ITURAN PRESENTS FIRST QUARTER 2024 RESULTS

Rhea-AI Summary

Ituran Location and Control (NASDAQ: ITRN) reported record revenues of $85 million for Q1 2024, up 7% year-over-year.

Net income rose 15% to $13 million, with EBITDA increasing by 7% to $22.3 million.

The company added 39,000 net subscribers, bringing the total to 2,291,000.

Gross profit was $39.5 million, an 8% increase from the previous year.

Operating cash flow stood at $11.4 million.

The Board declared a dividend of $8 million, or $0.39 per share.

Ituran reiterated its 2024 guidance, expecting EBITDA between $90-95 million and targeting over $100 million in 2025.

The results are based on current exchange rates and assume stable global and political conditions.

Positive

• Record revenue of $85 million, a 7% increase year-over-year.
• Net income rose by 15% to $13 million.
• EBITDA increased by 7% to $22.3 million.
• Gross profit grew to $39.5 million, an 8% increase.
• Subscriber base expanded by 39,000 to 2,291,000.
• Operating cash flow of $11.4 million.
• The Board declared a dividend of $8 million or $0.39 per share.
• Reiterated 2024 guidance with EBITDA expectations of $90-95 million and over $100 million for 2025.

Negative

• Product revenue showed minimal growth, increasing by only 2% year-over-year.
• Gross margin on products decreased from 18.2% to 17.1%.
• Financial income was only $0.1 million, compared to financial expenses of $0.2 million last year.

Insights

Financial Analyst

Ituran's financial results for the first quarter of 2024 present a positive outlook for the company. Revenue has climbed to $85 million, marking a 7% increase year-over-year. This is a promising sign of growth, reflecting strong demand for their services.

The company's EBITDA for the quarter increased by 7% to $22.3 million, maintaining a healthy margin of 26.3%. This indicates solid operational efficiency and profitability. Net income also saw a significant rise of 15%, reaching $13 million, which translates to a diluted earnings per share of $0.66. This improvement in net income is a strong indicator of the company's capability to convert revenue into profit effectively.

Importantly, Ituran’s balance sheet remains robust with a net cash position of $53.9 million and minimal debt. This financial stability supports the company's dividend policy, which saw an 60% increase in the prior quarter, continuing with an $8 million payout this quarter. This steady dividend distribution is a positive signal to investors, implying confidence in sustained future profitability.

Overall, the financial performance suggests a stable and growing business, with continued prospects for revenue and profit growth. This performance bodes well for both short-term and long-term investors.

Market Research Analyst

The increase in Ituran's subscriber base to 2,291,000 reflects a strong market position, with net additions of 39,000 in the first quarter. This growth is particularly notable as it aligns with the high end of their expected range, showcasing effective customer acquisition strategies.

Subscription revenue, contributing 72% to total revenue, grew by 9% year-over-year. This segment's revenue growth underscores the recurring nature and stability of this income stream, which is essential for predictable and consistent cash flows. On the product side, revenue grew by 2%, with varying gross margins due to changes in the product mix. This indicates potential areas for optimizing product offerings to enhance profitability further.

Looking ahead, Ituran's guidance for 2024 is optimistic, with expectations to add approximately 35,000 to 40,000 new subscribers each quarter and annual EBITDA projections between $90-95 million. Such guidance, if achieved, would represent a continuation of solid growth trends and investor confidence should align with these projections.

For retail investors, these growth metrics and the strategic focus on expanding their subscriber base are positive indicators. However, maintaining this trajectory will depend on the broader economic and political context, particularly in Israel.

Record revenue and continued strong profitability; reiterates guidance and declares an $8 million dividend for the first quarter of 2024

AZOUR, Israel, May 28, 2024 /PRNewswire/ -- Ituran Location and Control Ltd. (NASDAQ: ITRN) today announced its consolidated financial results for the first quarter 2024.

Highlights of the first quarter of 2024

• Number of subscribers reached 2,291,000, adding a net 39,000 in the first quarter; 
• Record revenue of $85.0 million, an increase of 7% year-over-year;
• Net income increased to $13.0 million, up by 15% year-over-year;
• EBITDA grew to $22.3 million, a 7% increase year-over-year;
• Operating cash flow of $11.4 million;
• The Board declared a dividend of $8 million or $0.39 per share, in-line with the Company's dividend policy, which was increased in the prior quarter;

Guidance for 2024

Overall, looking ahead to 2024, management reiterates its expectations for continued revenue growth and profitability throughout the year.

Management continues to expect to add approximately 35,000 to 40,000, net new subscribers per each quarter during 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.

It is noted that these targets are based on current exchange rates and assumes that the current global macro-economic situation and political situation in Israel does not significantly worsen.

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, "We are pleased with our first quarter results which represent a very good start to 2024. The growth in subscribers came in at the high-end of our expectations reflecting strong demand for our products and services as well as the effectiveness of our strategic initiatives."

Continued Mr. Sheratzky, "Looking ahead, we remain on track with our strong expectations for 2024, and given our ongoing success we are happy to reward our shareholders with a high level of dividend for their ongoing support of our company."

First quarter 2024 Results

Revenue for the first quarter of 2024 was $85.0 million, a 7% increase compared with revenues of $79.5 million in the first quarter of 2023.  

72% of revenues were from location-based service subscription fees and 28% were from product revenues.

Revenues from subscription fees were $60.9 million, an increase of 9% over the first quarter 2023 revenues.  

The subscriber base expanded to 2,291,000 by the end of March 2024, marking an increase of 39,000 from the previous quarter. During the quarter, there was an increase of 33,000 net in the aftermarket subscriber base and an increase of 6,000 net in the OEM subscriber base.

Product revenues were $24.1 million, an increase of 2% year-over-year.  

Gross profit for the quarter was $39.5 million (46.5% of revenues), an 8% increase compared with gross profit of $36.7 million (46.2% of revenues) in the first quarter of last year.

The gross margin in the quarter on subscription revenues was 58.1%, similar with the first quarter of last year. The gross margin on products was 17.1% in the quarter, compared with 18.2% in the first 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 $17.0 million (20.0% of revenues), representing a 7% increase compared to $15.9 million (20.0% of revenue) in the first quarter of last year.  

EBITDA for the quarter was $22.3 million (26.3% of revenues), an increase of 7% compared with EBITDA of $20.8 million (26.2% of revenues) in the first quarter of last year.  

Financial income for the quarter was $0.1 million, compared with financial expenses of $0.2 million in the first quarter of last year.  

Net income for the first quarter of 2024 was $13.0 million (15.3% of revenues) or diluted earnings per share of $0.66, an increase of 15% compared to $11.4 million (14.3% of revenues) or diluted earnings per share of $0.56 in the first quarter of last year.  

Cash flow from operations for the first quarter of 2024 was $11.4 million.

On the balance sheet, as of March 31, 2024, the Company had cash, including marketable securities, of $54.2 million and debt of $0.3 million, amounting to a net cash position of $53.9 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, which was increased by 60% in the prior 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, May 28, 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 2.2 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

 

 

ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
		US dollars
		March 31,				December  31,
(in thousands)		2024				2023
		(unaudited)
Current assets:
Cash and cash equivalents		54,035				53,434
Investments in marketable securities		221				119
Accounts receivable (net of allowance for doubtful accounts)		49,271				45,390
Other current assets		54,467				52,724
Inventories		26,140				26,872
		184,134				178,539
Long-term investments and other assets
Investments in affiliated companies		710				714
Investments in other companies		1,972				2,213
Other non-current assets		3,851				3,989
Deferred income taxes		14,804				14,452
Funds in respect of employee rights upon retirement		18,957				18,525
		40,294				39,893
Property and equipment, net		39,331				41,955
Operating lease right of use assets, net		7,831				8,071
Intangible assets, net		10,259				10,830
Goodwill		39,346				39,400
Total assets		321,195				318,688

 

 

ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)
		US dollars
		March 31,				December  31,
(in thousands)		2024				2023
		(unaudited)
Current liabilities
Credit from banking institutions		320				355
Accounts payable		19,904				20,842
Deferred revenues		28,006				27,117
Other current liabilities		44,622				44,150
		92,852				92,464
Long-term liabilities
Loan from bank institutions		-				237
Liability for employee rights upon retirement		24,959				24,562
Deferred income taxes		842				1,116
Deferred revenues		13,227				13,259
Others non-current liabilities		2,059				2,027
Operating lease liabilities, non-current		4,711				4,774
		45,798				45,975
Stockholders' equity		177,106				174,454
Non-controlling interests		5,439				5,795
Total  equity		182,545				180,249
Total liabilities and equity		321,195				318,688

 

 

ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
		US dollars
		Three months period
(in thousands		ended March  31,
except per share data)		2024			2023
		(unaudited)
Revenues:
Telematics services		60,935			55,777
Telematics products		24,091			23,695
		85,026			79,472
Cost of Revenues:
Telematics services		25,521			23,392
Telematics products		19,962			19,391
		45,483			42,783
Gross profit		39,543			36,689
Research and Development expenses		4,523			4,138
Selling and Marketing expenses		3,574			3,323
General and administrative expenses		14,456			13,273
Other expenses (income), net		(39)			43
Operating income		17,029			15,912
Other income, net		-			21
Financing income (expenses), net		75			(195)
Income before income tax		17,104			15,738
Income tax expenses		(3,430)			(3,419)
Share in losses of affiliated companies, net		(81)			(366)
Net income for the period		13,593			11,953
Less: Net income attributable to non-controlling interest		(557)			(598)
Net income attributable to the Company		13,036			11,355
Basic and diluted earnings per share attributable to Company's stockholders		0.66			0.56
Basic and diluted weighted average number of shares outstanding (in thousands)		19,894			20,228

 

 

ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		US dollars
		Three months period
		ended March  31,
(in thousands)		2024			2023
		(unaudited)
Cash flows from operating activities
Net income for the period		13,593			11,953
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		5,298			4,905
Loss (gain) in respect of trading marketable securities		(104)			1
Increase in liability for employee rights upon retirement, net		762			861
Share in losses of affiliated company, net		81			366
Deferred income taxes		(790)			(603)
Capital loss (gain) from sale of property and equipment, net		36			(7)
Increase in accounts receivable		(4,840)			(2,780)
Increase in other current and non-current assets		(3,485)			(4,576)
Decrease (increase) in inventories		521			(159)
Increase (decrease) in accounts payable		(470)			3,665
Increase in deferred revenues		1,264			2,729
Increase (decrease) in other current and non-current liabilities		(464)			1,040
Net cash provided by operating activities		11,402			17,395
Cash flows from investment activities
Increase in funds in respect of employee rights upon retirement, net of withdrawals		(707)			(383)
Capital expenditures		(3,131)			(2,903)
Return of (investments in) affiliated and other companies		138			(295)
Return of long term deposit		64			-
Sale of investment in marketable securities		-			99
Proceeds from sale of property and equipment		156			18
Net cash used in investment activities		(3,480)			(3,464)
Cash flows from financing activities
Short term credit from banking institutions, net		(273)			1,139
Repayment of long term loan		-			(4,142)
Dividend paid		(4,774)			(2,797)
Dividend paid to non-controlling interest		(1,630)			(795)
Acquisition of company shares		-			(1,200)
Net cash used in financing activities		(6,677)			(7,795)
Effect of exchange rate changes on cash and cash equivalents		(644)			(710)
Net increase in cash and cash equivalents		601			5,426
Balance of cash and cash equivalents at beginning of period		53,434			27,850
Balance of cash and cash equivalents at end of period		54,035			33,276
Supplementary information on financing and investing activities not involving cash flows:
In March 2024, the Company declared a dividend in the amount of US$ 8 million. The dividend was paid in April 2024.

 

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SOURCE Ituran Location and Control Ltd.

FAQ

What were Ituran's revenues for Q1 2024?

Ituran reported record revenues of $85 million for the first quarter of 2024.

How many subscribers did Ituran add in Q1 2024?

Ituran added 39,000 net subscribers in the first quarter of 2024.

What was Ituran's net income for Q1 2024?

Ituran's net income for Q1 2024 was $13 million.

What is the dividend declared by Ituran for Q1 2024?

Ituran declared a dividend of $8 million or $0.39 per share for Q1 2024.

What is Ituran's EBITDA guidance for 2024?

Ituran expects its EBITDA for 2024 to be between $90-95 million.

What is the total number of Ituran subscribers as of Q1 2024?

Ituran's total number of subscribers as of Q1 2024 is 2,291,000.