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Eltek Reports Third Quarter 2012 Financial Results

Eltek Ltd. (NASDAQ:ELTK), a leading Israeli manufacturer of advanced flex-rigid circuitry solutions, announced today its financial results for the quarter ended September 30, 2012.

Third Quarter 2012:

Revenues for the quarter ended September 30, 2012 were $10.8 million compared with revenues of $12.0 million recorded in the third quarter of 2011.

Gross profit for the third quarter of 2012 was $1.7 million (16.1% of revenues) compared with gross profit of $2.4 million (20.0% of revenues) in the third quarter of 2011.

Operating profit for the third quarter of 2012 was $285,000 compared to operating profit of $959,000 in the third quarter of 2011.

Net profit for the third quarter of 2012 was $135,000 or $0.02 per fully diluted share compared to net profit of $573,000, or $0.09 per fully diluted share, in the third quarter of 2011.

First nine months of 2012:

Revenues for the nine-month period ended September 30, 2012 were $34.3 million compared to revenues of $35.3 million recorded in the first nine months of 2011.

Gross profit for the first nine months of 2012 was $6.0 million (17.4% of revenues) compared to gross profit of $7.0 million (19.7% of revenues) in the first nine months of 2011.

Operating profit for the first nine months of 2012 was $1.5 million compared to operating profit of $2.3 million in the first nine months of 2011.

Net profit for the first nine months of 2012 was $1.0 million, or $0.15 per fully diluted share, compared with net profit of $1.6 million, or $0.24 per fully diluted share, in the first nine months of 2011.

EBITDA:

In the third quarter of 2012, Eltek had EBITDA of $680,000 compared with EBITDA of $1.6 million in the third quarter of 2011. In the first nine months of 2012, Eltek had EBITDA of $2.8 million compared with EBITDA of $3.9 million in the same period in 2011.

ELTEK uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income interest, taxes, depreciation and amortization. EBITDA is provided to investors to complement results provided in accordance with GAAP, as management believes the measure helps illustrate underlying operating trends in the Company's business and uses the measure to establish internal budgets and goals, manage the business and evaluate performance. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. Reconciliation between the company's results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statement of Operations.

Management Comments:

Arieh Reichart, President and Chief Executive Officer of Eltek, commented: "Eltek was able to report its seventh consecutive quarter of profitable operations in spite of a temporary production line problem, which reduced our revenues in the third quarter. I am glad to say that this temporary problem was resolved and is not expected to affect our ongoing production activity. The encouraging news is that this issue did not affect our company's business in its main target market in the US, in which Eltek continues to generate quarterly growth, despite the uncertainties in the global markets. Based on our order backlog for the fourth quarter we expect to return to a similar level of revenues as we have recorded in the previous six quarters."

"We recently signed a corporate purchasing agreement (CPA) with DRS Technologies, Inc. of the US, a Finmeccanica Company that is a leading supplier of integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide, which employs approximately 70,000 people worldwide. Being selected as a preferred supplier by an important group like DRS and signing a CPA is very encouraging. It is evidence of Eltek's high-end technology, capability and reliability, which are key factors for the defense, aerospace and medical sectors," Mr. Reichart concluded.

About Eltek

Eltek is Israel's leading manufacturer of printed circuit boards, the core circuitry of most electronic devices. It specializes in the complex high-end of PCB manufacturing, i.e., HDI, multilayered and flex-rigid boards. Eltek's technologically advanced circuitry solutions are used in today's increasingly sophisticated and compact electronic products. For more information, visit Eltek's web site at www.eltekglobal.com.

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

Nine months ended

Year ended
September 30, September 30, December 31,
2012 2011 2012 2011 2011
Unaudited Unaudited Audited
 
Revenues 10,779 11,974 34,291 35,345 46,830
Costs of revenues (9,045 ) (9,585 ) (28,321 ) (28,389 ) (38,101 )
 
Gross profit 1,734 2,389 5,970 6,956 8,729
 
Selling, general and administrative expenses (1,449 ) (1,430 ) (4,503 ) (4,694 ) (6,155 )
         
Operating profit (loss) 285 959 1,467 2,262 2,573
 
Financial income (expenses), net (128 ) (374 ) (394 ) (590 ) (739 )
 
Profit (loss) before other income, net 157 585 1,072 1,672 1,834
 
Other income, net (4 ) 1   5   10   12  
 
Profit (loss) before income tax expenses 154 586 1,078 1,682 1,846
 
Income tax (expenses), net (9 ) (22 ) (43 ) (45 ) (31 )
 
Net Profit (loss) 145 564 1,035 1,637 1,815
 
Net profit (loss) attributable to non controlling interest 10   9   23   (19 ) 31  
 
Net Profit (loss) attributable to controlling interest / Eltek 135   573   1,012   1,618   1,846  
 
Earnings per share
 
Basic and diluted net gain (loss) per ordinary share 0.02   0.09   0.15   0.24   (0.26 )

 

Weighted average number of ordinary shares used to compute basic and diluted net gain (loss) per ordinary share (in thousands)

6,610   6,610   6,610   6,610   6,610  
 
 
Eltek Ltd.
Consolidated Balance Sheets
(In thousands US$)
 
    September 30,     December 31,
2012     2011 2011
Unaudited Audited
Assets
 
Current assets
Cash and cash equivalents 1,434 1,310 892
Receivables: Trade, net of provision for doubtful accounts 6,808 8,425 8,885
Other 285 271 116
Inventories 5,124 5,154 4,434
Prepaid expenses 212   289   239  
 
Total current assets 13,863   15,449   14,566  
 
Assets held for employees' severance benefits 44   40   39  
 
Fixed assets, less accumulated depreciation 8,445   7,588   7,746  
 
Goodwill 486   540   518  
 
Total assets 22,838   23,617   22,869  
 
Liabilities and Shareholder's equity
 
Current liabilities
Short-term credit and current maturities of long-term debts 5,167 6,841 4,856
Accounts payable: Trade 5,940 5,920 6,456
Related parties 1,035 1,108 1,046
Other 4,024   4,439   3,995  
 
Total current liabilities 16,166   18,308   16,353  
 
Long-term liabilities
Long term debt, excluding current maturities 898 145 1,604
Employee severance benefits 138   421   150  
 
Total long-term liabilities 1,036   566   1,754  
 
Equity
Ordinary shares, NIS 0.6 par value authorized 50,000,000 shares, issued and outstanding 6,610,107 as of December 31, 2011. 1,384 1,384 1,384
Additional paid-in capital 14,295 14,328 14,328
Cumulative foreign currency translation adjustments 2,507 2,855 2,622
Capital reserve 695 695 695
Accumulated deficit (13,386 ) (14,716 ) (14,398 )
Shareholders' equity 5,495 4,546 4,631
Non controlling interest 141   197   131  
Total equity 5,636   4,743   4,762  
Total liabilities and shareholders' equity 22,838   23,617   22,869  
 
 
Eltek Ltd.
Unaudited Non-GAAP EBITDA Reconciliations
For the period ended December 31, 2011
(In thousands US$, except per share data)
 
Non-GAAP EBITDA Reconciliations     Three months ended    

Nine months ended

    Year ended
September 30, September 30, December 31,
2012     2011 2012     2011 2011
 
GAAP net Income (loss) 135 573 1,012 1,618 1,846

Add back items:

 
Financial (income) expenses, net 128 374 394 590 739
Income tax (benefit) expense 9 22 43 45 31
Depreciation 408 583 1,343 1,642 2,091
Adjusted EBITDA 680 1,552 2,792 3,895 4,707

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