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Eltek Reports 2021 Third Quarter Financial Results

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·10 min read
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- Revenues of $8.0 million in the third quarter of 2021 compared to $9.3 million in the third quarter of 2020

- Net loss of $26,000 in the third quarter of 2021 compared to net profit of $598,000 in the third quarter of 2020

- EBITDA of $553,000 in the third quarter of 2021 compared to EBITDA of $1.0 million in the third quarter of 2020

- Cash and cash equivalents as of September 30, 2021 were $8.9 million

PETACH-TIKVA, Israel, Nov. 17, 2021 /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 September 30, 2021.

Eltek Logo
Eltek Logo

Mr. Eli Yaffe, Chief Executive Officer, commented: "Our third quarter results reflect a reduction in working days during this quarter, compared to the number of working days in the third quarter of 2020. In addition, we incurred higher expenses due to the strength of the New Israeli Shekel ("NIS") compared to the US$ during the third quarter."

"We are conducting several R&D programs in order to keep our position as an innovative industry leader. In addition, we invested $1.4 million in new equipment during the first nine months of 2021. We continue to invest in new advanced manufacturing equipment that will strengthen our manufacturing capabilities and increase our competitiveness by implementing improved production processes and adoption of Industry 4.0 technologies," added Mr. Yaffe.

"Eltek has an improved balance sheet and cash flow, with a positive working capital of $12.5 million as of September 30, 2021 and operating cash flow of $3.4 million in the first nine months of 2021. We are making the necessary operational adjustments to expand our business, improve customer satisfaction, increase revenues and return to the trend of improved operational results," concluded Mr. Yaffe.

Highlights of the Third Quarter of 2021 compared to the Third Quarter of 2020

  • Revenues for the third quarter of 2021 were $8.0 million compared to revenues of $9.3 million in the third quarter of 2020;

  • Gross profit was $1.4 million (17.5% of revenues) in the third quarter of 2021 compared to $1.8 million (19.7% of revenues) in the third quarter of 2020;

  • Operating profit was $65,000 during the third quarter of 2021 as compared to operating profit of $638,000 in the third quarter of 2020;

  • Net loss was $26,000, or ($0.00) per share in the third quarter of 2021 as compared to net profit of $598,000, or $0.14 per fully diluted share, in the third quarter of 2020;

  • EBITDA was $553,000 in the third quarter of 2021 compared to EBITDA of $1.0 million in the third quarter of 2020;

  • Net cash provided by operating activities amounted to $598,000 in the third quarter of 2021 compared to net cash provided by operating activities of $873,000 in the third quarter of 2020.

  • Cash and cash equivalents as of September 30, 2021 totaled $8.9 million compared to $4.7 million as of December 31, 2020.

Highlights for the First Nine Months of 2021

  • Revenues for the first nine months of 2021 were $24.3 million compared to $27.2 million in the first nine months of 2020;

  • Gross profit was $4.9 million (20.2% of revenues) compared to gross profit of $5.5 million (20.3% of revenues) in the first nine months of 2020;

  • Operating profit was $1.1 million compared to operating profit of $2.1 million in the first nine months of 2020;

  • Net profit was $1.0 million, or $0.17 per fully diluted share compared to net profit of $1.8 million, or $0.42 per fully diluted share in the first nine months of 2020;

  • EBITDA was $2.5 million in the first nine months of 2021, compared to EBITDA of $3.2 million in the first nine months of 2020;

  • Net cash provided by operating activities amounted to $3.4 million in the first nine months of 2021 compared to net cash provided by operating activities of $3.7 million in the first nine months of 2020.

Conference Call

Today, Wednesday, November 17, 2021, 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: 1-888-723-3164
Israel: 03-9180691
International: +972-3-9180691

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 subsidiary in North America 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. To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents the Non-GAAP presentation of EBITDA. This non-GAAP measure is not in accordance with, nor is it a substitute for, a GAAP measure. The Company uses EBITDA 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, the impact of the Coronavirus on the economy and our operations, 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.

Investor Contact:

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

Eltek Ltd.

Consolidated Statements of Operations

(In thousands US$, except per share data)












Three months ended


Nine months ended




September 30,


September 30,




2021

2020


2021


2020








Revenues


7,965

9,256


24,302


27,206


Costs of revenues


(6,570)

(7,433)


(19,397)


(21,679)











Gross profit


1,395

1,823


4,905


5,527











Selling, general and administrative expenses


(1,285)

(1,183)


(3,706)


(3,467)











R&D expenses, net


(45)

(2)


(55)


-











Operating profit


65

638


1,144


2,060











Financial expenses, net


(121)

(19)


(101)


(158)


Other income (expenses), net


44

(10)


41


(10)











Profit before income tax


(12)

609


1,084


1,892











Tax expenses


(14)

(11)


(64)


(50)











Net Profit (loss)


(26)

598


1,020


1,842











Earnings per share


















Basic and diluted net profit per ordinary share


(0.00)

0.14


0.17


0.42











Weighted average number of ordinary shares used to compute









basic net profit per ordinary share (in thousands)


5,840

4,380


5,840


4,380











Weighted average number of ordinary shares used to compute









diluted net profit per ordinary share (in thousands)


5,840

4,380


5,871


4,380


Eltek Ltd.

Consolidated Balance Sheets

(In thousands US$)












September 30,

December 31,








2021

2020






Assets


















Current assets









Cash and cash equivalents


8,885

4,735






Receivables: Trade, net of provision for doubtful accounts


6,441

9,062






Other


901

700






Inventories


4,216

3,704






Prepaid expenses


269

619















Total current assets


20,712

18,820















Long term assets









Restricted deposits


218

62






Severance pay fund


64

64






Operating lease right of use assets


8,802

8,948






Total long term assets


9,084

9,074















Fixed assets, less accumulated depreciation


7,414

7,263















Total Assets


37,210

35,157
























Liabilities and Shareholder's equity


















Current liabilities









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


595

676






Accounts payable: Trade


3,523

4,452






Other


3,230

3,831






Short-term operating lease liabilities


852

742















Total current liabilities


8,200

9,701















Long-term liabilities









Long term debt, excluding current maturities


3,965

1,495






Employee severance benefits


332

338






Deferred tax liabilities


107

84






Long-term operating lease liabilities


8,057

8,272















Total long-term liabilities


12,461

10,189















Equity









Ordinary shares, NIS 3.0 par value authorized 10,000,000 shares, issued and outstanding 5,840,357


5,296

5,296






Additional paid-in capital


22,846

22,846






Cumulative foreign currency translation adjustments


3,103

3,153






Capital reserve


1,394

1,084






Accumulated deficit


(16,090)

(17,112)






Shareholders' equity


16,549

15,267






Total liabilities and shareholders' equity


37,210

35,157






Eltek Ltd.


Unaudited Non-GAAP EBITDA Reconciliations


(In thousands US$)










Non-GAAP EBITDA Reconciliations



Three months ended


Nine months ended




September 30,


September 30,




2021

2020


2021


2020
















GAAP net Income (loss)



(26)

598


1,020


1,842

Add back items:


















Financial expenses, net



121

19


101


158

Income tax expense



14

11


64


50

Depreciation and amortization



444

390


1,330


1,176

Non-GAAP EBITDA



553

1,018


2,515


3,226

Eltek Ltd.

Consolidated Statement of Cash flow

(In thousands US$)












Three months ended


Nine months ended




September 30,


September 30,




2021

2020


2021


2020











Cash flows from operating activities:


















Net Income


(26)

598


1,020


1,842











Adjustments to reconcile net profit to net









cash flows provided by operating activities:









Depreciation and amortization


445

391


1,331


1,177


Capital gain on disposal of fixed assets, net


-

(16)


-


(16)


Stock-based compensation


127

48


310


91


Revaluation of long term loans


-

(2)


-


2


Increase in deferred tax liabilities


6

6


22


18




578

427


1,663


1,272











Decrease (Increase) in operating lease right-of-use assets


17

(1)


41


(5)


Decrease in trade receivables


1,015

949


2,560


1,098


Decrease (increase) in other receivables and prepaid expenses


48

(1,077)


143


(890)


Decrease (increase) in inventories


(275)

(50)


(525)


198


Increase (decrease) in trade payables


(464)

397


(875)


27


Increase (decrease) in other liabilities and accrued expenses


(300)

(357)


(579)


181


Increase (decrease) in employee severance benefits, net


5

(13)


(5)


27




46

(152)


760


636











Net cash provided by operating activities


598

873


3,443


3,750











Cash flows from investing activities:









Purchase of fixed assets


(824)

(348)


(1,362)


(802)


Restricted deposits


(2)

(1)


(156)


(58)


Net cash used in investing activities


(826)

(349)


(1,518)


(860)











Cash flows from financing activities:









Short- term bank credit, net


-

(1,163)


(377)


(1,928)


Repayment of short- term shareholder loan


-

-


-


(571)


Repayment of long-term loans from bank


(111)

(37)


(188)


(145)


Proceeds from long-term loans


-

-


3,062


1,141


Repayment of credit from fixed asset payables


-

(87)


(285)


(391)


Net cash used in financing activities


(111)

(1,287)


2,212


(1,894)











Effect of translation adjustments


55

7


13


27











Net increase (decrease) in cash and cash equivalents


(284)

(756)


4,150


1,023











Cash and cash equivalents at beginning of the period


9,169

3,407


4,735


1,628











Cash and cash equivalents at period end


8,885

2,651


8,885


2,651


Cision
Cision

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SOURCE Eltek Ltd.