Eltek Reports Full Year and Fourth Quarter 2019 Financial Results

    --  Revenues of $34.8 million in 2019 compared to $33.9 million in 2018
    --  Net profit of $1.8 million in 2019 compared to a net loss of $2.6
        million in 2018
    --  Revenues of $8.6 million in the fourth quarter of 2019 compared to $7.8
        million in the fourth quarter of 2018
    --  Net profit of $370,000 in the fourth quarter of 2019 compared to a net
        loss of $631,000 in the fourth quarter of 2018

PETACH-TIKVA, Israel, April 27, 2020 /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 full year and fourth quarter ended December 31, 2019.

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Mr. Eli Yaffe, Chief Executive Officer, commented: "We are pleased with the growth in our revenues and profitability in the fourth quarter and the significant change in our full year results. The improved results reflect the implementation of our previously announced turnaround plan."

"The outbreak and spread of the Coronavirus has created new operational and business challenges that we are dealing with. We see both additional risks and opportunities in this new environment," concluded Mr. Yaffe.

Highlights of the Full Year of 2019 compared to the Full Year of 2018

    --  Revenues for the full year of 2019 amounted to $34.8 million compared to
        revenues of $33.9 million in 2018.
    --  Gross profit was $6.0 million (17.3% of revenues) in 2019 compared to
        gross profit of $2.6 million (7.7% of revenues) in 2018.
    --  Operating profit was $1.4 million in 2019 compared to an operating loss
        of $2.1 million in 2018.
    --  Net profit was $1.8 million or $0.48 per fully diluted share in 2019,
        compared to a net loss of $2.6 million or $1.28 per fully diluted share
        in 2018.
    --  EBITDA was $3.8 million in 2019 compared to negative EBITDA of $420,000
        in 2018.
    --  Net cash provided by operating activities amounted to $2.6 million in
        2019 compared to $813,000 used in operating activities in 2018.
    --  Cash and cash equivalents as of December 31, 2019 were $1.6 million
        compared to $992,000 as of December 31, 2018.

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

    --  Revenues for the fourth quarter of 2019 were $8.6 million compared to
        revenues of $7.8 million in the fourth quarter of 2018.
    --  Gross profit was $1.5 million (17.0% of revenues) in the fourth quarter
        of 2019 compared to a gross profit of $603,000 (7.7% of revenues) in the
        fourth quarter of 2018.
    --  Operating profit was $379,000 in the fourth quarter of 2019 compared to
        an operating loss of $416,000 in the fourth quarter of 2018.
    --  Net profit was $370,000 or $0.08 per fully diluted share in the fourth
        quarter of 2019 compared to a net loss of $631,000 or $0.31 per fully
        diluted share in the fourth quarter of 2018.
    --  EBITDA was $817,000 in the fourth quarter of 2019 compared to negative
        EBITDA of $43,000 in the fourth quarter of 2018.
    --  Net cash used in operating activities amounted to $141,000 in the fourth
        quarter of 2019 compared to $136,000 of cash provided from operating
        activities in the fourth quarter of 2018.

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.

Conference Call

Eltek will conduct a conference call to discuss the results today, Monday, April 27, 2019, at 8:30 a.m. Eastern Time. 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, which was founded in 1970, has its headquarters 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.

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.


                                                                            
          
              Eltek Ltd.


                                                                     
        
         Consolidated Statements of Operations


                                                                   
        
         (In thousands US$, except per share data)




                                                          Three months
                                                               ended                                         Twelve months ended



                                                          December  31,                                         December  31,



                                                                   2019            2018                                                2019        2018





                 Revenues                                         8,582           7,827                                              34,794      33,939


                 Costs of revenues                              (7,124)        (7,224)                                           (28,787)   (31,342)



                 Gross profit                                     1,458             603                                               6,007       2,597


      Selling, general
       and administrative
       expenses                                                 (1,063)        (1,022)                                            (4,604)    (4,669)


      Impairment loss on
       goodwill                                                       0               0                                                   0           0


      R&D expenses, net                                            (16)              3                                                (16)


                 Operating profit
                  (loss)                                            379           (416)                                              1,387     (2,072)


      Financial expenses,
       net                                                         (32)          (211)                                              (440)      (475)


      Other income, net                                              48               3                                                 923           3





                 Loss before income
                  tax                                               347           (627)                                                947     (2,547)








                 Profit (loss)
                  before income tax                                 395           (624)                                              1,870     (2,544)




      Tax expenses                                                 (25)            (7)                                               (77)       (63)





                 Net Profit (loss)                                  370           (631)                                              1,793     (2,607)





      Net loss
       attributable to
       non controlling
       interest                                                       0               0                                                   0           0




     Net loss attributable to non controlling interest


                 Net Profit (loss)
                  attributable to
                  Eltek Ltd.                                     369.73           (631)                                           1,792.88     (2,607)



                 ????                                               370            -630                                               1,793      -2,607



     
              Earnings per share




      Basic and diluted
       net profit (loss)
       per ordinary share                                          0.08          (0.31)                                               0.48      (1.28)






     Weighted average number of ordinary shares



     used to compute basic and diluted net profit (loss)


      per ordinary share
       (in thousands)                                             4,380           2,029                                               3,734       2,029


                                                          
         
               Eltek Ltd.


                                                      
         
          Consolidated Balance Sheets


                                                        
         
             (In thousands US$)




                                                                  December  31,                December 31,



                                                                           2019                         2018






     
                Assets





     
                Current assets


      Cash and cash equivalents                                           1,628                          992


      Receivables:   Trade, net of
       provision for doubtful accounts                                    7,480                        5,682


                           Other                                            145                          868



     Inventories                                                         3,735                        3,611



     Prepaid expenses                                                      530                          292





                   Total current assets                                  13,518                       11,445





                   Long term assets                                           0                            0




     
                Long term assets



     Severance pay fund                                                     60                           53


      Long term prepaid expenses                                              -                          39


      Operating lease right of use
       assets                                                             2,490


                   Total long term assets                                 2,550                           92




                   Fixed assets, less accumulated
                    depreciation                                          6,761                        6,623





                   Total Assets                                          22,829                       18,160












     
                Liabilities and Shareholder's equity





     
                Current liabilities


      Short-term credit and current
       maturities of long-term debts                                      2,120                        6,606


      Short-term credit from related
       party                                                              3,472                        2,668


      Accounts payable: Trade                                             4,673                        4,108


                                  Related parties                             -                           0


                                  Other                                   3,118                        3,377


      Short-term operating lease
       liabilities                                                        1,383




                   Total current liabilities                             14,766                       16,759






     
                Long-term liabilities


      Long term debt, excluding
       current maturities                                                   387                          308


      Employee severance benefits                                           268                          211


      Deferred tax liabilities                                               45


      Long-term operating lease
       liabilities                                                        1,094





                   Total long-term liabilities                            1,794                          519






     
                Equity


      Ordinary shares, NIS 3.0  par
       value authorized 10,000,000
       shares, issued and outstanding
       4,380,268 and 2,028,552 at
       December 31, 2019 and December
       31, 2018, respectively                                             3,964                        1,985


      Additional paid-in capital                                         18,583                       17,270


      Cumulative foreign currency
       translation adjustments                                            2,479                        2,340



     Capital reserve                                                       963                          800



     Accumulated deficit                                              (19,720)                    (21,513)


                   Shareholders' equity                                   6,269                          882


                   Non controlling interest                                   0                            0



                   Total equity                                           6,269                          882



                   Total liabilities and
                    shareholders' equity                                 22,829                       18,160


                                                            
              
                Eltek Ltd.


                                                     
     
                Unaudited Non-GAAP EBITDA Reconciliations


                                                        
              
                (In thousands US$)




                     Non-GAAP EBITDA Reconciliations     Three months
                                                              ended                                           Twelve months ended



                                                         December  31,                                           December  31,



                                                                  2019                 2018                                         2019     2018



                                                           Unaudited                                               Unaudited







                     GAAP net Income (loss)                        370                (631)                                       1,793  (2,607)


                                    Add back items:

    ---




       Financial expenses, net                                     32                  211                                          440      475



       Income tax expense                                          25                    7                                           77       63


        Impairment loss on goodwill                                  0                    0                                            0        0


        Depreciation and amortization                              390                  370                                        1,508    1,649



                     Non-GAAP EBITDA                               817                 (43)                                       3,818    (420)


                                                             
       
                Eltek Ltd.


                                                
              
         Consolidated Statement of  Cash flow


                                                         
         
              (In thousands US$)




                                                Three months
                                                     ended                                            Twelve months ended



                                                December  31,                                            December  31,



                                                         2019              2018                                               2019     2018





                   Cash flows from operating
                    activities:




                   Net Income (loss)                      370             (631)                                             1,793  (2,607)




                   Adjustments to reconcile net
                    loss to net


       cash flows provided by
        operating activities:


      Depreciation and amortization                       390               367                                              1,508    1,649


      Capital loss on disposal of
       fixed assets, net                                                   101                                                        101


      Stock-based compensation                             53                56                                                141       56


      Transaction with controlling
       shareholder                                       (22)               49                                                 22       49


      Revaluation of long term
       loans                                              (2)                6                                               (38)      29


      Increase in deferred tax
       liabilities                                         45                                                                  45


      Impairment of goodwill


                                                          464               579                                              1,678    1,884





      Decrease (Increase) in
       operating lease right-of-
       use assets                                           8                                                                 (3)


      Decrease in operating lease
       liabilities


      Decrease (increase) in trade
       receivables                                      (565)            1,264                                            (1,277)     790


      Decrease (Increase) in other
       receivables and prepaid
       expenses                                          (58)              155                                                598      467


      Decrease (increase) in
       inventories                                         77               631                                                175     (30)


      Increase (decrease)  in trade
       payables                                            15           (1,518)                                               107    (871)


      Decrease in other liabilities
       and accrued expenses                             (473)            (309)                                             (529)   (443)


      Increase (decrease) in
       employee severance benefits,
       net                                                 21              (35)                                                36      (3)


                                                        (975)              188                                              (893)    (90)





                   Net cash provided by (used
                    in) operating activities            (141)              136                                              2,578    (813)







                   Cash flows from investing
                    activities:



     Owners investment


      Purchase of fixed assets                          (263)            (425)                                             (806)   (619)


      Purchase of Intangible asset


      Purchase of Intangible asset


                   Net cash used in investing
                    activities                          (263)            (425)                                             (806)   (619)







                   Cash flows from financing
                    activities:


      Short- term bank credit, net                        135                30                                            (4,181)     986


      Short- term shareholder loan                          2              (40)                                               561    1,390


      Issuance of ordinary shares
       in rights offering, net                                                                                             3,298


      Repayment of long-term loans
       from bank                                        (216)            (220)                                             (891)   (910)


      Proceeds from long-term
       loans                                              (0)              377                                                558      378


      Repayment of credit from
       fixed asset payables                             (188)             (83)                                             (477)   (317)


                   Net cash provided by (used
                    in) financing activities            (267)               64                                            (1,132)   1,527





                   Effect of translation
                    adjustments                            11                15                                                (4)      10




                   Net increase (decrease) in
                    cash and cash equivalents           (660)            (210)                                               636      105





                   Cash and cash equivalents at
                    beginning of the period             2,288             1,202                                                992      887





                   Cash and cash equivalents at
                    period end                          1,628               992                                              1,628      992

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

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SOURCE Eltek Ltd.