EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1


 
Press Release

Eltek Reports Full Year and Fourth Quarter 2020 Financial Results


 •
Revenues of $36.7 million in 2020 compared to $34.8 million in 2019 - 5.5% growth in revenues YoY.

•
Net profit of $2.6 million in 2020 compared to a net profit of $1.8 million in 2019, growth of 44.4% YoY.

•
Revenues of $9.5 million in the fourth quarter of 2020 compared to $8.6 million in the fourth quarter of 2019, a 10.5% increase.

•
Net profit of $766,000 in the fourth quarter of 2020 compared to net profit of $370,000 in the fourth quarter of 2019, a 107% increase.

•
Achieved gross margins above 21% for the year.

•
Achieved $4.6M EBITDA in the year, or 12.5% of total sales.

•
Achieved cash flow provided by operating activities of $3.3 million for the year.

•
Equity to total balance sheet was 43.4% at the end of 2020 compared to 27.5% at the end of 2019.

PETACH-TIKVA, Israel, March 25, 2021 - 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 full year and fourth quarter ended December 31, 2020.

Mr. Eli Yaffe, Chief Executive Officer, commented: "We are pleased with the growth in our revenues and profitability in the fourth quarter and the significant change in our full year results. The improved results reflect the growth in our revenues and the continued improved operating efficiencies.”
 
Eltek has managed successfully through the COVID pandemic in 2020 because of the following actions:
 

 •
Eltek’s balance market sectors strategy enabled Eltek to mitigate the downturn in the commercial aerospace market through its involvement in the defense market and the medical devices market.
 

 •
Eltek managed carefully its cash during the pandemic period by obtaining a reduced rate long term loan guaranteed by the government and by raising $5.7 million in a rights offering.
 

 •
Eltek increased investments during 2020 capitalizing on the reduced prices of capital equipment due to Covid.
 
In addition, we were able to emphasis the following:
 

 •
Eltek used its strong cash flow during 2020 in order to pay back part of its short-term loans. As a result, the ratio of Equity/Total Balance sheet increased to 43.4% at the end of 2020 compared to 27.5% at the end of 2019.
 

 •
Eltek accelerated its R&D plans and was awarded a grant from the Israel Investment Authority and approval for participation in a special R&D program funded by the Israel Innovation Authority.
 
"The outbreak and spread of the Coronavirus has created new operational and business challenges, including a shortage of certain raw material that we are dealing with. The Covid pandemic forced Eltek to start a new expense reduction plan at the end of 2020 that will reduce further the breakeven point of the company.” concluded Mr. Yaffe.
 
Highlights of the Full Year of 2020 compared to the Full Year of 2019

 •
Revenues for the full year of 2020 amounted to $36.7 million compared to revenues of $34.8 million in 2019, an increase of 5.5% YoY.
 

 •
Gross profit increased by 28.3% to $7.7 million (21.0% of revenues) in 2020 from gross profit of $6.0 million (17.3% of revenues) in 2019.
 

 •
Operating profit was $3.0 million in 2020 compared to an operating profit of $1.4 million in 2019, an increase of 114.3% YoY.
 

 •
Net profit was $2.6 million, or $0.58 per fully diluted share in 2020, compared to a net profit of $1.8 million, or $0.48 per fully diluted share in 2019. Net profit increased 44.4% YoY.
 

 •
EBITDA was $4.6 million in 2020 compared to EBITDA of $3.8 million in 2019, an increase of 21.1% YoY.
 

 •
Net cash provided by operating activities amounted to $3.3 million in 2020 compared to $2.6 million in 2019.
 

 •
Cash and cash equivalents as of December 31, 2020 were $4.7 million compared to $1.6 million as of December 31, 2019.
 
Highlights of the Fourth Quarter of 2020 compared to the Fourth Quarter of 2019

 •
Revenues for the fourth quarter of 2020 were $9.5 million compared to revenues of $8.6 million in the fourth quarter of 2019, an increase of 10.5% YoY.
 

 •
Gross profit increased by 46.7% from gross profit of $1.5 million (17.0% of revenues) in the fourth quarter of 2019 to $2.2 million (23.2% of revenues) in the fourth quarter of 2020.
 

 •
Operating profit was $973,000 in the fourth quarter of 2020 compared to an operating profit of $379,000 in the fourth quarter of 2019, an increase of 156.7% YoY.
 

 •
Net profit was $766,000 or $0.16 per fully diluted share in the fourth quarter of 2020 compared to a net profit of $370,000 or $0.08 per fully diluted share in the fourth quarter of 2019. Fourth quarter net profit increased 107.0% YoY.
 

 •
EBITDA was $1.4 million in the fourth quarter of 2020 compared to EBITDA of $817,000 in the fourth quarter of 2019, an increase of 71.4% YoY.
 

 •
Short term credit and loans were down from 24.5% of the total balance sheet at the end of 2019 to 1.9% at the end of 2020.
 
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.
 
Conference Call
Eltek will conduct a conference call to discuss the results today, Thursday, March 25, 2021, at 8:30 a.m. Eastern Time. 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: 03-9180691
International: +972-3-9180691

 
At:
 
  8:30 a.m. Eastern Time  
  5:30 a.m. Pacific Time  
  14:30 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.com approximately 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 subsidiary in North America and by agents and distributors in Europe, India, South Africa and South America.

For more information, visit Eltek's web site at www.nisteceltek.com

Forward Looking Statement:
Some of the statements included in this press release may be forward-looking statements that involve a number of risks and uncertainties including, but not limited to 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. Any forward-looking statements set forth in this press release speak only as of the date of this press release. The information found on our website is not incorporated by reference into this press release and is included for reference purposes only.

Investor Contact:
Alon Mualem
Chief Financial Officer
alonm@nisteceltek.com
+972-3-9395023
(Tables follow)

Eltek Ltd.
Consolidated Statements of Operations
(In thousands US$, except per share data)

   
Three months ended
    
Twelve months ended
  
   
December 31,
    
December 31,
  
   
2020
    
2019
    
2020
    
2019
  
                         
                         
Revenues
    
9,501
      
8,582
      
36,707
      
34,794
  
Costs of revenues
    
(7,290
)
    
(7,124
)
    
(28,969
)
    
(28,787
)
                                 
Gross profit
    
2,211
      
1,458
      
7,738
      
6,007
  
                                 
Selling, general and administrative expenses
    
(1,236
)
    
(1,063
)
    
(4,704
)
    
(4,604
)
                                 
R&D expenses, net
    
(2
)
    
(16
)
    
(2
)
    
(16
)
                                 
Operating profit
    
973
      
379
      
3,032
      
1,387
  
                                 
Financial expenses, net
    
(179
)
    
(32
)
    
(337
)
    
(440
)
Other income, net
    
(6
)
    
48
      
(16
)
    
923
  
                                 
Profit before income tax
    
788
      
395
      
2,679
      
1,870
  
                                 
Tax expenses
    
(22
)
    
(25
)
    
(71
)
    
(77
)
                                 
Net Profit
    
766
      
370
      
2,608
      
1,793
  
                                 
Earnings per share
                                
                                 
Basic and diluted net profit per ordinary share
    
0.16
      
0.08
      
0.58
      
0.48
  
                                 
Weighted average number of ordinary shares used to compute
                                
basic net profit per ordinary share (in thousands)
    
4,841
      
4,380
      
4,495
      
3,734
  
                                 
Weighted average number of ordinary shares used to compute
                                
diluted net profit per ordinary share (in thousands)
    
4,852
      
4,380
      
4,501
      
3,734
  

Eltek Ltd.
Consolidated Balance Sheets
(In thousands US$)

   
December 31,
    
December 31,
  
   
2020
    
2019
  
             
Assets
            
             
Current assets
            
Cash and cash equivalents
    
4,735
      
1,628
  
Receivables:   Trade, net of provision for doubtful accounts
    
9,062
      
7,480
  
  Other
    
700
      
145
  
Inventories
    
3,704
      
3,735
  
Prepaid expenses
    
619
      
530
  
                 
Total current assets
    
18,820
      
13,518
  
                 
Long term assets
                
Restricted deposits
    
62
      
-
  
Severance pay fund
    
64
      
60
  
Operating lease right of use assets
    
8,948
      
2,490
  
Total long term assets
    
9,074
      
2,550
  
                 
Fixed assets, less accumulated depreciation
    
7,263
      
6,761
  
                 
Total Assets
    
35,157
      
22,829
  
                 
Liabilities and Shareholder's equity
                
                 
Current liabilities
                
Short-term credit and current maturities of long-term debts
    
676
      
2,120
  
Short-term credit from related party
    
-
      
3,472
  
Accounts payable: Trade
    
4,452
      
4,673
  
  Other
    
3,831
      
3,118
  
Short-term operating lease liabilities
    
742
      
1,383
  
                 
Total current liabilities
    
9,701
      
14,766
  
                 
Long-term liabilities
                
Long term debt, excluding current maturities
    
1,495
      
387
  
Employee severance benefits
    
338
      
268
  
Deferred tax liabilities
    
84
      
45
  
Long-term operating lease liabilities
    
8,272
      
1,094
  
                 
Total long-term liabilities
    
10,189
      
1,794
  
                 
Equity
                
Ordinary shares, NIS 3.0  par value authorized 10,000,000 shares, issued and outstanding 5,840,357 and 4,380,268 at December 31, 2020 and December 31, 2019, respectively
    
5,296
      
3,964
  
Additional paid-in capital
    
22,846
      
18,583
  
Cumulative foreign currency translation adjustments
    
3,153
      
2,479
  
Capital reserve
    
1,084
      
963
  
Accumulated deficit
    
(17,112
)
    
(19,720
)
Shareholders' equity
    
15,267
      
6,269
  
Total liabilities and shareholders' equity
    
35,157
      
22,829
  

Eltek Ltd.
Unaudited Non-GAAP EBITDA Reconciliations
(In thousands US$)

Non-GAAP EBITDA Reconciliations
  
Three months ended
    
Twelve months ended
  
   
December 31,
    
December 31,
  
   
2020
    
2019
    
2020
    
2019
  
   
Unaudited
    
Unaudited
  
                         
GAAP net Income (loss)
    
766
      
370
      
2,608
      
1,793
  
Add back items:
                                
Financial expenses, net
    
179
      
32
      
337
      
440
  
Income tax expense
    
21
      
25
      
71
      
77
  
Depreciation and amortization
    
414
      
390
      
1,590
      
1,508
  
Non-GAAP EBITDA
    
1,380
      
817
      
4,606
      
3,818
  

Eltek Ltd.
Consolidated Statement of  Cash flow
(In thousands US$)

   
Three months ended
    
Twelve months ended
  
   
December 31,
    
December 31,
  
   
2020
    
2019
    
2020
    
2019
  
                         
Cash flows from operating activities:
                        
                         
Net Income
    
766
      
370
      
2,608
      
1,793
  
                                 
Adjustments to reconcile net profit to net
                                
 cash flows provided by operating activities:
                                
Depreciation and amortization
    
415
      
390
      
1,592
      
1,508
  
Capital (gain) loss on disposal of fixed assets, net
    
14
      
-
      
(2
)
    
-
  
Stock-based compensation
    
30
      
53
      
121
      
141
  
Transaction with controlling shareholder
    
-
      
(22
)
    
-
      
22
  
Revaluation of long term loans
    
-
      
(2
)
    
2
      
(38
)
Increase in deferred tax liabilities
    
15
      
45
      
33
      
45
  
     
474
      
464
      
1,746
      
1,678
  
                                 
Decrease (increase) in operating lease right-of-use assets
    
79
      
8
      
74
      
(3
)
Increase in trade receivables
    
(2,054
)
    
(565
)
    
(956
)
    
(1,277
)
Decrease (increase) in other receivables and prepaid expenses
    
334
      
(58
)
    
(556
)
    
598
  
Decrease in inventories
    
93
      
77
      
290
      
175
  
Increase (decrease)  in trade payables
    
(476
)
    
15
      
(449
)
    
107
  
Increase (decrease) in other liabilities and accrued expenses
    
267
      
(473
)
    
448
      
(529
)
Increase in employees severance benefits, net
    
20
      
21
      
47
      
36
  
     
(1,737
)
    
(975
)
    
(1,102
)
    
(893
)
                                 
Net cash provided by (used in) operating activities
    
(497
)
    
(141
)
    
3,252
      
2,578
  
                                 
Cash flows from investing activities:
                                
Purchase of fixed assets
    
(279
)
    
(263
)
    
(1,082
)
    
(806
)
Restricted deposits
    
-
      
-
      
(58
)
    
-
  
Net cash used in investing activities
    
(279
)
    
(263
)
    
(1,140
)
    
(806
)
                                 
Cash flows from financing activities:
                                
Short- term bank credit, net
    
328
      
135
      
(1,600
)
    
(4,181
)
Proceeds from short- term shareholder loan
    
-
      
2
      
-
      
561
  
Repayment of short- term shareholder loan
    
(3,090
)
    
-
      
(3,661
)
    
-
  
Issuance of ordinary shares in rights offering, net
    
5,594
      
-
      
5,594
      
3,298
  
Repayment of long-term loans from bank
    
(38
)
    
(216
)
    
(183
)
    
(891
)
Proceeds from long-term loans
    
-
      
-
      
1,141
      
558
  
Repayment of credit from fixed asset payables
    
(86
)
    
(188
)
    
(477
)
    
(477
)
Net cash provided by (used in) financing activities
    
2,708
      
(267
)
    
814
      
(1,132
)
                                 
Effect of translation adjustments
    
152
      
11
      
181
      
(4
)
                                 
Net increase (decrease) in cash and cash equivalents
    
2,084
      
(660
)
    
3,107
      
636
  
                                 
Cash and cash equivalents at beginning of the period
    
2,651
      
2,288
      
1,628
      
992
  
                                 
Cash and cash equivalents at period end
    
4,735
      
1,628
      
4,735
      
1,628