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Eltek reports second quarter financial results

- Implementation of a re-organization plan

PETACH-TIKVA, Israel, Aug. 27, 2014 /PRNewswire/ -- Eltek Ltd. (NASDAQ: ELTK), the leading Israeli manufacturer of advanced circuitry solutions, including complex build ups of rigid and flex-rigid printed circuit boards, announced today its financial results for the quarter ended June 30, 2014.

Revenues for the quarter ended June 30, 2014 were $12 million compared to revenues of $12.4 million in the second quarter of 2013. 

Gross Profit for the second quarter of 2014 was $1.7 million (13.9% of revenues) compared to gross profit of $2.1 million (17% of revenues) in the second quarter of 2013.

Operating loss for the second quarter of 2014 was $65,000 compared to the operating profit of $491,000 in the second quarter of 2013.

Net loss for second quarter of 2014 was $125,000 or $0.01 per fully diluted share compared to net profit of $339,000 or $0.05 per fully diluted share in the second quarter of 2013.

First six months of 2014:

Revenues for the first six months of 2014 were $24.3 million compared to revenues of $24.8 million recorded in the first six months of 2013. 

Gross profit for the first six months of 2014 was $3.2 million (13.1% of revenues) compared to gross profit of $3.9 million (15.9% of revenues) in the first six months of 2013.

Operating loss for the first six months of 2013 was $186,000 compared to the operating profit of $721,000 in the first six months of 2013.

Net loss for the first six months of 2014 was $312,000 or $0.03 per fully diluted share, compared to net profit of $465,000, or $0.07 per fully diluted share, in the first six months of 2013.

EBITDA:

In the quarter ended June 30, 2014, Eltek had EBITDA of $480,000 compared to EBITDA of $932,000 in the second quarter of 2013.

In the first six months of 2014, Eltek had EBITDA of $834,000 compared to EBITDA of $1.5 million in the first six months of 2013.

Management Comments:

Mr. Yitzhak Nissan, Chairman of the Board, stated: "The decrease in our operating results was primarily attributable to a decline in orders, mainly for a key project, and the weakness of the U.S. dollar, as the exchange rate of the dollar compared to the NIS in the second quarter of 2014 was 6.6% lower than in the comparable period in 2013. We have implemented several important changes to our operations in order to improve our performance. We have lowered our costs by reorganizing the Company's management structure.  We are doing this by redefining areas of management responsibilities, thus creating increased flexibility to timely meet market demands. We believe that we have a clear technological edge, which along with the steps that we are taking will allow us to better compete and offer our customers highly sophisticated products at competitive prices."

Mr. Nissan added: "The Company's costs structure and aging equipment have limited our ability to provide competitive prices. We are making good progress in upgrading our production lines. The new equipment and the cost reduction plan, including renegotiation of raw material prices, along with the operating efficiency steps we are implementing, will enhance our competitive abilities, although we expect that the re-organization and management downsizing will require us to record one-time expenses of approximately $400,000 in the third quarter."

"As previously reported, Mr. Reichart, who has been the Company's CEO for 22 years, has stepped down and Mr. Roberto Tulman has assumed the position of interim CEO. I want to take this opportunity to thank Mr. Reichart for his long service and noteworthy achievements as the Company's CEO, and wish Mr. Tulman good-luck in fulfilling this position," Mr. Nissan 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.

Use of EBITDA
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.

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


Six months ended




June  30,


June  30,




2014


2013


2014


2013








Revenues


12,031


12,350


24,294


24,803


Costs of revenues


(10,355)


(10,256)


(21,107)


(20,920)












Gross profit


1,676


2,094


3,187


3,882












Selling, general and administrative expenses


(1,742)


(1,603)


(3,373)


(3,161)












Operating profit (loss)


(65)


491


(186)


721












Financial income (expenses), net


(117)


(144)


(185)


(244)












Profit (loss) before other income, net


(182)


347


(372)


477












Other income, net


22


(7)


22


(10)












Profit (loss) before income tax expenses


(161)


340


(350)


466












Income tax (expenses), net


(23)


(9)


(41)


(18)












Net Profit (loss)


(184)


331


(391)


448












Net profit (loss) attributable to non controlling interest


(58)


(8)


(79)


(17)












Net Profit (loss) attributable to Eltek Ltd.


(125)


339


(312)


465












Earnings per share




















Basic and diluted net gain (loss) per ordinary share


(0.01)


0.05


(0.03)


0.07












Weighted average number of ordinary shares 










used to compute basic and diluted net gain (loss) per










ordinary share (in thousands)


10,143


6,610


10,143


6,610


 

Eltek Ltd. 

Consolidated Balance Sheets

(In thousands US$)




June  30,



2014


2013

Assets










Current assets





Cash and cash equivalents


1,237


829

Receivables:   Trade, net of provision for doubtful accounts


8,773


9,583

                     Other


408


325

Inventories 


5,635


5,647

Prepaid expenses 


243


262






Total current assets


16,296


16,646






Deferred taxes


2,891


0






Assets held for employees' severance benefits


55


49






Fixed assets, less accumulated depreciation


10,326


9,585






Goodwill


72


74






Total assets


29,640


26,354





















Liabilities and Shareholder's equity










Current liabilities





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


2,012


4,813

Accounts payable: Trade


7,319


7,158

                            Related parties


-


1,523

                            Other


5,742


4,967






Total current liabilities


15,073


18,461






Long-term liabilities





Long term debt, excluding current maturities


1,125


1,563

Employee severance benefits


375


193






Total long-term liabilities


1,500


1,756






Equity





Ordinary shares, NIS 0.6  par value authorized 50,000,000 shares, issued and outstanding 6,610,107 in 2013 and 10,142,762 in 2014


1,985


1,384

Additional paid-in capital


17,270


14,328

Cumulative foreign currency translation adjustments


3,299


2,997

Capital reserve


695


695

Accumulated deficit


(10,197)


(13,370)

Shareholders' equity


13,052


6,034

Non controlling interest


15


103

Total equity


13,067


6,137

Total liabilities and shareholders' equity


29,640


26,354

 

Eltek Ltd.

Unaudited Non-GAAP EBITDA Reconciliations

(In thousands US$, except per share data)










Non-GAAP EBITDA Reconciliations


Three months ended


Six months ended



June  30,


June  30,



2014


2013


2014


2013















GAAP net Income (loss)


(125)


339


(312)


465

Add back items:


















Financial (income) expenses, net 


117


143


185


244

Income tax (benefit) expense


23


9


41


18

Depreciation and amortization


465


441


920


818

Adjusted EBITDA            


480


932


834


1,546

 

Investor Contact:
Amnon Shemer
Chief Financial Officer
[email protected]
+972-3-9395050         

SOURCE Eltek Ltd.

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