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Eltek Reports 2019 First Quarter Financial Results

  • Revenues of $8.7 million
  • Gross profit of $1.5 million
  • Net Profit of $242,000

PETACH TIKVA, Israel, May 29, 2019 /PRNewswire/ -- Eltek Ltd. (NASDAQ: ELTK), a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards, announced today its financial results for the quarter ended March 31, 2019.

(PRNewsfoto/Eltek)

Mr. Eli Yaffe, Chief Executive Officer, commented: "We are glad that this quarter's results reflect the implementation of the first stage of our turnaround plan, which we started during the last quarter of 2018. We continue in our efforts to further increase operating efficiencies, to improve customer satisfaction, to formulate a more effective sales strategy and continue implementing our plan to reach sustained profitability."

Highlights of the First Quarter of 2019 compared to the First Quarter of 2018

  • Revenues for the first quarter of 2019 were $8.7 million compared to revenues of $8.9  million in the first quarter of 2018; 
  • Gross profit increased from $444,000 (5.0% of revenues) in the first quarter of 2018 to $1,539,000 (17.6% of revenues) in the first quarter of 2019;
  • Operating profit was $433,000 as compared to an operating loss of $626,000 in the first quarter of 2018;
  • Net profit was $242,000, or $0.12 per fully diluted share compared to a net loss of $670,000, or ($0.33) per fully diluted share, in the first quarter of 2018;
  • EBITDA was a $811,000 (9.3% of revenues) compared to negative EBITDA of $185,000 (2.1% of revenues) in the first quarter of 2018;
  • Net cash provided by operating activities amounted to $1.6 million compared to net cash used in operating activities of $859,000 in the first quarter of 2018.

Conference Call

Today, Wednesday, May 29, 2018, at 8:30 a.m. Eastern Time, Eltek will conduct a conference call to discuss the results. The call will feature remarks by Eli Yaffe, Chief Executive Officer and Alon Mualem, Chief Financial Officer.

To participate, please call the following teleconference numbers. Please allow for additional time to connect prior to the call:

United States:

1-888-668-9141

Israel: 

03-9180687

International:

+972-3-9180687




At: 


8:30 a.m. Eastern Time


5:30 a.m. Pacific Time


15:30 p.m. Israel Time

A replay of the call will be available through the Investor Info section on Eltek's corporate website at http://www.nisteceltek.com approximately 24 hours after the conference call is completed and will be archived for 30 days.

About Eltek
Eltek – "Innovation Across the Board", is a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), and is the Israeli leader in this industry. PCBs are the core circuitry of most electronic devices. Eltek specializes in the manufacture and supply of complex and high quality PCBs, HDI, multilayered and flex-rigid boards for the high-end market. Eltek is ITAR compliant and has AS-9100 and NADCAP Electronics certifications. Its customers include leading companies in the defense, aerospace and medical industries in Israel, the United States, Europe and Asia.

Eltek was founded in 1970. The Company's headquarters, R&D, production and marketing center are located in Israel. Eltek also operates through its subsidiaries in North America and in Europe and by agents and distributors in Europe, India, South Africa and South America.

For more information, visit Eltek's web site at www.nisteceltek.com.

Use of Non-GAAP Financial Information
The Company reports financial results in accordance with U.S. GAAP and herein provides some non-GAAP measures, including EBITDA. These non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. These non-GAAP measures are intended to supplement the Company's presentation of its financial results that are prepared in accordance with GAAP. The Company uses the non-GAAP measures presented to evaluate and manage the Company's operations internally. The Company is also providing this information to assist investors in performing additional financial analysis. Reconciliation between the company's results on a GAAP and non-GAAP basis is provided in a table below.

Forward Looking Statement: 
Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to statements regarding expected results in future quarters, risks in product and technology development and rapid technological change, product demand, the impact of competitive products and pricing, market acceptance, the sales cycle, changing economic conditions and other risk factors detailed in the Company's Annual Report on Form 20-F and other filings with the United States Securities and Exchange Commission.

                                                            (Tables follow)

 

Eltek Ltd.

Consolidated Statements of Operations

(In thousands US$, except per share data)







Three months ended



March  31,



2019

2018








Revenues

8,735

8,943

Costs of revenues

(7,196)

(8,499)





Gross profit

1,539

444













Selling, general and administrative expenses

(1,106)

(1,069)









R&D expenses, net

0

(1)





Operating profit (loss)

433

(626)





Financial expenses, net

(184)

(27)

Other income, net

6

0

















Profit (loss) before income tax 

255

(653)





Tax expenses

(13)

(17)





Net profit (loss)

242

(670)






Earnings per share







Basic and diluted net profit (loss) per ordinary share

0.12

(0.33)





Weighted average number of ordinary shares 

used to compute basic and diluted net profit 

(loss) per ordinary share (in thousands)

2,029

2,029

 

 

Eltek Ltd.

Consolidated Balance Sheets

(In thousands US$)







March  31,

December  31,



2019

2018




Assets








Current assets



Cash and cash equivalents

1,068

992

Receivables:   Trade, net of provision for doubtful accounts

5,623

5,682

                     Other

660

868

Inventories 

4,142

3,611

Prepaid expenses 

150

292





Total current assets

11,643

11,445





Long term assets



Severance pay fund

55

53

Long term prepaid expenses

112

39

Operating lease right of use assets

3,117

-

Total long term assets

3,284

92





Fixed assets, less accumulated depreciation

6,540

6,623





Total Assets

21,467

18,160

















Liabilities and Shareholder's equity





Current liabilities



Short-term credit and current maturities of long-term debts


4,978

6,606

Short-term credit from related party


3,304

2,668

Accounts payable: Trade

5,000

4,108

                            Other

3,487

3,377

Short-term operating lease liabilities

1,003

-





Total current liabilities

17,772

16,759





Long-term liabilities


Long term debt, excluding current maturities

213

308

Employee severance benefits

218

211

Long-term operating lease liabilities

2,105

-





Total long-term liabilities

2,536

519





Equity




Ordinary shares, NIS 3.0  par value authorized 10,000,000 shares, issued and outstanding 2,028,552 


1,985

1,985

Additional paid-in capital


17,270

17,270

Cumulative foreign currency translation adjustments


2,330

2,340

Capital reserve


845

800

Accumulated deficit


(21,271)

(21,513)

Shareholders' equity


1,159

882

Total liabilities and shareholders' equity

21,467

18,160

 

 

 

Eltek Ltd.

Unaudited Non-GAAP EBITDA Reconciliations

(In thousands US$)





Non-GAAP EBITDA Reconciliations


Three months ended



March  31,



2019

2018








GAAP net income (loss)


242

(670)

Add back items:








Financial expenses, net 


184

27

Income tax expense 


13

17

Depreciation and amortization


372

441

Non-GAAP EBITDA


811

(185)





















Eltek Ltd.

Unaudited Proforma Equity information 

(In thousands US$)



As of March 31, 2019



As presented

As adjusted (*)

Equity




Ordinary shares


1,985

3,966

Additional paid-in capital


17,270

18,619

Cumulative foreign currency translation adjustments


2,330

2,330

Capital reserve


845

845

Accumulated deficit


(21,274)

(21,274)

Shareholders' equity


1,156

4,486





(*) The proforma information reflects on an as adjusted basis the issuance of  2,351,701 ordinary shares
in the April 2019 rights offering at a subscription price of $1.464 per ordinary share with aggregate net
proceeds of approximately $3.3 million, after deducting offering expenses.




 

 

 

Eltek Ltd.

Consolidated Statement of  Cash flow

(In thousands US$, except per share data)







Three months ended



March  31,



2019

2018





Cash flows from operating activities:








Net income (loss)


242

(670)





Adjustments to reconcile net loss to net




 cash flows provided by operating activities:




Depreciation and amortization


372

441

Stock-based compensation


31

-

Transaction with controlling shareholder


14

-

Revaluation of long term loans 


(16)

16



401

457





Decrease (increase) in trade receivables


240

(1,569)

Decrease in other receivables and prepaid expenses


315

719

Increase in inventories


(415)

(585)

Increase in trade payables


846

975

Increase (decrease) in other liabilities and accrued expenses


4

(199)

Increase in employee severance benefits, net


-

13

Changes in operating leases, net


(9)

-



981

(646)





Net cash provided by (used in) operating activities


1,624

(859)

















Cash flows from investing activities:




Purchase of fixed assets


(159)

(80)

Net cash used in investing activities


(159)

(80)









Cash flows from financing activities:




Short- term bank credit, net


(1,608)

(341)

Short- term shareholder loan


549

1,156

Repayment of long-term loans from bank


(225)

(237)

Proceeds from long-term loans


0


Repayment of credit from fixed asset payables


(96)

(85)

Net cash provided by (used in) financing activities


(1,380)

493





Effect of translation adjustments


(10)

(6)





Net increase (decrease) in cash and cash equivalents


75

(452)





Cash and cash equivalents at beginning of the period


993

887





Cash and cash equivalents at period end


1,068

435

 

Investor Contact: 
Alon Mualem
Chief Financial Officer
alonm@nisteceltek.com
+972-3-9395023

 

Cision

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