Eltek Reports Fourth Quarter and Full Year 2017 Financial Results

Eltek Reports Fourth Quarter and Full Year 2017 Financial Results

- Revenues of $9.1 million in the fourth quarter of 2017, compared to $7.3 million in Q4-2016 (excluding Kubatronik)

- Net loss of $669,000, compared to net loss of $2.8 million in Q4-2016 (excluding Kubatronik

- Revenues of $32.8 million in 2017, compared to $33.2 million in 2016 (excluding Kubatronik)

- Net loss of $3.8 million in 2017, compared to net loss of $3.2 million in 2016 (excluding Kubatronik)

PETACH-TIKVA, Israel, April 30, 2018 /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 fourth quarter and full year ended December 31, 2017.

Mr. Yitzhak Nissan, Chairman of the Board and Chief Executive Officer, commented: "Our revenues in the full year of 2017 decreased to $32.8 million from $33.2 million in 2016, excluding Kubatronik. Our revenues increased in the fourth quarter of 2017 to $9.1 million compared to revenues of $7.3 million in the fourth quarter of 2016, excluding Kubatronik. We continue the implementation of the improvements we made in our manufacturing procedures, in order to supply our increased backlog of orders.

We see an increased demand for our products and our backlog of orders has grown significantly. I believe that the adjustments made to our manufacturing and marketing operations will assist the Company to reach its goals quickly and efficiently. I am determined to bring the Company back to profitability in the near future.

In March 2018, Nistec Ltd., the Company's controlling shareholder, extended the Company a bridge financing of NIS 4 million (approximately $1.1 million) for working capital. In addition, in April 2018, Nistec provided the Company a letter of commitment to provide additional financing in the amount of up to $2.5 million, valid for one year following the date of the approval of its 2017 financial statements. These supports, along with the financial support provided by Nistec in 2017, reflect my confidence in the Company and my belief that Eltek has the potential to overcome the manufacturing challenges and return to profitability.

The results for the fourth quarter and the full year ended December 31, 2017, do not include the operations of Kubatronik Leiterplatten GmbH, which were included in Eltek's results for the comparable periods in 2016. Therefore, we have provided selected financial information on a proforma basis, excluding Kubatronik's results for 2016," Mr. Nissan concluded.

Highlights of the Full Year of 2017 compared to the Full Year of 2016

    --  Revenues for the full year of 2017 amounted to $32.8 million compared to
        revenues of $37.1 million in 2016 ($33.2 million excluding Kubatronik).
    --  Gross profit was $1.3 million (4.1% of revenues), compared to gross
        profit of $2.8 million (7.6% of revenues) in 2016, ($2.8 million or 8.3%
        of revenues excluding Kubatronik).
    --  Operating loss was $3.4 million compared to an operating loss of $2
        million in 2016, ($1.6 million excluding Kubatronik).
    --  Net loss was $3.8 million or $1.86 per fully diluted share, compared to
        a net loss of $3.6 million or $1.79 per fully diluted share in 2016 (a
        net loss of $3.2 million or $1.6 per fully diluted share excluding
        Kubatronik).
    --  EBITDA was a negative $1.3 million compared to a negative $313,000 in
        the 2016 (a negative $124,000 excluding Kubatronik).
    --  Net cash used in operating activities amounted to $3.4 million compared
        to $165,000 provided by operating activities in 2016.
    --  Cash and cash equivalents as of December 31, 2017 were $887,000,
        compared to $1.2 million as of December 31, 2016.

Highlights of the Fourth Quarter of 2017 compared to the Fourth Quarter of 2016

    --  Revenues for the fourth quarter of 2017 were $9.1 million compared to
        revenues of $8.1 million in the fourth quarter of 2016 ($7.3 million
        excluding Kubatronik).
    --  Gross profit was $740,000 (8.1% of revenues) compared to a gross loss of
        $463,000 (5.7% of revenues) in the fourth quarter of 2016 (gross loss of
        $283,000 or 3.9% of revenues excluding Kubatronik).
    --  Operating loss was $568,000 compared to an operating loss of $1.6
        million in the fourth quarter of 2016 (an operating loss of $1.4 million
        excluding Kubatronik).
    --  Net loss was $669,000 or $0.33 per fully diluted share compared to a net
        loss of $3 million or $1.48 per fully diluted share in the fourth
        quarter of 2016 (a net loss of $2.8 million or $1.4 per fully diluted
        share excluding Kubatronik).
    --  EBITDA was a negative $130,000 compared to a negative $1.4 million in
        the fourth quarter of 2016 (a negative $1.2 million excluding
        Kubatronik).
    --  Net cash used in operating activities amounted to $775,000 compared to
        $1.3 million of cash used in operating activities in the fourth quarter
        of 2016.

Conference Call:

Today, Monday, April 30, 2018, at 9:30 a.m. Eastern Time, Eltek will conduct a conference call to discuss the results. The call will feature remarks by Mr. Yitzhak Nissan, Chairman of the Board of Directors and Chief Executive Officer, Mr. Roberto Tulman, Deputy CEO and Chief Technology Officer, and Mr. 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: 1-888-407-2553
Israel: 03-9180664
International: +972-3-9180664

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.

                                Proforma (Non-GAAP) Statements of Operations

                                 (In thousands US$, except per share data)

                                  Excluding Kubatronik's operation in 2016


                                                   Solo                            Solo

                                           Three months ended                Year ended
                                           ------------------                ----------

                                               Dec 31,                       Dec 31,
                                               -------                       -------

                                               2017                  2016                  2017        2016
                                               ----                  ----                  ----        ----


    Revenues                                  9,091                 7,347                32,754      33,161

    Costs of revenues                       (8,352)              (7,630)             (31,427)   (30,409)
                                             ------                ------               -------     -------


    Gross profit                                740                 (283)                1,327       2,752


    Research and development
     income, net                                (3)                 (20)                 (41)      (117)


    Selling, general and
     administrative expenses                (1,305)              (1,106)              (4,704)    (4,206)


    Operating profit (loss)                   (568)              (1,408)              (3,418)    (1,570)


    Financial expenses, net                    (77)                 (93)                (298)      (253)
                                                ---                   ---                  ----        ----


    Profit (loss) before other
     income, net                              (645)              (1,501)              (3,716)    (1,823)


    Other income, net                             0                 (263)                   15       (263)
                                                ---                  ----                   ---        ----


    Profit (loss) before income
     tax expenses                             (645)              (1,764)              (3,701)    (2,086)


    Income tax (expenses), net                 (23)              (1,080)                 (74)    (1,157)
                                                ---                ------                   ---      ------


    Net Profit (loss)                         (669)              (2,844)              (3,775)    (3,244)
                                               ====                ======                ======      ======



    Diluted net loss per
     ordinary share                          (0.33)               (1.40)               (1.86)     (1.60)
                                              =====                 =====                 =====       =====


    Weighted average number of
     ordinary shares

    used to compute diluted net
     loss per

    ordinary share (in
     thousands)                               2,029                 2,029                 2,029       2,029
                                              =====                 =====                 =====       =====


                                      Eltek Ltd.

                          Proforma (Non-GAAP) Balance Sheets

                                  (In thousands US$)

                       Excluding Kubatronik's operation in 2016


                                                                      Dec 31,
                                                                    -------

                                                                    2017           2016
                                                                    ----           ----

    Assets


    Current assets

    Cash and cash equivalents                                        887          1,234

    Receivables:   Trade, net of provision
     for doubtful accounts                                         6,963          5,704

                            Other                                  1,527            205

    Inventories                                                    3,871          3,926

    Prepaid expenses                                                 254            251
                                                                     ---            ---


    Total current assets                                          13,502         11,320
                                                                  ------         ------


    Deferred taxes                                                     0              0
                                                                     ---            ---


    Assets held for employees' severance
     benefits                                                         57             50
                                                                     ---            ---


    Fixed assets, less accumulated
     depreciation                                                  8,586          8,453
                                                                   -----          -----


    Intangible asset                                                   0            322
                                                                     ---            ---


    Total assets                                                  22,145         20,145
                                                                  ======         ======





    Liabilities and Shareholder's equity


    Current liabilities

    Short-term credit and current maturities
     of long-term debts                                            7,063          2,868

    Short-term credit from related party                           1,442              -

    Accounts payable: Trade                                        5,451          4,727

                                Other                              4,111          3,818
                                                                   -----          -----



    Total current liabilities                                     18,067         11,413
                                                                  ------         ------


    Long-term liabilities

    Long term debt, excluding current
     maturities                                                      388          1,954

    Employee severance benefits                                      231            144
                                                                     ---            ---


    Total long-term liabilities                                      619          2,098
                                                                     ---          -----


    Equity

    Ordinary shares, NIS 0.6  par value
     authorized 50,000,000 shares,                                 1,985          1,985
    issued and outstanding 6,610,107 as of
     December 31, 2011.

    Additional paid-in capital                                    17,270         17,270

    Cumulative foreign currency translation
     adjustments                                                   2,415          1,815

    Capital reserve                                                  695            695

    Accumulated deficit                                         (18,906)      (15,131)

    Shareholders' equity                                           3,459          6,634

    Non controlling interest                                           0              0
                                                                     ---            ---

    Total equity                                                   3,459          6,634
                                                                   -----          -----

    Total liabilities and shareholders'
     equity                                                       22,145         20,145
                                                                  ======         ======


                                                                Eltek Ltd.

                                            Proforma Unaudited Non-GAAP EBITDA Reconciliations

                                                            (In thousands US$)

                                                 Excluding Kubatronik's operation in 2016


    Non-GAAP EBITDA Reconciliations  Three months ended                     Year ended
                                     ------------------                     ----------

                                          Dec 31,                            Dec 31,           Dec 31,          Dec 31,
                                          -------                            -------           -------          -------

                                                   2017                                 2016               2017              2016
                                                   ----                                 ----               ----              ----


    GAAP net Income (loss)                        (669)                             (2,844)           (3,775)          (3,244)

    Add back items:
    ---------------


    Financial expenses (income), net                 77                                   93                298               253

    Income tax expense                               23                                1,080                 74             1,157

    Depreciation and amortization                   438                                  438              2,058             1,710
                                                    ---                                  ---              -----             -----

    Adjusted EBITDA                               (131)                             (1,233)           (1,345)            (124)
                                                   ====                               ======             ======              ====


                                                                     Eltek Ltd.

                                                        Consolidated Statement of  Cash flow

                                                     (In thousands US$, except per share data)

                                                      Excluding Kubatronik's operation in 2016


                                          Three months ended                  Year months ended
                                          ------------------                  -----------------

                                              Decmber  31,                       Decmber  31,
                                              ------------                       ------------

                                                         2017                                 2016      2017       2016
                                                         ----                                 ----      ----       ----

    Cash flows from operating activities:


    Net Income (loss)                                   (669)                             (3,050)  (3,775)   (3,725)


    Adjustments to reconcile net loss to
     net

     cash flows provided by operating
      activities:

    Depreciation and amortization                         438                                  443     1,722      1,856

    Capital lose on disposal of fixed
     assets, net                                            -                                (12)     (13)      (12)

    Amortization of Intangible asset                        -                                          348

    Revaluation of long term loans                         13                                    -      (0)         1

    Decrease (increase) in Deferred Tax                     -                               1,062        17      1,083

    Equity loss (gain)                                      -                                   -        -

                                                          451                                1,492     2,075      2,929
                                                          ---                                -----     -----      -----


    Decrease (increase) in trade
     receivables                                        (975)                                 641     (597)     2,143

    Decrease (increase) in other
     receivables and prepaid expenses                   (447)                                  17   (1,249)      (97)

    Decrease (increase) in inventories                    541                                  504       471        289

    Increase (decrease) in trade payables                  69                                (378)    (330)     (561)

    Increase (decrease) in other
     liabilities and accrued expenses                     187                                (409)    (107)     (664)

    Increase (decrease) in employee
     severance benefits, net                               67                                (148)       69      (150)

                                                        (558)                                 226   (1,743)       961
                                                         ----                                  ---    ------        ---


    Net cash provided by (used in)
     operating activities                               (775)                             (1,331)  (3,444)       165
                                                         ----                               ------    ------        ---


    Proceeds from sale of investments in
     previously consolidated
     subsidiaries:
    ------------------------------------

    The subsidiaries' assets and
     liabilities at date of sale:

    Trade accounts receivable net                                                             290                 290

    Inventories                                                                               298                 298

    Prepaid and other current assets                                                          107                 107

    Assets held for employees' severance
     benefits                                                                                   -                  -

    Property, plant and equipment                                                             537                 537

                                                                                                -                  -

    deferred Tax - Long Term                                                                    -                  -

    Goodwill/intangible asset                                                                 (0)                (0)

    Short-term credit                                                                           -                  -

    Trade                                                                                   (604)              (604)

    Other                                                                                   (185)              (185)

    Long-term debt, including current
     maturities                                                                             (112)              (112)

    Employee severance benefits                                                             (276)              (276)

    Investment in company accounted for
     at equity                                                                                191                 191
                                                                                              ---                 ---

                                                                                              245                 245
                                                                                              ---                 ---

    Cash flows from investing activities:

    Owners investment

    Purchase of fixed assets                             (43)                               (146)    (275)     (708)

    Purchase of Intangible asset                            -                                            -

    Purchase of Intangible asset                            -                                   -        -      (43)

    Net cash used in investing activities                (43)                               (146)    (275)     (750)
                                                          ---                                 ----      ----       ----


    Cash flows from financing activities:

    Increase (decrease) in short- term
     credit                                               984                                1,657     2,757      1,589

    Increase (decrease) in short- term
     shareholder loan                                       -                                   -    1,430

    Repayment of long-term loans from
     bank                                               (233)                               (175)    (870)     (680)

    Proceeds from long-term loans                        (36)                                 199       167        199

    Repayment of credit from fixed asset
     payables                                            (32)                                (83)    (241)     (635)

    Net cash provided by (used in)
     financing activities                                 683                                1,598     3,244        473
                                                          ---                                -----     -----        ---


    Effect of translation adjustments                      20                                   25       128         64


    Net increase (decrease) in cash and
     cash equivalents                                   (116)                                 392     (347)       196


    Cash and cash equivalents at
     beginning of the period                            1,003                                  842     1,234      1,038


    Cash and cash equivalents at period
     end                                                  887                                1,234       887      1,234
                                                          ---                                -----       ---      -----

                                                          887                                1,234       887      1,234

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 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 is located in Israel. Eltek operates also through its subsidiaries in North America and 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.

Safe Harbor for Forward Looking Statements:

This press release contains express or implied forward-looking statements within the Private Securities Litigation Reform Act of 1995 and other U.S Federal securities laws, 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 in subsequent filings with the United States Securities and Exchange Commission. Except as otherwise required by law, Eltek is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

Investor Contact:
Amnon Shemer

Chief Financial Officer
amnons@nisteceltek.com
+972-3-9395023

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SOURCE Eltek Ltd.