EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1

Exhibit 99.1
 
Press Release
 
 
Eltek Reports 2019 First Quarter Financial Results

·
Revenues of $8.7 million
 
·
Gross profit of $1.5 million
 
·
Net Profit of $242,000

PETACH-TIKVA, Israel, May 29, 2019 - 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, 2019.

Mr. Eli Yaffe, Chief Executive Officer, commented: "We are glad that this quarter’s results reflect the implementation of the first stage of our turnaround plan, which we started during the last quarter of 2018. We continue in our efforts to further increase operating efficiencies, to improve customer satisfaction, to formulate a more effective sales strategy and continue implementing our plan to reach sustained profitability.”
 
Highlights of the First Quarter of 2019 compared to the First Quarter of 2018
 
·
Revenues for the first quarter of 2019 were $8.7 million compared to revenues of $8.9  million in the first quarter of 2018;
 
·
Gross profit increased from $444,000 (5.0% of revenues) in the first quarter of 2018 to $1,539,000 (17.6% of revenues) in the first quarter of 2019;
 
·
Operating profit was $433,000 as compared to an operating loss of $626,000 in the first quarter of 2018;
 
·
Net profit was $242,000, or $0.12 per fully diluted share compared to a net loss of $670,000, or ($0.33) per fully diluted share, in the first quarter of 2018;
 
·
EBITDA was a $811,000 (9.3% of revenues) compared to negative EBITDA of $185,000 (2.1% of revenues) in the first quarter of 2018;
 
·
Net cash provided by operating activities amounted to $1.6 million compared to net cash used in operating activities of $859,000 in the first quarter of 2018.
Conference Call
 
Today, Wednesday, May 29, 2018, 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:                            03-9180687
International:              +972-3-9180687

                                 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.

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
  
   
March 31,
  
   
2019
    
2018
  
             
Revenues
    
8,735
      
8,943
  
Costs of revenues
    
(7,196
)
    
(8,499
)
                 
Gross profit
    
1,539
      
444
  
                 
Selling, general and administrative expenses
    
(1,106
)
    
(1,069
)
                 
R&D expenses, net
    
0
      
(1
)
                 
Operating profit (loss)
    
433
      
(626
)
                 
Financial expenses, net
    
(184
)
    
(27
)
Other income, net
    
6
      
0
  
                 
Profit (loss) before income tax
    
255
      
(653
)
                 
Tax expenses
    
(13
)
    
(17
)
                 
Net profit (loss)
    
242
      
(670
)
                 
Earnings per share
                
                 
Basic and diluted net profit (loss) per ordinary share
    
0.12
      
(0.33
)
                 
Weighted average number of ordinary shares
used to compute basic and diluted net profit
                
(loss) per ordinary share (in thousands)
    
2,029
      
2,029
  
 
Eltek Ltd.
  
Consolidated Balance Sheets
  
(In thousands US$)
  
             
   
March 31,
    
December 31,
  
   
2019
    
2018
  
Assets
            
             
Current assets
            
Cash and cash equivalents
    
1,068
      
992
  
Receivables:   Trade, net of provision for doubtful accounts
    
5,623
      
5,682
  
                     Other
    
660
      
868
  
Inventories
    
4,142
      
3,611
  
Prepaid expenses
    
150
      
292
  
                 
Total current assets
    
11,643
      
11,445
  
                 
Long term assets
                
Severance pay fund
    
55
      
53
  
Long term prepaid expenses
    
112
      
39
  
Operating lease right of use assets
    
3,117
      
-
  
Total long term assets
    
3,284
      
92
  
                 
Fixed assets, less accumulated depreciation
    
6,540
      
6,623
  
                 
Total Assets
    
21,467
      
18,160
  
                 
Liabilities and Shareholder's equity
                
                 
Current liabilities
                
Short-term credit and current maturities of long-term debts
    
4,978
      
6,606
  
Short-term credit from related party
    
3,304
      
2,668
  
Accounts payable: Trade
    
5,000
      
4,108
  
                            Other
    
3,487
      
3,377
  
Short-term operating lease liabilities
    
1,003
      
-
  
                 
Total current liabilities
    
17,772
      
16,759
  
                 
Long-term liabilities
                
Long term debt, excluding current maturities
    
213
      
308
  
Employee severance benefits
    
218
      
211
  
Long-term operating lease liabilities
    
2,105
      
-
  
                 
Total long-term liabilities
    
2,536
      
519
  
                 
Equity
                
Ordinary shares, NIS 3.0  par value authorized 10,000,000 shares, issued and outstanding 2,028,552
    
1,985
      
1,985
  
Additional paid-in capital
    
17,270
      
17,270
  
Cumulative foreign currency translation adjustments
    
2,330
      
2,340
  
Capital reserve
    
845
      
800
  
Accumulated deficit
    
(21,271
)
    
(21,513
)
Shareholders' equity
    
1,159
      
882
  
Total liabilities and shareholders' equity
    
21,467
      
18,160
  
Eltek Ltd.
  
Unaudited Non-GAAP EBITDA Reconciliations
  
(In thousands US$)
  
             
Non-GAAP EBITDA Reconciliations
  
Three months ended
  
   
March 31,
  
   
2019
    
2018
  
             
GAAP net income (loss)
    
242
      
(670
)
Add back items:
                
                 
Financial expenses, net
    
184
      
27
  
Income tax expense
    
13
      
17
  
Depreciation and amortization
    
372
      
441
  
Non-GAAP EBITDA
    
811
      
(185
)
 
Eltek Ltd.
  
Unaudited Proforma Equity information
  
(In thousands US$)
  
   
As of March 31, 2019
  
   
As presented
    
As adjusted (*)
  
Equity
                
Ordinary shares
    
1,985
      
3,966
  
Additional paid-in capital
    
17,270
      
18,619
  
Cumulative foreign currency translation adjustments
    
2,330
      
2,330
  
Capital reserve
    
845
      
845
  
Accumulated deficit
    
(21,274
)
    
(21,274
)
Shareholders' equity
    
1,156
      
4,486
  
                 
(*) The proforma information reflects on an as adjusted basis the issuance of 2,351,701 ordinary shares in the April 2019 rights offering at a subscription price of $1.464 per ordinary share with aggregate net proceeds of approximately $3.3 million, after deducting offering expenses.
  
 
Eltek Ltd.
  
Consolidated Statement of  Cash flow
  
(In thousands US$, except per share data)
  
             
   
Three months ended
  
   
March 31,
  
   
2019
    
2018
  
             
Cash flows from operating activities:
            
             
Net income (loss)
    
242
      
(670
)
                 
Adjustments to reconcile net loss to net
                
 cash flows provided by operating activities:
                
Depreciation and amortization
    
372
      
441
  
Stock-based compensation
    
31
      
-
  
Transaction with controlling shareholder
    
14
      
-
  
Revaluation of long term loans
    
(16
)
    
16
  
     
401
      
457
  
                 
Decrease (increase) in trade receivables
    
240
      
(1,569
)
Decrease in other receivables and prepaid expenses
    
315
      
719
  
Increase in inventories
    
(415
)
    
(585
)
Increase in trade payables
    
846
      
975
  
Increase (decrease) in other liabilities and accrued expenses
    
4
      
(199
)
Increase in employee severance benefits, net
    
-
      
13
  
Changes in operating leases, net
    
(9
)
    
-
  
     
981
      
(646
)
                 
Net cash provided by (used in) operating activities
    
1,624
      
(859
)
                 
Cash flows from investing activities:
                
Purchase of fixed assets
    
(159
)
    
(80
)
Net cash used in investing activities
    
(159
)
    
(80
)
                 
Cash flows from financing activities:
                
Short- term bank credit, net
    
(1,608
)
    
(341
)
Short- term shareholder loan
    
549
      
1,156
  
Repayment of long-term loans from bank
    
(225
)
    
(237
)
Repayment of credit from fixed asset payables
    
(96
)
    
(85
)
Net cash provided by (used in) financing activities
    
(1,380
)
    
493
  
                 
Effect of translation adjustments
    
(10
)
    
(6
)
                 
Net increase (decrease) in cash and cash equivalents
    
75
      
(452
)
                 
Cash and cash equivalents at beginning of the period
    
993
      
887
  
                 
Cash and cash equivalents at period end
    
1,068
      
435