Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

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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

 

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 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): ______

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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:

 

Exhibit 99.1 Press release, dated August 19, 2024 titled "Ituran Location & Control Reports Q2 2024 Results"

 

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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

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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.”

 

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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

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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:  [phone]

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

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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 Udi Mizrahi [e-mail] Deputy CEO & VP Finance, Ituran (Israel) [phone]

International Investor Relations Ehud Helft [e-mail] EK Global  Investor Relations (US) [phone]

 

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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 ended June 30,								Three months period 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 ended June 30,								Three months period 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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