Form 6-K Ituran Location & Contro For: May 24

May 24, 2022 6:30 AM EDT

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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
 
May 24, 2022
 
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 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 May 24, 2022, Ituran Location and Control Ltd. issued a press release announcing Q1 2022 earnings results with revenues for Q1 2022 of $72.1 million and net profit on a GAAP-basis of $8.7 million.
 
The following document is attach 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: May 24, 2022



Exhibit 99.1

ITURAN PRESENTS RECORD AFTER-MARKET SUBSCRIBER
GROWTH IN ITS RESULTS FOR THE FIRST QUARTER OF 2022

Added 43,000 net subscribers and presents 7% growth in revenue & 13% growth in
EBITDA

AZOUR, Israel – May 24, 2022 – Ituran Location and Control Ltd. (NASDAQ: ITRN), today announced its consolidated financial results for the first quarter of 2022.

Highlights of the first quarter of 2022
43,000 net subscriber growth: net increase in aftermarket of 59,000 and net decrease in OEM of 16,000 with total number of subscribers at 1,924,000 at quarter-end;
Revenues of $72.1 million, an increase of 7% year-over-year;
Net income was $8.7 million, an increase of 6% year-over-year;
EBITDA of $19.3 million, up 13% year-over-year;
Generated $7.0 million in quarterly operating cash flow;
Declared dividend of $0.14 per share (approximately $3 million) and continued the share buy-back program starting on April 1, 2022.

Management Comment

Eyal Sheratzky, Co-CEO of Ituran said, “We are pleased with the financial results and the very solid start to 2022, demonstrating a real recovery in our aftermarket business across all our geographies as well as the contribution from some of our new growth engines: including UBI, finance customers and car rental companies. What I am most pleased about is the very solid growth in our subscriber base which strengthens our expectations of adding between 140 and 160 thousand net subscribers in 2022. Our subscriber base is expected to cross the two million customers mark during this year and I am very proud of soon reaching this milestone. I look forward to reaping the fruits of our continued growth in the upcoming quarters. ”

First Quarter 2022 Results

Revenues for the first quarter of 2022 were $72.1 million, an increase of 7% compared with revenues of $67.4 million in the first quarter of 2021.

70% of revenues were from location-based service subscription fees and 30% were from product revenues.

Revenues from subscription fees were $50.2 million, an increase of 10% over first quarter 2021 revenues.

The subscriber base amounted to 1,924,000 as of March 31, 2022. This represents an increase of 43,000 net over that of the end of the prior quarter, and an increase of 136,000 year-over-year. During the quarter, there was an increase of 59,000 in the aftermarket subscriber base and a decrease of 16,000 in the OEM subscriber base.


Product revenues were $21.8 million, an increase of 0.5% compared with that of the first quarter of 2021.

Gross profit for the quarter was $33.3 million (46.2% of revenues), a 9% increase compared with gross profit of $30.7 million (45.5% of revenues) in the first quarter of 2021.

The gross margin in the quarter on subscription revenues was 55.9%, compared with 55.1% in the first quarter of 2021. The gross margin on products was 23.7% in the quarter, compared with 25.4% in the first quarter of 2021, and the product margin was somewhat impacted due to the product sales mix as well as increased spot prices of components due to the global shortage.

Operating income for the quarter was $14.4 million (19.9% of revenues), an increase of 12% compared with an operating income of $12.8 million (19.0% of revenues) in the first quarter of last year.

EBITDA for the quarter was $19.3 million (26.7% of revenues), an increase of 13% compared with an EBITDA of $17.1 million (25.4% of revenues) in the first quarter of last year.  

Financial expense for the quarter was $2.6 million compared with a financial expense of $1.0 million in the first quarter of last year. The increase in financial expense in the quarter was primarily due to the fall in the public market value of Ituran’s early-stage company holding, SaverOne, which amounted $2.4 million in the current quarter.

Net income for the first quarter of 2022 was $8.7 million (12.1% of revenues) or diluted earnings per share of $0.43, compared with $8.3 million (12.3% of revenues) or diluted earnings per share of $0.40.

Cash flow from operations for the first quarter of 2022 was $7.0 million.

As of March 31, 2022, the Company had cash, including marketable securities, of $45.2 million and short and long-term bank credit of of $26.5 million, amounting to a net cash of $18.7 million. This is compared with cash, including marketable securities, of $54.7 million and short and long-term bank credit of $31.4 million, amounting to a net cash of $23.3 million, as of December 31, 2021.

Dividend

For the first quarter of 2022, a dividend of $0.14 per diluted share (approximately $3.0 million) was declared. This is in line with the Board’s current policy of issuing at least $3 million on a quarterly basis.

Buy Back

On August 4, 2021, Ituran announced that it Board of Directors made the decision to continue executing on the $19 million remainder of a $25 million share buy-back program that was first announced in 2019. Share repurchases, were funded by available cash and repurchases of Ituran's ordinary shares under SEC Rule10b-18 terms. In 2022, the share buyback was renewed on April 1.


Conference Call Information

The Company will also be hosting a conference call later today, May 24, 2022 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 industry 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 approximately 2 million subscribers using its location based services with a market leading position in Israel and Latin America. Established in 1995, Ituran has approximately 3,000 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
 
International Investor Relations
Udi Mizrahi
Deputy CEO & VP Finance, Ituran
(Israel) +972 3 557 1348
 
Ehud Helft
GK  Investor & Public Relations
(US) +1 212 378 8040
 


 ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of March 31, 2022

ITURAN LOCATION AND CONTROL LTD.
 
Condensed Consolidated Financial Statements
as of March 31, 2022

Table of Contents
 
 
Page
   
Condensed Consolidated Interim Financial Statements:
 
2-3
4
5
 
=======================
=============


ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

   
US dollars
 
   
March 31,
   
Decmber 31,
 
(in thousands)
 
2022
   
2021
 
   
(unaudited)
       
             
Current assets
           
Cash and cash equivalents
   
43,254
     
50,306
 
Investments in marketable securities
   
1,951
     
4,405
 
Accounts receivable (net of allowance for doubtful accounts)
   
48,245
     
43,916
 
Other current assets
   
44,544
     
36,979
 
Inventories
   
31,550
     
27,128
 
     
169,544
     
162,734
 
                 
Non- Current investments and other assets
               
Investments in affiliated companies
   
1,218
     
885
 
Investments in other companies
   
1,827
     
1,866
 
Other non-current assets
   
3,405
     
3,146
 
Deferred income taxes
   
11,412
     
11,091
 
Funds in respect of employee rights upon retirement
   
16,263
     
16,205
 
     
34,125
     
33,193
 
                 
Property and equipment, net
   
39,453
     
35,652
 
                 
Operating lease right-of-use assets, net
   
11,682
     
4,690
 
                 
Intangible assets, net
   
15,937
     
16,753
 
                 
Goodwill
   
39,912
     
39,999
 
                 
Total assets
   
310,653
     
293,021
 

- 2 -

ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (cont.)

   
US dollars
 
   
March 31,
   
December 31,
 
(in thousands)
 
2022
   
2021
 
   
(unaudited)
       
Current liabilities
           
Credit from banking institutions
   
17,865
     
18,257
 
Accounts payable
   
24,075
     
21,275
 
Deferred revenues
   
23,401
     
24,333
 
Other current liabilities
   
39,985
     
40,767
 
     
105,326
     
104,632
 
                 
Non- Current liabilities
               
Long term loan
   
8,597
     
13,169
 
Liability for employee rights upon retirement
   
22,971
     
22,476
 
Deferred income taxes
   
1,909
     
1,952
 
Deferred revenues
   
12,064
     
8,902
 
Others non-current liabilities
   
2,316
     
2,337
 
Operating lease liabilities, non-current
   
8,457
     
1,750
 
     
56,314
     
50,586
 
                 
Stockholders’ equity
   
143,174
     
132,460
 
Non-controlling interests
   
5,839
     
5,343
 
Total equity
   
149,013
     
137,803
 
Total liabilities and equity
   
310,653
     
293,021
 

- 3 -

ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

   
US dollars
 

 
Three months period
ended March 31,
 
(in thousands except per share data)
 
2022
   
2021
 
   
(unaudited)
 
Revenues:
           
Telematics services
   
50,226
     
45,619
 
Telematics products
   
21,846
     
21,746
 
     
72,072
     
67,365
 
                 
Cost of revenues:
               
Telematics services
   
22,132
     
20,471
 
Telematics products
   
16,677
     
16,231
 
     
38,809
     
36,702
 
                 
Gross profit
   
33,263
     
30,663
 
Research and development expenses
   
4,140
     
3,546
 
Selling and marketing expenses
   
3,124
     
3,256
 
General and administrative expenses
   
11,712
     
11,098
 
Other income, net
   
(79
)
   
(12
)
Operating income
   
14,366
     
12,775
 
Other expenses, net
   
-
     
(3
)
Financing expenses, net
   
(2,565
)
   
(993
)
Income before income tax
   
11,801
     
11,779
 
Income tax expenses
   
(2,464
)
   
(2,813
)
Share in losses of affiliated companies ,net
   
(43
)
   
(11
)
Net income for the period
   
9,294
     
8,955
 
Less: Net income attributable to non-controlling interest
   
(565
)
   
(694
)
Net income attributable to the Company
   
8,729
     
8,261
 
                 
Basic and diluted earnings per share attributable to Company’s stockholders
   
0.43
     
0.40
 
                 
Basic and diluted weighted average number of shares outstanding (in thousands)
   
20,534
     
20,813
 

- 4 -

ITURAN LOCATION AND CONTROL LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

   
US dollars
 
   
Three months period
ended March 31,
 
(in thousands)
 
2022
   
2021
 
   
(unaudited)
 
Cash flows from operating activities
           
Net income for the period
   
9,294
     
8,955
 
Adjustments to reconcile net income to net cash from operating activities:
               
Depreciation and  amortization
   
4,907
     
4,352
 
Interest and exchange rate on short and long term credit
   
-
     
(29
)
Loss in respect of trading marketable securities
   
2,350
     
481
 
Increase in liability for employee rights upon retirement, net
   
918
     
462
 
Share in losses of affiliated company, net
   
43
     
11
 
Deferred income taxes
   
157
     
(921
)
Capital gain from sale of property and equipment, net
   
(62
)
   
(4
)
Increase in accounts receivable
   
(3,685
)
   
(5,588
)
Increase in other current and non-current assets
   
(3,026
)
   
(520
)
Decrease (increase) in inventories
   
(4,750
)
   
1,660
 
Increase (decrease) in accounts payable
   
1,211
     
(956
)
Increase decrease in deferred revenues
   
1,846
     
1,821
 
Decrease in other current and non-current liabilities
   
(2,253
)
   
(521
)
Net cash provided by operating activities
   
6,950
     
9,203
 
                 
Cash flows from investment activities
               
Increase in funds in respect of employee rights upon
               
retirement, net of withdrawals
   
(392
)
   
(739
)
Capital expenditures
   
(6,122
)
   
(2,717
)
Investments in affiliated and other companies
   
(377
)
   
(282
)
Investment in long term deposit
   
(22
)
   
(79
)
Proceeds from sale of property and equipment
   
210
     
221
 
Net cash used in investment activities
   
(6,703
)
   
(3,596
)
                 
Cash flows from financing activities
               
Short term credit from banking institutions, net
   
(49
)
   
(49
)
Repayment of long term loan
   
(4,177
)
   
(10,771
)
Dividend paid
   
(2,891
)
   
-
 
Dividend paid to non-controlling interest
   
-
     
(29
)
Net cash used in  in financing activities
   
(7,117
)
   
(10,849
)
Effect of exchange rate changes on cash and cash equivalents
   
(182
)
   
(2,808
)
Net decrease in cash and cash equivalents
   
(7,052
)
   
(8,050
)
Balance of cash and cash equivalents at beginning of period
   
50,306
     
72,183
 
Balance of cash and cash equivalents at end of period
   
43,254
     
64,133
 

Supplementary information on financing and investing activities not involving cash flows:
In March 2022, the Company declared a dividend in the amount of US$ 3 million.  The dividend was paid in April 2022
 
- 5 -



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