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Eltek Reports 2020 Second Quarter Financial Results
[August 12, 2020]

Eltek Reports 2020 Second Quarter Financial Results


PETACH-TIKVA, Israel, Aug. 12, 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 June 30, 2020.

Eltek_Logo

Mr. Eli Yaffe, Chief Executive Officer, commented: "We are pleased that our second quarter reflects the continuing trend of improved results. We are gratified that despite the global Covid-19 pandemic and its related challenges, we were able to grow our top line by 7.2% compared to the second quarter of 2019 and improve our gross margins from 15.3% in Q2 2019 to 21.6% in Q2 2020."

"We are operating in a challenging business environment and making the necessary adjustments to protect our staff, expand our business, improve customer satisfaction, increase revenues, maintain the trend of improved operating efficiencies and reach sustained profitability," concluded Mr. Yaffe.

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

  • Revenues for the second quarter of 2020 were $8.8 million compared to revenues of $8.2 million in the second quarter of 2019;
  • Gross profit increased from $1.3 million (15.3% of revenues) in the second quarter of 2019 to $1.9 million (21.6% of revenues) in the second quarter of 2020;
  • Operating profit increased to $809,000 during the second quarter of 2020 as compared to operating profit of $7,000 in the second quarter of 2019;
  • Other expenses were nil during the second quarter of 2020 as compared to other income of $871,000 in the second quarter of 2019 that was mainly attributable to receipt of a non-recurring insurance payment relating to the damage to one of our manufacturing machines and the resulting losses;
  • Net profit was $704,000, or $0.16 per fully diluted share in the second quarter of 2020 compared to net profit of $790,000, or $0.19 per fully diluted share, in the second quarter of 2019;
  • EBITDA was $1.2 million in the second quarter of 2020 compared to EBITDA of $1.25 million in the second quarter of 2019;
  • Net cash provided by operating activities amounted to $1.4 million in the second quarter of 2020 compared to net cash used in operating activities of $301,000 in the second quarter of 2019.

Highlights for the First Six Months of 2020

  • Revenues for the first six months of 2020 were $17.9 million compared to $16.9 million in the first six months of 2019;
  • Gross profit was $3.7 million (20.6% of revenues) compared to gross profit of $2.8 million (16.5% of revenues) in the first six months of 2019;
  • Operating profit was $1.4 million compared to operating profit of $440,000in the first six months of 2019;
  • Other expenses were $1,000 in the first six months of 2020 as compared to other income of 877,000 in the first six months of 2019;
  • Net profit was $1.2 million, or $0.28 per fully diluted share compared to net profit of $1.0 million, or $0.33 per fully diluted share in the first six months of 2019;
  • EBITDA was $2.2 million in the first six months of 2020, compared to EBITDA of $2.1 million in the first six months of 2019;
  • Net cash provided by operating activities amounted to $2.9 million in the first six months of 2020 compared to net cash provided by operating activities of $1.3 million in the first six months of 2019.

Conference Call

Today, Wednesday, August 12, 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, 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.

Investor Contact:

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

                                                            (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,




2020

2019


2020


2019








Revenues


8,792

8,198


17,949


16,933


Costs of revenues


(6,892)

(6,942)


(14,246)


(14,139)











Gross profit


1,900

1,256


3,703


2,795











Selling, general and administrative expenses


(1,095)

(1,249)


(2,284)


(2,355)











R&D expenses, net


4

-


2


-











Operating profit


809

7


1,421


440











Financial expenses, net


(83)

(78)


(139)


(263)


Other income, net


-

871


-


877











Profit before income tax 


726

800


1,282


1,054











Tax expenses


(22)

(10)


(38)


(23)











Net Profit 


704

790


1,244


1,032











Earnings per share


















Basic and diluted net profit per ordinary share


0.16

0.19


0.28


0.33











Weighted average number of ordinary shares 









used to compute basic and diluted net profit per









ordinary share (in thousands)


4,380

4,148


4,380


3,088














 

Eltek Ltd.

Consolidated Balance Sheets

(In thousands US$)








June  30,

December 31,




2020

2019


Assets










Current assets





Cash and cash equivalents


3,407

1,628


Receivables:   Trade, net of provision for doubtful accounts


7,307

7,480


                     Other


246

145


Inventories 


3,474

3,735


Prepaid expenses 


238

530







Total current assets


14,672

13,518







Long term assets





Restricted deposits


58

-


Severance pay fund


59

60


Operating lease right of use assets


2,029

2,490


Total long term assets


2,146

2,550







Fixed assets, less accumulated depreciation


6,407

6,761







Total Assets


23,225

22,829












Liabilities and Shareholder's equity










Current liabilities





Short-term credit and current maturities of long-term debts


1,303

2,120


Short-term credit from related party


2,885

3,472


Accounts payable: Trade


3,983

4,673


                              Other


3,653

3,118


Short-term operating lease liabilities


1,141

1,383







Total current liabilities


12,965

14,766







Long-term liabilities





Long term debt, excluding current maturities


1,468

387


Employee severance benefits


307

268


Deferred tax liabilities


57

45


Long-term operating lease liabilities


872

1,094







Total long-term liabilities


2,704

1,794







Equity





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


3,964

3,964


Additional paid-in capital


18,583

18,583


Cumulative foreign currency translation adjustments


2,479

2,479


Capital reserve


1,006

963


Accumulated deficit


(18,476)

(19,720)


Shareholders' equity


7,556

6,269


Total liabilities and shareholders' equity


23,225

22,829













Eltek Ltd.

Unaudited Non-GAAP EBITDA Reconciliations

(In thousands US$)









Non-GAAP EBITDA Reconciliations


Three months ended


Six months ended



June  30,


June  30,



2020

2019


2020


2019














GAAP net Income (loss)


704

790


1,244


1,032

Add back items:
















Financial expenses, net 


83

78


139


263

Income tax expense 


22

10


38


22

Depreciation and amortization


391

372


786


744

Non-GAAP EBITDA


1,200

1,250


2,207


2,061










Eltek Ltd.

Consolidated Statement of  Cash flow

(In thousands US$)












Three months ended


Six months ended




June  30,


June  30,




2020

2019


2020


2019











Cash flows from operating activities:


















Net Income


704

790


1,244


1,032











Adjustments to reconcile net profit to net









 cash flows provided by operating activities:









Depreciation and amortization


391

375


786


748


Stock-based compensation


17

31


43


62


Transaction with controlling shareholder


-

15


-


29


Revaluation of long term loans 


(6)

(8)


4


(24)


Increase in deferred tax liabilities


6

-


12


-




408

413


845


815











Decrease in operating lease right-of-use assets


1



(4)


(9)


Decrease (increase) in trade receivables


280

(1,838)


149


(1,598)


Decrease in other receivables and prepaid expenses


49

564


187


879


Decrease (increase) in inventories


27

302


248


(114)


Increase (decrease)  in trade payables


(113)

(652)


(370)


194


Increase in other liabilities and accrued expenses


17

129


538


132


Increase  in employee severance benefits, net


24

(9)


40


(9)




285

(1,504)


788


(525)











Net cash provided by operating activities


1,397

(301)


2,877


1,322




















Cash flows from investing activities:









Purchase of fixed assets


(250)

(91)


(454)


(250)


Restricted deposits


(58)

-


(58)


-


Net cash used in investing activities


(308)

(91)


(512)


(250)











Cash flows from financing activities:









Short- term bank credit, net


(326)

(1,787)


(765)


(3,394)


Proceeds from short- term shareholder loan


-

-


-


555


Repayment of short- term shareholder loan


(571)

-


(571)


-


Issuance of ordinary shares in rights offering, net


-

3,298


-


3,298


Repayment of long-term loans from bank


(35)

(231)


(108)


(455)


Proceeds from long-term loans


1,141

-


1,141


-


Repayment of credit from fixed asset payables


(152)

(98)


(304)


(194)


Net cash used in financing activities


57

1,182


(607)


(190)











Effect of translation adjustments


47

(21)


21


(37)











Net increase (decrease) in cash and cash equivalents


1,193

769


1,779


845











Cash and cash equivalents at beginning of the period


2,214

1,068


1,628


992











Cash and cash equivalents at period end


3,407

1,837


3,407


1,837











 

Cision View original content:http://www.prnewswire.com/news-releases/eltek-reports-2020-second-quarter-financial-results-301110727.html

SOURCE Eltek Ltd.


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