Continued strong profitability and reiterates guidance; Declares an $8 million dividend for the second quarter of 2024
AZOUR, Israel, Aug. 19, 2024 /PRNewswire/ -- 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.
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.
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.
Ituran Location and Control LTD.CONDENSED CONSOLIDATION 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
Ituran Location and Control LTD.CONDENSED CONSOLIDATION BALANCE SHEETS (cont.)
US dollars
