Eltek Reports 2019 Second Quarter Financial Results
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.
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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$) June 30, December 31, 2019 2018 Assets Current assets Cash and cash equivalents 1,837 992 Receivables: Trade, net of provision for doubtful accounts 7,587 5,682 Other 110 868 Inventories 3,910 3,611 Prepaid expenses 266 292 Total current assets 13,710 11,445 Long term assets Severance pay fund 57 53 Long term prepaid expenses - 39 Operating lease right of use assets 3,054 - Total long term assets 3,111 92 Fixed assets, less accumulated depreciation 6,271 6,623 Total Assets 23,092 18,160 Liabilities and Shareholder's equity Current liabilities Short-term credit and current maturities of long-term debts 3,056 6,606 Short-term credit from related party 3,365 2,668 Accounts payable: Trade 4,312 4,108 Other 3,691 3,377 Short-term operating lease liabilities 1,139 - Total current liabilities 15,563 16,759 Long-term liabilities Long term debt, excluding current maturities 116 308 Employee severance benefits 214 211 Long-term operating lease liabilities 1,903 - Total long-term liabilities 2,233 519 Equity Ordinary shares, NIS 3.0 par value authorized 10,000,000 3,964 1,985 shares, issued and outstanding 2,028,552 Additional paid-in capital 18,583 17,270 Cumulative foreign currency translation adjustments 2,339 2,340 Capital reserve 891 800 Accumulated deficit (20,481) (21,513) Shareholders' equity 5,296 882 Total liabilities and shareholders' equity 23,092 18,160
Eltek Ltd. Unaudited Non-GAAP EBITDA Reconciliations (In thousands US$) 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 (3) (12) Changes in operating leases, net 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
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SOURCE Eltek Ltd.