Eltek 2Q EPS 2c >ELTK

Press Release: Eltek Reports 2016 Second Quarter Financial Results

Eltek Reports 2016 Second Quarter Financial Results

– Revenues of $9.9 million in the Second Quarter of 2016

– 10% growth in sales to the North American market compared to Q2-2015

– Gross profit of $1.5 million

– Net profit of $213,000

PR Newswire

PETACH-TIKVA, Israel, Aug. 10, 2016

PETACH-TIKVA, Israel, Aug. 10, 2016 /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 second quarter ended June 30, 2016.

Mr. Yitzhak Nissan, Chairman of the Board and Chief Executive Officer, commented: “Revenues in the second quarter of 2016 amounted to $9.9 million, slightly lower (5%) than revenues in the second quarter of last year. The revenues reflect the continued competition in the Israeli market for high end products. Revenues from the North American market in the second quarter of 2016 grew by 12% as compared to the first quarter of 2016 and amounted to $2.0 million. Our focus on profitability by improving production processes and closely monitoring expenses, led us to a net profit of $213,000 in the second quarter of 2016.

“We remain focused on growth in the global markets, which we expect will continue to have a positive effect on our revenues,” Mr. Nissan concluded.

Highlights of the Second Quarter of 2016


   -- Revenues for the second quarter of 2016 were $9.9 million compared to 
      $10.4 million in the second quarter of 2015 
 
   -- Gross profit was $1.5 million (14.8% of revenues) compared to gross 
      profit of $1.9 million (18.3% of revenues) in the second quarter of 2015. 
      The decrease in gross profit and gross margins reflects the decreased 
      sales, while a significant portion of our cost of sales remained 
      constant. 
 
   -- Operating profit was $244,000 compared to operating profit of $543,000 in 
      the second quarter of 2015. 
 
   -- Net profit was $213,000 or $0.02 per fully diluted share compared to net 
      profit of $424,000 or $0.04 per fully diluted share in the second quarter 
      of 2015. 
 
   -- EBITDA amounted to $754,000 (7.6% of revenues) compared to EBITDA of $1.0 
      million (10% of revenues) in the second quarter of 2015. 
 
   -- Net cash used by operating activities amounted to $37,000 compared to net 
      cash used by operating activities of $118,000 in the second quarter of 
      2015. The improvement is mainly attributable to a decrease in working 
      capital requirements. 
 
   -- Cash and cash equivalents as of June 30, 2016 were $894,000 compared to 
      $994,000 as of June 30, 2015. 
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Highlights for the First Six Months of 2016


   -- Revenues for the first six months of 2016 were $19.7 million compared to 
      $20.1 million in the first six months of 2015. 
 
   -- Gross profit was $2.4 million (12.2% of revenues) compared to gross 
      profit of $3.1 million (15.6% of revenues) in the first six months of 
      2015. 
 
   -- Operating loss was $48,000 compared to operating profit of $435,000 in 
      the first six months of 2015. 
 
   -- Net loss was $171,000, or $0.02 per fully diluted share compared to net 
      profit of $190,000 or $0.02 per fully diluted share in the first six 
      months of 2015. 
 
   -- EBITDA amounted to $921,000 (4.7% of revenues) compared to EBITDA of $1.4 
      million (6.7% of revenues) in the first six months of 2015. 
 
   -- Net cash provided by operating activities amounted to $853,000 compared 
      to net cash used by operating activities of $289,000 in the first six 
      months of 2015. The improvement is mainly attributable to a decrease in 
      working capital requirements. 
 

Conference Call

Today, Wednesday, August 10, 2016 at 9:30 a.m. Eastern Time, Eltek will conduct a conference call to discuss the results. The call will feature remarks by Mr. Yitzhak Nissan, Chairman of the Board of Directors and Chief Executive Officer, Roberto Tulman, Deputy CEO and Chief Technology Officer, and Mr. 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:   1-866-860-9642 
Israel:          03-9180688 
International:   +972-3-9180688 
 
At: 
 
9:30 a.m. Eastern Time 
6:30 a.m. Pacific Time 
16:30 p.m. Israel Time 
 
 

A replay of the call will be available through the Investor Info section on Eltek’s corporate website at 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, 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 has ITAR, AS-9100 and NADCAP Electronics permits and its customers include top-of-the-line 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, and R&D, production and marketing center are located in Israel. Eltek also operates through its subsidiaries, Eltek USA (100%) in North America and Kubatronik (79%) in Europe, and by agents and distributors in Europe, India, South Africa and South America.

For additional 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 includes some non-GAAP measures, such as EBITDA. These non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. The 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 EBITDA to evaluate and manage its internal operations and 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:

Nir Zalik

KM Investor relations

Tel: +972- 3-5167620

nir[a]km-ir.co.il

www.km-ir.co.il

Amnon Shemer

Chief Financial Officer

amnons[a]nisteceltek.com


 
Eltek Ltd. 
Consolidated Statements of Operations 
(In thousands US$, except per share data) 
 
                            Three months ended    Six months ended 
                            June 30,              June 30, 
                            2016       2015       2016      2015 
 
Revenues                    9,904      10,383     19,705    20,100 
Costs of revenues           (8,442)    (8,481)    (17,305)  (16,972) 
 
Gross profit                1,462      1,902      2,400     3,128 
 
Selling, general and 
 administrative expenses    (1,186)    (1,286)    (2,384)   (2,585) 
 
R&D expenses, net           (32)       (73)       (64)      (108) 
 
Operating profit (loss)     244        543        (48)      435 
 
Financial expenses, net     (37)       (87)       (98)      (205) 
 
Profit (loss) before other 
 income, net                207        456        (146)     230 
 
Other income, net           0          3          0         5 
 
Profit (loss) before 
 income tax expenses        208        459        (146)     235 
 
Tax expenses                (25)       (17)       (48)      (31) 
 
Net Profit (loss)           182        442        (194)     204 
 
Net loss attributable to 
 non controlling interest   (30)       18         (23)      14 
 
Net Profit (loss) 
 attributable to Eltek 
 Ltd.                       213        424        (171)     190 
 
Earnings per share 
Basic and diluted net gain 
 (loss) per ordinary 
 share                      0.02       0.04       (0.02)    0.02 
 
Weighted average number 
of ordinary shares 
used to compute basic and 
diluted net gain (loss) 
per 
ordinary share (in 
 thousands)                 10,143     10,143     10,143    10,143 
 
 
Eltek Ltd. 
Consolidated Balance Sheets 
(In thousands US$) 
 
                                                        June 30 
                                                        2016      2015 
 
Assets 
 
Current assets 
Cash and cash equivalents                               894       994 
Receivables:  Trade, net of provision for doubtful 
 accounts                                               7,548     8,185 
                    Other                               222       504 
Inventories                                             4,618     5,278 
Prepaid expenses                                        227       274 
 
Total current assets                                    13,509    15,235 
 
Deferred taxes                                          1,066     1,089 
 
Assets held for employees' severance benefits           49        50 
 
Fixed assets, less accumulated depreciation             9,747     9,971 
 
Intangible asset                                        301       215 
 
Total assets                                            24,672    26,560 
 
 
 
Liabilities and Shareholder's equity 
 
Current liabilities 
Short-term credit and current maturities of long-term 
 debts                                                  1,373     2,302 
 

Press Release: Eltek Reports 2016 Second Quarter -2-


Accounts payable: Trade                                 5,778     6,629 
                           Other                        4,611     4,733 
 
Total current liabilities                               11,762    13,664 
 
Long-term liabilities 
Long term debt, excluding current maturities            2,423     2,921 
Employee severance benefits                             296       206 
 
Total long-term liabilities                             2,719     3,127 
 
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     2,037     2,241 
Capital reserve                                         695       695 
Accumulated deficit                                     (11,679)  (12,359) 
Shareholders' equity                                    10,308    9,832 
Non controlling interest                                (117)     (63) 
Total equity                                            10,191    9,769 
Total liabilities and shareholders' equity              24,672    26,560 
 
 
Eltek Ltd. 
Unaudited Non-GAAP EBITDA Reconciliations 
(In thousands US$) 
 
Non-GAAP EBITDA 
Reconciliations             Three months ended    Six months ended 
                            June 30,              June 30, 
                            2016      2015        2016      2015 
 
 
GAAP net Income (loss)      213       424         (171)     190 
Add back items: 
------------------------- 
 
Financial expenses 
 (income), net              37        87          98        205 
Income tax expense          25        17          48        31 
Depreciation and 
 amortization               479       508         946       926 
Adjusted EBITDA             754       1,036       921       1,352 
 
 
 
 
Eltek Ltd. 
Consolidated Statement of Cash flows 
(In thousands US$, except per share data) 
 
                            Three months ended    Six months ended 
                            June 30,              June 30, 
                            2016      2015        2016     2015 
 
Cash flows from operating 
activities: 
 
Net Income (loss)           182       442         (194)    204 
 
Adjustments to reconcile 
net loss to net 
 cash flows provided by 
 operating activities: 
Depreciation and 
 amortization               479       432         946      850 
Capital lose on disposal 
 of fixed assets, net                 76          -        76 
Revaluation of long term 
 loans                      -         5           1        3 
Decrease (increase) in 
 Deferred Tax               7         -           14       - 
                            487       514         961      929 
 
Decrease (increase) in 
 trade receivables          (15)      (301)       575      284 
Decrease (increase) in 
 other receivables and 
 prepaid expenses           (17)      57          18       102 
Decrease (increase) in 
 inventories                (232)     (281)       (106)    (443) 
Increase (decrease) in 
 trade payables             (435)     (320)       (354)    (750) 
Increase (decrease) in 
 other liabilities and 
 accrued expenses           (11)      (200)       (49)     (566) 
Increase (decrease) in 
 employee severance 
 benefits, net              5         (28)        3        (49) 
                            (706)     (1,074)     86       (1,422) 
 
Net cash provided by (used 
 in) operating activities   (37)      (118)       853      (289) 
 
Cash flows from investing 
activities: 
Owners investment 
Purchase of fixed assets    (238)     (268)       (330)    (493) 
Purchase of Intangible 
 asset                      (14)      -           (21)     - 
Net cash used in investing 
 activities                 (251)     (268)       (351)    (493) 
 
 
Cash flows from financing 
activities: 
Increase (decrease) in 
 short- term credit         577       581         91       (914) 
Repayment of long-term 
 loans from bank            (175)     (52)        (330)    (18) 
Proceeds from long-term 
 loans                      -         -           -        1,707 
Repayment of credit from 
 fixed asset payables       (137)     (127)       (394)    (295) 
Net cash provided by (used 
 in) financing activities   265       403         (634)    480 
 
Effect of translation 
 adjustments                (20)      73          (12)     167 
 
Net increase (decrease) in 
 cash and cash 
 equivalents                (44)      90          (144)    (135) 
 
Cash and cash equivalents 
 at beginning of the 
 period                     938       904         1,038    1,129 
                                                  - 
Cash and cash equivalents 
 at period end              894       994         894      994 
 
 
 

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SOURCE Eltek Ltd.

/Web site: http://www.nisteceltek.com