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Eltek Reports 2019 Second Quarter Financial Results

Revenues of $8.2 million

Gross profit of $1.3 million

Net Profit of $790,000

PETAH TIKVA, Israel, Sept. 4, 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 June 30, 2019.

Eltek_Logo

Mr. Eli Yaffe, Chief Executive Officer, commented: "We are pleased that this quarter's results reflect the continuing trend of improved results. The improved results are a consequence of the implementation of our turnaround plan. We are continuing our efforts to maintain the trend of improved operating efficiencies, while increasing sales by expanding our business into the vertical markets we currently service."

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

  • Revenues for the second quarter of 2019 were $8.2 million compared to revenues of $8.7  million in the second quarter of 2018; 
  • Gross profit increased from $578,000 (6.7% of revenues) in the second quarter of 2018 to $1,256,000 (15.3% of revenues) in the second quarter of 2019;
  • Operating profit was $7,000 as compared to an operating loss of $721,000 in the second quarter of 2018;
  • Other Income was $871,000 in the second quarter of 2019, mainly attributable to receipt of payment on an insurance claim made in 2018 for damage to one of our manufacturing machines and the resulting losses that occurred as a result of this event;
  • Net profit was $790,000, or $0.19 per fully diluted share in the second quarter of 2019 compared to a net loss of $843,000, or ($0.42) per fully diluted share, in the second quarter of 2018;
  • EBITDA was $1.25 million in the second quarter of 2019 compared to negative EBITDA of $295,000  in the second quarter of 2018;
  • Net cash used in operating activities amounted to $301,000 in the second quarter of 2019 compared to net cash used in operating activities of $572,000 in the second quarter of 2018.

Highlights for the First Six Months of 2019

  • Revenues for the first six months of 2019 were $16.9 million compared to $17.6 million in the first six months of 2018;
  • Gross profit was $2.8 million (16.5% of revenues) compared to gross profit of $1.0 million (5.8% of revenues) in the first six months of 2018;
  • Operating profit was $440,000 compared to an operating loss of $1.3 million in the first six months of 2018;
  • Other Income was 877,000 in the first six months of 2019 compared to nil in the first six months of 2018;
  • Net profit was $1.0 million, or $0.33 per fully diluted share compared to a net loss of $1.5 million, or ($0.75) per fully diluted share in the first six months of 2018;
  • EBITDA was $2.1 million in the first six months of 2019, compared to negative EBITDA of $481,000 in the first six months of 2018;
  • Net cash provided by operating activities amounted to $1.3 million compared to net cash used in operating activities of $1.4 million in the first six months of 2018.

Conference Call

Today, Wednesday, September 4, 2019, 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: 03-9180609
International: +972-3-9180609

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


Six months ended




June  30,


June  30,




2019

2018


2019


2018


Revenues

8,198

8,667


16,934


17,610


Costs of revenues

(6,942)

(8,089)


(14,139)


(16,588)


Gross profit

1,256

578


2,795


1,022


Selling, general and administrative expenses

(1,249)

(1,299)


(2,355)


(2,367)


R&D expenses, net

-

-


-


(1)


Operating profit (loss)

7

(721)


440


(1,347)


Financial expenses, net

(78)

(105)


(263)


(132)


Other income, net

871

-


877


-


Profit (loss) before income tax 

800

(825)


1,054


(1,479)


Tax expenses

(10)

(17)


(22)


(34)


Net Profit (loss)

790

(843)


1,032


(1,513)


 

Earnings per share








Basic and diluted net loss per ordinary share

0.19

(0.42)


0.33


(0.75)


Weighted average number of ordinary shares 





used to compute basic and diluted net loss per





ordinary share (in thousands)

4,148

2,029


3,088


2,029












 

 

Eltek Ltd.

Consolidated Balance Sheets

(In thousands US$) 







June  30,

December 31,



2019

2018

Assets




Current assets



Cash and cash equivalents

1,837

992

Receivables:   Trade, net of provision for doubtful accounts

7,587

5,682

                        Other

110

868

Inventories 

3,910

3,611

Prepaid expenses 

266

292

Total current assets

13,710

11,445

Long term assets



Severance pay fund

57

53

Long term prepaid expenses

-

39

Operating lease right of use assets

3,054

-

Total long term assets

3,111

92

Fixed assets, less accumulated depreciation

6,271

6,623

Total Assets

23,092

18,160

Liabilities and Shareholder's equity

Current liabilities



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


3,056

6,606

Short-term credit from related party


3,365

2,668

Accounts payable: Trade

4,312

4,108

                               Other

3,691

3,377

Short-term operating lease liabilities

1,139

-

Total current liabilities

15,563

16,759

Long-term liabilities


Long term debt, excluding current maturities

116

308

Employee severance benefits

214

211

Long-term operating lease liabilities

1,903

-

Total long-term liabilities

2,233

519

Equity




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


3,964

1,985

Additional paid-in capital


18,583

17,270

Cumulative foreign currency translation adjustments


2,339

2,340

Capital reserve


891

800

Accumulated deficit


(20,481)

(21,513)

Shareholders' equity


5,296

882

Total liabilities and shareholders' equity

23,092

18,160

 

 


Eltek Ltd.

Unaudited Non-GAAP EBITDA Reconciliations

(In thousands US$)









Non-GAAP EBITDA Reconciliations


Three months ended


Six months ended



June  30,


June  30,



2019

2018


2019


2018



Unaudited


Unaudited

GAAP net Income (loss)


790

(843)


1,032


(1,513)

Add back items:








Financial expenses, net 


78

105


263


132

Income tax expense 


10

17


22


34

Depreciation and amortization


372

425


744


866

Non-GAAP EBITDA


1,250

(296)


2,061


(481)



 

 


Eltek Ltd.

Consolidated Statement of  Cash flow

(In thousands US$, except per share data)












Three months ended


Six months ended




June  30,


June  30,




2019

2018


2019


2018


Cash flows from operating activities:









Net Income (loss)


790

(843)


1,032


(1,513)


Adjustments to reconcile net loss to net









 cash flows provided by operating activities:









Depreciation and amortization


375

425


748


866


Stock-based compensation


31

-


62


-


Transaction with controlling shareholder


15

-


29


-


Revaluation of long term loans 


(8)

8


(24)


24




413

433


815


890


 

Changes in operating leases, net


(3)

-


(12)


-


Decrease (increase) in trade receivables


(1,838)

78


(1,598)


(1,491)


Decrease  in other receivables and prepaid expenses


560

132


875


851


Decrease (increase) in inventories


302

(330)


(114)


(915)


Increase (decrease)  in trade payables


(652)

(205)


194


770


Increase (decrease) in other liabilities and accrued expenses


136

149


139


(50)


Increase (decrease) in employee severance benefits, net


(9)

14


(9)


27




(1,504)

(162)


(525)


(808)


Net cash provided by (used in) operating activities


(301)

(572)


1,322


(1,431)


Cash flows from investing activities:









Owners investment









Purchase of fixed assets


(91)

(30)


(250)


(110)


Net cash used in investing activities


(91)

(30)


(250)


(110)


Cash flows from financing activities:









Short- term bank credit, net


(1,787)

1,501


(3,394)


1,160


Short- term shareholder loan


-

-


555


1,156


Issuance of ordinary shares in rights offering, net


3,298

-


3,298


-


Repayment of long-term loans from bank


(231)

(228)


(456)


(464)


Repayment of credit from fixed asset payables


(98)

(73)


(194)


(159)


Net cash provided by (used in) financing activities


1,182

1,200


(191)


1,693


Effect of translation adjustments


(21)

(42)


(37)


(48)


Net increase (decrease) in cash and cash equivalents


769

556


844


104


Cash and cash equivalents at beginning of the period


1,068

435


993


887


Cash and cash equivalents at period end


1,837

991


1,837


991


 

 

Investor Contact:

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

Cision

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