News Recap: Ituran Location and Control Ltd. (US) (NASDAQ: ITRN)

On Tuesday, Ituran Location and Control Ltd. (US) (NASDAQ: ITRN) stock dropped -3.1% and closed at 14.05. The stock opened the session at $14.34 and touched its highest price point at $14.58. Its recent trading capacity is 0 shares versus to its average trading volume of 28966 shares. The company stock lowest price point for the session stood at $13.9.

Ituran Location and Control Ltd. (ITRN) recently reported its consolidated financial results for the second quarter of 2020.

Second quarter 2020 Results

Revenues for the second quarter of 2020 were $53.3M, a decrease of 25% contrast with revenues of $71.2M in the second quarter of 2019.

The lower revenue level was Because of the impact of the Covid-19 pandemic on new car sales, particularly in Brazil, Israel and also in the other geographies in which Ituran operates. Furthermore, the higher average level of the US dollar exchange rate versus the Brazilian real during the quarter contrast with the same period last year, reduced the overall revenue level in US dollar terms and had a negative impact on the revenue growth rate. In local currency terms, second quarter revenue declined by 19% year-over-year.

82% of revenues were from location-based service subscription fees and 18% were from product revenues.

Revenues from subscription fees were $43.7M, a decrease of 15% over second quarter 2019 revenues. In local currency terms, subscription fees declined by 7% year-over-year.

The subscriber base amounted to 1,751,000 as of June 30, 2020. This represents a decrease of 43,000 net, over that of the end of the previous quarter. During the quarter, there was a decline of 16,000 in the aftermarket subscriber base and a decline of 27,000 in the OEM subscriber base. Ituran expects the aftermarket subscriber base to resume growth on a net basis once the main impacts of the Covid-19 pandemic is over.

Product revenues were $9.6M, a decrease of 51% contrast with that of the second quarter of 2019. The decline was primarily Because of limited installations of Ituran’s products Because of the Covid-19 pandemic shutdown implemented in many of the geographies in which Ituran operates, during most of the second quarter.

Gross profit for the quarter was $27.7M (51.9% of revenues), a 17% decrease contrast with gross profit of $33.5M (47.0% of revenues) in the second quarter of 2019.

The gross margin in the quarter on subscription revenues was 58.5%, contrast with 56.4% in the second quarter of 2019. The gross margin on products was 21.8%, contrast with 22.3% in the second quarter of 2019.

During the second quarter, Ituran’s operating expenses were $32.5M. The operating expenses included a non-cash impairment charge of $14.2M, related to the acquisition of Road Track. Not Including the non-cash impairment charge, operating expenses amounted to $18.3M. This is contrast with $19.9M in operating expenses in the second quarter of 2019 and $20.9M in the previous quarter.

Operating loss for the quarter was $4.9M. Not Including the above-mentioned non-cash impairment charge in the operating expenses, the operating income was $9.3M (17.5% of revenues). This is contrast with $13.6M (19.1% of revenues) in the second quarter of last year. This is a decline of 31% year-over-year. In local currency terms, not including the impairment, the operating income decline would have been 25% year over year.

Adjusted EBITDA for the quarter was $13.9M (26.1% of revenues), which excludes the above-mentioned impairment charge, a decrease of 28% contrast with $19.4M (27.2% of revenues) in the second quarter of last year. In local currency terms, the decline would have been 20% year over year.

It is noted that versus the previous quarter, the decline in adjusted EBITDA was 9%, in local currency terms the decline would have been only 2%, which was ahead of management’s expectation of a 10-20% sequential decline in EBITDA versus the first quarter.

Net loss for the second quarter of 2020 was $6.3M or loss per share of $0.30. Not Including the above-mentioned non-cash impairment charge and not including a $0.7M financial gain Because of a reduced minority liability related to the impairment of Road Track, net income for the quarter was $7.2M (13.4% of revenues) or fully diluted earnings per share of $0.34. Net income not including the impairment charges represent a decrease of 7% contrast with $7.7M (10.8% of revenues) or fully diluted earnings per share of $0.36 in the second quarter of last year. In local currency terms, the gain would have been 1% year over year.

The price moved ahead of -3.39% from the mean of 20 days, -6.47% from mean of 50 days SMA and performed -26.22% from mean of 200 days price. Company’s performance for the week was -2.57%, -0.35% for month and YTD performance remained -44.09%.

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