Document_And_Entity_Informatio
Document And Entity Information | 12 Months Ended |
Dec. 31, 2014 | |
Document And Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | FALSE |
Document Period End Date | 31-Dec-14 |
Document Fiscal Year Focus | 2014 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | Ituran Location & Control Ltd. |
Entity Central Index Key | 1337117 |
Entity Filer Category | Accelerated Filer |
Current Fiscal Year End Date | -19 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Common Stock, Shares Outstanding | 23,475,431 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $38,418 | $41,697 |
Deposit in Escrow (Note 11A1) | 4,982 | |
Investment in marketable securities | 2,362 | |
Accounts receivable (net of allowance for doubtful accounts) | 27,960 | 29,239 |
Other current assets (Note 2) | 22,318 | 18,437 |
Inventories (Note 3) | 12,164 | 14,506 |
Total current assets | 103,222 | 108,861 |
Long-term investments and other assets | ||
Investments in affiliated company (Note 4A) | 1,016 | 1,423 |
Investments in other company (Note 4B) | 79 | 88 |
Other non-current assets (Note 5) | 2,091 | 1,022 |
Deferred income taxes (Note 15) | 2,886 | 3,781 |
Funds in respect of employee rights upon retirement | 6,642 | 6,649 |
Total non-current assets | 12,714 | 12,963 |
Property and equipment, net (Note 6) | 31,908 | 32,546 |
Intangible assets, net (Note 7) | 452 | 739 |
Goodwill (Note 8) | 4,041 | 5,433 |
Total assets | 152,337 | 160,542 |
Current liabilities | ||
Credit from banking institutions (Note 9) | 38 | |
Accounts payable | 11,658 | 11,436 |
Deferred revenues | 9,401 | 9,852 |
Other current liabilities (Note 10) | 25,253 | 30,276 |
Total current liabilities | 46,312 | 51,602 |
Long-term liabilities | ||
Liability for employee rights upon retirement | 10,229 | 9,607 |
Provision for contingencies | 2,599 | |
Deferred revenues | 1,063 | 1,033 |
Deferred income taxes (Note 15) | 150 | 216 |
Total non-current liabilities | 11,442 | 13,455 |
Contingent liabilities (Note 11) | ||
Stockholders' equity (Note 12) | ||
Share capital - ordinary shares of NIS 0.3333 par value: Authorized - December 31, 2014 and 2013 - 60,000,000 shares Issued and outstanding - December 31, 2014 and 2013 - 23,475,431 shares | 1,983 | 1,983 |
Additional paid- in capital | 71,550 | 71,550 |
Accumulated other comprehensive income | -1,850 | 8,608 |
Retained earnings | 49,067 | 38,831 |
Treasury stock at cost - December 31, 2014 and 2013 - 2,507,314 shares | -30,054 | -30,054 |
Stockholders' equity | 90,696 | 90,918 |
Non-controlling interests | 3,887 | 4,567 |
Total equity | 94,583 | 95,485 |
Total liabilities and equity | $152,337 | $160,542 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (ILS) | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Common stock, par value | 0.3333 | 0.3333 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 23,475,431 | 23,475,431 |
Common stock, shares outstanding | 23,475,431 | 23,475,431 |
Treasury stock, shares | 2,507,314 | 2,507,314 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||
Location based services | $133,692 | $126,951 | $114,565 |
Wireless communications products | 48,435 | 43,216 | 35,753 |
Total revenues | 182,127 | 170,167 | 150,318 |
Cost of revenues: | |||
Location based services | 46,852 | 44,850 | 44,974 |
Wireless communications products | 38,142 | 36,015 | 29,786 |
Total cost of revenues | 84,994 | 80,865 | 74,760 |
Gross profit | 97,133 | 89,302 | 75,558 |
Research and development expenses | 2,526 | 2,414 | 2,066 |
Selling and marketing expenses | 9,264 | 9,715 | 8,489 |
General and administrative expenses | 38,617 | 34,483 | 33,439 |
Other expenses, net (Note 13) | 856 | 4,760 | 1,617 |
Operating income | 45,870 | 37,930 | 29,947 |
Other (expenses) income, net (Note 11A2) | -166 | 6,755 | |
Financing income, net (Note 14) | 1,704 | 238 | 987 |
Income before income tax | 47,574 | 38,002 | 37,689 |
Income tax expenses (Note 15) | -14,246 | -12,447 | -11,690 |
Share in losses of affiliated companies, net (Note 4A) | -421 | -1 | -39 |
Net income for the year | 32,907 | 25,554 | 25,960 |
Less: Net income attributable to non-controlling interest | -2,478 | -1,792 | -1,080 |
Net income attributable to the Company | $30,429 | $23,762 | $24,880 |
Basic and diluted earnings per share attributable to Company's stockholders (Note 16) | $1.45 | $1.13 | $1.19 |
Basic and diluted weighted average number of shares outstanding | 20,968 | 20,968 | 20,968 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||
Net income for the year | $32,907 | $25,554 | $25,960 |
Other comprehensive loss, net of tax: | |||
Foreign currency translation adjustments | -13,354 | -2,754 | -2,286 |
Unrealized gains (losses) in respect of derivative financial instruments designated for cash flow hedge | 2,273 | -635 | |
Reclassification of net gains realized to net income | 29 | 217 | |
Other comprehensive loss, net of tax | -11,052 | -3,172 | -2,286 |
Comprehensive income | 21,855 | 22,382 | 23,674 |
Less: comprehensive income attributable to non-controlling interests | -1,884 | -1,996 | -963 |
Comprehensive income attributable to the Company | $19,971 | $20,386 | $22,711 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | Total | Total | Ordinary shares [Member] | Additional paid in capital [Member] | Accumulated other comprehensive income [Member] | Retained earnings [Member] | Treasury stock [Member] | Non-controlling interests [Member] |
In Thousands, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
Balance at Dec. 31, 2011 | $105,352 | $1,983 | $71,927 | $14,153 | $43,185 | ($30,054) | $4,158 | |
Balance, shares at Dec. 31, 2011 | 23,476 | |||||||
Changes during period: | ||||||||
Net income | 25,960 | 24,880 | 1,080 | |||||
Other comprehensive income (loss) | -2,286 | -2,169 | -117 | |||||
Dividend paid to non-controlling interests | -1,141 | -1,141 | ||||||
Dividend paid | -33,308 | -33,308 | ||||||
Dividend declared | -2,570 | -2,570 | ||||||
Balance at Dec. 31, 2012 | 92,007 | 1,983 | 71,927 | 11,984 | 32,187 | -30,054 | 3,980 | |
Balance, shares at Dec. 31, 2012 | 23,476 | |||||||
Changes during period: | ||||||||
Net income | 25,554 | 23,762 | 1,792 | |||||
Other comprehensive income (loss) | -3,172 | -3,376 | 204 | |||||
Acquisition of non-controlling interests | -500 | -377 | -123 | |||||
Dividend paid to non-controlling interests | -1,286 | -1,286 | ||||||
Dividend paid | -13,502 | -13,502 | ||||||
Dividend declared | -3,616 | -3,616 | ||||||
Balance at Dec. 31, 2013 | 95,485 | 1,983 | 71,550 | 8,608 | 38,831 | -30,054 | 4,567 | |
Balance, shares at Dec. 31, 2013 | 23,476 | |||||||
Changes during period: | ||||||||
Net income | 32,907 | 30,429 | 2,478 | |||||
Other comprehensive income (loss) | -11,052 | -10,458 | -594 | |||||
Dividend paid to non-controlling interests | -2,564 | -2,564 | ||||||
Dividend paid | -15,697 | -15,697 | ||||||
Dividend declared | -4,496 | -4,496 | ||||||
Balance at Dec. 31, 2014 | $94,583 | $1,983 | $71,550 | ($1,850) | $49,067 | ($30,054) | $3,887 | |
Balance, shares at Dec. 31, 2014 | 23,476 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net income for the year | $32,907 | $25,554 | $25,960 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation, amortization and impairment of goodwill and other intangibles | 12,219 | 16,196 | 14,671 |
Losses of sale affiliated company | 166 | ||
Exchange differences on principal of deposit and loans, net | -23 | 317 | 55 |
Gains in respect of trading marketable securities | -133 | -2 | |
Increase in liability for employee rights upon retirement | 1,655 | 1,095 | 888 |
Share in losses of affiliated companies, net | 421 | 1 | 39 |
Deferred income taxes | -737 | -1,812 | 955 |
Capital (gain) losses on sale of property and equipment, net | -270 | 19 | 23 |
Decrease (increase) in accounts receivable | -1,864 | -609 | -300 |
Decrease (increase) in other current and non-current assets | -4,749 | 580 | 2,766 |
Decrease (increase) in inventories | 783 | 1,354 | -3,609 |
Increase (decrease) in accounts payable | 927 | 1,446 | -372 |
Increase (decrease) in deferred revenues | 749 | -227 | 1,532 |
Increase (decrease) in other current and non-current liabilities | -4,154 | 2,617 | -3,413 |
Write-off of account receivable in respect of sale of subsidiary | 484 | ||
Litigation obligation adjustment | -7,462 | ||
Net cash provided by operating activities | 37,731 | 46,697 | 32,215 |
Cash flows from investment activities | |||
Increase in funds in respect of employee rights upon retirement, net of withdrawals | -708 | -718 | -662 |
Capital expenditures | -14,976 | -14,216 | -9,676 |
Investment in affiliated company | -1,400 | ||
Investment in marketable securities | -2,771 | ||
Deposit in escrow | 5,005 | ||
Proceeds from (Investment in) short- term deposit | -283 | 217 | -291 |
Proceeds from sale of property and equipment | 489 | 651 | 319 |
Sale of marketable securities | 70 | ||
Repayment of loan to a former employee | 355 | ||
Company no longer consolidated (Appendix A) | 326 | ||
Net cash used in investment activities | -13,244 | -15,466 | -9,559 |
Cash flows from financing activities | |||
Short term credit from banking institutions, net | -38 | -7 | -310 |
Repayment of long term loans | -182 | -44 | |
Acquisition of non-controlling interests | -500 | ||
Dividend paid | -19,324 | -16,072 | -33,308 |
Dividend paid to non-controlling interests | -2,564 | -1,286 | -1,141 |
Settlement of litigation obligation in connection with financing transaction | 7,462 | ||
Net cash used in financing activities | -22,426 | -17,547 | -27,341 |
Effect of exchange rate changes on cash and cash equivalents | -5,340 | -1,440 | -1,132 |
Net increase (decrease) in cash and cash equivalents | -3,279 | 12,244 | -5,817 |
Balance of cash and cash equivalents at beginning of year | 41,697 | 29,453 | 35,270 |
Balance of cash and cash equivalents at end of year | 38,418 | 41,697 | 29,453 |
Supplementary information on investing and financing activities not involving cash flows: | |||
Purchasing of property and equipment using a directly related liability | 217 | 104 | |
Dividends declared | 4,496 | 3,616 | 2,570 |
Non-controlling interest purchased | 0.50% | ||
Payment to purchase non-controlling interests | 500,000 | ||
Appendix A - Company no longer consolidated | |||
Working capital (excluding cash and equivalents and inventory), net | -130 | ||
Account receivable in respect of sale of subsidiary | -430 | ||
Property and equipment, net | 750 | ||
Intangible assets | 136 | ||
Company no longer consolidated | 326 | ||
Supplementary disclosure of cash flow information | |||
Interest paid | 397 | 254 | 318 |
Income taxes paid, net of refunds | $15,078 | $9,280 | $8,950 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
A. General | |||||||||||||
1. Operations | |||||||||||||
a. Ituran Location and Control Ltd. (the “Company”) commenced operations in 1994. The Company and its subsidiaries (the “Group”) are engaged in the provision of Location based services and machine-to-machine Wireless communications products for use in stolen vehicle recovery, fleet management and other applications. | |||||||||||||
b. Regarding the tax dispute in Brazil, see Note 11A3. | |||||||||||||
2. Functional currency and translation to the reporting currency | |||||||||||||
The functional currency of the Company and its subsidiaries located in Israel is the New Israeli Shekel (“NIS”), which is the local currency in which those entities operate. The functional currency of the foreign subsidiaries of the Group is their respective local currency. | |||||||||||||
The consolidated financial statements of the Company and all of its subsidiaries were translated into U.S. dollars in accordance with the standards of the Financial Accounting Standards Board ("FASB"). Accordingly, assets and liabilities were translated from local currencies to U.S. dollars using yearend exchange rates, and income and expense items were translated at average exchange rates during the year. | |||||||||||||
Gains or losses resulting from translation adjustments (which result from translating an entity's financial statements into U.S. dollars if its functional currency is different than the U.S. dollar) are reported in other comprehensive income and are reflected in equity, under “accumulated other comprehensive income (loss)”. | |||||||||||||
Balances denominated in, or linked to foreign currency are stated on the basis of the exchange rates prevailing at the balance sheet date. For foreign currency transactions included in the statement of income, the exchange rates applicable on the relevant transaction dates are used. Transaction gains or losses arising from changes in the exchange rates used in the translation of such balances are carried to financing income or expenses. | |||||||||||||
The following table presents data regarding the dollar exchange rate of relevant currencies and the Israeli CPI: | |||||||||||||
Exchange rate | Israeli CPI(*) | ||||||||||||
of one US dollar | |||||||||||||
NIS | Real | ||||||||||||
At December 31, | |||||||||||||
2014 | 3.889 | 2.6562 | 113.96 points | ||||||||||
2013 | 3.471 | 2.3426 | 114.18 points | ||||||||||
2012 | 3.733 | 2.0435 | 112.15 points | ||||||||||
Increase (decrease) during the year: | |||||||||||||
2014 | 12.04 | % | 13.39 | % | (0.2 | )% | |||||||
2013 | (7.02 | )% | (14.63 | )% | 1.8 | % | |||||||
2012 | (2.30 | )% | (8.94 | )% | 1.6 | % | |||||||
(*) | Based on the Index for the month ending on each balance sheet date, on the basis of 2008 average 100. | ||||||||||||
3. Basis of presentation | |||||||||||||
The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). | |||||||||||||
4. Use of estimates in the preparation of financial statements | |||||||||||||
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from the estimates. | |||||||||||||
As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to contingencies, revenue recognition, goodwill impairment assessment, deferred taxes and tax liabilities and uncertainties. | |||||||||||||
B. Principles of consolidation | |||||||||||||
The consolidated financial statements include the accounts of the Company and all of its subsidiaries. In these financial statements, the term “subsidiary” refers to a company over which the Company exerts control (ownership interest of more than 50%), and the financial statements of which are consolidated with those of the Company. Significant intercompany transactions and balances are eliminated upon consolidation; profits from intercompany sales, not yet realized outside of the Group, are also eliminated. Non-controlling interests are presented in equity. | |||||||||||||
Changes in the Company ownership interest in a subsidiary while the control is retained are accounted for as equity transactions and accordingly no gain or loss is recognized in consolidated net income or comprehensive income. Upon such transaction, the carrying amount of the noncontrolling interest is adjusted to reflect the change in its ownership interest in the subsidiary and any difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest was adjusted is recognized in additional paid-in capital. | |||||||||||||
C. Cash and cash equivalents | |||||||||||||
The Group considers all highly liquid investments, which include short-term bank deposits that are not restricted as to withdrawal or use, and short-term debentures, with original periods to maturity not exceeding three months, to be cash equivalents. | |||||||||||||
D. Deposits in escrow | |||||||||||||
Restricted cash is invested in certificates of deposit, which are used to ensure certain representations and warranties to third parties. See Note 11A1. | |||||||||||||
Such deposits are presented in the balance sheets as current assets or as long-term assets based on management's assessment regarding their realization. | |||||||||||||
E. Marketable securities | |||||||||||||
The Company accounts for investments in marketable securities in accordance with ASC Topic 320-10, "Investments - Debt and Equity Securities" (“ASC Topic 320-10”). Management determines the appropriate classification of its investments in marketable securities at the time of purchase and reassesses such determination at each balance sheet date. | |||||||||||||
The investments in marketable securities covered by ASC Topic 320-10 that were held by the Company during the reported periods were designated by management as trading securities. | |||||||||||||
Trading securities are stated at market value. The changes in market value are charged to financing income or expenses. | |||||||||||||
Trading gains for the year 2014 amounted to US$ 133,000 and trading gains for the years 2013 and 2012, in respect of trading securities held by the Group were insignificant. | |||||||||||||
F. Treasury stock | |||||||||||||
Company shares held by the Company and its subsidiary are presented as a reduction of equity, at their cost, under the caption “Treasury Stock”. Gains and losses upon sale of these shares, net of related income taxes, are recorded as additional paid in capital. | |||||||||||||
G. Allowance for doubtful accounts | |||||||||||||
The allowance for doubtful accounts is determined with respect to amounts the Group has determined to be doubtful of collection. In determining the allowance for doubtful accounts, the Company considers, among other things, its past experience with customers, the length of time that the balance is post due, the customer's current ability to pay and available information about the credit risk on such customers. See also Note 19A. | |||||||||||||
The allowance in respect of accounts receivable at December 31, 2014 and 2013 was US$ 2,391,000 and US$ 1,945,000, respectively. | |||||||||||||
H. Inventories | |||||||||||||
Inventories are stated at the lower of cost or market. Cost is determined as follows: raw materials and finished products – mainly on the basis of first-in, first-out (FIFO); work in progress – on the basis of direct production costs including materials, labor and subcontractors. | |||||||||||||
I. Investment in affiliated companies | |||||||||||||
Investments in companies in which the Group has significant influence (ownership interest of between 20% and 50%) but less than controlling interests, are accounted for by the equity method. Income on intercompany sales, not yet realized outside of the Group, was eliminated. The Company also reviews these investments for impairment whenever events indicate the carrying amount may not be recoverable. | |||||||||||||
Investments in companies in which the company no longer has significant influence, are classified as "investments in other companies". See J. below. | |||||||||||||
J. Investment in other companies | |||||||||||||
Non-marketable investments in other companies in which the Company does not have a controlling interest nor significant influence are accounted for at cost, net of write down for any permanent decrease in value. | |||||||||||||
K. Derivatives | |||||||||||||
The group applies the provisions of ASC Topic 815, "Derivatives and Hedging". In accordance with ASC Topic 815, all the derivative financial instruments are recognized as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value of a derivative financial instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For derivative financial instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. | |||||||||||||
From time to time the Company carries out transactions involving foreign exchange derivative financial instruments (mainly forward exchange contracts) which are designed to hedge the cash flows expected to be paid with respect to forecasted purchases of inventory, denominated in currencies other than the functional currency of the Company. Such transactions were designated as hedging instruments on the date that the Company entered into such derivative contracts, and qualify as cash flow hedges under ASC Topic 815. | |||||||||||||
The effective portion of the changes in fair value of the derivative instruments designated for hedging purposes are reported as other comprehensive income (loss), net of tax under the caption "unrealized gains (losses) in respect of derivative financial instruments designated for cash flow hedge" and are reclassified to the statements of income when the hedged transaction realizes (i.e when the related inventory is sold). During the reporting periods, the gains or losses that were recognized in earnings for hedge ineffectiveness were insignificant. | |||||||||||||
All other derivatives which do not qualify for hedge accounting, or which have not been designated as hedging instruments, are recognized in the balance sheet at their fair value, with changes in the fair value carried to the statements of income as incurred in financing income (expenses), net. | |||||||||||||
See also Note 19B for further information. | |||||||||||||
L. Property and equipment | |||||||||||||
1. Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated on the straight-line method over the shorter of the estimated useful life of the property or the duration of the lease. | |||||||||||||
2. Rates of depreciation: | |||||||||||||
% | |||||||||||||
Operating equipment (mainly 20%-33%) | 6.5-33 | ||||||||||||
Office furniture, equipment and computers | Jul-33 | ||||||||||||
Buildings | 2.5 | ||||||||||||
Vehicles | 15 | ||||||||||||
Leasehold improvements | Duration of the lease which | ||||||||||||
is less or equal to useful life. | |||||||||||||
M. Impairment of long-lived assets | |||||||||||||
The Group's long-lived assets are reviewed for impairment, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value (see also Note 1O and Notes 7 and 8). | |||||||||||||
N. Income taxes | |||||||||||||
The Group accounts for income taxes in accordance with ASC Topic 740-10, "Income Taxes". According to this guidance, deferred income taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting and the tax bases of assets and liabilities under the applicable tax law. Deferred tax balances are computed using the tax rates expected to be in effect at the time when these differences reverse. Valuation allowances in respect of the deferred tax assets are provided for if, based upon the weight of available evidence, it is more likely than not that all or a portion of the deferred income tax assets will not be realized. | |||||||||||||
US GAAP provides that the tax effects from an uncertain tax position can be recognized in the financial statements only if the position is "more-likely-than-not" to be sustained were to be challenged by a taxing authority. The assessment of a tax position is based solely on the technical merits of the position, without regard the likelihood that the tax position may be challenged. If an uncertain tax position meets the "more-likely-than-not" threshold, the largest amount of tax benefit that is greater than 50% likely to be recognized upon ultimate settlement with the taxing authority is recorded. See also Note 15K. | |||||||||||||
The Company recognizes interest as interest expenses (among financing expenses) and penalties, if any, related to unrecognized tax benefits in its provision for income tax. | |||||||||||||
O. Goodwill and intangible assets | |||||||||||||
1. Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in business combinations accounted for in accordance with the "purchase method" and is allocated to reporting units at acquisition. Goodwill is not amortized but rather tested for impairment at least annually in accordance with the provisions of ASC Topic 350, "Intangibles - Goodwill and Other". The Company performs its goodwill annual impairment test for the reporting units at December 31 of each year, or more often if indicators of impairment are present. | |||||||||||||
As required by ASC Topic 350, , the Company chooses either to perform a qualitative assessment whether the two-step goodwill impairment test is necessary or proceeds directly to the two-step goodwill impairment test. Such determination is made for each reporting unit on a stand-alone basis. The qualitative assessment includes various factors such as macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, earnings multiples, gross margin and cash flows from operating activities and other relevant factors. When the Company chooses to perform a qualitative assessment and determines that it is more likely than not (a more than 50 percent likelihood) that the fair value of the reporting unit is less than its carrying value, then the Company proceeds to the two-step goodwill impairment test. If the Company determines Otherwise, no further evaluation is necessary. | |||||||||||||
When the Company decides or is required to perform the two-step goodwill impairment test, the Company compares the fair value of the reporting unit to its carrying value ("step 1"). If the fair value of the reporting unit exceeds the carrying value of the reporting unit net assets (including the goodwill allocated to such reporting unit), goodwill is considered not to be impaired, and no further testing is required. If the carrying value exceeds the fair value of the reporting unit, then the implied fair value of goodwill is determined by subtracting the fair value of all the identifiable net assets from the fair value of the reporting unit. An impairment loss is recorded for the excess, if any, of the carrying value of the goodwill allocated to the reporting unit over its implied fair value ("step 2"). | |||||||||||||
There are a number of generally accepted methods used for valuing a reporting unit: | |||||||||||||
The ‘income approach' utilizes discounted forecasted cash flows, the ‘Market – approach which utilize pricing multiples of business entities with publicly traded securities whose business and financial risks are comparable to those of the reporting unit being valued and the ‘Asset - based approach' which establishes a value based on the cost of reproducing or replacing the asset being valued. These methods described may be used alone or in combination with one another. | |||||||||||||
The Company applies assumptions that market participants would consider in determining the fair value of each reporting unit and the fair value of the identifiable assets and liabilities of the reporting units, as applicable. | |||||||||||||
The Company performed a qualitative assessment for two reporting units as of December 31, 2014 and 2013, and concluded that the qualitative assessment did not result in a more likely than not indication of impairment, and therefore no further impairment testing was required, with respect to such units. | |||||||||||||
For other reporting unit (three different units in 2013), operating in Israel, the Company elected to bypass the qualitative assessment and proceeded directly to performing the first step of the goodwill impairment test. | |||||||||||||
In order to determine the fair value of that reporting unit, the Company utilized the "income approach". According to the income approach expected future cash flows are discounted to their present value using an appropriate rate of return. Judgments and assumptions related to future cash flows (projected revenues, operating expenses, and capital expenditures), future short-term and long-term growth rates, and weighted average cost of capital, which are based on management's internal assumptions, and believed to be similar to those that would be utilized by market participants under the circumstances and to represent both the specific risks associated with the business, and capital market conditions, are inherent in developing the discounted cash flow model. | |||||||||||||
During 2014, 2013 and 2012, the Company recorded a goodwill impairment loss in an amount of US$ 879,000, US$ 3,093,000 and US$ 672,000, respectively. See Note 8. | |||||||||||||
2. Intangible assets with finite lives are amortized using the straight-line basis over their useful lives, to reflect the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up, as follows | |||||||||||||
Years | |||||||||||||
GIS database | 10 | ||||||||||||
Customer base | 5 | ||||||||||||
Brand name | 15 | ||||||||||||
Other | 10-Mar | ||||||||||||
Recoverability of intangible assets is measured as described in Note 1M above. During 2014, the Company recorded an intangible assets impairment loss in an amount of US$ 43,000. See Note 7. | |||||||||||||
P. Contingencies | |||||||||||||
The Company and its subsidiaries are involved in certain legal proceedings that arise from time to time in the ordinary course of their business and in connection with certain agreements with third parties. Except for income tax contingencies, the Company records accruals for contingencies to the extent that the management concludes that the occurrence is probable and that the related liabilities are estimable. Legal expenses associated with contingencies are expensed as incurred. | |||||||||||||
Q. Funds in respect of, and liability for employee rights upon retirement | |||||||||||||
The Company's liability for employee rights upon retirement with respect to its Israeli employees is calculated, pursuant to Israeli severance pay law, based on the most recent salary of each employee multiplied by the number of years of employment, as of the balance sheet date. Employees are entitled to one month's salary for each year of employment, or a portion thereof. The Company makes monthly deposits to insurance policies and severance pay funds. The liability of the Company is fully provided for. | |||||||||||||
The deposited funds include profits or losses accumulated up to the balance sheet date. The deposited funds may be withdrawn upon the fulfillment of the obligation pursuant to Israeli severance pay laws or labor agreements. The value of the deposited funds is based on the cash surrender value of these policies, and includes profits or losses. | |||||||||||||
The liability for employee rights upon retirement in respect of the employees of the non-Israeli subsidiaries of the Company, is calculated on the basis of the labor laws of the country in which the subsidiary is located and is covered by an appropriate accrual. | |||||||||||||
Severance expenses for the years ended December 31, 2014, 2013 and 2012, amounted to US$ 1,460,000 US$ 882,000 and US$ 1,204,000, respectively. | |||||||||||||
R. Revenue recognition | |||||||||||||
Revenues are recognized when delivery has occurred and, where applicable, after installation has been completed, there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection of the related receivable is reasonably assured and no further obligations exist. In cases where delivery has occurred but the required installation has not been performed, the Company does not recognize the revenues until the installation is completed. | |||||||||||||
The Company's revenues are recognized as follows: | |||||||||||||
1. Revenues from sales are recognized when title and risk of loss of the product pass to the customer (usually upon delivery). | |||||||||||||
2. The Company applies the provisions of ASC Topic 605-25, "Revenue Recognition - Multiple-Element Arrangements", as amended. ASC Topic 605-25 provides guidance on how to account for arrangements that involve the delivery or performance of multiple products, services and/or rights to use assets. For such arrangements, each element of the contract is accounted for as a separate unit when it provides the customer value on a stand-alone basis and if an arrangement includes a right of return relative to a delivered item, delivery or performance of the undelivered item or items is considered probable and substantially in the control of the Company. According to ASC 605-25, as amended, when neither "vendor specific objective evidence" of selling price, nor third party price exists, the Company is required to develop a best estimate of the selling price of the deliverables and the entire arrangement consideration is allocated to the deliverables based on the relative selling prices. | |||||||||||||
Revenues from SVR services subscription fees and from installation services, sold to customers within a single contractually binding arrangement were accounted for revenue recognition purposes as a single unit of accounting in accordance with ASC Topic 605-25, since the installation services element was determined not to have a value on a stand-alone basis to the customer. Accordingly, the entire contract fee for the two deliverables is recognized ratably on a straight-line basis over the subscription period. | |||||||||||||
3. Deferred revenues include unearned amounts received from customers (mostly for the provision of installation and subscription services) but not yet recognized as revenues. Such deferred revenues are recognized as described in paragraph 2, above. | |||||||||||||
4. Extended warranty | |||||||||||||
Revenues from extended warranty which are provided for a monthly fee and are sold separately are recognized over the duration of the warranty periods. | |||||||||||||
S. Warranty costs | |||||||||||||
The Company provides a standard warranty for its products to end-users at no extra charge. The Company estimates the costs that may be incurred under its warranty obligation and records a liability at the time the related revenues are recognized. | |||||||||||||
Among the factors affecting the warranty liability are the number of installed units and historical percentages of warranty claims. The Company periodically assesses the adequacy of the recorded warranty liability and adjusts the amount to the extent necessary. To date, warranty costs and the related liabilities have not been material. | |||||||||||||
T. Research and development costs | |||||||||||||
1. Research and development costs (other than computer software related expenses) are expensed as incurred. | |||||||||||||
2. Software Development Costs | |||||||||||||
ASC Topic 985-20, "Costs of Software to Be Sold, Leased, or Marketed" requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Research and development costs incurred in the process of developing product improvements or new products, are generally expensed as incurred, net of grants received from the Government of Israel for development of approved projects. Costs incurred by the Company between the establishment of technological feasibility and the point at which the product is ready for general release are usually insignificant. | |||||||||||||
U. Advertising costs | |||||||||||||
Advertising costs are expensed as incurred. | |||||||||||||
Advertising expenses for the years ended December 31, 2014, 2013 and 2012 amounted to US$ 6.7 million, US$ 7.6 million and US$ 6.6 million, respectively. Advertising expenses are presented among "selling and marketing expenses". | |||||||||||||
V. Earnings per share | |||||||||||||
Basic earnings per share are computed by dividing net income attributable to the common shares, by the weighted average number of shares outstanding during the year, net of the weighted average number of treasury stock. | |||||||||||||
In computing diluted earnings per share, basic earnings per share are adjusted to reflect the potential dilution that could occur upon the exercise of options granted under employee stock option plans, using the treasury stock method, and the conversion of the convertible capital notes, using the if converted method. | |||||||||||||
W. Fair value measurements | |||||||||||||
The Company measures fair value and discloses fair value measurements for financial and non-financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. | |||||||||||||
As such, fair value is a market based measurement that is required to be determined based on the assumptions that market participants would use to determine the price of an asset or a liability. | |||||||||||||
As a basis for considering such assumptions, the fair value accounting standard establishes the following fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | |||||||||||||
Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||||||||||||
Level 2 - Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |||||||||||||
Level 3 - Unobservable inputs are used when little or no market data is available. Level 3 inputs are considered as the lowest priority under the fair value hierarchy. | |||||||||||||
In determining fair value, companies are required to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as to consider counterparty credit risk in the assessment of fair value. | |||||||||||||
Regarding the fair value measurements of financial assets and liabilities and the fair value hierarchy of such measurements, see Note 19C. | |||||||||||||
The Company also measures certain non-financial assets, consisting mainly goodwill and intangible assets at fair value on a nonrecurring basis. These assets are adjusted to fair value when they are considered to be impaired (see 1O and 1M above). As of December 31, 2014, the Company measured the fair value of goodwill with a total carrying amount of US$ 1.5 million (before the recognition of an impairment loss) that is allocated to one reporting unit. As a result of the above impairment test, the Company recorded an impairment loss of goodwill in an amount of US$ 0.8 million, allocated to such reporting unit to its imputed fair value of US$ 0.7 million. The fair value measurement of the non-financial assets is classified as level 3. | |||||||||||||
As of December 31, 2013, the Company measured the fair value of goodwill with a total carrying amount of US$ 4.8 million (before the recognition of an impairment loss) that was allocated to three reporting units. As a result of the above impairment test, the Company recorded an impairment loss of goodwill with a carrying amount of US$ 2.6 million, US$ 0.5 million and US$ 1.7 million allocated to three different reporting units to their imputed fair value of US$ 1.7 million, US$ 0 and US$ 0, respectively, resulting in an aggregate impairment charge of US$ 3.1 million. The fair value measurement of the non-financial assets is classified as level 3.See also Notes 1O and 8. | |||||||||||||
X. Deferred installation expenses | |||||||||||||
Direct installation expenses incurred at the inception of specific subscription arrangements in Brazil with specific customers, to enable the Company's subsidiary in Brazil to perform under the terms of the arrangement (i.e. directly attributable to obtaining a specific subscriber), which their costs can be measured reliably, are capitalized and presented as "Deferred installation expenses" within the balances "Other current assets" and "Other non-current assets", as applicable. | |||||||||||||
Such installation activities has determined not to represent separate earnings process for revenue recognition purposes in accordance with the principles of ASC Topic 605-25, "Multiple-Element Arrangements" as they has been determined not to have a value on a stand-alone basis to the customer. | |||||||||||||
The deferred expenses that are capitalized are limited to the higher of value of the amount of nonrefundable deferred revenue, if any or to the amount of the minimum contractual subscription revenue, net of direct costs. | |||||||||||||
The deferred expenses are amortized over the contractual life of the related subscription arrangements by the straight-line method (usually 20 months). Costs that do not meet the aforementioned criteria, are recognized immediately as expenses. | |||||||||||||
Y. Reclassification | |||||||||||||
Certain comparative figures have been reclassified to conform to the current year presentation. Such reclassifications did not have any impact on the Company's equity, net income or cash flows. | |||||||||||||
Z. Recently issued accounting pronouncements | |||||||||||||
1. Accounting pronouncements adopted in 2014 | |||||||||||||
a. ASC Topic 830, “Foreign Currency Matters" | |||||||||||||
Effective January 1, 2014, the Group adopted Accounting Standards Update 2013-5, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity ("ASU 2013-5"). | |||||||||||||
ASU 2013-5 clarifies among other things that, when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business (other than a sale of in-substance real estate or conveyance of oil and gas mineral rights) within a foreign entity, the parent is required to apply the guidance in Subtopic 830-30 to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. | |||||||||||||
For public companies, the amendments in ASU 2013-5 became effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The amendments should be applied prospectively to derecognition events occurring after the effective date. Prior periods should not be adjusted. | |||||||||||||
The adoption did not have a material impact on the Group's consolidated results of operations and financial condition. | |||||||||||||
b. ASC Topic 740, "Income Taxes" | |||||||||||||
Effective January 1, 2014, the Company adopted Accounting Standard Update 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force) ("ASU 2013-11"). | |||||||||||||
The amendments in ASU 2013-11 state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be presented net of deferred tax assets. | |||||||||||||
ASU 2013-11 applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. For public companies the amendments in this ASU became effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments were applied prospectively to all unrecognized tax benefits that existed at the effective date. | |||||||||||||
The adoption did not have a material impact on the Company's consolidated results of operations and financial condition. | |||||||||||||
2. Accounting pronouncements not yet effective | |||||||||||||
Accounting Standard Update 2014-09, “Revenue from Contracts with Customers” | |||||||||||||
In May 2014, the FASB issued Accounting Standard Update 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). | |||||||||||||
ASU 2014-09 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 also requires entities to disclose sufficient information, both quantitative and qualitative, to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. | |||||||||||||
An entity should apply the amendments in this ASU using one of the following two methods: 1. Retrospectively to each prior reporting period presented with a possibility to elect certain practical expedients, or, 2. Retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. If an entity elects the latter transition method, it also should provide certain additional disclosures. | |||||||||||||
For a public entity, the amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period (the first quarter of fiscal year 2017 for the Company). Early application is not permitted. | |||||||||||||
The Company is in the process of assessing the impact, if any, of ASU 2014-09 on its consolidated financial statements. | |||||||||||||
OTHER_CURRENT_ASSETS
OTHER CURRENT ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
OTHER CURRENT ASSETS [Abstract] | |||||||||
OTHER CURRENT ASSETS | NOTE 2 - OTHER CURRENT ASSETS | ||||||||
US dollars | |||||||||
December 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Prepaid expenses and others | 9,779 | 9,314 | |||||||
Government institutions | 2,694 | 1,716 | |||||||
Deferred installation expenses | 2,485 | 2,905 | |||||||
Deferred income taxes (*) | 3,649 | 3,692 | |||||||
Advances to suppliers | 324 | 457 | |||||||
Employees | 343 | 300 | |||||||
Forward Exchange Contracts | 1,580 | - | |||||||
Others | 1,464 | 53 | |||||||
22,318 | 18,437 | ||||||||
(*) | See Note 15. |
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INVENTORIES [Abstract] | |||||||||
INVENTORIES | NOTE 3 - INVENTORIES | ||||||||
US dollars | |||||||||
December 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Finished products | 8,845 | 11,733 | |||||||
Raw materials | 3,319 | 2,773 | |||||||
12,164 | 14,506 |
INVESTMENTS_IN_AFFILIATED_AND_
INVESTMENTS IN AFFILIATED AND OTHER COMPANY | 12 Months Ended |
Dec. 31, 2014 | |
INVESTMENTS IN AFFILIATED AND OTHER COMPANY [Abstract] | |
INVESTMENTS IN AFFILIATED AND OTHER COMPANY | NOTE 4 - INVESTMENTS IN AFFILIATED AND OTHER COMPANY |
A. Investment in affiliated companies | |
1. Ecomtrade Ltd. (“Ecomtrade”) | |
The Company held 50% of the shares of Ecomtrade. | |
In December 2013, the Company sold its entire investment in Ecomtrade which amounted to a net amount of US$ 166,000 (including a loan in an amount fo US$ 273,000) for no proceeds. | |
2. BRINGG Delivery Technologies Ltd. ("BRINGG") Formerly Overvyoo Ltd | |
In December 2013, the Company purchased 27.5% of BRINGG's shares for an amount of US$ 1.4 million. BRINGG is an Israeli start-up Company developing solutions of the management of mobile/field workforce. See also Note 20. | |
B. Investment in other company | |
Locationet Systems Ltd. (“Locationet”) | |
The Company holds 10.64% of the shares of Locationet. | |
The balance of the Company's investment in Locationet as of December 31, 2014 and 2013 was US$ 79,000 and US$ 88,000 respectively. | |
OTHER_NONCURRENT_ASSETS
OTHER NON-CURRENT ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
OTHER NON-CURRENT ASSETS [Abstract] | |||||||||
OTHER NON-CURRENT ASSETS | NOTE 5 - OTHER NON-CURRENT ASSETS | ||||||||
US dollars | |||||||||
December 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Forward Exchange Contracts | 984 | - | |||||||
Government institutions | 73 | 128 | |||||||
Deferred installation expenses | 459 | 526 | |||||||
Deposits | 575 | 368 | |||||||
2,091 | 1,022 |
PROPERTY_AND_EQUIPMENT_NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PROPERTY AND EQUIPMENT, NET [Abstract] | |||||||||
PROPERTY AND EQUIPMENT, NET | NOTE 6 - PROPERTY AND EQUIPMENT, NET | ||||||||
A. Property and equipment, net consists of the following: | |||||||||
US dollars | |||||||||
December 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Operating equipment (*) | 46,947 | 46,991 | |||||||
Office furniture, equipment and computers | 23,858 | 25,116 | |||||||
Land | 1,022 | 1,022 | |||||||
Buildings | 1,855 | 2,252 | |||||||
Vehicles | 3,412 | 3,197 | |||||||
Leasehold improvements | 3,088 | 3,099 | |||||||
80,182 | 81,677 | ||||||||
Less – accumulated depreciation and amortization (**) | (48,274 | ) | (49,131 | ) | |||||
31,908 | 32,546 | ||||||||
(*) | As December 31, 2014 and 2013, an amount of US$ 26.0 million and US$ 25.8 million is subject to operating lease transactions, respectively. | ||||||||
(**) | As at December 31, 2014 and 2013, an amount of US$ 10.4 million and US$ 11.3 million is subject to operating lease transactions, respectively. | ||||||||
B. In the years ended December 31, 2014, 2013 and 2012, depreciation expense was US$ 11.2 million, US$ 11.1 million and US$ 13.3 million, respectively and additional equipment was purchased in an amount of US$ 15 million, US$ 14 million and US$ 10 million, respectively. | |||||||||
C. After deduction of the cost and the accumulated depreciation of items fully depreciated. | |||||||||
INTANGIBLE_ASSETS_NET
INTANGIBLE ASSETS, NET | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
INTANGIBLE ASSETS, NET [Abstract] | |||||||||||||||||
INTANCIBLE ASSETS, NET | NOTE 7 - INTANGIBLE ASSETS, NET | ||||||||||||||||
A. Intangible assets, net, consist of the following: | |||||||||||||||||
US dollars | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(in thousands) | 2014 | 2014 | 2014 | 2013 | |||||||||||||
Original amount | Accumulated amortization and | ||||||||||||||||
impairment charges | |||||||||||||||||
Unamortized balance | Unamortized balance | ||||||||||||||||
GIS database | 3,889 | 3,594 | 295 | 555 | |||||||||||||
Brand name | 1,181 | 1,049 | 132 | 163 | |||||||||||||
Others | 5,490 | 5,465 | 25 | 21 | |||||||||||||
10,560 | 10,108 | 452 | 739 | ||||||||||||||
Amortization of intangible assets amounted to US$ 231,000, US$ 367,000 and US$ 703,000 for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014, the estimated aggregate amortization of intangible assets for the next five years is as follows: 2015 – US$ 170,000; 2016 – US$ 170,000; 2017 – US$ 80,000, 2018 – US$ 20,000, 2019 – US$ 12,000. | |||||||||||||||||
B. Due to the deteriorating results of a certain Israeli subsidiary and the current expectation of management for further decrease its anticipated performance, during 2014 and 2013, the Company recorded an impairment charge for its intangible assets which directly relate to the operations of the subsidiary. | |||||||||||||||||
In order to determine the fair value of such intangible assets, the Company, based on a valuation performed by the management, with the assistance of a third party appraiser, utilized the "Relief from Royalties" valuation method. Accordingly, certain assumptions and judgments were made in order to determine the future income from which royalties will be derived from and in order to determine the appropriate rate of royalties and rate of discount. | |||||||||||||||||
As a result of the above, the Company recorded in 2014 and 2013, an impairment loss in an amount of US$ 33,500 and US$ 1,017,000, respectively, with respect to the GIS database and in 2014 and 2013, an amount of US$ 9,500 and US$ 511,000, respectively, with respect to the Brand name totaling an aggregate impairment charge of US$ 43,000 in 2014 (of which related to wireless communications products segment) and an aggregate impairment charge of US$ 1,527,000 in 2013 (of which US$ 661,000 related to location based services segment and US$ 866,000 is related to wireless communications products segment). | |||||||||||||||||
The impairment was included in "other expenses, net" (see Note 13). | |||||||||||||||||
GOODWILL
GOODWILL | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
GOODWILL [Abstract] | |||||||||||||
GOODWILL | NOTE 8 - GOODWILL | ||||||||||||
A. The changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2013 are as follows: | |||||||||||||
US dollars | |||||||||||||
Location based services | Wireless | Total | |||||||||||
communications | |||||||||||||
products | |||||||||||||
(in thousands) | |||||||||||||
Balance as of January 1, 2013 (*) | 3,692 | 4,351 | 8,043 | ||||||||||
Changes during 2013: | |||||||||||||
Impairment (see B. below) | (2,155 | ) | (938 | ) | (3,093 | ) | |||||||
Translation differences | 193 | 290 | 483 | ||||||||||
Balance as of December 31, 2013 | 1,730 | 3,703 | 5,433 | ||||||||||
Changes during 2014: | |||||||||||||
Impairment (See B. below) | - | (879 | ) | (879 | ) | ||||||||
Translation differences | (186 | ) | (327 | ) | (513 | ) | |||||||
Balance as of December 31, 2014 | 1,544 | 2,497 | 4,041 | ||||||||||
(*) | The accumulated amount of impairment loss as of January 1, 2013, December 31, 2013 and December 31, 2014 was US$ 2,452,000, US$ 5,545,000 and US$ 6,424,000, respectively. | ||||||||||||
B. | During 2014, 2013 and 2012, the Company recorded an amount of US$ 879,000 US$ 3,093,000 and US$ 672,000, respectively, as impairment with respect to goodwill. | ||||||||||||
The impairment amount was included in "other expenses, net". See Note 13. | |||||||||||||
The Company performed its annual impairment test as of December 31, 2014 and recorded goodwill impairment in the total amount of US$ 0.9 million in connection with certain reporting unit which is a part of the Wireless communications products segment and operates in the internet portal in the field of local travel and recreation. The impairment was recorded primarily due to a significant decline in current and future forecasted revenues and profitability margins of the GIS services offered by an Israeli subsidiary resulting from the continued weakness in the cellular industry in Israel that has suffered from recent regulatory changes and also the continuing popularity of navigation applications and tools developed by competitors which are offered for no charge. The impairment was based on valuation performed by the management using the assistance of a third party appraiser in accordance with the income approach. The significant assumptions used for the assessment were 3 years of projected net cash flows, a discount rate of 16.9% and a long-term growth rate of 0% (See Note 1W regarding fair value measurements). | |||||||||||||
The Company performed its annual impairment test as of December 31, 2013 and recorded goodwill impairment in the total amount of US$ 3.1 million in connection with three reporting units within the Location based services segment operating in the internet portal in the field of local travel and recreation. The impairment was based on valuation performed by the management using the assistance of a third party appraiser in accordance with the income approach. The significant assumptions used for the assessment were 3 years of projected net cash flows, a discount rate of 17.5% and a long-term growth rate of 0% (See Note 1W regarding fair value measurements). | |||||||||||||
See also Note 1O. | |||||||||||||
CREDIT_FROM_BANKING_INSTITUTIO
CREDIT FROM BANKING INSTITUTIONS | 12 Months Ended |
Dec. 31, 2014 | |
CREDIT FROM BANKING INSTITUTIONS [Abstract] | |
CREDIT FROM BANKING INSTITUTIONS | NOTE 9 - CREDIT FROM BANKING INSTITUTIONS |
Lines of credit | |
Unutilized short-term lines of credit of the Group as of December 31, 2014, aggregated to US$ 0.5 million. | |
OTHER_CURRENT_LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
OTHER CURRENT LIABILITIES [Abstract] | |||||||||
OTHER CURRENT LIABILITIES | NOTE 10 - OTHER CURRENT LIABILITIES | ||||||||
Composition: | |||||||||
US dollars | |||||||||
December 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Accrued expenses (*) | 7,919 | 13,620 | |||||||
Accrued payroll and related taxes | 5,692 | 4,597 | |||||||
Government institutions | 6,009 | 7,524 | |||||||
Related party | 98 | 133 | |||||||
Accrued dividend | 4,639 | 3,616 | |||||||
Others | 896 | 786 | |||||||
25,253 | 30,276 | ||||||||
(*) | As of December 31, 2013 includes approximately US $5 million, regarding the legal fees resulting from the claim described in Note 11A3. |
CONTINGENT_LIABILITIES
CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2014 | |
CONTINGENT LIABILITIES [Abstract] | |
CONTINGENT LIABILITIES | NOTE 11 - CONTINGENT LIABILITIES |
A. Claims | |
1. On December 31, 2007, the Company completed the sale of the subsidiary, Telematics Wireless Ltd. (Telematics), to a third party (hereinafter: the "Purchaser"). Pursuant to the sale transaction, the Company sold its entire shareholdings of Telematics to the purchaser, for an amount of US$ 80 million (based on a specified enterprise value of Telematics). The Company was required to deposit an amount of US$5 million in order to secure any adjustments to the purchase price, as further described below (the “Adjustment Escrow Amount”). In addition, the Company was required to deposit an amount of US$ 7.5 million in an escrow account in order to ensure certain representations and warranties towards the Purchaser (the “Escrow Amount”). The Adjustment Escrow Amount and the Escrow Amount were deposited in escrow in January 2008, after receipt of the entire consideration from the purchaser. | |
In 2008, the Company received a notice from the Purchaser (ST (Infocomm) Ltd. ("ST")), claiming that based on Telematics' performance parameters, the purchase price needs to be decreased by an amount of approximately US$ 10 million (out of which $3 million was recognized as a provision according to management estimate as of the date of such claim). The Company rejected most of the Purchaser's claims and requested that certain amounts be released from the Adjustment Escrow Amount in accordance with the terms of the agreement with the Purchaser. The Company and Purchaser commenced arbitration proceedings in this matter, and on February 10, 2011 the arbitrator delivered his determination according to which, the Purchaser's main claims for adjustments to the purchase price were rejected and based on Telematics' 2007 financial statements, the purchase price should be reduced by approximately US$4.4 million. The arbitrator determined that an amount of US$572,000 plus interest was to be released from escrow and be available to the Company. However, the funds held in the Adjustment Escrow Amount remained in escrow until October 2011, when an agreement between the parties provided that the sum of US$4.4 million (and interest accrued thereon) shall be released from the Adjustment Escrow Amount to the Purchaser and that the Company shall waive its claims with regard to the adjustment of the purchase price; and that an amount of US$3 million shall be released to the Company from the second escrow account (in which the Escrow Amount in the sum of US$7.5 million out of the purchase price was deposited), without derogating from the Purchaser's claims for indemnification under the purchase agreement. | |
Consequently, in October 2011, an amount of US$ 4.65 million (the US$ 4.4 noted above plus interest) was released to ST from the Adjustment Escrow Amount, and an amount of US$ 3 million was released to the Company from the Escrow Amount. The remainder of US$ 4.9 million of the Escrow Amount, after interest and the release of the US$ 3 million noted above (the "Remaining Escrow Amount") has remained in escrow until ST's additional arbitration (as described below) is resolved. | |
On December 21, 2009, the Company also received from ST a letter seeking indemnification for an alleged breach of certain representations by the Company under the purchase agreement, claiming damages in an amount of approximately US$ 4.3 million. ST's letter also included an allegation in respect of a possible and additional breach of representation in an additional amount of approximately US$ 4.3 million. The Company and ST entered into arbitration proceedings in Israel in which ST claimed damages in the amount of approximately US$ 10.3 million (which amount was considered as the reasonably possible loss amount). On December 19, 2013, the parties reached a settlement agreement regarding the above dispute and these arbitration proceedings were concluded. Consequently, the Remaining Escrow Amount in the amount of US$ 4.9 million (including accumulated interest), less US$200,000 that was released to ST, released to the Company in April 2014. | |
2. The Company was involved in litigation with Leonardo L.P. (hereinafter: "Leonardo"), a US-based hedge fund, arising out of a financial transaction entered into between the Company and Leonardo in February 2000. On June 13, 2011, the district court in its decision accepted one of Leonardo's claims and ordered the Company to pay the sum of approximately US$9.6 million, to be paid in accordance with the exchange rate in NIS at the date of the occurrence of the "triggering event", plus interest and linkage differences under the law and legal expenses in the sum of NIS 1.2 million (approximately US$0.3 million at that time), which totals approximately NIS 78.7 million (approximately US$22.7 million at that time). The Company filed an appeal with the Israeli Supreme Court, in which it appealed the district court's decision dated June 13, 2011 as well as the legal expenses and costs which it was ordered to pay according to the district court's decision. Leonardo counter-appealed the district court's decision to dismiss Leonardo's three alternative claims and to apply interest under the law and not default interest under the terms of the financial transaction between Leonardo and the Company as well as the legal expenses and costs which they were ordered to pay. | |
As a result of the above district court decision, the Company has recorded an expense (among the balance "other non-operating expenses") in the sum of approximately US$ 14.7 million in its consolidated statements of income of fiscal year 2010. The expense amount represented the excess amount over the US$ 5.9 million that was presented in past periods as Capital Notes with respect to Leonardo. During 2011, US$0.6 million was recorded as adjustment. | |
In October 2011, the Company paid Leonardo an amount of US$ 22.4 million. Pursuant to the district court's rulling, the payment amount was placed in escrow under the control of Leonardo, until the consummation of the legal proceedings between the parties. | |
On July 25, 2012, Leonardo and the Company settled the mutual claims against one another in a settlement agreement that annulled the decision of the district court dated June 13, 2011, pursuant to which out of the sum of NIS 81.9 million (approximately US$22.4 million at that time) which was deposited in escrow, the sum of approximately NIS 49.7 million (approximately $12.2 million at that time) was released to Leonardo and the sum of approximately NIS 32.2 million (approximately $7.4 million at that time) was released to the Company. In addition, it was determined that any surplus amount in the escrow account shall be released to Leonardo and the Company at the ratio of 60-40. | |
Following the above settlement, the Company recorded an amount of US$ 6.7 million, net of related expenses as a non-operating income, in its 2012 fiscal year financial statements. | |
3. On July 13, 2010 the State Revenue Services of São Paulo issued a tax deficiency notice against a subsidiary in Brazil, Ituran Sistemas de Monitoramento Ltda. ("the subsidiary"), claiming that the vehicle tracking and monitoring services provided by their subsidiary should be classified as telecommunication services and therefore subject to the imposition of State Value Added Tax – ICMS, resulting in an imposition of 25% state value added tax on all revenues of the subsidiary during the period between August 2005 and December 2007. At the time of serving the notice upon the Company, the tax deficiency notice was in the amount of R$36,499,984 (approximately US$22.1 million at the time) plus interest in the amount of R$30,282,420 (approximately US$18.2 million at the time) and penalties in the amount of R$66,143,446 (approximately US$40.0 million at the time). As of December 31, 2014, the aggregate sum claimed pursuant to the tax deficiency notice (principal amount, interest and penalties) was estimated at R$220,000,000 (approximately $82.7 million). The decision of the administration first level was unfavorable to the subsidiary and the company has filed an appeal to the Administrative Court of Appeals in São Paulo. On March 2, 2012 the Administrative Court of the State of São Paulo dismissed the State Revenue Services of São Paulo's claims and resolved in the subsidiary's favor. The State of São Paulo filed an administrative appeal to a full bench session at the Administrative Court which has been dismissed on December 20, 2014 and such a decision is non-appealable. | |
Furthermore, it is noted that the effect of aforesaid decision is limited to the period of August 2005 up to December 2007. It is possible that the State of São Paulo may issue us additional tax deficiency notices regarding the past 5 year period. However, the company maintain their position, based among other things on the results of the aforesaid legal proceedings, that if such tax deficiency notices are issued in future, their chances of success in defending its position are overwhelmingly favorable. | |
4. On June 24, 2010 the Brazilian Internal Revenue Service issued a tax assessment that claimed the payment, at the time of filing the tax assessment, of R$5,567,032 (approximately US$3,120,000 at the time), including interest and penalties, following the offsetting on October 1, 2005 of an amount of approximately US$ 2.1 million of a receivable held by Ituran Beheer BV, a Dutch legal entity held by us, against accumulated losses of our subsidiary Ituran Sistemas de Monitamento Ltda, which originated from a technology transfer agreement executed by and between Ituran Brazil and OGM Investments B.V. (also a Dutch company held by us). The decision of the administrative court of the first level was unfavourable to us and therefore the company have filed an appeal to the Administrative Court of Appeals in São Paulo. In October 2013, the company were notified that the Court of Appeal has partially accepted their administrative defense in order to reduce the percentage of penalty imposed on us and the company currently await the decision of the Administrative Court of Appeal. Based on the legal opinion of the subsidiary's Brazilian legal counsel the company believes that such claim is without merit and the company will continue to vigorously defend their selves in the appeal proceedings. As of December 31, 2014, the aggregate sum claimed pursuant to the tax assessment (principal amount, interest and penalties) is estimated at R$9.8 million (approximately $3.7 million) and the company are waiting for the admissibility of their special appeal. Based on the above as of December 31, 2014, no provision has been made with respect to the Brazilian IRS claim. | |
5. On October 29, 2014, Brazilian Federal Communication Agency – Anatel issued an additional tax assessment for FUST contribution (contribution on telecommunication services) levied on the monitoring services rendered by the company regarding the year of 2010 in amount of R$ 2,678,226 (approximately US$ 1 million) including interest and penalties. This amount added up to the previous Anatel tax assessment for the years 2007 and 2008 which was issued on October 20, 2011, and at time was R$ 3,350,165 (approximately US$ 1.9 million) including interest and penalties, which on December 31, 2014 amounts to R$ 4,630,000 (approximately US$ 1.7 million). Due to the 2010 tax assessment, on December 31, 2014, the aggregate amount claimed by Anatel increased to approximately R$ 7.3 million (approximately US$ 2.7 million). The reason Anatel demand the payment of FUST from the company is the fact that in order to provide monitoring services the company needs to operate telecommunication equipment in a given radio frequency. The company hold a telecommunication license from Anatel. The authorities have construed that the company render telecommunication services and FUST should be levied in relation to Net Revenues. Based on the legal opinion of the subsidiary's Brazilian legal counsel the company believes that such claim is without merit, the interpretation of the legislation is mistaken, given that the company doesn't render telecommunication services, but rather services of monitoring goods and persons for security purposes. The company has filed the defense for the years 2007 and 2008 on December 1, 2011. The company's Defense for the year 2010 was filed on November 27, 2014. The company is currently awaiting the Lower Court decision on all the aforementioned Anatel claims. As a result of the above as of December 31, 2014, no provision has been made with respect to the Brazilian FUST contribution. | |
6. Claims are filed against the Company and its subsidiaries from time to time during the ordinary course of business, usually with respect to civil, labor and commercial matters. The Company's management believes, based on its legal counsels' assessment, that the provision for contingencies recognized in the balance sheet is sufficient and that currently there are no claims (other than those described in this Note above) that are material, individually or in the aggregate, to the consolidated financial statements as a whole. | |
B. The Company was declared a monopoly under the Israeli Restrictive Trade Practices Law, 1988, in the market for the provision of systems for the location of vehicles in Israel. Under Israeli law, a monopoly is prohibited from taking certain actions, such as predatory pricing and the provision of loyalty discounts, which prohibitions do not apply to other companies. The Israeli Antitrust Authority may further declare that the Company has abused its position in the market. Any such declaration in any suit in which it is claimed that the Company engages in anticompetitive conduct may serve as prima facie evidence that the Company is either a monopoly or that it has engaged in anticompetitive behavior. Furthermore, it may be ordered to take or refrain from taking certain actions, such as setting maximum prices, in order to protect against unfair competition. | |
C. Commitments | |
1. As of December 31, 2014, minimum future rentals under operating leases of buildings for periods in excess of one year were as follows: 2015 – US$ 1.9 million; 2016 – US$ 1.3 million; 2017 – US$ 1.1 million, 2018 – US$ 1 million and 2019 – US$ 0.9 thousand. | |
The leasing fees expensed in each of the years ended December 31, 2014, 2013 and 2012, were US$ 2.5 million, US$ 2.5 million and US$ 2.5 million, respectively. | |
2. In January 2008, the Company entered into a 10 year Frame Product and Service Purchase Agreement with Telematics, pursuant to which (after the completion of the sale of Telematics, described in Note 11A1, above), the Company and Telematics shall purchase from each other certain products and services as detailed in the agreement for a price and subject to other conditions as detailed in the agreement. In addition, each of the Company and Telematics undertook toward one another not to compete in each other's exclusive markets in the area of RF vehicle location and tracking RF technology or similar RF terrestrial location systems and technology. The agreement was for a term of 10 years, following which it shall be renewed automatically for additional consecutive 12 month periods, unless nonrenewal notice is sent by one of the parties to the other. Pursuant to the agreement, each of Telematics and Ituran granted the other party a license to use certain technology in connection with the products and services purchased from each other, which license survives the termination or expiration of the agreement. | |
As of December 31, 2014, the Company is obliged to purchase from Telematics products in an aggregate amount of approximately US$ 4.5 million. | |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
STOCKHOLDERS' EQUITY [Abstract] | ||||||
STOCKHOLDERS' EQUITY | NOTE 12 - STOCKHOLDERS' EQUITY | |||||
A. Share capital | ||||||
1. Composition: | ||||||
December 31, 2013 and 2012 | Registered | Issued and fully paid | ||||
Ordinary shares of NIS 0.33⅓ each | 60,000,000 | 23,475,431 | ||||
2. Since May 1998, the Company has been trading its shares on the Tel-Aviv Stock Exchange (“TASE”). On September 2005, the Company registered its Ordinary shares for trade in the United States. | ||||||
3. The Ordinary shares of the Company confer upon their holders the right to receive notice to participate and vote in general meetings of the Company and the right to receive dividends, if and when, declared. | ||||||
4. As of December 31, 2014, 2013 and 2012, 2,507,314 ordinary shares representing 10.7% of the share capital of the Company is held by the Group as treasury shares. | ||||||
5. Shares of the Company held by the Group have no voting rights. | ||||||
B. Retained earnings | ||||||
1. In determining the amount of retained earnings available for distribution as a dividend, the Israeli Companies Law stipulates that the cost of the Company's shares acquired by the Company and its subsidiaries (presented as a separate item in the statement of changes in equity) must be deducted from the amount of retained earnings. | ||||||
2. On February 21, 2012, the board of directors of the Company revised its dividend policy so that dividends will be declared and distributed on a quarterly basis in an amount not less than 50% of its net profits, calculated on the basis of the interim financial statements. | ||||||
3. Dividends are declared and paid in NIS. Dividends paid to stockholders outside Israel are converted into dollars on the basis of the exchange rate prevailing at the date of declaration. See also B1, above. | ||||||
4. During 2012, the Company declared dividends totaling an amount of approximately US$ 36.1 million (NIS 135.4 million). These dividends were paid during 2012 and January 2013. | ||||||
5. During 2013, the Company declared dividends totaling an amount of approximately US$ 17.2 million (NIS 61.1 million). These dividends were paid during 2013 and January 2014. | ||||||
6. During 2014, the Company declared dividends totaling an amount of approximately US$ 20.5 million (NIS 72.4 million). These dividends were paid during 2014 and January 2015. | ||||||
7. In February 2015, the Company declared a dividend in the amount of US 0.33 dollar per share, totaling approximately US$ 7 million (NIS 27.3 million). The dividend was paid in April 2015. | ||||||
OTHER_EXPENSES_NET
OTHER EXPENSES, NET | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
OTHER EXPENSES, NET [Abstract] | |||||||||||||
OTHER EXPENSES, NET | NOTE 13 - OTHER EXPENSES, NET | ||||||||||||
US dollars | |||||||||||||
Year ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Adjustment of purchase price of subsidiary sold (1) | - | 200 | - | ||||||||||
Impairment of goodwill and intangible assets (2) | 922 | 4,620 | 672 | ||||||||||
Write-off of account receivable in respect of sale of subsidiary (3) | - | - | 484 | ||||||||||
Other | (66 | ) | (60 | ) | 461 | ||||||||
856 | 4,760 | 1,617 | |||||||||||
-1 | See Note 11A1. | ||||||||||||
-2 | See Note 7 and 8. | ||||||||||||
-3 | During April 2012, the Company sold its entire holding in the subsidiary Ituran Cellular Communication Ltd. for US$ 0.3 million in cash and for an additional amount of approximately US$ 0.5 million that was required to be paid soon thereafter. However, during late 2012, the acquirer entered into liquidation proceedings by its creditors and therefore due to the significant uncertainty regarding the collection of this receivable, the entire amount was written-off. |
FINANCING_INCOME_NET
FINANCING INCOME, NET | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
FINANCING INCOME, NET [Abstract] | |||||||||||||
FINANCING INCOME, NET | NOTE 14 - FINANCING INCOME, NET | ||||||||||||
US dollars | |||||||||||||
Year ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Short-term interest expenses, commissions and other | 309 | (1,201 | ) | (873 | ) | ||||||||
Gains in respect of marketable securities | 133 | - | 2 | ||||||||||
Interest expenses in respect of long-term loans | - | (4 | ) | (8 | ) | ||||||||
Interest income in respect of deposit | 982 | 1,998 | 1,770 | ||||||||||
Exchange rate differences and others, net | 280 | (555 | ) | 96 | |||||||||
1,704 | 238 | 987 |
INCOME_TAX
INCOME TAX | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
INCOME TAX [Abstract] | |||||||||||||
INCOME TAX | NOTE 15 | - | INCOME TAX | ||||||||||
A. | Taxes on income included in the statements of income: | ||||||||||||
US dollars | |||||||||||||
Year ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Income taxes (tax benefit): | |||||||||||||
Current taxes: | |||||||||||||
In Israel | 7,564 | 6,060 | 4,896 | ||||||||||
Outside Israel | 7,630 | 8,194 | 6,013 | ||||||||||
15,194 | 14,254 | 10,909 | |||||||||||
Deferred taxes: | |||||||||||||
In Israel | (471 | ) | (503 | ) | (249 | ) | |||||||
Outside Israel | (432 | ) | (1,309 | ) | 1,204 | ||||||||
(903 | ) | (1,812 | ) | 955 | |||||||||
Taxes in respect of prior years: | |||||||||||||
In Israel | - | - | (126 | ) | |||||||||
Outside Israel | (45 | ) | 5 | (48 | ) | ||||||||
(45 | ) | 5 | (174 | ) | |||||||||
14,246 | 12,447 | 11,690 | |||||||||||
B. | Measurement of results for tax purposes under the Income Tax (Inflationary Adjustments) Law, 1985 (the “Inflationary Adjustment Law”) | ||||||||||||
Until December 31, 2007, the Company and its Israeli subsidiaries reported income for tax purposes in accordance with the provisions of the Inflationary Adjustments Law, whereby taxable income was measured in NIS, adjusted for changes in the Israeli Consumer Price Index where results of operations for tax purposes were measured in terms of earnings in NIS after adjustments for changes in the Israeli Consumer Price Index ("CPI"). Commencing January 1, 2008, this law became void and in its place there are transition provisions, whereby the results of operations for tax purposes are measured on a nominal basis. | |||||||||||||
C. | The Law for the Encouragement of Capital Investments, 1959 (the "Investment Law") | ||||||||||||
1 | On December, 2010, the Israeli parliament approved an amendment to the Investments Law, effective as of January 1, 2011, which introduces a new status of "Preferred Company" and "Preferred Enterprise". The amendment allows enterprises meeting certain required criteria to enjoy grants as well as tax benefits. The amendment also introduces certain changes to the map of geographic development areas for purposes of the Investments Law, which will take effect in future years. The amendment generally abolishes the previous tax benefit routes that were afforded under the Investment Law, specifically the tax-exemption periods previously allowed, and introduces new tax benefits for industrial enterprises meeting the criteria of the law, which include among others the following: | ||||||||||||
A reduced corporate tax rate for industrial enterprises, provided that more than 25% of their annual income is derived from export, which will apply to the enterprise's entire preferred income so that in the tax years 2011-2012 the reduced tax rate will be 15% for preferred income derived from industrial facilities located in located in areas which are not classifies as area A. In the tax years 2013, the reduced tax rate was 12.5%. | |||||||||||||
On August 5, 2013 the Israeli Parliament amended the Investments Law, by which, inter alia, it canceled the scheduled progressive reduction in the corporate tax rate for Preferred Enterprises and set it at 16% for enterprises located elsewhere as of January 1, 2014. | |||||||||||||
The reduced tax rates will no longer be contingent upon making a minimum qualifying investment in productive assets. | |||||||||||||
2 | As of December 31, 2014, only one Israeli subsidiary is entitled to a "Preferred Company" status pursuant to the investment law. | ||||||||||||
D. | Israeli corporate tax rates | ||||||||||||
On December 6, 2011, the Law for the Change in the Tax Burden (Legislative Amendments) – 2011 was published. As part of this law, among other things, commencing from 2012 the Israeli corporate income tax rate was increased to 25%. In addition, commencing in 2012, the tax rate on capital gains in real terms and the tax rate applicable to betterment in real terms were increased to 25%. | |||||||||||||
On July 30, 2013, the Israeli parliament approved the Law for the Change in National Priorities (Legislative Amendments to Achieve Budgetary Goals for 2013 and 2014) – 2013 (hereinafter – the “Law for the Change in National Priorities”), which, among other things increased the standard Israeli corporate income tax rate from 25% to 26.5% effective as of January 1, 2014. | |||||||||||||
This change of tax rate did not have material effect on the deferred tax assets of the Company and its Israeli subsidiaries. | |||||||||||||
E. | Non-Israeli subsidiaries | ||||||||||||
Non-Israeli subsidiaries are taxed according to the tax laws and rates in their country of residence. | |||||||||||||
F. | Use of assumptions and judgements | ||||||||||||
The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and can be ambiguous; the Company is, therefore, obliged to make many subjective assumptions and judgments regarding the application of such laws and regulations to its facts and circumstances. In addition, interpretations of and guidance surrounding income tax laws and regulations are subject to changes over time. Any changes in the Company's subjective assumptions and judgments could materially affect amounts recognized in its consolidated balance sheets and statements of income. | |||||||||||||
G. | Tax assessments | ||||||||||||
The Company has received final tax assessments through the 2009 tax year. | |||||||||||||
On August 4, 2014, the Company announced that it received from the Israeli tax authority ("ITA") tax assessments for the years 2010-2012 amounting to NIS 36 million (approximately US$ 10.5 million). Approximately 50% is due to disallowance of various deductions and the remaining balance is due to timing differences of the deduction of certain expenses, which will be deducted in the coming years. | |||||||||||||
The Company filed an objection with the ITA for the above Tax Assessments. The Company believes, considering the advice of professional advisors, that the Tax Assessments should be significantly reduced or overruled and that the ITA assessment is without merits and intends to vigorously defend its position. | |||||||||||||
As a result of the above, no adjustment was required to be recorded with respect to amounts that were previously recorded for the respective tax matters. | |||||||||||||
A certain Israeli subsidiary has received final tax assessments through the 2009 tax year. The subsidiary in Brazil has received final tax assessments through the 2008 tax year and the subsidiary in America through 2006. The other subsidiaries have not been assessed since incorporation. | |||||||||||||
H. | Carry forward tax losses | ||||||||||||
As of December 31, 2014, the Company and its subsidiaries in Brazil and Argentina have no carry forward tax losses. | |||||||||||||
Carry forward tax losses of a certain Israeli subsidiary as of December 31, 2014 amount to approximately US$ 0.8 million. Carry forward tax losses in Israel may be utilized indefinitely. | |||||||||||||
As of December 31, 2014, the Company's non-Israeli subsidiary in the United States has available estimated carry forward foreign tax credits tax approximately US$ 13.6 million. Such carry forward tax losses may be utilized until 2022. | |||||||||||||
I. | The following is a reconciliation between the theoretical tax on pretax income, at the applicable Israeli tax rate, and the tax expense reported in the financial statements: | ||||||||||||
US dollars | |||||||||||||
Year ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Pretax income | 47,574 | 38,002 | 37,689 | ||||||||||
Statutory tax rate | 26.5 | % | 25 | % | 25 | % | |||||||
Tax computed at the ordinary tax rate | 12,607 | 9,500 | 9,422 | ||||||||||
Nondeductible expenses | 757 | 1,701 | 418 | ||||||||||
Losses in respect of which no deferred taxes were generated (including reduction of deferred tax assets recorded in prior period) | (304 | ) | 137 | 1,087 | |||||||||
Deductible financial expenses recorded to other comprehensive income | (365 | ) | (312 | ) | (244 | ) | |||||||
Taxes in respect of prior years | 45 | 5 | (174 | ) | |||||||||
Tax adjustment in respect of different tax rates | 1,662 | 1,877 | 1,734 | ||||||||||
Taxes in respect of withholding at the source from royalties and dividends | 615 | 817 | 853 | ||||||||||
Adjustment in respect of tax rate deriving from “approved enterprises” | (558 | ) | (467 | ) | (233 | ) | |||||||
Others | (213 | ) | (811 | ) | (1,173 | ) | |||||||
14,246 | 12,447 | 11,690 | |||||||||||
J. | Summary of deferred taxes | ||||||||||||
Composition: | |||||||||||||
US dollars | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||
Deferred taxes included in other current assets: | |||||||||||||
Provision for employee related obligations | 130 | 139 | |||||||||||
Provision for legal obligation and other | 3,519 | 3,553 | |||||||||||
3,649 | 3,692 | ||||||||||||
Composition: | |||||||||||||
US dollars | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||
Long-term deferred income taxes: | |||||||||||||
Provision for employee related obligations | 678 | 533 | |||||||||||
Carry forward tax losses and foreign tax credit | 3,223 | 4,029 | |||||||||||
Temporary differences, net | 1,010 | 1,982 | |||||||||||
4,911 | 6,544 | ||||||||||||
Valuation allowance | (2,175 | (2,979 | ) | ||||||||||
2,736 | 3,565 | ||||||||||||
Composition: | |||||||||||||
US dollars | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||
Deferred income taxes included in long-term investments and other assets | 2,886 | 3,781 | |||||||||||
Deferred income taxes included in long-term liabilities | (150 | ) | (216 | ) | |||||||||
2,736 | 3,565 | ||||||||||||
K. | Income before income taxes is composed as follows: | ||||||||||||
US dollars | |||||||||||||
Year ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
The Company and its Israeli subsidiaries | 26,021 | 17,296 | 20,060 | ||||||||||
Non-Israeli subsidiaries | 21,553 | 20,706 | 17,629 | ||||||||||
47,574 | 38,002 | 37,689 | |||||||||||
L. | Uncertain tax positions | ||||||||||||
The Company and its subsidiaries files income tax returns in Israel, US, Argentina and Brazil. | |||||||||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||||||
US dollars | |||||||||||||
(in thousands) | |||||||||||||
Balance at January 1, 2013 | 439 | ||||||||||||
Translations differences related to the current year | 33 | ||||||||||||
Balance at December 31, 2013 | 472 | ||||||||||||
Translations differences related to the current year | (51 | ||||||||||||
Balance at December 31, 2014 | 421 | ||||||||||||
The Company anticipates that it is reasonably possible that over the next twelve months the amount of unrecognized tax benefits could be reduced to zero, therefore as of December 31, 2014, the liability with respect to uncertain tax positions is presented as short-term liability in the balance sheet (within "Other current liabilities"). |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
EARNINGS PER SHARE [Abstract] | ||||||||
EARNINGS PER SHARE | NOTE 16 - | EARNINGS PER SHARE | ||||||
During the periods, there were no potential instruments that could be exercised or converted to ordinary shares. The net income and the weighted average number of shares used in computing basic and diluted earnings per share for the years ended December 31, 2014, 2013 and 2012, are as follows: | ||||||||
US dollars | ||||||||
Year ended December 31, | ||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||
Net income attributable to stockholder's used for the computation of basic and diluted earnings per share | 30,429 | 23,762 | 24,880 | |||||
Number of shares | ||||||||
Year ended December 31, | ||||||||
(in thousands) | 2014 | 2013 | 2011 | |||||
Weighted average number of shares used in the computation of basic and diluted earnings per share | 20,968 | 20,968 | 20,968 |
RELATED_PARTIES
RELATED PARTIES | 12 Months Ended | ||
Dec. 31, 2014 | |||
RELATED PARTIES [Abstract] | |||
RELATED PARTIES | NOTE 17 - | RELATED PARTIES | |
A. | The Tzivtit Insurance Ltd. (“Tzivtit Insurance”), owned by a director of the Company, serves as the Company's insurance agent and provides the Company with elementary insurance and managers insurance. | ||
In respect of these insurance services, Tzivtit Insurance is entitled to receive commissions at various rates, paid by the insurance company (which is not considered a related party). | |||
With respect to basic insurance policies, and directors and offices insurance policies, the Company paid to the insurance company in 2014, US$ 324 thousand and US$ 189 thousand, respectively (In 2013 US$ 303 thousand and US$ 193 thousand, respectively.) | |||
Tzivtit Insurance is entitled to commissions in an aggregate amount of NIS 187 thousand (US$ 52 thousand) to be paid to Tzivtit Insurance by the insurance company on account of these policies. (US$ 80 thousand and US$ 72 thousand in 2013 and 2012, respectively.) | |||
B. | In February 2003, an agreement was signed between the Company and A. Sheratzky Holdings Ltd., a wholly-owned and controlled company belonging to Mr. Izzy Sheratzky, President and Director. The agreement includes, among other things, the cost of Mr. Izzy Sheratzky's monthly employment in an amount of NIS 98,000 (US$ 25,000), entertainment expenses, car maintenance expenses, cellular phone, and entitlement to participate in the profits of the Company in an amount equal to 5% of the pretax income of the Company, plus the share of the Company in the income or losses of affiliated companies, on the basis of the audited consolidated financial statements. | ||
The agreement is for a two-year period, with automatic two-year extensions, unless either of the parties gives 180 day advance notice of its intention to terminate the agreement. | |||
Whereas the term of the agreement exceeded three years, under recent amendments to the Israeli Companies Law, the Company's audit committee, board of directors and shareholders have ratified and approved the agreement with A. Sheratzky, which according to current Israeli law remained in force and effect until May 11, 2014. | |||
See section F below with respect to the approval of a new service agreement with A. Sheratzky Holdings during February 2014. | |||
C. | On September 5, 2002, the Company entered into independent contractor agreements with A. Sheratzky Holdings Ltd. and each of Eyal Sheratzky and Nir Sheratzky (the Co-CEO's of the Company), pursuance to which A. Sheratzky Holdings will provide management services to the Company through Eyal Sheratzky and Nir Sheratzky in consideration of monthly payments in the amount of NIS 48,892 and NIS 49,307 (US$ 12,600 and US$ 12,700), respectively, in addition to providing each of them a company car and reimbursement of certain business expenses. In January 2004, changes in the employment terms of the two Co-CEOs of the Company were approved, whereby in addition to the agreement detailed above, each would be entitled to an annual bonus equal to 1% of the pretax income of the Company, plus the share of the Company in the income or losses of affiliated companies, on the basis of the audited consolidated financial statements. | ||
Whereas the term of the agreement exceeded three years, under recent amendments to the Israeli Companies Law, the Company's audit committee, board of directors and shareholders have ratified and approved the agreement with A. Sheratzky (including third addendum thereto that clarifies the nature of its role and services), which according to current Israeli law remained in force and effect until May 11, 2014. | |||
See section F below with respect to the approval of a new service agreement with A. Sheratzky Holdings during February 2014. | |||
The amounts paid to A. Sheratzky Holdings in 2014, 2013 and 2012 (including with respect to B. above but excluding amounts paid to A. Sheratzky Holdings in 2014 under the new service agreement, described in F. below), were approximately US$ 793,000, US$ 3,470,000 and US$ 2,691,000, respectively (all numbers include value added tax). | |||
D. | In accordance with an agreement with a related party (as amended), Prof. Yehuda Kahane, for financial consulting, the Company is required to pay the consultant monthly consulting fees of NIS 15,000 (US$ 3,900) a month, linked to the Israeli Consumer Price Index. The aggregate amount paid to Professor Kahane in each of the years 2014, 2013 and 2012 was approximately US$ 62,000, US$ 59,000 and US$ 56,000, respectively. | ||
E. | On January 23, 2007, the Company's subsidiary, E-Com Global Electronic Commerce Ltd. ("E-Com "), signed an agreement with Gil Sheratzky for the employment of Mr. Sheratzky as CEO of that company, in consideration of monthly payments in the amount of NIS 25,000 (US$ 6,400), in addition to providing him a company car, managers insurance and education fund contribution (as customary in Israel) and reimbursement of certain business expenses. In his position, Mr. Sheratzky will report to the Co-CEO of the Company. The compensation paid to Gil Sheratzky includes a bonus in an amount equal to 2% of the annual increase in E-COM profits before tax (up to a maximum amount of 1% of that company's profits before tax), based on its audited consolidated financial statements for the relevant year, beginning January 1, 2007. | ||
The aggregate amount paid to Mr. Gil Sheratzky in 2014, 2013 and 2012 was approximately US$ 1,131,000, US$ 145,000 US$ 196,000, respectively. | |||
Whereas the term of the agreement exceeded three years, under recent amendments to the Israeli Companies Law, the Company's audit committee, board of directors and shareholders have ratified and approved the agreement with Gil Sheratzky, which according to current Israeli law remained in force and effect until May 11, 2014. | |||
See section F below with respect to the approval of a new service agreement with A. Sheratzky Holdings during February 2014. | |||
F. | In February 2014, following the approval of the Company's general meeting of shareholders on January 28, 2014, the Company entered into new service agreements, setting forth the terms of service of its President and Co-Chief Executive Officers in compliance with the Company's compensation policy for office holders; and E-Com entered into a service agreement setting forth the terms of service of its Chief Executive Officer in compliance with the Company's compensation policy for officer holders. The principal terms of these agreements are as follows: | ||
Mr. Izzy Sheratzky shall provide his services as an independent contractor through A. Sheratzky Holdings Ltd., which shall be entitled to a monthly payment of NIS 225,000 (or $57,900) plus VAT, linked to the consumer price index for December 2013. At the request of the service provider, part of the fixed monthly pay may be granted through benefits, such as the provision of a company car for the use of Mr. Sheratzky and the payment of its maintenance costs and the cost of tax resulting therefrom. The fixed monthly pay shall also include Mr. Sheratzky's entitlement for a 25 days' vacation and sick days as provided by law. The service provider shall also be entitled to payment or reimbursement of expenses, including hosting expenses, subsistence allowance abroad and participation in work-related home telephone expenses. The service provider shall be entitled to Target-based Cash Incentives and Excess Return Cash Incentives as detailed below. The agreement shall be in force for a period of 3 years and may be terminated upon 180 days' advance notice of termination; however, the Company may terminate the agreement without an advance notice and without compensation if the following shall occur: (a) Mr. Sheratzky is convicted of a criminal offense involving moral turpitude; (b) a final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has breached his fiduciary duty towards the Company; (c) a final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has materially breached the agreement through the unauthorized disclosure of Company's secrets or competition with the Company. | |||
The aggregate amounts paid to A. Sheratzky according this new service agreement in 2014 were approximately $2,387,000 (includes value added tax). | |||
Mr. Eyal Sheratzky shall provide his services as an independent contractor through ORAS Capital Ltd. which shall be entitled to a monthly payment of NIS 175,000 (or $45,000) plus VAT, linked to the consumer price index for December 2013. At the request of the service provider, part of the fixed monthly pay may be granted through benefits, such as the provision of a company car for the use of Mr. Sheratzky and the payment of its maintenance costs and the cost of tax resulting therefrom. The fixed monthly pay shall also include Mr. Sheratzky's entitlement for a 25 days' vacation and sick days as provided by law. The service provider shall also be entitled to payment or reimbursement of expenses, including hosting expenses and subsistence allowance abroad. The service provider shall be entitled to Target-based Cash Incentives and Excess Return Cash Incentives as detailed below. The agreement shall be in force for a period of 3 years and may be terminated upon 180 days' advance notice of termination; however, the Company may terminate the agreement without an advance notice and without compensation if the following shall occur: (a) Mr. Sheratzky is convicted of a criminal offense involving moral turpitude; (b) a final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has breached his fiduciary duty towards the Company; (c) a final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has materially breached the agreement through the unauthorized disclosure of Company's secrets or competition with the Company. | |||
The aggregate amounts paid to ORAS Capital Ltd (for new and old agreements combined) in 2014 were approximately $1,552,000 (include value added tax). | |||
Mr. Nir Sheratzky shall provide his services as an independent contractor through Galnir Management and Investments Ltd., which shall be entitled to a monthly payment of NIS 175,000 (or $45,000) plus VAT, linked to the consumer price index for December 2013. At the request of the service provider, part of the fixed monthly pay may be granted through benefits, such as the provision of a company car for the use of Mr. Sheratzky and the payment of its maintenance costs and the cost of tax resulting therefrom. The fixed monthly pay shall also include Mr. Sheratzky's entitlement for a 25 days' vacation and sick days as provided by law. The service provider shall also be entitled to payment or reimbursement of expenses, including hosting expenses and subsistence allowance abroad. The service provider shall be entitled to Target-based Cash Incentives and Excess Return Cash Incentives as detailed below. The agreement shall be in force for a period of 3 years and may be terminated upon 180 days' advance notice of termination; however, the Company may terminate the agreement without an advance notice and without compensation if the following shall occur: (a) Mr. Sheratzky is convicted of a criminal offense involving moral turpitude; (b) a final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has breached his fiduciary duty towards the Company; (c) a final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has materially breached the agreement through the unauthorized disclosure of Company's secrets or competition with the Company. | |||
The aggregate amounts paid to Galnir Management and Investments Ltd, (for new and old agreements combined) were approximately 1,418,000 (includes value added tax). | |||
Mr. Gil Sheratzky shall provide his services as an independent contractor through ZERO-TO-ONE S.B.L. INVESTMENTS LTD., which shall be entitled to a monthly payment of NIS 125,000 (or $32,000) plus VAT, linked to the consumer price index for December 2013. At the request of the service provider, part of the fixed monthly pay may be granted through benefits, such as the provision of a company car for the use of Mr. Sheratzky and the payment of its maintenance costs and the cost of tax resulting therefrom. The fixed monthly pay shall also include Mr. Sheratzky's entitlement for a 25 days' vacation and sick days as provided by law. The service provider shall also be entitled to payment or reimbursement of expenses, including hosting expenses and subsistence allowance abroad. The service provider shall be entitled to Target-based Cash Incentives and Excess Return Cash Incentives as detailed below. The agreement shall be in force for a period of 3 years and may be terminated upon two months' advance notice of termination; however, E-Com may terminate the agreement without an advance notice and without compensation if the following shall occur: (a) Mr. Sheratzky is convicted of a criminal offense involving moral turpitude; (b) a final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has breached his fiduciary duty towards E-Com; (c) a final court ruling (without the possibility of appeal) determines that Mr. Sheratzky has materially breached the agreement through the unauthorized disclosure of E-Com' and/or Company's secrets or competition with E-Com and/or the Company. | |||
The aggregate amounts paid to ZERO-TO-ONE S.B.L. INVESTMENTS LTD, in 2014 were approximately $948,000 (includes value added tax). | |||
Each of the above agreements also provides that the executives may request to provide their services to the Company as an employee, and not through a service provider, and in such event, the they shall execute an employment agreement with the Company, in lieu of the above service agreements, which shall also set forth the provisions of social security and other benefits that the Company usually grants its senior executive officers (which may not deviate from the provisions of the Compensation Policy in this respect). In any event, it was agreed that the nature of the agreement pursuant to which the services are provided shall not affect the cost to the Company of the provision of the services as set forth in the service agreements. | |||
The terms of the Cash Incentives applicable to each of Messrs. Izzy Sheratzky, Eyal Sheratzky, Nir Sheratzky and Gil Sheratzky (the "Executive Offices Holders"), as set forth in their agreements referred to above (the "Agreements"), are as follows: | |||
• | "Target-based Cash Incentives" means a cash incentive awarded to the Executive Office Holders for the Company's achievement of the following Profit-Before-Tax targets in each calendar year following the effective date of the above agreements, in which the Minimum Threshold (as defined below) has been achieved: | ||
Company's Profit-Before-Tax Targets | |||
(in USD thousands) Level of Incentive - As a Percentage of the Executive Office Holder's Annual Cost of Pay | |||
24,001 - 27,500 20% | |||
27,501-31,000 45% | |||
31,001-35,000 75% | |||
35,001-39,000 110% | |||
Above 39,001 150% | |||
"Minimum Threshold" means, with respect to a particular calendar year, a minimum Company's Return on Equity (as defined below) of 15%, and a minimum company's Profit Before Tax of USD 24 million. | |||
"Excess Return Cash Incentives" means that at the end of each calendar year, the Company shall examine the Company's Stock Yield since January 1 of such year or, with respect to the first year of such grant – since the date of its approval (an "Examined Period"), as compared to the TA 100 Index's Yield over such Examined Period; and to the extent that the Company's Stock Yield exceeds the TA 100 Index's Yield for such period, each of the Executive Office Holders shall receive an amount equal to 50% of his monthly Cost of Pay for each 1% of excess return (in percentage points' terms), or a relative amount in the event of a partial excess return. For the avoidance of doubt, in the event that the Company's Stock Yield during such period is negative, no grant shall be awarded. | |||
The Excess Return Cash Incentive for each year shall not exceed an amount equal to the Executive Officer Holder's annual Cost of Pay. | |||
• | In the event that an Agreement is terminated during a calendar year, the Company's compensation committee and board of directors shall determine the relative amounts out of the Target-based Cash Incentives and/or Excess Return Cash Incentives to which the relevant Executive Office Holder is entitled for the portion of the year during which the Agreement was in force; and these amounts shall be paid within 30 days after the termination of service/employment, as the case may be. | ||
• | On the date of determination of each Executive Office Holder's entitlement for a Target-based Cash Incentive for a particular year, the Company's compensation committee shall examine whether the total amount of grants to which Executive Officers are entitled with respect to such calendar year and which constitute variable components of their terms of services (the "Total Amount of Grants to Executive Officers"), exceed an amount equal to 10% of the Company's EBITDA for such year (the "EBITDA's Threshold"), as calculated in accordance with data extracted from the Company's audited consolidated annual financial statements, after taking into account the Executive Officers' fixed compensation but excluding their variable compensation. In such event, the amount by which the Total Amount of Grants to Executive Officers exceeds the EBITDA's Threshold shall be referred to as the "Excess Amount". | ||
• | In the event that the Total Amount of Grants to Executive Officers exceeds the EBITDA's Threshold, then the Target-based Cash Incentive and the Excess Return Cash Incentive to which an Executive Office Holder is entitled (together, the "Grants") shall be reduced by an amount equal to the Executive Office Holder's Rate of Grants (as defined below) out of the Excess Amount. The term "Executive Office Holder's Rate of Grants" means, with respect to a particular Executive Office Holder, the percentage which such Executive Office Holder's Grants constitute out of the Total Amount of Grants to Executive Officers. | ||
• | The Company's board of directors shall have the right, under special circumstances at its discretion, to reduce the amount of Grants to which the Executive Office Holders are entitled, upon a 60 days prior notice. | ||
• | The Executive Office Holder shall be required to return any compensation paid to them on the basis of results included in financial statements that turned out to be erroneous and were subsequently restated in the Company's financial statements published during the three year period following publication of the erroneous financial statements; to the extent they would not have been entitled to the compensation actually received had it been determined based on the restated financial statements. In such case, compensation amounts will be returned within 60 days from the date of publication of the restated financial statements, net of taxes that were withheld thereon. If the Executive Office Holder has a right to reclaim such tax payments with respect to Grants which were paid in excess, from the relevant tax authorities, then the Executive Office Holder shall reasonably act to reclaim such amounts from the tax authorities and upon their receipt, shall remit them to the Company. In 2014 Executive Offices Holders where ineligible to Target based cash incentives at the maximum rate of (150%). | ||
G. | On January 28, 2014, the Company's general meeting of the of shareholders re-approved the terms of engagement of Mr. Avner Kurz as a consultant to Ituran Sistemas de Monitoramento Ltda, a Brazilian subsidiary of the Company, in accordance with an agreement dated February 23, 2012. Pursuant to the terms of this agreement, Mr. Kurz provided consultation services to the Brazilian subsidiary as an independent contractor, including services concerning: general strategy of the subsidiary, developing connections with the private market, infrastructure development and in any other area as is required from time to time. In addition, he was in direct contact with the chief executive officer of the subsidiary and its office holders, he was directly reporting to the Company's president and advised him regarding the aforementioned; Mr. Kurz undertook to stay at least eight times per year in Brazil at the subsidiary's offices and to invest no less than twenty monthly hours in providing the services; the term of the agreement automatically renews every two years, although each party may terminate it with a 180 days prior notice; and in consideration for the services described above, the Brazilian subsidiary paid Mr. Kurz a monthly amount of $8,000, against the receipt of a tax invoice; and Mr. Kurz was entitled to receive a cellular phone and reimbursement of related expenses from the Company, payable against receipts The aggregate amounts paid to Mr Kurz by virtue of this agreement for each of the years 2014, 2013 and 2012 were approximately $80,000, $81,105 and $99,771, respectively. The agreement with Mr. Kurz was terminated on September 15, 2014 as the date of his resignation from the board. | ||
SEGMENT_REPORTING
SEGMENT REPORTING | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
SEGMENT REPORTING [Abstract] | ||||||||
SEGMENT REPORTING | NOTE 18 - | SEGMENT REPORTING | ||||||
A. | General information: | |||||||
The operations of the Group are conducted through two different core activities: Location based services and Wireless communications products. These activities also represent the reportable segments of the Group. | ||||||||
The reportable segments are viewed and evaluated separately by Company management, since the marketing strategies, processes and expected long term financial performances of the segments are different. | ||||||||
Location based services: | ||||||||
The Location based services segment consists predominantly of regionally- based stolen vehicle recovery (SVR) services, fleet management services and value-added services comprised of personal advanced locater services and concierge services. | ||||||||
The Group provides Location based services in Israel, Brazil, Argentina and the United States. | ||||||||
Wireless communications products: | ||||||||
The wireless communications product segment consists of short and medium range two-way machine-to-machine wireless communications products that are used for various applications, including automatic vehicle location, and automatic vehicle identification. The Group sells products to customers in Israel, United States, and others. | ||||||||
B. | Information about reported segment profit or loss and assets: | |||||||
US dollars | ||||||||
(in thousands) | Location based | Wireless | Total | |||||
services | communications | |||||||
products | ||||||||
Year ended December 31, 2014 | ||||||||
Revenues | 133,692 | 48,435 | 182,127 | |||||
Operating income | 42,603 | 3,267 | 45,870 | |||||
Assets | 63,795 | 11,094 | 74,889 | |||||
Goodwill | 1,544 | 2,497 | 4,041 | |||||
Expenditures for assets | 12,574 | 598 | 13,172 | |||||
Depreciation and amortization | 8,920 | 148 | 9,068 | |||||
Impairment of goodwill and intangible assets | 34 | 888 | 922 | |||||
Year ended December 31, 2013 | ||||||||
Revenues | 126,951 | 43,216 | 170,167 | |||||
Operating income (loss) | 38,470 | (540 | ) | 37,930 | ||||
Assets | 66,300 | 10,564 | 76,864 | |||||
Goodwill | 1,730 | 3,703 | 5,433 | |||||
Expenditures for assets | 12,312 | 264 | 12,576 | |||||
Depreciation and amortization | 9,360 | 358 | 9,718 | |||||
Impairment of goodwill and intangible assets | 2,816 | 1,804 | 4,620 | |||||
Year ended December 31, 2012 | ||||||||
Revenues | 114,565 | 35,753 | 150,318 | |||||
Operating income | 29,850 | 97 | 29,947 | |||||
Assets | 65,332 | 10,629 | 75,961 | |||||
Goodwill | 3,692 | 4,351 | 8,043 | |||||
Expenditures for assets | 7,636 | 77 | 7,713 | |||||
Depreciation and amortization | 11,471 | 130 | 11,601 | |||||
C. | Information about reported segment profit or loss and assets: | |||||||
The evaluation of performance is based on the operating income of each of the two reportable segments. | ||||||||
Accounting policies of the segments are the same as those described in the accounting policies applied in the consolidated financial statements. | ||||||||
Due to the nature of the reportable segments, there have been no inter-segment sales or transfers during the reported periods. | ||||||||
Financing expenses, net, non-operating other expenses, net, taxes on income and the share of the Company in losses of affiliated companies were not allocated to the reportable segments, since these items are carried and evaluated on the enterprise level. | ||||||||
D. | Reconciliations of reportable segment revenues, profit or loss, and assets, to the enterprise's consolidated totals: | |||||||
US dollars | ||||||||
Year ended December 31, | ||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||
Total revenues of reportable segment and consolidated revenues | 182,127 | 170,167 | 150,318 | |||||
Operating income | ||||||||
Total operating income for reportable segments | 45,870 | 37,930 | 29,947 | |||||
Unallocated amounts: | ||||||||
Other income (expenses) income | - | (166 | ) | 6,755 | ||||
Financing income, net | 1,704 | 238 | 987 | |||||
Consolidated income before taxes on income | 47,574 | 38,002 | 37,689 | |||||
Assets | ||||||||
Total assets for reportable segments (*) | 78,930 | 82,297 | 84,004 | |||||
Other unallocated amounts: | ||||||||
Current assets | 57,159 | 61,530 | 48,512 | |||||
Investments in affiliated and other companies | 1,095 | 1,511 | 242 | |||||
Property and equipment, net | 7,786 | 8,644 | 9,187 | |||||
Other unallocated amounts | 7,367 | 6,560 | 5,394 | |||||
Consolidated total assets (at year end) | 152,337 | 160,542 | 147,339 | |||||
Other significant items | ||||||||
Total expenditures for assets of reportable segments | 13,172 | 12,576 | 7,713 | |||||
Unallocated amounts | 2,021 | 1,387 | 2,320 | |||||
Consolidated total expenditures for assets | 15,193 | 13,963 | 10,033 | |||||
Total depreciation, amortization and impairment for reportable segments | 9,990 | 14,338 | 11,601 | |||||
Unallocated amounts | 2,229 | 1,858 | 3,070 | |||||
Consolidated total depreciation and amortization | 12,219 | 16,196 | 14,671 | |||||
(*) | Including goodwill. | |||||||
E. | Geographic information | |||||||
Revenues | ||||||||
Year ended December 31, | ||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||
Israel | 90,061 | 83,331 | 70,595 | |||||
United States | 7,568 | 4,876 | 4,749 | |||||
Brazil | 66,462 | 63,454 | 58,242 | |||||
Argentina | 13,792 | 15,190 | 13,546 | |||||
Others | 4,244 | 3,316 | 3,186 | |||||
Total | 182,127 | 170,167 | 150,318 | |||||
Property and equipment, net | ||||||||
December 31, | ||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||
Israel | 8,563 | 9,051 | 9,440 | |||||
United States | 120 | 155 | 146 | |||||
Brazil | 17,801 | 19,178 | 20,132 | |||||
Argentina | 5,424 | 4,162 | 4,438 | |||||
Total | 31,908 | 32,546 | 34,156 | |||||
- | Revenues were attributed to countries based on customer location. | |||||||
- | Property and equipment were classified based on major geographic areas in which the Company operates. | |||||||
F. | Major customers | |||||||
During 2014, 2013 and 2012 there were no sales exceeding 10% of total revenues to none of our customers. | ||||||||
FINANCIAL_INSTRUMENTS_AND_RISK
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT [Abstract] | |||||||||
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT | NOTE 19 - | FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT | |||||||
A. | Concentrations of credit risks | ||||||||
Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents, accounts receivables, derivatives and deposits in escrow. | |||||||||
Most of the Group's cash and cash equivalents, deposits in short-term investments (and investments in trading marketable securities), as of December 31, 2014 and 2013, were deposited with major banks (mostly in Israel). The Company is of the opinion that the credit risk in respect of these balances is immaterial. | |||||||||
Most of the Group's sales are made in Israel, Brazil, Argentina and the United States, to a large number of customers, including insurance companies. Management periodically evaluates the collectability of the trade receivables to determine the amounts that are doubtful of collection and determine a proper allowance for doubtful accounts. Accordingly, the Group's trade receivables do not represent a substantial concentration of credit risk. | |||||||||
B. | Foreign exchange risk management | ||||||||
The Group operates internationally, which gives rise to exposure to market risks mainly from changes in exchange rates of foreign currencies in relation to the functional currency of each of the entities of the Group. | |||||||||
During 2013 and 2014, the Company entered into foreign currency forward transactions in order to protect itself against the risk that the eventual cash flows resulting from anticipated transactions (mainly purchases of inventory), denominated in currencies other than the functional currency, will be affected by changes in exchange rates. | |||||||||
During 2013 and 2014, all the financial derivatives were designated and accounted for as hedging instruments. | |||||||||
The following table summarizes a tabular disclosure of (a) fair values of derivative instruments in the balance sheets and (b) the effect of derivative instruments in the statements of income: | |||||||||
Fair values of derivative instruments: | |||||||||
Asset derivatives | |||||||||
As of December 31, 2014 | Thousands of US dollars | ||||||||
Balance sheet | Fair | ||||||||
location | value | ||||||||
Derivatives designated as hedging instruments: | |||||||||
Foreign exchange contracts | Other Assets | 2,564 | |||||||
Liability derivatives | |||||||||
As of December 31, 2013 | Thousands of US dollars | ||||||||
Balance sheet | Fair | ||||||||
location | value | ||||||||
Derivatives designated as hedging instruments: | |||||||||
Foreign exchange contracts | Other liabilities | (568 | ) | ||||||
Amounts reclassified to statement of income: | |||||||||
Derivatives designated | Location of loss | Amount of gain | |||||||
as hedging instruments | recognized in income | recognized in income | |||||||
Year ended December 31, 2014 | Thousands of US dollars | ||||||||
Foreign exchange contracts | Cost of revenues | 68 | |||||||
Derivatives designated | Location of loss | Amount of loss | |||||||
as hedging instruments | recognized in income | recognized in income | |||||||
Year ended December 31, 2013 | Thousands of US dollars | ||||||||
Foreign exchange contracts | Cost of revenues | (295 | ) | ||||||
As of December 31, 2013 and 2014, the notional amount of forward exchange contracts with respect to cash flow hedge of anticipated transactions amounted to US$ 28.5 million (US$ 1.5 million per month for the next 19 months). | |||||||||
C. | Fair value of financial instruments | ||||||||
The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is an exit price, representing the amount that would be received to sell an asset or the amount that would be paid to transfer a liability in an orderly transaction between market participants. | |||||||||
The Company measured cash equivalents and derivative financial instruments at fair value. Such financial instruments are measured at fair value, on a recurring basis. The measurement of cash equivalents are classified within Level 1. The fair value of derivatives generally reflects the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting dates, based on the prevailing currency prices and the relevant interest rates. Such measurement is classified within Level 2. | |||||||||
The fair value of the financial instruments included in the working capital of the Group (cash and cash equivalents, deposit in escrow, accounts receivable, accounts payable and other current assets and liabilities) approximates their carrying value, due to the short-term maturity of such instruments. | |||||||||
See also Note 1W. | |||||||||
The Company's financial assets measured at fair value on a recurring basis, consisted of the following types of instruments as of December 31, 2014: | |||||||||
31-Dec-14 | |||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | ||||||
Derivatives | |||||||||
Derivatives designated as hedging instruments | - | 2,564 | - | ||||||
31-Dec-13 | |||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | ||||||
Derivatives | |||||||||
Derivatives designated as hedging instruments | - | 568 | - |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
SUBSEQUENT EVENTS [Abstract] | |
Subsequent Events [Text Block] | NOTE 20 - SUBSEQUENT EVENTS |
In January 2015, the Company purchased an additional 13.3% of Bringg shares for an amount of $1.1 million. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||
Operations | 1. Operations | ||||||||||||
a. Ituran Location and Control Ltd. (the “Company”) commenced operations in 1994. The Company and its subsidiaries (the “Group”) are engaged in the provision of Location based services and machine-to-machine Wireless communications products for use in stolen vehicle recovery, fleet management and other applications. | |||||||||||||
b. Regarding the tax dispute in Brazil, see Note 11A3. | |||||||||||||
Functional currency and translation to the reporting currency | 2. Functional currency and translation to the reporting currency | ||||||||||||
The functional currency of the Company and its subsidiaries located in Israel is the New Israeli Shekel (“NIS”), which is the local currency in which those entities operate. The functional currency of the foreign subsidiaries of the Group is their respective local currency. | |||||||||||||
The consolidated financial statements of the Company and all of its subsidiaries were translated into U.S. dollars in accordance with the standards of the Financial Accounting Standards Board ("FASB"). Accordingly, assets and liabilities were translated from local currencies to U.S. dollars using yearend exchange rates, and income and expense items were translated at average exchange rates during the year. | |||||||||||||
Gains or losses resulting from translation adjustments (which result from translating an entity's financial statements into U.S. dollars if its functional currency is different than the U.S. dollar) are reported in other comprehensive income and are reflected in equity, under “accumulated other comprehensive income (loss)”. | |||||||||||||
Balances denominated in, or linked to foreign currency are stated on the basis of the exchange rates prevailing at the balance sheet date. For foreign currency transactions included in the statement of income, the exchange rates applicable on the relevant transaction dates are used. Transaction gains or losses arising from changes in the exchange rates used in the translation of such balances are carried to financing income or expenses. | |||||||||||||
The following table presents data regarding the dollar exchange rate of relevant currencies and the Israeli CPI: | |||||||||||||
Exchange rate | Israeli CPI(*) | ||||||||||||
of one US dollar | |||||||||||||
NIS | Real | ||||||||||||
At December 31, | |||||||||||||
2014 | 3.889 | 2.6562 | 113.96 points | ||||||||||
2013 | 3.471 | 2.3426 | 114.18 points | ||||||||||
2012 | 3.733 | 2.0435 | 112.15 points | ||||||||||
Increase (decrease) during the year: | |||||||||||||
2014 | 12.04 | % | 13.39 | % | (0.2 | )% | |||||||
2013 | (7.02 | )% | (14.63 | )% | 1.8 | % | |||||||
2012 | (2.30 | )% | (8.94 | )% | 1.6 | % | |||||||
(*) | Based on the Index for the month ending on each balance sheet date, on the basis of 2008 average 100. | ||||||||||||
Basis of presentation | 3. Basis of presentation | ||||||||||||
The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). | |||||||||||||
Use of estimates in the preparation of financial statements | 4. Use of estimates in the preparation of financial statements | ||||||||||||
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from the estimates. | |||||||||||||
As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to contingencies, revenue recognition, goodwill impairment assessment, deferred taxes and tax liabilities and uncertainties. | |||||||||||||
Principles of consolidation | B. Principles of consolidation | ||||||||||||
The consolidated financial statements include the accounts of the Company and all of its subsidiaries. In these financial statements, the term “subsidiary” refers to a company over which the Company exerts control (ownership interest of more than 50%), and the financial statements of which are consolidated with those of the Company. Significant intercompany transactions and balances are eliminated upon consolidation; profits from intercompany sales, not yet realized outside of the Group, are also eliminated. Non-controlling interests are presented in equity. | |||||||||||||
Changes in the Company ownership interest in a subsidiary while the control is retained are accounted for as equity transactions and accordingly no gain or loss is recognized in consolidated net income or comprehensive income. Upon such transaction, the carrying amount of the noncontrolling interest is adjusted to reflect the change in its ownership interest in the subsidiary and any difference between the fair value of the consideration received or paid and the amount by which the noncontrolling interest was adjusted is recognized in additional paid-in capital. | |||||||||||||
Cash and cash equivalents | C. Cash and cash equivalents | ||||||||||||
The Group considers all highly liquid investments, which include short-term bank deposits that are not restricted as to withdrawal or use, and short-term debentures, with original periods to maturity not exceeding three months, to be cash equivalents. | |||||||||||||
Deposits in escrow | D. Deposits in escrow | ||||||||||||
Restricted cash is invested in certificates of deposit, which are used to ensure certain representations and warranties to third parties. See Note 11A1. | |||||||||||||
Such deposits are presented in the balance sheets as current assets or as long-term assets based on management's assessment regarding their realization. | |||||||||||||
Marketable securities | E. Marketable securities | ||||||||||||
The Company accounts for investments in marketable securities in accordance with ASC Topic 320-10, "Investments - Debt and Equity Securities" (“ASC Topic 320-10”). Management determines the appropriate classification of its investments in marketable securities at the time of purchase and reassesses such determination at each balance sheet date. | |||||||||||||
The investments in marketable securities covered by ASC Topic 320-10 that were held by the Company during the reported periods were designated by management as trading securities. | |||||||||||||
Trading securities are stated at market value. The changes in market value are charged to financing income or expenses. | |||||||||||||
Trading gains for the year 2014 amounted to US$ 133,000 and trading gains for the years 2013 and 2012, in respect of trading securities held by the Group were insignificant. | |||||||||||||
Treasury stock | F. Treasury stock | ||||||||||||
Company shares held by the Company and its subsidiary are presented as a reduction of equity, at their cost, under the caption “Treasury Stock”. Gains and losses upon sale of these shares, net of related income taxes, are recorded as additional paid in capital. | |||||||||||||
Allowance for doubtful accounts | G. Allowance for doubtful accounts | ||||||||||||
The allowance for doubtful accounts is determined with respect to amounts the Group has determined to be doubtful of collection. In determining the allowance for doubtful accounts, the Company considers, among other things, its past experience with customers, the length of time that the balance is post due, the customer's current ability to pay and available information about the credit risk on such customers. See also Note 19A. | |||||||||||||
The allowance in respect of accounts receivable at December 31, 2014 and 2013 was US$ 2,391,000 and US$ 1,945,000, respectively. | |||||||||||||
Inventories | H. Inventories | ||||||||||||
Inventories are stated at the lower of cost or market. Cost is determined as follows: raw materials and finished products – mainly on the basis of first-in, first-out (FIFO); work in progress – on the basis of direct production costs including materials, labor and subcontractors. | |||||||||||||
Investment in affiliated companies | I. Investment in affiliated companies | ||||||||||||
Investments in companies in which the Group has significant influence (ownership interest of between 20% and 50%) but less than controlling interests, are accounted for by the equity method. Income on intercompany sales, not yet realized outside of the Group, was eliminated. The Company also reviews these investments for impairment whenever events indicate the carrying amount may not be recoverable. | |||||||||||||
Investments in companies in which the company no longer has significant influence, are classified as "investments in other companies". See J. below. | |||||||||||||
Investment in other companies | J. Investment in other companies | ||||||||||||
Non-marketable investments in other companies in which the Company does not have a controlling interest nor significant influence are accounted for at cost, net of write down for any permanent decrease in value. | |||||||||||||
Derivatives | K. Derivatives | ||||||||||||
The group applies the provisions of ASC Topic 815, "Derivatives and Hedging". In accordance with ASC Topic 815, all the derivative financial instruments are recognized as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value of a derivative financial instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For derivative financial instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. | |||||||||||||
From time to time the Company carries out transactions involving foreign exchange derivative financial instruments (mainly forward exchange contracts) which are designed to hedge the cash flows expected to be paid with respect to forecasted purchases of inventory, denominated in currencies other than the functional currency of the Company. Such transactions were designated as hedging instruments on the date that the Company entered into such derivative contracts, and qualify as cash flow hedges under ASC Topic 815. | |||||||||||||
The effective portion of the changes in fair value of the derivative instruments designated for hedging purposes are reported as other comprehensive income (loss), net of tax under the caption "unrealized gains (losses) in respect of derivative financial instruments designated for cash flow hedge" and are reclassified to the statements of income when the hedged transaction realizes (i.e when the related inventory is sold). During the reporting periods, the gains or losses that were recognized in earnings for hedge ineffectiveness were insignificant. | |||||||||||||
All other derivatives which do not qualify for hedge accounting, or which have not been designated as hedging instruments, are recognized in the balance sheet at their fair value, with changes in the fair value carried to the statements of income as incurred in financing income (expenses), net. | |||||||||||||
See also Note 19B for further information. | |||||||||||||
Property and equipment | L. Property and equipment | ||||||||||||
1. Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated on the straight-line method over the shorter of the estimated useful life of the property or the duration of the lease. | |||||||||||||
2. Rates of depreciation: | |||||||||||||
% | |||||||||||||
Operating equipment (mainly 20%-33%) | 6.5-33 | ||||||||||||
Office furniture, equipment and computers | Jul-33 | ||||||||||||
Buildings | 2.5 | ||||||||||||
Vehicles | 15 | ||||||||||||
Leasehold improvements | Duration of the lease which | ||||||||||||
is less or equal to useful life. | |||||||||||||
Impairment of long-lived assets | M. Impairment of long-lived assets | ||||||||||||
The Group's long-lived assets are reviewed for impairment, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value (see also Note 1O and Notes 7 and 8). | |||||||||||||
Income taxes | N. Income taxes | ||||||||||||
The Group accounts for income taxes in accordance with ASC Topic 740-10, "Income Taxes". According to this guidance, deferred income taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting and the tax bases of assets and liabilities under the applicable tax law. Deferred tax balances are computed using the tax rates expected to be in effect at the time when these differences reverse. Valuation allowances in respect of the deferred tax assets are provided for if, based upon the weight of available evidence, it is more likely than not that all or a portion of the deferred income tax assets will not be realized. | |||||||||||||
US GAAP provides that the tax effects from an uncertain tax position can be recognized in the financial statements only if the position is "more-likely-than-not" to be sustained were to be challenged by a taxing authority. The assessment of a tax position is based solely on the technical merits of the position, without regard the likelihood that the tax position may be challenged. If an uncertain tax position meets the "more-likely-than-not" threshold, the largest amount of tax benefit that is greater than 50% likely to be recognized upon ultimate settlement with the taxing authority is recorded. See also Note 15K. | |||||||||||||
The Company recognizes interest as interest expenses (among financing expenses) and penalties, if any, related to unrecognized tax benefits in its provision for income tax. | |||||||||||||
Goodwill and intangible assets | O. Goodwill and intangible assets | ||||||||||||
1. Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in business combinations accounted for in accordance with the "purchase method" and is allocated to reporting units at acquisition. Goodwill is not amortized but rather tested for impairment at least annually in accordance with the provisions of ASC Topic 350, "Intangibles - Goodwill and Other". The Company performs its goodwill annual impairment test for the reporting units at December 31 of each year, or more often if indicators of impairment are present. | |||||||||||||
As required by ASC Topic 350, , the Company chooses either to perform a qualitative assessment whether the two-step goodwill impairment test is necessary or proceeds directly to the two-step goodwill impairment test. Such determination is made for each reporting unit on a stand-alone basis. The qualitative assessment includes various factors such as macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, earnings multiples, gross margin and cash flows from operating activities and other relevant factors. When the Company chooses to perform a qualitative assessment and determines that it is more likely than not (a more than 50 percent likelihood) that the fair value of the reporting unit is less than its carrying value, then the Company proceeds to the two-step goodwill impairment test. If the Company determines Otherwise, no further evaluation is necessary. | |||||||||||||
When the Company decides or is required to perform the two-step goodwill impairment test, the Company compares the fair value of the reporting unit to its carrying value ("step 1"). If the fair value of the reporting unit exceeds the carrying value of the reporting unit net assets (including the goodwill allocated to such reporting unit), goodwill is considered not to be impaired, and no further testing is required. If the carrying value exceeds the fair value of the reporting unit, then the implied fair value of goodwill is determined by subtracting the fair value of all the identifiable net assets from the fair value of the reporting unit. An impairment loss is recorded for the excess, if any, of the carrying value of the goodwill allocated to the reporting unit over its implied fair value ("step 2"). | |||||||||||||
There are a number of generally accepted methods used for valuing a reporting unit: | |||||||||||||
The ‘income approach' utilizes discounted forecasted cash flows, the ‘Market – approach which utilize pricing multiples of business entities with publicly traded securities whose business and financial risks are comparable to those of the reporting unit being valued and the ‘Asset - based approach' which establishes a value based on the cost of reproducing or replacing the asset being valued. These methods described may be used alone or in combination with one another. | |||||||||||||
The Company applies assumptions that market participants would consider in determining the fair value of each reporting unit and the fair value of the identifiable assets and liabilities of the reporting units, as applicable. | |||||||||||||
The Company performed a qualitative assessment for two reporting units as of December 31, 2014 and 2013, and concluded that the qualitative assessment did not result in a more likely than not indication of impairment, and therefore no further impairment testing was required, with respect to such units. | |||||||||||||
For other reporting unit (three different units in 2013), operating in Israel, the Company elected to bypass the qualitative assessment and proceeded directly to performing the first step of the goodwill impairment test. | |||||||||||||
In order to determine the fair value of that reporting unit, the Company utilized the "income approach". According to the income approach expected future cash flows are discounted to their present value using an appropriate rate of return. Judgments and assumptions related to future cash flows (projected revenues, operating expenses, and capital expenditures), future short-term and long-term growth rates, and weighted average cost of capital, which are based on management's internal assumptions, and believed to be similar to those that would be utilized by market participants under the circumstances and to represent both the specific risks associated with the business, and capital market conditions, are inherent in developing the discounted cash flow model. | |||||||||||||
During 2014, 2013 and 2012, the Company recorded a goodwill impairment loss in an amount of US$ 879,000, US$ 3,093,000 and US$ 672,000, respectively. See Note 8. | |||||||||||||
2. Intangible assets with finite lives are amortized using the straight-line basis over their useful lives, to reflect the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up, as follows | |||||||||||||
Years | |||||||||||||
GIS database | 10 | ||||||||||||
Customer base | 5 | ||||||||||||
Brand name | 15 | ||||||||||||
Other | 10-Mar | ||||||||||||
Recoverability of intangible assets is measured as described in Note 1M above. During 2014, the Company recorded an intangible assets impairment loss in an amount of US$ 43,000. See Note 7. | |||||||||||||
Contingencies | P. Contingencies | ||||||||||||
The Company and its subsidiaries are involved in certain legal proceedings that arise from time to time in the ordinary course of their business and in connection with certain agreements with third parties. Except for income tax contingencies, the Company records accruals for contingencies to the extent that the management concludes that the occurrence is probable and that the related liabilities are estimable. Legal expenses associated with contingencies are expensed as incurred. | |||||||||||||
Funds in respect of, and liability for employee rights upon retirement | Q. Funds in respect of, and liability for employee rights upon retirement | ||||||||||||
The Company's liability for employee rights upon retirement with respect to its Israeli employees is calculated, pursuant to Israeli severance pay law, based on the most recent salary of each employee multiplied by the number of years of employment, as of the balance sheet date. Employees are entitled to one month's salary for each year of employment, or a portion thereof. The Company makes monthly deposits to insurance policies and severance pay funds. The liability of the Company is fully provided for. | |||||||||||||
The deposited funds include profits or losses accumulated up to the balance sheet date. The deposited funds may be withdrawn upon the fulfillment of the obligation pursuant to Israeli severance pay laws or labor agreements. The value of the deposited funds is based on the cash surrender value of these policies, and includes profits or losses. | |||||||||||||
The liability for employee rights upon retirement in respect of the employees of the non-Israeli subsidiaries of the Company, is calculated on the basis of the labor laws of the country in which the subsidiary is located and is covered by an appropriate accrual. | |||||||||||||
Severance expenses for the years ended December 31, 2014, 2013 and 2012, amounted to US$ 1,460,000 US$ 882,000 and US$ 1,204,000, respectively. | |||||||||||||
Revenue recognition | R. Revenue recognition | ||||||||||||
Revenues are recognized when delivery has occurred and, where applicable, after installation has been completed, there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection of the related receivable is reasonably assured and no further obligations exist. In cases where delivery has occurred but the required installation has not been performed, the Company does not recognize the revenues until the installation is completed. | |||||||||||||
The Company's revenues are recognized as follows: | |||||||||||||
1. Revenues from sales are recognized when title and risk of loss of the product pass to the customer (usually upon delivery). | |||||||||||||
2. The Company applies the provisions of ASC Topic 605-25, "Revenue Recognition - Multiple-Element Arrangements", as amended. ASC Topic 605-25 provides guidance on how to account for arrangements that involve the delivery or performance of multiple products, services and/or rights to use assets. For such arrangements, each element of the contract is accounted for as a separate unit when it provides the customer value on a stand-alone basis and if an arrangement includes a right of return relative to a delivered item, delivery or performance of the undelivered item or items is considered probable and substantially in the control of the Company. According to ASC 605-25, as amended, when neither "vendor specific objective evidence" of selling price, nor third party price exists, the Company is required to develop a best estimate of the selling price of the deliverables and the entire arrangement consideration is allocated to the deliverables based on the relative selling prices. | |||||||||||||
Revenues from SVR services subscription fees and from installation services, sold to customers within a single contractually binding arrangement were accounted for revenue recognition purposes as a single unit of accounting in accordance with ASC Topic 605-25, since the installation services element was determined not to have a value on a stand-alone basis to the customer. Accordingly, the entire contract fee for the two deliverables is recognized ratably on a straight-line basis over the subscription period. | |||||||||||||
3. Deferred revenues include unearned amounts received from customers (mostly for the provision of installation and subscription services) but not yet recognized as revenues. Such deferred revenues are recognized as described in paragraph 2, above. | |||||||||||||
4. Extended warranty | |||||||||||||
Revenues from extended warranty which are provided for a monthly fee and are sold separately are recognized over the duration of the warranty periods. | |||||||||||||
Warranty costs | S. Warranty costs | ||||||||||||
The Company provides a standard warranty for its products to end-users at no extra charge. The Company estimates the costs that may be incurred under its warranty obligation and records a liability at the time the related revenues are recognized. | |||||||||||||
Among the factors affecting the warranty liability are the number of installed units and historical percentages of warranty claims. The Company periodically assesses the adequacy of the recorded warranty liability and adjusts the amount to the extent necessary. To date, warranty costs and the related liabilities have not been material. | |||||||||||||
Research and development costs | T. Research and development costs | ||||||||||||
1. Research and development costs (other than computer software related expenses) are expensed as incurred. | |||||||||||||
2. Software Development Costs | |||||||||||||
ASC Topic 985-20, "Costs of Software to Be Sold, Leased, or Marketed" requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Research and development costs incurred in the process of developing product improvements or new products, are generally expensed as incurred, net of grants received from the Government of Israel for development of approved projects. Costs incurred by the Company between the establishment of technological feasibility and the point at which the product is ready for general release are usually insignificant. | |||||||||||||
Advertising costs | U. Advertising costs | ||||||||||||
Advertising costs are expensed as incurred. | |||||||||||||
Advertising expenses for the years ended December 31, 2014, 2013 and 2012 amounted to US$ 6.7 million, US$ 7.6 million and US$ 6.6 million, respectively. Advertising expenses are presented among "selling and marketing expenses". | |||||||||||||
Earnings per share | V. Earnings per share | ||||||||||||
Basic earnings per share are computed by dividing net income attributable to the common shares, by the weighted average number of shares outstanding during the year, net of the weighted average number of treasury stock. | |||||||||||||
In computing diluted earnings per share, basic earnings per share are adjusted to reflect the potential dilution that could occur upon the exercise of options granted under employee stock option plans, using the treasury stock method, and the conversion of the convertible capital notes, using the if converted method. | |||||||||||||
Fair value measurements | W. Fair value measurements | ||||||||||||
The Company measures fair value and discloses fair value measurements for financial and non-financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. | |||||||||||||
As such, fair value is a market based measurement that is required to be determined based on the assumptions that market participants would use to determine the price of an asset or a liability. | |||||||||||||
As a basis for considering such assumptions, the fair value accounting standard establishes the following fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | |||||||||||||
Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||||||||||||
Level 2 - Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |||||||||||||
Level 3 - Unobservable inputs are used when little or no market data is available. Level 3 inputs are considered as the lowest priority under the fair value hierarchy. | |||||||||||||
In determining fair value, companies are required to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as to consider counterparty credit risk in the assessment of fair value. | |||||||||||||
Regarding the fair value measurements of financial assets and liabilities and the fair value hierarchy of such measurements, see Note 19C. | |||||||||||||
The Company also measures certain non-financial assets, consisting mainly goodwill and intangible assets at fair value on a nonrecurring basis. These assets are adjusted to fair value when they are considered to be impaired (see 1O and 1M above). As of December 31, 2014, the Company measured the fair value of goodwill with a total carrying amount of US$ 1.5 million (before the recognition of an impairment loss) that is allocated to one reporting unit. As a result of the above impairment test, the Company recorded an impairment loss of goodwill in an amount of US$ 0.8 million, allocated to such reporting unit to its imputed fair value of US$ 0.7 million. The fair value measurement of the non-financial assets is classified as level 3. | |||||||||||||
As of December 31, 2013, the Company measured the fair value of goodwill with a total carrying amount of US$ 4.8 million (before the recognition of an impairment loss) that was allocated to three reporting units. As a result of the above impairment test, the Company recorded an impairment loss of goodwill with a carrying amount of US$ 2.6 million, US$ 0.5 million and US$ 1.7 million allocated to three different reporting units to their imputed fair value of US$ 1.7 million, US$ 0 and US$ 0, respectively, resulting in an aggregate impairment charge of US$ 3.1 million. The fair value measurement of the non-financial assets is classified as level 3.See also Notes 1O and 8. | |||||||||||||
Deferred installation expenses | X. Deferred installation expenses | ||||||||||||
Direct installation expenses incurred at the inception of specific subscription arrangements in Brazil with specific customers, to enable the Company's subsidiary in Brazil to perform under the terms of the arrangement (i.e. directly attributable to obtaining a specific subscriber), which their costs can be measured reliably, are capitalized and presented as "Deferred installation expenses" within the balances "Other current assets" and "Other non-current assets", as applicable. | |||||||||||||
Such installation activities has determined not to represent separate earnings process for revenue recognition purposes in accordance with the principles of ASC Topic 605-25, "Multiple-Element Arrangements" as they has been determined not to have a value on a stand-alone basis to the customer. | |||||||||||||
The deferred expenses that are capitalized are limited to the higher of value of the amount of nonrefundable deferred revenue, if any or to the amount of the minimum contractual subscription revenue, net of direct costs. | |||||||||||||
The deferred expenses are amortized over the contractual life of the related subscription arrangements by the straight-line method (usually 20 months). Costs that do not meet the aforementioned criteria, are recognized immediately as expenses. | |||||||||||||
Reclassification | Y. Reclassification | ||||||||||||
Certain comparative figures have been reclassified to conform to the current year presentation. Such reclassifications did not have any impact on the Company's equity, net income or cash flows. | |||||||||||||
Recently issued accounting pronouncements | Z. Recently issued accounting pronouncements | ||||||||||||
1. Accounting pronouncements adopted in 2014 | |||||||||||||
a. ASC Topic 830, “Foreign Currency Matters" | |||||||||||||
Effective January 1, 2014, the Group adopted Accounting Standards Update 2013-5, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity ("ASU 2013-5"). | |||||||||||||
ASU 2013-5 clarifies among other things that, when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business (other than a sale of in-substance real estate or conveyance of oil and gas mineral rights) within a foreign entity, the parent is required to apply the guidance in Subtopic 830-30 to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. | |||||||||||||
For public companies, the amendments in ASU 2013-5 became effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The amendments should be applied prospectively to derecognition events occurring after the effective date. Prior periods should not be adjusted. | |||||||||||||
The adoption did not have a material impact on the Group's consolidated results of operations and financial condition. | |||||||||||||
b. ASC Topic 740, "Income Taxes" | |||||||||||||
Effective January 1, 2014, the Company adopted Accounting Standard Update 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force) ("ASU 2013-11"). | |||||||||||||
The amendments in ASU 2013-11 state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be presented net of deferred tax assets. | |||||||||||||
ASU 2013-11 applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. For public companies the amendments in this ASU became effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments were applied prospectively to all unrecognized tax benefits that existed at the effective date. | |||||||||||||
The adoption did not have a material impact on the Company's consolidated results of operations and financial condition. | |||||||||||||
2. Accounting pronouncements not yet effective | |||||||||||||
Accounting Standard Update 2014-09, “Revenue from Contracts with Customers” | |||||||||||||
In May 2014, the FASB issued Accounting Standard Update 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). | |||||||||||||
ASU 2014-09 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 also requires entities to disclose sufficient information, both quantitative and qualitative, to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. | |||||||||||||
An entity should apply the amendments in this ASU using one of the following two methods: 1. Retrospectively to each prior reporting period presented with a possibility to elect certain practical expedients, or, 2. Retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. If an entity elects the latter transition method, it also should provide certain additional disclosures. | |||||||||||||
For a public entity, the amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period (the first quarter of fiscal year 2017 for the Company). Early application is not permitted. | |||||||||||||
The Company is in the process of assessing the impact, if any, of ASU 2014-09 on its consolidated financial statements. | |||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||
Schedule of Relevant Exchange Rates of US Dollar and Israeli CPI | Exchange rate | Israeli CPI(*) | |||||||||||
of one US dollar | |||||||||||||
NIS | Real | ||||||||||||
At December 31, | |||||||||||||
2014 | 3.889 | 2.6562 | 113.96 points | ||||||||||
2013 | 3.471 | 2.3426 | 114.18 points | ||||||||||
2012 | 3.733 | 2.0435 | 112.15 points | ||||||||||
Increase (decrease) during the year: | |||||||||||||
2014 | 12.04 | % | 13.39 | % | (0.2 | )% | |||||||
2013 | (7.02 | )% | (14.63 | )% | 1.8 | % | |||||||
2012 | (2.30 | )% | (8.94 | )% | 1.6 | % | |||||||
(*) | Based on the Index for the month ending on each balance sheet date, on the basis of 2008 average 100. | ||||||||||||
Schedule of Depreciation Rates | % | ||||||||||||
Operating equipment (mainly 20%-33%) | 6.5-33 | ||||||||||||
Office furniture, equipment and computers | Jul-33 | ||||||||||||
Buildings | 2.5 | ||||||||||||
Vehicles | 15 | ||||||||||||
Leasehold improvements | Duration of the lease which | ||||||||||||
is less or equal to useful life. | |||||||||||||
Schedule of Intangible Assets Useful Lives | Years | ||||||||||||
GIS database | 10 | ||||||||||||
Customer base | 5 | ||||||||||||
Brand name | 15 | ||||||||||||
Other | 10-Mar |
OTHER_CURRENT_ASSETS_Tables
OTHER CURRENT ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
OTHER CURRENT ASSETS [Abstract] | |||||||||
Schedule of Other Current Assets | US dollars | ||||||||
December 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Prepaid expenses and others | 9,779 | 9,314 | |||||||
Government institutions | 2,694 | 1,716 | |||||||
Deferred installation expenses | 2,485 | 2,905 | |||||||
Deferred income taxes (*) | 3,649 | 3,692 | |||||||
Advances to suppliers | 324 | 457 | |||||||
Employees | 343 | 300 | |||||||
Forward Exchange Contracts | 1,580 | - | |||||||
Others | 1,464 | 53 | |||||||
22,318 | 18,437 | ||||||||
(*) | See Note 15. |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INVENTORIES [Abstract] | |||||||||
Schedule of Inventory | US dollars | ||||||||
December 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Finished products | 8,845 | 11,733 | |||||||
Raw materials | 3,319 | 2,773 | |||||||
12,164 | 14,506 |
OTHER_NONCURRENT_ASSETS_Tables
OTHER NON-CURRENT ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
OTHER NON-CURRENT ASSETS [Abstract] | |||||||||
Schedule of Other Non-Current Assets | US dollars | ||||||||
December 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Forward Exchange Contracts | 984 | - | |||||||
Government institutions | 73 | 128 | |||||||
Deferred installation expenses | 459 | 526 | |||||||
Deposits | 575 | 368 | |||||||
2,091 | 1,022 |
PROPERTY_AND_EQUIPMENT_NET_Tab
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PROPERTY AND EQUIPMENT, NET [Abstract] | |||||||||
Schedule of Property and Equipment, Net | US dollars | ||||||||
December 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Operating equipment (*) | 46,947 | 46,991 | |||||||
Office furniture, equipment and computers | 23,858 | 25,116 | |||||||
Land | 1,022 | 1,022 | |||||||
Buildings | 1,855 | 2,252 | |||||||
Vehicles | 3,412 | 3,197 | |||||||
Leasehold improvements | 3,088 | 3,099 | |||||||
80,182 | 81,677 | ||||||||
Less – accumulated depreciation and amortization (**) | (48,274 | ) | (49,131 | ) | |||||
31,908 | 32,546 | ||||||||
(*) | As December 31, 2014 and 2013, an amount of US$ 26.0 million and US$ 25.8 million is subject to operating lease transactions, respectively. | ||||||||
(**) | As at December 31, 2014 and 2013, an amount of US$ 10.4 million and US$ 11.3 million is subject to operating lease transactions, respectively. | ||||||||
INTANGIBLE_ASSETS_NET_Tables
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
INTANGIBLE ASSETS, NET [Abstract] | |||||||||||||||||
Schedule of Intangible Assets, Net | US dollars | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
(in thousands) | 2014 | 2014 | 2014 | 2013 | |||||||||||||
Original amount | Accumulated amortization and | ||||||||||||||||
impairment charges | |||||||||||||||||
Unamortized balance | Unamortized balance | ||||||||||||||||
GIS database | 3,889 | 3,594 | 295 | 555 | |||||||||||||
Brand name | 1,181 | 1,049 | 132 | 163 | |||||||||||||
Others | 5,490 | 5,465 | 25 | 21 | |||||||||||||
10,560 | 10,108 | 452 | 739 |
GOODWILL_Tables
GOODWILL (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
GOODWILL [Abstract] | |||||||||||||
Schedule of Goodwill | US dollars | ||||||||||||
Location based services | Wireless | Total | |||||||||||
communications | |||||||||||||
products | |||||||||||||
(in thousands) | |||||||||||||
Balance as of January 1, 2013 (*) | 3,692 | 4,351 | 8,043 | ||||||||||
Changes during 2013: | |||||||||||||
Impairment (see B. below) | (2,155 | ) | (938 | ) | (3,093 | ) | |||||||
Translation differences | 193 | 290 | 483 | ||||||||||
Balance as of December 31, 2013 | 1,730 | 3,703 | 5,433 | ||||||||||
Changes during 2014: | |||||||||||||
Impairment (See B. below) | - | (879 | ) | (879 | ) | ||||||||
Translation differences | (186 | ) | (327 | ) | (513 | ) | |||||||
Balance as of December 31, 2014 | 1,544 | 2,497 | 4,041 | ||||||||||
(*) | The accumulated amount of impairment loss as of January 1, 2013, December 31, 2013 and December 31, 2014 was US$ 2,452,000, US$ 5,545,000 and US$ 6,424,000, respectively. | ||||||||||||
OTHER_CURRENT_LIABILITIES_Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
OTHER CURRENT LIABILITIES [Abstract] | |||||||||
Summary of Other Current Liabilities | US dollars | ||||||||
December 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Accrued expenses (*) | 7,919 | 13,620 | |||||||
Accrued payroll and related taxes | 5,692 | 4,597 | |||||||
Government institutions | 6,009 | 7,524 | |||||||
Related party | 98 | 133 | |||||||
Accrued dividend | 4,639 | 3,616 | |||||||
Others | 896 | 786 | |||||||
25,253 | 30,276 | ||||||||
(*) | As of December 31, 2013 includes approximately US $5 million, regarding the legal fees resulting from the claim described in Note 11A3. |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
STOCKHOLDERS' EQUITY [Abstract] | ||||||
Schedule of Common Stock | December 31, 2013 and 2012 | Registered | Issued and fully paid | |||
Ordinary shares of NIS 0.33⅓ each | 60,000,000 | 23,475,431 |
OTHER_EXPENSES_NET_Tables
OTHER EXPENSES, NET (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
OTHER EXPENSES, NET [Abstract] | |||||||||||||
Schedule of Other Expenses, Net | US dollars | ||||||||||||
Year ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Adjustment of purchase price of subsidiary sold (1) | - | 200 | - | ||||||||||
Impairment of goodwill and intangible assets (2) | 922 | 4,620 | 672 | ||||||||||
Write-off of account receivable in respect of sale of subsidiary (3) | - | - | 484 | ||||||||||
Other | (66 | ) | (60 | ) | 461 | ||||||||
856 | 4,760 | 1,617 | |||||||||||
-1 | See Note 11A1. | ||||||||||||
-2 | See Note 7 and 8. | ||||||||||||
-3 | During April 2012, the Company sold its entire holding in the subsidiary Ituran Cellular Communication Ltd. for US$ 0.3 million in cash and for an additional amount of approximately US$ 0.5 million that was required to be paid soon thereafter. However, during late 2012, the acquirer entered into liquidation proceedings by its creditors and therefore due to the significant uncertainty regarding the collection of this receivable, the entire amount was written-off. |
FINANCING_INCOME_NET_Tables
FINANCING INCOME, NET (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
FINANCING INCOME, NET [Abstract] | |||||||||||||
Schedule of Financing Income, Net | US dollars | ||||||||||||
Year ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Short-term interest expenses, commissions and other | 309 | (1,201 | ) | (873 | ) | ||||||||
Gains in respect of marketable securities | 133 | - | 2 | ||||||||||
Interest expenses in respect of long-term loans | - | (4 | ) | (8 | ) | ||||||||
Interest income in respect of deposit | 982 | 1,998 | 1,770 | ||||||||||
Exchange rate differences and others, net | 280 | (555 | ) | 96 | |||||||||
1,704 | 238 | 987 |
INCOME_TAX_Tables
INCOME TAX (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
INCOME TAX [Abstract] | |||||||||||||
Schedule of Components of Income Taxes | US dollars | ||||||||||||
Year ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Income taxes (tax benefit): | |||||||||||||
Current taxes: | |||||||||||||
In Israel | 7,564 | 6,060 | 4,896 | ||||||||||
Outside Israel | 7,630 | 8,194 | 6,013 | ||||||||||
15,194 | 14,254 | 10,909 | |||||||||||
Deferred taxes: | |||||||||||||
In Israel | (471 | ) | (503 | ) | (249 | ) | |||||||
Outside Israel | (432 | ) | (1,309 | ) | 1,204 | ||||||||
(903 | ) | (1,812 | ) | 955 | |||||||||
Taxes in respect of prior years: | |||||||||||||
In Israel | - | - | (126 | ) | |||||||||
Outside Israel | (45 | ) | 5 | (48 | ) | ||||||||
(45 | ) | 5 | (174 | ) | |||||||||
14,246 | 12,447 | 11,690 | |||||||||||
Schedule of Income Tax Reconciliation | US dollars | ||||||||||||
Year ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
Pretax income | 47,574 | 38,002 | 37,689 | ||||||||||
Statutory tax rate | 26.5 | % | 25 | % | 25 | % | |||||||
Tax computed at the ordinary tax rate | 12,607 | 9,500 | 9,422 | ||||||||||
Nondeductible expenses | 757 | 1,701 | 418 | ||||||||||
Losses in respect of which no deferred taxes were generated (including reduction of deferred tax assets recorded in prior period) | (304 | ) | 137 | 1,087 | |||||||||
Deductible financial expenses recorded to other comprehensive income | (365 | ) | (312 | ) | (244 | ) | |||||||
Taxes in respect of prior years | 45 | 5 | (174 | ) | |||||||||
Tax adjustment in respect of different tax rates | 1,662 | 1,877 | 1,734 | ||||||||||
Taxes in respect of withholding at the source from royalties and dividends | 615 | 817 | 853 | ||||||||||
Adjustment in respect of tax rate deriving from “approved enterprises” | (558 | ) | (467 | ) | (233 | ) | |||||||
Others | (213 | ) | (811 | ) | (1,173 | ) | |||||||
14,246 | 12,447 | 11,690 | |||||||||||
Summary of Deferred Taxes | |||||||||||||
Composition: | |||||||||||||
US dollars | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||
Deferred taxes included in other current assets: | |||||||||||||
Provision for employee related obligations | 130 | 139 | |||||||||||
Provision for legal obligation and other | 3,519 | 3,553 | |||||||||||
3,649 | 3,692 | ||||||||||||
Composition: | |||||||||||||
US dollars | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||
Long-term deferred income taxes: | |||||||||||||
Provision for employee related obligations | 678 | 533 | |||||||||||
Carry forward tax losses and foreign tax credit | 3,223 | 4,029 | |||||||||||
Temporary differences, net | 1,010 | 1,982 | |||||||||||
4,911 | 6,544 | ||||||||||||
Valuation allowance | (2,175 | (2,979 | ) | ||||||||||
2,736 | 3,565 | ||||||||||||
Composition: | |||||||||||||
US dollars | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||
Deferred income taxes included in long-term investments and other assets | 2,886 | 3,781 | |||||||||||
Deferred income taxes included in long-term liabilities | (150 | ) | (216 | ) | |||||||||
2,736 | 3,565 | ||||||||||||
Schedule of Income Before Income Taxes | US dollars | ||||||||||||
Year ended December 31, | |||||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||||
The Company and its Israeli subsidiaries | 26,021 | 17,296 | 20,060 | ||||||||||
Non-Israeli subsidiaries | 21,553 | 20,706 | 17,629 | ||||||||||
47,574 | 38,002 | 37,689 | |||||||||||
Changes in Unrecognized Tax Benefits | US dollars | ||||||||||||
(in thousands) | |||||||||||||
Balance at January 1, 2013 | 439 | ||||||||||||
Translations differences related to the current year | 33 | ||||||||||||
Balance at December 31, 2013 | 472 | ||||||||||||
Translations differences related to the current year | (51 | ||||||||||||
Balance at December 31, 2014 | 421 |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
EARNINGS PER SHARE [Abstract] | ||||||||
Schedule of Net Income Used in Earnings Per Share | US dollars | |||||||
Year ended December 31, | ||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||
Net income attributable to stockholder's used for the computation of basic and diluted earnings per share | 30,429 | 23,762 | 24,880 | |||||
Schedule of Weighted Average Shares Used in Earnings Per Share | Number of shares | |||||||
Year ended December 31, | ||||||||
(in thousands) | 2014 | 2013 | 2011 | |||||
Weighted average number of shares used in the computation of basic and diluted earnings per share | 20,968 | 20,968 | 20,968 |
RELATED_PARTIES_Tables
RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
RELATED PARTIES [Abstract] | |
Schedule of Target-based Cash Incentives | 24,001 - 27,500 20% |
27,501-31,000 45% | |
31,001-35,000 75% | |
35,001-39,000 110% | |
Above 39,001 150% | |
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
SEGMENT REPORTING [Abstract] | ||||||||
Schedule of Reportable Operating Segments | US dollars | |||||||
(in thousands) | Location based | Wireless | Total | |||||
services | communications | |||||||
products | ||||||||
Year ended December 31, 2014 | ||||||||
Revenues | 133,692 | 48,435 | 182,127 | |||||
Operating income | 42,603 | 3,267 | 45,870 | |||||
Assets | 63,795 | 11,094 | 74,889 | |||||
Goodwill | 1,544 | 2,497 | 4,041 | |||||
Expenditures for assets | 12,574 | 598 | 13,172 | |||||
Depreciation and amortization | 8,920 | 148 | 9,068 | |||||
Impairment of goodwill and intangible assets | 34 | 888 | 922 | |||||
Year ended December 31, 2013 | ||||||||
Revenues | 126,951 | 43,216 | 170,167 | |||||
Operating income (loss) | 38,470 | (540 | ) | 37,930 | ||||
Assets | 66,300 | 10,564 | 76,864 | |||||
Goodwill | 1,730 | 3,703 | 5,433 | |||||
Expenditures for assets | 12,312 | 264 | 12,576 | |||||
Depreciation and amortization | 9,360 | 358 | 9,718 | |||||
Impairment of goodwill and intangible assets | 2,816 | 1,804 | 4,620 | |||||
Year ended December 31, 2012 | ||||||||
Revenues | 114,565 | 35,753 | 150,318 | |||||
Operating income | 29,850 | 97 | 29,947 | |||||
Assets | 65,332 | 10,629 | 75,961 | |||||
Goodwill | 3,692 | 4,351 | 8,043 | |||||
Expenditures for assets | 7,636 | 77 | 7,713 | |||||
Depreciation and amortization | 11,471 | 130 | 11,601 | |||||
Reconciliation of Reporting Information from Segments to Consolidated Totals | US dollars | |||||||
Year ended December 31, | ||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||
Total revenues of reportable segment and consolidated revenues | 182,127 | 170,167 | 150,318 | |||||
Operating income | ||||||||
Total operating income for reportable segments | 45,870 | 37,930 | 29,947 | |||||
Unallocated amounts: | ||||||||
Other income (expenses) income | - | (166 | ) | 6,755 | ||||
Financing income, net | 1,704 | 238 | 987 | |||||
Consolidated income before taxes on income | 47,574 | 38,002 | 37,689 | |||||
Assets | ||||||||
Total assets for reportable segments (*) | 78,930 | 82,297 | 84,004 | |||||
Other unallocated amounts: | ||||||||
Current assets | 57,159 | 61,530 | 48,512 | |||||
Investments in affiliated and other companies | 1,095 | 1,511 | 242 | |||||
Property and equipment, net | 7,786 | 8,644 | 9,187 | |||||
Other unallocated amounts | 7,367 | 6,560 | 5,394 | |||||
Consolidated total assets (at year end) | 152,337 | 160,542 | 147,339 | |||||
Other significant items | ||||||||
Total expenditures for assets of reportable segments | 13,172 | 12,576 | 7,713 | |||||
Unallocated amounts | 2,021 | 1,387 | 2,320 | |||||
Consolidated total expenditures for assets | 15,193 | 13,963 | 10,033 | |||||
Total depreciation, amortization and impairment for reportable segments | 9,990 | 14,338 | 11,601 | |||||
Unallocated amounts | 2,229 | 1,858 | 3,070 | |||||
Consolidated total depreciation and amortization | 12,219 | 16,196 | 14,671 | |||||
(*) | Including goodwill. | |||||||
Schedule of Revenues and Long-Lived Assets by Geographical Areas | Revenues | |||||||
Year ended December 31, | ||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||
Israel | 90,061 | 83,331 | 70,595 | |||||
United States | 7,568 | 4,876 | 4,749 | |||||
Brazil | 66,462 | 63,454 | 58,242 | |||||
Argentina | 13,792 | 15,190 | 13,546 | |||||
Others | 4,244 | 3,316 | 3,186 | |||||
Total | 182,127 | 170,167 | 150,318 | |||||
Property and equipment, net | ||||||||
December 31, | ||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||
Israel | 8,563 | 9,051 | 9,440 | |||||
United States | 120 | 155 | 146 | |||||
Brazil | 17,801 | 19,178 | 20,132 | |||||
Argentina | 5,424 | 4,162 | 4,438 | |||||
Total | 31,908 | 32,546 | 34,156 | |||||
- | Revenues were attributed to countries based on customer location. | |||||||
- | Property and equipment were classified based on major geographic areas in which the Company operates. |
FINANCIAL_INSTRUMENTS_AND_RISK1
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT [Abstract] | |||||||||
Schedule of Fair Values of Derivative Instruments | Fair values of derivative instruments: | ||||||||
Asset derivatives | |||||||||
As of December 31, 2014 | Thousands of US dollars | ||||||||
Balance sheet | Fair | ||||||||
location | value | ||||||||
Derivatives designated as hedging instruments: | |||||||||
Foreign exchange contracts | Other Assets | 2,564 | |||||||
Liability derivatives | |||||||||
As of December 31, 2013 | Thousands of US dollars | ||||||||
Balance sheet | Fair | ||||||||
location | value | ||||||||
Derivatives designated as hedging instruments: | |||||||||
Foreign exchange contracts | Other liabilities | (568 | ) | ||||||
Amounts reclassified to statement of income: | |||||||||
Derivatives designated | Location of loss | Amount of gain | |||||||
as hedging instruments | recognized in income | recognized in income | |||||||
Year ended December 31, 2014 | Thousands of US dollars | ||||||||
Foreign exchange contracts | Cost of revenues | 68 | |||||||
Derivatives designated | Location of loss | Amount of loss | |||||||
as hedging instruments | recognized in income | recognized in income | |||||||
Year ended December 31, 2013 | Thousands of US dollars | ||||||||
Foreign exchange contracts | Cost of revenues | (295 | ) | ||||||
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis | 31-Dec-14 | ||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | ||||||
Derivatives | |||||||||
Derivatives designated as hedging instruments | - | 2,564 | - | ||||||
31-Dec-13 | |||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | ||||||
Derivatives | |||||||||
Derivatives designated as hedging instruments | - | 568 | - |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Trading gains | $133,000 | $2,000 | ||||
Allowance for doubtful accounts receivable | 2,391,000 | 1,945,000 | ||||
Intangible asset impairment loss | 43,000 | |||||
Goodwill | 4,041,000 | 5,433,000 | 8,043,000 | [1] | ||
Goodwill impairment loss | 879,000 | [2] | 3,093,000 | [2] | 672,000 | |
Severance expenses | 1,460,000 | 882,000 | 1,204,000 | |||
Advertising expenses | 6,700,000 | 7,600,000 | 6,600,000 | |||
Deferred expenses amortization period | 20 months | |||||
Minimum [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Ownership percentage, equity method | 20.00% | |||||
Maximum [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Ownership percentage, equity method | 50.00% | |||||
Certain Reporting Units [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Goodwill | 1,500,000 | 4,800,000 | ||||
Goodwill impairment loss | 900,000 | 3,100,000 | ||||
Goodwill, fair value | 700,000 | |||||
Certain Reporting Unit One [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Goodwill | 0 | 2,600,000 | ||||
Goodwill impairment loss | 3,100,000 | |||||
Goodwill, fair value | 0 | 1,700,000 | ||||
Certain Reporting Unit Two [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Goodwill | 0 | 500,000 | ||||
Goodwill, fair value | 0 | 0 | ||||
Certain Reporting Unit Three [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Goodwill | 0 | 1,700,000 | ||||
Goodwill, fair value | $0 | $0 | ||||
[1] | The accumulated amount of impairment loss as of January 1, 2013, December 31, 2013 and December 31, 2014 was US$ 2,452,000, US$ 5,545,000 and US$ 6,424,000, respectively. | |||||
[2] | During 2014, 2013 and 2012, the Company recorded an amount of US$ 879,000 US$ 3,093,000 and US$ 672,000, respectively, as impairment with respect to goodwill. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Relevant Exchange Rates) (Details) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Israel [Member] | Israel [Member] | Israel [Member] | Brazil [Member] | Brazil [Member] | Brazil [Member] | Israeli CPI [Member] | Israeli CPI [Member] | Israeli CPI [Member] | ||||
Dollar Exchange Rate of Relevant Currencies [Line Items] | ||||||||||||
Exchange rate of one US dollar | 3.889 | 3.471 | 3.733 | 2.6562 | 2.3426 | 2.0435 | 113.96 | [1] | 114.18 | [1] | 112.15 | [1] |
Increase (decrease) during the year: Exchange rate of one US dollar | 12.04% | -7.02% | -2.30% | 13.39% | -14.63% | -8.94% | -0.20% | [1] | 1.80% | [1] | 1.60% | [1] |
[1] | Based on the Index for the month ending on each balance sheet date, on the basis of 2008 average 100. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Depreciation Rates) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Operating Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 6.50% |
Operating Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 33.00% |
Office Furniture, Equipment, And Computers [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 7.00% |
Office Furniture, Equipment, And Computers [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 33.00% |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 2.50% |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 15.00% |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Description of depreciation method | Duration of the lease which |
is less or equal to useful life. | |
Majority [Member] | Operating Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 20.00% |
Majority [Member] | Operating Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 33.00% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Intangible Assets Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
GIS Database [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets finite lived, useful life | 10 years |
Customer Base [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets finite lived, useful life | 5 years |
Brand Name [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets finite lived, useful life | 15 years |
Others [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets finite lived, useful life | 3 years |
Others [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets finite lived, useful life | 10 years |
OTHER_CURRENT_ASSETS_Details
OTHER CURRENT ASSETS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
OTHER CURRENT ASSETS [Abstract] | ||||
Prepaid expenses and others | $9,779 | $9,314 | ||
Government institutions | 2,694 | 1,716 | ||
Deferred installation expenses | 2,485 | 2,905 | ||
Deferred income taxes | 3,649 | [1] | 3,692 | [1] |
Advances to suppliers | 324 | 457 | ||
Employees | 343 | 300 | ||
Forward Exchange Contracts | 1,580 | |||
Others | 1,464 | 53 | ||
Other current assets, net | $22,318 | $18,437 | ||
[1] | (*) See Note 15. |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
INVENTORIES [Abstract] | ||
Finished products | $8,845 | $11,733 |
Raw materials | 3,319 | 2,773 |
Inventory, net | $12,164 | $14,506 |
INVESTMENTS_IN_AFFILIATED_AND_1
INVESTMENTS IN AFFILIATED AND OTHER COMPANY (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | ||
Investments in affiliated company | $1,423,000 | $1,016,000 |
Investments in other company | 88,000 | 79,000 |
Ecomtrade [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage, equity method | 50.00% | |
Investments in affiliated company | 166,000 | |
Investments in affiliates, loans portion | 273,000 | |
Locationet [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage, equity method | 10.64% | |
BRINGG Delivery Technologies Ltd [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage, equity method | 27.50% | |
Payments to equity interest | $1,400,000 |
OTHER_NONCURRENT_ASSETS_Detail
OTHER NON-CURRENT ASSETS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
OTHER NON-CURRENT ASSETS [Abstract] | ||
Forward Exchange Contracts | $984 | |
Government institutions | 73 | 128 |
Deferred installation expenses | 459 | 526 |
Deposits | 575 | 368 |
Other non-current assets | $2,091 | $1,022 |
PROPERTY_AND_EQUIPMENT_NET_Nar
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
PROPERTY AND EQUIPMENT, NET [Abstract] | |||
Depreciation | $11.20 | $11.10 | $13.30 |
Additional equipment purchased | $15 | $14 | $10 |
PROPERTY_AND_EQUIPMENT_NET_Sch
PROPERTY AND EQUIPMENT, NET (Schedule of Property And Equipment, Net) (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $80,182,000 | $81,677,000 | |||
Less - accumulated depreciation and amortization | -48,274,000 | [1] | -49,131,000 | [1] | |
Property and equipment, net | 31,908,000 | 32,546,000 | 34,156,000 | ||
Operating equipment, amount subject to lease transactions | 26,000,000 | 25,800,000 | |||
Accumulated depreciation and amortization subject to lease transactions | 10,400,000 | 11,300,000 | |||
Operating Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 46,947,000 | [2] | 46,991,000 | [2] | |
Office Furniture, Equipment, And Computers [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 23,858,000 | 25,116,000 | |||
Land [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 1,022,000 | 1,022,000 | |||
Buildings [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 1,855,000 | 2,252,000 | |||
Vehicles [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 3,412,000 | 3,197,000 | |||
Leasehold Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $3,088,000 | $3,099,000 | |||
[1] | As at December 31, 2014 and 2013, an amount of US$ 10.4 million and US$ 11.3 million is subject to operating lease transactions, respectively. | ||||
[2] | As December 31, 2014 and 2013, an amount of US$ 26.0 million and US$ 25.8 million is subject to operating lease transactions, respectively. |
INTANGIBLE_ASSETS_NET_Narrativ
INTANGIBLE ASSETS, NET (Narrative) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
INTANGIBLE ASSETS, NET [Abstract] | |||
Amortization of intangible assets | $231,000 | $367,000 | $703,000 |
Estimated aggregate amortization of intangible assets - 2015 | 170,000 | ||
Estimated aggregate amortization of intangible assets - 2016 | 170,000 | ||
Estimated aggregate amortization of intangible assets - 2017 | 80,000 | ||
Estimated aggregate amortization of intangible assets - 2018 | 20,000 | ||
Estimated aggregate amortization of intangible assets - 2019 | 12,000 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets | 43,000 | ||
GIS Database [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets | 33,500 | 1,017,000 | |
Brand Name [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets | 9,500 | 511,000 | |
Location Based Services and Wireless Communications Products [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets | 1,527,000 | ||
Location Based Services [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets | 661,000 | ||
Wireless Communications Products [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets | $43,000 | $866,000 |
INTANGIBLE_ASSETS_NET_Schedule
INTANGIBLE ASSETS, NET (Schedule of Intangible Assets, Net) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amount | $10,560 | |
Accumulated amortization and impairment charges | 10,108 | |
Unamortized balance | 452 | 739 |
GIS Database [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amount | 3,889 | |
Accumulated amortization and impairment charges | 3,594 | |
Unamortized balance | 295 | 555 |
Brand Name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amount | 1,181 | |
Accumulated amortization and impairment charges | 1,049 | |
Unamortized balance | 132 | 163 |
Others [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original amount | 5,490 | |
Accumulated amortization and impairment charges | 5,465 | |
Unamortized balance | $25 | $21 |
GOODWILL_Narrative_Details
GOODWILL (Narrative) (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Goodwill [Line Items] | |||||
Goodwill impairment loss | $879,000 | [1] | $3,093,000 | [1] | $672,000 |
Accumulated impairment loss | 6,424,000 | 5,545,000 | 2,452,000 | ||
Certain Reporting Units [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill impairment loss | 900,000 | 3,100,000 | |||
Term used for projected net cash flows | 3 years | ||||
Discount rate | 16.90% | ||||
Growth rate | 0.00% | ||||
Certain Reporting Unit One [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill impairment loss | $3,100,000 | ||||
Term used for projected net cash flows | 3 years | ||||
Discount rate | 17.50% | ||||
Growth rate | 0.00% | ||||
[1] | During 2014, 2013 and 2012, the Company recorded an amount of US$ 879,000 US$ 3,093,000 and US$ 672,000, respectively, as impairment with respect to goodwill. |
GOODWILL_Schedule_Of_Goodwill_
GOODWILL (Schedule Of Goodwill) (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Goodwill [Line Items] | ||||||
Goodwill, beginning balance | $5,433,000 | $8,043,000 | [1] | |||
Impairment | -879,000 | [2] | -3,093,000 | [2] | -672,000 | |
Translation differences | -513,000 | 483,000 | ||||
Goodwill, ending balance | 4,041,000 | 5,433,000 | 8,043,000 | [1] | ||
Location Based Services [Member] | ||||||
Goodwill [Line Items] | ||||||
Goodwill, beginning balance | 1,730,000 | 3,692,000 | [1] | |||
Impairment | [2] | -2,155,000 | [2] | |||
Translation differences | -186,000 | 193,000 | ||||
Goodwill, ending balance | 1,544,000 | 1,730,000 | ||||
Wireless Communications Products [Member] | ||||||
Goodwill [Line Items] | ||||||
Goodwill, beginning balance | 3,703,000 | 4,351,000 | [1] | |||
Impairment | -879,000 | [2] | -938,000 | [2] | ||
Translation differences | -327,000 | 290,000 | ||||
Goodwill, ending balance | $2,497,000 | $3,703,000 | ||||
[1] | The accumulated amount of impairment loss as of January 1, 2013, December 31, 2013 and December 31, 2014 was US$ 2,452,000, US$ 5,545,000 and US$ 6,424,000, respectively. | |||||
[2] | During 2014, 2013 and 2012, the Company recorded an amount of US$ 879,000 US$ 3,093,000 and US$ 672,000, respectively, as impairment with respect to goodwill. |
CREDIT_FROM_BANKING_INSTITUTIO1
CREDIT FROM BANKING INSTITUTIONS (Narrative) (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
CREDIT FROM BANKING INSTITUTIONS [Abstract] | |
Unutilized short-term lines of credit | $0.50 |
OTHER_CURRENT_LIABILITIES_Deta
OTHER CURRENT LIABILITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
OTHER CURRENT LIABILITIES [Abstract] | ||||
Accrued expenses | $7,919,000 | [1] | $13,620,000 | [1] |
Accrued payroll and related taxes | 5,692,000 | 4,597,000 | ||
Government institutions | 6,009,000 | 7,524,000 | ||
Related party | 98,000 | 133,000 | ||
Accrued dividend | 4,639,000 | 3,616,000 | ||
Others | 896,000 | 786,000 | ||
Total | 25,253,000 | 30,276,000 | ||
Legal fees | $5,000,000 | |||
[1] | As of December 31, 2013 includes approximately US $5 million, regarding the legal fees resulting from the claim described in Note 11A3. |
CONTINGENT_LIABILITIES_Sale_of
CONTINGENT LIABILITIES (Sale of Telematics Wireless Ltd.) (Details) (USD $) | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||
Dec. 31, 2007 | Feb. 10, 2011 | Dec. 21, 2009 | Dec. 31, 2013 | Oct. 31, 2011 | Dec. 31, 2008 | Apr. 30, 2014 | |
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||||
Deposit in escrow, amount | $4,900,000 | ||||||
Sale of Telematics Wireless Ltd. [Member] | |||||||
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||||
Proceeds from sale of shareholdings | 80,000,000 | ||||||
Adjustment Escrow Amount [Member] | Sale of Telematics Wireless Ltd. [Member] | |||||||
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||||
Deposit in escrow, amount | 5,000,000 | ||||||
Escrow Amount [Member] | Sale of Telematics Wireless Ltd. [Member] | |||||||
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||||
Escrow deposits | 7,500,000 | ||||||
ST Ltd. [Member] | |||||||
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||||
Purchase price adjustment, arbitrator amount | 4,400,000 | ||||||
Escrow deposit disbursements | 200,000 | ||||||
Escrow deposit disbursements to purchaser | 4,650,000 | ||||||
Damages sought by purchaser | 4,300,000 | ||||||
Damages sought by purchaser although no damages were incurred | 4,300,000 | ||||||
Possible loss | 10,300,000 | ||||||
ST Ltd. [Member] | Sale of Telematics Wireless Ltd. [Member] | |||||||
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||||
Purchase price adjustment, purchaser claim amount | 10,000,000 | ||||||
Purchase price adjustment, amount recognized | 3,000,000 | ||||||
ST Ltd. [Member] | Adjustment Escrow Amount [Member] | |||||||
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||||
Escrow deposit disbursements, including interest, to purchaser | 4,400,000 | ||||||
Company [Member] | |||||||
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||||
Escrow deposit disbursements, including interest | 572,000 | 4,900,000 | |||||
Company [Member] | Escrow Amount [Member] | |||||||
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||||
Escrow deposit disbursements | $3,000,000 |
CONTINGENT_LIABILITIES_Leonard
CONTINGENT LIABILITIES (Leonardo L.P. Claim) (Details) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2011 | Jul. 25, 2012 | Jul. 25, 2012 | Jun. 13, 2011 | Jun. 13, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Oct. 31, 2011 | Oct. 31, 2011 | Jul. 25, 2012 | Jul. 25, 2012 | Dec. 31, 2012 | Dec. 31, 2010 | Jun. 13, 2011 | Jun. 13, 2011 | Jun. 13, 2011 | |
USD ($) | USD ($) | USD ($) | USD ($) | Leonardo L.P. [Member] | Leonardo L.P. [Member] | Leonardo L.P. [Member] | Leonardo L.P. [Member] | Leonardo L.P. [Member] | Leonardo L.P. [Member] | Leonardo L.P. [Member] | Leonardo L.P. [Member] | Ituran Location And Control [Member] | Ituran Location And Control [Member] | Ituran Location And Control [Member] | Ituran Location And Control [Member] | Damages Awarded Less Interest, Legal Fees, And Linkage Differences [Member] | Legal Fees [Member] | Legal Fees [Member] | |
USD ($) | ILS | USD ($) | ILS | USD ($) | USD ($) | USD ($) | ILS | USD ($) | ILS | USD ($) | USD ($) | Leonardo L.P. [Member] | Leonardo L.P. [Member] | Leonardo L.P. [Member] | |||||
USD ($) | USD ($) | ILS | |||||||||||||||||
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||||||||||||||||
Damages awarded | $22,700,000 | 78,700,000 | $9,600,000 | $300,000 | 1,200,000 | ||||||||||||||
Other non-operating income, net | 166,000 | -6,755,000 | 6,700,000 | ||||||||||||||||
Other non-operating expense | 14,700,000 | ||||||||||||||||||
Settlements of litigation obligation in connection with financial transaction | -7,462,000 | ||||||||||||||||||
Amount presented as capital notes | 5,900,000 | ||||||||||||||||||
Amount presented as capital notes, adjustment | 600,000 | ||||||||||||||||||
Deposit in escrow, amount | 4,900,000 | 22,400,000 | 81,900,000 | ||||||||||||||||
Escrow deposit disbursements | $12,200,000 | 49,700,000 | $7,400,000 | 32,200,000 | |||||||||||||||
Escrow account surplus release ratio | 60.00% | 60.00% | 40.00% | 40.00% |
CONTINGENT_LIABILITIES_Sao_Pau
CONTINGENT LIABILITIES (Sao Paulo State Revenue Services) (Details) (Sao Paulo State Revenue Services [Member]) | 0 Months Ended | 12 Months Ended | ||
Jul. 13, 2010 | Jul. 13, 2010 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | BRL | USD ($) | BRL | |
Contingent Liabilities, Liens and Guarantees [Line Items] | ||||
Possible state value added tax rate | 25.00% | 25.00% | ||
Income tax deficiency notice, amount | $22,100,000 | 36,499,984 | ||
Tax deficiency, penalties | 40,000,000 | 66,143,446 | ||
Tax deficiency, interest | 18,200,000 | 30,282,420 | ||
Aggregate sum claimed pursuant to tax deficiency | $82,700,000 | 220,000,000 |
CONTINGENT_LIABILITIES_Brazili
CONTINGENT LIABILITIES (Brazilian Internal Revenue Service) (Details) | 0 Months Ended | 12 Months Ended | |||
Oct. 01, 2005 | Jun. 24, 2010 | Jun. 24, 2010 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | Tax Assessment [Member] | Tax Assessment [Member] | Tax Assessment [Member] | Tax Assessment [Member] | |
Brazilian Internal Revenue Service [Member] | Brazilian Internal Revenue Service [Member] | Brazilian Internal Revenue Service [Member] | Brazilian Internal Revenue Service [Member] | ||
USD ($) | BRL | USD ($) | BRL | ||
Contingent Liabilities, Liens and Guarantees [Line Items] | |||||
Aggregate sum claimed pursuant to tax deficiency | $3,700,000 | 9,800,000 | |||
Amount of possible loss | 3,120,000 | 5,567,032 | |||
Offsetting amount | $2,100,000 |
CONTINGENT_LIABILITIES_Brazili1
CONTINGENT LIABILITIES (Brazilian Federal Communication Agency - Anatel) (Details) (Unfavorable Regulatory Action [Member]) | 0 Months Ended | 12 Months Ended | ||||
Oct. 29, 2014 | Oct. 29, 2014 | Oct. 20, 2011 | Oct. 20, 2011 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | BRL | USD ($) | BRL | USD ($) | BRL | |
Contingent Liabilities, Liens and Guarantees [Line Items] | ||||||
Additional tax assessment | $1,000,000 | 2,678,226 | ||||
Previous tax assessment | 1,900,000 | 3,350,165 | 1,700,000 | 4,630,000 | ||
Aggregate tax assessment | $2,700,000 | 7,300,000 |
CONTINGENT_LIABILITIES_Commitm
CONTINGENT LIABILITIES (Commitments) (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2008 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CONTINGENT LIABILITIES [Abstract] | ||||
Minimum future rentals under operating leases - 2015 | $1,900,000 | |||
Minimum future rentals under operating leases - 2016 | 1,300,000 | |||
Minimum future rentals under operating leases - 2017 | 1,100,000 | |||
Minimum future rentals under operating leases - 2018 | 1,000,000 | |||
Minimum future rentals under operating leases - 2019 | 900 | |||
Leasing fees | 2,500,000 | 2,500,000 | 2,500,000 | |
Term of Frame Product and Service Purchase Agreement | 10 years | |||
Term of any renewal period for Frame Product and Service Purchase Agreement | 12 months | |||
Aggregate amount obligated to purchase from Telematics | $4,500,000 |
STOCKHOLDERS_EQUITY_Narrative_
STOCKHOLDERS' EQUITY (Narrative) (Details) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 13 Months Ended | ||||||||
In Thousands, except Share data, unless otherwise specified | Feb. 21, 2012 | Feb. 28, 2015 | Feb. 28, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2015 | Jan. 31, 2015 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2013 |
USD ($) | ILS | USD ($) | USD ($) | USD ($) | USD ($) | ILS | USD ($) | ILS | USD ($) | ILS | ||
STOCKHOLDERS' EQUITY [Abstract] | ||||||||||||
Treasury stock acquired | 2,507,314 | 2,507,314 | 2,507,314 | |||||||||
Percentage of outstanding stock in treasury stock | 10.70% | 10.70% | 10.70% | |||||||||
Dividend rate as a percentage of net profits | 50.00% | |||||||||||
Dividend paid | $7,000 | 27,300 | $15,697 | $13,502 | $33,308 | $20,500 | 72,400 | $17,200 | 61,100 | $36,100 | 135,400 | |
Cash dividend declared, value per share | $0.33 | |||||||||||
Dividends payable date | 2015-04 | 2015-04 |
STOCKHOLDERS_EQUITY_Schedule_o
STOCKHOLDERS' EQUITY (Schedule of Common Stock) (Details) (ILS) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
STOCKHOLDERS' EQUITY [Abstract] | |||
Ordinary shares, par value | 0.3333 | 0.3333 | 0.3333 |
Ordinary shares, registered | 60,000,000 | 60,000,000 | 60,000,000 |
Ordinary shares, issued and fully paid | 23,475,431 | 23,475,431 | 23,475,431 |
OTHER_EXPENSES_NET_Details
OTHER EXPENSES, NET (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||||
Apr. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
OTHER EXPENSES, NET [Abstract] | |||||||
Adjustment of purchase price of subsidiary sold (1) | [1] | $200,000 | [1] | [1] | |||
Impairment of goodwill and intangible assets (2) | 922,000 | [2] | 4,620,000 | [2] | 672,000 | [2] | |
Write-off of account receivable in respect of sale of subsidiary (3) | [3] | [3] | 484,000 | [3] | |||
Other | -66,000 | -60,000 | 461,000 | ||||
Other expenses, net | 856,000 | 4,760,000 | 1,617,000 | ||||
Cash received from sale of subsidiary | 300,000 | ||||||
Debt write-off | $500,000 | ||||||
[1] | See Note 11A1. | ||||||
[2] | See Note 7 and 8. | ||||||
[3] | During April 2012, the Company sold its entire holding in the subsidiary Ituran Cellular Communication Ltd. for US$ 0.3 million in cash and for an additional amount of approximately US$ 0.5 million that was required to be paid soon thereafter. However, during late 2012, the acquirer entered into liquidation proceedings by its creditors and therefore due to the significant uncertainty regarding the collection of this receivable, the entire amount was written-off. |
FINANCING_INCOME_NET_Details
FINANCING INCOME, NET (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
FINANCING INCOME, NET [Abstract] | |||
Short-term interest expenses, commissions and other | $309 | ($1,201) | ($873) |
Gains in respect of marketable securities | 133 | 2 | |
Interest expenses in respect of long-term loans | -4 | -8 | |
Interest income in respect of deposit | 982 | 1,998 | 1,770 |
Exchange rate differences and others, net | 280 | -555 | 96 |
Financing income, net | $1,704 | $238 | $987 |
INCOME_TAX_Narrative_Details
INCOME TAX (Narrative) (Details) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 04, 2014 | Dec. 31, 2014 | Aug. 04, 2014 | Dec. 31, 2014 | Aug. 04, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Aug. 04, 2014 |
ILS | Israel [Member] | Israel [Member] | United States [Member] | 2012 [Member] | 2012 [Member] | 2012 [Member] | 2013 [Member] | 2014 [Member] | 2010 [Member] | ||||
USD ($) | USD ($) | USD ($) | Israel [Member] | Scenario, Actual [Member] | Preferred Company [Member] | Preferred Company [Member] | Preferred Company [Member] | Israel [Member] | |||||
Investment Law [Member] | Investment Law [Member] | Investment Law [Member] | |||||||||||
Income Taxes [Line Items] | |||||||||||||
Minimum percentage of annual income which is derived from export considered for application of reduced corporate tax rate | 25.00% | ||||||||||||
Tax rate applicable to the Company | 26.50% | 25.00% | 25.00% | 25.00% | 15.00% | 12.50% | 16.00% | ||||||
Year under examination | 2012 | 2010 | |||||||||||
Income tax liability for prior year tax assessments | 36 | $10.50 | |||||||||||
Carry forward tax losses | $0.80 | $13.60 | |||||||||||
Carry forward tax losses, expiration | 31-Dec-22 | ||||||||||||
Tax rate on capital gains | 25.00% | ||||||||||||
Tax rate applicable to betterment | 25.00% |
INCOME_TAX_Schedule_of_Compone
INCOME TAX (Schedule of Components of Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
INCOME TAX [Abstract] | |||
Current taxes: In Israel | $7,564 | $6,060 | $4,896 |
Current taxes: Outside Israel | 7,630 | 8,194 | 6,013 |
Current taxes | 15,194 | 14,254 | 10,909 |
Deferred taxes: In Israel | -471 | -503 | -249 |
Deferred taxes: Outside Israel | -432 | -1,309 | 1,204 |
Deferred tax expense (benefit) | -903 | -1,812 | 955 |
Taxes in respect of prior years: In Israel | -126 | ||
Taxes in respect of prior years: Outside Israel | -45 | 5 | -48 |
Taxes in respect of prior years | -45 | 5 | -174 |
Income tax expense (benefit) | $14,246 | $12,447 | $11,690 |
INCOME_TAX_Schedule_of_Income_
INCOME TAX (Schedule of Income Tax Reconciliation) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
INCOME TAX [Abstract] | |||
Pretax income | $47,574 | $38,002 | $37,689 |
Statutory tax rate | 26.50% | 25.00% | 25.00% |
Tax computed at the ordinary tax rate | 12,607 | 9,500 | 9,422 |
Nondeductible expenses | 757 | 1,701 | 418 |
Losses in respect of which no deferred taxes were generated (including reduction of deferred tax assets recorded in prior period) | -304 | 137 | 1,087 |
Deductible financial expenses recorded to other comprehensive income | -365 | -312 | -244 |
Taxes in respect of prior years | -45 | 5 | -174 |
Tax adjustment in respect of different tax rates | 1,662 | 1,877 | 1,734 |
Taxes in respect of withholding at the source from royalties and dividends | 615 | 817 | 853 |
Adjustment in respect of tax rate deriving from "approved enterprises" | -558 | -467 | -233 |
Others | -213 | -811 | -1,173 |
Income tax expense (benefit) | $14,246 | $12,447 | $11,690 |
INCOME_TAX_Summary_of_Deferred
INCOME TAX (Summary of Deferred Taxes) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
INCOME TAX [Abstract] | ||||
Provision for employee related obligations, current | $130 | $139 | ||
Provision for legal obligation, current | 3,519 | 3,553 | ||
Deferred taxes included in other current assets | 3,649 | [1] | 3,692 | [1] |
Provision for employee related obligations, non-current | 678 | 533 | ||
Carry forward tax losses and foreign tax credit, non-current | 3,223 | 4,029 | ||
Temporary differences, net, non-current | 1,010 | 1,982 | ||
Gross deferred income taxes, non-current | 4,911 | 6,544 | ||
Valuation allowance, non-current | -2,175 | -2,979 | ||
Deferred income taxes, non-current | $2,736 | $3,565 | ||
[1] | (*) See Note 15. |
INCOME_TAX_Schedule_of_Deferre
INCOME TAX (Schedule of Deferred Taxes Balance Sheet Location) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent Classification [Abstract] | ||
Deferred income taxes included in long-term investments and other assets | $2,886 | $3,781 |
Deferred income taxes included in long-term liabilities | -150 | -216 |
Deferred income taxes, non-current | $2,736 | $3,565 |
INCOME_TAX_Schedule_of_Income_1
INCOME TAX (Schedule of Income Before Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
INCOME TAX [Abstract] | |||
The Company and its Israeli subsidiaries | $26,021 | $17,296 | $20,060 |
Non-Israeli subsidiaries | 21,553 | 20,706 | 17,629 |
Income before income tax | $47,574 | $38,002 | $37,689 |
INCOME_TAX_Changes_in_Unrecogn
INCOME TAX (Changes in Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
INCOME TAX [Abstract] | ||
Balance | $472 | $439 |
Translations differences related to the current year | -51 | 33 |
Balance | $421 | $472 |
EARNINGS_PER_SHARE_Schedule_of
EARNINGS PER SHARE (Schedule of Net Income Used in Earnings Per Share) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
EARNINGS PER SHARE [Abstract] | |||
Net income attributable to stockholder's used for the computation of basic and diluted earnings per share | $30,429 | $23,762 | $24,880 |
EARNINGS_PER_SHARE_Schedule_of1
EARNINGS PER SHARE (Schedule of Weighted Average Shares Used in Earnings Per Share) (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
EARNINGS PER SHARE [Abstract] | |||
Weighted average number of shares used in the computation of basic and diluted earnings per share | 20,968 | 20,968 | 20,968 |
RELATED_PARTIES_Details
RELATED PARTIES (Details) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | |
Tzivtit Insurance [Member] | Tzivtit Insurance [Member] | Tzivtit Insurance [Member] | Tzivtit Insurance [Member] | A. Sheratzky Holdings [Member] | A. Sheratzky Holdings [Member] | A. Sheratzky Holdings [Member] | Basic Insurance Policies [Member] | Basic Insurance Policies [Member] | Directors And Officers Insurance Policies [Member] | Directors And Officers Insurance Policies [Member] | Izzy Sheratzky [Member] | Izzy Sheratzky [Member] | Izzy Sheratzky [Member] | Izzy Sheratzky [Member] | Eyal Sheratzky [Member] | Eyal Sheratzky [Member] | Eyal Sheratzky [Member] | Eyal Sheratzky [Member] | Nir Sheratzky [Member] | Nir Sheratzky [Member] | Nir Sheratzky [Member] | Nir Sheratzky [Member] | Eyal Sheratzky And Nir Sheratzky[Member] | Yehuda Kahane [Member] | Yehuda Kahane [Member] | Yehuda Kahane [Member] | Yehuda Kahane [Member] | Gil Sheratzky [Member] | Gil Sheratzky [Member] | Gil Sheratzky [Member] | Gil Sheratzky [Member] | Gil Sheratzky [Member] | Gil Sheratzky [Member] | Gil Sheratzky [Member] | Mr. Avner Kurz [Member] | Mr. Avner Kurz [Member] | Mr. Avner Kurz [Member] | Mr. Avner Kurz [Member] | Maximum [Member] | |
USD ($) | ILS | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Tzivtit Insurance [Member] | Tzivtit Insurance [Member] | Tzivtit Insurance [Member] | Tzivtit Insurance [Member] | A. Sheratzky Holdings [Member] | A. Sheratzky Holdings [Member] | A. Sheratzky Holdings [Member] | A. Sheratzky Holdings [Member] | A. Sheratzky Holdings [Member] | A. Sheratzky Holdings [Member] | ORAS Capital Ltd. [Member] | ORAS Capital Ltd. [Member] | A. Sheratzky Holdings [Member] | A. Sheratzky Holdings [Member] | Galnir Management and Investments Ltd. [Member] | Galnir Management and Investments Ltd. [Member] | A. Sheratzky Holdings [Member] | USD ($) | ILS | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | E-Com Global Electronic Commerce Lt. [Member] | E-Com Global Electronic Commerce Lt. [Member] | ZERO-TO-ONE S.B.L. INVESTMENTS LTD. [Member] | ZERO-TO-ONE S.B.L. INVESTMENTS LTD. [Member] | USD ($) | USD ($) | USD ($) | Ituran Sistemas de Monitoramento Ltda [Member] | Eyal Sheratzky [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ILS | President and Director [Member] | President and Director [Member] | USD ($) | ILS | USD ($) | ILS | USD ($) | ILS | USD ($) | ILS | USD ($) | ILS | USD ($) | ILS | USD ($) | ||||||||||||||||||||
USD ($) | ILS | |||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Payments for insurance policies | $324,000 | $303,000 | $189,000 | $193,000 | ||||||||||||||||||||||||||||||||||||
Related party commission from insurance company | 52,000 | 187,000 | 80,000 | 72,000 | ||||||||||||||||||||||||||||||||||||
Monthly cost | 25,000 | 98,000 | 57,900 | 225,000 | 12,600 | 48,892 | 45,000 | 175,000 | 12,700 | 49,307 | 45,000 | 175,000 | 3,900 | 15,000 | 6,400 | 25,000 | 32,000 | 125,000 | 8,000 | |||||||||||||||||||||
Percentage of increase in profit available based on agreement | 2.00% | 2.00% | ||||||||||||||||||||||||||||||||||||||
Percentage of pretax income available based on employment agreement | 5.00% | 5.00% | 1.00% | 1.00% | ||||||||||||||||||||||||||||||||||||
Term of agreement | 2 years | 2 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | |||||||||||||||||||||||||||
Term of automatic extension | 2 years | 2 years | 2 years | |||||||||||||||||||||||||||||||||||||
Notice required to terminate agreement | 180 days | 180 days | 180 days | 180 days | 180 days | 180 days | 180 days | 180 days | 2 months | 2 months | 180 days | |||||||||||||||||||||||||||||
Threshold term agreement for Israeli law | 3 years | 3 years | ||||||||||||||||||||||||||||||||||||||
Aggregate amounts paid | 793,000 | 3,470,000 | 2,691,000 | 62,000 | 59,000 | 56,000 | 1,131,000 | 145,000 | 196,000 | 80,000 | 81,105 | 99,771 | ||||||||||||||||||||||||||||
Vacation and sick days | 25 days | 25 days | 25 days | 25 days | 25 days | 25 days | 25 days | 25 days | ||||||||||||||||||||||||||||||||
Payment to related party for services | $2,387,000 | $1,552,000 | $1,418,000 | $948,000 |
RELATED_PARTIES_Schedule_of_Ta
RELATED PARTIES (Schedule of Target-based Cash Incentives) (Details) (Executive Offices Holders [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Minimum [Member] | |
Related Party Transaction [Line Items] | |
Profit-Before-Tax Targets | $24,000 |
Level of incentive | 15.00% |
Profit Before Tax Targets Range One [Member] | |
Related Party Transaction [Line Items] | |
Level of incentive | 20.00% |
Profit Before Tax Targets Range One [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Profit-Before-Tax Targets | 24,001 |
Profit Before Tax Targets Range One [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Profit-Before-Tax Targets | 27,500 |
Profit Before Tax Targets Range Two [Member] | |
Related Party Transaction [Line Items] | |
Level of incentive | 45.00% |
Profit Before Tax Targets Range Two [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Profit-Before-Tax Targets | 27,501 |
Profit Before Tax Targets Range Two [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Profit-Before-Tax Targets | 31,000 |
Profit Before Tax Targets Range Three [Member] | |
Related Party Transaction [Line Items] | |
Level of incentive | 75.00% |
Profit Before Tax Targets Range Three [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Profit-Before-Tax Targets | 31,001 |
Profit Before Tax Targets Range Three [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Profit-Before-Tax Targets | 35,000 |
Profit Before Tax Targets Range Four [Member] | |
Related Party Transaction [Line Items] | |
Level of incentive | 110.00% |
Profit Before Tax Targets Range Four [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Profit-Before-Tax Targets | 35,001 |
Profit Before Tax Targets Range Four [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Profit-Before-Tax Targets | 39,000 |
Profit Before Tax Targets Range Five [Member] | |
Related Party Transaction [Line Items] | |
Level of incentive | 150.00% |
Profit Before Tax Targets Range Five [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Profit-Before-Tax Targets | $39,001 |
RELATED_PARTIES_Narrative_Cash
RELATED PARTIES (Narrative - Cash Incentives) (Details) (Executive Offices Holders [Member], USD $) | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 |
Related Party Transaction [Line Items] | |
Cash incentive award, terms | since the date of its approval (an "Examined Period"), as compared to the TA 100 Index's Yield over such Examined Period; and to the extent that the Company's Stock Yield exceeds the TA 100 Index's Yield for such period, each of the Executive Office Holders shall receive an amount equal to 50% of his monthly Cost of Pay for each 1% of excess return (in percentage points' terms), or a relative amount in the event of a partial excess return. |
Percentage of monthly Cost of Pay for each 1% of excess return | 50.00% |
Excess return percentage | 1.00% |
Shares granted | 0 |
Maximum payment term after the termination of service/employment | 30 days |
EBITDA''s Threshold (as a percent) | 10.00% |
Prior notice period for amount of grants under special circumstances | 60 days |
Maximum return period for compensation amounts | 60 days |
Minimum [Member] | |
Related Party Transaction [Line Items] | |
Level of incentive | 15.00% |
Profit before tax targets | 24,000 |
SEGMENT_REPORTING_Schedule_of_
SEGMENT REPORTING (Schedule of Segment Reporting Infomation by Segment) (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Segment Reporting Information [Line Items] | ||||||
Revenues | $182,127 | $170,167 | $150,318 | |||
Operating income (loss) | 45,870 | 37,930 | 29,947 | |||
Assets | 74,889 | 76,864 | 75,961 | |||
Goodwill | 4,041 | 5,433 | 8,043 | [1] | ||
Expenditures for assets | 13,172 | 12,576 | 7,713 | |||
Depreciation and amortization | 9,068 | 9,718 | 11,601 | |||
Impairment of goodwill and intangible assets | 922 | [2] | 4,620 | [2] | 672 | [2] |
Location Based Services [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 133,692 | 126,951 | 114,565 | |||
Operating income (loss) | 42,603 | 38,470 | 29,850 | |||
Assets | 63,795 | 66,300 | 65,332 | |||
Goodwill | 1,544 | 1,730 | 3,692 | [1] | ||
Expenditures for assets | 12,574 | 12,312 | 7,636 | |||
Depreciation and amortization | 8,920 | 9,360 | 11,471 | |||
Impairment of goodwill and intangible assets | 34 | 2,816 | ||||
Wireless Communications Products [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 48,435 | 43,216 | 35,753 | |||
Operating income (loss) | 3,267 | -540 | 97 | |||
Assets | 11,094 | 10,564 | 10,629 | |||
Goodwill | 2,497 | 3,703 | 4,351 | [1] | ||
Expenditures for assets | 598 | 264 | 77 | |||
Depreciation and amortization | 148 | 358 | 130 | |||
Impairment of goodwill and intangible assets | $888 | $1,804 | ||||
[1] | The accumulated amount of impairment loss as of January 1, 2013, December 31, 2013 and December 31, 2014 was US$ 2,452,000, US$ 5,545,000 and US$ 6,424,000, respectively. | |||||
[2] | See Note 7 and 8. |
SEGMENT_REPORTING_Reconciliati
SEGMENT REPORTING (Reconciliation of Reporting Information from Segments to Consolidated Totals) (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Segment Reporting Information [Line Items] | ||||||
Total revenues of reportable segment and consolidated revenues | $182,127 | $170,167 | $150,318 | |||
Operating Income | ||||||
Total operating income for reportable segments | 45,870 | 37,930 | 29,947 | |||
Financing income, net | -166 | 6,755 | ||||
Other income (expenses) | -856 | -4,760 | -1,617 | |||
Consolidated income before taxes on income | 47,574 | 38,002 | 37,689 | |||
Assets | ||||||
Current assets | 103,222 | 108,861 | ||||
Property and equipment, net | 31,908 | 32,546 | 34,156 | |||
Total assets | 152,337 | 160,542 | 147,339 | |||
Other significant items | ||||||
Expenditures for assets | 13,172 | 12,576 | 7,713 | |||
Asset expenditures, reportable segments and unallocated amounts | 15,193 | 13,963 | 10,033 | |||
Depreciation, amortization and impairment for reportable segments | 9,068 | 9,718 | 11,601 | |||
Depreciation and amortization | 12,219 | 16,196 | 14,671 | |||
Reportable Segment [Member] | ||||||
Operating Income | ||||||
Total operating income for reportable segments | 45,870 | 37,930 | 29,947 | |||
Assets | ||||||
Total assets | 78,930 | [1] | 82,297 | [1] | 84,004 | [1] |
Other significant items | ||||||
Expenditures for assets | 13,172 | 12,576 | 7,713 | |||
Depreciation, amortization and impairment for reportable segments | 9,990 | 14,338 | 11,601 | |||
Unallocated Amounts [Member] | ||||||
Operating Income | ||||||
Financing income, net | 1,704 | 238 | 987 | |||
Other income (expenses) | -166 | 6,755 | ||||
Assets | ||||||
Current assets | 57,159 | 61,530 | 48,512 | |||
Investments in affiliated and other companies | 1,095 | 1,511 | 242 | |||
Property and equipment, net | 7,786 | 8,644 | 9,187 | |||
Other unallocated amounts | 7,367 | 6,560 | 5,394 | |||
Other significant items | ||||||
Expenditure for assets unallocated amounts | 2,021 | 1,387 | 2,320 | |||
Depreciation and amortization, unallocated amounts | $2,229 | $1,858 | $3,070 | |||
[1] | Including goodwill. |
SEGMENT_REPORTING_Schedule_of_1
SEGMENT REPORTING (Schedule of Revenue and Long-Lived Assets by Geographical Areas) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $182,127 | $170,167 | $150,318 |
Property and equipment, net | 31,908 | 32,546 | 34,156 |
Israel [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 90,061 | 83,331 | 70,595 |
Property and equipment, net | 8,563 | 9,051 | 9,440 |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 7,568 | 4,876 | 4,749 |
Property and equipment, net | 120 | 155 | 146 |
Brazil [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 66,462 | 63,454 | 58,242 |
Property and equipment, net | 17,801 | 19,178 | 20,132 |
Argentina [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 13,792 | 15,190 | 13,546 |
Property and equipment, net | 5,424 | 4,162 | 4,438 |
Others [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $4,244 | $3,316 | $3,186 |
FINANCIAL_INSTRUMENTS_AND_RISK2
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Foreign Exchange Contract [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative notional amount | $28,500,000 | |
Derivative, term of contract | 19 months | |
Monthly notional amount | 1,500,000 | |
Designated as Hedging Instrument [Member] | Level 1 [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset | ||
Designated as Hedging Instrument [Member] | Level 2 [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset | 2,564,000 | 568,000 |
Designated as Hedging Instrument [Member] | Level 3 [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset | ||
Designated as Hedging Instrument [Member] | Other Assets [Member] | Foreign Exchange Contract [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset | 2,564,000 | |
Designated as Hedging Instrument [Member] | Other Liabilities [Member] | Foreign Exchange Contract [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability | -568,000 | |
Cost of Sales [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income on derivatives | $68,000 | ($295,000) |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (BRINGG [Member], USD $) | 12 Months Ended | 1 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 | Jan. 31, 2015 |
Subsequent Event [Line Items] | ||
Payments to equity interest | $1.40 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Ownership percentage acquired, equity method | 13.30% | |
Payments to equity interest | $1.10 |