00:06 Ladies and gentlemen, thank you for standing by. Welcome to the Eltek Ltd Fourth Quarter and Full-Year 2021 Financial Results Conference Call. All participants are present in a listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. 00:27 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 Eltek's earnings release today and this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities and Exchange Act of 1934, as well as certain non-GAAP financial measures. Before making any investment decisions, we strongly encourage you to read our full disclosures on forward-looking statements and use of non-GAAP financial measures set forth at the end of our earnings release, as well as review our latest filings with the SEC for important material assumptions, expectations and risk factors that may cause actual results to differ materially from those anticipated and described in such forward-looking statements. 01:22 These forward-looking statements are projections and reflect the current beliefs and expectations of the company; actual events or results may differ materially. Eltek undertakes no obligation to publicly release revisions to such forward-looking statements to reflect events or circumstances occurring subsequent to this date. 01:44 I will now turn the call over to Mr. Eli Yaffe. Mr. Yaffe, please go ahead.

01:50 Thank you. Good morning, everyone. Thank you for joining us and welcome to Eltek's 2021 fourth quarter and full-year earning call. With me is Ron Freund, our Chief Financial Officer, who joined us on January 1, 2022. We will begin by providing you with an overview of our business and summary of the principal factors that affected our results in 2021, followed by the details of our financial results. After our prepared remarks, we will be happy to answer any of your questions. By now, everyone should have access to our fourth quarter press release, which was released earlier today. The release will also be available on our website at www.nisteceltek.com. 02:40 2021 was a very challenging year, both operationally and business-wise. In addition to the COVID-19 pandemic that affected us, our results were affected by the strength of the new Israeli shekels compared to the U.S. dollar and the euro. Nevertheless, we were able to maintain operational profitability and to the end of 2021 with $1.5 million of pre-tax income. Based on the fact that we were profitable during the last three years and the several other factors, we concluded that it is more likely than not that we will utilize our tax losses carry forward. 03:21 Therefore, we recorded a one-time tax benefit in the amount of $3.5 million, while reversing the tax valuation allowance recorded in prior years. We ended the year with a net profit of $5 million. Our cash from operation activities totaled $3.9 million and contribute to our strong balance sheet. As of 2021 year-end, our cash balance totaled $9.3 million. The outbreak and the spread of the coronavirus during 2021 created operational and business challenges, including shortage of certain of our key raw materials. This shortage required us to make quick adjustment…

08:59 Thank you, Eli. I'm glad to have joined Eltek and look forward to contributing its future success. I would add to draw your attention to the financial statement for the year ended December 31, 2021 and for the fourth quarter then ended. During this call, I will discuss also certain non-GAAP financial measures. Eltek uses EBITDA as a non-GAAP financial performance measurement, please see our earnings release for its definition and the reason for its use. 9:31 First, I will go over the highlights of 2021. Revenues for the full year of 2021 totaled $33.8 million compared to $36.7 million in 2020, a decrease of 9%. The decrease in revenue is mainly due to the effect of the COVID-19 crisis on our customers’ demand and to the shortage in raw material that Eli mentioned before. Gross profit decreased by 11%, reaching $6.9 million compared to a gross profit of $7.7 million in 2020. The decrease is the outcome of the decrease in revenues and the devaluation of the U.S. dollar against the NIS. 10:19 Operating profit amounted $1.9 million in 2021 compared to $3 million in 2020. I should note that we have changed the policy of recording share-based compensation expenses from the accelerated method to the straight-line method, which is the more common practice within our economic environment. In our Form 20-F, we disclosed the restated results of operation for the first-three quarters of 2021. The impact on prior years was immaterial. The devaluation of the U.S. dollar against the NIS contributed to the increase in our dollar reported expenses in the amount of $1.2 million. We recorded a tax assets of $3.5 million in 2021, according to U.S. GAAP if management estimation is that it is more likely than not that the company would utilize its tax…

14:09 Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. [Operator Instructions] The first question is from Ron Dror (ph). Please go ahead.

14:45 Hi. Hi, Eli and good morning. I have a few questions. The first one is, just to make sure you solved all the issues with the raw materials that encountered during 2021. The second question is, if you can give more color about the backlog in 2022? And the third question is, although, you don't give a specific guidance, if you can maybe give us a color of how we can model 2022 because you announced the activity with plant and equipment and what we can see in our -- may be model for growth in 2022?

15:29 Thank you, Ron. Good morning. Regarding your first question -- regarding the raw material, the raw material issue is beyond us. And as I mentioned in my statement before, there is no issue on DuPont raw material and we have enough inventory right now in our warehouse to support at least six, seven months from now -- from 2022, of course, we'll continue to buy raw material. As you know, there is some hiccups right now in the supply from China and Taiwan. We have enough inventory in our warehouses that we can go over these hiccups. 16:10 Regarding the backlog, as I mentioned, we don't provide data, but backlog that we face right now is above what we see in the last years. And as I mentioned, the book to sell ratio is significantly high as in the last six months. 16:28 Regarding the plan for 2022, we don't provide forecast. But as you can understand from the strong backlog that we have, we will support it with the agreement that we have, and that's the reason that we decided to accelerate our investments instead of five years to invest everything in two years, and to accelerate our capability to grow.

16:55 My last question, if it's possible to ask is, what is like the net contribution of new incremental sales from the and the net profit?

17:06 Same as before.

17:09 Okay. Thank you.

17:15 Thank you.

17:18 [Operator Instructions] 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 Eltek's website www.nisteceltek.com. Mr. Yaffe, would you like to make your concluding statement?

17:54 Before we conclude our call, I would like to thank all our employees for their efforts to make Eltek profitable and capitalize on our strength to renew our position as a leading high-end PCB manufacturer. I would like to thank also to our customers, partners, investors and Eltek team for their continued support. I wish everyone, good health and Happy Passover. Thank you all for joining us on today's call. Have a good day.

18:25 This concludes the Eltek Ltd. fourth quarter and full-year 2021 financial results conference call. Thank you for your participation. You may go ahead and disconnect.