Eltek Reports 2017 Second Quarter Financial Results
PETACH-TIKVA, Israel, Aug. 14, 2017 /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, 2017.
Mr. Yitzhak Nissan, Chairman of the Board and Chief Executive Officer, commented: "Our sales in the second quarter were $7.5 million, 14.6% lower than the second quarter of 2016, excluding Kubatronik. The decrease was primarily attributable to the continued competition in the local market and weakness in our global operations.
The Company is vigorously continuing the implementation of efficiency measures to its operating systems, which now support a higher sales rate relative to the rate prior to such implementation. Furthermore, the market is indicating a positive momentum with an increase in the frequency of incoming orders beginning this July. This increase includes a significant order from a governmental authority that we announced on July 24, 2017.
As previously released, we have enhanced our marketing and sales forces in Israel, Europe and the United States, alongside our efforts made to streamline expenses.
We are determined to bring the Company back to profitability in the near future. I believe that our actions to date, along with the renewal of manufacturing equipment that we are currently implementing, will assist us to reach these goals quickly and efficiently.
"When comparing the results to the second quarter and the first six months of 2017, please note that the operations of Kubatronik Leiterplatten GmbH were included in Eltek's results during the comparable period in 2016. Therefore, selected financial information is also presented on a proforma basis, excluding Kubatronik's results in 2016 (first six months and second quarter)," Mr. Nissan concluded.
Highlights of the Second Quarter of 2017
-- Revenues for the second quarter of 2017 were $7.5 million compared to
$9.9 million in the second quarter of 2016 ($8.8 million excluding
Kubatronik);
-- Gross profit was $134,000 (1.8% of revenues) compared to gross profit of
$1.5 million (14.8% of revenues) in the second quarter of 2016 ($1.4
million or 16.3% of revenues excluding Kubatronik); The decrease in
gross profit and gross profit margins reflects the decreased sales,
while a significant portion of our cost of sales remained constant.
-- Operating loss was $1 million compared to operating profit of $244,000
in the second quarter of 2016 ($373,000 excluding Kubatronik);
-- Net loss was $1.1 million or $0.11 per fully diluted share compared to
net profit of $213,000 or $0.02 per fully diluted share in the second
quarter of 2016 ($327,000 or $0.03 per fully diluted share excluding
Kubatronik);.
-- EBITDA amounted to $(583,000) compared to EBITDA of $754,000 in the
second quarter of 2016 ($809,000 excluding Kubatronik);
-- Net cash used by operating activities amounted to $516,000 compared to
net cash used by operating activities of $37,000 in the second quarter
of 2016. The decline is mainly attributable to the operating results in
this quarter.
-- Cash and cash equivalents as of June 30, 2017 were $792,000 compared to
$894,000 as of June 30, 2016.
Highlights for the First Six Months of 2017
-- Revenues for the first six months of 2017 were $16 million compared to
$19.7 million in the first six months of 2016 ($17.4 million excluding
Kubatronik);
-- Gross profit was $619,000 (3.9% of revenues) compared to gross profit of
$2.4 million (12.2% of revenues) in the first six months of 2016 ($2.2
million or 12.5% of revenues excluding Kubatronik);
-- Operating loss was $1.6 million compared to operating loss of $49,000 in
the first six months of 2016 ($31,000 profit excluding Kubatronik);
-- Net loss was $1.9 million, or $0.19 per fully diluted share compared to
net loss of $171,000, or $0.02 per fully diluted share in the first six
months of 2016 ($82,000 or $0.01 per fully diluted share excluding
Kubatronik);
-- EBITDA amounted to $(794,000) compared to EBITDA of $921,000 in the
first six months of 2016 ($871,000 excluding Kubatronik);
-- Net cash used by operating activities amounted to $1.3 million compared
to net cash provided by operating activities of $853,000 in the first
six months of 2016. The decline is mainly attributable to the operating
results in this period.
Conference Call
Today, Monday August 14, 2017 at 9:30 a.m. Eastern Time, Eltek will conduct a conference call to discuss the results. The call will feature remarks by Yitzhak Nissan, Chairman of the Board of Directors and Chief Executive Officer, Roberto Tulman, Deputy CEO and Chief Technology Officer and Amnon Shemer, Chief Financial Officer.
To participate, please call the following teleconference numbers. Please allow for additional time to connect prior to the call:
United States: 1-888-668-9141
Israel: 03-9180610
International: +972-3-9180610
At:
9:30 a.m. Eastern Time
6:30 a.m. Pacific Time
16:30 p.m. Israel Time
A replay of the call will be available through the Investor Info section on Eltek's corporate website at www.nisteceltek.com approximately 24 hours after the conference call is completed and will be archived for 30 days.
(Tables follow)
Eltek Ltd.
Consolidated Statements of Operations
(In thousands US$, except per share data)
Three months ended Six months ended
------------------ ----------------
June 30, June 30,
--------- ---------
2017 2016 2017 2016
---- ---- ---- ----
Revenues 7,492 9,904 15,960 19,705
Costs of revenues (7,358) (8,442) (15,341) (17,305)
------ ------ ------- -------
Gross profit 134 1,462 619 2,400
Selling, general and
administrative expenses (1,138) (1,186) (2,233) (2,384)
R&D expenses, net (15) (32) (34) (64)
Operating profit (loss) (1,019) 244 (1,649) (49)
Financial expenses, net (41) (37) (218) (98)
--- --- ---- ---
Profit (loss) before other
income, net (1,060) 207 (1,867) (146)
Other income, net 0 (0) 15 0
--- --- --- ---
Profit (loss) before income
tax expenses (1,060) 207 (1,852) (146)
Tax expenses (27) (25) (50) (48)
--- --- --- ---
Net Profit (loss) (1,087) 182 (1,901) (194)
====== === ====== ====
Net loss attributable to
non controlling interest 0 (31) 0 (23)
--- --- --- ---
Net Profit (loss)
attributable to Eltek Ltd. (1,087) 213 (1,901) (171)
====== === ====== ====
Earnings per share
Basic and diluted net gain
(loss) per ordinary share (0.11) 0.02 (0.19) (0.02)
===== ==== ===== =====
Weighted average number of
ordinary shares
used to compute basic and
diluted net gain (loss)
per
ordinary share (in
thousands) 10,143 10,143 10,143 10,143
====== ====== ====== ======
Eltek Ltd.
Consolidated Balance Sheets
(In thousands US$)
June 30, June 30,
--------- ---------
2017 2016
---- ----
Assets
Current assets
Cash and cash
equivalents 792 894
Receivables:
Trade, net of
provision for
doubtful accounts 6,097 7,548
Other 171 222
Inventories 4,305 4,618
Prepaid expenses 394 227
--- ---
Total current
assets 11,759 13,509
------ ------
Deferred taxes 0 1,066
--- -----
Assets held for
employees'
severance benefits 55 49
--- ---
Fixed assets, less
accumulated
depreciation 8,966 9,747
----- -----
Intangible asset 355 301
--- ---
Total assets 21,135 24,672
====== ======
Liabilities and
Shareholder's
equity
Current liabilities
Short-term credit
and current
maturities of
long-term debts 4,570 1,373
Accounts payable:
Trade 5,382 5,778
Other 4,008 4,611
----- -----
Total current
liabilities 13,960 11,762
------ ------
Long-term
liabilities
Long term debt,
excluding current
maturities 1,692 2,423
Employee severance
benefits 157 296
--- ---
Total long-term
liabilities 1,849 2,719
----- -----
Equity
Ordinary shares,
NIS 0.6 par value
authorized
50,000,000 shares,
issued and
outstanding
10,142,762 1,985 1,985
Additional paid-in
capital 17,270 17,270
Cumulative foreign
currency
translation
adjustments 2,408 2,037
Capital reserve 695 695
Accumulated deficit (17,032) (11,679)
Shareholders'
equity 5,326 10,308
Non controlling
interest 0 (117)
--- ----
Total equity 5,326 10,191
----- ------
Total liabilities
and shareholders'
equity 21,135 24,672
====== ======
Eltek Ltd.
Unaudited Non-GAAP EBITDA Reconciliations
(In thousands US$)
Non-GAAP EBITDA
Reconciliations Three months ended Six months ended
------------------ ----------------
June 30, June 30,
--------- ---------
2017 2016 2017 2016
---- ---- ---- ----
GAAP net Income
(loss) (1,087) 213 (1,901) (171)
Add back items:
---------------
Financial
expenses
(income), net 41 37 218 98
Income tax
expense 27 25 50 48
Depreciation and
amortization 436 479 840 946
--- --- --- ---
Adjusted EBITDA (583) 754 (794) 921
Eltek Ltd.
Consolidated Statement of Cash flow
(In thousands US$, except per share data)
Three months ended Six months ended
------------------ ----------------
June 30, June 30,
--------- ---------
2017 2016 2017 2016
---- ---- ---- ----
Cash flows from operating
activities:
Net Income (loss) (1,087) 182 (1,901) (194)
-
Adjustments to reconcile net
loss to net -
cash flows provided by
operating activities: -
Depreciation and amortization 436 479 852 946
Capital lose on disposal of
fixed assets, net - - (13) -
Revaluation of long term
loans - - (0) 1
Decrease (increase) in
Deferred Tax (12) 7 3 14
424 487 842 961
--- --- --- ---
Decrease (increase) in trade
receivables 1,152 (15) 209 575
Decrease (increase) in other
receivables and prepaid
expenses (122) (17) (64) 18
Decrease (increase) in
inventories (154) (232) 6 (106)
Increase (decrease) in trade
payables (735) (435) (206) (354)
Increase (decrease) in other
liabilities and accrued
expenses 7 (11) (176) (49)
Increase (decrease) in
employee severance benefits,
net (1) 5 (2) 3
147 (706) (233) 86
--- ---- ---- ---
Net cash provided by
operating activities (516) (37) (1,292) 853
---- --- ------ ---
Three months ended Six months ended
------------------ ----------------
June 30, June 30,
--------- ---------
2017 2016 2016 2015
---- ---- ---- ----
Cash flows from investing
activities:
Owners investment
Purchase of fixed assets (70) (238) (161) (330)
Purchase of Intangible asset - (14) - (21)
Net cash used in investing
activities (70) (251) (161) (351)
--- ---- ---- ----
Cash flows from financing
activities:
Increase (decrease) in short-
term credit (1,020) 577 (161) 91
Increase (decrease) in short-
term shareholder loan 1,430 - 1,430 -
Repayment of long-term loans
from bank (207) (175) (407) (330)
Proceeds from long-term loans 131 - 167 -
Repayment of credit from
fixed asset payables (24) (137) (129) (394)
Net cash provided by (used
in) financing activities 309 265 901 (634)
--- --- --- ----
Effect of translation
adjustments 316 (20) 111 (12)
Net increase (decrease) in
cash and cash equivalents (237) (44) (441) (144)
---- --- ---- ----
Cash and cash equivalents at
beginning of the period 1,029 938 1,234 1,038
----- --- ----- -----
- -
Cash and cash equivalents at
period end 792 894 792 894
=== === === ===
792 894 792 894
Eltek ltd.
Proforma (Non-GAAP) Statements of Operations
(In thousands US$, except per share data)
Excluding Kubatronik's operation in 2016
Solo Solo
Three months ended Six months ended
------------------ ----------------
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Unaudited Unaudited
--------- ---------
Revenues 7,492 8,777 15,960 17,370
Costs of revenues (7,358) (7,347) (15,341) (15,206)
------ ------ ------- -------
Gross profit 134 1,431 619 2,165
Research and development
income, net (15) (32) (34) (64)
Selling, general and
administrative expenses (1,138) (1,026) (2,233) (2,070)
Operating profit (loss) (1,019) 373 (1,649) 31
Financial expenses, net (41) (21) (218) (65)
--- --- ---- ---
Profit (loss) before other
income, net (1,060) 352 (1,867) (34)
Other income, net 0 0 15 0
--- --- --- ---
Profit (loss) before income
tax expenses (1,060) 352 (1,852) (34)
Income tax (expenses), net (27) (25) (50) (48)
--- --- --- ---
Net Profit (loss) (1,087) 327 (1,901) (82)
====== === ====== ===
Diluted net loss per
ordinary share (0.11) 0.03 (0.19) (0.01)
===== ==== ===== =====
Weighted average number of
ordinary shares
used to compute diluted net
loss per
ordinary share (in
thousands) 10,143 10,143 10,143 10,143
====== ====== ====== ======
Eltek ltd.
Proforma (Non-GAAP) Balance Sheets
(In thousands US$)
Excluding Kubatronik's operation in 2016
June 30,
--------
2017 2016
---- ----
Unaudited
---------
Assets
Current assets
Cash and cash equivalents 792 891
Receivables: Trade, net of
provision for doubtful accounts 6,097 7,108
Other 171 1,287
Inventories 4,305 4,324
Prepaid expenses 394 227
--- ---
Total current assets 11,759 13,837
------ ------
Deferred taxes 0 1,066
--- -----
Assets held for employees'
severance benefits 55 49
--- ---
Fixed assets, less accumulated
depreciation 8,966 9,118
----- -----
Investment (440)
----
Intangible asset 355 301
--- ---
Total assets 21,135 23,931
====== ======
Liabilities and Shareholder's
equity
Current liabilities
Short-term credit and current
maturities of long-term debts 4,570 1,373
Accounts payable: Trade 5,382 5,366
Other 4,008 4,403
----- -----
Total current liabilities 13,960 11,142
------ ------
Long-term liabilities
Long term debt, excluding current
maturities 1,692 2,236
Employee severance benefits 157 246
--- ---
Total long-term liabilities 1,849 2,482
----- -----
Equity
Ordinary shares, NIS 0.6 par
value authorized 50,000,000
shares, issued and outstanding
6,610,107 as of December 31,
2011. 1,985 1,985
Additional paid-in capital 17,270 17,270
Cumulative foreign currency
translation adjustments 2,408 2,036
Capital reserve 695 695
Accumulated deficit (17,032) (11,679)
Shareholders' equity 5,326 10,307
Non controlling interest 0 0
--- ---
Total equity 5,326 10,307
----- ------
Total liabilities and
shareholders' equity 21,135 23,931
====== ======
Eltek Ltd.
Proforma Unaudited Non-GAAP EBITDA Reconciliations
(In thousands US$)
Excluding Kubatronik's operation in 2016
Non-GAAP EBITDA Reconciliations Three months ended six months ended
------------------ ----------------
June 30, June 30, June 30, June 30,
--------- --------- --------- ---------
2017 2016 2017 2016
---- ---- ---- ----
GAAP net Income (loss) (1,087) 327 (1,901) (82)
Add back items:
---------------
Financial expenses (income), net 41 21 218 65
Income tax expense 27 25 50 48
Depreciation and amortization 436 436 840 840
--- --- --- ---
Adjusted EBITDA (583) 809 (794) 871
==== === ==== ===
Eltek Ltd.
Consolidated Statement of Cash flow
(In thousands US$, except per share data)
Excluding Kubatronik's operation in 2016
Three months ended Six months ended
------------------ ----------------
June 30, June 30,
--------- ---------
2017 2016 2017 2016
---- ---- ---- ----
Cash flows from
operating activities:
Net Income (loss) (1,087) 213 (1,901) (171)
Adjustments to reconcile
net loss to net
cash flows provided by
operating activities:
Depreciation and
amortization 436 441 852 870
Capital lose on disposal
of fixed assets, net - (13) -
Revaluation of long term
loans - 7 (0) 14
Decrease (increase) in
Deferred Tax (12) - 3 1
Impairment of goodwill - 111 - 85
424 559 842 971
--- --- --- ---
Decrease (increase) in
trade receivables 1,152 (38) 209 662
Decrease (increase) in
other receivables and
prepaid expenses (122) (4) (64) 10
Decrease (increase) in
inventories (154) (303) 6 (154)
Increase (decrease) in
trade payables (735) (440) (206) (448)
Increase (decrease) in
other liabilities and
accrued expenses 7 (7) (176) (82)
Increase (decrease) in
employee severance
benefits, net (1) 4 (2) 4
147 (789) (233) (8)
--- ---- ---- ---
Net cash provided by
operating activities (516) (17) (1,292) 792
---- --- ------ ---
Three months ended Six months ended
------------------ ----------------
June 30, June 30,
--------- ---------
2017 2016 2016 2015
---- ---- ---- ----
Cash flows from
investing activities:
Owners investment
Purchase of fixed assets (70) (235) (161) (335)
Purchase of Intangible
asset - - - -
Purchase of Intangible
asset - (14) - (21)
Net cash used in
investing activities (70) (249) (161) (356)
--- ---- ---- ----
Cash flows from
financing activities:
Increase (decrease) in
short- term credit (1,020) 577 (161) 91
Increase (decrease) in
short- term
shareholder loan 1,430 - 1,430 -
Repayment of long-term
loans from bank (207) (175) (407) (330)
Proceeds from long-term
loans 131 - 167 -
Repayment of credit from
fixed asset payables (24) (100) (129) (324)
Net cash provided by
(used in) financing
activities 309 301 901 (564)
--- --- --- ----
Effect of translation
adjustments 316 (17) 111 21
Net increase (decrease)
in cash and cash
equivalents (237) 18 (441) (107)
Cash and cash
equivalents at
beginning of the period 1,029 872 1,234 998
Cash and cash
equivalents at period
end 792 891 792 891
--- --- --- ---
About Eltek
Eltek - "Innovation across the board", is a global manufacturer and supplier of technologically advanced solutions in the field of Printed Circuit Boards, 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 has ITAR, AS-9100 and NADCAP Electronics permits and its customers include top-of-the-line 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, and R&D, production and marketing center are located in Israel. Eltek also operates through its subsidiaries, Eltek USA (100%) in North America and Kubatronik (79%) in Europe, and by agents and distributors in Europe, India, South Africa and South America.
For additional 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 includes some non-GAAP measures, such as EBITDA and proforma financial information. These non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. The 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 EBITDA to evaluate and manage its internal operations and 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.
Investor Contact:
Amnon Shemer
Chief Financial Officer
amnons@nisteceltek.com
+972-3-9395023
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SOURCE Eltek Ltd.
