Q3 2020 Eltek Ltd Earnings Call

[music].

Ladies and gentlemen, thank you for standing by welcome to the Eltek Limited third quarter 2020 financial results Conference call.

All participants are present in listen only mode.

Following management's formal presentation instructions will be given for the question answer session.

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., Elyakim, Chief Executive Officer, and alone, while Im Chief Financial Officer, I'd like to remind you that eltek earnings release today.

This call includes forward looking statements within the meaning of private Securities Litigation Reform Act of 90, 95, and the Securities and Exchange Act was 934.

As well as certain non-GAAP financial measures before making any investment decisions. We strongly encourage you to read our full disclosures.

Forward looking statements and use of non-GAAP financial measures such force.

At the end of our earnings release as well as we review our our latest fillings with the S.P.C. from imported material assumptions.

Expectations and risk factors that may cause actual results to differ materially differ materially from those anticipated in described in such forward looking statements. These forward looking statements or projections and reflect the current beliefs and expectations of the company actual events or results may differ materially Eltek undertakes no.

Litigation to publicly release revisions to such forward looking statements.

Reflect events or circumstances. According occurring subs subsequent to this day I will now turn the call over to Mr. Al you often mystery assets. Please go ahead.

Thank you.

Good morning, everyone. Thank you for joining us and welcome to index Twentytwenty sales growth.

With me is a low on him Oh, Chief Financial Officer.

I will begin by providing you with an overview of our business. This summer we will.

Principal factors affected our results.

In the sales will dose Twentytwenty and then update.

Current with my team has impacted our business followed by the details of our financial results.

After our prepared remarks, we will be happy to answer any of your questions.

By now everyone should have access to low simple to running press release, which was released earlier today.

These will be also a better.

On our website at www <unk> needs to Celtic does call.

This is the seventh quarter in a role that we achieved both operating and net growth our revenue.

So quartiles 2020 from.

$9.3 million instance, we saw revenue in the second quarter 2019.

Revenue for the first nine months of Twentytwenty will 27.2 million due low built from $26.2 million in the first nine months of 2019.

This increase may.

Finally, as a result of 16% gross in the sense of customers in Israel and the flow rose 8% in sales in the defense segment.

The call trucks from manufacturers with 22% decline in the Indian Italian market as a result of customer shutdown due to the Colby line.

I'm also pleased with the continued improvements in production efficiency is evidenced in our improved operation profit, which is more the other more than doubled.

Your volume.

Our diversified end market allowed us to grow revenue. We also realized despite the weakness from deals getting done in market.

In addition, strong operational execution overcome production inefficiencies and ex or cause you to do COVID-19.

Linking pandemic as graded operational difficulties Macquarie, calling some certainty and the frequency.

I'm extremely proud of found Luis if sales deliver excellent performance net.

By the formidable and unexpected and challenges of these environments.

We also add from Luis wed just its positive flow Cobi 19, DCIO with other turning toward after being cleared following testing and growing thing for total gross.

We continue to use growth contact Fracing and current DMD, we do indeed was growing.

Growth in close contact with an effective team members. In addition to the deep cleaning affected area areas you.

We also continue to bleed off to employ other measures such as extensive internal communication masking temperature check in brocal distancing in our facility worldwide.

Because of this threeq.

Presenting measure measures in place and our cultural from Sterci and in communication COVID-19 is minimal impact in our manufacturing operation to date.

I would like to remind you that uptick was sales as a session on enterprise and therefore, we for to continue our operation and we will close any walking day.

Since the beginning of depend on day me.

Greg do quantify gross and affected new operational and business challenges, which requires quick adjustment that allowed us to maintain our production BCBS, while maintaining the safety of our workforce.

We see both risk and new opportunities in the existing business environment and are making the necessary reductions to meet customer demand and our revenue and profit margin gross.

As we said in the past, we also see an opportunity to grow our business in the us market due to the waltzing relationship.

The relationship between the us in China, the impact of any trade flow between the US and China was also income could easily market. Since we see you, especially on these ready government to reduce these when China is rate of DVT we.

We believe that.

And the new administration to US we continue the same route as the previous administration at least in the military any communication PCB segments.

At the same time will.

Facing slowdown from some of our customers in India I need to Lee due to the continuing negative impacted of Corbin line team.

Enter continues to investing in new coming week meant in order to get the benefits of social marketing to capital equipment manufacturing.

You link quarter three index started the installation of a new and fast modem. This line, which is one of the main PCB production lines.

And then you line is now running investing mode in parallel to the old one.

So far we have financed our growth strategy by all our positive operating cash flow and our own internal resources doing 2020 and Twentytwenty. One we plan to continue our investments in new equipment and the expansion of our facility and infrastructure to support our long term sales schools.

The increase on the top line of Twentytwenty flexible and continued market's recognition of our high quality and reliable products.

Main mainly in the flex PCB six total our revenue from the defense ex tool and conduct electronic manufacturers growth from 25 21.7 million. During the first nine months of 2000 $19 million to $23.5 million in the first nine months of Twentytwenty.

8% growth seems orphan.

Year over year, the medical sector contributes 8.7 per cent of revenue during the nine months of Twentytwenty, representing 17% gross you over.

Our customers continue to see the value proposition of all products and have a great deal of interest in our company and its capabilities.

We are continuing to pursue new business opportunities and increase customers design engagement activity with.

That will leverage that vintage technology technology capability, we remain focused on operational excellence and financial discipline as well as our strategic goal gross growers.

We are all focused on addressing the challenges and the widespread as crises.

Yes, and we are walking the likely.

Extending our business, while maintaining the trend of improved growth gross and operating results.

I will now turn the call over to a long while NIM, our CFO will discuss our financial.

Thank you Andy I.

I would like to draw your attention to the financial sales.

Third quarter sales 2020.

During this call I will.

Also be discussing certain non-GAAP financial measures.

Thank you. This EBITDA is a non-GAAP financial performance measurement. Please.

Please see our earnings release.

Following to the finish line and the reason for its use.

Now I will go over the highlights of the third quarter of Twentytwenty compared to the third quarter sales fell 2019.

As Eddie mentioned.

Revenues for the third quarter Twentytwenty were 9.3 million consistent with our revenues in the third quarter of 2019.

Gross profit increased from $1.75 million or.

Or 18.9% of revenues in the third quarter of 20 $19 million to $1.82 million or 19.7 per cent of revenue in the third quarter growth Twentytwenty.

During the third quarter of 2020, we had an operating profit of 638000.

Which are 6.9% of revenues as compared to operating profit of.

568000, or 6.1% of revenue in the second quarter growth last.

Last year.

Net profit was $598000 or 14 cents per share in the third quarter of 2020 compared to a net profit of 391.

Cozzens or nine cents per share in the third quarter of 2019.

EBITDA was approximately 1 million.

In the third quarter of Twentytwenty EPS compared to EBITDA from 940000 in the third quarter of 2019.

During the third quarter of Twentytwenty, we had positive operating cash flow of 873000 compared to $1.4 million during the third quarter of 2018.

During the nine month period of 2020, the company achieved positive operating cash flow of 3.7 million as compared to positive operating cash flow of $2.7 million in the nine months of 2019.

As we mentioned before we remain focused on operational excellence and financial discipline as well as our long term strategic growth goal.

As per the previously.

Previously announce we filed a shelf registration statement during the third quarter 2019 two.

To provide the company with the ability to raise additional funds to support our planned growth and accelerate the expansion of our business.

In addition last week, we issued perspectives to our shareholders of record on November nine Twentytwenty.

Share orders received one non fund some price of about subscription right for each free ordinary shares door deem held.

On the record date.

It's tried and title the holder to purchase one ordinary share subscription price for free and all of the 98 cents.

Per ordinary share.

The subscription rights are non profit of about and maybe only exercise during the period ending.

Five PM Eastern time on December 2nd Twentytwenty.

We are now ready to take your questions.

Thank you ladies and gentlemen at this time, we will begin the question answer session. If you will.

Other question. Please press star one if you wish to cancel your request. Please press star two if.

We are using speaker equipment from people with the headset before pressing the numbers.

Your questions when we pulled in the order. They are received please stand by while we poll for your questions.

I repeat if you had a question please press star one.

There are no questions at this time before I ask Mr. Yasir to go ahead with his closing statement I would like to remind the participants that a replay of this call will be available tomorrow on Elteks website at www Dot missed.

Ms Tech.

Missed out net.

Eltek dotcom Mr. Yaphet, what do you like to make your concluding statement.

Before we conclude our call I would like to thank all of our employees for our older assets. During these difficult periods under a contribution line remained weak and renewing our position, leading PCB manufacturer and making eltek profitable again.

I would like to think once again to our customers partners investors.

Eltek team for their continued support I wish everyone. A good sales. Thank you for all joining us until they close every other day.

This concludes the Eltek limited third quarter 2020 financial results Conference call. Thank you for your participation you May go ahead and disconnect.

[music].

Okay.

[music].

Yeah.

Okay.

Total.

[music].

Total.

Okay.

Total.

[music].

Hello.

[music].