Ituran Location and trol .(US:ITRN)2022-03-07 16:59Financial Data and Key Metrics Changes - Full year revenues for 2021 were $271 million, a 10% increase from $245.6 million in 2020 [16] - EBITDA for the fourth quarter was $18.9 million, representing 26.9% of revenues, a 14% increase compared to $16.6 million in Q4 2020 [18] - Net income for Q4 2021 was $9.6 million, or 13.6% of revenues, compared to $6.8 million, or 10.7% of revenues in Q4 2020 [19] Business Line Data and Key Metrics Changes - Subscription revenues for Q4 2021 were $48.8 million, up 7% year-over-year, while full year subscription revenues were $189.6 million, a 4% increase [16][17] - Product revenues for Q4 2021 were $21.6 million, a 21% increase year-over-year, and full year product revenues were $81.2 million, representing a 30% increase [17] Market Data and Key Metrics Changes - Geographic revenue breakdown for Q4 2021: Israel 52%, Brazil 20%, rest of the world 28% [17] - The subscriber base grew by 44,000 in Q4 2021, totaling 1.88 million subscribers, with significant growth in the aftermarket segment [7][17] Company Strategy and Development Direction - The company is focusing on growth engines such as Usage Based Insurance (UBI) in Israel and expanding into financing solutions in Brazil and Mexico [8][12] - The company expects subscriber growth to continue, raising its forecast for 2022 to between 140,000 and 160,000 new subscribers [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term potential, highlighting that the benefits from new subscribers will materialize more significantly in 2022 and beyond [10][15] - The company is managing through electronic component shortages, which are expected to temporarily lower product gross margins in the first half of 2022 [13] Other Important Information - The company declared a dividend of $3 million for Q4 2021 and repurchased $7.3 million worth of shares during the year [14][20] - Cash flow from operations for 2021 was $55.8 million, with a net cash position of $23.3 million as of December 31, 2021 [20] Q&A Session Summary Question: Can you provide insights on cost inflation and supply chain issues? - Management acknowledged the component shortage and its impact on gross margins but emphasized that service revenues remain unaffected [22] Question: Where do you see the largest growth in subscriptions? - Management identified growth in traditional services and new segments such as financing companies and fleet management solutions in Latin America [23][25] Question: Are there any shortages limiting product volumes? - Management stated that they do not expect shortages affecting customer deliveries, although there is increased cost pressure on hardware [30][31] Question: Can you elaborate on the financing opportunities? - Management highlighted the focus on financing solutions in Brazil and Mexico, which are expected to drive significant growth [36] Question: What is the status of the UBI proposition in other markets? - Management is exploring expansion into Latin America but noted that traditional insurance companies are slow to adapt [44]