PETAH-TIKVA, Israel,
Sept. 27, 2018 /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, 2018.
Mr. Yitzhak Nissan,
Chairman of the Board commented: "Revenues in Q2 2018 were
$8.7 million, up 16% from Q2 2017,
and we incurred a net loss of $843,000, 22% less than in Q2 2017. We recently
appointed Mr. Eli Yaffe, who has a
proven track record as a CEO in the defense and aerospace
industries, as chief executive officer in order to create and
implement a turnaround plan that will focus on further improving
operating results and cash flow. Mr. Yaffe is establishing a new
leadership team and has appointed a VP sales and marketing, an
operations manager and an IT and procurement manager."
Mr. Eli Yaffe, Chief
Executive Officer, commented: "I am pleased to join Eltek as
its CEO. In accepting this position, I am aware of the challenges
that face the company and am determined and committed to returning
the Company back to profitability and to renew the industry's
recognition of Eltek as a leading high-end PCB manufacturer."
Highlights of the Second Quarter of 2018
- Revenues for the second quarter of 2018 were
$8.7 million compared to $7.5 million in the second quarter of 2017;
- Gross profit was $578,000
(6.7% of revenues) compared to gross profit of $134,000 (1.8% of revenues) in the second quarter
of 2017;
- Operating loss was $721,000 compared to an operating loss of
$1 million in the second quarter of
2017;
- Net loss was $843,000 or
($0.42) per fully diluted share
compared to a net loss of $1.1
million or ($0.54) per fully
diluted share in the second quarter of 2017;
- EBITDA was a negative $296,000 (3.4% of revenues) compared to a
negative EBITDA of $583,000 (7.8% of
revenues) in the second quarter of 2017;
- Net cash used in operating activities amounted to
$571,000 compared to net cash used in
operating activities of $517,000 in
the second quarter of 2017. The change is mainly attributable to
the operating results in this quarter, and changes in asset and
liability accounts.
- Cash and cash equivalents as of June 30, 2018 were $991,000 compared to $792,000 as of June 30,
2017.
Highlights for the First Six Months of 2018
- Revenues for the first six months of 2018 were
$17.6 million compared to
$16 million in the first six months
of 2017;
- Gross profit was $1
million (5.8% of revenues) compared to gross profit of
$619,000 (3.9% of revenues) in the
first six months of 2017;
- Operating loss was $1.3
million compared to an operating loss of $1.6 million in the first six months of
2017;
- Net loss was $1.5 million,
or ($0.75) per fully diluted share
compared to a net loss of $1.9
million, or ($0.94) per fully
diluted share in the first six months of 2017;
- EBITDA was a negative $481,000 (2.7% of revenues) compared to a
negative EBITDA of $794,000 (5% of
revenues) in the first six months of 2017;
- Net cash used in operating activities amounted to
$1.4 million compared to net cash
used in operating activities of $1.3
million in the first six months of 2017.
Financial Status
As of June 30, 2018, the Company
was not in compliance with its financial covenants with its banks
and does not expect to be in compliance at December 31, 2018. The Company has initiated
discussions with its banks to obtain waivers for such
non-compliance. As a result, long term bank loans amounting to
$417,000 were reclassified from
long term to short term.
In April 2018, Nistec provided a
letter of commitment to the Company to provide additional financing
in the amount of up to $2.5 million,
valid for one year, of which $2.2
million have been utilized. It should be noted that the
Company is making efforts to improve operations and its cash
position (including applicable waivers), although there is no
certainty that the Company will be able to attain these.
Conference Call
Today, Thursday, September 27,
2018, at 9:00 a.m. Eastern
Time, Eltek will conduct a conference call to discuss the
results. The call will feature remarks by Yitzhak Nissan, Chairman of the Board of
Directors, Eli Yaffe, Chief
Executive Officer and Amnon Shemer,
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:
9:00 a.m. Eastern Time
6:00 a.m. Pacific Time
16:00 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.
(Tables follow)
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.
Eltek
Ltd.
|
Consolidated
Statements of Operations
|
(In thousands US$,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
2018
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
Revenues
|
|
8,667
|
7,492
|
|
17,610
|
|
15,960
|
|
Costs of
revenues
|
|
(8,089)
|
(7,358)
|
|
(16,588)
|
|
(15,341)
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
578
|
134
|
|
1,022
|
|
619
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
(1,299)
|
(1,138)
|
|
(2,367)
|
|
(2,233)
|
|
|
|
|
|
|
|
|
|
|
R&D expenses,
net
|
|
0
|
(15)
|
|
(1)
|
|
(34)
|
|
|
|
|
|
|
|
|
|
|
Operating profit
(loss)
|
|
(721)
|
(1,019)
|
|
(1,347)
|
|
(1,649)
|
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net
|
|
(105)
|
(41)
|
|
(132)
|
|
(218)
|
|
|
|
|
|
|
|
|
|
|
Profit (loss)
before other income, net
|
|
(826)
|
(1,060)
|
|
(1,479)
|
|
(1,867)
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
0
|
0
|
|
0
|
|
15
|
|
|
|
|
|
|
|
|
|
|
Profit (loss)
before income tax expenses
|
|
(826)
|
(1,060)
|
|
(1,479)
|
|
(1,852)
|
|
|
|
|
|
|
|
|
|
|
Tax
expenses
|
|
(17)
|
(26)
|
|
(34)
|
|
(50)
|
|
|
|
|
|
|
|
|
|
|
Net Profit
(loss)
|
|
(843)
|
(1,087)
|
|
(1,513)
|
|
(1,902)
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic and diluted net
gain (loss) per ordinary share
|
|
(0.42)
|
(0.54)
|
|
(0.75)
|
|
(0.94)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares
|
|
|
|
|
|
|
|
|
used to compute basic
and diluted net gain (loss) per
|
|
|
|
|
|
|
|
|
ordinary share (in
thousands)
|
|
2,029
|
2,029
|
|
2,029
|
|
2,029
|
|
Eltek
Ltd.
|
Consolidated
Balance Sheets
|
(In thousands
US$)
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
June
30,
|
|
|
|
|
|
|
|
2018
|
2017
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
991
|
792
|
|
|
|
|
|
Receivables: Trade, net of provision for
doubtful accounts
|
|
8,024
|
6,097
|
|
|
|
|
|
Other
|
|
668
|
171
|
|
|
|
|
|
Inventories
|
|
4,555
|
4,305
|
|
|
|
|
|
Prepaid
expenses
|
|
212
|
394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
14,450
|
11,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
taxes
|
|
0
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets held for
employees' severance benefits
|
|
54
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed assets, less
accumulated depreciation
|
|
7,468
|
8,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
asset
|
|
0
|
355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
21,972
|
21,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholder's equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term credit and
current maturities of long-term debts
|
|
9,876
|
4,570
|
|
|
|
|
|
Accounts payable:
Trade
|
|
5,956
|
5,382
|
|
|
|
|
|
Other
|
|
3,864
|
4,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
19,696
|
13,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities
|
|
|
|
|
|
|
|
|
Long term debt,
excluding current maturities
|
|
222
|
1,692
|
|
|
|
|
|
Employee severance
benefits
|
|
245
|
157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
467
|
1,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Ordinary shares, NIS
0.6 par value authorized 50,000,000
shares, issued and outstanding 10,142,762
|
|
1,985
|
1,985
|
|
|
|
|
|
Additional paid-in
capital
|
|
17,270
|
17,270
|
|
|
|
|
|
Cumulative foreign
currency translation adjustments
|
|
2,278
|
2,408
|
|
|
|
|
|
Capital
reserve
|
|
695
|
695
|
|
|
|
|
|
Accumulated
deficit
|
|
(20,419)
|
(17,032)
|
|
|
|
|
|
Shareholders'
equity
|
|
1,809
|
5,326
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
21,972
|
21,135
|
|
|
|
|
|
Eltek
Ltd.
|
Unaudited Non-GAAP
EBITDA Reconciliations
|
(In thousands
US$)
|
|
|
|
|
|
|
|
|
|
Non-GAAP EBITDA
Reconciliations
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
2018
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net Income
(loss)
|
|
(843)
|
(1,087)
|
|
(1,513)
|
|
(1,902)
|
|
Add back
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses
(income), net
|
|
105
|
41
|
|
132
|
|
218
|
|
Income tax
expense
|
|
17
|
26
|
|
34
|
|
50
|
|
Depreciation and
amortization
|
|
425
|
436
|
|
866
|
|
840
|
|
Adjusted
EBITDA
|
|
(296)
|
(583)
|
|
(481)
|
|
(794)
|
|
Eltek
Ltd.
|
Consolidated
Statement of Cash flow
|
(In thousands US$,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
2018
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(loss)
|
|
(843)
|
(1,087)
|
|
(1,513)
|
|
(1,902)
|
|
|
|
|
|
|
-
|
|
|
|
Adjustments to
reconcile net loss to net
|
|
|
|
|
-
|
|
|
|
cash flows
provided by operating activities:
|
|
|
|
|
-
|
|
|
|
Depreciation and
amortization
|
|
425
|
436
|
|
866
|
|
852
|
|
Capital lose on
disposal of fixed assets, net
|
|
-
|
|
|
-
|
|
(13)
|
|
Amortization of
Intangible asset
|
|
-
|
|
|
-
|
|
|
|
Revaluation of long
term loans
|
|
8
|
|
|
-
|
|
-
|
|
Decrease (increase)
in Deferred Tax
|
|
-
|
(12)
|
|
24
|
|
3
|
|
|
|
433
|
424
|
|
890
|
|
842
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase)
in trade receivables
|
|
78
|
1,152
|
|
(1,491)
|
|
209
|
|
Decrease (increase)
in other receivables and prepaid expenses
|
|
132
|
(122)
|
|
851
|
|
(64)
|
|
Decrease (increase)
in inventories
|
|
(330)
|
(154)
|
|
(915)
|
|
6
|
|
Increase (decrease)
in trade payables
|
|
(205)
|
(735)
|
|
770
|
|
(206)
|
|
Increase (decrease)
in other liabilities and accrued expenses
|
|
148
|
6
|
|
(51)
|
|
(175)
|
|
Increase (decrease)
in employee severance benefits, net
|
|
14
|
(1)
|
|
27
|
|
(2)
|
|
|
|
(162)
|
146
|
|
(807)
|
|
(232)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided
by (used in) operating activities
|
|
(571)
|
(517)
|
|
(1,430)
|
|
(1,292)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
2018
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Owners
investment
|
|
|
|
|
|
|
|
|
Purchase of fixed
assets
|
|
(30)
|
(70)
|
|
(110)
|
|
(161)
|
|
Purchase of
Intangible asset
|
|
|
-
|
|
-
|
|
|
|
Net cash used in
investing activities
|
|
(30)
|
(70)
|
|
(110)
|
|
(161)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Increase (decrease)
in short- term credit
|
|
1,501
|
(1,020)
|
|
1,160
|
|
(161)
|
|
Increase (decrease)
in short- term shareholder loan
|
|
-
|
1,430
|
|
1,156
|
|
1,430
|
|
Repayment of
long-term loans from bank
|
|
(229)
|
(207)
|
|
(465)
|
|
(407)
|
|
Proceeds from
long-term loans
|
|
1
|
131
|
|
1
|
|
167
|
|
Repayment of credit
from fixed asset payables
|
|
(73)
|
(24)
|
|
(159)
|
|
(129)
|
|
Net cash provided
by (used in) financing activities
|
|
1,200
|
310
|
|
1,692
|
|
900
|
|
|
|
|
|
|
|
|
|
|
Effect of
translation adjustments
|
|
(42)
|
40
|
|
(48)
|
|
111
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
556
|
(237)
|
|
104
|
|
(442)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of the period
|
|
435
|
1,029
|
|
887
|
|
1,234
|
|
|
|
|
|
|
-
|
|
-
|
|
Cash and cash
equivalents at period end
|
|
991
|
792
|
|
991
|
|
792
|
|
Investor Contact:
Amnon Shemer
Chief Financial Officer
amnons@nisteceltek.com
+972-3-9395023
View original
content:http://www.prnewswire.com/news-releases/eltek-reports-2018-second-quarter-financial-results-300720168.html
SOURCE Eltek Ltd.