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spk00: Ladies and gentlemen, thank you for standing by. Welcome to the LTCH LTD 2024 First Quarter Financial Results Conference Call. All participants are at 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 forecast 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.
spk02: Thank you. Good morning. Thank you for joining us for our 2024 first quarter running call. With me is Ron Freund, our chief financial officer. We will begin by providing you with an overview of our business and the summary of our principal factors that affected our results during Q1 2024. After our prepared remarks, we will be happy to answer any of your questions. Bye now. Everyone should have access to our press release, which was released earlier today. The release will also be available on our website. Throughout the quarter, we witnessed a notable surge in requests for quotations, primarily with the defense sector. Correspondingly, there has been a rise in the volume of orders received. Our backlog since the year's outset had escalated to approximately 25%. This surge is directly attribute to the demand for the defense product worldwide. We anticipated the full impact of this demand for the defense products as yet to be reflected in the purchase order received and expected the demand wave to intensify in the later half of 2024 and early 2025. Despite the increase in demand, we have refrained from significantly increased prices. Our pricing policy remains consistent with previous years. However, expedited production requests are subject to higher pricing than standard production. During the quarter, we secured a repeated order from an overseas defense client totaling $1.6 million, with $1 million scheduled to delivery by the end of 2024 and a remainder by the end of 2025. This order aligns with our strategy to secure long-term contracts, facilitating more efficient production planning. The operational landscape for the coming years presents significant challenges. During these years, we intend to receive and install the two coating lines, which are the main components of our accelerated investment plan. Unlike various other machines required, this coating lice spent tens of meters and required extensive construction work. Consisting with our policy of executing investment without disturbing current production, we faced the task of conducting construction alongside active production lines. Presently, the plan remains on track. with our technical team focused on establishing the new manufacturing area and installing new machinery, while supporting ongoing production processes and maintenance. In addition, we have finished issuing purchase orders for all the remaining machines, including the accelerated plan. In addressing current production volume requirements, manpower has emerged as a bottleneck. Our immediate focus lies in recruiting additional employees aiming to bolster the workforce by approximately 15%. This required substantial resource allocation, including wage increase, to attract a sufficient number of employees. I will now turn the call over to Ron Freund, our CFO, to discuss our financial results.
spk01: Thank you, Eli. I would like to draw your attention to the financial statements for the first quarter of 2024. During this call, I will also discuss certain non-GAAP financial measures. LTCH uses EBITDA as a non-GAAP financial performance measurement. Please see our earnings release for its definition and the reason for its use. I will now go over the highlights of the first quarter of 2024. All numbers mentioned are in US dollars. Revenues for the first quarter of 2024 were $11.8 million compared to $11.5 million in the first quarter of 2023. Gross profit increased by 8%, reaching $3.2 million compared to a gross profit of $3 million in the first quarter of 2023. The increase is mainly due to the increase in revenue and the fixed component of part of the expenses included in cost of the revenues. Operating profit amounted to $1.7 million in Q1 2024 compared to $1.6 million in Q1 2023. We recorded financial income of $0.4 million during Q1 2024 due to the devaluation of the NIS against the U.S. dollar and from interest on our interest-bearing accounts. Net profit was $1.7 million or 27 cents per share in Q1 2024 compared to net profit of $1.6 million or 27 cents per share during Q1 2023. EBITDA was $2.1 million compared to $1.2 During the first quarter of 2024, we enjoyed a positive cash flow for operating activities of $1.3 million. As of March 31, 2024, we had cash and cash equivalents and short and bank deposits of $19.9 million with no debt outstanding. We are now ready to answer your questions.
spk00: Thank you. Ladies and gentlemen, at this time we will begin the question and answer session. If you have a question, please press star 1. If you wish to cancel your request, please press star 2. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be polled 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 1. There are no 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 website. Mr. Yaffe, would you like to make your... There is a question. The first question is from Mr. Srogetsky of Kepler Capital. Please go ahead.
spk03: Hello. I want to ask a short question. How do you see about the growth at this year, 2024? And how do you look on your gross profit also this year?
spk01: Thank you. Hi, good morning. We don't give any forecast for the year. It was not our policy and we will not change this policy. As for the gross profit or the gross margin, we said in previous... calls and we still keep it. We anticipate that in the medium term will be around the 27% gross margin.
spk03: And then do you see a possibility to increase the gross margin after a construction has ended in 2025?
spk01: So we are not sure whether it will be because at the same time we hope that the investment will bring more efficiency. However, New investment require no depreciation, and the depreciation expenses will increase. We think that at the near term, it will be around the 27%. Okay, great.
spk03: Thank you.
spk00: Thank you. There are no further questions at this time. Mr. Yafet, would you like to make a concluding statement?
spk02: Before we conclude our call, I would like to thank all our employees for their continued effort to meet our strategy of growth and profitability. I would like also to thank all our customers, partners, and investors for their continued support. Thank you all for joining us on today's call. Have a good day.
spk00: Thank you. This concludes the LTEC LTD 2024 First Quarter Financial Results Conference Call. Thank you for your participation. You may go ahead and disconnect.
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