PR Newswire | May 25, 2021 06:31AM EDT

05/25 05:30 CDT

Ituran Location and Control Ltd. Presents Results For The First Quarter Of 2021 AZOUR, Israel, May 25, 2021

AZOUR, Israel, May 25, 2021 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the first quarter of 2021.

Highlights of the first quarter of 2021

* Continued growth as the Company continues to successfully overcome and exits the impacts of the Covid-19 pandemic; * Net increase in aftermarket subscribers of 25,000; net decrease in OEM subscribers of 5,000; * Revenue of $67.4 million at around the same level as in the first quarter of last year and up 6% sequentially; * Net income of $8.3 million, up 30% year-over-year and adjusted EBITDA of $17.1 million, up 12% year-over-year; * Generated $9.2 million in quarterly operating cash flow; * Declared dividend of $3 million;

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, "We are happy with the continued improvement in our quarterly results with a solid increase in profitability. We are especially pleased with the strong growth in our after-market subscriber base which grew by 25,000, above our typically expected range. While the pandemic continues to impact many people in many of the countries we operate in, we are pleased that we are successfully overcoming the challenges and moving through 2021, we have returned to growth and improving profitability.

Mr. Sheratzky concluded, "Our results demonstrate that Ituran is emerging from this period as a stronger company, with a platform for continued sustainable and profitable growth. We expect the positive trends in our results to continue throughout the year ahead."

First Quarter 2021 Results

Revenues for the first quarter of 2021 were $67.4 million, a decrease of 1% compared with revenues of $68.4 million in the first quarter of 2020.

The higher average level of the US dollar exchange rate versus the Brazilian real during the quarter compared with the same period last year, reduced the overall revenue level in US dollar terms. In local currency terms, first quarter revenue were at the same level as those of the first quarter of last year.

68% of revenues were from location-based service subscription fees and 32% were from product revenues.

Revenues from subscription fees were $45.6 million, a decrease of 7% over first quarter 2020 revenues. In local currency terms, first quarter subscription fees decreased by 4% year-over-year.

The subscriber base amounted to 1,788,000 as of March 31, 2021.

This represents an increase of 20,000 net over that of the end of the prior quarter. During the quarter, there was an increase of 25,000 in the aftermarket subscriber base and a decline of 5,000 in the OEM subscriber base.

Product revenues were $21.7 million, an increase of 12% compared with that of the first quarter of 2020.

Gross profit for the quarter was $30.4 million (45.1% of revenues), a 2% decrease compared with gross profit of $31.0 million (45.3% of revenues) in the first quarter of 2020.

The gross margin in the quarter on subscription revenues was 54.5%, compared with 54.4% in the first quarter of 2020. The gross margin on products was 25.4%, compared with 22.3% in the first quarter of 2020.

Operating income for the quarter was $12.8 million (19.0% of revenues), an increase of 27% compared with an operating income of $10.1 million (14.7% of revenues), in the first quarter of last year. In local currency terms, the operating income would have grown by 30%.

EBITDA for the quarter was $17.1 million (25.4% of revenues), an increase of 12% compared with an EBITDA of $15.3 million (22.4% of revenues) in the first quarter of last year. In local currency terms, the EBITDA would have increased by 16% year over year.

Financial expensefor the quarter was $1.0 million compared with a financial expense of $0.7 million in the first quarter of last year.

Net income for the first quarter of 2021 was $8.3 million (12.3% of revenues) or earnings per share of $0.40. This is an increase of 30% compared to a net income of $6.4 million and earnings per share of $0.31 in the first quarter of 2020.

Cash flow from operations for the first quarter of 2021 was $9.2 million.

As of March 31, 2021, the Company had cash, including marketable securities, of $70.1 million and debt of $41.8 million, amounting to a net cash of $28.3 million. This is compared with cash, including marketable securities, of $78.8 million and debt of $54.5 million, amounting to a net cash of $24.3 million, as of December 31, 2020.

Dividend

For the first quarter of 2021, a dividend of $3.0 million was declared. This is in line with the Board's current policy of issuing at least $3 million on a quarterly basis.

Conference Call Information

The Company will also be hosting a conference call later today, March 25, 2021 at 9am 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 9642ISRAEL Dial-inNumber: 03 918 0609INTERNATIONAL Dial-inNumber: +972 3 918 0609at: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, 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 industry 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 approaching 2 million subscribers using its location based services with a market leading position in Israel and Latin America. Established in 1995, Ituran has approximately 3,000 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 International Investor Relations

Udi Mizrahi Ehud Helft

udi_m@ituran.com ituran@gkir.com

Deputy CEO & VP Finance, Ituran GK Investor & Public Relations

(Israel) +972 3 557 1348 (US) +1 646 201 9246

CONDENSED CONSOLIDATED BALANCE SHEETS

US dollars

March December 31, 31,

(in thousands) 2021 2020

(unaudited)

Current assets

Cash and cash equivalents 64,133 72,183

Investments in marketable securities 5,967 6,663

Accounts receivable (net of allowance for doubtful 43,336 39,343accounts)

Other current assets 36,377 38,624

Inventories 20,442 22,622

170,255 179,435

Non- Current investments and other assets

Investments in affiliated companies 900 908

Investments in other companies 1,495 1,263

Other non-current assets 3,396 2,953

Deferred income taxes 12,268 11,910

Funds in respect of employee rights upon retirement 13,798 13,558

31,857 30,592

Property and equipment, net 35,099 37,653

Operating lease right-of-use assets, net 4,942 5,548

Intangible assets, net 18,460 19,382

Goodwill 39,716 39,862

Total assets 300,329 312,472

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

US dollars

March 31, December 31,

(in thousands) 2021 2020

(unaudited)

Current liabilities

Credit from banking institutions 17,220 20,388

Accounts payable 17,753 19,716

Deferred revenues 25,445 24,351

Obligation to purchase non-controlling interests 10,595 10,595

Other current liabilities 45,520 37,677

116,533 112,727

Non- Current liabilities

Long term loan 24,568 34,068

Liability for employee rights upon retirement 19,515 19,715

Deferred income taxes 2,356 2,494

Deferred revenues 8,773 8,536

Others non-current liabilities 2,261 2,692

Operating lease liabilities, non-current 2,078 2,341

59,551 69,846

Stockholders' equity 121,024 127,192

Non-controlling interests 3,221 2,707

Total equity 124,245 129,899

Total liabilities and equity 300,329 312,472

CONDENSEDCONSOLIDATED STATEMENTS OF INCOME

US dollars

Three months(in thousands period ended March 31,

except per share data) 2021 2020

(unaudited)

Revenues:

Telematics services 45,619 48,976

Telematics products 21,746 19,398

67,365 68,374

Cost of revenues:

Telematics services 20,770 22,342

Telematics products 16,231 15,063

37,001 37,405

Gross profit 30,364 30,969

Research and development expenses 3,546 3,886

Selling and marketing expenses 2,957 3,059

General and administrative expenses 11,098 13,923

Other expenses (income), net (12) 27

Operating income 12,775 10,074

Other expenses, net (3) (10)

Financing expenses, net (993) (654)

Income before income tax 11,779 9,410

Income tax expenses (2,813) (1,926)

Share in losses of affiliated companies ,net (11) (903)

Net income for the period 8,955 6,581

Less: Net income attributable to non-controlling interest (694) (214)

Net income attributable to the Company 8,261 6,367

Basic and diluted earnings per share attributable to Company's stockholders 0.40 0.31

Basic and diluted weighted average number of shares outstanding (in 20,813 20,813thousands)

CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS

US dollars

Three months period ended March 31 ,

(in thousands) 2021 2020

(unaudited)

Cash flows from operating activities

Net income for the period 8,955 6,581

Adjustments to reconcile net income to net cash fromoperating activities:

Depreciation and amortization 4,352 5,223

Interest and exchange rate on short and long term credit (29) (598)

Loss in respect of trading marketable securities 481 90

Increase in liability for employee rights upon retirement, 462 834net

Share in losses of affiliated company, net 11 903

Deferred income taxes (921) 798

Capital losses (gain) from sale of property and equipment, (4) 60net

Increase in accounts receivable (5,588) (4,491)

Increase in other current and non-current assets (520) (528)

Decrease (increase) in inventories 1,660 (378)

Increase (decrease) in accounts payable (956) 190

Increase (decrease) in deferred revenues 1,821 (1,403)

Increase (decrease) in other current and non-current (521) 3,380liabilities

Increase in obligation for purchase non-controlling - 51interests

Net cash provided by operating activities 9,203 10,712

Cash flows from investment activities

Increase in funds in respect of employee rights upon

retirement, net of withdrawals (739) (108)

Capital expenditures (2,717) (3,451)

Investments in affiliated and other companies (282) (496)

Investment in long term deposit (79) (22)

Proceeds from sale of property and equipment 221 166

Net cash used in investment activities (3,596) (3,911)

Cash flows from financing activities

Short term credit from banking institutions, net (49) 2,660

Repayment of long term loan (10,771) (4,285)

Dividend paid - (5,050)

Dividend paid to non-controlling interest (29) -

Net cash used in in financing activities (10,849) (6,675)

Effect of exchange rate changes on cash and cash (2,808) (4,232)equivalents

Net decrease in cash and cash equivalents (8,050) (4,106)

Balance of cash and cash equivalents at beginning of period 72,183 53,964

Balance of cash and cash equivalents at end of period 64,133 49,858

Supplementary information on financing and investing activities not involving cash flows:

In March 2021, the Company declared a dividend in the amount of US$ 10 million. The dividend was paid on April 2021

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SOURCE Ituran Location and Control Ltd.