ITURAN LOCATION AND CONTROL LTD ANNOUNCES DISTRIBUTION OF A $8 MILLION DIVIDEND

Rhea-AI Summary

Ituran Location and Control Ltd. (NASDAQ: ITRN) declared a cash dividend of $0.39 per share, totaling $8 million, to be paid on April 3, 2024, with shareholders of record as of March 20, 2024. The Board of Directors ensured the dividend distribution aligns with Israeli law and won't hinder the company's operations or future plans. Retained earnings pre-distribution were $203.5 million, decreasing to $195.5 million post-distribution. The company held $53.4 million in cash as of December 31, 2023, with minimal long-term debt and healthy current assets exceeding liabilities.

Insights

Financial Analyst

The declaration of a $0.39 per share dividend by Ituran Location and Control Ltd. signifies a substantial return to shareholders, with the total payout amounting to approximately $8 million. When evaluating the company's financial health, it is notable that the retained earnings prior to the distribution stood at $203.5 million, which is a robust buffer that comfortably covers the dividend payment. Post-distribution, the retained earnings are projected to be $195.5 million, indicating that the company maintains a strong equity base even after rewarding its shareholders.

Furthermore, the company's liquidity position, as indicated by a cash balance of $53.4 million before the payment of a prior dividend, suggests a solid ability to meet short-term obligations. The minimal long-term loan ($0.2 million) and credit from banking institutions ($0.4 million) reflect a conservative leverage stance, which is typically favored by investors seeking lower-risk profiles. The current ratio, derived from current assets ($125.1 million) over current liabilities ($92.5 million), stands above 1, which is generally considered healthy in financial analysis.

Market Research Analyst

The announcement of a cash dividend can often serve as a positive signal to the market, indicating management's confidence in the company's financial stability and future earnings potential. Ituran Location and Control Ltd.'s decision to pay out dividends may be interpreted by investors as a commitment to shareholder returns, which could potentially enhance investor sentiment and have a favorable impact on the stock price.

However, it is important for investors to consider the sustainability of such dividend payments. With a considerable cash reserve and a conservative debt profile, Ituran appears to be in a position to sustain its dividend policy without jeopardizing its operational capabilities or investment in future growth. This balance between rewarding shareholders and funding operations is crucial for long-term value creation.

Legal Expert

The Board of Directors' review of the company's compliance with Israeli law before approving the dividend distribution is a critical aspect of corporate governance. It ensures that the company adheres to statutory requirements and maintains its fiduciary responsibility to shareholders. The fact that the Board has confirmed the company's ability to meet its undertakings when due, without undermining its current or future business plans, provides an additional layer of assurance to stakeholders regarding the company's prudent financial management and legal compliance.

It should be noted that the 25% tax rate on dividends is a statutory requirement which investors should factor into their net return calculations. Understanding the tax implications is essential for investors in assessing the actual yield of their investment.

AZOUR, Israel, Feb. 29, 2024 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN) announced that the Board of Directors approved the distribution of a cash dividend in the amount of $0.39 per share, totaling approximately US$ 8 million. The dividend will be paid to shareholders of record as of March 20, 2024. The Company will pay the dividend out on April 3, 2024 net of taxes at the rate of 25%.

In its decision to approve the distribution of the cash dividend, the Board of Directors examined whether the Company meets the distribution criteria according to Israeli law. The Board of Directors concluded that the abovementioned distribution will not undermine the Company's ability to keep performing in its current course of business or future, plans and is able to meet its undertakings when due.

Retained earnings as of December 31, 2023, prior to the distribution was US$ 203.5 million and retained earnings will reach US$ 195.5 million after the distribution. The Board of Directors emphasized that as of December 31, 2023, the Company had a cash balance in hand of US$ 53.4 million (this amount is prior to the payment of a dividend of approximately US$ 5 million which was issued for the third quarter 2023 and was paid out in January 2024). The Company also had long-term loan of US$ 0.2 million and credit from banking institutions of US$ 0.4 million. As of December 31, 2023, the Company's current assets (excluding cash and cash equivalents) were in the sum of US$ 125.1 million and current liabilities were in the sum of US$ 92.5 million.

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 over 2.2 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 

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SOURCE Ituran Location and Control Ltd.

FAQ

What is the cash dividend amount per share declared by Ituran Location and Control Ltd. (ITRN)?

Ituran Location and Control Ltd. declared a cash dividend of $0.39 per share.

When will the dividend be paid out to shareholders?

The dividend will be paid on April 3, 2024.

What was the total amount of the cash dividend declared by Ituran Location and Control Ltd.?

The total cash dividend declared was $8 million.

What was the retained earnings of Ituran Location and Control Ltd. before the distribution of the dividend?

Retained earnings before the distribution were $203.5 million.

What is the current cash balance of Ituran Location and Control Ltd. as of December 31, 2023?

The company had a cash balance of $53.4 million as of December 31, 2023.