Q1 2024 Eltek Ltd Earnings Call
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Eltek LTD 2024 first quarter financial results conference call. All participants are currently in 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.
Ladies and gentleman. Thank you for standing by welcome to the Alphatec LTV 2024 first quarter financial 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: As a reminder, this conference is being recorded. Before I turn the call over to Mr. Eli Yaffe, Chief Executive Officer, and Mr. Ron Freund, Chief Financial Officer, I'd like to remind you that they will be referring to forward-looking information in today's presentation and in the Q&A. By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to the risks and uncertainties outlined here and discussed more fully in Eltek's public disclosure filing. Forward-looking statements are projections and reflect the current beliefs and expectations of the company. However, actual events or results may differ materially. We'll also be referring to non-gap measures.
Speaker Change: 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. <unk>, Chief Executive Officer, and Ron <unk>, Chief Financial Officer, I'd like to remind you that they will be referring to forward looking information in today's presentation and in the Q&A biased.
Speaker Change: This information contains forecasts assumptions and expectations about future outcomes, which are subject to the risks and uncertainties outlined here and discussed more fully in <unk> public disclosure filings. These forward looking statements are projections and reflect the current beliefs and expectations of the company actual events or results.
Speaker Change: May differ materially we will also be referring to non-GAAP measures. All tech undertakes no obligation to publicly release revisions to such forward looking statements to reflect events or circumstances occurring subsequent to this date I will now turn the call over to Mr. Earl Yafei. Mr. Yao. Please go ahead.
Operator: Eltek undertakes no obligation to publicly release revisions to such forward-looking statements to reflect events or circumstances occurring subsequent to this date. I will now turn the call over to Mr. Eli Yaffe. Mr. Yaffe, please go ahead. Thank you.
Eli Yaffe: Thank you. Good morning.
Good morning. Thank you all for joining us for our 2020 full first quarter, earning call.
Eli Yaffe: Thank you for joining us for our 2024 first quarter running call. With me is Ron Freund, our Chief Financial Officer. We will begin by providing you with an overview of our business and a summary of our principal factors that affected our results and Ewing. Q1 2024. After our prepared remarks, we will be happy to answer any of your questions. Bye now!
Speaker Change: With me is Ron <unk>, our Chief Financial Officer, we will begin by providing you with an overview of our business and the summary of our principal factors that affected our results.
Speaker Change: <unk>.
Speaker Change: Q1, 2020 full update all of our prepared remarks, we will be happy to answer any of your questions by now.
Eli Yaffe: Everyone should have access to our press release, which was released earlier today. The release will also be available on our website. Throughout the quarter, we witnessed a notable surge in requests for quotations primary with the defense sector. Correspondently, we have seen a rise in the volume of orders received. Our backlog since the year's outset has escalated to approximately 25%. This surge is directly attributed to the demand for our defense products worldwide.
Speaker Change: Everyone should have access to our press release, which was released earlier today. The release will be also available on our website.
Speaker Change: So all of the quarter, we witness in multiple search in the request for quotations, but I'm Larry blame the REIT with the defense sexual correspondingly we has been the rise of the volume of older received our backlog since the outset.
Speaker Change: An escalated to approximately 25%.
Speaker Change: <unk> directly attribute to the demand for the defense products worldwide.
Eli Yaffe: We anticipate that the full impact of this demand for the defense product, as yet to be reflected in the purchase orders received, and expect the demand wave to intensify in the later half of 2024 and early 2025. Despite the increase in demand, we have refrained from significantly increasing prices. Our pricing policy remains consistent with previous years.
Speaker Change: We anticipate that the full impact of this demand for the defense products.
Speaker Change: As yet to be reflected in the purchase soldier received an expected the demand wave to intensify in the later half of 'twenty 'twenty four and early 2025.
Despite the increase in demand we have refrained from significantly increased prices our pricing policy remains consistent with previous years. However, expedited production request subject to oil pricing then stand up production.
Eli Yaffe: However, expedited production requests are subject to higher pricing than standard production. During the quarter, we secured a repeat order from an overseas defense client, totaling $1.6 million, with $1 million scheduled for delivery by the end of 2024 and the remainder by the end of 2025. This order aligns with our strategy to secure long-term contracts, facilitating more efficient production planning. The operational landscape for the coming years presents significant challenges. During these years, we plan to receive and install the two coating lines, which are the main components of our Accelerate Investment Plan.
Speaker Change: During the quarter, we secured a repeated older all form an overseas defense client totaling $1 6 million with $1 million scheduled to delivery by Dandle stands at 24 and the remainder by the end of 2025. These although in line with our strategy to secure long term.
Speaker Change: Contracts facilitating more efficient production planning.
Speaker Change: The operational landscape for the coming years presents significant challenges. During these years, we lend to receive and install the two coating lines, which are the main components of our accelerated investment plan. Unlike various other machines required. These scoping lives spent tens of meters and.
Eli Yaffe: Unlike various other machines required, these coating lines span tens of meters and require extensive construction work. Consistent with our policy of executing investment without disturbing current production, we face the task of conducting construction alongside active production lines. Presently, the plan remains on track, with our technical team focused on establishing the new manufacturing area and installing new machinery, while supporting ongoing production processes and maintenance. In addition, we have finished issuing purchase orders for all the remaining machines, including accelerated plants.
Speaker Change: The extensive construction work.
Speaker Change: Shifting with our policy of executing investment without disturbing.
Speaker Change: Current production, we face the task of conducting construction alongside active production lines.
Speaker Change: Presently the plan remains on track.
Speaker Change: With our technical team focused on establishing the new manufacturing area and installing a new machinery, while supporting ongoing production processes and maintenance.
Speaker Change: In addition, we have finished issuing purchase orders for all the remaining machines, including accelerated plan.
Eli Yaffe: In addressing current production volume requirements, manpower has emerged as a bottleneck. Our immediate focus lies in recruiting additional employees, aiming to bolster the workforce by approximately 15%. This requires substantial resource allocation, including wage increases, to attract a sufficient number of employees. I will now turn the call over to Ron Freund, our CFO, to discuss our financial results.
Speaker Change: In addressing carlin's production volume requirements manpower has emerged as a bottleneck.
Speaker Change: Its focus lies in the record.
Speaker Change: Recruiting additional employees aiming to bolster the walk for work force by approximately 15%.
Speaker Change: This requires substantial resource allocation, including wage increase to attract a sufficient number of employees.
Speaker Change: I will now turn the call over to one point, our CFO to discuss our financial results.
Speaker Change: Thank you Ernie.
Ron Freund: I would like to draw your attention to the financial statements for the first quarter of 2024. During this call, I will also discuss certain unagreed financial measures. Eltek uses EBITDA as an unapplied financial performance measurement. Please see our earnings release for its definition and the reasons for its use. I will now go over the highlights of the first quarter of 2024. All numbers mentioned are in US dollars. Revenues for the first quarter of 2024 were $11.8 million, compared to $11.5 million in the first quarter of 2026.
Ernie: I would like to draw your attention to the financial statements for the first quarter of 2024.
Speaker Change: During this quarter, we will also discuss certain non-GAAP financial measures <unk> uses EBITDA as a non-GAAP financial performance measurement. Please see our earnings release College, the tradition and the reasons for its use.
Ron Freund: Gross profit increased by 8%, reaching 3.2 million dollars compared to a gross profit of 3 million dollars in the first quarter of 2023. The increase is mainly due to an increase in revenue and the fixed component of part of the expenses included in the cost of revenue.
Speaker Change: I'll now go over the highlights of the first quarter.
Speaker Change: Before all numbers mentioned are in U S dollars.
Speaker Change: Revenues for the first quarter of 2024, and $11.8 million compared to $11 $5 million in the first quarter of 2023.
Speaker Change: Profit increased by 8%, reaching $3 $2 million compared to a gross profit of $3 million in the first quarter of 2023.
Speaker Change: The increase is mainly due to the increase in revenue of the fixed component of part of the expenses included in cost of revenues.
Ron Freund: Operating profit amounted to $1.7 million in Q1 2024 compared to $1.6 million in Q1 2023. We recorded financial income of $0.4 million during Q1 2024 due to the devaluation of the NIF against the U.S. dollar and from interest on our interest-bearing account. Net profit was 1.7 million dollars, or 27 cents per share, in Q1 2024 compared to net profit of 1.6 million dollars, or 27 cents per share, during Q1 2023. EBITDA was 2.1 million dollars, compared to 1.9 million dollars in Q1 2023.
Speaker Change: Operating profit amounted to $1.7 million in Q1, 2024 compared to $1 6 million Daus in Q1 2023.
We recorded financial income of zero point $4 million. During Q1 2024 due to the devaluation of the niche against U S dollar and from interest on our interest bearing accounts.
Speaker Change: Net profit was $1 $7 million or 27 cents per share in Q1, 2024 compared to a net profit of $1 $6 million or 27 cents per share. During Q1, 2023, EBITDA was $2 $1 million compared to $1 $9 million in Q1 2023.
Ron Freund: During the first quarter of 2024, we enjoyed a positive cash flow for operating activities of 1.3 million dollars. As of March 31, 2024, we had cash and cash equivalents and short and bank deposits of $19.9 million with no debt outstanding. We are not ready to answer your questions. Thank you.
Speaker Change: During the first quarter of 2024, we enjoyed a positive cash flow from operating activities of $1 3 million.
Speaker Change: As of March 31, 2024, we had cash and cash equivalents and short term bank deposits of $19 $9 million.
Speaker Change: No debt outstanding.
Speaker Change: We are now ready to answer your questions.
Operator: 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, kindly lift the handset before pressing the numbers.
Speaker Change: 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 kind of lift the handset before pressing the numbers questions will be pulled in the order. They are received please standby.
Operator: Your questions will be answered in the order they are received. Please stand by while we answer your question. I repeat, if you have a question, please press star 1. There are no questions at this time. Before I ask Mr. Yaffe 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 our website. Mr. Yaffe, would you like to make your closing statement? There is a question. The first question is from Mr. Shulgetsky of Kepler Capital; please go ahead.
Speaker Change: While we poll for your questions.
Speaker Change: I repeat if you have a question please press star one.
There are no questions at this time before I ask Mr. Yafei 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 our website. Mr. <unk> would you like to make you can.
Speaker Change: There is a question.
Speaker Change: The first question is from Mr. She'll Gatzke of Kepler capital. Please go ahead.
Mr. Shulgetsky: Hello. I want to ask a short question. How do you see the growth in this year, 2024, and how do you look at your gross profit also this year?
Speaker Change: Hello.
I want to ask consult question, how you see about that goal at this stage yet.
Speaker Change: Paul.
Speaker Change: And then how you look on your gross profit also this year.
Speaker Change: Thank you.
Eli Yaffe: Hi, good morning. We don't give any forecast for the year. It was not our policy, and we will not change this policy. As for the gross profit or the gross margin, we said in previous... (inaudible)
Speaker Change: Hi, Good morning, we don't give any forecast for the year. It was not our policy and we will not change this policy.
Speaker Change: The gross profit or the gross margin, we said in three of us.
Speaker Change: Hey, good calls and we still keep it we anticipate that in the medium term will be around 27% gross margin.
Eli Yaffe: Do you see a possibility to increase the gross margin after construction has ended in 2025?
Speaker Change: And then do you see possibility to increase the gross margin after the construction and then in the 'twenty to 'twenty five.
Eli Yaffe: So, we are not sure whether it will be because, at the same time, we hope that the investment will bring more efficiency. However, new investments require new depreciation, and the depreciation expenses will increase. We think that in the near term, it will be around 2017. Okay, great.
Speaker Change: So we are not sure whether it will be because.
Speaker Change: At the same time, we will hope we hope they invest a little bit more efficiency out of the new investment require no depreciation in the depreciation expenses will increase we think that it didn't have them it will be around 27%.
Operator: Thank you.
Speaker Change: Okay alright, thank you.
Operator: There are no further questions at this time. Mr. Yaffe, would you like to make a concluding statement?
Speaker Change: There are no further questions at this time, Mr. <unk> would you like to make your concluding statement.
Eli Yaffe: Before we conclude our call, I would like to thank all our employees for their continued effort to meet our strategy of growth and profitability. I would also like to thank all our customers, partners, and investors for their continued support. Thank you all for joining us on today's call. Have a good day.
Before we conclude our call I would like to thanks, all our employees for their very continue therefore to meet our strategy of growth and profitability I would like also to tanks are all our customers partners and investors Philadelphia continued support. Thank you for all for joining us on today's call.
Operator: Thank you. This concludes the Eltek LTD 2024 first quarter financial results conference call. Thank you for your participation. You may go ahead and disconnect.
Speaker Change: If a good day.
Speaker Change: Thank you. This concludes the <unk> L. T D 2024, our first quarter financial results Conference call. Thank you for your participation you May go ahead and disconnect.
Speaker Change: Okay.
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Speaker Change: Okay.
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