Ladies and gentlemen, thank you for standing by. Welcome to the Eltek LTB 2025 Annual and Fourth Quarter Financial Results Conference Call. As a reminder, this conference is being recorded. Before I turn over the call 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 Eltek'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. Eltek 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.

Thank you. Good morning. Thank you for joining us for our 2025 annual earnings call. With me is Ron Freund, our Chief Financial Officer. We will begin by providing you with an overview of our business and a summary of the principal factors that affected the results during 2025. After our prepared remarks, we'll be happy to answer any of your questions. By now, everyone should have access to our press release, which was released earlier today. Revenue for 2025 totaled $51.8 million, representing an 11% increase compared to 2024. This growth reflects the strategic accelerated investment program, which is beginning to reach its full potential. I will elaborate on this shortly. During the year, we faced several operational challenges, including the reallocation of machinery and production lines within the facility to prepare for the installation of the new plating lines. Difficulties in recruiting employees, challenges in retaining highly experienced personnel, and a significant depreciation of the U.S. dollar exchange rate adversely affected our profitability by approximately $2.2 million compared to 2024. As noted, we concluded the year with revenue approaching $52 million. At the time we approved the accelerated investment plan, Eltek was generating average annual revenue of approximately $77 million. The subsequent increase in revenue reflects strong demand for the company products alongside significant investment made in machinery and equipment over recent years. As previously communicated, we are targeting annual revenue installed capacity in the current plan of $60 million to $65 million at current market prices. During the year, we encountered significant operational constraints that affected our ability to meet customer delivery schedules. This situation, combined with demand levels exceeding domestic production capacity in Israel, led to increased competition from overseas players seeking to capture a share of the local demand. We continue to observe strong demand for our products, including from international customers, driven by limited manufacturing capability in Western countries. We are steadily improving delivery performance for our domestic customers, recognizing that many in Western countries, including Israel, aim to preserve local manufacturing capability. At the same time, we are actively expanding our presence in overseas markets, particularly in the United States, to increase order volume from these regions. Turning to operations, we are making steady progress on our investment program. The core components expected to drive meaningful improvement in output and quality are the two new plating lines. They do not represent the majority of the accelerated investment budget in financial terms, but their impact on production is highly significant. The first line arrived at the facility at the beginning of 2026 and is currently in the assembly phase, which was interrupted by the current situation in Israel. We remain hopeful that the ongoing conflict will not result in further delay in completing the installation. Following the installation, an extensive qualification process will be required to certify the lines across the full range of our product portfolio. Throughout this, we also address the need to recruit additional employees, particularly engineers, to support the extended base of machinery and equipment as well as manage the operational complexities created by the reallocation of these lines and the resulting impact on ongoing manufacturing. Additionally, we experienced the departure of several highly knowledgeable employees, including retirements. These operational challenges weighed on overall efficiency. We continue to make progress in advancing the process of bringing foreign workers to support our workforce needs as the company expands. Finally, the depreciation of the U.S. dollar resulted in increased expenses totaling approximately $2.2 million compared to 2024, adversely affecting both growth and operational profits. It is worth noting that part of our core backlog was priced based on a higher exchange rate, therefore margins on these orders will remain below the levels originally anticipated at the time of the quotations. Despite these challenges, we remain confident in the company's business and in our ability to return to healthy profitability levels upon completion of the investment program, installation of the new plating lines, and stabilization of production. In line with this long-term commitment, we extended the lease agreement for our manufacturing facility through the end of the year 2039. As part of this extension, we received a payment intended to partially offset the company investment in the facility. This amount will be amortized over the lease term and will modestly reduce annual rental expenses. I will now turn the call over to Ron Freund, our CFO, to discuss our financial results.

Thank you, Eli. I would like to draw your attention to the financial statements for the year ended December 31, 2025, and for the fourth quarter of 2025. During this call, I will also discuss certain non-GAAP financial measures. EBITDA is 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 2025; all numbers mentioned are in U.S. dollars. Revenues for the year ended December 31, 2025, totaled $51.8 million compared to $46.6 million in 2024. Gross profit was $8 million compared to $10.3 million in 2024. Gross margin was 15% compared to 22% in 2024. The decline in gross profit and gross margin was primarily attributed to higher expenses resulting from the depreciation of the U.S. dollar in 2025 as well as reduced production efficiency. Operating profit amounted to $2.3 million in 2025 compared to $4.4 million in 2024. In 2025, we recorded financial expenses of $1.3 million compared to financial income of $0.7 million in 2024. This change was primarily due to the depreciation of the U.S. dollar against non-dollar expenses reported. Net profit was $0.8 million or $0.12 per share in 2025, compared to a net profit of $4.2 million or $0.63 per share in 2024. EBITDA was $4.5 million in 2025 compared to $5.9 million in 2024. During 2025, we generated positive cash flow from operations of $0.6 million compared to $4.5 million in 2024. As of December 31, 2025, we had cash and cash equivalents and short-term bank deposits totaling $12.1 million. I will now go over the highlights of the fourth quarter of 2025 compared with the fourth quarter of 2024. Revenues for the fourth quarter of 2025 were $13.2 million compared to $10.8 million in the fourth quarter of 2024. Gross profit amounted to $1.2 million in the fourth quarter of 2025 compared to $1.9 million in the fourth quarter of 2024. Net loss in the fourth quarter of 2025 was $0.3 million or $0.05 per share compared to a net profit of $23,000 in the fourth quarter of 2024. EBITDA was $0.7 million in the fourth quarter of 2025 compared to $0.8 million in the fourth quarter of 2024. We are now ready to take your questions.

The first question is on Mark Sharogradsky of Kepler Capital.

The first question I have, the gross margin for this quarter is really low, around 9%, if I could collect correctly. So when do you expect to see some improvements in this result? Revenue was pretty okay, but the gross margin was very low. How do you see the situation?

Mark, as we previously reported, we expected to complete the integration and installation of the new plating line, which arrived at the beginning of mid-2026. The line is expected to streamline the core manufacturing processes and extend production capacity. Following the completion of the installation, we will begin the qualification process that is expected to continue through the remainder of 2026. During this period, we plan to qualify product families gradually, enabling the phased transition of production to the new line until full compliance and full qualification for all company products is completed. We expect that by the time our production process is stabilized, this should contribute to an improvement in gross margin. As we noted in the past, each additional dollar of revenue contributes meaningfully to gross profit and, of course, to net income. Therefore, the answer to your question is that increasing our sales volume is expected to have a significant positive impact on profitability and improve the gross margin.

Yes. But I’m trying to understand that even before you had gross margins of 27% to 29%. And now I understand the dollar situation, but what is the reason for such a sharp drop in the margin even now, even before those lines are installed?

Mark, this is Ron. In the first quarter, the depreciation of the U.S. dollar continued, and this caused us significant additional expenses. In addition, similar to prior quarters, we have faced efficiency issues in production. We expect that once we achieve increased sales volume, the gross margin will return to its previous positive levels.

Okay. And can you guys speak a little bit about the pricing dynamic? Everyone is noting the depreciation, but I was also today on another call, and they said they are raising prices now to adjust this depreciation to work on normal gross margins. How do you see the pricing dynamic going forward?

The pricing dynamic is that we immediately update our pricing system to reflect the new depreciation and the new exchange rate of the dollar. But as I mentioned before, we have quotations underway that were based on long-term proposals. It was based on a dollar-to-shekel ratio that is higher than today, and we will receive these purchase orders. However, some of our basket in the future will be below the expected volume based on our proposals today.

And Mark, it is not just quotations. We have received actual orders that we priced at higher dollar rates. For these orders, we expect a lower margin than anticipated based on new orders to be received in the next months.

Of course, I understand because if you adjust those orders to the new exchange rates, then we expect to see some improvement from this adjustment in the next quarter or in Q2?

As we noted before, typically, we have a 1 to 2 quarter delay, and we updated our pricing system during this call. So, we expect to see it within, I don’t know, four to five months to see some increase.

No, because I assume that you also updated it before because the problems began already in Q3.

You're right, but as in the fourth quarter, the depreciation continued, and we had to update it again.

There are no further questions at this time. Before I ask Mr. Yaffe to go ahead with his closing statements, I would like to remind the participants that a leader of this call will be available tomorrow on our website.

As we conclude, I would like to thank our investors for their support and confidence in the company. Our long-term view will present the belief in our strategy, which enables us to continue investing in our capabilities and pursuing our growth objectives. I also want to recognize the commitment of our employees. Their professionalism, adaptability, and dedication throughout the period have been critical to maintaining our operations and advancing our strategic initiatives. Thank you for joining us today.

This concludes the Eltek LTB 2025 Financial Results Conference Call. Thank you for your participation. You may go ahead and disconnect.