Ituran Location and Control Ltd. (ITRN) Q3 2021 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the Ituran Third Quarter 2021 Results Conference Call. All participants are at present in a listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. 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 Ituran's Investor Relations' Team at GK Investor and Public Relations at 1-212-378-8040 or view it in the News section of the company's website, www.ituran.com. I will now hand over the call to Mr. Ehud Helft of GK Investor Relations. Mr. Helft, would you like to begin, please?

Thank you, operator. Good day to all of you and welcome to Ituran's conference call to discuss the third quarter 2021 results. I would like to thank Ituran's management for hosting this call. With me today on the call are Mr. Eyal Sheratzky, the CEO; Mr. Udi Mizrahi, Deputy CEO and VP Finance; and Mr. Eli Kamer, CFO of Ituran. 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 question-and-answer session. I'd like to remind everyone that Safe Harbor in the press release also covers the contents 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 joining us today. We are very pleased with the results of the third quarter which were again ahead of our expectations. We grew our subscriber base at the highest rate we have seen for two years with 25,000 net adds. The OEM segment is showing recovery with 4,000 net adds and our aftermarket segment saw above average growth at 21,000 net adds. This is ahead of our typical expected range of between 15,000 and 20,000. The growth we experienced in subscriber adds is a positive indication with regard to revenue growth in the quarter ahead. We continue to see strong aftermarket subscriber growth in many of the geographies in which we operate, even in a quarter which is a seasonally weaker due to the holiday season in Israel. In particular, we see increasing contribution from one of our growth engine, Usage Based Insurance or UBI. The consumer market is now becoming increasingly educated to the value that they gain by using a usage based insurance plan rather than fixed. This has led to increased traction and we are now working with all the seven major insurance companies in Israel. The Corona slowdown created plenty of new markets and opportunities and over that time, new car sales around the world went down. We identified a very strong second-hand car market in many of our geographies in Latin America, and new FinTech startups, as well as the large banks have come in to provide the financing in this specific market. However, they all needed occasion-based and connected car technologies service provider, such as Ituran, to monitor the cars and driver behavior and by this, reduce the risk of loss against the car. We therefore initiated an approach to this financing companies and offered our solution. Following on from these efforts, we are now working with a number of partners in this area and we see great potential in which to expand this business. While currently, we are only in the initial stage, we see the interest and we therefore, believe this has the potential to be significant growth engine for Ituran starting from the second half of 2022 and beyond. I would like to discuss the electronic component shortage and increasing prices that has been widely reported and is increasingly become an issue for everyone. To-date, we have successfully been managing through the shortages. It's important to note that as primarily a subscriber service business, the impact on Ituran to-date has been low, primarily on the product revenue side, which has smaller effect on our bottom line. There is also a potentially indirect impact, due to the potential slowing of new car sales simply because of the inability of car manufacturers to produce cars at the required quantity. However, Ituran is a number -- growth engines, which will increasingly benefit us in the quarters ahead, which will compensate for slows in global sales of new cars. In summary, we are performing well. But most importantly, we are seeding new growth engines, which will accelerate our growth in the years ahead. I am more excited now than ever with our long-term potential over the coming years. I will now hand the call over to Eli for a financial summary. Eli?

Thanks, Eyal. Revenues for the third quarter of 2021 were $65.7 million, a 9% increase compared with revenues of $60.3 million in the third quarter of 2020. Revenues from subscription fees were $48.3 million, up 9% if -- year-over-year. The subscriber base amounted to 1,837,000 as of September 30, 2021, an increase of 25,000 net over that of the end of the prior quarter and an increase of 85,000 since the end of the third quarter of last year. During the quarter, there was both an increase of 21,000 in the aftermarket subscriber base and an increase of 4,000 in the OEM subscriber base. Product revenues were $17.4 million, up 10% year-over-year. The geographic breakdown of revenues in the third quarter was as follow: Israel, 52%; Brazil, 24%; Rest of World, 24%. Operating income for the quarter was $13.9 million or 21.1% of revenues, an increase of 32% compared with an operating income of $10.5 million or 17.5% of revenues in the third quarter of last year. EBITDA for the quarter was $18.5 million, or 28.1% of revenues, an increase of 23% compared with an EBITDA of $15 million or 24.9% of revenues in the third quarter of last year. Financial expense for the quarter was $2.7 million compared with a financial income of $2.8 million in the third quarter of last year. The difference between -- the difference being primarily due to the change in the Saver-One market capitalization during each quarter. Adjusted net income for the third quarter of 2021, which excludes the non-cash financial impact related to Saver-One was $9.6 million or 14.6% of revenues or diluted earnings per share of $0.46 compared with $6 million or 10% of revenues or diluted earnings per share of net $0.29. Cash flow from operations for the third quarter of 2021 was $11.5 million. As of September 30, 2021, the company had cash including marketable securities of $67 million and debt of $34.6 million, amounting to a net cash of $32.4 million. This is compared with cash including marketable securities of $78.8 million, and a debt of $54.5 million amounting to a net cash of $24.3 million, as of December 31, 2020. For the third quarter of 2021, a dividend of $3 million was declared. During the quarter, Ituran purchased 71,000 shares for a total of $1.9 million until the end of September 30, 2021. Share repurchases were funded by a valuable cash and repurchases of Ituran ordinary shares were made based on SEC Rule 10b-18. 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. The first question is from Tavy Rosner of Barclays. Please go ahead.

Hi. Good afternoon. Thank you for the presentation. I have three questions, please. First one is just maintaining from my end, but with regards to SaversOne. What's the accounting treatment here? Are you mark-to-market your stake on a quarterly basis, or you had it recorded at a certain value, and given the fluctuation you have to record an adjustment?

Hi, Tavy. Actually its mark-to-market, it's like a financial assets.

Okay. Understood. Okay. With that out of the way, I wanted to talk about the OEM dynamics a little bit. If I remember correctly, I think you had a 1,000 increase, last quarter 4,000. Is it fair to assume it's coming from Latin America? And guess, can you remind us when in the accounting of those OEM you add if any of this including a free trial period that that you give to OEM, I think, at some point you used to give us three months that went down to one month, clearly what was need for this?.

First of all, it's – include -- most of it is a free trial. The only country which the free trial is for one month, and it's very a few 1,000s of customers compared to the rest of the markets is Brazil and a few hundreds in Argentina, because this is kind of the end of a fade out of the business, those markets. But the rest, which is the major, high majority of these OEM subscribers are at least for 12 months, and some of them are even more, and I'm talking mainly about Mexico, Colombia, and Ecuador, and the free trial as-a-service for 12 months as the minimum.

Okay, understood. And then lastly talk about the new growth engines that you mentioned. You talked about the financial players that might be interested into your solution. So, would you believe that you would work in a similar way to the agreements you have for UBI and their insurance company, whereby they would purchase it from you and then pass on the cost to the end user?

Okay. So, basically, as we found a new segment, when we realized then -- that we don't want to be depend only on SVR and we developed our state-of-the-art UBI solution, which today, by the way, I would say, it’s close to market share of 100%. In Israel, by the way, most of the insurance companies are running multi-million dollars campaigns in the TV and in the digital. Most of it, it's a white labeled by Ituran, almost all of it. So, we are talking today, without getting too specific number of thousands of new subscribers per month growing exponentially. This is regard to UBI. When the Corona time came and we were -- we've been in a situation that the car plants were closed, specifically in Latin America, again, we had to think about how we can expand the markets, what segments we can offer. When we realize that there is, I think a market which wasn't very clear before the Corona is the second-hand market and the subprime board -- the subprime customers. This something that we do in the US almost for 15 years, which made people know it as a buyer/payer, and in some dealers or many dealers in the States when they finance the car, they use systems such as Ituran in order to recover the car, in order to get data on the payments and on the location. And sometimes in order to notify the people that take the loans that they missed -- or having the -- they missed some payments. So, we decided to enter some banks in Brazil and in Mexico may begin at the beginning, and offer this solution in order for them to expand giving money or financing cars for people that that credit lines are low. When we convince them that with our solution, they can have a better control on those payments and on those customers, they agreed to start working with us. On the same time, if you know the entire Fintech world is now very growing. Many digital companies now offering cars with finance, financed to cars, et cetera, on digital ways, we also approach them. And we get really open mind from those big players, I must say. And today we are having about three large customers, it still at the beginning as I said, because we are educating them. They are educating the market. And its worked in the same way as the UBI. Meaning, they are our customers, it's a B2B market. Those are -- again, those are big players with a high equity and there is no risk. It's like insurance companies. They install -- once they finance specific cars, they ask us to install this unit. We install it. They pay for the unit, and they pay for three years of the finance contract for us, kind of, the monthly fees. The ARPU today is on the same average ARPU as we have for the aftermarket sales in Brazil and in Argentina, which is quiet impressive, quiet with the high margins. But this is only the beginning. It’s growing exponentially. So, I must say that, if it continue, this is really going to be very important toward 2023, 2024, it can be a very strong leg, because it's a new market. Up until now, when we compete for those customers, we won, we won the customer. And we are the only supplier. And this is important for me to mention, because, again, the corona, sometimes bad things create people looking out of the box. And that's what we did and this market was zero players in Mexico and Brazil. And today, we are growing it. We are educating the market. And we’re talking about the potential of millions of cars a year in each market. I'm not saying that this is going to be our market share. But this is the potential of the market; every year in these two market, Brazil and Mexico.

Great. I appreciate the color. I’ll go back to the queue.

The next question is from David Kelley of Jefferies. Please go ahead.

Hey, good afternoon, and thanks for taking my questions. And maybe to start, I was hoping you could elaborate on the aftermarket net substrings in the quarter and specifically the regional dynamics. We were just curious of the momentum in Israel and then in Brazil. I think there was some sort of signs of stabilization last quarter. So I was hoping you could provide color on what you're seeing there as well.

Okay. So the main aftermarket that grows comes from our traditional business to the aftermarket, which is Israel and Brazil. Of course, we have some contribution from the rest of the -- from the other geographies, but the majority aftermarket subscribers are -- comes from Israel and Brazil. So I will divide it. I'll talk about these two geographies. In Israel, we have three main segments, the stolen vehicle recovery, the fleet management and the UBI. The stolen vehicle recovery and the fleet managers continue to grow very correlating to the new car sales in Israel, since it's a many years of operation in those segments. We still have the churn, because we have customers of 10 years, eight years and more. So the growth -- the net growth of this segment is not significant, but it continue to grow. There was years that we were in stable, in zero. So, this year, I must say, that even in these segments, we succeed to grow, but the most growth edging in 2021 for subscribers in Israel was the UBI, because we get more and more customers, we get more and more insurance companies integrating our system and it grows exponentially. So this is the three segments that continue to grow, but the UBI now is the main growth. Don’t forget that since the UBI is quite new, the churn of customers is still very low. So, the contribution to the net ads in Israel of the UBI is substantial, is important. This is in Israel. Now, looking ahead, we have to understand that the cars importers in Israel are forecasting for the coming quarters, declining in selling cars. By the way, the important thing is that, the request for cars in Israel, the demand is highest ever. I spoke with some car importers in Israel. For example, if in Israel there was 280,000, or 300,000, the highest year, which is this year. They say that, if they could bring 0.5 million of cars a year, they would sell it now. People are waiting a year for a car and they're willing to pay and wait. So it's important, because in one day, the request is more important. The demand is more important, because it showed the potential then, for example, a situation where there is no demand. Now, the problem is the offering -- the cars industry, we know the problem. So this is one of the reasons that can a little bit slowing down our growth in subscribers in Israel. I must say this is a nice thing you need to earn and we mentioned it at the beginning of this discussion is that -- and we saw it in the corona. Most of the churn in the customers of the aftermarket in Israel, and also in Brazil by the way, is when a person want to buy a new car, so he sell his car, his car is old, and the new buyer sometimes there is no motivation to renew or to come and be our subscribers. This is the main reason for churn. So, once car -- people cannot buy a new car, they still stay with their old car and that churn is not high. That's what happened in the corona. If you look backwards, you'll see we didn't lose many subscribers in the corona. And this is the situation in Israel and this is the situation that we forecast for the future. So, in selling hardware in Israel probably they will be declined, but the profit margins at this point is very low. Sometimes we will lose some money to sell the hardware. Regard subscriber, this is because of the operation leverage, I think that the problem of selling cars in Israel probably will hurt very little for our growth in the subscribers if at all, but it will affect some. Brazil, the market is different. We are selling mainly B2C, which is ICS, Ituran Com Seguro. We are now -- this contributes the highest in the last two years for our subscriber base that we show in the quarter, because during the corona, we saw a negative churn, then we get to a point, which was about even and now we have back after more than two years to a positive and net few thousands of subscribers per month. In Brazil, we are less affected by the new car sales in Brazil. Most or the segment that we are -- I would say the segment that we are very dominant in the Brazilian market is the second hand cars, old cars. Most of the people in Brazil, there insured only brand new cars for one or two years, then they decide to quit and sometimes they don't insure the car, sometimes they look at solution such as we offered. So I believe that, in Brazil, we will continue to grow our subscribers. And add to this something that is still in a very low contribution is the fleet management or the B2B market, which in Brazil, I wouldn't say it was neglected, but we were very focused only on the B2C. But again, during the corona, we had enough time. And we have the situation that we add some resources to approach the segment of the B2B. And we add more fleets. And we are adding more, as I said, more financial, let's call it, financial partners or financial banks that needs our services to generate more lenders for people that will use their financial services. So this is another segment, which is now, contribute a little bit. But, as I see it now, for the coming years, this can provide a very high push to the net new subscribers of the aftermarket in Brazil. So overall, I'm expecting -- although, there is a problem with the car sales, the new car sales, I'm expecting that we will continue to grow our net subscribers, specifically in the aftermarket.

Okay. Got it. That's helpful. Thank you. And then maybe last one for me. Operating expenses, we started to see general and administrative cost pick up again in the quarter. So how are you thinking about the OpEx trajectory, this assuming, that the post-COVID normalization continues here?

Okay. So there is two things I think that are relevant to this. First of all, this specific quarter, I think, it's will represent the number for OpEx. Before that, there was some items that still were in a -- were not execute, I would say. We still have some salaries costs cut down because of the corona and it’s add on the Q2. And almost full of it came to Q3. Since we grow, so we had some budget for advertisement in Brazil, et cetera. But I think that this is a representative quarter of OpEx. Second, we have to understand that in some divisions around the world, the main segment, it's the R&D people, which we found that it's more difficult, specifically in Israel, but also in other countries to recruit people, because the world probably feel that everything is now high price. And it's very difficult to recruit people. So I'm expecting some additional cost in some salaries. But I think that it will not be material. And we can continue to look on the OpEx of this quarter’s, I would say, is the right number.

Okay, great. Thanks so much.

The next question is from Sasha Karim of IPI. Please go ahead.

Hi, Eyal. In your statement you mentioned the potential for buy here, pay here in LATAM to generate the significant acceleration in subscriber growth in second half of 2022. And then just now you also mentioned that the ARPU on those subs is similar to your LATAM aftermarket business. So that sounds like it should accelerate service revenue growth as well over that period. But it does sound different in the US, where buy here, pay here subs are low ARPU and low margin. So could you tell us, is there a reason for that difference to persist between the LATAM and US or do you expect the ARPU on buy here, pay here in LATAM to also decline significantly over time?

No, the US market is totally different than I would say, I don't know what to say emerging market or Latin America, it's totally different business in the US. First of all, the competitive landscape. Second is the way that the dealers are many time are financing their customers. And they have other offers, such as extended warranties and things like this. And it's a different market. The way we sell it in the US for 15 years, it's totally different, which of course, it's influence on our ARPU in the States, specifically. In Latin America, it's a different model, the model is more, I would say more similar to, as I said to the UBI to the B2B business, where we are actually leasing the hardware. By the way in the States, we sell the hardware to the dealers, and they have some margins. Here it's different. We sell it, we call it a Comodato . The hardware stay on our balance sheet, so it's different. And we get the monthly returns together with the monthly services along with two or three or five years and this allow us by this model to show higher -- first higher ARPU. And second, it's a different mentality of the business model. I not expected it will drop. Of course, if we get to many -- to a large volume for specific customers, no doubt that we will have some different grades of price per customer. If for example, a bank will commit for 100,000 or 200,000 or 300,000, he will get different prices. But this is a regular commercial life. But currently, when we talk about numbers with no specific commitment, this is the ARPU. But I prefer to have commitment for a large number and reducing the ARPU because in the end, large numbers, because it's an operating leverage model, large numbers is very important to increase the profits, even if we hate it -- even if we hit a little bit the ARPU.

Yes, that's a good problem to have. Can I also just ask about this industry in general, and this applies to the US as well. How sustainable is the growth, the recent growth in buy here, pay here? Do you think that the industry, the growth may unwind somewhat, once the pandemic truly ends, perhaps because people were buying cars this way to avoid using public transport, and they have no other way of getting a car?

First of all, I don't know how to tell you about the US, the US we do it 15 years, we are now increased, because we increase our market share. I'm not sure if the market grows. This is regarding US. Again, I must be honest, in the US, our market share is quite low. We are not dominant in market. In Latin America, what was started recently, I think that we will dominate the market. Currently, we are the main player, I assume that the competition always, people see success and they will join like FM in Brazil with the ICS. But today, we are still dominating the market and the second player I think is a way behind us. I hope that we will succeed to do it also in the finance segment in Brazil and Mexico now. I don't think it's something that happened because of the Corona. I think that we had to think what we do when new car sale is declining. And we identified it, but it was there always. What we realize, for example, without giving names. One of the largest commercial bank in Latin America, which provide loans to buy cars for tenths of millions of cars, when we approached him, he made a survey and he get to results that there are few millions of car that he gave up only because of this reason. Now, allowed him to come back and get those few millions loans, it's interest, he leaves some interest, he can increase the interest, he reduces risk. So we can extend the potential customer base for those banks. It's not happened because of the Corona. We unfortunately, we didn't do it before the Corona because we were very, very busy with this stolen vehicle recovery and with the fleet management, etcetera. But when we have to look for a solution, sometimes when you feel pressure, that's what actually happen. But I think that payer -- buyer in Latin America specifically because it's emerging market, because people salaries are low, because people securities are low. I think that, we identified through the Corona, but this market is existing. This market will continue. The question, what will be our market share? This is a question mark. I don't want to be arrogant. But I really believe in our state-of-the-art technology. I believe that, we have the best services. I believe that we – as we have trust from all insurance companies, we will have trust from all financial institutions. And we will lead this market and if we lead this market in a year or two, it will be a very a substantial number that will contribute to our result that we showed now. I'm saying again, it's taking time, we increase now the subscriber base of this segment. Once we have a substantial number, it will be a dramatically influence on our profits.

Thanks. Okay. That sounds very encouraging. My last one, if I could. Could you just give us an update on two segments, I don't think you've touched upon, Ituran Con Seguro in Mexico, how that's going, any improvement there? And then fleet management, which you said last quarter was going to experience very strong growth to start to track it, if that's still coming through?

Okay. Regard the ICS, in Mexico, as I said, there was a delay at the beginning because of the Corona because we had to find the right timing to launch it. So, we launch it. The numbers today are growing – growing even exponentially. But again, when we have 1.8 million subscribers, still 100s per month it's a – it's not a material, so we are not -- provide too much data and information about it. It's now under kind of a soft lounge, I would say yet. I don't know, we see a very good attraction and interest and people getting to buy through the website. But again, I can't and I don't know yet to say, whether this is going to be a material number. The time that its operate is quiet low. We started only beginning of this year. And for a new segment, educating market, it's a B2C. Don't forget, it's a B2C. B2B, you have to convince three, four, five big players. B2C, you have to convince and educating millions of people in order to attract a few thousand per month, which will take more time, but it looks good and it looks promising. This is regarding -- regard fleet management. So fleet management, I think that I touch it, when I talk before fleet management, mainly in Brazil, is now growing together with the finance customer. We'll put it on the same by the way, it's under the same -- let's say, the same brand. I call it fleet management because it’s B2B. It's divided to two. It’s divided to the finance, which is still low number. And second is B2B to sell it to commercial, corporate that use it for control, manage and get data from their fleets. And this is growing. And this is now I think one of the main growth engines in Brazil and its 2022. Now, I think it's very promising and it will contribute as I say to the 2022 numbers, it will be important contribution.

Thank you. Thank you.

The next question is from Abba Horwitz with OSP. Please go ahead.

Hi. Good afternoon. I was wondering if you mentioned it all Bringg? And if you didn't, could you speak about it?

Yes, Bringg is a company that we have 17% and we are the largest market share, and we have the higher Board representative. Bringg is a company that developed a solution for the Last Mile for the deliveries. And the last round was done in the quarter before -- in the last quarter. And we had this -- and we discuss it in our last conference call, but I will repeat the round was on evaluation where the company raised $100 million on evaluation of $1 billion. The company is a typical SaaS company, which growing -- which has as very unique offer to enterprise groups and also to small and medium businesses. Most of the customers are in the US. Recently thanks to the round, they open accounts in Europe and in Latin America, which allow the company to expand its growth. And I believe that the money the company has and the growth that it show will allow the company to first of all not to go for another round soon. And at least expect hope and believe that the next time, it will be or an IPO or an M&A, but again this is something that nobody can forecast. But this is the goal of the company. The value is actually higher than you need to run balance sheet, because in different than SaverOne, here it's because we have -- I would say, major portion of the accounting regulation looks on this investment as a kind of an equity investment. So, it's zero on our balance sheet, because we already had to take part of the losses during the last five years, which actually balance the investment to zero. So, once we will realize value by liquidating our shares, so it will be a full 100% to our profit, of course, without the taxes. So, the value of our holdings now -- the total value is about -- based on the last day round is about $170 million.

Okay. So, first of all, that's an off-balance sheet asset that my understanding is it's a very good asset.

Yes.

Do you have any sense what the timeframe is for them to IPO? I've heard that they want an IPO. You know better than me, I'm just telling you what I've heard. Or you said M&A potentially? Is there a sense when this could happen? Is this a 2022 event? Is it a later than that? Do you believe whatever will happen will happen in 2022?

First of all, there will be actually, I think, they wouldn't be able to disclose it. But being more honest, there is no plan today -- any actual things taking place to make an IPO. So, with my experience, it's not taking place now, this will not happen in six to eight months, because this is a time always needed and no startup is even maybe need more. So, I'm not expecting it will happen in 2022. I can't forecast whether it's happen in 2023 or 2024, because all of us know that IPO sometimes depends on the market conditions and not always on the company condition. In M&A, something that I mentioned, not as a goal, but I think that always a company that touch in a market where there are large -- a large enterprise companies that need solution for deliveries, or last mile, et cetera. I'm not saying that it's something impossible that one of those giants will need this solution. No, I don't think that without any reason, Salesforce and Siemens are one of the main investors in Bringg. So, I said it only because of my thoughts and beliefs, but nothing is based on any actual thing. I believe that if it's a good company, it will continue to grow. It has a unique technology. We know what happens in the world. I hope that this will be the next stage, whether it will be one or two years from now, I've no really any – any something specific that I can count on.

And just final question on that is, I mean, when we look at this, it's about $8 to $8.5 of real value, asset value, based on the valuation that is given right now. And it is all and off balance sheet asset, meaning that it's zero on your books. And that's substantial. That's not -- often companies have $1 or $2. This is $8 to $8.5 of real value that's not being recognized in the stock at all. And I'm wondering, a, is there a way to do that, or would that really just require some sort of event such as an IPO or M&A? And if I may add, I remember when your asset was worth under $50 million.

We can do two things, one to talk about it, because it's real and second by shares. There is – not depend on us. People knows about it.

Okay.

And this is actually – exactly how you described it. But until the moment that we will realize this value to manual to public shares, it's something that on the accounting regulation will not appear in our -- I would say, our direct financial statements. But you're right. This is a value. Everybody can know about it, and can decide whether they include it in their valuations or not. But you're right.

All right. Thanks. This should be our biggest problem, right? So, okay. Thank you.

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 website, www.ituran.com. Mr. Sheratzky, would you like to make your concluding statements?

On behalf of the management of Ituran, I would like to thank you our shareholders for your continued interest and long-term support of our business. I do look forward to speaking with you next quarter and hope that we will all see better times by then. Have a good day.

Thank you. This concludes the Ituran third quarter 2021 results conference call. Thank you for your participation. You may go ahead and disconnect.