Ladies and gentlemen, thank you for standing by. Welcome to the Ituran's second 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 please.

Thank you, operator. Good day to all of you and welcome to Ituran's conference call to discuss the second quarter 2015 results. I would like to thank Ituran's management for hosting this conference call. With me on the call today are Mr. Eli Kamer, CFO and Mr. Udi Mizrahi, VP, Finance. In Eyal's absence, Udi 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 statement in today's press release also covers the content of this conference call. And now, Udi, would you like to begin please?

Thank you, Kenny. I would like to welcome all of you and thank you for joining us today. We are very pleased with the results of the second quarter and this quarter marked our 20 years anniversary of being in business. In particular, a very good time looking ahead is the strong and record growth in our subscriber base in both the past two quarters. Our subscriber base grew by a record of 34,000 in the second quarter after a growth of 28,000 also substantial which we demonstrated in the first quarter of this year. The additional 62,000 net subscribers in only half of the year has substantially eclipsed our previous growth by almost double, whereby our typical growth rate in the previous two years was around 35,000 subscribers in the half year. Due to the fact that our net growth rate substantially increased in order to support its continued strong growth, we have stepped up our operating expenses this quarter, which did have an effect on our margin. However, looking ahead, I want to stress that while every new subscriber add bring us additional revenue, our operating infrastructure is in place to support them. This means that as our subscriber base will continue to grow from this point we can bring much of the new revenue growth down to the bottomline. Our strong subscriber growth is a mix of bringing new products in local cost offering geared towards to the lower end of the market, as well as lowering the churn rate. This very much demonstrates that our core business continues to grow very soundly and remains the strongest ever. While subscriber adds demonstrate that this fundamental underpinning our business are exceptionally strong, the strengthening of the U.S. dollar versus the local currencies in which we sell in, in…

Thanks, Udi. Revenues for the second quarter of 2015 were $43.8 million, a decrease of 6% when compared to revenue of $46.6 million in the second quarter of 2014. When excluding the currency impact of the strengthening of U.S. dollar, our year-over-year growth in revenue would have been 12%. Revenue breakdown for the quarter was $32.5 million coming from subscription fee, a 6% year-on-year decrease. In local currency, revenues from services increased by 15% over the second quarter of last year. Product revenues decreased by 7% compared with the same period last year. This was due to the significant weakening of the various currencies in which Ituran sells its products, mainly the Israeli Shekel versus the U.S. dollars. In local currency terms, product revenues grew by 4.5% compared with product revenues reported in the second quarter of 2014. The geographic breakdown of revenues in the second quarter was as follow, Israel 52%, Brazil 34%, Argentina 10% and USA 4%. Gross margin in the quarter was 50.8% compared with a gross margin 53.3% in the second quarter of last year. The gross margin was weaker in the quarter due to the low margins on products sold which is depend on mix and varies between quarters. On the service side, typically salary adjustments are done in the second quarter of the year, so seasonally the second quarter stands to see relatively higher cost of goods expenses. Operating profit for the second quarter of 2015 was $10 million, a decrease of 17% compared with an operating profit of $12.1 million in the second quarter of 2014. Excluding the impact of the change in exchange rate over the period, the operating profits would have increased 8% over the second quarter of last year. EBITDA for the quarter was $12.7 million or 29% of revenue, a decrease of 13% compared to EBITDA of $14.6 million or 31.4% of revenue in second quarter of 2014. Excluding the impact of the change in exchange rates over the period, the EBITDA s would have increased 10% over the second quarter of last year. Net profit was $5.8 million in the quarter or fully diluted EPS of $0.28. This is compared with a net profit of $7.4 million or fully diluted EPS of $0.35 in the second quarter of 2014. Cash flow from operations during the quarter was $10.7 million. As of June 30, 2015, the company had net cash including marketable securities of $33.4 million or $1.59 per share. This is compared with $35.3 million or $1.68 per share as of March 31, 2015. In the second quarter, a dividend of $3 million was declared, representing 52% of net income. The dividend's record date is September 24, 2015 and the dividend will be paid on October 7, 2015, net of taxes and leverages at the rate of 25%. And with that, I would like to open the call for the question-and-answer session. Operator?

Thank you. Ladies and gentlemen, at this time will begin the question-and-answer session. [Operator Instructions]. The first question is from Gilad Sarig of Bank Hapoalim. Please go ahead.

Hi. Hello, everyone. Congratulations for the nice numbers. Just two short questions. Can you please give us the breakdown of the new subscribers for this quarter? And also maybe in general and also do you believe that at this pace of new subscribers in the extremely high, do you think it is sustainable for the future? Thank you.

Hi Gilad, As I mentioned, we are very pleased with the net growth of subscribers that we had in the first semester, especially in the second quarter. Majority of the net growth is coming from Brazil and Israel. Brazil is contributing even more. This is the majority. If we ask on the sense of some of the project that we have been working in the last year or so, it turned into sales and this is -- you see the contribution of those projects in the first semester. Going forward, I think it's reasonable to say that the second semester of 2015 will be more or less the same as the first semester.

Again. Sorry.

I am saying that going forward, it is reasonable to say that the next quarter or two till the 2015, will be more or less on the same track as the first semester of 2015.

Okay. Thank you.

[Operator Instructions]. The next question is from Matthew Handorf of Harbor Assets Management. Please go ahead.

Hi. Good morning. Congrats on great results here. I was hoping, could you give a little bit more color in terms of the breakdown between gross adds and churn? And maybe how churn has been trending in recent quarters? Thank you.

More or less, as you can see on our 20-F, we are talking about more or less between 2.5% to 3% monthly churn in our subscriber. Typically it is different between each regions where we operate and it depends on how we define churn. Basically the way we do it is, for example, when a customer is leaving us and a new customer is joining us. In Brazil, for example, lot of the case is, we are talking or working with insurance companies. So if the customer, for example, decides to move from one insurance company to another insurance company and we consider it as churn although probably we are working, even if we are working with both insurance companies, we consider it as a cancellation and as an addition.

Okay. Got it. I know CONTRAN 245 has been put on hold for the last many years. Any update, any potential for that to come online in 2016? Or unlikely at this point?

There isn't any update in the last couple of months regarding CONTRAN 245. The only thing that we do know was the last published information, which is that it was delayed for 2016 or the end of 2016. So we are waiting.

Okay. Got it. And then your capital expenditures have been running a little bit higher in each one 2015. Any more color on that? And then any expectations for CapEx spend for the second half of the year?

As you can see, the CapEx is mainly related to the end units that we are installing. And as you saw, we almost doubled our net growth in the first semester for 2015 compared to the last year's first semester. So we are actually, this is one of the main reason why the CapEx is growing because we need more equipment.

Okay. Got it. And then last question for me. Obviously the stock price has performed well in recent months. I didn't know if you had any thoughts in terms of any efforts the company might make to improve liquidity? I mean your stock has been fairly light. So any thoughts there would be appreciated. Thank you.

Basically, I don't have any answer, as this is not my work, let's say, or this is something that I have the ability to analyze the market and the liquidity of the trade of the share. More or less, majority of the share are in the public.

Okay. Thank you.

There no further questions at this time. Before I ask Mr. Mizrahi 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.co.il. Mr. Mizrahi, would you like to make your concluding statement.

Thank you. On behalf of the management of Ituran, I would like to thank you for your continued interest and long-term support of our business. Eyal will be back next quarter and we all look forward to speaking with you then. Have a good day.

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