Q4 2019 Earnings Call
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Ladies and gentlemen, thank you for standing by welcome to the Eltek limited fourth quarter and full year 2019 financial results Conference call.
All participants are present in listen only mode. Following managements 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.
Before I turn the call over to Mr., Eliokem, <unk>, Chief Executive Officer, and a lot more <unk> Chief financial Officer, I'd like to remind you that elteks, earning release today and this call include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
And the Securities and Exchange Act of 1934, as well certain non-GAAP financial measures.
Before making any investment decisions, we strongly encourage you to read our full disclosure on forward looking statements and use and use of non-GAAP financial measure set forth at the end of our earnings release.
As well as review our latest filings with the FCC four important material assumptions expectations and risk factors may cause actual results to differ materially from those anticipated and described in such forward looking statements.
These forward looking statements, our projections and reflect the current beliefs and expectations of a company actual events or results may differ materially.
Eltek undertakes no obligation to publicly in the release revision or for such forward looking statements to reflect events or circumstances occurring subsequent to the state I'll now turn the call over to Mr. Elliot.
Mystery Office. Please go ahead.
Thank you.
Good morning, everyone. Thank you for joint off and welcome to Winter 2000 Lichtenfels Walter.
Yeah.
Which means along one m., our chief financial Officer.
We will begin by providing you always an overview of our business in summary.
Factors that affect.
Our results in 2019 formal device defensible financial results.
After our prepared remarks, we were happy to answer any all fuel.
By now.
We watch that access to our fourth quarter press release.
Which was released.
Yes.
We'll be available on our website www dot mystic and things.
The fourth quarter neural did we achieved both operation and net profit was common excuse west months.
Oh $3.8 million.
We choose these results despite IR financial expenses.
Via the evaluation of the U.S. dollar against these really.
Shaken during 2019.
Oh revenue.
Before you have 2019 increased.
$4.8 million.
From 73.9 million during 2018.
Our revenues in the fourth quarter 2019 rose $8.6 million.
For seven.
Point $8 million seem to fourth quarter of 2018.
We have led into fourth quarter results continued to reflect to reflect the successful implementation of our previously announced doing it on there.
The outbreak coffee worse as created new operational and business challenges, which required weak adjustment to enable us to maintain our production will be CBC, while maintaining the safety of our workforce, we see both risks and opportunities.
For all companies and then you environment with new opportunities developing in the medical device markets.
As Liberal did in our or lease March 19, 2020, as Dick was <unk> rebuild early enough to cope with the spread of what we'd 19.
Both with respect to maintain the as our employees.
And maintain our existing raw materials and ability to maintain our operations.
Some of the new medical devices for which we are providing BCBS all directly related to handfuls, Columbus Colby linking kind of thing.
Most of these won't began during the first quarter of 2020.
He is continuing.
At this point I can report that our revenues into first quarter, 2020, where our yields and the same quarter last deal.
We are proud to be ball developmental for new type fenty like to be used in intensive care unit.
We also we were going forward in a rapid development often upgrade control responded.
For low grade Vinti like tool.
Developmental massive remote monitoring for monitoring lost rollup temperature and I'm looking at disposable bench noninvasive Detriments mean large quantity of medical Doctor.
From isolated patients do the hospital control.
We also see an opportunity to all our business in the <unk> in the U.S. due to the trade war between China, and U.S., which was possible, possibly accelerate due to the coffee 19 spreads.
We seem to kinko's, reflecting this change white ethics biggest companies all seen United States, increasing production lead times.
Also were not by some of our customers that some will follow company people, saying youre well shutdown due to the fires.
As announced before.
Third quarter of 2019, we find S three shelf.
Shelf registration statement to provide the company with the ability to raise additional funds.
Support our plan to go and expand our business.
The increase.
Our topline reflect the continued market recognition will follow and.
Quality and reliability products, our customers continue to see the value proposition will fall product and Ed Great deal of Trust company.
We are windfalls on addressing the challenges and a widespread and crises is on us and we are walking the lightly and on expanding our business while maintaining the trends.
Moving operation efficiencies.
I will now turn the call over the two along one of them our CFO to discuss our financials.
Thank you early.
I would like to draw your attention to the financials that for the full year and the fourth quarter of phase 2019.
During this call I will also be discussing certain non-GAAP financial measures.
And acute the EBITDA as a non-GAAP financial performance measurement. Please see our earnings release for each definition and the reason for it to use.
First I will go over the highlights for.
The full year or say 2019.
As I said revenues for the full year off 2019 went up to $34.8 million form $53.9 million in 2018.
Gross profit more than doubled in 2019, reaching $6 million or 17.3% of revenues compared to $2.6 million or 7.7% of revenues in 2018.
Net profit was $1.8 million or 48 cents per share in 2019 compared to a net loss of $2.6 million or one dollar point 28 cents per share in 2018.
[noise] EBITDA was $3.8 million being 2019 compared to negative EBITDA of 420000 in 2018.
During 2019, we enjoyed positive cash flow from operating activities of $2.6 million compared to an operating cash outflow of 813000 in 2018.
As of December.
2019, we had cash and cash balance of 1.6 million compared to 992000 as of the end of 2018.
Now I will go over the highlights of the fourth quarter of 2019 compared to the fourth quarter 2018.
Revenues for the fourth quarter of 29, 19 were 8.6 million.
From revenues of 7.8 million in the fourth quarter of 28 game.
Gross profit was 1.5 million into fourth quarter of 2019 compared to 603000 into fourth quarter.
Last year.
Net profit was 370000 or eight cents per share in the fourth quarter of 2019 compared to a net loss of 600, 631000 or 31 cents per share in the fourth quarter or 2018.
EBITDA was 817000 in the fourth quarter of 2019 compared to negative EBITDA of 43000 in the fourth quarter of 2018.
Cash flow used in operating activities was 141000.
In the fourth quarter this year compared to 136000 of cash provided from operating activities in the fourth quarter off last year.
During the second quarter off 2019, we completed the rights offering to our shareholders and raised the net amount of $3.3 million.
The proceeds from the offering improved our working capital and were used to reduce our line of credit investing plant and equipment and for general corporate purposes.
As Kelly mentioned before during the third quarter of 2019, we filed a baby shelf registration statement.
Provides the company with the ability to raise additional funds.
Both our plan to grow and extend out business.
We're now ready to take your question.
Thank you.
Ladies and gentlemen at this time, we will begin the question and answer session. If you have a question. Please press star one if you wish to cancel your request please press star chance.
If you are using speaker equipment kindly lift the handset before pressing the numbers your questions will be pulled in the order and they are received please standby while we pull for your question.
The first question is from Alan sort of PBS Holdings. Please go ahead.
Hello.
The next question.
It's from drew the capacity of Ed Edward Jones. Please go ahead.
Good morning, Thanks for the information this morning.
Ali could you tell us.
Where do you see it begets uptick in demand.
Here.
Certainly, but you can you repeat the question I don't think that I understood. The question.
[laughter].
No problem can you tell us where you see that they get.
The biggest increase in demand in the coming here.
Hi, yes.
Now I believe is going to be on the traditional areas that elteks years, the right now involved and on top of food, we have we choose them.
Vince.
Aerospace aircraft not really on but.
A military aircraft and of course medical devices.
And a weighted there is going to be changed for medical devices at least for the next year I put it will be a significant amount.
Thank you.
[noise] if there any additional questions. Please press star one if you wish to cancel your question. Please press star to please standby, while we pull for more question.
The next question is from Dean Chen. Please go ahead.
Hi, I'm, you mentioned about congratulations on the quarter.
You mentioned about a exchange rates and how they manage effect all tech or how did you see a exchange rates affecting this year.
During the first quarter.
The.
Evaluation of the Israeli shekel say compared to the U.S. dollar.
And.
Oh, we it has a.
The positive impact on our financial expenses.
Because most of our.
Levo cost and the thumbnail pressure caused sorry.
Dominated by a these red shekel at a whenever there is a devaluation of the shekel leg.
This is the U.S. dollar.
We see an improved financial expenses.
Great great. So you're going to have an increase in revenue year over year from first quarter and then you can get a little bump from.
Exchange from exchange rate.
We still don't have the Q1 and numbers but.
We we believed that the Adobe there wouldn't be some improvement also in day financial expenses.
Fantastic. Thank you so much thank you.
There are no further questions at this time before I ask Mr., Yes, I to go ahead with his closing statement I would like to remind participants that a replay of this call will be available tomorrow on Elteks website, www dot net check Eltek dotcom, Mr. Yes that would you like to make.
Her concluding statements.
Thank you before we conclude our call I would like to thank.
All our employees for their sole source, making and profitable again and capitalize on our strengths when youre, our position as a leading and PCB manufacturer I.
I would like to thanks.
Once again to our customers about no seem crystals and 16.
And continued support I wish everyone.
Who this thank you for all joining us on today's call every good day.
This concludes the Eltek limited fourth quarter and full year 2019 financial results Conference call. Thank you for your participation you May go ahead and disconnect.
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