PR Newswire | Nov 18, 2020 07:34AM EST

11/18 06:33 CST

Eltek Reports 2020 Third Quarter Financial Results- Revenues of $9.3 million- Gross profit of $1.8 million- Net Profit of $598,000 PETACH-TIKVA, Israel, Nov. 18, 2020

PETACH-TIKVA, Israel, Nov. 18, 2020 /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 September 30, 2020.

Mr. Eli Yaffe, Chief Executive Officer, commented: "We are pleased that our third quarter results reflect the continuing trend of improved results. We are gratified that despite the global Covid-19 pandemic and its related challenges, we were able to achieve continued profitability and improve our operating profit from $1.0 million in the first nine months of 2019 to $2.1 million in the first nine months of 2020."

"We are operating in a challenging business environment and making the necessary adjustments to increase revenues, maintain the trend of improved operating efficiencies and reach sustained profitability," concluded Mr. Yaffe.

Highlights of the Third Quarter of 2020 compared to the Third Quarter of 2019

* Revenues for the third quarter of 2020 were $9.3 million consistent with our revenues in the third quarter of 2019; * Gross profit increased from $1.75 million (18.9% of revenues) in the third quarter of 2019 to $1.82 million (19.7% of revenues) in the third quarter of 2020; * Operating profit increased to $638,000 during the third quarter of 2020 as compared to operating profit of $568,000 in the third quarter of 2019; * Net profit was $598,000, or $0.14 per fully diluted share in the third quarter of 2020 compared to net profit of $391,000, or $0.09 per fully diluted share, in the third quarter of 2019; * EBITDA was $1.0 million in the third quarter of 2020 compared to EBITDA of $940,000 in the third quarter of 2019; * Net cash provided by operating activities amounted to $873,000 in the third quarter of 2020 compared to net cash provided by operating activities of $1.4 million in the third quarter of 2019.

Highlights for the First Nine Months of 2020

* Revenues for the first nine months of 2020 were $27.2 million compared to $26.2 million in the first nine months of 2019; * Gross profit was $5.5 million (20.3% of revenues) compared to gross profit of $4.5 million (17.4% of revenues) in the first nine months of 2019; * Operating profit was $2.1 million in the first nine months of 2020 compared to operating profit of $1.0 million in the first nine months of 2019; * Other expenses were $10,000 in the first nine months of 2020 as compared to other income of $875,000 in the first nine months of 2019 which was attributable to an insurance payment related to a claim for damages incurred during 2018; * Net profit was $1.8 million, or $0.42 per fully diluted share in the first nine months of 2020 compared to net profit of $1.4 million, or $0.40 per fully diluted share in the first nine months of 2019; * EBITDA was $3.2 million in the first nine months of 2020 compared to EBITDA of $3.0 million in the first nine months of 2019; * Net cash provided by operating activities amounted to $3.7 million in the first nine months of 2020 compared to net cash provided by operating activities of $2.7 million in the first nine months of 2019.

Conference Call

Today, Wednesday, November 18, 2020, at 8:30 a.m. 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: 1-888-668-9141

Israel: 03-9180644

International: +972-3-9180644

At:

8:30 a.m. Eastern Time

5:30 a.m. Pacific Time

15:30 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.comapproximately 24 hours after the conference call is completed and will be archived for 30 days.

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 atwww.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 the Coronavirus 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, 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 MualemChief Financial Officeralonm@nisteceltek.com+972-3-9395023

(Tables follow)



Eltek Ltd.

Consolidated Statements of Operations

(In thousands US$, except per share data)

Nine months ended Three months ended

September 30, September 30,

2020 2019 2020 2019

Revenues 9,256 9,279 27,205 26,213

Costs of revenues (7,433) (7,524) (21,679) (21,663)

Gross profit 1,823 1,755 5,527 4,550

Selling, general and administrative expenses (1,183) (1,187) (3,467) (3,541)

R&D expenses, net (2) - - -

Operating profit 638 568 2,060 1,009

Financial expenses, net (19) (146) (158) (409)

Other income, net (10) (2) (10) 875

Profit before income tax 609 420 1,892 1,475

Tax expenses (11) (29) (49) (51)

Net Profit 598 391 1,842 1,424

Earnings per share

Basic and diluted net profit per ordinary 0.14 0.09 0.42 0.40share

Weighted average number of ordinary sharesused to compute basic net profit per ordinary 4,380 4,380 4,380 3,519share (in thousands)



Eltek Ltd.

Consolidated Balance Sheets

(In thousands US$)

September 30, December 31,

2020 2019

Assets

Current assets

Cash and cash equivalents 2,651 1,628

Receivables: Trade, net of provision for doubtful 6,402 7,480accounts

Other 1,719 145

Inventories 3,552 3,735

Prepaid expenses 151 530

Total current assets 14,475 13,518

Long term assets

Restricted deposits 58 -

Severance pay fund 60 60

Operating lease right of use assets 1,745 2,490

Total long term assets 1,863 2,550

Fixed assets, less accumulated depreciation 6,658 6,761

Total Assets 22,996 22,829

Liabilities and Shareholder's equity

Current liabilities

Short-term credit and current maturities of long-term 214 2,120debts

Short-term credit from related party 2,906 3,472

Accounts payable: Trade 4,851 4,673

Other 3,315 3,118

Short-term operating lease liabilities 1,170 1,383

Total current liabilities 12,456 14,766

Long-term liabilities

Long term debt, excluding current maturities 1,372 387

Employee severance benefits 296 268

Deferred tax liabilities 64 45

Long-term operating lease liabilities 558 1,094

Total long-term liabilities 2,290 1,794

Equity

Ordinary shares, NIS 3.0 par value authorized 10,000,000 3,964 3,964shares, issued and outstanding 4,380,268

Additional paid-in capital 18,583 18,583

Cumulative foreign currency translation adjustments 2,527 2,479

Capital reserve 1,054 963

Accumulated deficit (17,878) (19,720)

Shareholders' equity 8,250 6,269

Total liabilities and shareholders' equity 22,996 22,829

Eltek Ltd.

Unaudited Non-GAAP EBITDA Reconciliations

(In thousands US$)

Non-GAAP EBITDA Reconciliations Nine months ended Three months ended

September 30, September 30,

2020 2019 2020 2019

Unaudited Unaudited

GAAP Net Income 598 391 1,842 1,424

Add back items:

Financial expenses, net 19 146 158 409

Income tax expense 11 29 49 51

Depreciation and amortization 390 374 1,176 1,118

Non-GAAP EBITDA 1,018 940 3,226 3,002



Eltek Ltd.

Consolidated Statement of Cash flow

(In thousands US$)

Three months Nine months ended ended

September 30, September 30,

2020 2019 2020 2019

Cash flows from operating activities:

Net Income 598 391 1,842 1,424

Adjustments to reconcile net profit to net

cash flows provided by operating activities:

Depreciation and amortization 391 371 1,177 1,119

Capital gain on disposal of fixed assets, net (16) - (16) -

Stock-based compensation 48 26 91 87

Transaction with controlling shareholder - 15 - 44

Revaluation of long term loans (2) (12) 2 (36)

Increase in deferred tax liabilities 6 - 18 -

427 400 1,272 1,214

Decrease in operating lease right-of-use assets (1) (1) (5) (11)

Decrease (increase) in trade receivables 949 886 1,098 (712)

Decrease (increase) in other receivables and prepaid expenses (1,077) (224) (890) 655

Decrease (increase) in inventories (50) 211 198 98

Increase (decrease) in trade payables 397 (102) 27 92

Increase in other liabilities and accrued expenses (357) (188) 181 (55)

Increase (decrease) in employee severance benefits, net (13) 23 27 14

(152) 605 636 81

Net cash provided by operating activities 873 1,396 3,750 2,719

Cash flows from investing activities:

Purchase of fixed assets (348) (293) (802) (543)

Restricted deposits (1) - (58) -

Net cash used in investing activities (349) (293) (860) (543)

Cash flows from financing activities:

Short- term bank credit, net (1,163) (921) (1,928) (4,315)

Proceeds from short- term shareholder loan - - - 557

Repayment of short- term shareholder loan - - (571) -

Issuance of ordinary shares in rights offering, net - - - 3,298

Repayment of long-term loans from bank (37) (220) (145) (675)

Proceeds from long-term loans - 557 1,141 558

Repayment of credit from fixed asset payables (87) (94) (391) (289)

Net cash used in financing activities (1,287) (678) (1,894) (866)

Effect of translation adjustments 7 27 27 (13)

Net increase (decrease) in cash and cash equivalents (756) 452 1,023 1,297

Cash and cash equivalents at beginning of the period 3,407 1,837 1,628 992

Cash and cash equivalents at period end 2,651 2,289 2,651 2,289

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SOURCE Eltek Ltd.