Ladies and gentlemen, thank you for standing by. Welcome to the Ituran Third Quarter 2015 Results Conference Call. All participants are at present in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. You should have all received by now the Company's Press Release. If you have not received it, please call GK Investor Relations at 1-646-201-9246. I will now like to hand over the call to Mr. Kenny Green of GK Investor Relations. Mr. Green, would you like to begin?

Thank you, operator. Good day to all of you and welcome to Ituran's conference call to discuss the third quarter 2015 results. I would like to thank Ituran's management for this call. With me today on the line are Mr. Eyal Sheratzky, CEO, Mr. Eli Kamer, CFO and Mr. Udi Mizrahi, VP, Finance. Eyal will begin with a summary of the quarter's results, followed by Eli with a summary of the financials. We will then open the call for the question-and-answer session. I would like to remind everyone that the Safe Harbor statements in today's Press Release also covers the content of this conference call. And now, Eyal, would you like to begin please?

Thank you, Kenny. I’d like to welcome all of you and thank you for joining us today. We are pleased with the results of the third quarter. Particularly, the strong and record growth in our subscriber base in both the past two quarters. Our subscriber base grew by a record of 36,000 in the third quarter after growth of 34,000 last quarter. So far in 2015, we've added almost 100,000 subscribers, an 80% increase in net subscriber adds compared with the same nine month period of last year. This growth was due to the extensive work we've done over the past few years to bring new products to market which extended our addressable markets by targeting the lower end in Brazil, the uninsured segment of the markets. We are seeing tremendous attraction in both Brazil and Israel for our new products and services and you can see this in increased subscribers also. I want to stress that while every new subscriber add bring us additional revenue, we have an existing operating infrastructure is in place to support them, which normally doesn't need to be extended. However, in 2015 our growth in subscribers has been a close to double the rate we have historically. We had to therefore increase some cost to support this accelerated growth. Going forward as our subscriber base continues to grow from this point, we can bring much of the new revenue growth down to the bottom-line. Our subscriber growth is the prime indicator which demonstrates that our core business continues to grow very solidly and remains a strong and enhancive area. While subscriber add demonstrate that the fundamentals underpinning our business are unexceptionally strong, the strengthening of the U.S. dollar versus the local currencies in which we sell in, in particular the Brazilian real makes it hard to show that growth in U.S. dollars terms. In local currency terms which discounts the effect of the weakening of the various local currencies we operate in the [indiscernible] our growth was apparent. We would have grown revenues overall by 17%, while subscription revenue grew in local currencies by 18%. Our operating income would have shown 7% growth over last year. We generated operating cash flow in the quarter of $8.8 million, ending the quarter with $31.5 million in cash and equivalents. We continue to share the fruits of our success with our shareholders and during the third quarter we declared dividend of $3.1 million representing over 50% of our net profit in the quarter. I'd now like to provide you with a brief update with regard to our performance in our two main regions Brazil and Israel. Brazil continues to grow nicely and we see no impact from the weak economic environment on our success there. As you may have seen on September 30th, our subsidiary in Brazil from a joint venture called Ituran Road Track 50% owned by us IRT. IRT is signed a 4 million agreement with one of the major and global outdoor carmakers in Brazil to provide our customers with telematics services on various new car models they sell for the first year. Their services can include vehicle security, personal safety, remote diagnostic, web and app application and concierge. While we do expect some minimal investment and expense requirements during the first year, in 2017, we expect the joint venture to become profitable and become increasingly accretive to Ituran. This agreement very much strengthens our position in Brazil, as we evolve into a player in the automotive industry after two decades of operating in the aftermarket segments only. It will bring us hundreds of thousands of additional subscribers, positioning us as a clear market leader in Brazil. We also believe this agreement also open up many future opportunities for us in Latin America. We see our business still at an early stage in the Brazilian market with low penetration with much potential to grow and continue our success. In Israel as the major player, our business continues grow in line with new car sales which remain at high levels. At the same time we continue to penetrate the lower segments of the market through our Ituran safe service which is enabling us to grow. Overall we remain pleased with the strength and stability of the Israeli business and it is also supporting the overall growth in net subscribers. In summery from a business perspective, 2015 so far has been one of the most successful periods in our history, adding a record number of subscribers in a short period. Because of currency factors which are beyond our control in U.S. dollars this is not fully apparent, but over the long-term we expect the positive trend in our business we eventually become very apparent in our financials. We remain very well positioned to benefit in the coming quarters from our strong growth in subscribers and we're working hard to continue our success throughout 2015 and beyond. I will now hand the call over to Eli for the financial review. Eli?

Thanks, Eyal. Revenues for the third quarter of 2015 were $43.8 million, a decrease of 6% when compared to revenue of $46.5 million in the third quarter of 2014. When excluding the currency impact of the strengthening U.S. dollar, our year-over-year growth in our revenue would have been 17%. Revenue breakdown for the quarter was $31.5 million coming from subscription fees, a 9% year-on-year decrease. The local currency revenues from services increased by 18% over the third quarter of last year. Product revenues increased by 2% compared with the same period last year in local currency terms product revenues grew by 40% compared with product revenues reported in the third quarter in 2014. The geographic breakdown of revenues in the third quarter was as follows, Israel 53%, Brazil 32%, Argentina 10% and United States 5%. Gross margin in the quarter was 50.2% compared with a gross margin of 53.5% in the third quarter of last year. The decrease in the gross margin was mainly due to the weakening of Brazilian real and the Israel shekel versus the U.S. dollar. In addition, cost of services revenue increased due to the fast growth in subscribers in the past two quarters. Operating profit for the third quarter of 2015 was $9.8million, a decrease of 19% compared with an operating profit of $12.1 million in the third quarter of 2014. Excluding the impact of the change in exchange rate over the period, the operating profits would have increased 7% over the third quarter of last year. EBITDA for the quarter was $12.5 million or 28.6% of revenue, a decrease of 16% compared to an EBITDA of $15 million or 32.2% of revenues in third quarter of 2014. Excluding the impact of the change in exchange rates over the period, the EBITDA would have increased by 11% over the third quarter of last year. Net profit was $6.2 million in the quarter or fully diluted EPS of $0.29. This is compared with a net profit of $8.7 million or fully diluted EPS of $0.41 in the third quarter of 2014. Cash flow from operations during the quarter was $8.8 million. As of September 30, 2015, the Company had net cash including marketable securities of $31.5 million or $1.50 per share. This is compared with $33.5 million or $1.59 per share as of June 30, 2015. For the third quarter, a dividend of $3.5 million was declared, representing 50% of net income. The dividend's record date is December 23, 2015 and the dividend will be paid on January 06, 2015, net of taxes and liabilities at the rate of 25%. And with that, I’d like to open the call for the question-and-answer session. Operator?

Thank you. Ladies and gentlemen, at this time we will begin the question-and-answer session. [Operator Instructions] The first question is from Matthew Handorf of Harbor Assets Management. Please go ahead.

Hey, thanks for taking my questions and congrats on the continued success with the sub adds. I have two questions first can we just start off on the Ituran Road Track JV maybe help me understand when we should start seeing sub adds here. How to think about the economics anything around that would be helpful? Thanks.

Okay. Regarding the joint venture with Ituran that we have reports and then you asked me a question so actually based on the contract with this automotive company of course their whole project is depends on how many cars they will -- it will sell. The current situation no doubt there are less numbers of our cars being sold in Brazil and of course it's -- will represent lower potentially if the current situation will stay the next 5 weeks which I believe there will be some changes but nobody knows so the numbers will be lower than historically the numbers of car being sold in Brazil. But since the project based on one customer so we have actually we secured the payments we secured the revenues and since the business depend on how many subscribers we will get so we can be flexible with the cost, means if the project will provide 1 million cars or if it will provide 2 million cars, we will not have the same cost and our business plan is different. So, most likely or even we have the strong confidence that this JV will be a profitable. We expect that it will be very profitable but of course it's depends on the size of the Brazilian car markets. This is regarding the correlation between the economy and this let’s say this deal. By the way also the contract is for its limited -- with a limited period historically and also based on our understanding once this project and this next year will show and our customer -- it's meaning the car manufacturer will be satisfied with the services. There is almost no doubt that it will have a continuation in the future after the first period of the contract because it will be part of this brand, it will be part of the services that have touched to every car that it sells. So, I would say that still it is for us is kind of a game changer in terms of the segment that we're operating in.

And just so I understand, the -- in the current quarter Q4, with your services be included in the cars that are being manufactured and sold or is this 2016 when we should start seeing this?

Okay. First of all, it should be clear and we also reported, we are not consolidating the result of this JV, we are also reported of the bottom-line, as an equity portion. So, if we are looking on the bottom-line, how it will appear so it is as follows. First of all, we already sold and we sold more than thousands and we're in the rhythm of 10,000 currently. We already started the project but at the total number of units or total numbers of customers we currently have and thus we will expect based on the contract that we will have during 2016, still our cost and our investments in order to deploy all the infrastructure that we need including the human resources, including the space of the offices, including et cetera et cetera should be deployed on day one which is already behind us but -- so at the beginning the cost until the end of 2016, maybe beginning of 2017, where we see a lot recoveries, it means that it will -- the influence on our P&L. We're lowering our net profits. But from the moment that we will have a breakeven which will be around the end of 2016 beginning 2017 add the new subscriber will help us to increase our net profits. This is the reason, in terms of subscribers if we would consolidate it you will see currently additional tens of thousands of subscribers and also in 2016, additional hundreds of thousands of subscribers but since we're not consolidating it under the accounting policy, we are not publishing the subscribers numbers the operating profit and the revenues. The numbers by the way that you -- and if I try also to get more details about the subscribers that we really report, the numbers that we reported 36,000 are not including even single customer of this project, okay. This is only customers, the net customers that we add in the quarter according to our historical and bread and butter business I would say, which is the consumer and the insurance segment that we're doing already in Israel and Brazil more than 15 years. Okay.

And is there a number of subscribers that you need in this JV to breakeven or kind of what's that estimated number where you go from where you become profitable?

Actually it's I would say that it is no doubt that is depend on subscribers and we have some range of numbers that there is also no doubt that we will get there because we have a commitment from the car manufacturer based on the timeline to get at this point since we are not publishing it, I will mention it currently. The question is whether it will be in 8 months a year from now or whether it will be ’16 to 2 years from now, this is of course depend on the reason of this car manufacturer sales in Brazil. When we talk about 2017 as the yielding numbers of profit, we are considering the current reason which by the way it's a very and the current reason is the warrant in the last week in Brazil. We never know where the bottom is but to be a little bit more I would say fair, and we have some analyzing we read some [Indiscernible] on the market. This reason can stay but it is probably the bottom-line. We're talking about numbers that Brazil didn't faced and we see by the way 3-4 months very stable, so with this numbers we will be profitable in 2017 in the project, if it will be go down, it will go, further if it will be higher so we can make profits during 2016.

And then just one last question for me on the gross margin obviously FX is partially bringing that down and you noted that, you said that some of the faster growth of subs in the recent quarter has also pulled it down a bit, just trying -- can you give more detail on that is it just because some of these customers are in the lower end of the segment other some expenses that are kind of more you just need to leverage going forward, just trying to understand how we should think about gross margins going forward? Thank you.

Okay. Since our operating model is in a operating leverage model meaning we actually use the same cost which is mainly operator’s space and point of services usually we're growing our gross profit and our profitability rate is growing, but -- since as you can see in the last nine months since the beginning of 2015 we've been faced a very-very I would say dramatical new growth of subscribers we had to take the Company to the next level of growth so we added all the infrastructure winning again operators, offices, and servers and communication and et cetera to be ready to handle this very material growth. So it was influenced this year of course because we added in day one let's say over the first quarter of 2015 and now we can handle it without additional cost meaning what we expect is with this continued of freedom of subscriber’s growth, we will show growth of our gross margins again. We have to make this elevation of our cost for being ready to the next stage. Now we feel that we are ready. We have more confidence that we can grow numbers as you can see very close to 150,000 or 170,000 net subscribers a year don’t forget that it is something that in the last three years we did all together. So this is the reason that it is influenced in 2015 on our gross margin. We had to add resources but now based on our operating model we believe that we will grow it. One more thing that we cannot ignore is the currency exchange rate. Again when the currency exchange rate and your gross profits and your profits across the board in your P&L once the exchange rate is against that and dramatically when you look you know backward of course it's also influenced on our total growth and operating profit which by definition having some changes also in percentage.

[Operator Instructions] There are no further questions at this time. Before I ask Mr. Sheratzky to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available tomorrow on Ituran's Web site, www.ituran.co.il. Mr. Sheratzky, would you like to make your concluding statement?

Yes, on behalf of the management of Ituran, I would like to thank you for your continued interest and long-term support of our business. Have a good day.

Thank you. This concludes Ituran third quarter 2015 results conference call. Thank you for your participation. You may go ahead and disconnect.