Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Entity Central Index Key | 0001337117 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2020 |
Entity File Number | 001-32618 |
Entity Registrant Name | Ituran Location & Control Ltd. |
Entity Incorporation State Country Code | IL |
Entity Address, Address Line One | 3 Hashikma street |
Entity Address, City or Town | Azour |
Entity Address, Country | IL |
Entity Address, Postal Zip Code | 5800182 |
Title of 12(b) Security | Ordinary Shares, par value NIS 0.331/3 per share |
Trading Symbol | ITRN |
Name of Exchange on which Security is Registered | NASDAQ |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Auditor Attestation Flag | true |
Entity Common Stock, Shares Outstanding | 23,475,431 |
Business Contact [Member] | |
Contact Personnel Name | Guy Aharonov |
Entity Address, Address Line One | 3 Hashikma street |
Entity Address, City or Town | Azour |
Entity Address, Country | IL |
Entity Address, Postal Zip Code | 5800182 |
City Area Code | 972 |
Local Phone Number | 3-5571314 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Current assets | |||
Cash and cash equivalents | $ 72,183 | $ 53,964 | |
Investment in marketable securities | 6,663 | 358 | |
Accounts receivable (net of allowance for doubtful accounts) | 39,343 | 45,090 | |
Other current assets (Note 2) | 38,624 | 49,201 | |
Inventories (Note 4) | 22,622 | 25,537 | |
Total current assets | 179,435 | 174,150 | |
Long-term investments and other assets | |||
Investments in affiliated companies (Note 5A) | 908 | 1,666 | |
Investments in other companies (Note 5B) | 1,263 | 3,260 | |
Other non-current assets (Note 6) | 2,953 | 3,365 | |
Deferred income taxes (Note 17) | 11,910 | 10,385 | |
Funds in respect of employee rights upon retirement | 13,558 | 11,476 | |
Total non-current assets | 30,592 | 30,152 | |
Property and equipment, net (Note 7) | 37,653 | 45,900 | |
Operating lease right of use assets, net (Note 8) | 5,548 | 12,626 | |
Intangible assets, net (Note 9) | 19,382 | 26,321 | |
Goodwill (Note 10) | [1] | 39,862 | 50,086 |
Total assets | 312,472 | 339,235 | |
Current liabilities | |||
Credit from banking institutions (Note 11) | 20,388 | 18,110 | |
Accounts payable | 19,716 | 22,656 | |
Deferred revenues | 24,351 | 29,146 | |
Obligation to purchase non-controlling interests (Notes 1Y,3) | 10,595 | ||
Other current liabilities (Note 12) | 37,677 | 31,153 | |
Total current liabilities | 112,727 | 101,065 | |
Long-term liabilities | |||
Deferred income taxes (Note 17) | 2,494 | 2,867 | |
Loan from bank institution (Note 11B) | 34,068 | 49,803 | |
Liability for employee rights upon retirement | 19,715 | 17,000 | |
Deferred revenues | 8,536 | 9,763 | |
Operating lease liabilities, non-current | 2,692 | 10,839 | |
Other non-current liabilities | 2,341 | 241 | |
Obligation to purchase non-controlling interests (Notes 1Y,3) | 11,743 | ||
Total non-current liabilities | 69,846 | 102,256 | |
Stockholders' equity (Note 14) | |||
Share capital - ordinary shares of NIS 0.333 par value: Authorized - December 31, 2020 and 2019 - 60,000,000 shares Issued and outstanding - December 31, 2020 and 2019 - 23,475,431 shares | 1,983 | 1,983 | |
Additional paid- in capital | 78,304 | 78,680 | |
Accumulated other comprehensive income | (38,832) | (25,865) | |
Retained earnings | 127,684 | 116,479 | |
Treasury stock at cost - December 31, 2020 and 2019 - 2,662,125 shares. | (41,947) | (41,947) | |
Stockholders' equity | 127,192 | 129,330 | |
Non-controlling interests | 2,707 | 6,584 | |
Total equity | 129,899 | 135,914 | |
Total liabilities and equity | $ 312,472 | $ 339,235 | |
[1] | The accumulated amount of goodwill impairment loss as of December 31, 2020, and 2019 was US$ 29.89 million and US$ 19.39 million, respectively. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [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 | 2,662,125 | 2,662,125 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||
Revenues: | |||||
Telematics services | $ 182,944 | $ 204,728 | $ 181,357 | ||
Telematics products | 62,683 | 74,604 | 71,978 | ||
Total revenues | 245,627 | 279,332 | 253,335 | ||
Cost of revenues: | |||||
Telematics services | 81,365 | 90,158 | 70,329 | ||
Telematics products | 48,747 | 58,656 | 55,678 | ||
Total cost of revenues | 130,112 | 148,814 | 126,007 | ||
Gross profit | 115,515 | 130,518 | 127,328 | ||
Research and development expenses | 12,767 | 13,913 | 6,223 | ||
Selling and marketing expenses | 11,014 | 12,778 | 11,340 | ||
General and administrative expenses | 49,705 | 55,166 | 47,693 | ||
Impairment of goodwill (Note 10) | 10,508 | [1] | 12,292 | [2] | |
Impairment of intangible assets and other expenses (income), net (Note 9) | 3,690 | 13,715 | (306) | ||
Operating income | 27,831 | 22,654 | 62,378 | ||
Other income (expense), net (Note 15) | (272) | (26) | 13,138 | ||
Financing income, net (Note 16) | 1,480 | 576 | 717 | ||
Income before income tax | 29,039 | 23,204 | 76,233 | ||
Income tax expenses (Note 17) | (10,856) | (12,234) | (17,273) | ||
Share in gains (losses) of affiliated companies, net (Note 5A) | (842) | (3,203) | 4,219 | ||
Net income for the year | 17,341 | 7,767 | 63,179 | ||
Less: Net income attributable to non-controlling interest | (1,218) | (878) | (2,504) | ||
Net income attributable to the Company | $ 16,123 | $ 6,889 | $ 60,675 | ||
Basic and diluted earnings per share attributable to Company's stockholders | $ 0.77 | $ 0.33 | $ 2.88 | ||
Basic and diluted weighted average number of shares outstanding | 20,813 | 21,037 | 21,077 | ||
[1] | As a result of the circumstances described in note 9(**) the company recorded on June 30, 2020, a goodwill impairment in the total amount of US$ 10.5 million in connection with two reporting unit (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 3.5 years of projected net cash flows, a discount rate of 17.5% and a long-term growth rate of 0.5%. As of December 31, 2020, management preformed additional quantitative analysis and determined that no further impairment is required to be recognized. | ||||
[2] | As a result of the circumstances described in note 9(*) the company recorded on December 31, 2019, a goodwill impairment in the total amount of US$ 12.3 million in connection with two reporting units (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 discount rate of 14.9% and a long-term growth rate of 0.5%. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income for the year | $ 17,341 | $ 7,767 | $ 63,179 |
Other comprehensive gain (loss), net of tax: | |||
Foreign currency translation adjustments | (12,918) | (4,054) | (12,807) |
Unrealized gains (losses) in respect of derivative financial instruments designated for cash flow hedge | (384) | 1,615 | |
Reclassification of net gains realized to net income | (399) | (385) | |
Other comprehensive loss, net of tax | (12,918) | (4,837) | (11,577) |
Comprehensive income | 4,423 | 2,930 | 51,602 |
Less: comprehensive income attributable to non-controlling interests | (1,267) | (1,302) | (1,777) |
Comprehensive income attributable to the Company | $ 3,156 | $ 1,628 | $ 49,825 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Ordinary shares [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Income (loss) [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Purchase Price Adjustment to Be Settled in Shares [Member] | Non-controlling Interest [Member] | Total | |
Balance at Dec. 31, 2017 | $ 1,983 | $ 71,550 | $ (9,754) | $ 92,065 | $ (30,054) | $ 7,439 | $ 133,229 | ||
Balance, shares at Dec. 31, 2017 | 23,476,000 | ||||||||
Impact of change in accounting policy | (2,972) | (2,972) | |||||||
As adjusted balance at Dec. 31, 2018 | $ 1,983 | $ 71,550 | (9,754) | 89,093 | $ (30,054) | 7,439 | $ 130,257 | ||
Changes during period: | |||||||||
Issuance of treasury shares | 7,130 | 4,908 | (10,800) | 1,238 | |||||
Net income | 60,675 | 2,504 | $ 63,179 | ||||||
Other comprehensive gain (loss) | (10,850) | (727) | (11,577) | ||||||
Dividend paid to non-controlling interests | (2,709) | (2,709) | |||||||
Dividend paid | (15,366) | (15,366) | |||||||
Dividend declared | (4,822) | (4,822) | |||||||
Balance at Dec. 31, 2018 | $ 1,983 | $ 78,680 | (20,604) | 129,580 | $ (25,146) | $ (10,800) | 6,507 | 160,200 | |
Balance, shares at Dec. 31, 2018 | 23,476,000 | ||||||||
Changes during period: | |||||||||
Issuance of treasury shares | [1] | (10,800) | 10,800 | ||||||
Purchase of treasury shares | [2] | $ (6,001) | (6,001) | ||||||
Net income | 6,889 | 878 | 7,767 | ||||||
Other comprehensive gain (loss) | (5,261) | 424 | (4,837) | ||||||
Dividend paid to non-controlling interests | (1,225) | (1,225) | |||||||
Dividend paid | (14,940) | (14,940) | |||||||
Dividend declared | (5,050) | (5,050) | |||||||
Balance at Dec. 31, 2019 | $ 1,983 | 78,680 | (25,865) | 116,479 | (41,947) | 6,584 | $ 135,914 | ||
Balance, shares at Dec. 31, 2019 | 23,476,000 | 23,475,431 | |||||||
Changes during period: | |||||||||
Net income | 16,123 | 1,218 | $ 17,341 | ||||||
Other comprehensive gain (loss) | (12,967) | 49 | (12,918) | ||||||
Acquisition of non-controlling interests | (430) | (320) | (750) | ||||||
Dividend paid to non-controlling interests | (1,461) | (1,461) | |||||||
Dividend paid | (4,918) | (4,918) | |||||||
Dividend declared | (3,400) | ||||||||
Dividend declared to non-controlling interests | (3,363) | (3,363) | |||||||
Purchase of subsidiary shares from non-controlling interests | (430) | (320) | (750) | ||||||
Stock-based compensation in a subsidiary company | 54 | 54 | |||||||
Balance at Dec. 31, 2020 | $ 1,983 | $ 78,304 | $ (38,832) | $ 127,684 | $ (41,947) | $ 2,707 | $ 129,899 | ||
Balance, shares at Dec. 31, 2020 | 23,476,000 | 23,475,431 | |||||||
[1] | See Note 3 | ||||||||
[2] | See Note 14A5 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 13, 2019 | ||||
Cash flows from operating activities | |||||||
Net income for the year | $ 17,341 | $ 7,767 | $ 63,179 | ||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||
Depreciation and amortization | 18,831 | 22,843 | 14,608 | ||||
Interest and exchange rate on long term credit | (266) | 26 | 88 | ||||
Loss (gains) in respect of trading marketable securities and other investments | (4,101) | 241 | (166) | ||||
Increase in liability for employee rights upon retirement | 1,445 | 1,094 | 491 | ||||
Share in losses (gains) of affiliated companies, net | 842 | 3,203 | (4,219) | ||||
Deferred income taxes | (2,158) | (2,246) | 2,346 | ||||
Capital loss on sale of property and equipment, net | 199 | 112 | 85 | ||||
Gain from measurement of previously held interests at acquisition date fair value | [1] | (14,677) | |||||
Decrease in accounts receivable | 4,496 | 10,704 | 6,182 | ||||
Decrease (increase) in other current and non-current assets | 3,064 | 2,021 | (10,656) | ||||
Decrease in inventories | 3,120 | 3,815 | 3,580 | ||||
Decrease in accounts payable | (658) | (1,125) | (3,837) | ||||
Decrease in deferred revenues | (5,367) | (7,392) | (3,479) | ||||
Increase (decrease) in Obligation to purchase non-controlling interests | (848) | (3,215) | 519 | ||||
Impairment of goodwill | 10,508 | [2] | 12,292 | [3] | |||
Impairment of other intangible assets | 3,661 | [4] | 13,862 | [5] | |||
Increase (decrease) in other current and non-current liabilities | 9,959 | (4,323) | (780) | ||||
Net cash provided by operating activities | 60,068 | 59,679 | 53,264 | ||||
Cash flows from investment activities | |||||||
Increase in funds in respect of employee rights upon retirement, net of withdrawals | (1,148) | (1,191) | (576) | ||||
Capital expenditures | (10,234) | (18,310) | (21,744) | ||||
Investment in affiliated company | (90) | (55) | (1,250) | ||||
Investment in marketable securities | (1,102) | (8,100) | |||||
Repayment of loans from affiliated companies | 7,317 | ||||||
Proceeds from (investments in) long - term deposit | (32) | (16) | 10 | ||||
Investments in other companies | (467) | (229) | (1,517) | ||||
Proceeds from sale of property and equipment | 223 | 216 | 381 | ||||
Sale of marketable securities | 269 | 2,400 | 9,594 | ||||
Acquisition of subsidiary (Appendix A) | (68,969) | ||||||
Net cash used in investment activities | (11,479) | (18,287) | (84,854) | ||||
Cash flows from financing activities | |||||||
Repayment of long term loan | (18,157) | (8,938) | (7,994) | ||||
Receipt of long term credit from bank institution | 81,695 | ||||||
Short term credit from banking institutions | 1,186 | (2,167) | (1,004) | ||||
Acquisition of company shares purchased by a wholly owned subsidiary | (6,001) | ||||||
Purchase of shares from non-controlling interests | (750) | ||||||
Dividend paid | (9,967) | (19,848) | (20,219) | ||||
Dividend paid to non-controlling interests | (1,761) | (1,973) | (2,709) | ||||
Net cash provided by (used in) financing activities | (29,449) | (38,927) | 49,769 | ||||
Effect of exchange rate changes on cash and cash equivalents | (921) | 101 | (3,687) | ||||
Net increase in cash and cash equivalents | 18,219 | 2,566 | 14,492 | ||||
Balance of cash and cash equivalents at beginning of year | 53,964 | 51,398 | 36,906 | ||||
Balance of cash and cash equivalents at end of year | 72,183 | 53,964 | 51,398 | ||||
Supplementary information on investing and financing activities not involving cash flows: | |||||||
Long term investments and other assets | 6,500 | ||||||
Dividends declared | 3,400 | 5,050 | 4,822 | ||||
Appendix A - Acquisitions of subsidiary | |||||||
Working capital (excluding cash and cash equivalents and deferred revenues), net | $ 34,576 | ||||||
Intangible assets, net | 38,583 | ||||||
Property and equipment, net | 11,014 | ||||||
Liability for employee rights upon retirement | (1,337) | ||||||
Goodwill | 39,862 | [6] | 50,086 | [6] | 62,896 | 59,402 | |
Consideration paid by issuance of treasury stock, as adjusted | (12,038) | ||||||
Amount to be received as purchase price adjustment | 10,800 | ||||||
Deferred income taxes | 763 | ||||||
Other non-current assets | 2,132 | ||||||
Fair value of previous investments in acquired companies | (24,734) | ||||||
Deferred revenues (including current portion) | (34,048) | ||||||
Obligation to purchase non-controlling interests | (16,144) | ||||||
Net cash used to pay for the Acquisition | $ 68,969 | ||||||
Supplementary disclosure of cash flow information | |||||||
Interest paid | 1,956 | 1,788 | 1,266 | ||||
Income taxes paid, net of refunds | $ 14,402 | $ 10,376 | $ 15,533 | ||||
[1] | during 2018, as a result of the acquisition described in Note 3 the company gained control over certain companies that previously were accounted under the equity method (“JV's”) and began to include these JV's in the consolidated. The company recorded one time gain in the amount of approximately $14.7 million from measurement of the JV's at the acquisition date to fair value. | ||||||
[2] | As a result of the circumstances described in note 9(**) the company recorded on June 30, 2020, a goodwill impairment in the total amount of US$ 10.5 million in connection with two reporting unit (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 3.5 years of projected net cash flows, a discount rate of 17.5% and a long-term growth rate of 0.5%. As of December 31, 2020, management preformed additional quantitative analysis and determined that no further impairment is required to be recognized. | ||||||
[3] | As a result of the circumstances described in note 9(*) the company recorded on December 31, 2019, a goodwill impairment in the total amount of US$ 12.3 million in connection with two reporting units (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 discount rate of 14.9% and a long-term growth rate of 0.5%. | ||||||
[4] | Due to the decline in the results of Road Track (See Note 3) and the current expectation of management for further potential decrease in Road Track anticipated performance, the company performed on June 30, 2020, an impairment analysis of the intangible assets which relate directly to the operation of Road Track. Based on such analysis the company recorded an impairment charge further described below: | ||||||
[5] | Due to the decline in the results of Road Track (See Note 3) and the current expectation of management for further potential decrease in Road Track anticipated performance, the company performed on December 31, 2019, an impairment analysis of the intangible assets which relate directly to the operation of Road Track. Based on such analysis the company recorded an impairment charge further described below: | ||||||
[6] | The accumulated amount of goodwill impairment loss as of December 31, 2020, and 2019 was US$ 29.89 million and US$ 19.39 million, respectively. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. General 1. Operations 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 Telematics services and machine-to-machine Telematics products for use in stolen vehicle recovery, fleet management and other applications. On September 13, 2018 the company closed the acquisition of 81.3% of the shares of Road Track Holding S.L (“Road Track”), a telematics’ company operating primarily in the Latin American region. (See Note 3) 2. Functional currency and translation to the reporting currency The functional currency of the Company and its subsidiaries located in Israel (except those that are held through the subsidiary “Road track”) is the New Israeli Shekel (“NIS”), which is the local currency in which those entities operate. The functional currency of the foreign subsidiaries located in Brazil is the Brazilian Real and the functional currency of the rest of the subsidiaries (including Argentinian subsidiaries that operates in highly inflationary economy) is the US Dollar. Regarding the Argentinian subsidiaries see below. 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)”. Translation gains and losses resulting from changes in exchange rates used in the translation of intercompany balances that are long term investment nature (i.e. which their settlement is not planned or anticipated) are also included in other comprehensive income (loss). When an economy in which a foreign entity of the group operates, becomes highly inflationary environment (an economy with a cumulative inflation rate of approximately 100% or more over a three-year period, such as the company's subsidiaries in Argentina), the financial statements of that foreign entity are remeasured as if its functional currency is the reporting currency of its parent. F - 13 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) A. General (cont.) 2. Functional currency and translation to the reporting currency (cont.) 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 as applicable. The following table presents data regarding the dollar exchange rate of relevant currencies and the Israeli CPI: Exchange rate of one US dollar Israeli CPI (*) NIS Real At December 31, 2020 3.215 5.1967 113.84 points 2019 3.456 4.0307 114.63 points 2018 3.748 3.8748 113.95 points Increase (decrease) during the year: 2020 (6.97 )% 28.93% (0.69)% 2019 (7.79 )% 4.02% 0.60% 2018 8.10 % 17.13% 0.80% (*) 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 legal contingencies, valuation of goodwill and other intangible assets and revenue recognition and related deferred expenses (contract costs). As of December 31, 2020, the impact of the outbreak of COVID-19 continues to unfold. As a result, some of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. F - 14 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) 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 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 non-controlling 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 non-controlling 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. Marketable securities Commencing January 1, 2018 and upon the adoption of ASU 2016-01- Financial Instruments—Overall (Subtopic 825-10) "Investments - Equity Securities" According to ASC Topic 321-10, equity securities with readily determinable fair value are measured upon initial recognition and in subsequent periods at fair value with gains and losses reported periodically in earnings as financing income or expenses. The investments in debt and equity securities that were held by the Company during the reported periods and were subject to the provisions of ASC Topic 320-10 were designated by management as trading securities. Changes in fair value measurement of debt and equity securities for the years 2020, 2019 and 2018 amounted to gain (loss) of approximately US$ 11, (US$ 241) and US$ 166 thousand, respectively. E. Treasury stock Company shares held by the Company and a wholly owned 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. F - 15 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) F. 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 order to reflect the expected credit losses on accounts receivable balances. Judgment is required in the estimation of the allowance for doubtful accounts and the Company evaluates the collectability of its accounts receivable based on a combination of factors including , among other things, the past experience with customers, the length of time that the balance is past due using an aging schedule, the customer's current ability to pay and their the creditworthiness using all available information about the credit risk on such customers taking into consideration the current business environment. If it's becomes aware of a customer’s inability to meet its financial obligations, a specific allowance is recorded to reduce the net receivable to the amount reasonably believed to be collectible from such customer. Accounts receivable are written off against the allowance for uncollectible accounts when the Company determines amounts are no longer collectible. See also Note 21A. The allowance in respect of accounts receivable at December 31, 2020 and 2019 was US$ 4,111,000 and US$ 3,016,000, respectively. G. Inventories Inventories are stated at the lower of cost or net realizable value. Cost of raw materials and finished products is mainly determined on the basis of first-in, first-out (FIFO). Other method which is utilized for determining the value of inventories is the moving average. The Group regularly reviews its inventories for obsolescence and other impairment risks and reserves are established when necessary. H. Investment in affiliated companies Investments in companies in which the Group has significant influence 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. In accordance with ASC Topic 323-10-40-1, a change in the Company’s proportionate share of an investee’s equity, resulting from issuance of shares by the investee to third parties, is accounted for as if the Company had sold a proportionate share of its investment. Any gain or loss resulting from an investee’s share issuance is recognized in earnings. When the company obtain control of an affiliated company that was previously accounted for by the equity method, the investment is then remeasured at its fair value as of the date of which control was obtained and any remeasurement gain or loss is recognized in earnings. Management evaluates investments in affiliated companies, for evidence of other-than-temporary declines in value. Such evaluation is dependent on the specific facts and circumstances and includes analysis of relevant financial information (e.g. budgets, business plans, financial statements, etc.). During 2020 and 2019, no impairment was identified with respect to such affiliated companies. Investments in companies in which the company no longer has significant influence, are classified as "investments in other companies". See I. below. F - 16 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) I. Investment in other companies Equity investments without readily determinable fair values are measured at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Periodic changes in the basis of these equity investments are reported in current earnings. In addition, at each reporting period a qualitative assessment is performed to identify impairment. When a qualitative assessment indicates an impairment exists, the Company estimates the fair value of the investment and recognize in current earnings an impairment loss equal to the difference between the fair value and the carrying amount of the equity investment. During 2020, an Israeli investee have completed public registration in Israel and its shares became equity investment with readily determinable fair value. As a result, the company remeasured the investment to its fair value and recorded income in the amount of approximately $4.4 million in the consolidated statement of income under Financing income, net (see Note 16). J. 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 for accounting purposes, 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 (forward exchange contracts) which are mostly designed to hedge the cash flows expected to be paid with respect to forecasted monthly 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 were determined to qualify as cash flow hedges under ASC Topic 815. Commencing January 1, 2018, the entire changes in fair value of the derivative instruments designated for hedging purposes that were determined as qualifying for hedging purposes (including the ineffective components of the hedging relationship) 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. For all other derivative financial instruments that are not designated or qualify as hedging instruments for accounting purposes, the changes in fair value are recognized periodically in profit or loss, as incurred. However, as of December 31, 2020 and 2019, the company did not have material financial derivatives. K. Property and equipment 1. Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using 2. Rates of depreciation: % Operating equipment (mainly 20%-33%) 6.5-33 Office furniture, equipment and computers 7-33 Buildings 2.5 Vehicles 15 Leasehold improvements Duration of the lease which is less or equal to useful life. F - 17 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) L. Impairment of long-lived assets The Group’s long-lived assets (including finite-lived intangible 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 1N). M. Income taxes The Group accounts for income taxes in accordance with ASC Topic 740-10, "Income Taxes" 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. 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. N. Goodwill and intangible assets 1. Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets The company elected to perform the goodwill annual impairment test for its operating units as follows: A. An amount of approximately $ B. An amount of approximately $ As required by ASC Topic 350, the Company chooses either to perform a qualitative assessment whether the quantitative goodwill impairment test is necessary or proceeds directly to the quantitative 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 (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 quantitative goodwill impairment test. If the Company determines otherwise, no further evaluation is necessary. F - 18 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) N. Goodwill and intangible assets (cont.) 1. (cont.) With respect to goodwill impairment tests performed before the adoption of ASU 2017-04, when the Company decided or was required to perform the quantitative goodwill impairment test, the Company firstly was required to compare the fair value of the reporting unit to its carrying value ("step 1"). If the fair value of the reporting unit exceeded the carrying value of the reporting unit net assets (including the goodwill allocated to such reporting unit), goodwill was considered not to be impaired, and no further testing was required. If the carrying value was determined to exceed the fair value of the reporting unit, then the implied fair value of goodwill was determined by subtracting the fair value of all the identifiable net assets from the fair value of the reporting unit. An impairment loss was 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"). Commencing the adoption of ASU 2017-04 (which eliminated Step 2 from the goodwill impairment, see also Note 10), when the Company decides or is required to perform the quantitative goodwill impairment test, the Company compares the fair value of the reporting unit to its carrying value and an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. In the performance of the quantitative analysis 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. As of December 31, 2020, the Company had four reporting units which include goodwill (four in 2019 and two in 2018). Telematics services: Under the telematics services segment there are two reporting units with goodwill. For one of which (resulted from past acquisitions) with an allocated amount of approximately US$ 1.9 million of goodwill, the Company performed a qualitative assessment as of December 31, 2020 and 2019, 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 the second reporting unit (resulted from the acquisition described in Note 3) with an allocated amount of approximately US$ 41.8 million of goodwill (as of June 30, 2020, before the impairment test), the Company performed the annual impairment test, as of June 30, 2020 and recorded impairment of approximately US$ 9.5 million. The impairment was recorded in the consolidated statement of income under a separate line ("Impairment of goodwill"). As of December 31, 2020, the remaining balance of goodwill related to this unit is approximately US$ 32.3 million. Due to existence of negative factors during the following months until December 31,2020, the Company performed a qualitative assessment as of that date 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 unit. See Note 10. Telematics products: Under the telematics products segment there are two reporting units with goodwill, for one of which (resulted from past acquisitions) with an allocated amount of approximately US$ 2.2 million of goodwill, the Company performed a qualitative assessment as of December 31, 2020 and 2019, 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 the second reporting unit (resulted from the acquisition described in Note 3) with an allocated amount of approximately US$ 4.5 million of goodwill (as of June 30, 2020, before the impairment test), the Company performed annual impairment test, as of June 30, 2020 and recorded impairment of approximately US$ 1.0 million. The impairment was recorded in the consolidated statement of income under a separate line ("Impairment of goodwill"). F - 19 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) N. Goodwill and intangible assets (cont.) 1. (cont.) As of December 31, 2020, the remaining balance of goodwill related to this unit is approximately US$ 3.5 million. Due to existence of negative factors during the following months until December 31,2020, the Company performed a qualitative assessment as of that date 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 unit. See Note 10. 2. Intangible assets with finite live (As of December 31,2020, the Balance of intangible assets consist of As a part of the acquisition of describe in Note 3 the company identified intangible assets in a fair value (as of the acquisition date) of approximately US$ 38.6 million. As of December 31, 2020, the intangible assets are amortized as follows: Years Customer relationship 3 Technology services 5 Other 5 During 2020 and 2019 the company recorded an intangible assets impairment loss in the amount of approximately US$ 3.7 million and US$ 13.9 million, respectively. The impairment was recorded in the consolidated statement of income under "Impairment of intangible assets and other expenses". See Note 9. Recoverability of intangible assets is measured as described in Note 1L above. O. 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. P. 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 Company also has defined contribution plans for which it makes contributions to severance pay funds and appropriate insurance policies 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. Withdrawal of the reserve monies is contingent upon the fulfillment of detailed provision in the Law. 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 payments for the abovementioned policies for the years ended December 31, 2020, 2019 and 2018, amounted to US$ 1,610, US$ 1,557 and US$ 1,461 thousand, respectively. F - 20 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Q. Revenue recognition The Company and its subsidiaries generate revenue from subscriber fees for the provision of services and sales of systems and products, mainly in respect of fleet management services, stolen vehicle recovery services and other value-added services. To a lesser extent, revenues are also derived from technical support services. The Company and its subsidiaries sell the systems primarily through their direct sales force and indirectly through resellers. Revenue recognition accounting policy applied from January 1, 2018 (following the adoption of ASC Topic 606); On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) to all contracts, using the modified retrospective method. The cumulative impact of the adoption in an amount of approximately US$3 million (net of tax), was recognized as a reduction to retained earnings as of January 1, 2018. In accordance with ASC 606, the Company determines revenue recognition through the following five steps: 1. Identification of the contract, or contracts, with a customer; 2. Identification of the performance obligations in the contract; 3. Determination of the transaction price; 4. Allocation of the transaction price to the performance obligations in the contract; and 5. Recognition of revenue when, or as, the Company satisfies a performance obligation. A contract with a customer exists when all of the following criteria are met: the parties to the contract have approved it (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. For each type of contract at inception, the Company assesses the goods or service promised in a contract with a customer and identifies the performance obligations. With respect to contracts that are determined to have multiple performance obligations, such as contracts that combine product with services (mostly SVR services) and/or rights to use assets, the Company allocates the contract’s transaction price to each performance obligation using its best estimate of the relative standalone selling price of each distinct good or service in the contract. The primary method used to estimate the relative standalone selling price is expected costs of satisfying a performance obligation and an appropriate margin for that distinct good or service. Revenues are recognized when, or as, control of services or products is transferred to the customers at a point in time or over time, as applicable to each performance obligation. Revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer, excluding amounts collected on behalf of other third parties and sales taxes. F - 21 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Q. Revenue recognition (cont.) The Company does not adjust the amount of consideration for the effects of a significant financing component since the Company expects, at most contracts inception, that the period between the time of transfer of the promised goods or services to the customer and the time the customer pays for these goods or services to be generally one year or less, based on the practical expedient. The Company’s credit terms to customers are, on average, between thirty and ninety days. In accordance with ASC 606, the Company’s revenues are recognized as follows: 1. Revenues from sales of Automatic Vehicle Location ("AVL") products are recognized when the control of 2. Revenues from provision of SVR services are recognized over time, as the customers simultaneously 3. For arrangements that involve the delivery or performance of multiple products (mostly, AVL products), With respect to arrangement that are determined to have multiple performance obligations that are distinct, the Company allocates the contract’s transaction price to each performance obligation using its best estimate of the relative standalone selling price of each distinct good or service in the contract. The primary method used to estimate the relative standalone selling price is the expected costs of satisfying the performance obligation with an appropriate margin for that distinct good or service. 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 performance obligation, since the installation services element was determined not to be ‘distinct’. Accordingly, the entire contract fee for the two deliverables was recognized over time, on a straight-line basis over the subscription period. 4. Amounts earned by certain Brazilian subsidiary for arranging a bundle transaction of SVR services 5. Deferred revenues include unearned amounts received from customers (mostly for the provision of F - 22 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Q. Revenue recognition (cont.) 6. Extended warranty In the majority of countries, in which the Company operates, the statutory warranty period is one year, and the extended warranty covers periods beyond year one. Revenues from extended warranty include warranty services which were sold separately for a monthly fee, or warranty services that were determined to represent a separate performance obligation and were sold together with an AVL unit. Such revenues are recognized over the duration of the warranty periods. R. 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 related to the standard warranty period have not been material. S. Research and development costs 1. Research and development costs (other than computer software |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT ASSETS | NOTE 2 - OTHER CURRENT ASSETS US dollars December 31, (in thousands) 2020 2019 Prepaid expenses 22,996 32,679 Government institutions 6,247 5,549 Deferred installation expenses 6,993 8,405 Advances to suppliers 1,286 967 Employees 287 428 Others 815 1,173 38,624 49,201 |
ACQUISITION OF BUSINESS
ACQUISITION OF BUSINESS | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
ACQUISITION OF BUSINESS | NOTE 3 - ACQUISITION OF BUSINESS On September 13, 2018 the company closed the acquisition of 81.3% of the shares of Road Track Holding S.L (“Road Track”), a telematics’ company operating primarily in the Latin American region. The company paid the shareholders of Road Track $91.7 million for 81.3% of the company's shares, valuing the company at approximately $113 million as of the acquisition date. Of this, $75.7 million was paid in cash, through a debt facility provided by Ituran’s lending bank (See Note 11). An additional $12 million was paid in the company shares. The remaining $4 million are required to be paid out of the company’s equity as a bonus over the coming three years to the senior management of Road Track who will remain with the company through the end of that period. Therefore, such amount was reflected as a compensation expense over a period of three years after the acquisition, and not as part of the total acquisition price. The final consideration paid to the sellers was subject to downward adjustments depending on the full year 2018 performance of Road Track. Based on the aforementioned mechanism, during April 2019 an amount of 300,472 shares (valued at approximately $ 10.8 million) were transferred to our ownership. As part of the acquisition transaction, the Company is obligated to purchase the remaining 18.7% of the shares currently held by Non-controlling interests on July, 2021 (unless such date shall be accelerated in accordance with the terms of the transaction). The consideration related to such obligation will be based on a fair value estimate that will be determined at that time. Such obligation to acquire shares of a subsidiary held by Non-controlling interests at a stated future date, was determined to represent a liability under ASC Topic 480. Upon initial recognition such liability was measured at fair value in accordance with ASC Topic 480-10-30-3 at the amount of cash that would be paid under the conditions specified in the contract if the shares were repurchased immediately at the closing of the acquisition. The transaction costs in an amount of approximately US$ 1.5 million were fully recognized as an expense in the statements of comprehensive income for the year ended December 31, 2018. As part of the purchase price allocation for the acquisition, the Company recorded goodwill in the amount of $59.4 million. Goodwill reflects the value or premium of the acquisition price in excess of the fair values assigned to specific tangible and intangible assets. Goodwill has an indefinite useful life and therefore is not amortized as an expense (the goodwill balance is not deductible for income tax purposes), but is reviewed annually (or more, in certain circumstances) for impairment of its fair value to the Company. The purchase price intrinsically recognizes the benefits of the broadened depth of new markets and management team and is primarily attributable to expected synergies. See Notes 1N and 10. with respect to goodwill impairments recognized following the acquisition. In addition, the company identified intangible assets in the amount of $38.6 million. The fair value estimate of identifiable intangible assets was determined using the “income approach”, which is a valuation technique that estimates the fair value of an asset based on market participants’ expectations of the cash flows an asset would generate over its remaining useful life. See Note 9 with respect to impairment losses recognized in 2020 and 2019 with respect to such intangible assets. Upon obtaining control over Road Track, the Company previous holdings (50%) in certain entities jointly held by the Company and Road Track which were accounted for until that date by the equity method, was remeasured at its fair value and a remeasurement gain in an amount of $14.7 million was recorded. F - 28 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 3 - ACQUISITION OF BUSINESS (cont.) The amount of consideration was adjusted based (in an amount of $10.8 million) on fiscal 2018 results of Road Track business. Such amount was determined to be paid back to the company in Iturans Shares (300,472 shares out of 373,489 shares that we reissued as part of the consideration). As the purchase price adjustment was settled by receipt of the company's shares issued to the sellers, the amount to be received was presented as a deduction from equity. During April 2019 the sellers has transferred the shares back to the company. The consolidated results of operations do not include any revenues or expenses related to Road Track business on or prior to September 13, 2018, the closing date of the acquisition. For further information regarding the acquisition of Road Track, see the annual financial statements for the year ended December 31, 2018. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 - INVENTORIES US dollars December 31, (in thousands) 2020 2019 Finished products 17,626 20,665 Raw materials 4,996 4,872 22,622 25,537 |
INVESTMENTS IN AFFILIATED AND O
INVESTMENTS IN AFFILIATED AND OTHER COMPANIES | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN AFFILIATED AND OTHER COMPANIES | NOTE 5 - INVESTMENTS IN AFFILIATED AND OTHER COMPANIES A. Investment in affiliated companies US dollars December 31, (in thousands) 2020 2019 Bringg (*) 700 1,562 Lumax 208 104 908 1,666 (*) Bringg Delivery Technologies Ltd ("Bringg"). is an Israeli start-up company developing solutions for management of mobile/field workforce. B. Investment in other companies During the years 2019-2020, the company made additional investments in three Israeli companies, two of the investments were in Israeli startups (engaged in mobile and visual app development). The total investments in such companies were US$ 0.5 and US$ 0.2 million during the years ended December 31,2020 and 2019, respectively. During 2020, an Israeli investee have completed public registration in Israel and its shares became equity investment with readily determinable fair value. As a result, the company reclassified the above mention investment (in the amount of approximately US$6.5 million) from investment in other companies (under long-term investments and other assets) to investment in marketable securities (under current assets). |
OTHER NON-CURRENT ASSETS
OTHER NON-CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense and Other Assets, Noncurrent [Abstract] | |
OTHER NON-CURRENT ASSETS | NOTE 6 - OTHER NON-CURRENT ASSETS US dollars December 31, (in thousands) 2020 2019 Non-current deferred installation expenses (*) 2,674 3,049 Deposits 279 316 2,953 3,365 (*) See Note 1W. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 7 - PROPERTY AND EQUIPMENT, NET A. Property and equipment, net consists of the following: US dollars December 31, (in thousands) 2020 2019 Cost: Operating equipment (*) 47,647 59,888 Office furniture, equipment and computers 50,851 44,599 Land 1,819 1,914 Buildings 6,415 6,453 Vehicles 9,498 8,753 Leasehold improvements 9,515 8,208 125,745 129,815 Less – accumulated depreciation (**) (88,092 ) (83,915 ) Total property and equipment, net 37,653 45,900 (*) As of December 31, 2020, and 2019, an amount of US$ 29.4 million and US$ 36.3 million is subject to operating lease transactions, respectively. (**) As of December 31, 2020, and 2019, an amount of US$ 17.0 million and US$ 20.2 million is subject to operating lease transactions, respectively. B. In the years ended December 31, 2020, 2019 and 2018, depreciation expenses were US$ |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
LEASES | NOTE 8 - LEASES The company have entered into several non-cancelable operating lease agreements for real estate (mainly offices, warehouse and base stations), vehicles and certain network equipment. In addition to rent, the leases may require payment of maintenance, insurance and other operating expenses. The company's leases have original lease periods expiring between 2021 and 2028. Payments due under such lease contracts include primarily fix payments. The company do not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement (or become as such in future date). The company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. F - 30 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 8 - LEASES (cont.) The components of lease costs, lease term and discount rate are as follows: US dollars (in thousands) Year Ended December 31, 2020 Operating lease cost: Office and warehouse space 1,656 Base stations 697 Vehicle 493 Others 166 3,012 Weighted Average Remaining Lease Term (years): Office space 1.3 Base stations 5.3 Vehicle 1.3 Others 1.6 Weighted Average Discount Rate (%): Office space 5.26 Base stations 2.13 vehicle 9.17 Others 7.83 Supplemental cash flow information related to operating leases was as follows: US dollars (in Million) Year Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 3.0 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases - The following is a schedule, by years, of maturities of operating lease liabilities as of December 31, 2020: US dollars December 31, 2020 Period: 2021 2,974 2022 1,349 2023 456 2024 372 2025 328 Thereafter 436 Total operating lease payments 5,915 Less: imputed interest (367) Present value of lease liabilities 5,548 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 9 - INTANGIBLE ASSETS, NET US dollars December 31, 2018 Year ended December 31, 2019 December 31, 2019 (in thousands) Opening balance Impairment (*) Amortization Additions Translation differences Closing balance Costumer relationship 24,133 (10,914 ) (4,112 ) - - 9,107 Technology 12,100 (2,948 ) (2,549 ) 6,436 14 13,053 Others 4,215 - (1,229 ) 1,333 (158 ) 4,161 40,448 (13,862 ) (7,890 ) 7,769 (144 ) 26,321 US dollars December 31, 2019 Year ended December 31, 2020 December 31, 2020 (in thousands) Opening balance Impairment (**) Amortization (***) Additions Translation differences Closing balance Costumer relationship 9,107 (3,661 ) (2,115 ) - - 3,331 Technology 13,053 - (2,871 ) 2,992 243 13,417 Others 4,161 - (896 ) - (631 ) 2,634 26,321 (3,661 ) (5,882 ) 2,992 (388 ) 19,382 (*) Due to the decline in the results of Road Track (See Note 3) and the current expectation of management for further potential decrease in Road Track anticipated performance, the company performed on December 31, 2019, an impairment analysis of the intangible assets which relate directly to the operation of Road Track. Based on such analysis the company recorded an impairment charge further described below: 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, an impairment loss in an amount of US$ 10,914 thousand, with respect to Costumer relationship and an amount of US$ 2,948 thousand, with respect to Technology. totaling an aggregate impairment charge of US$ 13,862, that was recorded under "impairment of intangible assets and other expenses" in the consolidated statement of income. See also Note 1N. (**) Due to the decline in the results of Road Track (See Note 3) and the current expectation of management for further potential decrease in Road Track anticipated performance, the company performed on June 30, 2020, an impairment analysis of the intangible assets which relate directly to the operation of Road Track. Based on such analysis the company recorded an impairment charge further described below: 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, an impairment loss in an amount of US$ 3,661 thousand, with respect to Costumer relationship, that was recorded under "impairment of intangible assets and other expenses" in the consolidated statement of income. See also Note 1N. (***) As of December 31, 2020, the estimated aggregate amortization of intangible assets for the next five years is as follows: 2021- US$ 5,236 thousand, 2022- US$ 5,088 thousand, 2023- US$ 3,712 thousand, 2024- US$ 3,050 thousand and 2025 – US$ 2,296 thousand. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 10 - GOODWILL The changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019 are as follows: US dollars Telematics services Telematics products Total (in thousands) Balance as of January 1, 2019 55,069 7,827 62,896 Changes during 2019: Reimbursement (733 ) (80 ) (813 ) Impairment (**) (11,088 ) (1,204 ) (12,292 ) Translation differences 135 160 295 Balance as of December 31, 2019 (*) 43,383 6,703 50,086 Changes during 2020: Impairment (***) (9,479 ) (1,029 ) (10,508 ) Translation differences 248 36 284 Balance as of December 31, 2020 (*) 34,152 5,710 39,862 (*) The accumulated amount of goodwill impairment loss as of December 31, 2020, and 2019 was US$ 29.89 million and US$ 19.39 million, respectively. (**) As a result of the circumstances described in note 9(*) the company recorded on December 31, 2019, a goodwill impairment in the total amount of US$ 12.3 million in connection with two reporting units (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 discount rate of 14.9% and a long-term growth rate of 0.5%. (***) As a result of the circumstances described in note 9(**) the company recorded on June 30, 2020, a goodwill impairment in the total amount of US$ 10.5 million in connection with two reporting unit (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 3.5 years of projected net cash flows, a discount rate of 17.5% and a long-term growth rate of 0.5%. As of December 31, 2020, management preformed additional quantitative analysis and determined that no further impairment is required to be recognized. |
CREDIT FROM BANKING INSTITUTION
CREDIT FROM BANKING INSTITUTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
CREDIT FROM BANKING INSTITUTIONS | NOTE 11 - CREDIT FROM BANKING INSTITUTIONS A. Short term loans: US dollars December 31, (in thousands) 2020 2019 Short-term loans - linked to the Mexican Pezo 920 - Current maturities of long-term loan (Note 11B) 19,468 18,110 20,388 18,110 B. Long term loan: In August 2018, the company signed on Loan Agreement (the “Loan agreement”) with commercial Israeli bank (the “Bank”) under which the company has received an amount of approximately $81.7 million (296 million Nis) (the “Loan”) from the bank for a period of 5-years that bears an annual interest rate of Prime rate (as of December 31, 2020 the prime rate was 1.6%) + 0.53%. In December 2018 the company repaid to the bank in an early repayment an amount of approximately $8.0 million (30 million NIS). According to the loan agreement the company is obligated to comply with the following covenants (the “Loan Covenants”): • Equity to total assets Ratio - The Ratio will not be less than 30%. • Total equity - Total equity will not be less than $15 million. • Net debt to EBITDA Ratio - The Ratio will not exceed 4. • EBITDA - EBITDA will not be less than $10 million. The company is required to maintain such covenants on a quarterly basis Upon noncompliance with any of the above mention covenants, the bank shall have the right to demand immediate repayment of the remaining balance of the loan. During 2019, 2020 and as of December 31, 2020 and 2019, the company was in compliance with the Loan Covenants. C. Maturity dates: US dollars (in thousands) December 31, 2020 First year - current maturities 20,388 Second year 19,468 Third year 14,600 54,456 D. Lines of credit: Unutilized short-term lines of credit of the Group as of December 31, 2020, aggregated to US$ 1.6 million. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 12 - OTHER CURRENT LIABILITIES Composition: US dollars December 31, (in thousands) 2020 2019 Accrued expenses 16,000 7,663 Accrued payroll and related taxes 7,724 9,072 Government institutions 6,379 4,663 Accrued dividend 1,461 5,066 Operating lease liabilities, current 2,856 1,787 Others 3,257 2,902 37,677 31,153 |
CONTINGENT LIABILITIES
CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENT LIABILITIES | NOTE 13 - CONTINGENT LIABILITIES A. Claims 1. On June 24, 2010 the Brazilian Internal Revenue Service issued a tax assessment that claimed the payment, th F - 35 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 13 - CONTINGENT LIABILITIES (cont.) A. Claims (cont.) 2. On January 12, 2016, Brazilian Federal Communication Agency – Anatel issued an additional tax 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 believe that such claim is without merit (therefore, the Company has not made any provision in its consolidated financial statements in respect to this claim), the interpretation of the legislation is mistaken, given that the company do not render telecommunication services, but rather services of monitoring goods and persons for security purposes and therefore the chances of our success are more likely than not. the company filed defense for the years 2007 and 2008 on December 2011. Our Defense for the year 2010 was filed on November 2014, our defense for the year 2011 (and January 2012) was filed on February 2016 and our Defense for the year 2012 was filed on February 2016. the company is currently awaiting the Lower Court decisions on all the aforementioned FUST claims. As the FUST are levied at a fixed rate on the gross revenues, the company accounted for such matter in accordance with the provisions of ASC Topic 450-20 contingencies - loss contingencies. F - 36 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 13 - CONTINGENT LIABILITIES (cont.) A. Claims (cont.) 3. On November 22, 2016, Brazilian Federal Communication Agency - Anatel – issued an additional tax The company have filed our defenses as follows: for the year 2007 on July 2011, for the year 2008 on June 2011, for the year 2010 on December 2014, for the year 2011 on October 2015, and for the year 2012 on November 2016. On March 27, 2018 the Administrative published a decision which rejected our defense for year 2011 and on April 25, 2018 the company filed an appeal. The company is currently awaiting the Administrative decisions on all the aforementioned FUNTELL claims. As the FUNTELL are levied at a fixed rate on the gross revenues, the company accounted for such matter in accordance with the provisions of ASC Topic 450-20 contingencies - loss contingencies. F - 37 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 13 - CONTINGENT LIABILITIES (cont.) A. Claims (cont.) 4. On July 13, 2015 the company received a purported class action lawsuit which was filed against the 5. Claims are filed against the Company and its subsidiaries from time to time during the ordinary course of B. The Company was declared a monopoly under the Israeli Antitrust Law, 1988, in the market for the provision of prima facie C. Commitments As of December 31, 2020, minimum future rentals under operating leases of buildings and base station sites for periods were as follows: 2021 – US$ 2.93 million, 2022 – US$ 0.88 million, 2023 and hereafter– US$ 0.04 million. The leasing fees expensed in each of the years ended December 31, 2020, 2019 and 2018, were US$ 3.2 million, US$ 4.1 million and US$ 3.1 million, respectively. F - 38 ITURAN LOCATION AND CONTROL LTD. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 14 - STOCKHOLDERS’ EQUITY A. Share capital: 1. Composition: December 31, 2020 and 2019 Registered Issued and outstanding Ordinary shares of NIS 0.33⅓ 60,000,000 23,475,431 2. 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 4. As of December 31, 2017, As part of the Acquisition described in Note 3, the company reissued, on September 2018, 373,489 ordinary shares to the previous shareholders of Road Track (as part of the consideration paid to the sellers), of which 300,472 were returned to the Company on April 2019 due to downward transaction price adjustment. 5. On May 21, 2019, the board of directors approved a share buyback program, which Ituran has commenced. During 2019, our fully owned subsidiary had repurchased a total of 227,828 shares amounting to approximately $ 6.0 As of December 31, 2020, 2,662,125 ordinary shares representing 11.3% of the share capital of the Company is held by the Group as treasury shares. 6. Treasury stock have no voting rights. B. Retained earnings 1. In determining the amount of retained earnings available for distribution as a dividend, the Israeli 2. On February 27, 2017, the board of directors approved a change in the dividend policy. The new policy 3. Dividends are declared and paid in NIS. Dividends paid to stockholders outside Israel are converted into 4. During May 2020 (As part of the steps the company did in order to deal with Covid-19), the company's 5. During the years ended December 31, 2020, 2019 and 2018, the Company declared dividends in the amount |
OTHER INCOME (EXPENSES), NET (n
OTHER INCOME (EXPENSES), NET (non-operational) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSES), NET | NOTE 15 - OTHER INCOME (EXPENSES), NET (non-operational) US dollars Year ended December 31, (in thousands) 2020 2019 2018 Expenses related to Road Track acquisition (see Note 3) - - (1,539 ) Gain from measurement of previously held interests at acquisition date fair value (*) - - 14,677 Others (272 ) (26 ) - (272 ) (26 ) 13,138 (*) during 2018, as a result of the acquisition described in Note 3 the company gained control over certain companies that previously were accounted under the equity method (“JV's”) and began to include these JV's in the consolidated. The company recorded one time gain in the amount of approximately $14.7 million from measurement of the JV's at the acquisition date to fair value. |
FINANCING INCOME, NET
FINANCING INCOME, NET | 12 Months Ended |
Dec. 31, 2020 | |
Other Income, Nonoperating [Abstract] | |
FINANCING INCOME, NET | NOTE 16 - FINANCING INCOME, NET US dollars Year ended December 31, (in thousands) 2020 2019 2018 Short-term interest income, (expenses) commissions and other (895 ) (944 ) 64 Gains (loss) in respect of marketable securities and other investments 4,375 (241 ) 166 Interest expenses in respect of long-term loans (1,299 ) (1,666 ) (528 ) Interest income in respect of deposits 302 500 640 Income (expenses) related to taxes positions (501 ) 203 210 Exchange rate differences and others, net (1,350 ) (491 ) 684 Income (expenses) in respect of changes in Obligation to purchase non-controlling interests (*) 848 3,215 (519 ) 1,480 576 717 (*) See Note 1Y |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 17 - INCOME TAX A. Taxes on income included in the statements of income: US dollars Year ended December 31, (in thousands) 2020 2019 2018 Income taxes (tax benefit): Current taxes: In Israel 5,841 6,155 6,622 Outside Israel 4,341 7,674 8,325 10,182 13,829 14,947 Deferred taxes: In Israel (553 ) 299 781 Outside Israel (1,605 ) (2,545 ) 1,565 (2,158 ) (2,246 ) 2,346 Taxes in respect of prior years: In Israel 2,751 439 (20 ) Outside Israel 81 212 - 2,832 651 (20 ) 10,856 12,234 17,273 F - 40 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 17 - INCOME TAX (cont.) A. Taxes on income included in the statements of income (cont.): (*) During November 2020, the Company has received from the Israeli tax authority ("ITA") tax assessments 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 22, 2016, the Israeli parliament passed the Law for Economic Efficiency (Legislative 2. As of December 31, 2020, one Israeli subsidiary (located in areas other than Development Zone A). The D. The Law for the Encouragement of Capital Investments, 1959, under the 2016 amendment (the "Investment Law") 1. In December 2016 new legislation amended the Investments Law (the "2016 amendment"). Under the 2016 Technological Preferred Enterprise – an enterprise which, amongst other condition, is part of a consolidated group with consolidated revenues of less than NIS 10 billion. A Technological Preferred Enterprise which is located in areas other than Development Zone A will be subject to a tax rate of 12% on profits derived from intellectual property, and a Technological Preferred Enterprise in Development Zone A will be subject to tax rate at a 7.5%. 2. As of December 31, 2020, two Israeli subsidiaries (located in areas other than Development Zone A). are F - 41 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 17 - INCOME TAX (cont.) E. Israeli corporate tax rates Taxable income of the Company and its Israeli subsidiaries (that are not entitled to special tax rates as described above) is subject to a corporate tax rate of 23% in 2018, 2019 and 2020. F. Non-Israeli subsidiaries Non-Israeli subsidiaries are taxed according to the tax laws and rates in their country of residence. G. Use of assumptions and judgments 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. H. Tax assessments The Company and certain Israeli subsidiary have received final tax assessments through the 2018, certain Israeli subsidiary have received final tax assessments through the 2016 tax year. One of the subsidiaries in Brazil has received final tax assessments through the 2015 tax year. The other subsidiaries have not yet been assessed since incorporation. I. Carry forward foreign tax credits and tax losses As of December 31, 2020, there is no losses carried forward that are likely to use in the near future. J. The following is reconciliation between the theoretical tax on pretax income, at the applicable Israeli tax rate, US dollars Year ended December 31, (in thousands) 2020 2019 2018 Pretax income 29,039 23,204 76,233 Statutory tax rate 23 % 23 % 23 % Tax computed at the ordinary tax rate 6,679 5,337 17,534 Nondeductible expenses (income) 2,220 3,117 (2,785 ) Losses in respect of which no deferred taxes were generated (including changes in valuation allowance) (47 ) - (236 ) Deductible financial expenses recorded to other comprehensive income 470 297 (177 ) Tax adjustment in respect of different tax rates 753 3,045 2,384 Taxes in respect of withholding at the source from royalties and dividends - 725 31 Adjustment in respect of tax rate deriving from “approved enterprises” (1,583 ) (128 ) (100 ) Tax related to previous years 2,832 651 (20 ) Others (468 ) (810 ) 642 10,856 12,234 17,273 F - 42 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 17 - INCOME TAX (cont.) J. Summary of deferred taxes Composition: US dollars December 31, (in thousands) 2020 2019 Deferred taxes Provision for vacation, recreation and bad debt 1,894 1,180 Provision for other employee related obligations 1,400 1,193 Provision for deferred revenues/expenses and other obligations 4,292 4,631 Carry forward tax losses 551 - Other temporary differences, net 1,279 514 9,416 7,518 US dollars December 31, (in thousands) 2020 2019 Deferred income taxes included in long-term investments and other assets 11,910 10,385 Deferred income taxes included in long-term liabilities (2,494 ) (2,867 ) 9,416 7,518 K. Income before income taxes is composed as follows: US dollars Year ended December 31, (in thousands) 2020 2019 2018 The Company and its Israeli subsidiaries 38,469 27,045 46,138 Non-Israeli subsidiaries (9,430 ) (3,841 ) 30,095 29,039 23,204 76,233 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 18 - 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, 2020, 2019 and 2018, are as follows: US dollars Year ended December 31, (in thousands) 2020 2019 2018 Net income attributable to stockholder's used for the computation of basic and diluted earnings per share 16,123 6,889 60,675 Number of shares Year ended December 31, (in thousands) 2020 2019 2018 Weighted average number of shares used in the computation of basic and diluted earnings per share 20,813 21,037 21,077 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 19 - RELATED PARTIES A. The Tzivtit Insurance Ltd. (“Tzivtit Insurance”), owned by a director of the Company, serves as the Company’s 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 2020, US$ 430 thousand and US$ 877 thousand, respectively (In 2019 US$ 293 thousand and US$ 418 thousand, respectively.) Tzivtit Insurance is entitled to commissions in an aggregate amount of NIS 449 thousand (US$ 130 thousand) to be paid to Tzivtit Insurance by the insurance company on account of these policies, (US$ 130 thousand and US$ 95 thousand in 2019 and 2018, respectively). B. In accordance with an agreement with a related party (as amended), Prof. Yehuda Kahane, for financial C. In February 2014, following the approval of the Company's general meeting of shareholders on January 28, Messrs. Izzy Sheratzky, Eyal Sheratzky, Nir Sheratzky and Gil Sheratzky (the "Executive Offices Holders" or "the Executives"), shall provide services as independent contractors, which shall be entitled to a monthly payment of NIS 225,000, 175,000, 175,000 and 125,000 respectively plus VAT (US$70,000, US$54,000, US$54,000 and US$39,000 respectively) linked to the consumer price index for December 2013. At the request of the service providers, part of the fixed monthly pay may be granted through benefits, such as the provision of a company car and the payment of its maintenance costs and the cost of tax resulting therefrom. The fixed monthly pay shall also include 25 days' vacation and sick days as provided by law. The service providers 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 providers 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 (On December 12, 2019 the Company's general meeting of shareholders has reapproved the compensation policy for additional 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) The service provider is convicted of a criminal offense involving moral turpitude; (b) a final court ruling (without the possibility of appeal) determines that The service provider has breached his fiduciary duty towards the Company; (c) a final court ruling (without the possibility of appeal) determines that the service provider has materially breached the agreement through the unauthorized disclosure of Company's secrets or competition with the Company. Each of the above agreements also provides that the executives may request to provide their services to the Company as employees, 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 company's provision of the services as set forth in the service agreements. The terms of the Cash incentives applicable to the "Executive Offices Holders", as set forth in their agreements referred to above (the "Agreements"), are as follows: F - 44 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 19 - RELATED PARTIES (cont.) C. (cont.) • "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 US$ 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 of 15%, and a minimum company's Profit before Tax of USD 24 million. (*) Profit before tax target will not include adjustment of the value of assets and obligations to their fair value in accordance with accounting standard • "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 benchmark Yield over such Examined Period; and to the extent that the Company's Stock Yield exceeds the benchmark 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". F - 45 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 19 - RELATED PARTIES (cont.) C. (cont.) 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 2020 and 2019 Executive Offices Holders were entitled to Target based cash incentives at the maximum rate of (150%). Due to the Covid-19 effects and based on their own initiative, the company's executive Offices Holders agreed to temporarily decrease their base salary by 25% from April 2020, for an indefinite period until they will perceive that the effect of Covid -19 on Company’s business will be less significant. Such reduction is in effect as of the date of this annual report. The company's executive Offices Holders also agreed to temporarily delay the payment of their Target-based Cash Incentives for 2020, during the first quarter of 2021 the company paid the executive Offices Holders the incentives for 2020 (additional amount of $3 million). Herein below is attached table regards the aggregate amounts paid to Executive Offices Holders: US dollars Year ended December 31, (in thousands) 2020 2019 2018 Izzy Sheratzky 1,096 2,136 2,859 Eyal Sheratzky 864 1,707 2,224 Nir Sheratzky 864 1,707 2,208 Gil Sheratzky 518 1,051 1,039 |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 20 - SEGMENT REPORTING A. General information: The operations of the Group (including the companies the company acquired control over on September 2018 as describe in notes 3) are conducted through two different core activities: Location based services ("Telematics services") and Wireless communications products ("Telematics 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. F - 46 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 20 - SEGMENT REPORTING (cont.) A. General information (cont.): Telematics services: The telematics services segment consists predominantly of regionally- based stolen vehicle recovery (SVR) services, fleet management services and value-added services that include among others, connected car, UBI (usage base insurance), personal advanced locater services and concierge services. The Group provides Location based services in Israel, Brazil, Argentina, Colombia, Mexico, Ecuador and the United States. Telematics products: The telematics product segment consists mainly 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. B. Information about reported segment profit or loss and assets: US dollars (in thousands) Telematics services Telematics products Total Year ended December 31, 2020 Revenues 182,944 62,683 245,627 Operating income 28,666 (835 ) 27,831 Assets 89,939 22,425 112,364 Goodwill 34,152 5,710 39,862 Expenditures for assets 6,116 1,142 7,258 Depreciation and amortization 12,471 2,008 14,479 Impairment of goodwill 9,479 1,029 10,508 Impairment of intangible assets 1,869 1,792 3,661 Year ended December 31, 2019 Revenues 204,728 74,604 279,332 Operating income 26,092 (3,438 ) 22,654 Assets 118,361 28,114 146,475 Goodwill 43,383 6,703 50,086 Expenditures for assets 11,050 1,890 12,940 Depreciation and amortization 14,671 2,483 17,154 Impairment of goodwill 11,088 1,204 12,292 Impairment of intangible assets 10,914 2,948 13,862 Year ended December 31, 2018 Revenues 181,357 71,978 253,335 Operating income 56,913 5,465 62,378 Assets 101,305 36,355 137,660 Goodwill 55,069 7,827 62,896 Expenditures for assets 15,677 537 16,214 Depreciation and amortization 8,630 486 9,116 F - 47 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 20 - SEGMENT REPORTING (cont.) 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) 2020 2019 2018 Total revenues of reportable segment and consolidated revenues 245,627 279,332 253,335 Operating income Total operating income for reportable segments 27,831 22,654 62,378 Unallocated amounts: Financing income, net 1,480 576 717 Other income, net (272 ) (26 ) 13,138 Consolidated income before taxes on income 29,039 23,204 76,233 Assets Total assets for reportable segments (*) 152,226 196,561 200,556 Other unallocated amounts: Current assets 117,295 88,777 103,994 Investments in affiliated and other companies 2,171 4,926 7,644 Property and equipment, net 17,180 20,877 20,074 Other unallocated amounts 23,600 28,094 41,524 Consolidated total assets (at year end) 312,472 339,235 373,792 Other significant items Total expenditures for assets of reportable segments 7,258 12,940 16,214 Unallocated amounts 2,976 5,359 5,168 Consolidated total expenditures for assets 10,234 18,299 21,382 Total depreciation, amortization and impairment for reportable segments 28,648 43,308 9,116 Unallocated amounts 4,352 5,689 5,492 Consolidated total depreciation, amortization and impairment 33,000 48,997 14,608 (*) Including goodwill. F - 48 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 20 - SEGMENT REPORTING (cont.) E. Geographic information Revenues Year ended December 31, (in thousands) 2020 2019 2018 Israel 120,515 110,102 116,186 Brazil 61,470 98,020 90,842 Others 63,642 71,210 46,307 Total 245,627 279,332 253,335 Property and equipment, net December 31, (in thousands) 2020 2019 2018 Israel 13,784 14,967 16,478 Brazil 14,462 21,218 24,562 Others 9,407 9,715 9,420 Total 37,653 45,900 50,460 - 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 2018, there were no sales exceeding 10% of total revenues to none of our customers. During 2019, we had one costumer (global world vehicles manufacturer) which represent 15.8% of our total sales. During 2020, there were no sales exceeding 10% of total revenues to none of our customers. G. Major product lines and timing of revenue recognition In the following table, revenue is disaggregated by primary major product lines, and timing of revenue recognition for the years ended December 31, 2019 and 2020: US dollars Reportable segments result of operations (in thousands) Year ended December 31, 2019 Year ended December 31, 2020 Telematics services Telematics products Total Telematics services Telematics products Total At a point of time - 72,626 72,626 - 60,953 60,953 Over a period of time 204,728 1,978 206,706 182,944 1,730 184,674 204,728 74,604 279,332 182,944 62,683 245,627 |
FINANCIAL INSTRUMENTS AND RISKS
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT | NOTE 21 - 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 and marketable securities. Most of the Group’s cash and cash equivalents, deposits in short-term investments (and investments in trading marketable securities), as of December 31, 2020 and 2019, were deposited with major banks with high credit rating. 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, Mexico, Ecuador, Colombia and the United States to a large number of customers, including insurance companies and Car manufacturers. 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, management believes that the Group’s trade receivables do not represent a substantial concentration of credit risk. from time to time the Company enters into foreign exchange forward contracts intended to protect against the increase in the purchase price of forecasted inventory purchases dominated in currencies other than the functional currency of the purchasing entity (See B below) 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 2017 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 of the purchasing entity, will be affected by changes in exchange rates. As of December 31, 2020, and 2019, all the transactions that originated in 2017 were settled. During 2018, 2019 and 2020, most of the financial derivatives were designated and accounted for as hedging instruments. All other financial derivatives were measured at fair value through profit or loss. However, the effect of such derivatives as of December 31, 2020, 2019 and 2018 and for each of the years then ended was insignificant to the consolidated financial statements. 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: Amounts reclassified to statement of income: Derivatives designated as hedging instruments Location of loss recognized in income Amount of gain recognized in income Year ended December 31, 2020 Thousands of US dollars Foreign exchange contracts Cost of revenues - Derivatives designated as hedging instruments Location of loss recognized in income Amount of gain recognized in income Year ended December 31, 2019 Thousands of US dollars Foreign exchange contracts Cost of revenues 399 As of December 31, 2019, and 2020, there were no material forward exchange contracts outstanding. F - 50 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 21 - FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT (cont.) 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, marketable securities and derivative financial instruments at fair value. Such financial instruments are measured at fair value, on a recurring basis. The measurement of cash equivalents and marketable derivatives 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. However, as of December 31, 2020 and 2019, the company did not have material financial derivatives. The fair value of the financial instruments included in the working capital of the Group (cash and cash equivalents, accounts receivable, accounts payable and other current assets and liabilities) approximates their carrying value, due to the short-term maturity of such instruments. The fair value of the long-term liability (loans from bank institutions) approximates its fair value, as the loan carries variable interest rate. See Note 1N regarding non-recurring measurement of the fair value of certain non-financial assets (mainly reporting units with goodwill and other definite-lite intangible assets). The fair value of the company's obligation to purchase non-controlling interests is based on the amount of cash that would be paid to settle the liability if settlement occurred at the balance sheet date (see Note 1Y), See also Note 1V. The Company's financial assets (liabilities) measured at fair value on a recurring basis, consisted of the following types of instruments as of December 31, 2020 and 2019: December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Trading securities 6,663 - - Total 6,663 - - December 31, 2019 (in thousands) Level 1 Level 2 Level 3 Trading securities 358 - - Total 358 - - |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Operations | 1. Operations 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 Telematics services and machine-to-machine Telematics products for use in stolen vehicle recovery, fleet management and other applications. On September 13, 2018 the company closed the acquisition of 81.3% of the shares of Road Track Holding S.L (“Road Track”), a telematics’ company operating primarily in the Latin American region. (See Note 3) |
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 (except those that are held through the subsidiary “Road track”) is the New Israeli Shekel (“NIS”), which is the local currency in which those entities operate. The functional currency of the foreign subsidiaries located in Brazil is the Brazilian Real and the functional currency of the rest of the subsidiaries (including Argentinian subsidiaries that operates in highly inflationary economy) is the US Dollar. Regarding the Argentinian subsidiaries see below. 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)”. Translation gains and losses resulting from changes in exchange rates used in the translation of intercompany balances that are long term investment nature (i.e. which their settlement is not planned or anticipated) are also included in other comprehensive income (loss). When an economy in which a foreign entity of the group operates, becomes highly inflationary environment (an economy with a cumulative inflation rate of approximately 100% or more over a three-year period, such as the company's subsidiaries in Argentina), the financial statements of that foreign entity are remeasured as if its functional currency is the reporting currency of its parent. F - 13 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) A. General (cont.) 2. Functional currency and translation to the reporting currency (cont.) 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 as applicable. The following table presents data regarding the dollar exchange rate of relevant currencies and the Israeli CPI: Exchange rate of one US dollar Israeli CPI (*) NIS Real At December 31, 2020 3.215 5.1967 113.84 points 2019 3.456 4.0307 114.63 points 2018 3.748 3.8748 113.95 points Increase (decrease) during the year: 2020 (6.97 )% 28.93% (0.69)% 2019 (7.79 )% 4.02% 0.60% 2018 8.10 % 17.13% 0.80% (*) 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 legal contingencies, valuation of goodwill and other intangible assets and revenue recognition and related deferred expenses (contract costs). As of December 31, 2020, the impact of the outbreak of COVID-19 continues to unfold. As a result, some of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. |
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 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 non-controlling 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 non-controlling 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. |
Marketable securities | D. Marketable securities Commencing January 1, 2018 and upon the adoption of ASU 2016-01- Financial Instruments—Overall (Subtopic 825-10) "Investments - Equity Securities" According to ASC Topic 321-10, equity securities with readily determinable fair value are measured upon initial recognition and in subsequent periods at fair value with gains and losses reported periodically in earnings as financing income or expenses. The investments in debt and equity securities that were held by the Company during the reported periods and were subject to the provisions of ASC Topic 320-10 were designated by management as trading securities. Changes in fair value measurement of debt and equity securities for the years 2020, 2019 and 2018 amounted to gain (loss) of approximately US$ 11, (US$ 241) and US$ 166 thousand, respectively. |
Treasury stock | E. Treasury stock Company shares held by the Company and a wholly owned 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 | F. 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 order to reflect the expected credit losses on accounts receivable balances. Judgment is required in the estimation of the allowance for doubtful accounts and the Company evaluates the collectability of its accounts receivable based on a combination of factors including , among other things, the past experience with customers, the length of time that the balance is past due using an aging schedule, the customer's current ability to pay and their the creditworthiness using all available information about the credit risk on such customers taking into consideration the current business environment. If it's becomes aware of a customer’s inability to meet its financial obligations, a specific allowance is recorded to reduce the net receivable to the amount reasonably believed to be collectible from such customer. Accounts receivable are written off against the allowance for uncollectible accounts when the Company determines amounts are no longer collectible. See also Note 21A. The allowance in respect of accounts receivable at December 31, 2020 and 2019 was US$ 4,111,000 and US$ 3,016,000, respectively. |
Inventories | G. Inventories Inventories are stated at the lower of cost or net realizable value. Cost of raw materials and finished products is mainly determined on the basis of first-in, first-out (FIFO). Other method which is utilized for determining the value of inventories is the moving average. The Group regularly reviews its inventories for obsolescence and other impairment risks and reserves are established when necessary. |
Investment in affiliated companies | H. Investment in affiliated companies Investments in companies in which the Group has significant influence 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. In accordance with ASC Topic 323-10-40-1, a change in the Company’s proportionate share of an investee’s equity, resulting from issuance of shares by the investee to third parties, is accounted for as if the Company had sold a proportionate share of its investment. Any gain or loss resulting from an investee’s share issuance is recognized in earnings. When the company obtain control of an affiliated company that was previously accounted for by the equity method, the investment is then remeasured at its fair value as of the date of which control was obtained and any remeasurement gain or loss is recognized in earnings. Management evaluates investments in affiliated companies, for evidence of other-than-temporary declines in value. Such evaluation is dependent on the specific facts and circumstances and includes analysis of relevant financial information (e.g. budgets, business plans, financial statements, etc.). During 2020 and 2019, no impairment was identified with respect to such affiliated companies. Investments in companies in which the company no longer has significant influence, are classified as "investments in other companies". See I. below. F - 16 ITURAN LOCATION AND CONTROL LTD. |
Investment in other companies | I. Investment in other companies Equity investments without readily determinable fair values are measured at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Periodic changes in the basis of these equity investments are reported in current earnings. In addition, at each reporting period a qualitative assessment is performed to identify impairment. When a qualitative assessment indicates an impairment exists, the Company estimates the fair value of the investment and recognize in current earnings an impairment loss equal to the difference between the fair value and the carrying amount of the equity investment. During 2020, an Israeli investee have completed public registration in Israel and its shares became equity investment with readily determinable fair value. As a result, the company remeasured the investment to its fair value and recorded income in the amount of approximately $4.4 million in the consolidated statement of income under Financing income, net (see Note 16). |
Derivatives | J. 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 for accounting purposes, 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 (forward exchange contracts) which are mostly designed to hedge the cash flows expected to be paid with respect to forecasted monthly 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 were determined to qualify as cash flow hedges under ASC Topic 815. Commencing January 1, 2018, the entire changes in fair value of the derivative instruments designated for hedging purposes that were determined as qualifying for hedging purposes (including the ineffective components of the hedging relationship) 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. For all other derivative financial instruments that are not designated or qualify as hedging instruments for accounting purposes, the changes in fair value are recognized periodically in profit or loss, as incurred. However, as of December 31, 2020 and 2019, the company did not have material financial derivatives. |
Property and equipment | K. Property and equipment 1. Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using 2. Rates of depreciation: % Operating equipment (mainly 20%-33%) 6.5-33 Office furniture, equipment and computers 7-33 Buildings 2.5 Vehicles 15 Leasehold improvements Duration of the lease which is less or equal to useful life. |
Impairment of long-lived assets | L. Impairment of long-lived assets The Group’s long-lived assets (including finite-lived intangible 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 1N). |
Income taxes | M. Income taxes The Group accounts for income taxes in accordance with ASC Topic 740-10, "Income Taxes" 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. 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 | N. Goodwill and intangible assets 1. Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets The company elected to perform the goodwill annual impairment test for its operating units as follows: A. An amount of approximately $ B. An amount of approximately $ As required by ASC Topic 350, the Company chooses either to perform a qualitative assessment whether the quantitative goodwill impairment test is necessary or proceeds directly to the quantitative 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 (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 quantitative goodwill impairment test. If the Company determines otherwise, no further evaluation is necessary. F - 18 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) N. Goodwill and intangible assets (cont.) 1. (cont.) With respect to goodwill impairment tests performed before the adoption of ASU 2017-04, when the Company decided or was required to perform the quantitative goodwill impairment test, the Company firstly was required to compare the fair value of the reporting unit to its carrying value ("step 1"). If the fair value of the reporting unit exceeded the carrying value of the reporting unit net assets (including the goodwill allocated to such reporting unit), goodwill was considered not to be impaired, and no further testing was required. If the carrying value was determined to exceed the fair value of the reporting unit, then the implied fair value of goodwill was determined by subtracting the fair value of all the identifiable net assets from the fair value of the reporting unit. An impairment loss was 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"). Commencing the adoption of ASU 2017-04 (which eliminated Step 2 from the goodwill impairment, see also Note 10), when the Company decides or is required to perform the quantitative goodwill impairment test, the Company compares the fair value of the reporting unit to its carrying value and an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. In the performance of the quantitative analysis 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. As of December 31, 2020, the Company had four reporting units which include goodwill (four in 2019 and two in 2018). Telematics services: Under the telematics services segment there are two reporting units with goodwill. For one of which (resulted from past acquisitions) with an allocated amount of approximately US$ 1.9 million of goodwill, the Company performed a qualitative assessment as of December 31, 2020 and 2019, 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 the second reporting unit (resulted from the acquisition described in Note 3) with an allocated amount of approximately US$ 41.8 million of goodwill (as of June 30, 2020, before the impairment test), the Company performed the annual impairment test, as of June 30, 2020 and recorded impairment of approximately US$ 9.5 million. The impairment was recorded in the consolidated statement of income under a separate line ("Impairment of goodwill"). As of December 31, 2020, the remaining balance of goodwill related to this unit is approximately US$ 32.3 million. Due to existence of negative factors during the following months until December 31,2020, the Company performed a qualitative assessment as of that date 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 unit. See Note 10. Telematics products: Under the telematics products segment there are two reporting units with goodwill, for one of which (resulted from past acquisitions) with an allocated amount of approximately US$ 2.2 million of goodwill, the Company performed a qualitative assessment as of December 31, 2020 and 2019, 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 the second reporting unit (resulted from the acquisition described in Note 3) with an allocated amount of approximately US$ 4.5 million of goodwill (as of June 30, 2020, before the impairment test), the Company performed annual impairment test, as of June 30, 2020 and recorded impairment of approximately US$ 1.0 million. The impairment was recorded in the consolidated statement of income under a separate line ("Impairment of goodwill"). F - 19 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) N. Goodwill and intangible assets (cont.) 1. (cont.) As of December 31, 2020, the remaining balance of goodwill related to this unit is approximately US$ 3.5 million. Due to existence of negative factors during the following months until December 31,2020, the Company performed a qualitative assessment as of that date 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 unit. See Note 10. 2. Intangible assets with finite live (As of December 31,2020, the Balance of intangible assets consist of As a part of the acquisition of describe in Note 3 the company identified intangible assets in a fair value (as of the acquisition date) of approximately US$ 38.6 million. As of December 31, 2020, the intangible assets are amortized as follows: Years Customer relationship 3 Technology services 5 Other 5 During 2020 and 2019 the company recorded an intangible assets impairment loss in the amount of approximately US$ 3.7 million and US$ 13.9 million, respectively. The impairment was recorded in the consolidated statement of income under "Impairment of intangible assets and other expenses". See Note 9. Recoverability of intangible assets is measured as described in Note 1L above. |
Contingencies | O. 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 | P. 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 Company also has defined contribution plans for which it makes contributions to severance pay funds and appropriate insurance policies 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. Withdrawal of the reserve monies is contingent upon the fulfillment of detailed provision in the Law. 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 payments for the abovementioned policies for the years ended December 31, 2020, 2019 and 2018, amounted to US$ 1,610, US$ 1,557 and US$ 1,461 thousand, respectively. |
Revenue recognition | Q. Revenue recognition The Company and its subsidiaries generate revenue from subscriber fees for the provision of services and sales of systems and products, mainly in respect of fleet management services, stolen vehicle recovery services and other value-added services. To a lesser extent, revenues are also derived from technical support services. The Company and its subsidiaries sell the systems primarily through their direct sales force and indirectly through resellers. Revenue recognition accounting policy applied from January 1, 2018 (following the adoption of ASC Topic 606); On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) to all contracts, using the modified retrospective method. The cumulative impact of the adoption in an amount of approximately US$3 million (net of tax), was recognized as a reduction to retained earnings as of January 1, 2018. In accordance with ASC 606, the Company determines revenue recognition through the following five steps: 1. Identification of the contract, or contracts, with a customer; 2. Identification of the performance obligations in the contract; 3. Determination of the transaction price; 4. Allocation of the transaction price to the performance obligations in the contract; and 5. Recognition of revenue when, or as, the Company satisfies a performance obligation. A contract with a customer exists when all of the following criteria are met: the parties to the contract have approved it (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. For each type of contract at inception, the Company assesses the goods or service promised in a contract with a customer and identifies the performance obligations. With respect to contracts that are determined to have multiple performance obligations, such as contracts that combine product with services (mostly SVR services) and/or rights to use assets, the Company allocates the contract’s transaction price to each performance obligation using its best estimate of the relative standalone selling price of each distinct good or service in the contract. The primary method used to estimate the relative standalone selling price is expected costs of satisfying a performance obligation and an appropriate margin for that distinct good or service. Revenues are recognized when, or as, control of services or products is transferred to the customers at a point in time or over time, as applicable to each performance obligation. Revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer, excluding amounts collected on behalf of other third parties and sales taxes. F - 21 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Q. Revenue recognition (cont.) The Company does not adjust the amount of consideration for the effects of a significant financing component since the Company expects, at most contracts inception, that the period between the time of transfer of the promised goods or services to the customer and the time the customer pays for these goods or services to be generally one year or less, based on the practical expedient. The Company’s credit terms to customers are, on average, between thirty and ninety days. In accordance with ASC 606, the Company’s revenues are recognized as follows: 1. Revenues from sales of Automatic Vehicle Location ("AVL") products are recognized when the control of 2. Revenues from provision of SVR services are recognized over time, as the customers simultaneously 3. For arrangements that involve the delivery or performance of multiple products (mostly, AVL products), With respect to arrangement that are determined to have multiple performance obligations that are distinct, the Company allocates the contract’s transaction price to each performance obligation using its best estimate of the relative standalone selling price of each distinct good or service in the contract. The primary method used to estimate the relative standalone selling price is the expected costs of satisfying the performance obligation with an appropriate margin for that distinct good or service. 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 performance obligation, since the installation services element was determined not to be ‘distinct’. Accordingly, the entire contract fee for the two deliverables was recognized over time, on a straight-line basis over the subscription period. 4. Amounts earned by certain Brazilian subsidiary for arranging a bundle transaction of SVR services 5. Deferred revenues include unearned amounts received from customers (mostly for the provision of F - 22 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Q. Revenue recognition (cont.) 6. Extended warranty In the majority of countries, in which the Company operates, the statutory warranty period is one year, and the extended warranty covers periods beyond year one. Revenues from extended warranty include warranty services which were sold separately for a monthly fee, or warranty services that were determined to represent a separate performance obligation and were sold together with an AVL unit. Such revenues are recognized over the duration of the warranty periods. |
Warranty costs | R. 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 related to the standard warranty period have not been material. |
Research and development costs | S. Research and development costs 1. Research and development costs (other than computer software related expenses) are expensed as incurred. 2. Software Development Costs All research and development costs incurred in the process of software development before establishment of technological feasibility are charged to expenses as incurred. Costs incurred subsequent to the establishment of technological feasibility are capitalized according to the principles set forth in ASC Topic 985-20, “Costs of Software to be Sold, Leased or Marketed”. Capitalized software costs are amortized on a product by product basis by the straight-line method over the estimated useful life of the software product (3-5 years). The Company assesses the recoverability of these intangible assets on a regular basis by assessing the net realizable value of such intangible assets based on the estimated future gross revenues from each product net of the estimated future costs of completing and disposing of that product (including the estimated costs of performing maintenance and customer support over the remaining economical useful life), cost of completion of products and cost of delivery to customers over its remaining economical useful life. During each of the years ended December 31, 2020 and 2019, no such unrecoverable amounts were identified. |
Advertising costs | T. Advertising costs Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2020, 2019 and 2018 amounted to US$ 8.1 million, US$ 9.5 million and US$ 8.1 million, respectively. Advertising expenses are presented among "selling and marketing expenses". |
Earnings per share | U. 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 effect of any potential dilutive ordinary shares. During the reporting periods there were no such potential shares. |
Fair value measurements | V. 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, 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 21C. The Company also measures certain non-financial assets, consisting mainly of certain reporting units (as part of goodwill impairment test) 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 1N and 1L above). |
Deferred installation expenses and prepaid expenses | W. Deferred installation expenses and prepaid expenses Direct installation expenses were determined not to represent a separate performance obligation for revenue recognition purposes in accordance with the principles of ASC 606, as they were determined not to be considered ‘distinct’ (see Note 1Q above). The Company has determined that such expenses relate directly to obtaining or fulfilling contract with a specific subscriber, they generate or enhance the Company resources and are expected to be recovered. In accordance with ASC 340-40, Other Assets and Deferred Costs: Contracts with Customers, such installation costs are capitalized and presented as "Deferred installation expenses" within the balances "Other current assets" and "Other non-current assets", as applicable. The deferred expenses are amortized over the estimated life of the related subscription arrangements by the straight-line method. Costs that do not meet the aforementioned criteria, are recognized immediately as expenses. Prepaid expenses, consist of amounts paid by certain Brazilian subsidiary to insurance companies as a prepaid insurance on behalf of its customers as part of bundle transactions of SVR services together with insurance services to be supplied by a third-party insurance company. Under such transactions, the customers are required accordingly to pay to the Brazilian subsidiary a monthly fee for all the bundled services (see Note 1Q regarding the revenue recognition of such bundle transactions). The insurance companies are obligated to refund any unearned insurance amounts to the Brazilian subsidiary in the event of termination of the transaction by the customers. The prepaid expenses are amortized over the contractual life of the insurance service with the insurance company (usually 12 months) by the straight-line method. The amortization is netted against the monthly receipts from customers for the bundled services. |
Stock-based compensation | X. Stock-based compensation The Company accounts for stock-based compensation to employees and non-employees in accordance with ASC 718, " Compensation - Stock Compensation The Company measures and recognizes compensation expense for cash bonuses to senior employees, which are based, or partly based, on the price of the Company’s shares in accordance with ASC 718 -30, "Compensation-Stock Compensation - Awards Classified as Liabilities" (See Note 19C regarding "Excess Return Cash Incentives"). The awards are measured at the grant date at their fair value and remeasured at the end of each reporting period through settlement, with changes in the fair value recognized as compensation cost over the requisite service period. Compensation cost for awards that are subject to market conditions are be attributed separately for each vesting tranche of the award (generally calendar year). |
Obligation to purchase non-controlling interests | Y. Obligation to purchase non-controlling interests An obligation to acquire shares of a subsidiary held by Non-controlling interests at a stated future date, represents liability under ASC Topic 480. Upon initial recognition such liability is measured at fair value in accordance with ASC Topic 480-10-30-3 at the amount of cash that would be paid under the conditions specified in the contract if the shares were repurchased immediately and in subsequent periods at the amount of cash that would be paid under the conditions specified in the contract if settlement occurred at the reporting date with any change in value from the previous reporting date recognized as interest cost. In addition, the Non-controlling interests subject to such obligation are not recognized and no earnings are allocated to them. |
Leases | Z. Leases The Group entered into several non-cancelable lease agreements for real estate (mainly offices, warehouses and base sites), network equipment and vehicles for use in its operations, which are classified as operating leases. Lease accounting policy applied until December 31, 2018 (prior to the adoption of ASC Topic 842): Operating lease agreements were not reflected in the balance sheets of the Group. Such agreements were reflected as an expense over the lease term on a straight-line basis. Rental expense related to operating leases for the years ended December 31, 2018, were $3.1 million. The Group had no material capital leases. Lease accounting policy applied from January 1, 2019 (following the adoption of ASC Topic 842): On January 1, 2019, the Company adopted ASC Topic 842, Leases (“ASC 842”) and all its related amendments using the modified retrospective transition approach. Under such method of adoption, the results for reporting periods beginning after January 1, 2019 are presented in accordance with ASC 842, while prior period amounts were not adjusted and are reported in accordance with the previous accounting treatment required under ASC Topic 840. The Group determines if an arrangement is a lease at inception. A classification of a lease is determined based on the following criteria: 1. The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. 2. The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain 3. The lease term is for the major part of the remaining economic life of the underlying asset (Generally, 75% F - 25 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.). Z. Leases (cont.) 4. The present value of the sum of the lease payments and any residual value guaranteed by the lessee equals 5. The underlying asset is of such a specialized nature that it is expected to have no alternative use to the If any of these five criteria is met, the lease is classified as a finance lease. Otherwise, the lease is classified as an operating lease. With the exception of short-term leases, Operating leases are included at the commencement date as a lease liability, which represent the group‘s obligation to make lease payments arising from a lease, measured on a discounted basis. As the leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on information available on the commencement date in determining the present value of lease payments. Concurrently, the Company recognizes a right-of-use asset ("ROU") at the same amount of the liability, adjusted for any prepaid or accrued lease payments, plus initial direct costs incurred in respect of the lease. which represents the group’s right to use, or control the use of, a specified asset for the lease term. In subsequent periods the ROU asset is measured at the present value of the remaining lease payments, adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term and any unamortized initial direct costs. Further, the Company will recognize lease expense on a straight-line basis over the lease term. Lease liabilities are classified as current and non-current liabilities in the consolidated balance sheets. ROU assets are presented as non-current assets. See also Note 8. |
Reclassification | AA. Reclassification Certain comparative figures have been reclassified to conform to the current year presentation. Such reclassifications did not have any significant impact on the Company's equity, net income or cash flows. |
Recently adopted accounting pronouncements | AB. Recently adopted accounting pronouncements Accounting Standards Update No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 eliminated Step 2 from the goodwill impairment test, to simplify the subsequent measurement of goodwill. In accordance with the new guidance, the annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. F - 26 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.). AB. Recently issued accounting pronouncements (cont.) Accounting Standards Update No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” The amendments were applied by the Company, on a prospective basis with respect to goodwill impairment tests that were performed subsequent to January 1, 2020. The adoption of ASU 2017-04 impacted the goodwill impairment test that was performed with respect to the goodwill. For further information see Note 10. Accounting Standards Update No. 2016 - 13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” In June 2016, The FASB has issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied using the previous GAAP are still permitted, although the inputs to those techniques have been changed to reflect the full amount of expected credit losses. Organizations are required to continue to use judgment to determine which loss estimation method is appropriate for their circumstances. ASU 2016-13 requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The adoption of ASU 2016-13 did not have a significant impact on its consolidated financial statements. Recently issued accounting pronouncements not yet adopted In December 2019, The FASB has issued Accounting Standards Update (ASU) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 is intended to simplify the accounting for income taxes by removing certain exceptions (such as (1) the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items; (2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year) and by updating accounting requirements around certain other topics such as franchise taxes, goodwill recognized for tax purposes, the allocation of current and deferred tax expense among legal entities, and other minor changes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company is assessing what impact ASU 2019-12 will have on its condensed consolidated financial statements, if any. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Relevant Exchange Rates of US Dollar and Israeli CPI | The following table presents data regarding the dollar exchange rate of relevant currencies and the Israeli CPI: Exchange rate of one US dollar Israeli CPI (*) NIS Real At December 31, 2020 3.215 5.1967 113.84 points 2019 3.456 4.0307 114.63 points 2018 3.748 3.8748 113.95 points Increase (decrease) during the year: 2020 (6.97 )% 28.93% (0.69)% 2019 (7.79 )% 4.02% 0.60% 2018 8.10 % 17.13% 0.80% (*) Based on the Index for the month ending on each balance sheet date, on the basis of 2008 average 100. |
Schedule of Depreciation Rates | 2. Rates of depreciation: % Operating equipment (mainly 20%-33%) 6.5-33 Office furniture, equipment and computers 7-33 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 | As of December 31, 2020, the intangible assets are amortized as follows: Years Customer relationship 3 Technology services 5 Other 5 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | US dollars December 31, (in thousands) 2020 2019 Prepaid expenses 22,996 32,679 Government institutions 6,247 5,549 Deferred installation expenses 6,993 8,405 Advances to suppliers 1,286 967 Employees 287 428 Others 815 1,173 38,624 49,201 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | US dollars December 31, (in thousands) 2020 2019 Finished products 17,626 20,665 Raw materials 4,996 4,872 22,622 25,537 |
INVESTMENTS IN AFFILIATED AND_2
INVESTMENTS IN AFFILIATED AND OTHER COMPANIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of investment in affiliated companies | A. Investment in affiliated companies US dollars December 31, (in thousands) 2020 2019 Bringg (*) 700 1,562 Lumax 208 104 908 1,666 (*) Bringg Delivery Technologies Ltd ("Bringg"). is an Israeli start-up company developing solutions for management of mobile/field workforce. |
OTHER NON-CURRENT ASSETS (Table
OTHER NON-CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense and Other Assets, Noncurrent [Abstract] | |
Schedule of Other Non-Current Assets | US dollars December 31, (in thousands) 2020 2019 Non-current deferred installation expenses (*) 2,674 3,049 Deposits 279 316 2,953 3,365 (*) See Note 1W. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | NOTE 7 - PROPERTY AND EQUIPMENT, NET A. Property and equipment, net consists of the following: US dollars December 31, (in thousands) 2020 2019 Cost: Operating equipment (*) 47,647 59,888 Office furniture, equipment and computers 50,851 44,599 Land 1,819 1,914 Buildings 6,415 6,453 Vehicles 9,498 8,753 Leasehold improvements 9,515 8,208 125,745 129,815 Less – accumulated depreciation (**) (88,092 ) (83,915 ) Total property and equipment, net 37,653 45,900 (*) As of December 31, 2020, and 2019, an amount of US$ 29.4 million and US$ 36.3 million is subject to operating lease transactions, respectively. (**) As of December 31, 2020, and 2019, an amount of US$ 17.0 million and US$ 20.2 million is subject to operating lease transactions, respectively. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Schedule of Operating Right-of-use Assets and Operating Lease Liabilities | The components of lease costs, lease term and discount rate are as follows: US dollars (in thousands) Year Ended December 31, 2020 Operating lease cost: Office and warehouse space 1,656 Base stations 697 Vehicle 493 Others 166 3,012 Weighted Average Remaining Lease Term (years): Office space 1.3 Base stations 5.3 Vehicle 1.3 Others 1.6 Weighted Average Discount Rate (%): Office space 5.26 Base stations 2.13 vehicle 9.17 Others 7.83 |
Schedule of Supplemental Cash Flow Information Related Operating Leases | Supplemental cash flow information related to operating leases was as follows: US dollars (in Million) Year Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 3.0 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases - |
Schedule of Minimum lease Payments | The following is a schedule, by years, of maturities of operating lease liabilities as of December 31, 2020: US dollars December 31, 2020 Period: 2021 2,974 2022 1,349 2023 456 2024 372 2025 328 Thereafter 436 Total operating lease payments 5,915 Less: imputed interest (367) Present value of lease liabilities 5,548 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Schedule of Intangible Assets, Net | US dollars December 31, 2018 Year ended December 31, 2019 December 31, 2019 (in thousands) Opening balance Impairment (*) Amortization Additions Translation differences Closing balance Costumer relationship 24,133 (10,914 ) (4,112 ) - - 9,107 Technology 12,100 (2,948 ) (2,549 ) 6,436 14 13,053 Others 4,215 - (1,229 ) 1,333 (158 ) 4,161 40,448 (13,862 ) (7,890 ) 7,769 (144 ) 26,321 US dollars December 31, 2019 Year ended December 31, 2020 December 31, 2020 (in thousands) Opening balance Impairment (**) Amortization (***) Additions Translation differences Closing balance Costumer relationship 9,107 (3,661 ) (2,115 ) - - 3,331 Technology 13,053 - (2,871 ) 2,992 243 13,417 Others 4,161 - (896 ) - (631 ) 2,634 26,321 (3,661 ) (5,882 ) 2,992 (388 ) 19,382 (*) Due to the decline in the results of Road Track (See Note 3) and the current expectation of management for further potential decrease in Road Track anticipated performance, the company performed on December 31, 2019, an impairment analysis of the intangible assets which relate directly to the operation of Road Track. Based on such analysis the company recorded an impairment charge further described below: 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, an impairment loss in an amount of US$ 10,914 thousand, with respect to Costumer relationship and an amount of US$ 2,948 thousand, with respect to Technology. totaling an aggregate impairment charge of US$ 13,862, that was recorded under "impairment of intangible assets and other expenses" in the consolidated statement of income. See also Note 1N. (**) Due to the decline in the results of Road Track (See Note 3) and the current expectation of management for further potential decrease in Road Track anticipated performance, the company performed on June 30, 2020, an impairment analysis of the intangible assets which relate directly to the operation of Road Track. Based on such analysis the company recorded an impairment charge further described below: 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, an impairment loss in an amount of US$ 3,661 thousand, with respect to Costumer relationship, that was recorded under "impairment of intangible assets and other expenses" in the consolidated statement of income. See also Note 1N. (***) As of December 31, 2020, the estimated aggregate amortization of intangible assets for the next five years is as follows: 2021- US$ 5,236 thousand, 2022- US$ 5,088 thousand, 2023- US$ 3,712 thousand, 2024- US$ 3,050 thousand and 2025 – US$ 2,296 thousand. |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019 are as follows: US dollars Telematics services Telematics products Total (in thousands) Balance as of January 1, 2019 55,069 7,827 62,896 Changes during 2019: Reimbursement (733 ) (80 ) (813 ) Impairment (**) (11,088 ) (1,204 ) (12,292 ) Translation differences 135 160 295 Balance as of December 31, 2019 (*) 43,383 6,703 50,086 Changes during 2020: Impairment (***) (9,479 ) (1,029 ) (10,508 ) Translation differences 248 36 284 Balance as of December 31, 2020 (*) 34,152 5,710 39,862 (*) The accumulated amount of goodwill impairment loss as of December 31, 2020, and 2019 was US$ 29.89 million and US$ 19.39 million, respectively. (**) As a result of the circumstances described in note 9(*) the company recorded on December 31, 2019, a goodwill impairment in the total amount of US$ 12.3 million in connection with two reporting units (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 discount rate of 14.9% and a long-term growth rate of 0.5%. (***) As a result of the circumstances described in note 9(**) the company recorded on June 30, 2020, a goodwill impairment in the total amount of US$ 10.5 million in connection with two reporting unit (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 3.5 years of projected net cash flows, a discount rate of 17.5% and a long-term growth rate of 0.5%. As of December 31, 2020, management preformed additional quantitative analysis and determined that no further impairment is required to be recognized. |
CREDIT FROM BANKING INSTITUTI_2
CREDIT FROM BANKING INSTITUTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Short Term Loans | A. Short term loans: US dollars December 31, (in thousands) 2020 2019 Short-term loans - linked to the Mexican Pezo 920 - Current maturities of long-term loan (Note 11B) 19,468 18,110 20,388 18,110 |
Schedule of Amount to be Paid | C. Maturity dates: US dollars (in thousands) December 31, 2020 First year - current maturities 20,388 Second year 19,468 Third year 14,600 54,456 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Current Liabilities | US dollars December 31, (in thousands) 2020 2019 Accrued expenses 16,000 7,663 Accrued payroll and related taxes 7,724 9,072 Government institutions 6,379 4,663 Accrued dividend 1,461 5,066 Operating lease liabilities, current 2,856 1,787 Others 3,257 2,902 37,677 31,153 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Common Stock | 1. Composition: December 31, 2020 and 2019 Registered Issued and outstanding Ordinary shares of NIS 0.33⅓ 60,000,000 23,475,431 |
OTHER INCOME (EXPENSES), NET _2
OTHER INCOME (EXPENSES), NET (non-operational) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other (Income) Expenses, Net | US dollars Year ended December 31, (in thousands) 2020 2019 2018 Expenses related to Road Track acquisition (see Note 3) - - (1,539 ) Gain from measurement of previously held interests at acquisition date fair value (*) - - 14,677 Others (272 ) (26 ) - (272 ) (26 ) 13,138 (*) during 2018, as a result of the acquisition described in Note 3 the company gained control over certain companies that previously were accounted under the equity method (“JV's”) and began to include these JV's in the consolidated. The company recorded one time gain in the amount of approximately $14.7 million from measurement of the JV's at the acquisition date to fair value. |
FINANCING INCOME, NET (Tables)
FINANCING INCOME, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income, Nonoperating [Abstract] | |
Schedule of Financing Income, Net | US dollars Year ended December 31, (in thousands) 2020 2019 2018 Short-term interest income, (expenses) commissions and other (895 ) (944 ) 64 Gains (loss) in respect of marketable securities and other investments 4,375 (241 ) 166 Interest expenses in respect of long-term loans (1,299 ) (1,666 ) (528 ) Interest income in respect of deposits 302 500 640 Income (expenses) related to taxes positions (501 ) 203 210 Exchange rate differences and others, net (1,350 ) (491 ) 684 Income (expenses) in respect of changes in Obligation to purchase non-controlling interests (*) 848 3,215 (519 ) 1,480 576 717 (*) See Note 1Y |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Taxes | A. Taxes on income included in the statements of income: US dollars Year ended December 31, (in thousands) 2020 2019 2018 Income taxes (tax benefit): Current taxes: In Israel 5,841 6,155 6,622 Outside Israel 4,341 7,674 8,325 10,182 13,829 14,947 Deferred taxes: In Israel (553 ) 299 781 Outside Israel (1,605 ) (2,545 ) 1,565 (2,158 ) (2,246 ) 2,346 Taxes in respect of prior years: In Israel 2,751 439 (20 ) Outside Israel 81 212 - 2,832 651 (20 ) 10,856 12,234 17,273 F - 40 ITURAN LOCATION AND CONTROL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont.) NOTE 17 - INCOME TAX (cont.) A. Taxes on income included in the statements of income (cont.): (*) During November 2020, the Company has received from the Israeli tax authority ("ITA") tax assessments |
Schedule of Income Tax Reconciliation | J. The following is reconciliation between the theoretical tax on pretax income, at the applicable Israeli tax rate, US dollars Year ended December 31, (in thousands) 2020 2019 2018 Pretax income 29,039 23,204 76,233 Statutory tax rate 23 % 23 % 23 % Tax computed at the ordinary tax rate 6,679 5,337 17,534 Nondeductible expenses (income) 2,220 3,117 (2,785 ) Losses in respect of which no deferred taxes were generated (including changes in valuation allowance) (47 ) - (236 ) Deductible financial expenses recorded to other comprehensive income 470 297 (177 ) Tax adjustment in respect of different tax rates 753 3,045 2,384 Taxes in respect of withholding at the source from royalties and dividends - 725 31 Adjustment in respect of tax rate deriving from “approved enterprises” (1,583 ) (128 ) (100 ) Tax related to previous years 2,832 651 (20 ) Others (468 ) (810 ) 642 10,856 12,234 17,273 |
Summary of Deferred Taxes | Composition: US dollars December 31, (in thousands) 2020 2019 Deferred taxes Provision for vacation, recreation and bad debt 1,894 1,180 Provision for other employee related obligations 1,400 1,193 Provision for deferred revenues/expenses and other obligations 4,292 4,631 Carry forward tax losses 551 - Other temporary differences, net 1,279 514 9,416 7,518 US dollars December 31, (in thousands) 2020 2019 Deferred income taxes included in long-term investments and other assets 11,910 10,385 Deferred income taxes included in long-term liabilities (2,494 ) (2,867 ) 9,416 7,518 |
Schedule of Income Before Income Taxes | K. Income before income taxes is composed as follows: US dollars Year ended December 31, (in thousands) 2020 2019 2018 The Company and its Israeli subsidiaries 38,469 27,045 46,138 Non-Israeli subsidiaries (9,430 ) (3,841 ) 30,095 29,039 23,204 76,233 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Net Income Used in 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, 2020, 2019 and 2018, are as follows: US dollars Year ended December 31, (in thousands) 2020 2019 2018 Net income attributable to stockholder's used for the computation of basic and diluted earnings per share 16,123 6,889 60,675 |
Schedule of Weighted Average Shares Used in Earnings Per Share | Number of shares Year ended December 31, (in thousands) 2020 2019 2018 Weighted average number of shares used in the computation of basic and diluted earnings per share 20,813 21,037 21,077 |
RELATED PARTIES (Tables)
RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Target-based Cash Incentives | • "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 US$ 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% |
Schedule of aggregate amounts paid to Executive Offices | Herein below is attached table regards the aggregate amounts paid to Executive Offices Holders: US dollars Year ended December 31, (in thousands) 2020 2019 2018 Izzy Sheratzky 1,096 2,136 2,859 Eyal Sheratzky 864 1,707 2,224 Nir Sheratzky 864 1,707 2,208 Gil Sheratzky 518 1,051 1,039 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Operating Segments | B. Information about reported segment profit or loss and assets: US dollars (in thousands) Telematics services Telematics products Total Year ended December 31, 2020 Revenues 182,944 62,683 245,627 Operating income 28,666 (835 ) 27,831 Assets 89,939 22,425 112,364 Goodwill 34,152 5,710 39,862 Expenditures for assets 6,116 1,142 7,258 Depreciation and amortization 12,471 2,008 14,479 Impairment of goodwill 9,479 1,029 10,508 Impairment of intangible assets 1,869 1,792 3,661 Year ended December 31, 2019 Revenues 204,728 74,604 279,332 Operating income 26,092 (3,438 ) 22,654 Assets 118,361 28,114 146,475 Goodwill 43,383 6,703 50,086 Expenditures for assets 11,050 1,890 12,940 Depreciation and amortization 14,671 2,483 17,154 Impairment of goodwill 11,088 1,204 12,292 Impairment of intangible assets 10,914 2,948 13,862 Year ended December 31, 2018 Revenues 181,357 71,978 253,335 Operating income 56,913 5,465 62,378 Assets 101,305 36,355 137,660 Goodwill 55,069 7,827 62,896 Expenditures for assets 15,677 537 16,214 Depreciation and amortization 8,630 486 9,116 |
Reconciliation of Reporting Information from Segments to Consolidated Totals | 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) 2020 2019 2018 Total revenues of reportable segment and consolidated revenues 245,627 279,332 253,335 Operating income Total operating income for reportable segments 27,831 22,654 62,378 Unallocated amounts: Financing income, net 1,480 576 717 Other income, net (272 ) (26 ) 13,138 Consolidated income before taxes on income 29,039 23,204 76,233 Assets Total assets for reportable segments (*) 152,226 196,561 200,556 Other unallocated amounts: Current assets 117,295 88,777 103,994 Investments in affiliated and other companies 2,171 4,926 7,644 Property and equipment, net 17,180 20,877 20,074 Other unallocated amounts 23,600 28,094 41,524 Consolidated total assets (at year end) 312,472 339,235 373,792 Other significant items Total expenditures for assets of reportable segments 7,258 12,940 16,214 Unallocated amounts 2,976 5,359 5,168 Consolidated total expenditures for assets 10,234 18,299 21,382 Total depreciation, amortization and impairment for reportable segments 28,648 43,308 9,116 Unallocated amounts 4,352 5,689 5,492 Consolidated total depreciation, amortization and impairment 33,000 48,997 14,608 (*) Including goodwill. |
Schedule of Revenues and Long-Lived Assets by Geographical Areas | E. Geographic information Revenues Year ended December 31, (in thousands) 2020 2019 2018 Israel 120,515 110,102 116,186 Brazil 61,470 98,020 90,842 Others 63,642 71,210 46,307 Total 245,627 279,332 253,335 Property and equipment, net December 31, (in thousands) 2020 2019 2018 Israel 13,784 14,967 16,478 Brazil 14,462 21,218 24,562 Others 9,407 9,715 9,420 Total 37,653 45,900 50,460 |
Schedule of Major Product Lines and Timing of Revenue Recognition | In the following table, revenue is disaggregated by primary major product lines, and timing of revenue recognition for the years ended December 31, 2019 and 2020: US dollars Reportable segments result of operations (in thousands) Year ended December 31, 2019 Year ended December 31, 2020 Telematics services Telematics products Total Telematics services Telematics products Total At a point of time - 72,626 72,626 - 60,953 60,953 Over a period of time 204,728 1,978 206,706 182,944 1,730 184,674 204,728 74,604 279,332 182,944 62,683 245,627 |
FINANCIAL INSTRUMENTS AND RIS_2
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Schedule of Fair Values of Derivative 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: Amounts reclassified to statement of income: Derivatives designated as hedging instruments Location of loss recognized in income Amount of gain recognized in income Year ended December 31, 2020 Thousands of US dollars Foreign exchange contracts Cost of revenues - Derivatives designated as hedging instruments Location of loss recognized in income Amount of gain recognized in income Year ended December 31, 2019 Thousands of US dollars Foreign exchange contracts Cost of revenues 399 |
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis | The Company's financial assets (liabilities) measured at fair value on a recurring basis, consisted of the following types of instruments as of December 31, 2020 and 2019: December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Trading securities 6,663 - - Total 6,663 - - December 31, 2019 (in thousands) Level 1 Level 2 Level 3 Trading securities 358 - - Total 358 - - |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | Sep. 13, 2018 | Jun. 30, 2020 | Mar. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 13, 2019 | ||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Trading gains | $ 4,375 | $ (241) | $ 166 | ||||||||
Allowance for doubtful accounts receivable | 4,111 | 3,016 | |||||||||
Intangible asset impairment loss | 3,661 | [1] | 13,862 | [2] | |||||||
Financing income, net | 4,400 | ||||||||||
Goodwill | 39,862 | [3] | 50,086 | [3] | 62,896 | $ 59,402 | |||||
Goodwill, fair value | 35,800 | ||||||||||
Severance expenses | 1,610 | 1,557 | 1,461 | ||||||||
Advertising expenses | 8,100 | 9,500 | 8,100 | ||||||||
Intangible assets fair value | 38,600 | ||||||||||
Cumulative adjustment to retained earnings | $ 3,000 | ||||||||||
Rent expenses | 3,100 | ||||||||||
Goodwill impairment | 10,508 | [4] | 12,292 | [5] | |||||||
Telematics Services [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Goodwill | 34,152 | [3] | 43,383 | [3] | $ 55,069 | ||||||
Goodwill impairment | 9,479 | [4] | 11,088 | [5] | |||||||
Telematics Products [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Goodwill | 3,500 | ||||||||||
Road Track [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Bussiness acquisition percentage | 81.30% | ||||||||||
Amount paid to shareholders | $ 91,700 | ||||||||||
Purchase price | 113,000 | ||||||||||
Payment in cash | 75,700 | ||||||||||
Additional amount paid | 12,000 | ||||||||||
Remaining amount paid as bonus | 4,000 | ||||||||||
Shares issued during period | 373,489 | 373,489 | |||||||||
Goodwill | 59,400 | ||||||||||
Intangible assets fair value | $ 38,600 | ||||||||||
Two different reporting [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Goodwill | 4,100 | ||||||||||
Two different reporting [Member] | Telematics Services [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Goodwill | $ 41,800 | ||||||||||
Goodwill impairment | 9,500 | ||||||||||
Two different reporting [Member] | Telematics Products [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Goodwill | 4,500 | ||||||||||
Goodwill impairment | $ 1,000 | ||||||||||
One reporting unit [Member] | Telematics Services [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Goodwill | 1,900 | 1,900 | |||||||||
One reporting unit [Member] | Telematics Products [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Goodwill | $ 2,200 | $ 2,200 | |||||||||
[1] | Due to the decline in the results of Road Track (See Note 3) and the current expectation of management for further potential decrease in Road Track anticipated performance, the company performed on June 30, 2020, an impairment analysis of the intangible assets which relate directly to the operation of Road Track. Based on such analysis the company recorded an impairment charge further described below: | ||||||||||
[2] | Due to the decline in the results of Road Track (See Note 3) and the current expectation of management for further potential decrease in Road Track anticipated performance, the company performed on December 31, 2019, an impairment analysis of the intangible assets which relate directly to the operation of Road Track. Based on such analysis the company recorded an impairment charge further described below: | ||||||||||
[3] | The accumulated amount of goodwill impairment loss as of December 31, 2020, and 2019 was US$ 29.89 million and US$ 19.39 million, respectively. | ||||||||||
[4] | As a result of the circumstances described in note 9(**) the company recorded on June 30, 2020, a goodwill impairment in the total amount of US$ 10.5 million in connection with two reporting unit (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 3.5 years of projected net cash flows, a discount rate of 17.5% and a long-term growth rate of 0.5%. As of December 31, 2020, management preformed additional quantitative analysis and determined that no further impairment is required to be recognized. | ||||||||||
[5] | As a result of the circumstances described in note 9(*) the company recorded on December 31, 2019, a goodwill impairment in the total amount of US$ 12.3 million in connection with two reporting units (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 discount rate of 14.9% and a long-term growth rate of 0.5%. |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Relevant Exchange Rates) (Details) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
IL [Member] | ||||
Dollar Exchange Rate of Relevant Currencies [Line Items] | ||||
Exchange rate of one US dollar | 3.215 | 3.456 | 3.748 | |
Increase (decrease) during the year: Exchange rate of one US dollar | (6.97%) | (7.79%) | 8.10% | |
BR [Member] | ||||
Dollar Exchange Rate of Relevant Currencies [Line Items] | ||||
Exchange rate of one US dollar | 5.1967 | 4.0307 | 3.8748 | |
Increase (decrease) during the year: Exchange rate of one US dollar | 28.93% | 4.02% | 17.13% | |
Israeli Consumer Price Index [Member] | ||||
Dollar Exchange Rate of Relevant Currencies [Line Items] | ||||
Israeli consumer price index | [1] | 113.84 | 114.63 | 113.95 |
Increase (decrease) during the year: Exchange rate of one US dollar | [1] | (0.69%) | 0.60% | 0.80% |
[1] | Based on the Index for the month ending on each balance sheet date, on the basis of 2008 average 100. |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Depreciation Rates) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Operating equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 6.50% |
Operating equipment [Member] | Minimum [Member] | Majority [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 20.00% |
Operating equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 33.00% |
Operating equipment [Member] | Maximum [Member] | Majority [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% |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Rate of depreciation | 2.50% |
Vehicle [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 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Intangible Assets Amortized) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Customer Relationship [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets finite lived, useful life | 3 years |
Technology Services [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets finite lived, useful life | 5 years |
Other Intangible Assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets finite lived, useful life | 5 years |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 22,996 | $ 32,679 |
Government institutions | 6,247 | 5,549 |
Deferred installation expenses | 6,993 | 8,405 |
Advances to suppliers | 1,286 | 967 |
Employees | 287 | 428 |
Others | 815 | 1,173 |
Other current assets, net | $ 38,624 | $ 49,201 |
ACQUISITION OF BUSINESS (Narrat
ACQUISITION OF BUSINESS (Narrative) (Details) - USD ($) $ in Thousands | Sep. 13, 2018 | Apr. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 31, 2021 | Sep. 13, 2019 | |||
Business Acquisition [Line Items] | ||||||||||||
Transaction costs | $ (1,539) | |||||||||||
Goodwill | 39,862 | [1] | 50,086 | [1] | 62,896 | $ 59,402 | ||||||
Intangible assets fair value | 38,600 | |||||||||||
Gain from measurement of previously held interests at acquisition date fair value | [2] | 14,677 | ||||||||||
Road Track [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Bussiness acquisition percentage | 81.30% | |||||||||||
Amount paid to shareholders | $ 91,700 | |||||||||||
Purchase price | 113,000 | |||||||||||
Payment in cash | 75,700 | |||||||||||
Additional amount paid | 12,000 | |||||||||||
Remaining amount paid as bonus | 4,000 | |||||||||||
Shares issued during period | 373,489 | 373,489 | ||||||||||
Shares return due to downward transaction price | 300,472 | 300,472 | ||||||||||
Equity return due to downward price adjustment | $ 10,800 | |||||||||||
Transaction costs | $ 1,500 | |||||||||||
Goodwill | 59,400 | |||||||||||
Intangible assets fair value | $ 38,600 | |||||||||||
Percentage of previous holding | 50.00% | |||||||||||
Gain from measurement of previously held interests at acquisition date fair value | $ 14,700 | |||||||||||
Road Track [Member] | Subsequent Event [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Bussiness acquisition percentage | 18.70% | |||||||||||
Road Track [Member] | Total shares to be issued [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Shares issued during period | 300,472 | |||||||||||
[1] | The accumulated amount of goodwill impairment loss as of December 31, 2020, and 2019 was US$ 29.89 million and US$ 19.39 million, respectively. | |||||||||||
[2] | during 2018, as a result of the acquisition described in Note 3 the company gained control over certain companies that previously were accounted under the equity method (“JV's”) and began to include these JV's in the consolidated. The company recorded one time gain in the amount of approximately $14.7 million from measurement of the JV's at the acquisition date to fair value. |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 17,626 | $ 20,665 |
Raw materials | 4,996 | 4,872 |
Inventory, net | $ 22,622 | $ 25,537 |
INVESTMENTS IN AFFILIATED AND_3
INVESTMENTS IN AFFILIATED AND OTHER COMPANIES (Schedule of Investment in Affiliated Companies) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Investment in affiliated companies | $ 908 | $ 1,666 | |
BRINGG Delivery Technologies Ltd [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in affiliated companies | [1] | 700 | 1,562 |
Lumax [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in affiliated companies | $ 208 | $ 104 | |
[1] | Bringg Delivery Technologies Ltd ("Bringg"). is an Israeli start-up company developing solutions for management of mobile/field workforce |
INVESTMENTS IN AFFILIATED AND_4
INVESTMENTS IN AFFILIATED AND OTHER COMPANIES (Narrative) (Details) - USD ($) $ in Thousands, shares in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||
Investments in other company | $ 1,263 | $ 3,260 |
Locationet [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in equity | 6.5 | |
Investments in other company | $ 500 | $ 200 |
OTHER NON-CURRENT ASSETS (Detai
OTHER NON-CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Prepaid Expense and Other Assets, Noncurrent [Abstract] | |||
Non-current deferred installation expenses | [1] | $ 2,674 | $ 3,049 |
Deposits | 279 | 316 | |
Other non-current assets | $ 2,953 | $ 3,365 | |
[1] | See Note 1W. |
PROPERTY AND EQUIPMENT, NET (Na
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 12.9 | $ 15 | $ 13.4 |
Additional equipment purchased | $ 7.2 | $ 11.3 | $ 20.1 |
PROPERTY AND EQUIPMENT, NET (Sc
PROPERTY AND EQUIPMENT, NET (Schedule of Property And Equipment, Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Property, Plant and Equipment [Line Items] | ||||
Cost | $ 125,745 | $ 129,815 | ||
Less - accumulated depreciation | [1] | (88,092) | (83,915) | |
Total property and equipment, net | 37,653 | 45,900 | $ 50,460 | |
Operating equipment, amount subject to lease transactions | 29,400 | 36,300 | ||
Accumulated depreciation and amortization subject to lease transactions | 17,000 | 20,200 | ||
Operating equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | [2] | 47,647 | 59,888 | |
Office furniture, equipment and computers [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | 50,851 | 44,599 | ||
Land [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | 1,819 | 1,914 | ||
Building [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | 6,415 | 6,453 | ||
Vehicle [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | 9,498 | 8,753 | ||
Leasehold Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Cost | $ 9,515 | $ 8,208 | ||
[1] | As of December 31, 2020, and 2019, an amount of US$ 17.0 million and US$ 20.2 million is subject to operating lease transactions, respectively. | |||
[2] | As of December 31, 2020, and 2019, an amount of US$ 29.4 million and US$ 36.3 million is subject to operating lease transactions, respectively. |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Lease Term | between 2021 and 2028 |
LEASES (Schedule of Components
LEASES (Schedule of Components of Lease Costs, Lease Term and Discount Rate) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Operating lease cost: | |
Total Operating lease Cost | $ 3,012 |
Office and warehouse space [Member] | |
Operating lease cost: | |
Total Operating lease Cost | 1,656 |
Base stations [Member] | |
Operating lease cost: | |
Total Operating lease Cost | $ 697 |
Weighted Average Remaining Lease Term | 5 years 3 months 18 days |
Weighted Average Discount Rate | 2.13% |
Vehicle [Member] | |
Operating lease cost: | |
Total Operating lease Cost | $ 493 |
Weighted Average Remaining Lease Term | 1 year 3 months 18 days |
Weighted Average Discount Rate | 9.17% |
Others [Member] | |
Operating lease cost: | |
Total Operating lease Cost | $ 166 |
Weighted Average Remaining Lease Term | 1 year 7 months 6 days |
Weighted Average Discount Rate | 7.83% |
Office and warehouse space [Member] | |
Operating lease cost: | |
Weighted Average Remaining Lease Term | 1 year 3 months 18 days |
Weighted Average Discount Rate | 5.26% |
LEASES (Schedule of Supplementa
LEASES (Schedule of Supplemental Cash Flow Information Related to Operating Leases) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 3 |
Right-of-use assets obtained in exchange for lease obligations (non-cash): | |
Operating leases |
LEASES (Schedule of Maturities
LEASES (Schedule of Maturities of Operating Lease Liabilities) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Period: | |
2021 | $ 2,974 |
2022 | 1,349 |
2023 | 456 |
2024 | 372 |
2025 | 328 |
Thereafter | 436 |
Total operating lease payments | 5,915 |
Less: imputed interest | (367) |
Present value of lease liabilities | $ 5,548 |
INTANGIBLE ASSETS, NET (Narrati
INTANGIBLE ASSETS, NET (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
INTANGIBLE ASSETS, NET [Abstract] | ||
Estimated aggregate amortization of intangible assets - 2021 | $ 5,236 | |
Estimated aggregate amortization of intangible assets - 2022 | 5,088 | |
Estimated aggregate amortization of intangible assets - 2023 | 3,712 | |
Estimated aggregate amortization of intangible assets - 2024 | 3,050 | |
Estimated aggregate amortization of intangible assets - 2025 | 2,296 | |
Fixed assets transfer to intangible assets | $ 2,992 | $ 7,769 |
INTANGIBLE ASSETS, NET (Schedul
INTANGIBLE ASSETS, NET (Schedule of Intangible Assets, Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||
Opening balance | $ 26,321 | $ 40,448 | |||
Impairment | (3,661) | [1] | (13,862) | [2] | |
Amortization | (5,882) | [3] | (7,890) | ||
Additions | 2,992 | 7,769 | |||
Translation differences | (388) | (144) | |||
Closing balance | 19,382 | 26,321 | 40,448 | ||
Customer Relationship [Member] | |||||
Opening balance | 9,107 | 24,133 | |||
Impairment | (3,661) | [1] | (10,914) | [2] | |
Amortization | (2,115) | [3] | (4,112) | ||
Additions | |||||
Translation differences | |||||
Closing balance | 3,331 | 9,107 | 24,133 | ||
Technology [Member] | |||||
Opening balance | 13,053 | 12,100 | |||
Impairment | [1] | (2,948) | [2] | ||
Amortization | (2,871) | [3] | (2,549) | ||
Additions | 2,992 | 6,436 | |||
Translation differences | 243 | 14 | |||
Closing balance | 13,417 | 13,053 | 12,100 | ||
Other Intangible Assets [Member] | |||||
Opening balance | 4,161 | 4,215 | |||
Impairment | [1] | [2] | |||
Amortization | (896) | [3] | (1,229) | ||
Additions | 1,333 | ||||
Translation differences | (631) | (158) | |||
Closing balance | $ 2,634 | $ 4,161 | $ 4,215 | ||
[1] | Due to the decline in the results of Road Track (See Note 3) and the current expectation of management for further potential decrease in Road Track anticipated performance, the company performed on June 30, 2020, an impairment analysis of the intangible assets which relate directly to the operation of Road Track. Based on such analysis the company recorded an impairment charge further described below: | ||||
[2] | Due to the decline in the results of Road Track (See Note 3) and the current expectation of management for further potential decrease in Road Track anticipated performance, the company performed on December 31, 2019, an impairment analysis of the intangible assets which relate directly to the operation of Road Track. Based on such analysis the company recorded an impairment charge further described below: | ||||
[3] | As of December 31, 2020, the estimated aggregate amortization of intangible assets for the next five years is as follows: 2021- US$ 5,236 thousand, 2022- US$ 5,088 thousand, 2023- US$ 3,712 thousand, 2024- US$ 3,050 thousand and 2025 – US$ 2,296 thousand. |
GOODWILL (Narrative) (Details)
GOODWILL (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Accumulated impairment loss | $ 29,890 | $ 19,390 |
GOODWILL (Schedule Of Goodwill)
GOODWILL (Schedule Of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||
Goodwill [Line Items] | |||||
Goodwill, beginning balance | $ 50,086 | [1] | $ 62,896 | ||
Reimbursement | (813) | ||||
Impairment | (10,508) | [2] | (12,292) | [3] | |
Translation differences | 284 | 295 | |||
Goodwill, ending balance | 39,862 | [1] | 50,086 | [1] | 62,896 |
Telematics Services [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill, beginning balance | 43,383 | [1] | 55,069 | ||
Reimbursement | (733) | ||||
Impairment | (9,479) | [2] | (11,088) | [3] | |
Translation differences | 248 | 135 | |||
Goodwill, ending balance | 34,152 | [1] | 43,383 | [1] | 55,069 |
Telematics products [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill, beginning balance | 6,703 | [1] | 7,827 | ||
Reimbursement | (80) | ||||
Impairment | (1,029) | [2] | (1,204) | [3] | |
Translation differences | 36 | 160 | |||
Goodwill, ending balance | $ 5,710 | [1] | $ 6,703 | [1] | $ 7,827 |
[1] | The accumulated amount of goodwill impairment loss as of December 31, 2020, and 2019 was US$ 29.89 million and US$ 19.39 million, respectively. | ||||
[2] | As a result of the circumstances described in note 9(**) the company recorded on June 30, 2020, a goodwill impairment in the total amount of US$ 10.5 million in connection with two reporting unit (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 3.5 years of projected net cash flows, a discount rate of 17.5% and a long-term growth rate of 0.5%. As of December 31, 2020, management preformed additional quantitative analysis and determined that no further impairment is required to be recognized. | ||||
[3] | As a result of the circumstances described in note 9(*) the company recorded on December 31, 2019, a goodwill impairment in the total amount of US$ 12.3 million in connection with two reporting units (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 discount rate of 14.9% and a long-term growth rate of 0.5%. |
CREDIT FROM BANKING INSTITUTI_3
CREDIT FROM BANKING INSTITUTIONS (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Aug. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||||
Repayments of long term debt | $ 18,157 | $ 8,938 | $ 7,994 | ||
Amount of total equity | 127,192 | $ 129,330 | |||
Unutilized short-term lines of credit | $ 1,600 | ||||
Loan Covenants [Member] | |||||
Debt Instrument [Line Items] | |||||
Ratio of total equity | 30.00% | ||||
Amount of total equity | $ 15,000 | ||||
EBITDA amount | $ 10,000 | ||||
Commercial Israeli Bank [Member] | |||||
Debt Instrument [Line Items] | |||||
Proceeds from long term debt | $ 81,700 | ||||
Long term debt term | 5 years | ||||
Interest rate | 0.53% | 1.60% | |||
Repayments of long term debt | $ 8,000 | ||||
Commercial Israeli Bank [Member] | ILS [Member] | |||||
Debt Instrument [Line Items] | |||||
Proceeds from long term debt | $ 296,000 | ||||
Repayments of long term debt | $ 30,000 |
CREDIT FROM BANKING INSTITUTI_4
CREDIT FROM BANKING INSTITUTIONS (Schedule of Short Term Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Short-term loans - linked to the Mexican Pezo | $ 920 | |
Current maturities of long-term loan (Note 11B) | 19,468 | 18,110 |
Credit from banking institutions | $ 20,388 | $ 18,110 |
CREDIT FROM BANKING INSTITUTI_5
CREDIT FROM BANKING INSTITUTIONS (Schedule of Amount to be Paid) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
First year - current maturities | $ 20,388 |
Second year | 19,468 |
Third year | 14,600 |
Total | $ 54,456 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued expenses | $ 16,000 | $ 7,663 |
Accrued payroll and related taxes | 7,724 | 9,072 |
Government institutions | 6,379 | 4,663 |
Accrued dividend | 1,461 | 5,066 |
Others | 3,257 | 2,902 |
Total | 37,677 | 31,153 |
Other Current Liabilities [Member] | ||
Operating lease liabilities, current | $ 2,856 | $ 1,787 |
CONTINGENT LIABILITIES (Brazili
CONTINGENT LIABILITIES (Brazilian Internal Revenue Service) (Details) $ in Thousands | Jun. 24, 2010USD ($) | Jun. 24, 2010BRL (R$) | Oct. 01, 2005USD ($) | Apr. 25, 2021USD ($) | Apr. 25, 2021BRL (R$) | Feb. 28, 2021BRL (R$) |
Loss Contingencies [Line Items] | ||||||
Offsetting amount | $ | $ 2,100 | |||||
Tax Assessment [Member] | Brazilian Internal Revenue Service [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Aggregate sum claimed pursuant to tax deficiency | $ | $ 3,120 | |||||
Tax Assessment [Member] | Brazilian Internal Revenue Service [Member] | Subsequent Event [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Estimated amount of aggregate sum claimed pursuant to the tax assessment (principal amount, interest and penalties) | $ | $ 247 | |||||
Tax Assessment [Member] | Brazilian Internal Revenue Service [Member] | Brazil, Brazil Real | ||||||
Loss Contingencies [Line Items] | ||||||
Aggregate sum claimed pursuant to tax deficiency | R$ | R$ 5567032 | |||||
Tax Assessment [Member] | Brazilian Internal Revenue Service [Member] | Brazil, Brazil Real | Subsequent Event [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Remainder of debt owed if Federal Government does not file appeal | R$ | R$ 2000 | |||||
Estimated amount of aggregate sum claimed pursuant to the tax assessment (principal amount, interest and penalties) | R$ | R$ 128000 |
CONTINGENT LIABILITIES (Brazi_2
CONTINGENT LIABILITIES (Brazilian Federal Communication Agency - Anatel) (Details) | Jan. 12, 2016USD ($) | Jan. 12, 2016BRL (R$) | Jul. 13, 2015USD ($) | Mar. 05, 2012USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020BRL (R$) | Nov. 22, 2016USD ($) | Nov. 22, 2016BRL (R$) | Dec. 31, 2020USD ($) | Dec. 31, 2020BRL (R$) |
Loss Contingencies [Line Items] | ||||||||||
Amount of compensation to plaintiff | $ 9,300 | |||||||||
ILS [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Amount of compensation to plaintiff | $ 30,000 | |||||||||
Unfavorable Regulatory Action FUST Contribution [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Additional tax assessment | $ 686,000 | |||||||||
Aggregate tax assessment | $ 3,130,000 | |||||||||
Unfavorable Regulatory Action FUST Contribution [Member] | Tax Year 2007 and 2008 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Previous tax assessment | 1,020,000 | |||||||||
Unfavorable Regulatory Action FUST Contribution [Member] | Tax Year 2010 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Previous tax assessment | 714,000 | |||||||||
Unfavorable Regulatory Action FUST Contribution [Member] | Tax Year 2011 and 2012 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Previous tax assessment | 712,000 | |||||||||
Unfavorable Regulatory Action FUST Contribution [Member] | Brazil, Brazil Real | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Additional tax assessment | R$ | R$ 3564031 | |||||||||
Aggregate tax assessment | R$ | R$ 16280000 | |||||||||
Unfavorable Regulatory Action FUST Contribution [Member] | Brazil, Brazil Real | Tax Year 2007 and 2008 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Previous tax assessment | R$ | 5,310,332 | |||||||||
Unfavorable Regulatory Action FUST Contribution [Member] | Brazil, Brazil Real | Tax Year 2010 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Previous tax assessment | R$ | 3,708,869 | |||||||||
Unfavorable Regulatory Action FUST Contribution [Member] | Brazil, Brazil Real | Tax Year 2011 and 2012 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Previous tax assessment | R$ | 3,701,330 | |||||||||
Unfavorable Regulatory Action [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Total amount claimed | $ 93,000,000 | |||||||||
Unfavorable Regulatory Action [Member] | ILS [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Total amount claimed | $ 300,000,000 | |||||||||
Unfavorable Regulatory Action FUNTELL Contribution [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Additional tax assessment | $ 281,000 | |||||||||
Aggregate tax assessment | 930,000 | |||||||||
Unfavorable Regulatory Action FUNTELL Contribution [Member] | Tax Year 2007 and 2008 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Previous tax assessment | 191,000 | |||||||||
Unfavorable Regulatory Action FUNTELL Contribution [Member] | Tax Year 2010 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Previous tax assessment | $ 265,000 | $ 188,000 | ||||||||
Unfavorable Regulatory Action FUNTELL Contribution [Member] | Brazil, Brazil Real | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Additional tax assessment | R$ | R$ 1460827 | |||||||||
Aggregate tax assessment | R$ | 4,800,000 | |||||||||
Unfavorable Regulatory Action FUNTELL Contribution [Member] | Brazil, Brazil Real | Tax Year 2007 and 2008 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Previous tax assessment | R$ | 991,613 | |||||||||
Unfavorable Regulatory Action FUNTELL Contribution [Member] | Brazil, Brazil Real | Tax Year 2010 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Previous tax assessment | R$ | R$ 1377564 | R$ 977453 |
CONTINGENT LIABILITIES (Commitm
CONTINGENT LIABILITIES (Commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Minimum future rentals under operating leases - 2021 | $ 2,930 | ||
Minimum future rentals under operating leases - 2022 | 880 | ||
Minimum future rentals under operating leases - 2023 | 40 | ||
Leasing fees | $ 3,200 | $ 4,100 | $ 3,100 |
STOCKHOLDERS' EQUITY (Narrative
STOCKHOLDERS' EQUITY (Narrative) (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | 13 Months Ended | ||||||||||||
Mar. 31, 2021USD ($) | Apr. 30, 2019shares | Mar. 31, 2019shares | Sep. 30, 2018shares | Feb. 27, 2017USD ($) | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) | Dec. 31, 2017shares | Jan. 31, 2020USD ($) | Jan. 31, 2019USD ($) | Jan. 31, 2018USD ($) | Mar. 31, 2021₪ / shares | May 21, 2020USD ($) | ||
Amount authorized for repurchase of ordinary shares | $ | $ 25,000 | ||||||||||||||
Treasury stock acquired | shares | 2,662,125 | 2,662,125 | 2,507,314 | ||||||||||||
Percentage of outstanding stock in treasury stock | 11.30% | 10.70% | |||||||||||||
Dividend paid | $ | $ 5,000 | $ 4,918 | $ 14,940 | $ 15,366 | $ 5,000 | $ 20,000 | $ 20,200 | ||||||||
Stcok repurchased by subsidiary, shares | shares | 227,828 | ||||||||||||||
Stcok repurchased by subsidiary, amount | $ | [1] | $ 6,001 | |||||||||||||
Road Track [Member] | |||||||||||||||
Shares Issued during period | shares | 373,489 | 373,489 | |||||||||||||
Shares return due to downward transaction price | shares | 300,472 | 300,472 | |||||||||||||
Subsequent Event [Member] | |||||||||||||||
Dividend paid | $ | $ 10,000 | ||||||||||||||
Cash dividend declared, value per share | ₪ / shares | ₪ 0.48 | ||||||||||||||
Dividends payable date | 2019-04 | ||||||||||||||
[1] | See Note 14A5 |
STOCKHOLDERS' EQUITY (Schedule
STOCKHOLDERS' EQUITY (Schedule of Common Stock) (Details) - ₪ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Stockholders' Equity Note [Abstract] | ||
Ordinary shares, par value | ₪ 0.3333 | ₪ 0.3333 |
Ordinary shares, registered | 60,000,000 | 60,000,000 |
Ordinary shares, issued and fully paid | 23,475,431 | 23,475,431 |
OTHER INCOME (EXPENSES), NET _3
OTHER INCOME (EXPENSES), NET (non-operational) (Narrative) (Details) - USD ($) $ in Thousands | Sep. 13, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Measurement of the previous investment in this companies at the acquisition date to fair value | [1] | $ 14,677 | |||
Road Track [Member] | |||||
Measurement of the previous investment in this companies at the acquisition date to fair value | $ 14,700 | ||||
[1] | during 2018, as a result of the acquisition described in Note 3 the company gained control over certain companies that previously were accounted under the equity method (“JV's”) and began to include these JV's in the consolidated. The company recorded one time gain in the amount of approximately $14.7 million from measurement of the JV's at the acquisition date to fair value. |
OTHER INCOME (EXPENSES), NET _4
OTHER INCOME (EXPENSES), NET (non-operational) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Other Income and Expenses [Abstract] | ||||
Expenses related to Road Track acquisition | $ (1,539) | |||
Gain from measurement of previously held interests at acquisition date fair value | [1] | 14,677 | ||
Others | (272) | (26) | 13,138 | |
Other income, net | $ (272) | $ (26) | $ 13,138 | |
[1] | during 2018, as a result of the acquisition described in Note 3 the company gained control over certain companies that previously were accounted under the equity method (“JV's”) and began to include these JV's in the consolidated. The company recorded one time gain in the amount of approximately $14.7 million from measurement of the JV's at the acquisition date to fair value. |
FINANCING INCOME, NET (Details)
FINANCING INCOME, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Other Income, Nonoperating [Abstract] | ||||
Short-term interest income, (expenses) commissions and other | $ (895) | $ (944) | $ 64 | |
Gains (loss) in respect of marketable securities and other investments | 4,375 | (241) | 166 | |
Interest expenses in respect of long-term loans | (1,299) | (1,666) | (528) | |
Interest income in respect of deposits | 302 | 500 | 640 | |
Income (expenses) related to taxes positions | (501) | 203 | 210 | |
Exchange rate differences and others, net | (1,350) | (491) | 684 | |
Income (expenses) in respect of changes in Obligation to purchase non-controlling interests | [1] | 848 | 3,215 | (519) |
Financing income, net | $ 1,480 | $ 576 | $ 717 | |
[1] | See Note 1Y |
INCOME TAX (Narrative) (Details
INCOME TAX (Narrative) (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2020USD ($) | Nov. 30, 2020ILS (₪) | Dec. 31, 2020USD ($) | Dec. 31, 2019ILS (₪) | Dec. 31, 2018 | Nov. 30, 2020ILS (₪) | |
Income Taxes [Line Items] | ||||||
Tax rate applicable to the Company | 23.00% | 23.00% | 23.00% | |||
Preferred Company [Member] | Scenario One [Member] | ||||||
Income Taxes [Line Items] | ||||||
Tax rate applicable to the Company | 16.00% | |||||
Preferred Company [Member] | Scenario One [Member] | Maximum [Member] | ||||||
Income Taxes [Line Items] | ||||||
Tax rate applicable to the Company | 9.00% | |||||
Preferred Company [Member] | Scenario One [Member] | Minimum [Member] | ||||||
Income Taxes [Line Items] | ||||||
Tax rate applicable to the Company | 7.50% | |||||
Technological Preferred Enterprise [Member] | ||||||
Income Taxes [Line Items] | ||||||
Tax rate applicable to the Company | 12.00% | |||||
Consolidated revenues | $ | $ 10,000 | |||||
Technological Preferred Enterprise [Member] | Scenario One [Member] | ||||||
Income Taxes [Line Items] | ||||||
Tax rate applicable to the Company | 7.50% | |||||
Israeli Tax Authority (ITA) [Member] | ||||||
Income Taxes [Line Items] | ||||||
Income tax liability for prior year tax assessments | $ | $ 3 | |||||
Timing difference - deductions | $ | 2 | |||||
Amount received from tax authorities | $ | 4 | |||||
Amount paid to tax authorities as interest expense | $ | $ 0.5 | |||||
Israeli Tax Authority (ITA) [Member] | ILS [Member] | ||||||
Income Taxes [Line Items] | ||||||
Income tax liability for prior year tax assessments | ₪ | ₪ 9 | |||||
Timing difference - deductions | ₪ | ₪ 6 | |||||
Amount received from tax authorities | ₪ | ₪ 13 | |||||
Amount paid to tax authorities as interest expense | ₪ | ₪ 2 | |||||
Claim under tax assessment | ₪ | ₪ 2 |
INCOME TAX (Schedule of Compone
INCOME TAX (Schedule of Components of Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current taxes: In Israel | $ 5,841 | $ 6,155 | $ 6,622 |
Current taxes: Outside Israel | 4,341 | 7,674 | 8,325 |
Current taxes | 10,182 | 13,829 | 14,947 |
Deferred taxes: In Israel | (553) | 299 | 781 |
Deferred taxes: Outside Israel | (1,605) | (2,545) | 1,565 |
Deferred tax expense (benefit) | (2,158) | (2,246) | 2,346 |
Taxes in respect of prior years: In Israel | 2,751 | 439 | (20) |
Taxes in respect of prior years: Outside Israel | 81 | 212 | |
Taxes in respect of prior years | 2,832 | 651 | (20) |
Income tax expense (benefit) | $ 10,856 | $ 12,234 | $ 17,273 |
INCOME TAX (Schedule of Income
INCOME TAX (Schedule of Income Tax Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Pretax income | $ 29,039 | $ 23,204 | $ 76,233 |
Statutory tax rate | 23.00% | 23.00% | 23.00% |
Tax computed at the ordinary tax rate | $ 6,679 | $ 5,337 | $ 17,534 |
Nondeductible expenses (income) | 2,220 | 3,117 | (2,785) |
Losses in respect of which no deferred taxes were generated (including changes in valuation allowance) | (47) | (236) | |
Deductible financial expenses recorded to other comprehensive income | 470 | 297 | (177) |
Tax adjustment in respect of different tax rates | 753 | 3,045 | 2,384 |
Taxes in respect of withholding at the source from royalties and dividends | 725 | 31 | |
Adjustment in respect of tax rate deriving from "approved enterprises" | (1,583) | (128) | (100) |
Tax related to previous years | 2,832 | 651 | (20) |
Others | (468) | (810) | 642 |
Income tax expense (benefit) | $ 10,856 | $ 12,234 | $ 17,273 |
INCOME TAX (Summary of Deferred
INCOME TAX (Summary of Deferred Taxes) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Provision for vacation, recreation and bad debt | $ 1,894 | $ 1,180 |
Provision for other employee related obligations, non-current | 1,400 | 1,193 |
Provision for deferred revenues/expenses and other obligations, non-current | 4,292 | 4,631 |
Carry forward tax losses, non-current | 551 | |
Other temporary differences, net, non-current | 1,279 | 514 |
Gross deferred income taxes, non-current | 9,416 | 7,518 |
Deferred income taxes included in long-term investments and other assets | 11,910 | 10,385 |
Deferred income taxes included in long-term liabilities | (2,494) | (2,867) |
Total deferred income taxes | $ 9,416 | $ 7,518 |
INCOME TAX (Schedule of Incom_2
INCOME TAX (Schedule of Income Before Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
The Company and its Israeli subsidiaries | $ 38,469 | $ 27,045 | $ 46,138 |
Non-Israeli subsidiaries | (9,430) | (3,841) | 30,095 |
Income before income tax | $ 29,039 | $ 23,204 | $ 76,233 |
EARNINGS PER SHARE (Schedule of
EARNINGS PER SHARE (Schedule of Net Income Used in Earnings Per Share) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Net income attributable to stockholder's used for the computation of basic and diluted earnings per share | $ 16,123 | $ 6,889 | $ 60,675 |
EARNINGS PER SHARE (Schedule _2
EARNINGS PER SHARE (Schedule of Weighted Average Shares Used in Earnings Per Share) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Weighted average number of shares used in the computation of basic and diluted earnings per share | 20,813 | 21,037 | 21,077 |
RELATED PARTIES (Details)
RELATED PARTIES (Details) | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020ILS (₪) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Yehuda Kahane [Member] | ||||
Related Party Transaction [Line Items] | ||||
Monthly cost | $ 4,400 | |||
Aggregate amounts paid | 64,000 | $ 62,000 | $ 61,000 | |
ILS [Member] | Yehuda Kahane [Member] | ||||
Related Party Transaction [Line Items] | ||||
Monthly cost | ₪ | ₪ 15,000 | |||
Izzy Sheratzky [Member] | ||||
Related Party Transaction [Line Items] | ||||
Monthly cost | ₪ | ₪ 225,000 | |||
Monthly cost Plus VAT | $ 70,000 | |||
Term of agreement | 3 years | 3 years | ||
Additional term of agreement | 3 years | 3 years | ||
Notice required to terminate agreement | 180 days | 180 days | ||
Vacation and sick days | 25 days | 25 days | ||
Eyal Sheratzky [Member] | ||||
Related Party Transaction [Line Items] | ||||
Monthly cost | ₪ | ₪ 175,000 | |||
Monthly cost Plus VAT | $ 54,000 | |||
Term of agreement | 3 years | 3 years | ||
Additional term of agreement | 3 years | 3 years | ||
Notice required to terminate agreement | 180 days | 180 days | ||
Vacation and sick days | 25 days | 25 days | ||
Nir Sheratzky [Member] | ||||
Related Party Transaction [Line Items] | ||||
Monthly cost | ₪ | ₪ 175,000 | |||
Monthly cost Plus VAT | $ 54,000 | |||
Term of agreement | 3 years | 3 years | ||
Additional term of agreement | 3 years | 3 years | ||
Notice required to terminate agreement | 180 days | 180 days | ||
Vacation and sick days | 25 days | 25 days | ||
Gil Sheratzky [Member] | ||||
Related Party Transaction [Line Items] | ||||
Monthly cost | ₪ | ₪ 125,000 | |||
Monthly cost Plus VAT | $ 39,000 | |||
Term of agreement | 3 years | 3 years | ||
Additional term of agreement | 3 years | 3 years | ||
Notice required to terminate agreement | 180 days | 180 days | ||
Vacation and sick days | 25 days | 25 days | ||
Tzivtit Insurance [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party commission from insurance company | $ 130,000 | 130,000 | $ 95,000 | |
Tzivtit Insurance [Member] | ILS [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party commission from insurance company | ₪ | ₪ 449,000 | |||
Tzivtit Insurance [Member] | Basic Insurance Policies [Member] | ||||
Related Party Transaction [Line Items] | ||||
Payments for insurance policies | 430,000 | 293,000 | ||
Tzivtit Insurance [Member] | Directors And Officers Liability Insurance [Member] | ||||
Related Party Transaction [Line Items] | ||||
Payments for insurance policies | $ 877,000 | $ 418,000 |
RELATED PARTIES (Schedule of Ta
RELATED PARTIES (Schedule of Target-based Cash Incentives) (Details) - Executive Officer [Member] - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2020 | Dec. 31, 2020 | ||
Related Party Transaction [Line Items] | |||
Level of incentive | 25.00% | ||
Profit Before Tax Targets Range One [Member] | |||
Related Party Transaction [Line Items] | |||
Level of incentive | 20.00% | ||
Profit Before Tax Targets Range Two [Member] | |||
Related Party Transaction [Line Items] | |||
Level of incentive | 45.00% | ||
Profit Before Tax Targets Range Three [Member] | |||
Related Party Transaction [Line Items] | |||
Level of incentive | 75.00% | ||
Profit Before Tax Targets Range Four [Member] | |||
Related Party Transaction [Line Items] | |||
Level of incentive | 110.00% | ||
Profit Before Tax Targets Range Five [Member] | |||
Related Party Transaction [Line Items] | |||
Level of incentive | 150.00% | ||
Minimum [Member] | |||
Related Party Transaction [Line Items] | |||
Profit-Before-Tax Targets | $ 24,000 | ||
Level of incentive | 15.00% | ||
Minimum [Member] | Profit Before Tax Targets Range One [Member] | |||
Related Party Transaction [Line Items] | |||
Profit-Before-Tax Targets | [1] | $ 24,001 | |
Minimum [Member] | Profit Before Tax Targets Range Two [Member] | |||
Related Party Transaction [Line Items] | |||
Profit-Before-Tax Targets | [1] | 27,501 | |
Minimum [Member] | Profit Before Tax Targets Range Three [Member] | |||
Related Party Transaction [Line Items] | |||
Profit-Before-Tax Targets | [1] | 31,001 | |
Minimum [Member] | Profit Before Tax Targets Range Four [Member] | |||
Related Party Transaction [Line Items] | |||
Profit-Before-Tax Targets | [1] | 35,001 | |
Minimum [Member] | Profit Before Tax Targets Range Five [Member] | |||
Related Party Transaction [Line Items] | |||
Profit-Before-Tax Targets | [1] | $ 39,001 | |
Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Level of incentive | 150.00% | ||
Maximum [Member] | Profit Before Tax Targets Range One [Member] | |||
Related Party Transaction [Line Items] | |||
Profit-Before-Tax Targets | [1] | $ 27,500 | |
Maximum [Member] | Profit Before Tax Targets Range Two [Member] | |||
Related Party Transaction [Line Items] | |||
Profit-Before-Tax Targets | [1] | 31,000 | |
Maximum [Member] | Profit Before Tax Targets Range Three [Member] | |||
Related Party Transaction [Line Items] | |||
Profit-Before-Tax Targets | [1] | 35,000 | |
Maximum [Member] | Profit Before Tax Targets Range Four [Member] | |||
Related Party Transaction [Line Items] | |||
Profit-Before-Tax Targets | [1] | $ 39,000 | |
[1] | Profit before tax target will not include adjustment of the value of assets and obligations to their fair value in accordance with accounting standard |
RELATED PARTIES (Narrative - Ca
RELATED PARTIES (Narrative - Cash Incentives) (Details) - Executive Officer [Member] - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Apr. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Level of incentive | 25.00% | ||
Cash incentive award, terms | since the date of its approval (an "Examined Period"), as compared to the benchmark Yield over such Examined Period; and to the extent that the Company's Stock Yield exceeds the benchmark 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% | ||
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 | ||
Subsequent Event [Member] | |||
Related Party Transaction [Line Items] | |||
Offices Holders incentives | $ 3 | ||
Minimum [Member] | |||
Related Party Transaction [Line Items] | |||
Level of incentive | 15.00% | ||
Profit before tax targets | $ 24 | ||
Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Level of incentive | 150.00% |
RELATED PARTIES (Schedule of ag
RELATED PARTIES (Schedule of aggregate amounts paid to Executive Offices) (Details) (USD $) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Izzy Sheratzky [Member] | |||
Payment to related party for services | $ 1,096 | $ 2,136 | $ 2,859 |
Eyal Sheratzky [Member] | |||
Payment to related party for services | 864 | 1,707 | 2,224 |
Nir Sheratzky [Member] | |||
Payment to related party for services | 864 | 1,707 | 2,208 |
Gil Sheratzky [Member] | |||
Payment to related party for services | $ 518 | $ 1,051 | $ 1,039 |
SEGMENT REPORTING (Narrative) (
SEGMENT REPORTING (Narrative) (Details) | Dec. 31, 2019 |
Segment Reporting [Abstract] | |
Percentage of revenue | 15.80% |
SEGMENT REPORTING (Schedule of
SEGMENT REPORTING (Schedule of Segment Reporting Infomation by Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 13, 2019 | |||
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 245,627 | $ 279,332 | $ 253,335 | |||
Operating income | 27,831 | 22,654 | 62,378 | |||
Assets | 112,364 | 146,475 | 137,660 | |||
Goodwill | 39,862 | [1] | 50,086 | [1] | 62,896 | $ 59,402 |
Expenditures for assets | 7,258 | 12,940 | 16,214 | |||
Depreciation and amortization | 14,479 | 17,154 | 9,116 | |||
Impairment of goodwill | 10,508 | [2] | 12,292 | [3] | ||
Impairment of intangible assets | 3,661 | 13,862 | ||||
Telematics Services [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 182,944 | 204,728 | 181,357 | |||
Operating income | 28,666 | 26,092 | 56,913 | |||
Assets | 89,939 | 118,361 | 101,305 | |||
Goodwill | 34,152 | 43,383 | 55,069 | |||
Expenditures for assets | 6,116 | 11,050 | 15,677 | |||
Depreciation and amortization | 12,471 | 14,671 | 8,630 | |||
Impairment of goodwill | 9,479 | 11,088 | ||||
Impairment of intangible assets | 1,869 | 10,914 | ||||
Telematics Products [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 62,683 | 74,604 | 71,978 | |||
Operating income | (835) | (3,438) | 5,465 | |||
Assets | 22,425 | 28,114 | 36,355 | |||
Goodwill | 5,710 | 6,703 | 7,827 | |||
Expenditures for assets | 1,142 | 1,890 | 537 | |||
Depreciation and amortization | 2,008 | 2,483 | $ 486 | |||
Impairment of goodwill | 1,029 | 1,204 | ||||
Impairment of intangible assets | $ 1,792 | $ 2,948 | ||||
[1] | The accumulated amount of goodwill impairment loss as of December 31, 2020, and 2019 was US$ 29.89 million and US$ 19.39 million, respectively. | |||||
[2] | As a result of the circumstances described in note 9(**) the company recorded on June 30, 2020, a goodwill impairment in the total amount of US$ 10.5 million in connection with two reporting unit (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 3.5 years of projected net cash flows, a discount rate of 17.5% and a long-term growth rate of 0.5%. As of December 31, 2020, management preformed additional quantitative analysis and determined that no further impairment is required to be recognized. | |||||
[3] | As a result of the circumstances described in note 9(*) the company recorded on December 31, 2019, a goodwill impairment in the total amount of US$ 12.3 million in connection with two reporting units (both units related to Road track operations, see Note 3). One reporting unit within the Telematics services and the other reporting unit within the Telematics product's segments. 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 discount rate of 14.9% and a long-term growth rate of 0.5%. |
SEGMENT REPORTING (Reconciliati
SEGMENT REPORTING (Reconciliation of Reporting Information from Segments to Consolidated Totals) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Segment Reporting Information [Line Items] | ||||
Total revenues of reportable segment and consolidated revenues | $ 245,627 | $ 279,332 | $ 253,335 | |
Operating Income | ||||
Total operating income for reportable segments | 27,831 | 22,654 | 62,378 | |
Other income, net | (272) | (26) | 13,138 | |
Consolidated income before taxes on income | 29,039 | 23,204 | 76,233 | |
Assets | ||||
Current assets | 179,435 | 174,150 | ||
Property and equipment, net | 37,653 | 45,900 | 50,460 | |
Total assets | 312,472 | 339,235 | 373,792 | |
Other significant items | ||||
Expenditures for assets | 7,258 | 12,940 | 16,214 | |
Asset expenditures, reportable segments and unallocated amounts | 10,234 | 18,299 | 21,382 | |
Depreciation, amortization and impairment for reportable segments | 14,479 | 17,154 | 9,116 | |
Depreciation and amortization | 33,000 | 48,997 | 14,608 | |
Segment Reconciling Items [Member] | ||||
Operating Income | ||||
Financing income, net | 1,480 | 576 | 717 | |
Assets | ||||
Current assets | 117,295 | 88,777 | 103,994 | |
Investments in affiliated and other companies | 2,171 | 4,926 | 7,644 | |
Property and equipment, net | 17,180 | 20,877 | 20,074 | |
Other unallocated amounts | 23,600 | 28,094 | 41,524 | |
Other significant items | ||||
Expenditure for assets unallocated amounts | 2,976 | 5,359 | 5,168 | |
Depreciation and amortization, unallocated amounts | 4,352 | 5,689 | 5,492 | |
Reportable Segment [Member] | ||||
Assets | ||||
Total assets | [1] | 152,226 | 196,561 | 200,556 |
Other significant items | ||||
Expenditures for assets | 7,258 | 12,940 | 16,214 | |
Depreciation, amortization and impairment for reportable segments | $ 28,648 | $ 43,308 | $ 9,116 | |
[1] | Including goodwill. |
SEGMENT REPORTING (Schedule o_2
SEGMENT REPORTING (Schedule of Revenue and Long-Lived Assets by Geographical Areas) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 245,627 | $ 279,332 | $ 253,335 |
Property and equipment, net | 37,653 | 45,900 | 50,460 |
IL [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 120,515 | 110,102 | 116,186 |
Property and equipment, net | 13,784 | 14,967 | 16,478 |
BR [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 61,470 | 98,020 | 90,842 |
Property and equipment, net | 14,462 | 21,218 | 24,562 |
Other Foreign Countries [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 63,642 | 71,210 | 46,307 |
Property and equipment, net | $ 9,407 | $ 9,715 | $ 9,420 |
SEGMENT REPORTING (Schedule o_3
SEGMENT REPORTING (Schedule of Revenues and Long-Lived Assets by Geographical Areas) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Total revenues | $ 245,627 | $ 279,332 | $ 253,335 |
Transferred at Point in Time [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 60,953 | 72,626 | |
Transferred over Time [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 184,674 | 206,706 | |
Telematics Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 182,944 | 204,728 | 181,357 |
Telematics Services [Member] | Transferred at Point in Time [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | |||
Telematics Services [Member] | Transferred over Time [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 182,944 | 204,728 | |
Telematics Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 62,683 | 74,604 | $ 71,978 |
Telematics Products [Member] | Transferred at Point in Time [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 60,953 | 72,626 | |
Telematics Products [Member] | Transferred over Time [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | $ 1,730 | $ 1,978 |
FINANCIAL INSTRUMENTS AND RIS_3
FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Trading securities | $ 6,663 | $ 358 |
Total Securities | 6,663 | 358 |
Fair Value, Inputs, Level 2 [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Trading securities | ||
Total Securities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Trading securities | ||
Total Securities | ||
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Cost of Sales [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain recognized in income on derivatives | $ 399 |