6-K
Ituran Location & Control Ltd. (ITRN)
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
August 19, 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)
_________________________
| Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. |
|---|
| Form 20-F ☒ Form 40-F ☐ |
| Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b) (1): |
| Yes ☐ No ☒ |
| Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b) (7): |
| Yes ☐ No ☒ |
| Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information<br> to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. |
| Yes ☐ No ☒ |
| If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): ______ |
On August 19, 2024, Ituran Location and Control Ltd. issued a press release announcing Q2 2024 earnings results with revenues for Q2 2024 of $84.9 million and net profit on a GAAP-basis of $13.1 million.
The following document is attached hereto and incorporated by reference herein:
SIGNATURE
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: August 19, 2024
Exhibit 99.1
ITURAN PRESENTS SECOND QUARTER 2024 RESULTS
Continued strong profitability and reiterates guidance;
Declares an $8 million dividend for the second quarter of 2024
AZOUR, Israel – August 19, 2024 – Ituran Location and Control Ltd. (NASDAQ: ITRN) today announced its consolidated financial results for the second quarter 2024.
Highlights of the Second Quarter of 2024
| • | Number of subscribers reached 2,329,000, adding a net 38,000 in the second quarter. |
|---|---|
| • | Revenue of $84.9 million, an increase of 4% year-over-year. |
| --- | --- |
| • | Net income increased to $13.1 million, up by 7% year-over-year. |
| --- | --- |
| • | EBITDA grew to $23.1 million, a 6% increase year-over-year. |
| --- | --- |
| • | Operating cash flow of $22.9 million. |
| --- | --- |
| • | The Board declared a dividend of $8 million or $0.39 per share, in line with the Company’s dividend policy. |
| --- | --- |
Guidance for 2024
Overall, looking ahead to 2024, management reiterates its expectations for continued revenue and profit growth, adding approximately 35,000 to 40,000, net new subscribers per each quarter throughout 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 current 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, “We are pleased with our second quarter results with continued solid growth in the subscriber base and ongoing strong financial performance. Our business remains fundamentally strong and showed accelerated growth in our geographies, when measured in local currency terms. The strong dollar appreciation in the quarter prevented these solid growth rates from being reflected fully in our financial results. Overall, our performance show ongoing solid demand growth for our broad location-based products and telematic services, and especially increased traction from many of our new initiatives.”
Continued Mr. Sheratzky, “Looking ahead, we remain on track for 2024. Given our ongoing success, we are happy to reward our shareholders with a high level of dividend for their ongoing support of our company.”
Second Quarter 2024 Results
Revenues for the second quarter of 2024 were $84.9 million, a 4% increase compared with revenues of $81.6 million in the second quarter of 2023.
It is noted that the strengthening of the US dollar in the second quarter versus the various local currencies in which Ituran operates in, impacted the revenues when translated into US dollars. In local currencies, revenues grew by 6% year-over-year.
71% of revenues were from location-based service subscription fees and 29% were from product revenues.
Revenues from subscription fees were $60.4 million, an increase of 2% over the second quarter 2023 revenues. In local currencies, subscription revenues grew by 5% year-over-year.
The subscriber base expanded to 2,329,000 by the end of June 2024, marking an increase of 38,000 from the previous quarter.
Product revenues were $24.5 million, an increase of 9% year-over-year. In local currencies, product revenue grew by 10% year-over-year.
Gross profit for the quarter was $39.8 million (46.9% of revenues), a 3% increase compared with gross profit of $38.7 million (47.4% of revenues) in the second 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 58.2%, compared to 57.3% in the second quarter of last year. The gross margin on products was 18.9% in the quarter, compared with 21.0% in the second 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 $17.7 million (20.9% of revenues), representing a 7% increase compared to $16.6 million (20.4% of revenues) in the second quarter of last year. In local currencies, operating income grew 10% year-over-year.
EBITDA for the quarter was $23.1 million (27.2% of revenues), an increase of 6% compared with EBITDA of $21.8 million (26.7% of revenues) in the second quarter of last year. In local currencies, EBITDA grew 9% year-over-year.
Financial income for the quarter was $0.1 million, compared with $0.3 million in the second quarter of last year.
Net income for the second quarter of 2024 was $13.1 million (15.5% of revenues) or diluted earnings per share of $0.66, an increase of 7% compared to $12.2 million (15.0% of revenues) or diluted earnings per share of $0.61 in the second quarter of last year. In local currencies, net income grew 10% year-over-year.
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Cash flow from operations for the second quarter of 2024 was $22.9 million.
On the balance sheet, as of June 30, 2024, the Company had cash, including marketable securities, of $63.3 million and debt of $0.2 million, amounting to a net cash position of $63.1 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.
Conference Call Information
The Company will also be hosting a conference call later today, Monday, August 19, 2024 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 9642
ISRAEL Dial-in Number: 03 918 0609
INTERNATIONAL Dial-in Number: +972 3 918 0609
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, as well as factors related to the global COVID-19 pandemic.
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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 2.3 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
| Company Contact<br><br> <br>Udi Mizrahi<br><br> <br>[email protected]<br><br> <br>Deputy CEO & VP Finance, Ituran<br><br> <br>(Israel) +972 3 557 1348 | International Investor Relations<br><br> <br>Ehud Helft<br><br> <br>[email protected]<br><br> <br>EK Global Investor Relations<br><br> <br>(US) +1 212 378 8040 |
|---|
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ITURAN LOCATION AND CONTROL LTD.
Condensed Consolidated Financial Statements
as of June 30, 2024
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ITURAN LOCATION AND CONTROL LTD.
Condensed Consolidated Financial Statements
as of June 30, 2024
Table of Contents
| Page | |
|---|---|
| Condensed Consolidated Interim Financial Statements: | |
| Condensed Consolidated Balance Sheets | 7-8 |
| Condensed Consolidated Statements of Income | 9 |
| Condensed Consolidated Statements of Cash Flows | 10 |
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ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
| US dollars | ||||
|---|---|---|---|---|
| June 30, | December 31, | |||
| (in thousands) | 2024 | 2023 | ||
| (unaudited) | ||||
| Current assets | ||||
| Cash and cash equivalents | 63,210 | 53,434 | ||
| Investments in marketable securities | 81 | 119 | ||
| Accounts receivable (net of allowance for doubtful accounts) | 49,168 | 45,390 | ||
| Other current assets | 50,146 | 52,724 | ||
| Inventories | 24,806 | 26,872 | ||
| 187,411 | 178,539 | |||
| Long-term investments and other assets | ||||
| Investments in affiliated companies | 736 | 714 | ||
| Investments in other companies | 2,060 | 2,213 | ||
| Other non-current assets | 3,431 | 3,989 | ||
| Deferred income taxes | 14,121 | 14,452 | ||
| Funds in respect of employee rights upon retirement | 19,364 | 18,525 | ||
| 39,712 | 39,893 | |||
| Property and equipment, net | 35,582 | 41,955 | ||
| Operating lease right of use assets, net | 7,342 | 8,071 | ||
| Intangible assets, net | 9,488 | 10,830 | ||
| Goodwill | 39,219 | 39,400 | ||
| Total assets | 318,754 | 318,688 |
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ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)
| US dollars | ||||
|---|---|---|---|---|
| June 30, | December 31, | |||
| (in thousands) | 2024 | 2023 | ||
| (unaudited) | ||||
| Current liabilities | ||||
| Credit from banking institutions | 236 | 355 | ||
| Accounts payable | 20,913 | 20,842 | ||
| Deferred revenues | 25,557 | 27,117 | ||
| Other current liabilities | 45,215 | 44,150 | ||
| 91,921 | 92,464 | |||
| Long-term liabilities | ||||
| Loan from bank institutions | - | 237 | ||
| Liability for employee rights upon retirement | 25,317 | 24,562 | ||
| Deferred income taxes | 703 | 1,116 | ||
| Deferred revenues | 12,636 | 13,259 | ||
| Others non-current liabilities | 2,058 | 2,027 | ||
| Operating lease liabilities, non-current | 4,458 | 4,774 | ||
| 45,172 | 45,975 | |||
| Stockholders’ equity | 175,512 | 174,454 | ||
| Non-controlling interests | 6,149 | 5,795 | ||
| Total equity | 181,661 | 180,249 | ||
| Total liabilities and equity | 318,754 | 318,688 |
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ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| US dollars | US dollars | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Six months period<br><br> ended June 30, | Three months period<br><br> ended June 30, | |||||||||||
| (in thousands except per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||
| (unaudited) | (unaudited) | |||||||||||
| Revenues: | ||||||||||||
| Telematics services | 121,352 | 114,963 | 60,417 | 59,186 | ||||||||
| Telematics products | 48,543 | 46,154 | 24,452 | 22,459 | ||||||||
| 169,895 | 161,117 | 84,869 | 81,645 | |||||||||
| Cost of revenues: | ||||||||||||
| Telematics services | 50,746 | 48,642 | 25,225 | 25,250 | ||||||||
| Telematics products | 39,802 | 37,124 | 19,840 | 17,733 | ||||||||
| 90,548 | 85,766 | 45,065 | 42,983 | |||||||||
| Gross profit | 79,347 | 75,351 | 39,804 | 38,662 | ||||||||
| Research and development expenses | 9,117 | 8,354 | 4,594 | 4,216 | ||||||||
| Selling and marketing expenses | 7,272 | 6,606 | 3,698 | 3,283 | ||||||||
| General and administrative expenses | 28,307 | 27,716 | 13,851 | 14,443 | ||||||||
| Other expenses (income), net | (123 | ) | 118 | (84 | ) | 75 | ||||||
| Operating income | 34,774 | 32,557 | 17,745 | 16,645 | ||||||||
| Other expenses, net | - | (3 | ) | - | (24 | ) | ||||||
| Financing income, net | 131 | 154 | 56 | 349 | ||||||||
| Income before income tax | 34,905 | 32,708 | 17,801 | 16,970 | ||||||||
| Income tax expenses | (7,205 | ) | (7,220 | ) | (3,775 | ) | (3,801 | ) | ||||
| Share in losses of affiliated companies, net | (122 | ) | (627 | ) | (41 | ) | (261 | ) | ||||
| Net income for the period | 27,578 | 24,861 | 13,985 | 12,908 | ||||||||
| Less: Net income attributable to non-controlling interest | (1,415 | ) | (1,257 | ) | (858 | ) | (659 | ) | ||||
| Net income attributable to the Company | 26,163 | 23,604 | 13,127 | 12,249 | ||||||||
| Basic and diluted earnings per share attributable to Company’s stockholders | 1.32 | 1.17 | 0.66 | 0.61 | ||||||||
| Basic and diluted weighted average number of shares outstanding (in thousands) | 19,894 | 20,097 | 19,894 | 20,045 |
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ITURAN LOCATION AND CONTROL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| US dollars | US dollars | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Six months period<br><br> ended June 30, | Three months period<br><br> ended June 30, | |||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||
| (unaudited) | (unaudited) | |||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income for the period | 27,578 | 24,861 | 13,985 | 12,908 | ||||||||
| Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||
| Depreciation and amortization | 10,651 | 10,051 | 5,353 | 5,146 | ||||||||
| Loss (gain) in respect of trading marketable securities | 35 | (53 | ) | 139 | (54 | ) | ||||||
| Increase in liability for employee rights upon retirement | 1,680 | 1,590 | 918 | 729 | ||||||||
| Share in losses of affiliated companies, net | 122 | 627 | 41 | 261 | ||||||||
| Deferred income taxes | (1,237 | ) | (1,394 | ) | (447 | ) | (791 | ) | ||||
| Capital loss (gain) from sale of property and equipment, net | (95 | ) | 46 | (131 | ) | 53 | ||||||
| Increase in accounts receivable | (6,544 | ) | (2,952 | ) | (1,704 | ) | (172 | ) | ||||
| Increase in other current and non-current assets | (4,371 | ) | (6,975 | ) | (886 | ) | (2,399 | ) | ||||
| Decrease (increase) in inventories | 1,529 | (609 | ) | 1,008 | (450 | ) | ||||||
| Increase (decrease) in accounts payable | 1,816 | 939 | 2,286 | (2,726 | ) | |||||||
| Increase (decrease) in deferred revenues | 372 | 5,227 | (892 | ) | 2,498 | |||||||
| Increase in other current and non-current liabilities | 2,804 | 3,544 | 3,268 | 2,504 | ||||||||
| Net cash provided by operating activities | 34,340 | 34,902 | 22,938 | 17,507 | ||||||||
| Cash flows from investment activities | ||||||||||||
| Increase in funds in respect of employee rights upon retirement, net of withdrawals | (1,515 | ) | (1,160 | ) | (808 | ) | (777 | ) | ||||
| Capital expenditures | (6,309 | ) | (6,282 | ) | (3,178 | ) | (3,379 | ) | ||||
| Return of (investments in) affiliated and other companies, net | 57 | (607 | ) | (81 | ) | (312 | ) | |||||
| Return of (investments in) long term deposit | 23 | (45 | ) | (41 | ) | (45 | ) | |||||
| Sale of marketable securities | - | 99 | - | - | ||||||||
| Proceeds from sale of property and equipment | 293 | 58 | 137 | 40 | ||||||||
| Net cash used in investment activities | (7,451 | ) | (7,937 | ) | (3,971 | ) | (4,473 | ) | ||||
| Cash flows from financing activities | ||||||||||||
| Short term credit from banking institutions, net | (331 | ) | 185 | (58 | ) | (954 | ) | |||||
| Repayment of long term loan | - | (7,907 | ) | - | (3,765 | ) | ||||||
| Dividend paid | (12,533 | ) | (5,617 | ) | (7,759 | ) | (2,820 | ) | ||||
| Acquisition of company shares | - | (4,717 | ) | - | (3,517 | ) | ||||||
| Dividend paid to non-controlling interest | (1,630 | ) | (1,687 | ) | - | (892 | ) | |||||
| Net cash used in financing activities | (14,494 | ) | (19,743 | ) | (7,817 | ) | (11,948 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (2,619 | ) | (867 | ) | (1,975 | ) | (157 | ) | ||||
| Net increase in cash and cash equivalents | 9,776 | 6,355 | 9,175 | 929 | ||||||||
| Balance of cash and cash equivalents at beginning of the period | 53,434 | 27,850 | 54,035 | 33,276 | ||||||||
| Balance of cash and cash equivalents at end of the period | 63,210 | 34,205 | 63,210 | 34,205 |
Supplementary information on financing and investing activities not involving cash flows:
In May 2024, the Company declared a dividend in an amount of approximately US$ 8 million. The dividend was paid in July 2024.
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