Eltek Reports 2020 First Quarter Financial Results

PETACH-TIKVA, Israel, June 2, 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 quarter ended March 31, 2020.


Mr. Eli Yaffe, Chief Executive Officer, commented: "We are gratified that despite the global Covid-19 related challenges encountered in the first quarter we were able to continue the growth and profitability we achieved in 2019. During this year, we plan to significantly increase our investment in new equipment and the expansion of our facilities and infrastructure, in order to support our continued growth, despite the impact of the Covid-19 pandemic."

"We are operating in a challenging business environment and making the necessary adjustments to increase operating efficiencies, improve customer satisfaction, increase revenues and reach sustained profitability," concluded Mr. Yaffe.

Highlights of the First Quarter of 2020 compared to the First Quarter of 2019

    --  Revenues for the first quarter of 2020 were $9.2 million compared to
        revenues of $8.7  million in the first quarter of 2019;
    --  Gross profit increased from $1.5 million (17.6% of revenues) in the
        first quarter of 2019 to $1.8 (19.7% of revenues) in the first quarter
        of 2020;
    --  Operating profit was $612,000 as compared to an operating profit of
        $433,000 in the first quarter of 2019;
    --  Net profit was $541,000, or $0.12 per fully diluted share compared to a
        net profit of $242,000, or $0.12 per fully diluted share, in the first
        quarter of 2019;
    --  EBITDA was a $1.0 million (11.0% of revenues) compared to EBITDA of
        $811,000 (9.3% of revenues) in the first quarter of 2019;
    --  Net cash provided by operating activities amounted to $1.5 million
        compared to net cash provided by operating activities of $1.6 million in
        the first quarter of 2019.

Conference Call

Today, Tuesday, June 2, 2020, 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:                          

         03- 9180609

       +972-3- 9180609


                     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 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, 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.

(Tables follow)

                Eltek Ltd.

         Consolidated Statements of Operations

         (In thousands US$, except per share data)

                                                                                                       Three months

                                                                                                        March  31,

                                                                                                               2020     2019

                Revenues                                                                                   9,157    8,735

                Costs of revenues                                                                        (7,354) (7,196)

                Gross profit                                                                               1,803    1,539

     Selling, general and administrative expenses                                                          (1,189) (1,106)

                R&D expenses, net                                                                            (2)

                Operating profit                                                                             612      433

     Financial expenses, net                                                                                  (55)   (184)

     Other income, net                                                                                         (1)       6

                Profit before income tax                                                                     556      255

     Tax expenses                                                                                             (15)    (13)

                Net Profit                                                                                   541      242

                Earnings per share

     Basic and diluted net profit per ordinary share                                                          0.12     0.12

     Weighted average number of ordinary shares

     used to compute basic and diluted net profit per

     ordinary share (in thousands)                                                                           4,380    2,029

              Eltek Ltd.

         Consolidated Balance Sheets

            (In thousands US$)

                                                                                                                    March  31, 
     December 31,

                                                                                                                          2020               2019


                Current assets

              Cash and cash equivalents                                                                                 2,214              1,628

              Receivables:   Trade, net of provision for doubtful accounts                                              7,379              7,480

                                   Other                                                                                  164                145

              Inventories                                                                                               3,404              3,735

              Prepaid expenses                                                                                            354                530

                Total current assets                                                                        13,515             13,518

                Long term assets

              Severance pay fund                                                                                           58                 60

              Operating lease right of use assets                                                                       2,140              2,490

                Total long term assets                                                                       2,198              2,550

                Fixed assets, less accumulated depreciation                                                  6,506              6,761

                Total Assets                                                                                22,219             22,829

                Liabilities and Shareholder's equity

                Current liabilities

              Short-term credit and current maturities of long-term debts                                               1,589              2,120

              Short-term credit from related party                                                                      3,366              3,472

              Accounts payable: Trade                                                                                   4,277              4,673

                                          Other                                                                         3,533              3,118

              Short-term operating lease liabilities                                                                    1,091              1,383

                Total current liabilities                                                                   13,856             14,766

                Long-term liabilities

              Long term debt, excluding current maturities                                                                340                387

              Employee severance benefits                                                                                 275                268

              Deferred tax liabilities                                                                                     49                 45

              Long-term operating lease liabilities                                                                     1,033              1,094

                Total long-term liabilities                                                                  1,697              1,794


              Ordinary shares, NIS 3.0 par value authorized 10,000,000                                                  3,964              3,964
    shares, issued and outstanding 4,380,268

              Additional paid-in capital                                                                               18,583             18,583

              Cumulative foreign currency translation adjustments                                                       2,310              2,479

              Capital reserve                                                                                             989                963

              Accumulated deficit                                                                                    (19,180)          (19,720)

                Shareholders' equity                                                                         6,666              6,269

                Total liabilities and shareholders' equity                                                  22,219             22,829

                Eltek Ltd.

                Unaudited Non-GAAP EBITDA Reconciliations

                (In thousands US$)

                     Non-GAAP EBITDA                                           Three months
                      Reconciliations                                              ended

                                                                                March  31,

                                                                                       2020 2019


                     GAAP net Income (loss)                                             541  242

                                    Add back items:


        Financial expenses, net                                                          55  184

        Income tax expense                                                               15   13

        Depreciation and
         amortization                                                                   395  372

                     Non-GAAP EBITDA                                                  1,006  811

                Eltek Ltd.

         Consolidated Statement of  Cash flow

              (In thousands US$)

                                                                                                                     Three months

                                                                                                                      March  31,

                                                                                                                             2020     2019

                Cash flows from operating activities:

                Net Income                                                                                                 541      242

                Adjustments to reconcile net profit to net

      cash flows provided by operating activities:

     Depreciation and amortization                                                                                           395      372

     Stock-based compensation                                                                                                 26       31

     Transaction with controlling shareholder                                                                                         14

     Revaluation of long term loans                                                                                           10     (16)

     Increase in deferred tax liabilities                                                                                      5

                                                                                                                              436      401

     Decrease in operating lease right-of-use assets                                                                         (5)     (9)

     Decrease (increase) in trade receivables                                                                              (132)     240

     Decrease in other receivables and prepaid expenses                                                                      139      315

     Decrease (increase) in inventories                                                                                      221    (415)

     Increase (decrease)  in trade payables                                                                                (257)     846

     Increase in other liabilities and accrued expenses                                                                      520        4

     Increase  in employee severance benefits, net                                                                            16

                                                                                                                              502      981

                Net cash provided by operating activities                                                                1,479    1,624

                Cash flows from investing activities:

     Purchase of fixed assets                                                                                              (204)   (159)

                Net cash used in investing activities                                                                    (204)   (159)

                Cash flows from financing activities:

     Short- term bank credit, net                                                                                          (438) (1,608)

     Short- term shareholder loan                                                                                                    549

     Repayment of long-term loans from bank                                                                                 (73)   (225)

     Repayment of credit from fixed asset payables                                                                         (151)    (96)

                Net cash used in financing activities                                                                    (662) (1,380)

                Effect of translation adjustments                                                                         (27)    (10)

                Net increase in cash and cash equivalents                                                                  586       75

                Cash and cash equivalents at beginning of the period                                                     1,628      993

                Cash and cash equivalents at period end                                                                  2,214    1,068

Investor Contact:

Alon Mualem
Chief Financial Officer

View original content:http://www.prnewswire.com/news-releases/eltek-reports-2020-first-quarter-financial-results-301069136.html

SOURCE Eltek Ltd.