Max Stock Ltd

So, good morning and good afternoon, everyone, and thank you for joining us today. In particular, we welcome our U.S. investors who are joining us early after the Thanksgiving weekend, which we hope was joyful. I'm Talia Sesler, Chief Corporate Development and IR Officer, and with me on the call today is Nir Dagan, our Deputy CEO and Head of Finance. Nir will start with a review of our third quarter and September year-to-date financials, and I will address the swords of iron war and the impact on our business since October 7, as well as present the second part of the presentation. Before we start, as a reminder, there is a presentation accompanying today's prepared remarks. The slides are available, as always, on our IR site at ir.maxtalk.co.il. And slide number two is our standard disclaimer language, which I'm sure you are all familiar with. With that, I'll turn the flow over to Nir to go through the financials, Nir.

Thanks, Talia. Slide four. Starting with our operational highlights on slide four, we are very pleased with our results in the third quarter. We delivered record revenue of 314.5 million, representing a growth of 7.1% for the third quarter of 2022. This strong revenue growth was driven by two primary factors, strong store traffic and the addition of approximately 1.3 net square meters of selling space compared to the year period ago. We also delivered same store sales growth of 1.5% in the third quarter, driven by strong volume growth that was partly offset by lower average price per item. Despite the low average item price, we deliver strong growth margin expansion of 180 basis points or 12% versus the prior year ago. The combination of stronger top line and gross margin were the main driver behind the almost 18% increase in gap net income attribute to shareholder in the third quarter. Going to slide five. Our strong third quarter added to the momentum that we've built throughout the year. For the first nine months period of 2023, steady store traffic, store expansion, and the 2.4% increase in sales, drove a 6.2% increase in the revenue compared to the first three quarter of 2022. Similarly, through the first nine months of 2023, we've seen strong gross margin gain with margin up 200 basis points to 41.5%. As a result, for the nine-month period, we delivered a 35% increase in GAAP net income and adjusted net income to shareholder increased by 7.4% to almost 60 million shekels. The reason for the difference in our stock-based compensation that is the only item included in our EPS adjustment, in the first nine months of 2022, the expansion was 11.1 million, while this period, as we guided in the past, there was an insignificant amount. Still, in the first nine months of 2023, adjusted EPS attribute to shareholder was 0.343, up almost 10% compared to the prior year period. Now I'll turn the call back to Talia.

Thank you, Nir. Turning to slide number six, I want to address the sword of Iran war and the impact on our business since October 7. About two months ago, our country was brutally attacked by Hamas terror organization and now finds itself at war to protect itself and its citizens. The unspeakable acts committed by known terrorists and the resulting unrest in the region have brought significant change to Israel and its people. Our hearts go out to all those directly and indirectly impacted, including some members of our team. The turmoil has also brought about unforeseen headwinds for Israel's business community, and given the extreme nature of recent events, we feel that we have navigated the situation adequately and that we have positioned Maxtalk for the best outcome. From a business perspective, the company's stores were closed at the outbreak of the war, and as of October 9, two days after the start of the war, and over the duration of approximately two weeks, the branches gradually reopened with a reduced scope of operations. Comparable store sales for the period July 1, 23, until October 31, which includes the impact of the Jewish holiday period, decreased 2.1%, primarily reflecting the temporary store closure and subsequent reduced operating schedule during the month of October due to the war. From the end of October and as of today, 60 of the company's 60 stores in Israel are fully open and operating as usual. While these reduced hours did impact sales in the month of October, store productivity while stores were open was robust. And in November, we see revenue in line with our budget and tracking to our original plan. More importantly, we haven't experienced any long-term impact to our business to date, and as of the end of November, we had no material supply chain issues and employee staffing remained at pre-war capacity. Additionally, the NAS depreciation experienced in October has rebounded, with the current exchange rate even below that on October 6th. Given the limited disruption, we still plan to move forward with our current store expansion strategy, including one additional store by year-end. Since October 7th, we have donated thousands of products to our defense forces and Israeli residents that have been evacuated from their homes. And as we look ahead, we will continue to support our fellow Israelis while also remaining focused on our long-term plans. With that, I'll turn the call back to you, Nir.