Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Eltek Ltd 2023 Second 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 Instructions] As a reminder, this conference is being recorded.

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

beliefs contains this forward-looking reflect risks future Eltek's to or assumptions and uncertainties public expectations fully statements in outlined and here and disclosure By outcomes, information expectations current materially. company. are These which are the its projections Actual the may forecasts, results nature, more filings. subject and about of and discussed events differ

We'll measures. forward-looking to statements obligation referring date. occurring also such events publicly reflect this be circumstances or to Eltek undertakes to to subsequent non-GAAP release revisions to no

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

Eli Yaffe

us morning. second me is Thank Thank our year earnings Financial joining Chief our for you Officer. call. for XXXX Good Ron With fiscal quarter you. Freund,

with the our business by After our any an your our financial We of providing results. the during prepared details results factors will principal by of second quarter our questions. we to be you answer begin happy the overview of will followed of that remarks, summary and affected

access earlier have at also should press everyone was our released www.nisteceltek.com. now, By available on which today. release, will release website The to be our

to our dedicated target. aerospace us demand for quarter efforts of the demand defense The revenue the the to The employees meet XXXX products, were the of our continues XXXX, and strong strengths witnessed of in high in and XXXX. In the end second $XX which our sales million enabled continued into due trend we market. company

fewer has the due to the holidays. quarter Also days second working usually

be into see rest into in look translated of increased will purchase segment, which XXXX As demand the we and into sales. orders XXXX, hope we increased and the semiconductor an we

our of balance the amount June amount cash $X.X million. repaid bank -- of as second on of we outstanding. And of prevailing based had our bank The loans we the the the interest no During the to was in quarter strong high loans our rates. bank repay XX, and XXXX, XXXX, loans to flows decision

the us XXXX financial erosion The of the record against third continued income. quarter allowed has and of shekel XXXX. during the of to continued second This the erosion into dollar quarter

I increased bit now of is would sector our domain. military growth is The expected in aerospace sophistication PCB electronics. device medical like sector a the defense, for complexity substantial to driven and years expand little The on upcoming by defense by the high-end the and driven primarily strategy.

growth active steady in, require The satellite of aerospace sales that forecast global industry other us which industry, high-end with X% in a spacecraft complex and reliable PCBs. as for systems new creating by The we rise and device over medical are electronic year. and position annual is is growth such expecting opportunities with a

increasing PCB the in These for of reflect the major being We coming expected new innovative the devices. that years these demand drivers grow significantly sectors sectors growth. projections with is to believe high-end

invest have profitability industry efficiency. PCB miniaturization, invested demand that sustainability. are shape of for In high-performance of include we safety to The continue the the and years, these and of increasing in increasing light PCBs, the of In demands we key reliability trends and operational expected improving our importance this, heavily sectors future the growth. recent to growing in in

same At investment XXXX, our a efficiency an decided of to accelerated enable increasing workforce. lot and of time, lines, on plan the sales. on we the At capacity our efforts invested we which will the increasing manufacturing beginning of expand

beginning XXXX. workforce XX% by the of our today, As of we have increased since

also growth to include strategy M&A increase activity. Our

this territory. us this in area allow to North company activities America with a of manufacturing goal capacity that in in will is initial Our acquisition expand an our

this our informed of Earlier QX Environmental to in in on statement we that for the record interim the on the financial rejected penalty full $XXX,XXX. month, the it penalty January and expense a provided allowance of we imposed Therefore, this clean onetime us by air claim were reduce year. Protection our have Ministry the amount

We administrative which the have we reduce penalty hope decided will to amount. an file appeal,

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

Ron Freund

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

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

are XXXX the of second second I the mentioned go dollars. were $X.X XXXX quarter the $XX now million Revenues second quarter to in numbers quarter. XXXX. US of of All over in million will highlights compared the for

increased QX million in QX gross reaching $X.X XXXX by The to a increase due of in compared million revenues. $X.X profit of in $X to $X.X million second profit compared XXXX. Gross the increase mainly to the Operating profit XX%, to amounted million XXXX. is quarter in

We recorded due QX QX during XXXX $X.X XXXX Profit the against million to QX compared XXXX US $X.X $X the of million the QX $X.X in before financial of and NIS dollar. tax income in income million devaluation to million in XXXX. to amounted

million to was net was Net QX $X.X QX in to or $X.X share of in EBITDA million $X.XX XXXX. or $X.X profit compared XXXX. XXXX $X.XX million in profit per $X.X per QX share million compared

in XXXX, revenues. $X.X we During The decrease due of second mainly compared inventory an enjoyed receivables to in million increase $X.X of is million positive quarter and from cash increase derives flow from QX activities levels, XXXX. which trade in to the operating the

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

your answer questions. to ready now are We

Operator

will and first question-and-answer time question Zacks at Instructions] Thank from Kerr [Operator you. ahead. Please The begin of session. Ladies the gentlemen we this is go Tom Investments.

Thomas Kerr

And the on should $XX are current that? you the spending I when in where improvement capital be the morning. -- are we Good completed? you million. think and total talk plan Can in about that? that where was Is

Eli Yaffe

I Yes, about morning. Good Tom. Hi, can it. elaborate

POs previous the put And had the 'XX is balance of equipment. about 'XX. going in call, for the arrive we spoke of to and the most equipment we As in

to end is arrive now between year of going equipment of Some the and the XXXX. the

it see don't Europe. issued but books in in POs yet, You already to the manufacturers the were our

Thomas Kerr

does it capacity? Where think do stand And in Okay. the $XX revenue was range. year that last what to I million of terms mean? we in million $XX

increased that has recently? So

Eli Yaffe

No, finish We we're when production hope million capacity investments. range. -- this these when be still in capacity, in $XX to we'll we'll capital

Thomas Kerr

on And for say searching? the acquisitions, Okay. still into just color the US process the one were found of you market? provide in looking you you or can entry Did then more have

Ron Freund

one. we No, Tom. Hi, still not did find

searching trying for a find which company and to to acquire. in will good target be are of We stage us the

Thomas Kerr

more in for One you you outlined question. next this gross of or for Okay. perhaps margin Do targets set goals what rest have margin year, year the gross could you have -- reach? the

Ron Freund

first will hope XX% Yes, in increased around year as even as of higher. our the will target. And we -- we this XX% for the of that is with now, But be target was half XXXX. our sales, it be

Thomas Kerr

Thanks. questions That's the have all Okay. I for morning. this

Eli Yaffe

Tom. you, Thank

Ron Freund

you, Thank Tom.

Operator

Markets. from go [Operator Shuki Instructions] The question ahead. next Hazan Please of Hazan is Capital

Shuki Hazan

$X.X the I to Hello. ask, of deduction $XXX,XXX? Hi. operating million income was after wanted

Eli Yaffe

Yes.

Ron Freund

Shuki. right, you're Yes,

Shuki Hazan

there's it to Okay. the the quarter, than if I correct? quarter, second more second the working the say, third And I'm let's quarter, days compare in quarter, third

Ron Freund

you Yes, are.

Shuki Hazan

I understand.

the around maximum quarters, let's this quarter, is for million, year, And the say, second range the million, that that next half sell Okay. capacity about maximum of in capacity in the a you the two can Do XXXX, million. your XX.X sell? produce $XX that maximum you have you you can production can any is $XX that in

Eli Yaffe

is million upon The range of to $XX our mix per capacity sell quarter. million $XX the depends

Shuki Hazan

million $XX $XX to million?

Eli Yaffe

to $XX $XX million, million X-X, yes.

Shuki Hazan

Yes.

I understand. okay. Okay,

Eli Yaffe

mix the products. But it depends upon the of

Shuki Hazan

understand. I

Thank Thank good Okay. much you very luck. and you.

Eli Yaffe

Shuki Thank you,

Ron Freund

you, Thank Shuki

Operator

time. no questions this at further There are

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

Eli Yaffe

closing, I as continue for investors to Thank support forward like in thank our your joining continued Thank you as us. for and move company. So you to a care. we Take customers our our employees, would again.

Operator

XXXX Eltek you Financial your Second Results concludes Call. the This Conference you. participation. Thank Quarter for Ltd Thank

You go and may ahead disconnect.

Eltek (ELTK) 21 Aug 232023 Q2 Earnings call transcript