EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1



 
Press Release

Eltek Reports 2019 Third Quarter Financial Results


 •
Revenues of $9.3 million


•
Gross profit of $1.8 million


•
Net Profit of $391,000

PETACH-TIKVA, Israel, November 20, 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 September 30, 2019.

Mr. Eli Yaffe, Chief Executive Officer, commented: "We are pleased with our growth in revenues and profitability in the third quarter’s results. The improved results are a consequence of the implementation of our previously announced turnaround plan.”
 
Highlights of the Third Quarter of 2019 compared to the Third Quarter of 2018


 •
Revenues for the third quarter of 2019 were $9.3 million compared to revenues of $8.5 million in the third quarter of 2018;
 

 •
Gross profit increased from $973,000 (11.4% of revenues) in the third quarter of 2018 to $1.8 million (19.1% of revenues) in the third quarter of 2019;
 

 •
Operating profit was $568,000 this quarter as compared to an operating loss of $307,000 in the third quarter of 2018;
 

 •
Net profit was $391,000, or $0.09 per fully diluted share in the third quarter of 2019 compared to a net loss of $463,000, or ($0.23) per fully diluted share, in the third quarter of 2018;
 

 •
EBITDA was $940,000 in the third quarter of 2019 compared to EBITDA of $109,000  in the third quarter of 2018;
 

 •
Net cash provided by operating activities amounted to $1.4 million in the third quarter of 2019 compared to net cash provided by operating activities of $164,000 in the third quarter of 2018.
 
Highlights for the First Nine Months of 2019


 •
Revenues for the first nine months of 2019 were $26.2 million compared to $26.1 million in the first nine months of 2018;
 

 •
Gross profit was $4.5 million (17.4% of revenues) compared to gross profit of $2.0 million (7.6% of revenues) in the first nine months of 2018;
 

 •
Operating profit was $1.0 million compared to an operating loss of $1.7 million in the first nine months of 2018;
 

 •
Other Income was $875,000 in the first nine months of 2019 compared to nil in the first nine months of 2018;
 

 •
Net profit was $1.4 million, or $0.40 per fully diluted share compared to a net loss of $2.0 million, or ($0.97) per fully diluted share in the first nine months of 2018;
 

 •
EBITDA was $3.0 million in the first nine months of 2019, compared to negative EBITDA of $373,000 in the first nine months of 2018;
 

 •
Net cash provided by operating activities amounted to $2.7 million compared to net cash used in operating activities of $950,000 in the first nine months 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

Today, Wednesday, November 20, 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.

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
    
Nine months ended
  
   
September 30,
    
September 30,
  
   
2019
    
2018
    
2019
    
2018
  
             
Revenues
    
9,279
      
8,503
      
26,213
      
26,112
  
Costs of revenues
    
(7,524
)
    
(7,530
)
    
(21,663
)
    
(24,118
)
                                 
Gross profit
    
1,755
      
973
      
4,550
      
1,994
  
                                 
Selling, general and administrative expenses
    
(1,187
)
    
(1,280
)
    
(3,541
)
    
(3,648
)
                                 
R&D expenses, net
    
-
      
-
      
-
      
(1
)
                                 
Operating profit (loss)
    
568
      
(307
)
    
1,009
      
(1,655
)
                                 
Financial expenses, net
    
(146
)
    
(132
)
    
(409
)
    
(264
)
Other income, net
    
(2
)
    
-
      
875
      
-
  
                                 
Profit (loss) before income tax
    
420
      
(439
)
    
1,475
      
(1,919
)
                                 
Tax expenses
    
(29
)
    
(24
)
    
(51
)
    
(57
)
                                 
Net Profit (loss)
    
391
      
(463
)
    
1,424
      
(1,976
)
                                 
Earnings per share
                                
                                 
Basic and diluted net profit (loss) per ordinary share
    
0.09
      
(0.23
)
    
0.40
      
(0.97
)
                                 
Weighted average number of ordinary shares used
                                
to compute basic and diluted net profit (loss) per
                                
ordinary share (in thousands)
    
4,380
      
2,029
      
3,519
      
2,029
  

 
Eltek Ltd.
Consolidated Balance Sheets
(In thousands US$)
 
   
September 30,
    
December 31,
  
   
2019
    
2018
  
Assets
            
             
Current assets
            
Cash and cash equivalents
    
2,289
      
992
  
Receivables:   Trade, net of provision for doubtful accounts
    
6,852
      
5,682
  
                     Other
    
195
      
868
  
Inventories
    
3,785
      
3,611
  
Prepaid expenses
    
412
      
292
  
                 
Total current assets
    
13,533
      
11,445
  
                 
Long term assets
                
Severance pay fund
    
59
      
53
  
Long term prepaid expenses
    
-
      
39
  
Operating lease right of use assets
    
2,750
      
-
  
Total long term assets
    
2,809
      
92
  
                 
Fixed assets, less accumulated depreciation
    
6,795
      
6,623
  
                 
Total Assets
    
23,137
      
18,160
  
                 
Liabilities and Shareholder's equity
                
                 
Current liabilities
                
Short-term credit and current maturities of long-term debts
    
2,123
      
6,606
  
Short-term credit from related party
    
3,446
      
2,668
  
Accounts payable: Trade
    
4,755
      
4,108
  
                            Other
    
3,579
      
3,377
  
Short-term operating lease liabilities
    
1,368
      
-
  
                 
Total current liabilities
    
15,271
      
16,759
  
                 
Long-term liabilities
                
Long term debt, excluding current maturities
    
436
      
308
  
Employee severance benefits
    
244
      
211
  
Long-term operating lease liabilities
    
1,362
      
-
  
                 
Total long-term liabilities
    
2,042
      
519
  
                 
Equity
                
Ordinary shares, NIS 3.0  par value authorized 10,000,000 shares, issued and outstanding 2,028,552
    
3,964
      
1,985
  
Additional paid-in capital
    
18,583
      
17,270
  
Cumulative foreign currency translation adjustments
    
2,435
      
2,340
  
Capital reserve
    
932
      
800
  
Accumulated deficit
    
(20,090
)
    
(21,513
)
Shareholders' equity
    
5,824
      
882
  
Total liabilities and shareholders' equity
    
23,137
      
18,160
  

 
Eltek Ltd.
Unaudited Non-GAAP EBITDA Reconciliations
(In thousands US$)
 
Non-GAAP EBITDA Reconciliations
  
Three months ended
    
Nine months ended
  
   
September 30,
    
September 30,
  
   
2019
    
2018
    
2019
    
2018
  
                         
GAAP net Income (loss)
    
391
      
(463
)
    
1,424
      
(1,976
)
Add back items:
                                
                                 
Financial expenses, net
    
146
      
132
      
409
      
264
  
Income tax expense
    
29
      
24
      
51
      
57
  
Depreciation and amortization
    
374
      
416
      
1,118
      
1,282
  
Non-GAAP EBITDA
    
940
      
109
      
3,002
      
(373
)

 
Eltek Ltd.
Consolidated Statement of  Cash flow
(In thousands US$)
 
   
Three months ended
    
Nine months ended
  
   
September 30,
    
September 30,
  
   
2019
    
2018
    
2019
    
2018
  
                         
Cash flows from operating activities:
                        
                         
Net Income (loss)
    
391
      
(463
)
    
1,423
      
(1,976
)
                                 
Adjustments to reconcile net loss to net
                                
 cash flows provided by operating activities:
                                
Depreciation and amortization
    
371
      
416
      
1,119
      
1,282
  
Stock-based compensation
    
26
      
-
      
88
      
-
  
Transaction with controlling shareholder
    
15
      
-
      
44
      
-
  
Revaluation of long term loans
    
(12
)
    
(1
)
    
(36
)
    
23
  
     
400
      
415
      
1,215
      
1,305
  
                                 
Changes in operating leases, net
    
(1
)
    
-
      
(11
)
    
-
  
Decrease (increase) in trade receivables
    
886
      
1,016
      
(712
)
    
(474
)
Decrease  in other receivables and prepaid expenses
    
(224
)
    
(538
)
    
655
      
313
  
Decrease (increase) in inventories
    
211
      
253
      
98
      
(661
)
Increase (decrease)  in trade payables
    
(102
)
    
(440
)
    
92
      
645
  
Increase (decrease) in other liabilities and accrued expenses
    
(188
)
    
(84
)
    
(55
)
    
(134
)
Increase (decrease) in employee severance benefits, net
    
23
      
5
      
14
      
32
  
     
605
      
212
      
81
      
(279
)
                                 
Net cash provided by (used in) operating activities
    
1,396
      
164
      
2,719
      
(950
)
                                 
                                 
Cash flows from investing activities:
                                
Purchase of fixed assets
    
(293
)
    
(86
)
    
(543
)
    
(196
)
Net cash used in investing activities
    
(293
)
    
(86
)
    
(543
)
    
(196
)
                                 
Cash flows from financing activities:
                                
Short- term bank credit, net
    
(921
)
    
113
      
(4,315
)
    
956
  
Short- term shareholder loan
    
-
      
275
      
557
      
1,431
  
Issuance of ordinary shares in rights offering, net
    
-
      
-
      
3,298
      
-
  
Repayment of long-term loans from bank
    
(220
)
    
(225
)
    
(675
)
    
(689
)
Proceeds from long-term loans
    
557
      
-
      
558
      
-
  
Repayment of credit from fixed asset payables
    
(94
)
    
(74
)
    
(289
)
    
(233
)
Net cash provided by (used in) financing activities
    
(678
)
    
89
      
(866
)
    
1,465
  
                                 
Effect of translation adjustments
    
27
      
43
      
(13
)
    
(5
)
                                 
Net increase (decrease) in cash and cash equivalents
    
452
      
210
      
1,297
      
314
  
                                 
Cash and cash equivalents at beginning of the period
    
1,837
      
991
      
992
      
887
  
                                 
Cash and cash equivalents at period end
    
2,289
      
1,201
      
2,289
      
1,201