ITRN Ituran Location and Control Ltd

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

________________________

 

FORM 6-K

 

REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934

 

November 21, 2024

 

Commission File Number: 001-32618

 

Ituran Location and Control Ltd.

(Exact name of Registrant as specified in its Charter)

 

________________________

 

3 Hashikma Street, Azour 58001, Israel

(Address of Registrant’s principal executive offices)

 

________________________

 

On November 21, 2024, Ituran Location and Control Ltd. issued a press release announcing Q3 2024 earnings results with revenues for Q3 2024 of $83.5 million and net profit on a GAAP-basis of $13.7 million.

 

The following document is attached hereto and incorporated by reference herein:

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

ITURAN LOCATION & CONTROL LTD. (Registrant) By: /s/ Eyal Sheratzky        Name: Eyal Sheratzky        Title: Co-Chief Executive Officer

 

Date: November 21, 2024

---

ITURAN PRESENTS THIRD QUARTER 2024 RESULTS

Continued strong profitability and reiterates guidance;

Declares an $8 million dividend for the third quarter of 2024

AZOUR, Israel – November 21, 2024. Ituran Location and Control Ltd. (NASDAQ: ITRN) today announced its consolidated financial results for the third quarter 2024.

Highlights of the third quarter of 2024

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.

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.

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

 

	Page
Condensed Consolidated Interim Financial Statements:
Condensed Consolidated Balance Sheets	2-3
Condensed Consolidated Statements of Income	4
Condensed Consolidated Statements of Cash Flows	5

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
(In thousands)		September 30, 2024				December 31, 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

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