The following is a summary of the Eltek Ltd. (ELTK) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Q2 2024 revenue declined to $10.5 million from $11 million in Q2 2023.

• Gross margin decreased to 16% due to an unfavorable product mix, compared to a higher margin in the previous period.

• Net profit for Q2 2024 was $0.8 million, down from $1.3 million in Q2 2023.

• Operating profit for Q2 2024 was $0.4 million, a decrease from $1.4 million in Q2 2023.

• Positive operating cash flow of $1.8 million in Q2 2024.

Business Progress:

• Implemented an accelerated investment plan, focusing on adding three new coating lines to boost capacity.

• Plans to hire 50 new employees to expand manufacturing capacity and include an extended sales shift.

• Aiming to improve the product mix and return to higher profitability in the latter half of 2024.

Opportunities:

• Increased backlog by 30% due to strong demand from the defense sector and shift back of manufacturing from the East.

• Plans to manage capacity to fulfill high-end demands in industrial and medical sectors while maintaining service quality.

Risks:

• Production challenges due to workforce limitations led to delays in fulfilling high-margin PCB orders.

• Lowered margins this quarter as a result of an unfavorable product mix with medium technology PCB orders.

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