Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Eltek Limited 2023 First Quarter Financial Results Conference Call. All participants are at present in a listen-only mode.

Following management's formal presentation, instructions will be given for the question-and-answer session. [Operator Instructions].

conference recorded. this reminder, a is being As

will Before Yaffe, Freund, Chief the today's call presentation that Chief information the forward Mr. Eli over to they you Executive remind Officer. and like I referring in I'd to looking turn Financial to be Q&A. Officer in and Ron

filings. which beliefs or here or nature, revisions the be disclosure release and risks to this materially. assumptions forward and occurring date. this By Eltek’s circumstances subject no more These expectations contains its referring in of may and expectations are also publicly events the reflect to to company, uncertainties subsequent outlined statements are to such undertakes forecasts, information about discussed actual fully future projections We'll outcomes, current Eltek the obligation looking and results events public forward-looking to statements measures. non-GAAP reflect differ to and

call Yaffe, Mr. now to Eli turn will Mr. the Yaffe. I ahead. over go please

Eli Yaffe

morning, Financial for call. With Good Thank earning Ron our Freund, you. you is quarter and Chief own joining welcome Eltek first me everyone. Thank Officer. to XXXX us

to our of will questions. during followed our providing now, you with affected and summary press your By will answer today. first an which our the We access prepared our release details everyone be of financial our we was begin results. by of released factors remarks, that of the our quarter principal should to any overview earlier by business results After have happy

we and of of that pleased XXXX into demand this efforts release million sales report our www.nisteceltek.com. products demand of website resulted record our The strong in at will $XX.X the dedicated during trend continue on that high also quarter for to XXXX. have employees our first quarter. The of the company the I'm available be witnessed

year. of Our than the is the backlog XX% higher beginning in today

manufacturer prepared of The are significant years shift and currently have recent PCB's trend to a identify western we to. We experiencing countries. back we

of back In trend our and which the efforts to efficiencies manufacturing years countries shifting western the This as prepared defense, mainly accelerating supported and this we in recent reason segments forecast mainly military, to due as aerospace sustained security the in enhance the for policy medical significant to market, for the investment high demand our operation our considerations. well and our plan. of ongoing is began

as of XXXX, for quarter first our phase all lines finished production of first the the orders investment and accelerated During purchased the issuing part we planned to machines of be plan.

scheduled while and of rest contribute Some of the operational capacity, that end production to XXXX. machines by machines are the these our already of is to arrive

margin will QX It profit of the our installation place sales. is XX% these gross machines in The important this gradual increase contribution attribute profitability. the XXXX note in that period our to through is mainly our take of resulting and sales to gradually in to a to growth

Our such as vary and in same insurance expenses as do fixed ratio tanks sales. the rent, municipal not

As sales, company the of a the our higher greater gross result our profitability.

reduce from decided million loans we expenses light the $X.X this, of prevailing high cash our repay rates. order $X.X long of XXXX first million quarters income high during last quarter and profitability with of resulted the of record XXXX income and This million. We $X.X activity. interest flow operating to in of ended pretax term net given to In in high results the the financial of

our to to CFO will results. our turn call financial the Ron I Freund, discuss now over

Ron Freund

to Eli. quarter of your I you, the to attention financial Thank would draw XXXX. for statements the first like

its and the financial reasons uses non-GAAP its measures. certain discuss also Eltek performance for earnings as release non-GAAP will I a use. EBITDA Please see call, financial for measurement. this During our definition

XXXX. a million is XX% were the first the in of the U.S. in to quarter are to million $X gross dollars. quarter increase Revenues of the part in highlights million over quarter. XXXX $X.X first now of XXXX. of quarter will first Gross All expenses first profit $X by for in increased million mentioned fixed and I included of cost go compared of XXXX numbers mainly of compared of increase the in due revenues. component revenue The profit the reaching to the $XX.X

U.S. million Operating $X.X the profit financial amounted million million million due to XXXX QX against in $X.X of $X.X QX We devaluation in the compared QX NIS XXXX. in and $X.X income XXXX recorded dollar. to the QX of during

to million $X.X $X.X in Profit in compared million million compared compared profit in XXXX. before $X.XX $X.X in EBITDA QX or XXXX. QX profit to QX QX per in $X.X share QX amounted to or Net of million XXXX. $X.X $X.XX XXXX income was share was net tax XXXX million million per $X.X

first enjoyed activities cash XXXX, XXXX. the operating positive to in quarter of flow During million $X.X compared $X.X we of for QX million

equivalents cash As of cash at XX, to and of million March $X we of the end XXXX had million $X.X XXXX. compared

take questions. to your We are ready now

Operator

Instructions]. Thank you. [Operator

Research. Thomas Investment go First Zacks Please from is of question Kerr ahead.

Thomas Kerr

Good morning, everybody.

feel And margins, is question gross from there? goals. of in exceed improve or can First your that it Do seems to sustainable near-term coming XX% that's you goals or quarters almost long-term one on coming years?

Ron Freund

improve think we targeting reach higher, we margin. our currently, are efficiency this percentage. that We that we goal with hope We gross we achieved Yes. are this although and this and profit satisfied can even

Thomas Kerr

on in capital accelerated Okay. investment And up where the expenditures plan, of statements? $XXX,XXX. that, show to Because And capital, that we are kind Thank spending? of terms the related financial the were what on you. then

on we of plan timeline are where best So and accelerated spending that of the does where up? sort show

Eli Yaffe

Tom. you, Thank morning. Good

and PO. most of ourselves of form commit we it's to before, mentioned the investments I As the in already

And issued. our XXXX. done is the start already some ended of still that result on the we is and We that's plan. by defined increase PO But get QX. the the our books. the planning nothing some already most critical is or of to yet machine So can machine will This and earlier it -- end assume linearly during of in sales be of is

Thomas Kerr

remaining on high? Okay. And so cash Any balances paying the since the balance become have one more question. debt thoughts

Eli Yaffe

I didn't fully. question understand your

Thomas Kerr

Plans of long-term debt. remaining to repay the amount

Eli Yaffe

Yes.

As you balance saw, we million debt. long-term X have a shekel of

financing accelerated plan. investment for have a the plan We

this we amount consider current stay term quarter with repay. whether we the and However, decide long repaying the loan will or during

credit have so utilized that would decision. a -- shouldn't easy be this line, pretty We

Thomas Kerr

you. the back in queue. Thank I'll get Okay.

Eli Yaffe

you, Tom. Okay. Thank

Operator

next The is (ph). ahead. from [Michael Wu] question Please go

Unidentified Analyst

Hello. Hi. Congrats for a great quarter.

the What my give is, product color mix. some So question can sector? first of revenue the the you revenues defense on percentage the is from

Eli Yaffe

approximately I XX% can aerospace it, and defense. estimate but didn't this analyze is I

Unidentified Analyst

great. Okay,

like any updates the sector have any on color you going do like So on this? forward, any

Eli Yaffe

your get sentence. Sorry, I didn't last

Unidentified Analyst

Oh, yeah.

defense like, you do -- the trend, on see what's like Just the the any trend sector?

Eli Yaffe

not years. sector defense the only coming and will decline the in grow will believe We

Unidentified Analyst

you Thank great. much. Okay, very

So expenditures. on capital follow-up questions the

fully you until right? So said XXXX, it invested will like be

Eli Yaffe

Yes.

Unidentified Analyst

Okay.

accelerated it's investment investment right? So sort for all plan, or linear like those of a

Eli Yaffe

Yes, ourselves issued between year now for and as step-by-step and the of I we commit balance equipment. the PO arrive to the XXXX. That going said, is

arrived the partially of reflected QX our results. and equipment XXXX already in Some it's

Unidentified Analyst

like be to update enough great. to Okay, on workers acquire I Any you enough have for guys? mean the will labor you you Do able -- side?

Eli Yaffe

site yet, it. I like it have Yes. only react it -- commit possible market We is the to -- the Most we fast we'll months, we other the go decided as we something will on right final to that that in side focus now decision give of is facility we in the the but to because growth if that the to next we the one time facility. to that and strong or cannot north no very we will here we'll to and about about continue will it seems don't longer. market to up me in and it there decide the will and next have grow weeks, take build would as But will in decide

Unidentified Analyst

Okay.

numbers you Do have clear. have -- now on it's added? right many whereas employees many last you year, how So like how like

Eli Yaffe

the XX in we Yes. and during the XXXX. We end approximately maintained added amount employees same XXXX as employees were of of we

Unidentified Analyst

Okay, great. very it. much. Thank you Appreciate

Eli Yaffe

Michael. you, Thank

Operator

[Operator Research. Instructions]. go of The ahead. question Please follow-up Kerr from next Investment a Zacks is Tom

Thomas Kerr

follow-up components on change? make majority backlog or Just the components up the flex-ridge is backlog, or did a the of those it quick still of

Eli Yaffe

the Yes. same mix. It's

Thomas Kerr

Okay. Thank I had you. That's all for today.

Eli Yaffe

you. Thank

Operator

There this no at questions are time. further

Before replay participants like remind his tomorrow I will available www.nisteceltek.com. be go to to closing statement, ask a website, call the with this Mr. ahead Eltek's Yaffe that of on I would

Eli Yaffe

conclude thank Eltek you day. for we to innovation employees of mission Have I critical joining our the our our for their today's all call. and our support. Eltek call, and good would Thank all our continued I inspiring to customers. wish us partners, to thank continued Before team for investors a like to for on contribute also customers,

Operator

your Limited concludes financial This Thank conference you results quarter participation. first for call. the Eltek XXXX

may go and You ahead disconnect.

Eltek (ELTK) 18 May 232023 Q1 Earnings call transcript