Eltek Reports 2017 Second Quarter Financial Results

2017-08-14 09:25:59

(MENAFNEditorial) 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 secondquarter were $7.5 million, 14.6% lower than the secondquarter 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 secondquarter 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 secondquarter)," 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 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,

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)

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

(31)

(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

Eltek Ltd.

Consolidated Balance Sheets

(In thousands US$)

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

1,066

Assets held for employees' severance benefits

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

Additional paid-in capital

17,270

Cumulative foreign currency translation adjustments

2,408

2,037

Capital reserve

695

Accumulated deficit

(17,032)

(11,679)

Shareholders' equity

5,326

10,308

Non controlling interest

(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,

2017

2016

2017

2016

GAAP net Income (loss)

(1,087)

213

(1,901)

(171)

Add back items:

Financial expenses (income), net

218

Income tax expense

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,

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)

Decrease (increase) in Deferred Tax

(12)

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)

Decrease (increase) in inventories

(154)

(232)

(106)

Increase (decrease) in trade payables

(735)

(435)

(206)

(354)

Increase (decrease) in other liabilities and accrued expenses

(11)

(176)

(49)

Increase (decrease) in employee severance benefits, net

(1)

(2)

147

(706)

(233)

Net cash provided by operating activities

(516)

(37)

(1,292)

853

Three months ended

Six months ended

June 30,

2017

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)

Increase (decrease) in short- term shareholder loan

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

Three months ended

Six months ended

June 30,

2017

2016

2017

2016

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)

Financial expenses, net

(41)

(21)

(218)

(65)

Profit (loss) before other income, net

(1,060)

352

(1,867)

(34)

Other income, net

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

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

1,066

Assets held for employees' severance benefits

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

Additional paid-in capital

17,270

Cumulative foreign currency translation adjustments

2,408

2,036

Capital reserve

695

Accumulated deficit

(17,032)

(11,679)

Shareholders' equity

5,326

10,307

Non controlling interest

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,

2017

2016

2017

2016

GAAP net Income (loss)

(1,087)

327

(1,901)

(82)

Add back items:

Financial expenses (income), net

218

Income tax expense

Depreciation and amortization

436

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,

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

(0)

Decrease (increase) in Deferred Tax

(12)

Impairment of goodwill

111

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)

Decrease (increase) in inventories

(154)

(303)

(154)

Increase (decrease) in trade payables

(735)

(440)

(206)

(448)

Increase (decrease) in other liabilities and accrued expenses

(7)

(176)

(82)

Increase (decrease) in employee severance benefits, net

(1)

(2)

147

(789)

(233)

(8)

Net cash provided by operating activities

(516)

(17)

(1,292)

792

Three months ended

Six months ended

June 30,

2017

2016

2015

Cash flows from investing activities:

Owners investment

Purchase of fixed assets

(70)

(235)

(161)

(335)

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)

Increase (decrease) in short- term shareholder loan

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

Net increase (decrease) in cash and cash equivalents

(237)

(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 .

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

+972-3-9395023

View original content:

SOURCE Eltek Ltd.

MENAFN1408201700701241ID1095729390

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.