituran.com ituran@ccgisrael.com
VP Finance, Ituran CCG Investor Relations
(Israel) +972-3-557-1348 (US) +1-646-201-9246
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