Q2 2021 Eltek Ltd Earnings Call

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[noise], ladies and gentlemen, thank you for standing by and welcome to the <unk> second quarter.

2021 financial results conference call all participants of arc 500 in a listen only mode. Following management's 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. LTE Opex.

Chief Executive Officer and IRA.

Long, while I'm Chief Financial Officer, I'd like to remind you that Opex earnings 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 as certain non-GAAP financial measures before making any.

And the decisions we strongly encourage you to read our full disclosures on forward looking statements.

And use of non-GAAP financial measures set forth at the end of our earnings release as well as review our latest filings with the SEC for important material assumptions.

Dictation and risk factors that may cause actual or the upstream for materially from those anticipated and described in such forward looking statements. These forward looking statements are projections and reflect the current beliefs and expectations of the company actual events or results may differ materially.

Our tech undertakes no obligation to publicly release.

Revisions to such forward looking statements to reflect events or circumstances occurring subsequent to this page I will now turn the call over to Mr. LTE off that extra yafei.

Please go ahead.

Thank you.

Good morning, everyone.

Two full join us and when it comes to enter 2021 second quarter, earning calls with them.

The longwall them out what you've seen on terminal for yourself.

We will begin by providing you with an overview of our business and some of it also brings to construct a little sort of symptoms.

Our results in the second quarter of 2020, one followed by the details of all three months of results.

Our prepared remarks, we will be happy to answer any of your questions right now.

Once you're there in excess of our second quarter earnings press release, which was released earlier today. We released will be also available on our website revenue Ww dogs newspaper and take a look for.

This quarter. It reflects really found to improve whose jobs in the first six we'll succeed to make the necessary adjustments to overcome most of our wholesale operational and business challenges, which will add the COVID-19 COVID-19 docks on all business on a long run.

Despite the global corporate banking payments in Etame.

That's mainly in the short supply with various political raw material, we were able to grow our top line and improve our gross margins.

During the second quarter of 'twenty or 'twenty, one revenue were $9.1 million compared to $8 million in the second quarter of 2020 and compared to $7.2 million in the first quarter of 2021.

The spread of the coffee, maintaining which feel sick.

We will follow craft thickness and the soldiers shelters for Pilar looks AP laminate produced favorable reviews into production with flexibility and flex where did you screen to see people created although the first half of 2021 operational challenges.

Kendrick which are required.

Adjustments to enable us to maintain our own production and deliveries of distribution to our customers.

Due to the all material worldwide shortage right now.

We have just enough inventory of alternative raw materials.

Preapproved like LTE story, as we go and pick up is it a pickup in both the production of <unk> and we've now introduced it to our customers.

During the second quarter, we were able to obtain authorization for a majority of our customers to use apparently people raw material.

Once a doctor or alternative raw material will be 40 approved by all our own custom elsewhere.

Now of course with production reached fever flexibility.

Wolford, our customers more options for production as well as better pricing and most acute social for materials.

During the second quarter.

Even now we face significant price increase or some follow on materials I'm a firewall materials. In addition, some of our operating expenses are dominating the new Israeli shekel and were negatively affected by the devaluation of the U S dollar against the new Israeli shekel. Nevertheless, we were able to recoup.

Our gross margin.

21, 6% in Q2 2020 to 25, 9% in Q2 2021.

And as we said in the past, we also see and of course your energy to all business in the U S. Due to the shift back to production in the Western World like the defense Aerospace and space Communications in the PCB sector.

Result of cyber threats like China, and the nickel production capacity in USA, Europe and Israel.

Debates.

We financed our growth strategy for Marvell on internal resource and sewer rights offering done in <unk>.

As to our shoulder shared with us.

During 4043, we plan to continue investing in sales activity that will enable us to grow revenue with a focus on New York market.

We also intend to continue to invest in the nuclear plants and an extension of our facility and infrastructure to support the long term trade schools.

As we have previously reported we are conducting similar R&D programs and are seeking to become an industry.

Industry leader.

A major portion of our investment for them and they'll be grenfell them are expected to.

We completed that become operational in the second half of 'twenty or 'twenty one we.

We believe these recent investments and the planned future investment.

We will strengthen our manufacturing capability and increase our competitiveness by implementing improved production processes.

In addition, as reorder Daniels, we received final approval from the Israeli innovation, that's really painful 50% royalty bearing participation not only be program begun begin already on March one 2021 and.

And as already achieved excel smartphone.

These 2021 R&D program is designed to May three and labor analytics, which you have significant faster production rates and reducing script. If successful. This RMB pool will enhance our ability to offer of eylea.

Your line to printed Circuit board.

<unk> production time and interview skills.

I'm glad to report that the R&D program progress and plan and around 50% of the program is already completed.

You have continued to pursue new business opportunities and increase customer design engagement activities to continue their parents are always advancing an overview.

Oh Gee perfect predictors.

In addition, as previously reported we apply to the Israeli Linda throwing people in that location of lending and also for Israel, where LTE can tend to be in the second production facility.

This is a major part of our long term strategic road map in order to grow and accelerate the expansion of our business.

We remain focused on operational excellence are using advanced technology and financial discipline, I mean, making the necessary adjustments to address the challenges we face from being widespread as crisis and the global supply chain crisis.

We all continue to work the likelihood.

Pending all businesses, while maintaining operational efficiency and continued the trend the trend of improved operational results.

And to continue its long term machinery investment program towards 'twenty, one 2021 'twenty two 'twenty three.

New and modern machinery, and we are glad to one of our 2020 major investments improved our real small event originally plan.

[laughter] focused on investment that we've increased the total yield and increase our production capacity.

We are focused on their business goals and now when we are closer to the cash flow informed walking company guidance.

We expect to further increase our future investment program as long as we get the clearing I, forcing people to come on the OEM basically.

I will now turn the call over for a long, while I'm always faithful to discuss our financials.

Thank you Elliot.

I would like to draw your attention to the financials of the second quarter of 2021, joining this call I will also be discussing certain non-GAAP financial measures.

And then accuses EBITDA is a non-GAAP financial performance measurement.

Please see our earnings release for exacerbation and the reason for its use.

Now I will go over the highlights of the second quarter of 2021 compared to the second quarter of 2020.

As already mentioned revenue for the second quarter of 2021 were $9.1 million up from revenues of $8.8 million in the second quarter of 2020 and up from $7.2 million in the first quarter of 2021.

Gross profit increased to $2.4 million or 25 nine.

9% of revenue in the second quarter of 2021 compared to $1.9 million or 21, 6% of revenues in the second quarter of 2020.

During the second quarter of 2021, and we had an operating profit of 944000 as compared to an operating profit of 809000 in the second quarter of 2020.

Net profit was 825000 or 14 cents per share in the second quarter of 2021 compared to net profit of 704000 or 16 cents per share into second quarter of 2020.

EBITDA was approximately $1.4 million in the second quarter of 2021 as compared to EBITDA of $1.2 million in the second quarter of 2020.

During the second quarter of 2021, we have the operating cash flow of 380000 compared to operating cash flow $1.4 million in the second quarter of 2020.

During the first half of 2021, and we achieved an operating cash flow of $2.8 million as compared to operating cash flow $2.9 million in the first half of 2020.

During the second quarter of 2021, we will obtain a loan of 10.

10 million, new Israeli shekels, approximately $3.5 million from bank Leumi.

This loan will enable us to support our growth plan.

The long term affinion, which favor in France, including repayment schedule stocks. After 12 months' grace periods and interests, which is waived for the first year of the loan.

As previously announced we filed the shelf registration statement during the third quarter of 2019 to provide us with the ability to raise additional funds to support our plan to grow and expand our business.

We expect that any proceeds will be used in part for additional investment in our production facilities and through accelerated long term growth.

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

We are now ready particular questions.

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 two if you are using speaker equipment time and lift the handset before pressing the numbers questions will be pulled in the order. They are received please stand.

By while we poll for your questions.

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

There are no questions at this time.

I ask Mr. Yap that 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 <unk> website, www Dot NASDAQ Altair Dot com Mr. <unk> would you like to make your concluding statement.

Thank you before we conclude our call I would like to thanks, all our employees for their efforts to make ethics sort of foreseeable even in these challenging times I would like to thanks, once again to our customers softness in vessels.

2016, full do and continue to support.

Thank you all for all joining us on today's call good day.

This concludes the Alphatec LCD second quarter and full year 2021 financial results Conference call. Thank you for your participation you May go ahead and disconnect.

Yes.

Okay.

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