Ituran Location and Control Ltd. (US) (NASDAQ: ITRN) stock rose 1.4% in the last five days (as of 12:40 PM GMT-4; Source: Investing.com)

In the first quarter of FY 18, the group has reported 12.5% growth in the revenues to $63.1 million. 72% of revenues were from location based service subscription fees and 28% were from product revenues. Revenues from subscription fees have increased by 15% over the same period last year. The growth was primarily due to the increase in the subscriber base, which expanded from 1,082,000 as of March 31, 2017, to 1,181,000 as of March 31, 2018. Product revenues increased by 7% compared with the same period last year. Product revenues can be volatile between the quarters. The main contribution to growth was the higher product sales in Israel.

Moreover, the gross profit for the first quarter of 2018 was $31.5 million (49.9% of revenues),which is an increase of 12%. The gross margin in the first quarter on subscription fees improved to 68.4% compared with 66.1% in the same period last year. The gross margin in the quarter on products was 1.2% compared with 11.2% in the same period last year. The lower margin on products during the first quarter was due to the product mix. The Operating profit for the first quarter of 2018 grew 13% to $15.5 million (24.6% of revenues). The Taxes in the first quarter amounted to $4.7 million compared with taxes of $4.6 million in the first quarter of last year.

During the quarter, share in affiliates, net was an income of $687 thousand versus an income of $4 million in the same quarter of last year. In the first quarter of 2017, the share in affiliates included a capital gain following an investment round in one of Ituran’s early stage holdings.

EBITDA for the quarter rose 13% to $19.2 million (30.4% of revenues).  Net profit was $11.3 million in the first quarter of 2018 (17.9% of revenues) or fully diluted EPS of $0.54, compared with a net profit of $13.0 million (23.2% of revenues) or fully diluted EPS of $0.62 in the first quarter of 2017. The higher net profit in the first quarter of 2017 was due to the the capital gain in that period.

Cash flow from operations for the quarter was $7.5 million.  As of March 31, 2018, the company had net cash, including marketable securities, of $38.2 million or $1.82 per share, compared with $40.4 million or $1.93 per share as of December 31, 2017.

ITRN has declared a dividend of $0.24 per share, totaling approximately US$ 5 million. The dividend will be paid to shareholders of record as of June 26, 2018. The company will pay the dividend out on July 11, 2018 net of taxes at the rate of 25%.