ELTK - Earnings call transcript Q3 2024

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Eltek Ltd. 2024 Third Quarter Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

Before I turn the call over to Mr. Officer; Freund, Executive Financial Chief Yaffe, and Chief Ron Officer. Eli session. they to presentation referring question-and-answer remind like will and you the today's I'd in that be information to in forward-looking assumptions By and are its to and more and risks outlined the information public fully nature, contains in subject expectations future Eltek's outcomes, this about which here discussed uncertainties forecast disclosure filings. projections and and the company. beliefs reflect expectations current are the statements forward-looking These of may results differ materially. or events Actual We'll referring also to be measures. non-GAAP such obligation forward-looking circumstances no Eltek to events this revisions to to publicly or statements undertakes occurring date. release reflect to subsequent

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

Eli Yaffe

Officer. you. Good Third Call. our XXXX Thank for Earnings Thank Financial morning. With me joining Freund, us Fiscal Ron Year for Quarter is you Chief our

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

with $XX.X everyone access concluded earlier also record to released release, was will which release of The totaling today. on have now, quarter XXXX third our revenue website. available should the million. our We press By a be

segment During contributed the X%. industrial our segment XX% market represents this market and defense period, total self market for accounted segment of XX% sales, while the medical

China the the the in demand medical our generate and ongoing and various backlog for with to tensions and significant due critical strong defense the growth and trends in and as any worldwide. in and products will strong believe steady not market maintain anticipate between that trade to U.S. continue We strategy. line change conflict to sectors PCBs We expect such for high-end growth do continue demand

customers changes to business. and our end from robust In customers, primary for recovery a in a due stemming Industrial We in slowdown have to this XXXX. remains grow. products India in in reduced the the demand segment, segment Demand we continue its observed our anticipate from

better We are demand, initiating co-production lead reduce partnership to and pricing. with time companies meet customers overseas specialized improve

not these partnership. is yet there However, significant through progress sales this been on

profit $X.X XX%. million, gross was of a margin third for Gross resulting the quarter in

the made product to XX% gross profit Operationally, quarter decline the market profitability we in reflecting was mix well significant to in progress. due adjustment worker of return Israel. compared as a typical as the the gross our in labor affected term. wages, This by anticipate We XX% profitability current second to the have medium to condition in production quarter's margin long, the

opening our in mask dedicated a investment are the $X final million. is We stage of new accelerated part which solder department, investment an of of approximately with all to program production application the

This other reallocated areas. space area, space reproposing which were smaller and was to created storage by office

operation, machinery prioritized demand skills. strategy investment higher manpower less border Our technical for but require and

machinery process During recruitment. approximately for employees and new in employees part our accelerated next quarters continues increased of integration investment the this wages -- support our to We additional coming direct year stabilized quarter, we the to arriving in XX order workforce only in prepare by of to level the plan. hiring as

new initiative existing We satellite replace processes X.X to project also to company into expected most program ERP years. of spend which an accelerated the various a is systems. investment computing consolidate numerous have not approximately and system, part ERP of initiated This the to project, systems aims the streamline

the in position Board Distribution financial statement, will distribution Our the the company's company's needs. policy, adopted will Board filing and up policy. the financial dividend net dividend the following flow distribution of of in consideration company declared be of profit. annual Under take the to this of cash XX% Directors

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

Ron Freund

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

$X.X During measurement. use. I are quarter, Eltek for earnings this financial of the see Revenues uses measures. all XXXX as EBITDA over go release in discuss numbers our third a non-GAAP will performance for now highlights non-GAAP I reasons call, and U.S. the Please its the will the certain for financial of also dollars. that in its $XX.X million definition lower $XX.X mentioned material XXXX some reflects primarily to more cost profit orders were included quarter favorable to QX with in million the XXXX $X.X quarter Gross This for XXXX. decrease of QX product in QX mix third XXXX compared third million XXXX. compared a component. a totaled million

wages contributed our to QX XXXX, shift labor have in the by prompt in of employees, we the for local gross decline beginning the manufacturing at which adjusted Additionally, market, margin.

XXXX. in or XXXX share $X.X $X.X million to million positive compared compared of QX $X.X QX Operating Profit $X.X QX generated driven in in $X.X QX by recorded XXXX cash net million million million million $X leading $X.X to year. to flow the tax in our in XXXX. down receivables. $X.X $X.XX the Net for is before changes decrease reserves. to the $X.X dollar QX in million share We sales, at we exchange million and QX increase to QX QX EBITDA XXXX, was on higher XXXX an to stood per or per rate In of mainly for cash last U.S. amounted QX $X.X QX period to $X.X interest million XXXX income compared compared financial operating in in million primarily compared million XXXX, $X.X from in income earnings in activities quarter XXXX. of same in XXXX. the trade $X.XX The was million to relative profit third profit XXXX, to from attributed

million. September our balance totaled cash XX, XXXX, of sheet $XX.X As

ready are to now We questions. your answer

Operator

Michael [Operator Instructions] is Mo. The first from question

Unknown Analyst

defense orders. quarter I is higher. have obviously, a question this little about the It a sector bit seems,

forward, or XX%. the on XX% mix Can Going do any revenue you color you expect what like this? give

Eli Yaffe

Yes. Thank Michael. you,

of the strong we sector, the may its will will that It due backlog go up. products mainly down. to not and go profitability As before, defense expect mentioned . I the sector, the increased defense

Unknown Analyst

Okay.

So about new the question the is the CapEx facility. second for

of opened You said year. it's going this end to the by be

for this So the Do year any guidance. is have left what next then you year? and CapEx

Ron Freund

Yes.

what in accelerated of is So XXXX. million and are basically, will, was of lines paid. coating the $X million that opening is during $X left $X will around is include XXXX to plan, part arrive And it us What investment this it course, XXXX. plan already the year-end we million during cost and accelerated it in to be paid in

Unknown Analyst

what by and capacity. year So just know generate the I capacity, end to next of will the this like able extra to want be we year,

Eli Yaffe

capacity will serve of the by program. approximately the of investment production So to $XX $XX sales end million that that we expect accelerated million the

Unknown Analyst

By the year, right? But next program ends, right? full

Ron Freund

Yes.

Operator

Zacks. next question Kerr is of The from Tom

Thomas Kerr

discuss had salaries? the in goods else cost that to can sold. more higher the -- of of does worker workers Does that pay just shortage and The issue a labor Or mean you was you mean? there what

Ron Freund

and And demand in Tom, them increase there employees. to a their in in also order workforce you yes, recruit in we so to high to of ones. is workers' need and working salaries to our Central are Israel Israel increase new that in right. The also to level of the experienced keep to had keep recruit is facility salaries order situation current employees. the We more for

Thomas Kerr

forward. that And continue going will

Ron Freund

least to at more increase level that We don't any we of that at we the expect is such stage. reached good. that not salaries believed this the We see need

Thomas Kerr

Okay. a question. And picture big

you and note anything Or were there? opportunities defense quarter. mentioned of last exploring of progress You outside Any markets medical on that?

Ron Freund

main operating we in but So are recall medical. and segments. aerospace, industrial the the that I X statement, are don't in the defense, These

are also increase our We other operation our to move We in in areas. to to expand don't the commercial trying side. expect or operations

Eli Yaffe

increase wages, customers to we is for already would it's that to all clarify like these Tom, expected tested the in Eli. the differences. pay I just and

Thomas Kerr

Okay.

you passed right, that right? So through,

Eli Yaffe

we slowly pass it, Yes, yes.

Thomas Kerr

Yes.

more one And Okay. question.

plan, on to. investment will million $X memory the there's my that $X new what goes remaining in to On million said go the XXXX, million left refresh and you and facility this $X accelerated

Ron Freund

I No. was not Maybe understood.

to during accelerated mainly million. around million What left $X on which So we the should installed XXXX. is left, It the coating the paid. $X and in is $X already lines investment million arrive is X

Operator

There this Instructions] questions [Operator further time. are at no

a of Yaffe, question Zacks. Mr. ask is Tom follow-up I Before from Kerr there

Thomas Kerr

quick more one one. Just

quarter, expecting and said On range. And Did mean that revenue quarter when you you margins strong we fourth secondly, -- growth? similar fourth XX%, beyond? XX% the and are to still gross returned

Ron Freund

long Thomas, term, will price give our that our don't XX% any next mid, year the margin revenues, said that and So of situation Eli next no we reflects forecast quarter gross what revenues. XX% increases, as of the that cetera. understanding in the wages, forecast to et between be we to is And

Thomas Kerr

long to Medium term. Okay.

term. Okay. thought I said you short

have. I all That's Okay.

Operator

time. are further this at There no questions

statement, would I like closing ahead Before on be this that the available Mr. Yaffe go like I will to you replay make with a remind statement? his website. of our ask to Mr. concluding Yaffe, your call would tomorrow to participants

Eli Yaffe

closing, to the hard our and work management for would the continued during team In for support. and . and I our their company customers like thanks this employees investors to to time thank their

Operator

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

ahead go may and You disconnect.

Eltek (ELTK) 19 Nov 242024 Q3 Earnings call transcript