Form 6-K Ituran Location & Contro For: Nov 18

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November 18, 2014 6:30 AM EST

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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

�

November 18, 2014

�

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 Registrants 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 x��Form 40-F o

�

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 o��No x

�

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 o��No x

�

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 o��No x

�

If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): ______

�

On November 18, 2014, Ituran Location and Control Ltd. issued a press release announcing Q3 2014 earnings results with revenues for Q3 2014 of $46.5 million and net profit on a GAAP-basis of $8.7 million.

�

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

�

Exhibit 99.1 Press release, dated November 18, 2014 titled "Ituran Location & Control Reports Q3 2014 Results"

�

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: November 18, 2014

Exhibit 99.1

�

ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES

�

ITURAN LOCATION AND CONTROL LTD. PRESENTS

RESULTS FOR THE THIRD QUARTER 2014

Revenue of $46.5m;

Record gross, operating and net margins of 53.5%, 26.1% & 18.7% respectively

AZOUR, Israel November 18, 2014 Ituran Location and Control Ltd. (NASDAQ: ITRN, TASE: ITRN), today announced its consolidated financial results for the third quarter ended September 30, 2014.

Highlights of the Third Quarter

�	Net subscribers adds in the quarter amounting to 20 thousand, to a record subscriber base of 795 thousand as of September 30, 2014;

�	Record gross margins at 53.5%;

�	Record operating margin at 26.1%;

�	Record EBITDA of $15.0 million or 32.2% of revenues;

�	Generated $12.9 million in operating cash flow; ended the quarter with $45.5 million in net cash (including marketable securities);

�	Dividend of $4.5 million declared for the quarter;

Third Quarter 2014 Results

Revenues for the third quarter of 2014 were $46.5 million, representing a 10% growth from revenues of $42.4 million in the third quarter of 2013. 74% of revenues were from location based service subscription fees and 26% from product revenues.

Revenues from subscription fees increased 10% over the same period last year. The increase in subscription fees was primarily due to the growth in the subscriber base, which expanded from 721,000 as of September 30, 2013, to 795,000 as of September 30, 2014.

Product revenues increased by 9% compared with the same period last year.

Gross profit for the third quarter of 2014 was $24.9 million (53.5% of revenues), an increase of 13% compared with $22.0 million (51.8% of revenues) in the third quarter of 2013.

Operating profit for the third quarter of 2014 was $12.1 million (26.1% of revenues), an increase of 12% compared with an operating profit of $10.8 million (25.5% of revenues) in the third quarter of 2013.

EBITDA for the quarter was $15.0 million (32.2% of revenues), an increase of 10% compared to an EBITDA of $13.6 million (32.1% of revenues) in the third quarter of 2013.

The company recorded a financial gain on its US Dollar deposits leading to the high level of financial income of $1.3 million in the quarter. This is because some of the Iturans cash is held in US Dollars, and there was a 7.5% appreciation of the US Dollar versus the Israeli Shekel between the end of the second quarter end of the third quarter of 2014, while Iturans functional currency in Israel is the Israeli Shekel.

�

ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES

�

Net profit was US$8.7 million in the third quarter of 2014 (18.7% of revenues) or fully diluted EPS of US$0.41. This is compared with a net profit of US$7.0 million (16.5% of revenues) or fully diluted EPS of US$0.33 in the third quarter of 2013.

Cash flow from operations during the quarter was $12.9 million.

As of September 30, 2014, the Company had net cash, including marketable securities, of $45.5 million or $2.17 per share. This is compared with $44.0 million or $2.10 per share as at June 30, 2014.

Dividend

For the third quarter of 2014, a dividend of $4.5 million was declared in line with the Companys stated policy of issuing at least 50% of net profits in a dividend, on a quarterly basis.

Eyal Sheratzky, Co-CEO of Ituran said, We are very pleased with our third quarter 2014 results. Our core business is growing very well in our target regions, demonstrated by the net addition of 20k subscribers in the quarter. Furthermore, we continue to benefit from the strong operating leverage which is inherent to our business model. Every additional subscriber we add can be serviced by our existing infrastructure, so as the revenue from our subscriber base continues to grow, we increasingly benefit through improving margins. Toward the end of the third quarter and into the fourth quarter we have seen the weakening of the local currencies in which we operate versus the US dollar, which had a negative impact on our results which we report in US dollars.��Notwithstanding this, we look forward to maintaining our growth trend in subscribers and expect to continue showing strong margins going forward.

�

Conference Call Information

The Company will also be hosting a conference call later today, November 18, 2014 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: 1 888 407 2553

ISRAEL Dial-in Number: 03 918 0650

CANADA Dial-in Number: 1 866 485 2399

INTERNATIONAL Dial-in Number:��+972 3 918 0650

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 Iturans 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.

�

ITURAN LOCATION AND CONTROL LTD. AND ITS SUBSIDIARIES

�

About Ituran

Ituran provides location-based services, consisting predominantly of stolen vehicle recovery and tracking services, as well as wireless communications products used in connection with its location-based services and various other applications. Ituran offers mobile asset location, Stolen Vehicle Recovery, management & control services for vehicles, cargo and personal security. Iturans subscriber base has been growing significantly since the Companys inception to over 795,000 subscribers distributed globally. Established in 1995, Ituran has over 1,300 employees worldwide, provides its location based services and has a market leading position in Israel, Brazil, Argentina and the United States.

Company Contact	�	International Investor Relations
Udi Mizrahi [email protected] VP Finance, Ituran (Israel) +972 3 557 1348	�	Ehud Helft & Kenny Green [email protected] GK��Investor Relations (US) +1 646 201 9246

�

ITURAN LOCATION AND CONTROL LTD.

�

Condensed Consolidated Interim Financial Statements

as of September 30, 2014

�

ITURAN LOCATION AND CONTROL LTD.

�

Condensed Consolidated Financial Statements

as of September 30, 2014

�

Table of Contents

�

�	Page
�	�
Balance Sheets	2-3
Statements of Income	4
Statements of Cash Flows	5

�

ITURAN LOCATION AND CONTROL LTD.

�

CONDENSED CONSOLIDATED BALANCE SHEETS

�	�	US dollars						�
�	�	September 30,		�	�	December 31,		�
(in thousands)	�	2014		�	�	2013		�
�	�	�		�	�	�		�
Current assets	�	�		�	�	�		�
Cash and cash equivalents	�	�	43,004	�	�	�	41,697	�
Deposit in escrow	�	�	-	�	�	�	4,982	�
Investment in marketable securities	�	�	2,515	�	�	�	-	�
Accounts receivable (net of allowance for doubtful accounts)	�	�	30,334	�	�	�	29,239	�
Other current assets	�	�	20,825	�	�	�	18,437	�
Inventories	�	�	11,390	�	�	�	14,506	�
�	�	�	108,068	�	�	�	108,861	�
�	�	�	�	�	�	�	�	�
Long-term investments and other assets	�	�	�	�	�	�	�	�
Investments in affiliated company	�	�	1,038	�	�	�	1,423	�
Investments in other company	�	�	92	�	�	�	88	�
Other non-current assets	�	�	1,574	�	�	�	1,022	�
Deferred income taxes	�	�	3,122	�	�	�	3,781	�
Funds in respect of employee rights upon retirement	�	�	6,786	�	�	�	6,649	�
�	�	�	12,612	�	�	�	12,963	�
�	�	�	�	�	�	�	�	�
Property and equipment, net	�	�	34,206	�	�	�	32,546	�
�	�	�	�	�	�	�	�	�
Intangible assets, net	�	�	564	�	�	�	739	�
�	�	�	�	�	�	�	�	�
Goodwill	�	�	5,104	�	�	�	5,433	�
�	�	�	�	�	�	�	�	�
Total assets	�	�	160,554	�	�	�	160,542	�

�

- 2 -

�

ITURAN LOCATION AND CONTROL LTD.

�

CONDENSED CONSOLIDATED BALANCE SHEETS

�

�	�	US dollars						�
�	�	September 30,		�	�	December 31,		�
(in thousands)	�	2014		�	�	2013		�
�	�	�		�	�	�		�
Current liabilities	�	�		�	�	�		�
Credit from banking institutions	�	�	2	�	�	�	38	�
Accounts payable	�	�	13,172	�	�	�	11,436	�
Deferred revenues	�	�	9,032	�	�	�	9,852	�
Other current liabilities	�	�	29,141	�	�	�	30,276	�
�	�	�	51,347	�	�	�	51,602	�
�	�	�	�	�	�	�	�	�
Long-term liabilities	�	�	�	�	�	�	�	�
Liability for employee rights upon retirement	�	�	10,319	�	�	�	9,607	�
Provision for contingencies	�	�	539	�	�	�	2,599	�
Deferred revenues	�	�	981	�	�	�	1,033	�
Deferred income taxes	�	�	169	�	�	�	216	�
�	�	�	12,008	�	�	�	13,455	�
�	�	�	�	�	�	�	�	�
�	�	�	�	�	�	�	�	�
Stockholders equity	�	�	93,070	�	�	�	90,918	�
Non-controlling interests	�	�	4,129	�	�	�	4,567	�
Total equity	�	�	97,199	�	�	�	95,485	�
�	�	�	�	�	�	�	�	�
Total liabilities and equity	�	�	160,554	�	�	�	160,542	�

�

- 3 -

�

ITURAN LOCATION AND CONTROL LTD.

�

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

�

US dollars

�

US dollars

�

Nine month period

ended September 30,

�

Three month period

ended September 30,

�

(in thousands except per share data)

�

2014

�

2013

�

2014

�

2013

�

Revenues:

�

Location-based services

�

100,737

�

94,754

�

34,442

�

31,332

�

Wireless communications products

�

37,843

�

31,787

�

12,048

�

11,055

�

138,580

�

126,541

�

46,490

�

42,387

�

Cost of revenues:

�

Location-based services

�

35,527

�

33,694

�

12,300

�

11,269

�

Wireless communications products

�

29,611

�

26,627

�

9,330

�

8,724

�

65,138

�

60,321

�

21,630

�

19,993

�

Gross profit

�

73,442

�

66,220

�

24,860

�

22,394

�

Research and development expenses

�

1,895

�

1,791

�

650

�

624

�

Selling and marketing expenses

�

6,783

�

7,358

�

2,346

�

2,386

�

General and administrative expenses

�

28,950

�

25,915

�

9,752

�

8,567

�

Other expenses (income), net

�

(63

)

�

913

�

)

�

)

Operating income

�

35,877

�

30,243

�

12,121

�

10,826

�

Financing��income (expenses), net

�

1,215

�

144

�

1,259

�

(96

)

Income before income tax

�

37,092

�

30,387

�

13,380

�

10,730

�

Income tax expense

�

(11,373

)

�

(9,406

)

�

(3,895

)

�

(3,172

)

Share in losses of affiliated companies, net

�

(308

)

�

)

�

(107

)

�

Net income for the period

�

25,411

�

20,980

�

9,378

�

7,558

�

Less: Net income attributable to non-controlling interests

�

(1,996

)

�

(1,266

)

�

(701

)

�

(576

)

Net��income attributable to the Company

�

23,415

�

19,714

�

8,677

�

6,982

�

Basic and diluted earnings per share attributable to Companys stockholders

�

1.12

�

0.94

�

0.41

�

0.33

�

Basic and diluted weighted average number of shares outstanding

�

20,968

�

20,968

�

20,968

�

20,968

�

- 4 -

�

ITURAN LOCATION AND CONTROL LTD.

�

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

�

US dollars

�

US dollars

�

Nine month period

ended September 30,

�

Three month period

ended September 30,

�

(in thousands except per share data)

�

2014

�

2013

�

2014

�

2013

�

Cash flows from operating activities

�

Net income for the period

�

25,411

�

20,980

�

9,378

�

7,558

�

Adjustments to reconcile net income to net cash from operating activities:

�

Depreciation and amortization

�

8,131

�

9,472

�

2,863

�

2,778

�

Losses (gains) in respect of trading marketable securities

�

(271

)

�

(359

)

�

Exchange differences on principal of deposit and loans, net

�

(23

)

�

229

�

Increase in liability for employee rights upon retirement

�

1,294

�

921

�

359

�

193

�

Share in losses of affiliated companies, net

�

308

�

107

�

Deferred income taxes

�

(1,209

)

�

(311

)

�

458

�

Capital losses (gains) on sale of property and equipment, net

�

(19

)

�

(39

)

�

)

Decrease (increase) in accounts receivable

�

(2,868

)

�

(2,500

)

�

2,330

�

1,371

�

Increase in other current assets

�

(770

)

�

(715

)

�

(63

)

�

(1,889

)

Decrease (increase) in inventories

�

2,237

�

3,060

�

(296

)

�

576

�

Increase (decrease) in accounts payable

�

(912

)

�

1,559

�

209

�

2,717

�

Decrease in deferred revenues

�

(212

)

�

(38

)

�

(236

)

�

(556

)

Increase (decrease) in other current liabilities

�

(553

)

�

1,097

�

(1,071

)

�

Net cash provided by operating activities

�

30,544

�

34,079

�

12,871

�

13,306

�

Cash flows from investment activities

�

Increase in funds in respect of employee rights upon retirement, net of withdrawals

�

(540

)

�

(482

)

�

(243

)

�

(153

)

Capital expenditures

�

(10,609

)

�

(13,040

)

�

(4,082

)

�

(7,380

)

Investment in marketable securities

�

(2,771

)

�

Deposit in escrow

�

5,005

�

Deposit

�

(123

)

�

317

�

Proceeds from sale of property and equipment

�

1,370

�

485

�

742

�

262

�

Net cash used in investment activities

�

(7,668

)

�

(12,720

)

�

(3,550

)

�

(7,267

)

�

Cash flows from financing activities

�

Short term credit from banking institutions, net

�

(36

)

�

489

�

510

�

Repayment of long term loans

�

(114

)

�

Acquisition of non-controlling��interest

�

(500

)

�

(500

)

�

Dividend paid to non-controlling interests

�

(2,062

)

�

(1,233

)

�

(557

)

�

(692

)

Dividend paid

�

(15,481

)

�

(12,479

)

�

(4,022

)

�

(2,894

)

Net cash provided by (used in) financing activities

�

(18,079

)

�

(13,337

)

�

(5,076

)

�

(3,076

)

�

Effect of exchange rate changes on cash and cash equivalents

�

(3,490

)

�

(855

)

�

(3,008

)

�

Net increase in cash and cash equivalents

�

1,307

�

7,167

�

1,237

�

2,965

�

Balance of cash and cash equivalents at beginning of��period

�

41,697

�

29,453

�

41,767

�

33,655

�

Balance of cash and cash equivalents at end of the period

�

43,004

�

36,620

�

43,004

�

36,620

�

Supplementary information on investing activities not involving cash flows:

In August the company declared a dividend in an amount of US$ 4 million. The dividend was paid in October 2014.During the nine month period ended September 30 2014, the Company purchased property and equipment in an amount of US$ 3,026 thousand using a directly related liabilities.

�

- 5 -

�

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