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


 Press Release

Eltek Reports 2021 First Quarter Financial Results


 •
Revenues of $7.2 million in the first quarter of 2021 compared to $9.2 million in the first quarter of 2020

•
Gross profit of $1.1 million in the first quarter of 2021 compared to $1.8 million in the first quarter of 2020

•
Net profit of $223,000 in the first quarter of 2021 compared to net profit of $541,000 in the first quarter of 2020

•
Achieved positive cash flow provided by operating activities of $2.5 million during the first quarter of 2021

•
Cash and cash equivalents as of March 31, 2021 were $6.4 million

Petach Tikva, Israel (May 20, 2021) Eltek Ltd. (NASDAQ: ELTK), a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), today announced its financial results for the quarter ended March 31, 2021.

“Despite the global challenges we encountered related to both the Covid-19 pandemic and the shortage of key raw materials, we were able to respond quickly, maintain operational efficiency and remain profitable in the first quarter”, said Eli Yaffe, Chief Executive Officer of Eltek. “We expect that revenues will rebound during the rest of the year and lost sales will be recovered upon the expected availability of key raw material (Pyralux AP) which was in short supply and with the authorization of the use of alternative raw materials by our customers,” added Mr. Yaffe. “The approval process with our customers for the use of the alternative raw materials is proceeding as planned and, is reducing our production costs. In addition, we are exploring ways to strengthen our position in the multi-billion dollar PCB market in North America, and can serve as a rapid growth engine for Eltek”, further explained Mr. Yaffe.
 
“We are operating in a challenging business environment and making the necessary adjustments to increase revenues, expand our operating efficiencies, improve customer satisfaction and maintain sustained profitability. We plan to strengthen our sales activities and continue our investments in new equipment to expand our manufacturing facilities and infrastructure during the remainder of the year as part of our strategic growth plan. Our board of directors approved our obtaining a loan of NIS 10 million (approximately $3.1 million) from Bank Leumi B.M. The loan has a term of ten years, with favorable terms, including a repayment schedule that starts after a 12 month grace period and carried interest of Prime + 1.50%, which is waived for the first year of the loan”, concluded Mr. Yaffe.

 
 
 
Highlights of the First Quarter of 2021 compared to the First Quarter of 2020


 •
Revenues were $7.2 million in the first quarter of 2021 compared to revenues of $9.2 million in the first quarter of 2020;
 

 •
Gross profit was $1.1 million (15.9% of revenues) in the first quarter of 2021 compared to $1.8 (19.7% of revenues) in the first quarter of 2020;
 

 •
Operating profit was $136,000 in the first quarter of 2021 compared to operating profit of $612,000 in the first quarter of 2020;
 

 •
Net profit was $223,000 or $0.04 per fully diluted share for the first quarter of 2021 compared to net profit of $541,000 or $0.12 per fully diluted share in the first quarter of 2020;
 

 •
EBITDA was a $577,000 (8.0% of revenues) in the first quarter of 2021 compared to EBITDA of $1.0 million (11.0% of revenues) in the first quarter of 2020;
 

 •
Net cash provided by operating activities amounted to $2.5 million in the first quarter of 2021 compared to net cash provided by operating activities of $1.5 million in the first quarter of 2020; and
 

 •
Cash and cash equivalents as of March 31, 2021 were $6.4 million compared to $4.7 million as of December 31, 2020.
 
Conference Call
Today, Thursday, May 20, 2021, at 8:30am 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:
1-888-723-3164
Israel:
03-918-0691
International:
+972-3-918-0691

                                  at:
                   8:30am Eastern Time
5:30am Pacific Time
                   15:30pm Israel Time

A replay of the call will be available for 30 days on the Investor Info section on Eltek’s corporate website at http://www.nisteceltek.com approximately 24 hours after the conference call is completed.
 
About Eltek
Eltek is a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs) and is the leading Israeli company in this industry. PCBs are the core circuitry of most electronic devices for which 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 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 COVID-19 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, shortage of raw materials, 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
+972-3-939-5023

(Tables follow)


Eltek Ltd.
Consolidated Statements of Operations
(In thousands US$, except per share data)

   
Three months ended
  
   
March 31,
  
   
2021
    
2020
  
             
Revenues
    
7,205
      
9,157
  
Costs of revenues
    
(6,061
)
    
(7,354
)
Gross profit
    
1,144
      
1,803
  
                 
Selling, general and administrative expenses
    
(1,008
)
    
(1,189
)
R&D expenses, net
    
-
      
(2
)
Operating profit
    
136
      
612
  
                 
Financial expenses, net
    
104
      
(55
)
Other income, net
    
(2
)
    
(1
)
Profit before income tax
    
238
      
556
  
                 
Tax expenses
    
(15
)
    
(15
)
Net Profit
    
223
      
541
  
                 
Earnings per share
                
Basic and diluted net profit per ordinary share
    
0.04
      
0.12
  
                 
Weighted average number of ordinary shares used to compute
          
basic net profit per ordinary share (in thousands)
    
5,840
      
4,380
  
                 
Weighted average number of ordinary shares used to compute
          
diluted net profit per ordinary share (in thousands)
    
5,866
      
4,382
  



Eltek Ltd.
Consolidated Balance Sheets
(In thousands US$)

   
March 31,
    
December 31,
  
   
2021
    
2020
  
             
Assets
            
             
Current assets
            
Cash and cash equivalents
    
6,406
      
4,735
  
Receivables:   Trade, net of provision for doubtful accounts
    
5,770
      
9,062
  
                     Other
    
938
      
700
  
Inventories
    
4,065
      
3,704
  
Prepaid expenses
    
552
      
619
  
                 
Total current assets
    
17,731
      
18,820
  
                 
Long term assets
                
Restricted deposits
    
60
      
62
  
Severance pay fund
    
62
      
64
  
Operating lease right of use assets
    
8,694
      
8,948
  
Total long term assets
    
8,816
      
9,074
  
                 
Fixed assets, less accumulated depreciation
    
7,029
      
7,263
  
                 
Total Assets
    
33,576
      
35,157
  
                 
Liabilities and Shareholder's equity
                
                 
Current liabilities
                
Short-term credit and current maturities of long-term debts
    
364
      
676
  
Accounts payable: Trade
    
4,289
      
4,452
  
                            Other
    
3,378
      
3,831
  
Short-term operating lease liabilities
    
713
      
742
  
                 
Total current liabilities
    
8,744
      
9,701
  
                 
Long-term liabilities
                
Long term debt, excluding current maturities
    
1,387
      
1,495
  
Employee severance benefits
    
320
      
338
  
Deferred tax liabilities
    
88
      
84
  
Long-term operating lease liabilities
    
8,049
      
8,272
  
                 
Total long-term liabilities
    
9,844
      
10,189
  
                 
Equity
                
Ordinary shares, NIS 3.0 par value authorized 10,000,000 shares, issued and outstanding 5,840,357
    
5,296
      
5,296
  
Additional paid-in capital
    
22,846
      
22,846
  
Cumulative foreign currency translation adjustments
    
2,638
      
3,153
  
Capital reserve
    
1,097
      
1,084
  
Accumulated deficit
    
(16,889
)
    
(17,112
)
Shareholders' equity
    
14,988
      
15,267
  
Total liabilities and shareholders' equity
    
33,576
      
35,157
  


Eltek Ltd.
Unaudited Non-GAAP EBITDA Reconciliations
(In thousands US$)

Non-GAAP EBITDA Reconciliations
  
Three months ended
  
   
March 31,
  
   
2021
    
2020
  
   
Unaudited
  
                 
GAAP net Income (loss)
    
223
      
541
  
Add back items:
                
                 
Financial expenses, net
    
(104
)
    
55
  
Income tax expense
    
15
      
15
  
Depreciation and amortization
    
443
      
395
  
Non-GAAP EBITDA
    
577
      
1,006
  


Eltek Ltd.
Consolidated Statement of  Cash flow
(In thousands US$)

   
Three months ended
  
   
March 31,
  
   
2021
    
2020
  
             
Cash flows from operating activities:
            
             
Net Income
    
223
      
541
  
                 
Adjustments to reconcile net profit to net
                
 cash flows provided by operating activities:
                
Depreciation and amortization
    
443
      
395
  
Stock-based compensation
    
13
      
26
  
Revaluation of long term loans
    
-
      
10
  
Increase in deferred tax liabilities
    
8
      
5
  
     
464
      
436
  
                 
Decrease (increase) in operating lease right-of-use assets
    
4
      
(5
)
Decrease (increase) in trade receivables
    
3,028
      
(132
)
Decrease (increase) in other receivables and prepaid expenses
    
(220
)
    
139
  
Decrease (increase) in inventories
    
(502
)
    
221
  
Decrease in trade payables
    
(200
)
    
(257
)
Increase (decrease) in other liabilities and accrued expenses
    
(323
)
    
520
  
Increase (decrease)  in employee severance benefits, net
    
(6
)
    
16
  
     
1,781
      
502
  
                 
Net cash provided by operating activities
    
2,468
      
1,479
  
                 
Cash flows from investing activities:
                
Purchase of fixed assets
    
(208
)
    
(204
)
Net cash used in investing activities
    
(208
)
    
(204
)
                 
Cash flows from financing activities:
                
Short- term bank credit, net
    
(377
)
    
(438
)
Repayment of long-term loans from bank
    
(38
)
    
(73
)
Repayment of credit from fixed asset payables
    
(11
)
    
(151
)
Net cash used in financing activities
    
(426
)
    
(662
)
                 
Effect of translation adjustments
    
(163
)
    
(27
)
                 
Net increase (decrease) in cash and cash equivalents
    
1,671
      
586
  
                 
Cash and cash equivalents at beginning of the period
    
4,735
      
1,628
  
                 
Cash and cash equivalents at period end
    
6,406
      
2,214