Ituran Location and Control Ltd.

ladies and gentlemen thank you for standing by welcome to the eturan third quarter 2020 results conference call all participants are present in listen only mode following management's formal presentation instructions will be given for the question and answer session for operator assistance during the conference please press star zero 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 contact Eturan's investor relations team at GK Investor and Public Relations at 1-646-688-3559 or view it in the news section of the company's website, www.eturan.com. I will now hand the call over to Mr. Ehud Helft of GK Investor Relations. Ehud, would you like to begin, please?

Thank you, good day to all of you, and welcome to E2RAN's conference call to discuss the third quarter 2020 results. I would like to thank E2RAN's management for hosting this conference call. With me today on the call are Mr. Eyal Sharadsky, the co-CEO, Mr. Udi Mizrahi, Deputy CEO and VP Finance, and Mr. Eli Kamar, the CFO of E2RAN. Eyal will begin with a summary of the quarter results, followed by Eli with a summary of the financials. We will then open the call for the questions and answers session. I would like to remind everyone that the safe harbor in the press release also covers the content of this conference call. And now, Eyal, would you like to begin, please?

Thank you, Ehud. I'd like to welcome all of you, and thank you for joining us today. I hope you and your families are continuing to stay healthy, and I wish all those who have been impacted by the virus a fast recovery. I do hope that with the recent progress towards a vaccine, we can soon look forward to a post-COVID world. We are happy with the improvement in our result in the third quarter. And this is down to our effort to overcome difficulties in many of our geographies due to the ongoing pandemic. We are also pleased that when looking at our revenues in local currencies, our subscription fee revenues were at similar level to those of the quarter last year, demonstrating the stability in the E2R business model. On the profitability side, the steps we took earlier this year as the effect of the pandemic became apparent. and nevertheless to reach similar operating profit and EBITDA levels compared with last year when excluding forest impacts. We reported an EBITDA of $15 million. I remind you that we had expected third quarter EBITDA to be similar to that of the previous quarter, which was $13.9 million. So I'm happy with that we are being successful in mitigating the impact of the pandemic on our profitability. On the cash side, we generated cash flow from operating activities of $13.6 million. This brings our business back to a net cash position for the first time since our acquisition of Roadtrak two years ago. Our ability to remain profitable and cash flow positive throughout this global crisis demonstrates the overall resilience and stability of our business model. Our stability is built on our subscriber base, which remains strong with close to 1.8 million subscribers. whereby the majority of them are paying us on an ongoing basis a monthly fee. Our starting point each month is already on the back of this. During the quarter, our aftermarket business returned to growth for the first time since the pandemic started, and we added 13,000 new subscribers in the quarter. The regions that were particularly strong were Israel and the U.S., In Brazil, the trend is also improving and we saw reduced net decrease of subscribers in the quarter compared with the previous one. We do hope to maintain this trend going forward. However, making predictions is difficult at the moment in the current environment and the new wave of lockdowns taking effect globally. The lower level of new car sales in many of our geographies during the third quarter impacted our OEM partners' ability to recruit new customers and grow the OEM side of the business, and we therefore saw a decline of 12,000 OEM subscribers. However, the fall was not as sharp as that of last quarter, which, if you remember, was a decline of 27,000 in the OEM base. Despite the impact of the pandemic and the weak economy situation in Brazil and Latin America, on our OEM business, we are working hard to harvest the synergies across our business and our various geographies. We believe that once we exit into a post-COVID world, Itoan is very well positioned for growth. In summary, overall we are very pleased with our third quarter financial results, which represent the resilience of our business model. We have used this period to make improvements throughout our business to improve efficiencies and harvest synergies. As we emerge from the corona pandemic, I believe we are well positioned to resume growth and increase profitability. I will now hand the call over to Eli for the financial review. Eli? Thank you, Eyal.