Eltek Ltd. (NASDAQ:ELTK) Q1 2019 Earnings Conference Call May 29, 2019 8:30 AM ET
Eli Yaffe - CEO
Alon Mualem - CFO
Conference Call Participants
Martin Elbaum - Horizon Networks
Ladies and gentlemen, thank you for standing by. Welcome to the Eltek Ltd. First Quarter 2019 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] As a reminder, this conference is being recorded, May 29, 2019.
Before I turn the call over to Mr. Eli Yaffe, Chief Executive Officer, and Alon Mualem, Chief Financial Officer, I would like to remind participants that comments made during this conference call may contain projections or other forward-looking statements regarding future events or the future financial performances of Eltek Limited. These statements are only projections and reflect the current beliefs and expectations of the company. Actual events or results may differ materially.
With that said, it is routine for internal projections and expectations to change as quarters progress. All forward-looking statements are based on information available to the company on the date hereof, and the company assumes no obligation to update such statements. Please refer to the documents the company files from time to time with the SEC, specifically the company’s Annual Report on Form 20-F, its periodic reports on Form 6-K, and the Safe Harbor language contained in the company’s press releases.
These documents contain and identify important factors that could cause the company’s actual results to differ materially from those contained in its projections or forward-looking statements, which the company urges all investors to consider. Eltek undertakes no obligation to publicly release the revisions to such forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events.
I would now turn the call over the call to Mr. Eli Yaffe. Mr. Yaffe, please go ahead.
Thank you. Good morning, everyone. Thank you for joining us and welcome to Eltek's 2019 first quarter earning call. With me is Alon Mualem our Chief Financial Officer. We'll begin by providing you with an overview of our business and a summary of the principal factors that affected our result in the first quarter, followed by the details of our financial results. After our prepared remarks, we'll be happy to answer any of your questions.
By now, everyone should have access to our first quarter press release, which was released earlier today. The release will be also available on our website at www.nisteceltek.com.
Our revenue in the first quarter of 2019 were $8.7 million as compared to revenue of $8.9 million in the first quarter of 2018. We are glad that this quarter results reflect the implementation of the first stage of our turnaround plan which we started during the last quarter of 2018. We identified the products that were underpriced and have declined such orders in order to increase profitability.
We're also closely monitoring our personnel expenses with a focus on cash flow. We're still facing challenges in our business and operations, but I'm optimistic that we will be able to capitalize on our strengths and renew our position as a leading high end PCB manufacturer.
I will now turn the call to Alon Mualem, our CFO to discuss our financials.
Thank you, Eli. I would like to draw your attention to the financials for the first quarter of 2019. During this call I will be discussing also our non-GAAP financial results, such as EBITDA. Eltek uses EBITDA as a non-GAAP financial performance measurement. Please see our earnings release for Eltek's definition and reason for its use.
As Eli mentioned, revenues for the first quarter of 2019 were $8.7 million compared to revenues of $8.9 million in the first quarter of 2018. Gross profit increased from $444,000 or 5% of revenue in the first quarter of 2018 to $1.5 million or 17.6% of revenues in the first quarter of 2019.
During the first quarter of 2019, we had an operating profit of $432,000 as compared to operating results of $626,000 in the first quarter of 2018. Net profit was $242,000 or $0.12 per fully diluted share, compared to net loss of $670,000 or $0.33 per fully diluted share in the first quarter of 2018.
During the first quarter of 2019 we had a positive EBITDA of $811,000, compared to a negative EBITDA of $185,000 in the first quarter last year. During this quarter we also achieve the positive operating cash flow of $1.6 million compared to a cash used in operating activities of $776,000 in the first quarter of 2018.
We are now ready to take your question.
[Operator Instructions] The first question is from Marty Elbaum of Horizon Networks. Please go ahead.
Congratulations on the turnaround. It's fabulous, it's great. Can you tell us, give us some guidance for the next quarter or two, that's congratulations what you've done so far.
As you know Marty, we do not provide looking forward statement. We're investing significant resource in global growth in order to compensate for the challenging market condition in Israel and several European countries. We will continue to closely monitor Eltek expenses, with the aim of returning and maintain sustained profitability, but we cannot assure that this will be successful.
Thank you very much.
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 www.nisteceltek.com. Mr. Yaffe would you like to make a concluding statement?
Yes, thank you for participating in this conference and the continuous support of Eltek.
This concludes the Eltek Ltd., first quarter 2019 financial results conference call. Thank you for your participation. You may go ahead and disconnect.