NASDAQ:ELTK Eltek Q2 2023 Earnings Report $8.90 +0.37 (+4.34%) Closing price 05/5/2025 03:52 PM EasternExtended Trading$8.94 +0.04 (+0.51%) As of 05/5/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History Eltek EPS ResultsActual EPS$0.22Consensus EPS $0.20Beat/MissBeat by +$0.02One Year Ago EPS$0.13Eltek Revenue ResultsActual Revenue$11.04 millionExpected Revenue$10.90 millionBeat/MissBeat by +$140.00 thousandYoY Revenue GrowthN/AEltek Announcement DetailsQuarterQ2 2023Date8/21/2023TimeQ2 2023 Earnings ReleaseConference Call DateMonday, August 21, 2023Conference Call Time8:30AM ETUpcoming EarningsEltek's Q1 2025 earnings is scheduled for Tuesday, May 20, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Earnings HistoryCompany ProfilePowered by Eltek Q2 2023 Earnings Call TranscriptProvided by QuartrAugust 21, 2023 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Ladies 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. As a reminder, this conference is being recorded. Operator00:00:24Before I turn the call over to Mr. Eli Yaffe, Chief Executive Officer and 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 and A. By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to risks and uncertainties outlined here and discussed more fully in Eltek's public disclosure filings. These forward looking statements are projections and reflect the current beliefs and expectations of the company. Actual events or results may differ materially. Operator00:01:02We'll also be referring to non GAAP measures. 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. Please go ahead. Speaker 100:01:22Thank you. Good morning. Thank you for joining us for our Q2 fiscal year 2023 earnings call. With me is Ron Freund, our Chief Financial Officer. We will begin by providing you with an overview of our business and summary of the principal factors that affected our results during the Q2, followed by details of our financial results. Speaker 100:01:48After our prepared remarks, we will be happy to answer any of your questions. By now, everyone should have access to our press release, which was released earlier today. The release will also be available on our website at www.nisteceltek.com. In the Q2 of 2023, revenue were $11,000,000 due to the continued strength in the aerospace and the defense end market. The trend of high demand for our company products, which we witnessed in 2022, continues into 2023. Speaker 100:02:28Therefore, so far our dedicated employee and the strongest demand enable us to meet our sales target also the Q2 usually has fewer working days due to the holidays. As we look into the rest of 2023 and into 2020 4, we see an increased demand in the semiconductor segment, which we hope we will be translated into purchase orders and increased sales. During the Q2 of 2023, we repaid the balance of our bank loans in the amount of $1,800,000 and as of June 30, 2023, we had no bank loans outstanding. The decision to repay our bank loans was based on our strong cash flows and the prevailing high interest rate. The erosion of the shekel against the dollar continued during the Q2 of 2023 and allowed us to record financial income. Speaker 100:03:29This erosion has continued into the Q3 of 2023. I would like now to expand a little bit on our strategy. The high end PCB sector is expected for substantial growth in the upcoming years, driven primarily by the defense, aerospace and medical device domain. The defense sector is driven by the increased complexity and sophistication of military electronics. The aerospace industry, which we are active in, is expecting growth and creating new opportunities for us such as satellite and other spacecraft that required complex electronic systems with high end and reliable PCBs. Speaker 100:04:15The medical device industry is in a position of steady growth with global annual sales forecast rise by over 5 years 5% a year. This projection reflects increasing demand for innovative new devices. We believe that the high end PCB sectors is expected to grow significantly in the coming years with these sectors being major driven drivers of the growth. The key trends that are expected to shape the future of the PCB industry in these sectors include increasing demands of high performance PCBs, miniaturization, growing importance of reliability and safety and the increasing demand for sustainability. In light of this, we continue to invest in our growth. Speaker 100:05:08In recent years, we have invested heavily in improving profitability and operational efficiency. At the beginning of 2022, we decided on an accelerated investment plan to expand the capacity and efficiency of our manufacturing lines, which will enable increasing sales. At the same time, we invested a lot of efforts on increasing our workforce. As of today, we have increased our workforce by 24% since the beginning of 2022. Our strict strategy to increase growth also include M and A activity. Speaker 100:05:44Our initial goal in this area is an acquisition of a company with manufacturing capacity in North America that will allow us to expand our activities in this territory. Earlier this month, we were informed by the Ministry of Environmental Protection that it rejected our claim to reduce the clean air penalty imposed on us on January this year. Therefore, we had provided the full allowance for the penalty in our Q2 interim financial statement and record a one time expense in the amount of $350,000 We have decided to file an administrative appeal, which we hope will reduce the penalty amount. I will now turn the call over to Ron Freund, our CFO to discuss our financial results. Speaker 200:06:35Thank you, Eli. I would like to draw your attention to the financial statement for the Q2 of 2023. During this call, I will also discuss certain non GAAP financial measures. Edtech uses EBITDA as a non GAAP financial performance measurement. Please see our earnings release for its definition and the reasons for its use. Speaker 200:06:57I will now go over the highlights of the 2023 Q2. All numbers mentioned are in U. S. Dollars. Revenues for the Q2 of 2023 were $11,000,000 compared to $9,100,000 in the Q2 of 2022. Speaker 200:07:14Gross profit increased by 76%, reaching $3,000,000 compared to a gross profit of $1,700,000 in the Q2 of 2022. The increase is mainly due to the increase in revenues. Operating profit amounted to $1,400,000 in Q2 2023 compared to $300,000 in Q2 2022. We recorded financial income of $200,000 during Q2 2023 and 0.6 $1,000,000 in Q2 2022 due to the devaluation of the NIS against the U. S. Speaker 200:07:53Dollar. Profit before income tax amounted to $1,600,000 in Q2 2023 compared to $1,000,000 in Q2 2022. Net profit was $1,300,000 or $0.22 per share in Q2 2023 compared to net profit of 0 point $8,000,000 or $0.13 per share in Q2 2022. EBITDA was 1 point $800,000 in Q2 2022. During the Q2 of 2023, we enjoyed positive cash flow from operating activities of $100,000 compared to $500,000 in Q2 2022. Speaker 200:08:38The decrease is mainly due to an increase in trade receivables and inventory levels, which derives from the increase in revenues. As of June 30, 20 23, we had cash and cash equivalents of $8,300,000 compared to $7,400,000 at the end of 20 22. We are now ready to answer your questions. Operator00:09:04Thank The first question is from Tom Kerr of Zacks Investments. Please go ahead. Speaker 300:09:39Good morning. Can you talk about the current capital improvement plan and where you are in the spending on that? I think the total was $15,000,000 Where are we in that and when should that be completed? Speaker 100:09:56Hi, Tom. Good morning. Yes, I can elaborate about it. As we spoke about in the previous call, we had put POs for most of the equipment and balance of the equipment is going to arrive in 2024 and 2025. Some of the equipment is going to arrive between now and the end of the year 2023. Speaker 100:10:22You don't see it in our books yet, but the POs were already issued to the manufacturers in Europe. Speaker 300:10:35Okay. And what does that mean? Where do we stand in terms of revenue capacity? I think last year it was in the $40,000,000 to $55,000,000 range. Has that increased recently? Speaker 100:10:48No, we're still in this range. We hope to be in $55,000,000 when we'll capacity production capacity when we'll finish these capital investments. Speaker 300:11:00Okay. And then can you provide more color on the entry into the U. S. Market? Did you say you were looking for acquisitions, have found 1 or just still in the process of searching? Speaker 200:11:15Hi, Tom. No, we still did not find 1. We are in the stage of searching and trying to find a target company, which will be good for us to acquire. Speaker 300:11:33Okay. And one more question. Do you have you outlined gross margin goals for the rest of this year or perhaps in the next year? Have you set targets for what gross margin could reach? Speaker 200:11:47Yes. Our target for this year will be around the 27% as was in the first half of twenty twenty three. And we hope that with increased sales, we will be even higher. But as of now, 27% is our target. Speaker 300:12:07Okay, thanks. That's all the questions I have for this morning. Speaker 400:12:09Thank you, Operator00:12:24The next question is from Shuky Hazan of Hazan Capital Markets. Please go ahead. Speaker 400:12:32Hi, hello. I wanted to ask the operating income was $1,400,000 after a deduction of $350,000 Yes, you're right, Shuky. Okay. And let's say the Q3, if I'll compare it to the Q2, in the Q3, there's more working days than the Q2, am I correct? Speaker 200:13:00Yes, you are. Speaker 400:13:02I understand. Okay. And about your production capacity in 2023, let's say for the second half of this year, the maximum capacity that you can produce is around $12,000,000 $12,500,000 $13,000,000 Do you have any range that is the maximum that you can sell in the quarter, in the next two quarters, the maximum that you can sell? Speaker 100:13:34The range of our sale capacity is dependent upon the mix is $11,000,000 to $13,000,000 per quarter. Speaker 400:13:41$11,000,000 to $13,000,000 Speaker 100:13:42$11,000,000 to $13,000,000 1.3, yes. Speaker 400:13:44Yes. Okay, okay. I understand. Speaker 100:13:47But it depends on the mix of the products. Speaker 400:13:50I understand. Okay. Thank you very much and good luck. Operator00:14:02There are no further 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 Eltek's website, www.nisteceltek.com. Mr. Yaffe, please go ahead. Speaker 100:14:21So in closing, I would like to thank our employees, our customers and our investors for your continued support as we continue to move forward as a company. Thank you again. Thank you for joining us. Take care. Operator00:14:38Thank you. This concludes the Eltek Ltd. 2023 Second Quarter Financial Results Conference Call. Thank you for your participation. You may go ahead and disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallEltek Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K) Eltek Earnings HeadlinesEltek (NASDAQ:ELTK) Research Coverage Started at StockNews.comMay 3 at 1:49 AM | americanbankingnews.comEltek Stock Short Interest Report | NASDAQ:ELTK | BenzingaApril 23, 2025 | benzinga.comAltucher: Turn $900 into $108,000 in just 12 months?We are entering the final Trump Bump of our lives. But the biggest returns will not be in the stock market.May 6, 2025 | Paradigm Press (Ad)Eltek Ltd (ELTK) Q4 2024 Earnings Call Highlights: Navigating Operational Challenges Amid ...April 21, 2025 | finance.yahoo.comThose who invested in Eltek (NASDAQ:ELTK) three years ago are up 106%April 8, 2025 | finance.yahoo.comEltek Ltd. Files 2024 Annual Report with SECApril 8, 2025 | tipranks.comSee More Eltek Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Eltek? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Eltek and other key companies, straight to your email. Email Address About EltekEltek (NASDAQ:ELTK) manufactures, markets, and sells printed circuit boards (PCBs) in Israel, Europe, North America, India, the Netherlands, and internationally. It offers a range of custom designed PCBs, including rigid, double-sided and multi-layer PCBs, and flexible circuitry boards. The company also provides high density interconnect, flex-rigid, and multi-layered boards. It primarily serves medical technology, defense and aerospace, industrial, telecom, and networking equipment industries, as well as contract electronic manufacturers. The company markets and sells its products primarily through direct sales personnel, sales representatives, and PCB trading and manufacturing companies. Eltek Ltd. was incorporated in 1970 and is headquartered in Petah Tikva, Israel. 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There are 5 speakers on the call. Operator00:00:00Ladies 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. As a reminder, this conference is being recorded. Operator00:00:24Before I turn the call over to Mr. Eli Yaffe, Chief Executive Officer and 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 and A. By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to risks and uncertainties outlined here and discussed more fully in Eltek's public disclosure filings. These forward looking statements are projections and reflect the current beliefs and expectations of the company. Actual events or results may differ materially. Operator00:01:02We'll also be referring to non GAAP measures. 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. Please go ahead. Speaker 100:01:22Thank you. Good morning. Thank you for joining us for our Q2 fiscal year 2023 earnings call. With me is Ron Freund, our Chief Financial Officer. We will begin by providing you with an overview of our business and summary of the principal factors that affected our results during the Q2, followed by details of our financial results. Speaker 100:01:48After our prepared remarks, we will be happy to answer any of your questions. By now, everyone should have access to our press release, which was released earlier today. The release will also be available on our website at www.nisteceltek.com. In the Q2 of 2023, revenue were $11,000,000 due to the continued strength in the aerospace and the defense end market. The trend of high demand for our company products, which we witnessed in 2022, continues into 2023. Speaker 100:02:28Therefore, so far our dedicated employee and the strongest demand enable us to meet our sales target also the Q2 usually has fewer working days due to the holidays. As we look into the rest of 2023 and into 2020 4, we see an increased demand in the semiconductor segment, which we hope we will be translated into purchase orders and increased sales. During the Q2 of 2023, we repaid the balance of our bank loans in the amount of $1,800,000 and as of June 30, 2023, we had no bank loans outstanding. The decision to repay our bank loans was based on our strong cash flows and the prevailing high interest rate. The erosion of the shekel against the dollar continued during the Q2 of 2023 and allowed us to record financial income. Speaker 100:03:29This erosion has continued into the Q3 of 2023. I would like now to expand a little bit on our strategy. The high end PCB sector is expected for substantial growth in the upcoming years, driven primarily by the defense, aerospace and medical device domain. The defense sector is driven by the increased complexity and sophistication of military electronics. The aerospace industry, which we are active in, is expecting growth and creating new opportunities for us such as satellite and other spacecraft that required complex electronic systems with high end and reliable PCBs. Speaker 100:04:15The medical device industry is in a position of steady growth with global annual sales forecast rise by over 5 years 5% a year. This projection reflects increasing demand for innovative new devices. We believe that the high end PCB sectors is expected to grow significantly in the coming years with these sectors being major driven drivers of the growth. The key trends that are expected to shape the future of the PCB industry in these sectors include increasing demands of high performance PCBs, miniaturization, growing importance of reliability and safety and the increasing demand for sustainability. In light of this, we continue to invest in our growth. Speaker 100:05:08In recent years, we have invested heavily in improving profitability and operational efficiency. At the beginning of 2022, we decided on an accelerated investment plan to expand the capacity and efficiency of our manufacturing lines, which will enable increasing sales. At the same time, we invested a lot of efforts on increasing our workforce. As of today, we have increased our workforce by 24% since the beginning of 2022. Our strict strategy to increase growth also include M and A activity. Speaker 100:05:44Our initial goal in this area is an acquisition of a company with manufacturing capacity in North America that will allow us to expand our activities in this territory. Earlier this month, we were informed by the Ministry of Environmental Protection that it rejected our claim to reduce the clean air penalty imposed on us on January this year. Therefore, we had provided the full allowance for the penalty in our Q2 interim financial statement and record a one time expense in the amount of $350,000 We have decided to file an administrative appeal, which we hope will reduce the penalty amount. I will now turn the call over to Ron Freund, our CFO to discuss our financial results. Speaker 200:06:35Thank you, Eli. I would like to draw your attention to the financial statement for the Q2 of 2023. During this call, I will also discuss certain non GAAP financial measures. Edtech uses EBITDA as a non GAAP financial performance measurement. Please see our earnings release for its definition and the reasons for its use. Speaker 200:06:57I will now go over the highlights of the 2023 Q2. All numbers mentioned are in U. S. Dollars. Revenues for the Q2 of 2023 were $11,000,000 compared to $9,100,000 in the Q2 of 2022. Speaker 200:07:14Gross profit increased by 76%, reaching $3,000,000 compared to a gross profit of $1,700,000 in the Q2 of 2022. The increase is mainly due to the increase in revenues. Operating profit amounted to $1,400,000 in Q2 2023 compared to $300,000 in Q2 2022. We recorded financial income of $200,000 during Q2 2023 and 0.6 $1,000,000 in Q2 2022 due to the devaluation of the NIS against the U. S. Speaker 200:07:53Dollar. Profit before income tax amounted to $1,600,000 in Q2 2023 compared to $1,000,000 in Q2 2022. Net profit was $1,300,000 or $0.22 per share in Q2 2023 compared to net profit of 0 point $8,000,000 or $0.13 per share in Q2 2022. EBITDA was 1 point $800,000 in Q2 2022. During the Q2 of 2023, we enjoyed positive cash flow from operating activities of $100,000 compared to $500,000 in Q2 2022. Speaker 200:08:38The decrease is mainly due to an increase in trade receivables and inventory levels, which derives from the increase in revenues. As of June 30, 20 23, we had cash and cash equivalents of $8,300,000 compared to $7,400,000 at the end of 20 22. We are now ready to answer your questions. Operator00:09:04Thank The first question is from Tom Kerr of Zacks Investments. Please go ahead. Speaker 300:09:39Good morning. Can you talk about the current capital improvement plan and where you are in the spending on that? I think the total was $15,000,000 Where are we in that and when should that be completed? Speaker 100:09:56Hi, Tom. Good morning. Yes, I can elaborate about it. As we spoke about in the previous call, we had put POs for most of the equipment and balance of the equipment is going to arrive in 2024 and 2025. Some of the equipment is going to arrive between now and the end of the year 2023. Speaker 100:10:22You don't see it in our books yet, but the POs were already issued to the manufacturers in Europe. Speaker 300:10:35Okay. And what does that mean? Where do we stand in terms of revenue capacity? I think last year it was in the $40,000,000 to $55,000,000 range. Has that increased recently? Speaker 100:10:48No, we're still in this range. We hope to be in $55,000,000 when we'll capacity production capacity when we'll finish these capital investments. Speaker 300:11:00Okay. And then can you provide more color on the entry into the U. S. Market? Did you say you were looking for acquisitions, have found 1 or just still in the process of searching? Speaker 200:11:15Hi, Tom. No, we still did not find 1. We are in the stage of searching and trying to find a target company, which will be good for us to acquire. Speaker 300:11:33Okay. And one more question. Do you have you outlined gross margin goals for the rest of this year or perhaps in the next year? Have you set targets for what gross margin could reach? Speaker 200:11:47Yes. Our target for this year will be around the 27% as was in the first half of twenty twenty three. And we hope that with increased sales, we will be even higher. But as of now, 27% is our target. Speaker 300:12:07Okay, thanks. That's all the questions I have for this morning. Speaker 400:12:09Thank you, Operator00:12:24The next question is from Shuky Hazan of Hazan Capital Markets. Please go ahead. Speaker 400:12:32Hi, hello. I wanted to ask the operating income was $1,400,000 after a deduction of $350,000 Yes, you're right, Shuky. Okay. And let's say the Q3, if I'll compare it to the Q2, in the Q3, there's more working days than the Q2, am I correct? Speaker 200:13:00Yes, you are. Speaker 400:13:02I understand. Okay. And about your production capacity in 2023, let's say for the second half of this year, the maximum capacity that you can produce is around $12,000,000 $12,500,000 $13,000,000 Do you have any range that is the maximum that you can sell in the quarter, in the next two quarters, the maximum that you can sell? Speaker 100:13:34The range of our sale capacity is dependent upon the mix is $11,000,000 to $13,000,000 per quarter. Speaker 400:13:41$11,000,000 to $13,000,000 Speaker 100:13:42$11,000,000 to $13,000,000 1.3, yes. Speaker 400:13:44Yes. Okay, okay. I understand. Speaker 100:13:47But it depends on the mix of the products. Speaker 400:13:50I understand. Okay. Thank you very much and good luck. Operator00:14:02There are no further 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 Eltek's website, www.nisteceltek.com. Mr. Yaffe, please go ahead. Speaker 100:14:21So in closing, I would like to thank our employees, our customers and our investors for your continued support as we continue to move forward as a company. Thank you again. Thank you for joining us. Take care. Operator00:14:38Thank you. This concludes the Eltek Ltd. 2023 Second Quarter Financial Results Conference Call. Thank you for your participation. You may go ahead and disconnect.Read morePowered by