Eltek Reports 2017 Second Quarter Financial Results

 

- Revenues of $7.5 million in the second quarter of 2017

- Gross profit of $134,000

- Net loss of $1.1 million

PETACH-TIKVA, Israel, Aug. 14, 2017 /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, 2017.

Mr. Yitzhak Nissan, Chairman of the Board and Chief Executive Officer, commented: "Our sales in the second quarter were $7.5 million, 14.6% lower than the second quarter of 2016, excluding Kubatronik. The decrease was primarily attributable to the continued competition in the local market and weakness in our global operations.

The Company is vigorously continuing the implementation of efficiency measures to its operating systems, which now support a higher sales rate relative to the rate prior to such implementation. Furthermore, the market is indicating a positive momentum with an increase in the frequency of incoming orders beginning this July. This increase includes a significant order from a governmental authority that we announced on July 24, 2017.

As previously released, we have enhanced our marketing and sales forces in Israel, Europe and the United States, alongside our efforts made to streamline expenses.

We are determined to bring the Company back to profitability in the near future. I believe that our actions to date, along with the renewal of manufacturing equipment that we are currently implementing, will assist us to reach these goals quickly and efficiently.

"When comparing the results to the second quarter and the first six months of 2017, please note that the operations of Kubatronik Leiterplatten GmbH were included in Eltek's results during the comparable period in 2016. Therefore, selected financial information is also presented on a proforma basis, excluding Kubatronik's results in 2016 (first six months and second quarter)," Mr. Nissan concluded.

Highlights of the Second Quarter of 2017

  • Revenues for the second quarter of 2017 were $7.5 million compared to $9.9 million in the second quarter of 2016 ($8.8 million excluding Kubatronik);
  • Gross profit was $134,000 (1.8% of revenues) compared to gross profit of $1.5 million (14.8% of revenues) in the second quarter of 2016 ($1.4 million or 16.3% of revenues excluding Kubatronik); The decrease in gross profit and gross profit margins reflects the decreased sales, while a significant portion of our cost of sales remained constant.
  • Operating loss was $1 million compared to operating profit of $244,000 in the second quarter of 2016 ($373,000 excluding Kubatronik);
  • Net loss was $1.1 million or $0.11 per fully diluted share compared to net profit of $213,000 or $0.02 per fully diluted share in the second quarter of 2016 ($327,000 or $0.03 per fully diluted share excluding Kubatronik);.
  • EBITDA amounted to $(583,000) compared to EBITDA of $754,000 in the second quarter of 2016 ($809,000 excluding Kubatronik);
  • Net cash used by operating activities amounted to $516,000 compared to net cash used by operating activities of $37,000 in the second quarter of 2016. The decline is mainly attributable to the operating results in this quarter.
  • Cash and cash equivalents as of June 30, 2017 were $792,000 compared to $894,000 as of June 30, 2016.

Highlights for the First Six Months of 2017

  • Revenues for the first six months of 2017 were $16 million compared to $19.7 million in the first six months of 2016 ($17.4 million excluding Kubatronik);
  • Gross profit was $619,000 (3.9% of revenues) compared to gross profit of $2.4 million (12.2% of revenues) in the first six months of 2016 ($2.2 million or 12.5% of revenues excluding Kubatronik);
  • Operating loss was $1.6 million compared to operating loss of $49,000 in the first six months of 2016 ($31,000 profit excluding Kubatronik);
  • Net loss was $1.9 million, or $0.19 per fully diluted share compared to net loss of $171,000, or $0.02 per fully diluted share in the first six months of 2016 ($82,000 or $0.01 per fully diluted share excluding Kubatronik);
  • EBITDA amounted to $(794,000) compared to EBITDA of $921,000 in the first six months of 2016 ($871,000 excluding Kubatronik);
  • Net cash used by operating activities amounted to $1.3 million compared to net cash provided by operating activities of $853,000 in the first six months of 2016. The decline is mainly attributable to the operating results in this period.

Conference Call

Today, Monday August 14, 2017 at 9:30 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 and Chief Executive Officer, Roberto Tulman, Deputy CEO and Chief Technology 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:                                   03-9180610
International:                      +972-3-9180610
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)

Eltek Ltd.

Consolidated Statements of Operations

(In thousands US$, except per share data)













Three months ended


Six months ended




June  30,


June  30,




2017


2016


2017


2016








Revenues


7,492


9,904


15,960


19,705


Costs of revenues


(7,358)


(8,442)


(15,341)


(17,305)












Gross profit


134


1,462


619


2,400












Selling, general and administrative expenses


(1,138)


(1,186)


(2,233)


(2,384)












R&D expenses, net


(15)


(32)


(34)


(64)












Operating profit (loss)


(1,019)


244


(1,649)


(49)












Financial expenses, net


(41)


(37)


(218)


(98)












Profit (loss) before other income, net


(1,060)


207


(1,867)


(146)












Other income, net


0


(0)


15


0












Profit (loss) before income tax expenses


(1,060)


207


(1,852)


(146)












Tax expenses


(27)


(25)


(50)


(48)












Net Profit (loss)


(1,087)


182


(1,901)


(194)












Net loss attributable to non controlling interest


0


(31)


0


(23)












Net Profit (loss) attributable to Eltek Ltd.


(1,087)


213


(1,901)


(171)












Earnings per share










Basic and diluted net gain (loss) per ordinary share


(0.11)


0.02


(0.19)


(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,


June  30,








2017


2016






Assets




















Current assets










Cash and cash equivalents


792


894






Receivables:   Trade, net of provision for doubtful accounts


6,097


7,548






                     Other


171


222






Inventories 


4,305


4,618






Prepaid expenses 


394


227
















Total current assets


11,759


13,509
















Deferred taxes


0


1,066
















Assets held for employees' severance benefits


55


49
















Fixed assets, less accumulated depreciation


8,966


9,747
















Intangible asset


355


301
















Total assets


21,135


24,672




































Liabilities and Shareholder's equity




















Current liabilities










Short-term credit and current maturities of long-term debts


4,570


1,373






Accounts payable: Trade


5,382


5,778






                            Other


4,008


4,611
















Total current liabilities


13,960


11,762
















Long-term liabilities










Long term debt, excluding current maturities


1,692


2,423






Employee severance benefits


157


296
















Total long-term liabilities


1,849


2,719
















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


2,408


2,037






Capital reserve


695


695






Accumulated deficit


(17,032)


(11,679)






Shareholders' equity


5,326


10,308






Non controlling interest


0


(117)






Total equity


5,326


10,191






Total liabilities and shareholders' equity


21,135


24,672






 

 

 

Eltek Ltd.

Unaudited Non-GAAP EBITDA Reconciliations

(In thousands US$)











Non-GAAP EBITDA Reconciliations


Three months ended


Six months ended




June  30,


June  30,




2017


2016


2017


2016


















GAAP net Income (loss)


(1,087)


213


(1,901)


(171)


Add back items:




















Financial expenses (income), net 


41


37


218


98


Income tax expense 


27


25


50


48


Depreciation and amortization


436


479


840


946


Adjusted EBITDA            


(583)


754


(794)


921


 

 

 

Eltek Ltd.

Consolidated Statement of  Cash flow

(In thousands US$, except per share data)













Three months ended


Six months ended




June  30,


June  30,




2017


2016


2017


2016












Cash flows from operating activities:




















Net Income (loss)


(1,087)


182


(1,901)


(194)








-




Adjustments to reconcile net loss to net






-




 cash flows provided by operating activities:






-




Depreciation and amortization


436


479


852


946


Capital lose on disposal of fixed assets, net


-


-


(13)


-


Revaluation of long term loans 


-


-


(0)


1


Decrease (increase) in Deferred Tax


(12)


7


3


14




424


487


842


961












Decrease (increase) in trade receivables


1,152


(15)


209


575


Decrease (increase) in other receivables and prepaid expenses


(122)


(17)


(64)


18


Decrease (increase) in inventories


(154)


(232)


6


(106)


Increase (decrease) in trade payables


(735)


(435)


(206)


(354)


Increase (decrease) in other liabilities and accrued expenses


7


(11)


(176)


(49)


Increase (decrease) in employee severance benefits, net


(1)


5


(2)


3




147


(706)


(233)


86












Net cash provided by operating activities


(516)


(37)


(1,292)


853












































Three months ended


Six months ended




June  30,


June  30,




2017


2016


2016


2015












Cash flows from investing activities:










Owners investment










Purchase of fixed assets


(70)


(238)


(161)


(330)


Purchase of Intangible asset


-


(14)


-


(21)


Net cash used in investing activities


(70)


(251)


(161)


(351)






















Cash flows from financing activities:










Increase (decrease) in short- term credit 


(1,020)


577


(161)


91


Increase (decrease) in short- term shareholder loan


1,430


-


1,430


-


Repayment of long-term loans from bank


(207)


(175)


(407)


(330)


Proceeds from long-term loans


131


-


167


-


Repayment of credit from fixed asset payables


(24)


(137)


(129)


(394)


Net cash provided by (used in) financing activities


309


265


901


(634)












Effect of translation adjustments


316


(20)


111


(12)












Net increase (decrease) in cash and cash equivalents


(237)


(44)


(441)


(144)












Cash and cash equivalents at beginning of the period


1,029


938


1,234


1,038








-


-


Cash and cash equivalents at period end


792


894


792


894




792


894


792


894


 

 

 

Eltek  ltd.

Proforma (Non-GAAP) Statements of Operations

(In thousands US$, except per share data)

Excluding Kubatronik's operation in 2016




Solo


Solo




Three months ended


Six months ended




June 30,


June 30,




2017


2016


2017


2016




Unaudited


Unaudited












Revenues


7,492


8,777


15,960


17,370


Costs of revenues


(7,358)


(7,347)


(15,341)


(15,206)












Gross profit


134


1,431


619


2,165












Research and development income, net


(15)


(32)


(34)


(64)












Selling, general and administrative expenses


(1,138)


(1,026)


(2,233)


(2,070)












Operating profit (loss)


(1,019)


373


(1,649)


31












Financial expenses, net


(41)


(21)


(218)


(65)












Profit (loss) before other income, net


(1,060)


352


(1,867)


(34)












Other income, net


0


0


15


0












Profit (loss) before income tax expenses


(1,060)


352


(1,852)


(34)












Income tax (expenses), net


(27)


(25)


(50)


(48)












Net Profit (loss)


(1,087)


327


(1,901)


(82)






















Diluted net loss per ordinary share


(0.11)


0.03


(0.19)


(0.01)












Weighted average number of ordinary shares 










used to compute diluted net loss per 










ordinary share (in thousands)


10,143


10,143


10,143


10,143


 

 

 

Eltek  ltd.

Proforma (Non-GAAP) Balance Sheets

(In thousands US$)

Excluding Kubatronik's operation in 2016




June 30,








2017


2016








Unaudited






Assets




















Current assets










Cash and cash equivalents


792


891






Receivables:   Trade, net of provision for doubtful accounts


6,097


7,108






                     Other


171


1,287






Inventories 


4,305


4,324






Prepaid expenses 


394


227
















Total current assets


11,759


13,837
















Deferred taxes


0


1,066
















Assets held for employees' severance benefits


55


49
















Fixed assets, less accumulated depreciation


8,966


9,118
















Investment




(440)
















Intangible asset


355


301
















Total assets


21,135


23,931














































Liabilities and Shareholder's equity




















Current liabilities










Short-term credit and current maturities of long-term debts


4,570


1,373






Accounts payable: Trade


5,382


5,366






                            Other


4,008


4,403


























Total current liabilities


13,960


11,142
















Long-term liabilities










Long term debt, excluding current maturities


1,692


2,236






Employee severance benefits


157


246
















Total long-term liabilities


1,849


2,482
















Equity










Ordinary shares, NIS 0.6  par value authorized 50,000,000 shares, issued and outstanding 6,610,107 as of December 31, 2011.


1,985


1,985






Additional paid-in capital


17,270


17,270






Cumulative foreign currency translation adjustments


2,408


2,036






Capital reserve


695


695






Accumulated deficit


(17,032)


(11,679)






Shareholders' equity


5,326


10,307






Non controlling interest


0


0






Total equity


5,326


10,307






Total liabilities and shareholders' equity


21,135


23,931






 

 

 

Eltek Ltd.

Proforma Unaudited Non-GAAP EBITDA Reconciliations

(In thousands US$)

Excluding Kubatronik's operation in 2016


Non-GAAP EBITDA Reconciliations


Three months ended


six months ended



June  30,


June  30,


June  30,


June  30,



2017


2016


2017


2016










GAAP net Income (loss)


(1,087)


327


(1,901)


(82)

Add back items:


















Financial expenses (income), net 


41


21


218


65

Income tax expense 


27


25


50


48

Depreciation and amortization


436


436


840


840

Adjusted EBITDA            


(583)


809


(794)


871

 

 

 

Eltek Ltd.

Consolidated Statement of  Cash flow

(In thousands US$, except per share data)

Excluding Kubatronik's operation in 2016












Three months ended


Six months ended



June  30,


June  30,



2017


2016


2017


2016










Cash flows from operating activities:









Net Income (loss)


(1,087)


213


(1,901)


(171)










Adjustments to reconcile net loss to net









 cash flows provided by operating activities:









Depreciation and amortization


436


441


852


870

Capital lose on disposal of fixed assets, net


-




(13)


-

Revaluation of long term loans 


-


7


(0)


14

Decrease (increase) in Deferred Tax


(12)


-


3


1

Impairment of goodwill


-


111


-


85



424


559


842


971










Decrease (increase) in trade receivables


1,152


(38)


209


662

Decrease (increase) in other receivables and prepaid expenses

(122)


(4)


(64)


10

Decrease (increase) in inventories


(154)


(303)


6


(154)

Increase (decrease) in trade payables


(735)


(440)


(206)


(448)

Increase (decrease) in other liabilities and accrued expenses

7


(7)


(176)


(82)

Increase (decrease) in employee severance benefits, net


(1)


4


(2)


4



147


(789)


(233)


(8)










Net cash provided by operating activities


(516)


(17)


(1,292)


792






























Three months ended


Six months ended



June  30,


June  30,



2017


2016


2016


2015










Cash flows from investing activities:









Owners investment









Purchase of fixed assets


(70)


(235)


(161)


(335)

Purchase of Intangible asset


-


-


-


-

Purchase of Intangible asset


-


(14)


-


(21)

Net cash used in investing activities


(70)


(249)


(161)


(356)



















Cash flows from financing activities:









Increase (decrease) in short- term credit 


(1,020)


577


(161)


91

Increase (decrease) in short- term shareholder loan


1,430


-


1,430


-

Repayment of long-term loans from bank


(207)


(175)


(407)


(330)

Proceeds from long-term loans


131


-


167


-

Repayment of credit from fixed asset payables


(24)


(100)


(129)


(324)

Net cash provided by (used in) financing activities


309


301


901


(564)










Effect of translation adjustments


316


(17)


111


21










Net increase (decrease) in cash and cash equivalents


(237)


18


(441)


(107)










Cash and cash equivalents at beginning of the period


1,029


872


1,234


998










Cash and cash equivalents at period end


792


891


792


891

 

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 and proforma financial information. 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:
Amnon Shemer
Chief Financial Officer
amnons@nisteceltek.com
+972-3-9395023

 

View original content:http://www.prnewswire.com/news-releases/eltek-reports-2017-second-quarter-financial-results-300503652.html

SOURCE Eltek Ltd.



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