This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the LTCH LTD 2023 annual and fourth quarter financial results conference call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded. Before 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&A. By its nature, this information contains forecasts, assumptions, and expectations about future outcomes, which are subject to the risks and uncertainties outlined here and discussed more fully in LTCH'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. We'll also be referring to non-GAAP measures. LTCH 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. Mr. Yaffe, please go ahead.
Yaffe
Thank you. Good morning. Thank you for joining us for our 2023 Annual Year Earning Call. This is Ron Freund, our Chief Financial Officer. We will begin by providing you with an overview of our business and the summary of the principal factors that affected our results during 2023. After 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. In 2023, the company achieved unprecedented milestones in terms of both revenue and profitability, setting new records. The company generated revenue of $46.7 million, with a set income of $6.4 million. EBITDA reaches $8.6 million. The cash flow from operations stood at $8.9 million. Remarkably, all key profitability indicators experienced a substantial growth rate, underscoring the success of our strategic host initiatives. The ongoing situation in Israel, coupled with the President's rise in the defense budget across European nations and the trade tension between the U.S. and China, continued to influence the demand of our high-end products. Since the inspection of our accelerated investment plan in 2022, our backlog had increased by 130 percent. The growing demand persist, and we anticipate the trend to extend into the upcoming years. While the influence of the current conflict in Israel has not been fully managed by our backlog, we expected more pronounced impact to become evident later in the second half of 2024. We have achievely diversified our revenue streams by exploring opportunities beyond the defense and medical devices market. Our focus includes strengthening collaboration and securing substantial orders for new products with a leading customer whose machinery and technology play a crucial role in the large-scale production of semiconductor chips. Currently, effort has been underway to argument our commercial sales volume. Our approach to pricing and order acceptance remains as a key focus as we continue to optimize this strategy to achieve optimal profitability rates. We are actively progressing with execution of our accelerated investment plan. To date, we have committed to an approximate investment of $10 million, and we anticipate fulfilling orders for the entire plan by the end of 2024. In the first quarter of 2024, the machines mentioned in our December 23 press release were received and installed, and the VFR line is currently under commissioning stages. We additionally installed additional press, which is a significant component of the accelerated investment plan. The press is in final installation stages and the software adjustment. Furthermore, we successfully implemented cutting-edge engineering software. During Q1 2024, we plan to complete the training of our engineers. This software is a position for us at the front end of the technological advancement in this field. We have initiated the construction of new office space within our building in Petah Tikva. This move seeks to optimize office utilization, freeing up space for expanded production capacity. By doing so, we aim to seamlessly integrate new production lines without incurring additional overhead expenses for the existing infrastructure. As a result of the security challenges in Israel and the logistical issue hindering the shipment of the arrival of the supplier technical team to the country, we anticipate potential delay of the accelerated investment program. We are actively dedicating significant efforts to try to mitigate this delay. In our pursuit expansion of the growth, we are actively seeking for a quiet PCB manufacturing company in the United States. Recognize the strategic importance of the U.S. market. We anticipate substantial growth in the upcoming years. The underlying motivation behind the chips and the PCB act to repatriate chips and PCB production to America, forcing increased demand for the domestic PCB manufacturing. Conceptually, we are focused on argumenting production capacity in the U.S. In February 2024, we raised capital of $10 million before expenses. This amount will be used by us together with our existing cash balances for the purpose of financing continuous growth. I would like to take this opportunity to thank the investors who participated in the offering for the trust they placed in our company and its management. The successful capital raising and the fact that during 2023 we have repaid all our bank debt loan will allow us to finance a future M&A transaction raising debt either from the bank or from the public. I will now turn the call over to Ron Freund, our CFO, to discuss our financial results.
Ron Freund
Thank you, Ely. I would like to draw your attention to the financial statements for the end of December 31, 2023 and for the first quarter of 2023. During this call, I will also discuss certain non-GAAP financial measures. HealthEQ uses EBITDA as a non-GAAP financial performance measurement. Please see our earnings release for its definition and the reasons for its use. I will now go over the highlights of 2023. All numbers mentioned are in U.S. dollars. Revenues for the year end of December 31, 2023 totaled $46.7 million compared to $39.7 million in 2022, an increase of 18%. The increase in revenue is mainly due to the increased demand for our products during 2023 and our continuous efforts to increase production capacity. Gross profit increased by 58% reaching $13.1 million compared to a gross profit of $8.3 million in 2022. The increase is mainly due to the increase in revenues. Operating profit amounted to $7.3 million in 2023 compared to $3 million in 2022. In 2023, we recorded financial income of $0.4 million compared to $0.9 million in 2022. The decrease is due to the revaluation of the NIS against the U.S. dollar during the first quarter of 2023. Net profit was $6.4 million or $1.07 per share in 2023 compared to net profit of $3.2 million or $0.55 per share in 2022. EBITDA was $8.6 million in 2023 compared to $4.5 million in 2022. During 2023, we enjoyed positive cash flow from operating activities of $8.9 million compared to $3.8 million in 2022. As of December 31, 2023, we had cash and cash equivalents and short and bank deposits in a $7.4 million in 2023 compared to $7.4 million at the end of 2022. I will now go over to the highlights of the fourth quarter of 2023 compared to the fourth quarter of 2022. Revenues for the fourth quarter of 2023 were $12.3 million compared to $10.5 million in the fourth quarter of 2022. Gross profit amounted to $3.5 million compared to $2.2 million in the fourth quarter of 2022. Net profit in the fourth quarter of 2023 was $1.3 million or $0.22 per share compared to net profit of $0.8 million or $0.40 per share in the fourth quarter of 2022. During the fourth quarter of 2023, we recorded financial expense of $0.3 million due to the revision of the needs against the U.S. dollar. In Q4 2022, we recorded financial income in the amount of $0.1 million. The impact of this difference is $0.07 per share. EBITDA was $2.4 million in the fourth quarter of 2023 compared to EBITDA of $1.2 million in the fourth quarter of 2022. Cash flow from operator activities was $2.3 million compared to $1.3 million in the fourth quarter of 2022. We are now ready to take your questions.
Operator
Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you're using speaker equipment, kindly list a handset before pressing the numbers. Your questions will be answered in the order they are received. Please stand by while we poll for your questions. I repeat, if you have a question, please press star one. There are no questions at this time. The first question is from Roy Cher. Please go ahead.
Roy Cher
Hello. I think you did great this last quarter and the last year. I want to find out if you've got any take on what you expect your revenue will be for the entire 2024 as well as your gross profit margin.
Ron Freund
Hi, Roy. We expect to continue in our increased revenues during 2023, 2024. The growth trend should continue as long as we continue in our accelerated. And we stick to the forecast that we gave before two calls about the gross margin. We anticipate it will be around 27 percent.
Roy Cher
OK. Do you think that you'll hit $50 million in 2024?
Ron Freund
We don't give an exact forecast. We are working very hard to meet this target, but I cannot assure you this forecast.
Roy Cher
OK. And one final question is your stock based compensation added into your expenses?
Ron Freund
We had about $0.4 million in 2023. We expect that it will be in the same area during 2024.
Roy Cher
OK. Thank you very
Operator
much. If there are any additional questions, please press star one. If you wish to cancel your request, please press star two. Please stand by while we poll for more questions. 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 the participants that a replay of this call will be available tomorrow on our Web site.
Yaffe
Before we conclude our calls, I would like to thank our employees for their continued efforts to meet our strategy of gross and profitability. I would also like to thank all our customers, partners and investors for their continued support. Thank you for all for joining us on today's call. Have a good day.
Operator
This concludes the LTD 2023 Financial Results Conference call. Thank you for your participation. You may go ahead and disconnect.
Disclaimer