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
udi_m@ituran.com
Deputy CEO & VP Finance, Ituran
(Israel) +972 3 557 1348
Ehud Helft
ituran@gkir.com
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:
Condensed Consolidated Balance Sheets
2-3
Condensed Consolidated Statements of Income
4
Condensed Consolidated Statements of Cash Flows
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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Disclaimer

Ituran Location and Control Ltd. published this content on 24 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 May 2022 10:37:08 UTC.