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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