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


 
Press Release

Eltek Reports 2020 Second Quarter Financial Results


 •
Revenues of $8.8 million

•
Gross profit of $1.9 million

•
Net Profit of $704,000

PETACH-TIKVA, Israel, August 12, 2020 - 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.

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