Eltek Ltd (ELTK) 2020 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. and welcome to the Eltek Ltd. first-quarter 2020 financial results conference call. (Operator Instructions) As a reminder, this conference is being recorded. Before I turn the call over to Mr. Eli Yaffe, Chief Executive Officer; and Alon Mualem, Chief Financial Officer, I would like to remind you that Eltek earnings released today. And this call is including forward-looking statements within the meanings of the Private Security Litigation Reform Act of 1995 and the Securities and Exchange Act of 1934, as well as certain non-GAAP financial measures.

女士們，先生們，謝謝你們的支持。歡迎參加 Eltek Ltd. 2020 年第一季度財務業績電話會議。 （操作員說明）提醒一下，正在錄製此會議。在我將電話轉交給首席執行官 Eli Yaffe 先生之前；和首席財務官 Alon Mualem，我想提醒您，Eltek 今天發布了財報。此電話會議包括 1995 年《私人證券訴訟改革法》和 1934 年《證券交易法》含義內的前瞻性陳述，以及某些非 GAAP 財務指標。

Before making any investment decisions, we strongly encourage you to read our full disclosures of forward-looking statements and use the non-GAAP financial measures set forth at the end of our earnings release, as well as review our latest filings with the SEC for important material assumptions, expectations, and risk factors that could cause actual results to differ materially from those anticipated and described in such forward-looking statements.

在做出任何投資決定之前，我們強烈建議您閱讀我們對前瞻性陳述的完整披露，並使用我們在收益發布末尾列出的非 GAAP 財務指標，並查看我們向美國證券交易委員會提交的最新文件，以了解重要信息可能導致實際結果與此類前瞻性陳述中預期和描述的結果存在重大差異的重大假設、預期和風險因素。

These forward-looking statements are projections and reflect the current beliefs and expectations of the company. Actual events or results may differ materially. Eltek undertakes no obligation to publicly release revisions to such forward-looking statements to reflect events or circumstances occurring subsequent to this date.

這些前瞻性陳述是預測，反映了公司當前的信念和期望。實際事件或結果可能存在重大差異。 Eltek 沒有義務公開發布對此類前瞻性陳述的修訂，以反映該日期之後發生的事件或情況。

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

我現在想把電話轉給 Eli Yaffe 先生。 Yaffe 先生，請繼續。

Thank you. Good morning, everyone. Thank you for joining us, and welcome to Eltek's 2020 first-quarter earnings call. With me is Alon Mualem, 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 in the first quarter of 2020, followed by the details of our financial results.

謝謝。大家，早安。感謝您加入我們，歡迎來到 Eltek 2020 年第一季度財報電話會議。和我一起的是我們的首席財務官 Alon Mualem。我們將首先向您概述我們的業務，並總結影響我們 2020 年第一季度業績的主要因素，然後是我們財務業績的詳細信息。

After our prepared remarks, we will be happy to answer any of your questions. By now, everyone should have access to our first-quarter earnings press release, which was released earlier today. The release will be also available on our website at www.nisteceltek.com.

在我們準備好的評論之後，我們將很樂意回答您的任何問題。到目前為止，每個人都應該可以訪問我們今天早些時候發布的第一季度收益新聞稿。該版本也將在我們的網站 www.nisteceltek.com 上提供。

This is the fifth quarter in a row that we achieved both operation and net profit. Our revenue in the first quarter of 2020 rose to $9.2 million from $8.7 million in the first quarter of 2019. I'm pleased that our revenue reflects year-over-year growth in the defense and aerospace segments.

這是我們連續第五個季度實現營業利潤和淨利潤雙豐收。我們在 2020 年第一季度的收入從 2019 年第一季度的 870 萬美元增加到 920 萬美元。我很高興我們的收入反映了國防和航空航天領域的同比增長。

I'm also pleased with the continuous improvement in production efficiency that is evident in our improved gross margin. The outbreak of the coronavirus created new operational and business challenges, which required a quick adjustment to enable us to maintain our production of PCBs while maintaining the safety of our workforce.

我也對生產效率的持續提高感到滿意，這在我們提高的毛利率中顯而易見。冠狀病毒的爆發帶來了新的運營和業務挑戰，需要快速調整，使我們能夠在維持 PCB 生產的同時維護我們員工的安全。

We see both risks and new opportunities in the existing business environment and are making the necessary reductions to meet customers' demand in our revenue and profit margin goals. As we said in the past, we also see an opportunity to grow our business in the US due to the worsening the relationship between the US and China.

我們看到了現有商業環境中的風險和新機遇，並正在做出必要的削減以滿足客戶對我們的收入和利潤率目標的需求。正如我們過去所說，由於美中關係惡化，我們也看到了在美國發展業務的機會。

The impact of any trade war between the US and China will also impact the Israeli market since we see the US pressure on the Israeli government to reduce the Israel-China trade activity. At the same time, we also are facing slowdown from some of our customers in India and are expected to be closed -- that are expected to be closed through the end of June 2020 due to the COVID-19 virus.

美國和中國之間的任何貿易戰的影響也將影響以色列市場，因為我們看到美國向以色列政府施加壓力，要求其減少以色列與中國的貿易活動。與此同時，我們也面臨著印度一些客戶的放緩，預計將關閉——由於 COVID-19 病毒，這些客戶預計將關閉到 2020 年 6 月底。

So far, we have financed our growth strategy by our own internal resources. During 2020 and 2021, we plan to increase our investment in new equipment and expansion of our facility and infrastructure to support our long-term sales growth.

到目前為止，我們已經通過我們自己的內部資源為我們的增長戰略提供資金。在 2020 年和 2021 年期間，我們計劃增加對新設備的投資以及我們設施和基礎設施的擴建，以支持我們的長期銷售增長。

As previously announced, we filed a self-registration statement during the third quarter of 2019 to provide the company with the ability to raise additional funds to support our plan to grow and expand our business. We expect that any proceeds from this will be used in part for additional investments and to accelerate our long-term growth. The increase in our top line in Q1 2020 reflects the continued market recognition of our high quality and reliable products, mainly in the flex PCB sector.

正如之前宣布的那樣，我們在 2019 年第三季度提交了一份自我註冊聲明，為公司提供籌集額外資金的能力，以支持我們發展和擴大業務的計劃。我們預計由此產生的任何收益將部分用於額外投資並加速我們的長期增長。我們 2020 年第一季度收入的增長反映了市場對我們高質量和可靠產品的持續認可，主要是在柔性 PCB 領域。

Our defense revenue grew from $4.1 million during Q1 2019 to $4.6 million in Q1 2020, 12% growth year-over-year. Our customers continue to see the value proposition of our products and have a great deal of trust in our company and its capabilities. We will continue to pursue new business opportunities and increase customer design engagement activity that will leverage the advanced technology capabilities.

我們的國防收入從 2019 年第一季度的 410 萬美元增長到 2020 年第一季度的 460 萬美元，同比增長 12%。我們的客戶繼續看到我們產品的價值主張，並對我們公司及其能力充滿信心。我們將繼續尋求新的商機，並增加利用先進技術能力的客戶設計參與活動。

We remain focused on operational excellence and financial discipline as well as our strategic growth goals. We are all focused on addressing the challenges that the widespread health crisis had on us. And we are working diligently on expanding our business, while maintaining the trend of improved operational efficiency.

我們仍然專注於卓越運營和財務紀律以及我們的戰略增長目標。我們都專注於應對廣泛的健康危機給我們帶來的挑戰。我們正在努力擴大我們的業務，同時保持運營效率提高的趨勢。

I will now turn the call over to Alon Mualem, our CFO, to discuss our financials.

我現在將把電話轉給我們的首席財務官 Alon Mualem，討論我們的財務狀況。

Thank you, Eli. I would like to draw your attention to the financials of the first quarter of 2020. During this call, I will also be discussing certain non-GAAP financial measures. Eltek uses EBITDA as a non-GAAP financial performance measurement. Please see our earnings release for its definition and the reasons for its use.

謝謝你，伊萊。我想提請您注意 2020 年第一季度的財務狀況。在這次電話會議中，我還將討論某些非 GAAP 財務措施。 Eltek 使用 EBITDA 作為非 GAAP 財務績效衡量標準。請參閱我們的收益發布以了解其定義和使用原因。

Now I will go over the highlights of the first quarter of 2020 compared to the first quarter of 2019. Revenues for the first quarter of 2020 were $9.2 million, up from revenues of $8.7 million in the first quarter of 2019. Gross profit was $1.8 million in the first quarter of 2020 compared to $1.5 million in the first quarter of last year.

現在我將回顧一下 2020 年第一季度與 2019 年第一季度相比的亮點。2020 年第一季度的收入為 920 萬美元，高於 2019 年第一季度的 870 萬美元。毛利潤為 180 萬美元2020 年第一季度，去年第一季度為 150 萬美元。

Net profit was $541,000 or $0.12 per share in the first quarter of this year compared to a net profit of $242,000 or $0.12 per share in the first quarter of 2019. EBITDA was approximately $1 million in the first quarter of 2020 compared to EBITDA of $811,000 in the first quarter of 2019.

今年第一季度的淨利潤為 541,000 美元或每股 0.12 美元，而 2019 年第一季度的淨利潤為 242,000 美元或每股 0.12 美元。2020 年第一季度的 EBITDA 約為 100 萬美元，而 2020 年第一季度的 EBITDA 為 811,000 美元2019 年第一季度。

Cash flow provided by operating activities was $1.5 million compared to $1.6 million in the first quarter of 2019. As Ali mentioned before, we remain focused on operational excellence and financial discipline as well as our long-term strategic growth goals. We are now ready to take your questions.

經營活動提供的現金流為 150 萬美元，而 2019 年第一季度為 160 萬美元。正如 Ali 之前提到的，我們仍然專注於卓越運營和財務紀律以及我們的長期戰略增長目標。我們現在準備好回答您的問題。

(Operator Instructions) The first question is from [Mark Stocker]. Please go ahead.

（操作員說明）第一個問題來自[Mark Stocker]。請繼續。

Yes, good afternoon, Eli. Mark Stocker, private investor. I see your profit has gone from $0.08 a share to $0.12 a share quarter over quarter. My question is really what are you planning to use this [F-3] for, what initiatives?

是的，下午好，伊萊。馬克斯托克，私人投資者。我看到您的利潤逐季從每股 0.08 美元增加到每股 0.12 美元。我的問題是，您真正打算將此 [F-3] 用於什麼目的，有哪些舉措？

As we mentioned, the F-3, the proceeds from such transaction may be used to general corporate purposes, which may include working capital expenditure, repayment of debt, acquisition of investment. The amount of any offering will be limited based on the results of [this act] to one-third of our public float. So we are going to use it in order to accelerate our growth because right now we grow based on our internal resources. And if we'll get the funds that we try to raise, we will accelerate our growth. That is the main purpose of raising the fund.

正如我們提到的 F-3，此類交易的收益可用於一般公司用途，其中可能包括營運資本支出、償還債務、收購投資。根據 [本法案] 的結果，任何發行量將被限制為我們公眾持股量的三分之一。所以我們將使用它來加速我們的增長，因為現在我們的增長基於我們的內部資源。如果我們能獲得我們試圖籌集的資金，我們將加速我們的增長。這是籌集資金的主要目的。

Thank you.

謝謝。

Roni Lifshitz, TechTime.

TechTime 的 Roni Lifshitz。

Hello, this is Roni from TechTime. Congratulations on your good results. Can you gauge some more background about your expansion programs?

大家好，我是 TechTime 的 Roni。祝賀你取得好成績。你能評估更多關於你的擴張計劃的背景嗎？

Roni, again, expansion?

羅尼，又是擴張？

Yes, in your PR you said that you have a plan to increase your investment in equipment and expansion of your facilities. Can you give some more background about those plans?

是的，在您的 PR 中您說您有增加設備投資和擴建設施的計劃。你能提供更多關於這些計劃的背景信息嗎？

Yes. What we speak mainly about investment in equipment in older and parallel equipment to double the capacity, for example, we would like to double the capacity, we have to double the amount of machines that we have installed. So it's very simple. It's capital investment that we are going to put in row in parallel to existing equipment and by doing it will increase our capacity.

是的。我們主要講的是對舊設備和平行設備的投資，以使產能翻倍，例如，我們想將產能翻倍，我們必須將已安裝的機器數量翻倍。所以這很簡單。這是我們將與現有設備並行進行的資本投資，這樣做將增加我們的產能。

Sorry. So then you are planning to double your capacity, oh it was just an example.

對不起。那麼你計劃將你的容量增加一倍，哦，這只是一個例子。

This is just an example.

這只是一個例子。

Okay.

好的。

(inaudible), PBS Holdings.

（聽不清），PBS 控股公司。

Okay. Congratulations on the good results. I'm looking at the gross margin increase between '19 and '20. And this happened despite the potential inventory and operating disruptions in the quarter. So how can we expect to think about margins going forward.

好的。祝賀取得好成績。我正在看 19 年和 20 年之間的毛利率增長。儘管本季度可能存在庫存和運營中斷，但還是發生了這種情況。那麼我們如何期望考慮未來的利潤率。

In general, our gross margin has improved during 2019 and even in the first quarter of 2020. We are making effort to increase our operational efficiency. But we cannot provide any other looking-forward statements. So at this point, we cannot give any forecast for 2020.

總的來說，我們的毛利率在 2019 年甚至 2020 年第一季度都有所改善。我們正在努力提高運營效率。但我們無法提供任何其他前瞻性陳述。因此，在這一點上，我們無法對 2020 年做出任何預測。

(Operator Instructions) The next question is from [Dean Chin]. Please go ahead.

（操作員說明）下一個問題來自 [Dean Chin]。請繼續。

Great quarter. Congratulations on growing the company and surviving COVID-19. Recently in the Israeli press, the Hebrew Press, Siemens was mentioned partnering with Nistec in terms of AI board processing and testing. Is Eltek participating in these programs since Eltek is a part of Nistec?

偉大的季度。祝賀公司發展壯大並在 COVID-19 中倖存下來。最近以色列媒體希伯來出版社提到了西門子與Nistec在AI板加工和測試方面的合作。 Eltek 是否參與了這些計劃，因為 Eltek 是 Nistec 的一部分？

Hi, Mr. Chin. No, we are not part of -- Nistec is a major stakeholder in -- stockholder in Eltek. But we don't participate in their program about AI. We have our own AI program that we develop in order to have some alignment between the layers. But this is technological issue that we developed here internally in order to improve our production. But it's not related to Nistec.

你好，陳先生。不，我們不屬於 - Nistec 是 Eltek 股東的主要利益相關者。但是我們不參與他們關於 AI 的項目。我們開發了自己的 AI 程序，以便在各層之間進行一些對齊。但這是我們為了改進我們的生產而在內部開發的技術問題。但它與 Nistec 無關。

Okay. And my second question is in terms of your shifts, as you mentioned in the 6-K, are you still running on three shifts?

好的。我的第二個問題是關於您的輪班制，正如您在 6-K 中提到的，您是否仍在三班倒？

Yes, we are running mainly 2.5 shifts.

是的，我們主要運行 2.5 個班次。

Okay. All right. Thank you so much.

好的。好的。太感謝了。

Thank you.

謝謝。

There are no further questions at this time. Before I ask Mr. Yaffe to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available tomorrow on Eltek's website at www.nisteceltek.com. Mr. Yaffe, would you like to make your concluding statement?

目前沒有其他問題。在我請 Yaffe 先生繼續他的閉幕詞之前，我想提醒與會者，明天將在 Eltek 的網站 www.nisteceltek.com 上提供這次電話會議的重播。 Yaffe 先生，您要作總結髮言嗎？

Before we conclude our call. I would like to thank all of our employees for all their efforts during this difficult period and their contribution in renewing our position as a leading high-end PCB manufacturer making Eltek profitable, again. I would like to thank once again to all our customers, partners, investors, and the Eltek team for their continued support. I wish everyone good health. Thank you all for joining us on today's call. Have a good day.

在我們結束通話之前。我要感謝我們所有的員工在這個困難時期所做的所有努力，以及他們為更新我們作為領先的高端 PCB 製造商的地位所做的貢獻，使 Eltek 再次盈利。我要再次感謝我們所有的客戶、合作夥伴、投資者和 Eltek 團隊一直以來的支持。祝大家身體健康。感謝大家參加今天的電話會議。祝你有美好的一天。

This concludes the Eltek Ltd.'s first-quarter 2020 financial results conference call. Thank you for your participation. You may go ahead and disconnect.

Eltek Ltd. 的 2020 年第一季度財務業績電話會議到此結束。感謝您的參與。您可以繼續並斷開連接。