Ituran Location and Control Ltd. Presents Results for the Third Quarter of 2008
 |
Third Quarter 2008 Revenues Reached $35.2m, a Pro-Forma YoY Growth of 28%;
Earnings per Share Reached $0.27, a Pro-Forma YoY Growth of 93%
AZOUR, Israel, November 24, 2008: Ituran Location and Control Ltd. , today announced its consolidated financial results for the third quarter ended September 30, 2008.
Highlights of the Quarter (compared with the pro-forma third quarter last year)
Strong bottom-line and top-line growth
Strong improvement in pro-forma gross and operating margins
A 16,000 net subscriber increase in the quarter to a record
of 495,000 as of September 30th, 2008
As previously announced, the sale of Telematics was completed on December 31st, 2007. The results of the third quarter of 2008 therefore exclude the contribution of Telematics. The pro-forma results of the comparable quarter in 2007 also exclude the contribution of Telematics, to enable investors to compare Ituran's historical results with current results on a similar basis.
Third Quarter Results
Revenues for the third quarter of 2008 reached US$35.2 million. This represents a 28% increase compared with pro-forma revenues of US$27.5 million in the third quarter of last year. The increase in revenues was primarily driven by the growth in the Company's subscriber base particularly in Brazil and Israel, the increased average revenue per user and the weak US Dollar. In addition, in Israel subscription fees which had previously been charged in US Dollars were switched to Israeli Shekels at the start of the quarter. The exchange rate at which the change was made, was above the average prevailing market exchange rate in the quarter, which increased subscription fees in US Dollar terms.
Operating profit for the third quarter of 2008 was US$7.4 million (21.0% of revenues) compared with a pro-forma operating profit of US$4.6 million (16.6% of revenues) in the third quarter of 2007.
EBITDA for the quarter was $10.0 million (28.4% of revenues) compared to a pro-forma EBITDA of $6.4 million (23.3% of revenues) in the third quarter of last year.
Financial income in the quarter was US$1.2 million as compared with a pro-forma financial income of $234 thousand in the third quarter of last year.
A $1.1m of financial gain was recorded as a result of the appreciation of the US dollar against the Israeli shekel during the quarter. This, as previously explained, is due to the fact that most of the Company's cash is held in dollars while its functional currency in Israel is the Israeli Shekel.
Net profit was US$5.6 million in the third quarter of 2008 (16.0% of revenues), compared with a net profit of US$3.2 million (11.5% of revenues), as reported in the third quarter of 2007. Fully diluted EPS in the third quarter of 2008 were US$0.27, compared with US$0.14 per fully diluted share in the third quarter of 2007.
Cash flow from operations during the quarter was US$11.2 million. Excluding the above-mentioned financial gain, cash flow from operations was US$10.1 million. During the quarter, the company repurchased 175,000 shares for a total of US$2 million.
As of September 30, 2008 the company had a net cash position (including marketable securities) of US$57.6 million compared with US$53.5 million on June 30, 2008.
Eyal Sheratzky, Co-CEO of Ituran said, "Our third quarter was a good quarter, particularly in terms of our strong profitability, and our results demonstrate the operating leverage inherent in our business model. We are very much seeing the financial rewards and the fruits of our investments throughout last year."
Continued Mr. Sheratzky, "While we are seeing a sharp slowdown in the global economy, we believe our business model is very defensive in this environment. While we expect that the global economic slowdown will decrease the number of new cars manufactured and sold, history has demonstrated that at the same time, the car theft rate increases in a recession."
"Our unique business model, based on recurring revenues from a firmly established customer base with continued growth potential, as well as our strong market position in all our geographies, underlies our expectations for the continued performance and growth of our Company. It is important to note that we do expect some quarterly volatility in our financial numbers due to the recent sharp exchange rate changes, given that most of our activity is denominated in non-US Dollar currencies, and our results are a translation into US Dollars. Most importantly, our continued cash generation and exceptionally strong net cash position in the current environment bodes very well for us, and enables us to pursue and invest in opportunities which will enhance our competiveness and growth," concluded Mr. Sheratzky.
Conference Call Information
The Company will be hosting a conference call today, November 24th, 2008, 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 10 minutes before the conference call commences.
US Dial-in Number: 1-866-345-5855
UK Dial-in Number: 0-800-404-8418
ISRAEL Dial-in Number: 03-918-0691
CANADA Dial-in Number: 1-866-958-6867
INTERNATIONAL Dial-in Number: +972-3-918-0691
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, at: ITURAN
