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


 
Press Release

Eltek Reports 2021 Second Quarter Financial Results


 •
Revenues of $9.1 million in the second quarter of 2021 compared to $8.8 million in the second quarter of 2020

•
Gross profit of $2.4 million in the second quarter of 2021 compared to $1.9 million in the second quarter of 2020

•
Net profit of $825,000 in the second quarter of 2021 compared to net profit of $704,000 in the second quarter of 2020

•
Achieved EBITDA of $1.4 million in the second quarter of 2021, or 15.2% of total sales compared to EBITDA of $1.2 million in the second quarter of 2020

•
Cash and cash equivalents as of June 20, 2021 were $9.2 million

PETACH-TIKVA, Israel, August 18, 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 quarter ended June 30, 2021.

Mr. Eli Yaffe, Chief Executive Officer, commented: "We are pleased that our second quarter reflects the return to improved results. We are gratified that despite the global Covid-19 pandemic that resulted in the short supply of various critical raw materials and the related challenges, we were able to grow our top line by 3.9% compared to the second quarter of 2020 and improve our gross margins from 21.6% in Q2 2020 to 25.9% in Q2 2021."
 
 “We are operating in a challenging business environment these days, mainly due to the global supply chain crisis, which was not resolved yet. As previously announced, during 2021 we were impacted by the worldwide shortage of Pyralux AP, a key material produced by DuPont. During the second quarter we were able to obtain authorizations from some of our customers to use alternative raw materials.” added Mr. Yaffe.
 
“During the second quarter we faced price increases for some of our raw materials. In addition, some of our operating expenses are dominated in New Israeli Shekel (“NIS”) and were negatively affected due to the devaluation of the US$ against the NIS. Nevertheless these challenges, we were able to improve our gross margin in the second quarter” said Mr. Yaffe.
 
“We are conducting several R&D programs and making effort to become an innovative industry leader. Eltek is making the necessary operational adjustments to expand our business, improve customer satisfaction, increase revenues, maintain the trend of improved operational results,” concluded Mr. Yaffe.
 
Highlights of the Second Quarter of 2021 compared to the Second Quarter of 2020
 

 •
Revenues for the second quarter of 2021 were $9.1 million compared to revenues of $8.8 million in the second quarter of 2020;
 

 •
Gross profit increased to $2.4 million (25.9% of revenues) in the second quarter of 2021 compared to $1.9 million (21.6% of revenues) in the second quarter of 2020;
 

 •
Operating profit increased to $944,000 (10.3% of revenues) during the second quarter of 2021 as compared to operating profit of $809,000 (9.2% of revenues)in the second quarter of 2020;
 

 •
Net profit was $825,000, or $0.14 per fully diluted share in the second quarter of 2021 compared to net profit of $704,000, or $0.16 per fully diluted share, in the second quarter of 2020;
 

 •
EBITDA was $1.4 million in the second quarter of 2021 compared to EBITDA of $1.2 million in the second quarter of 2020;
 

 •
Net cash provided by operating activities amounted to $380,000 in the second quarter of 2021 compared to net cash provided by operating activities of $1.4 million in the second quarter of 2020.
 

 •
Cash and cash equivalents as of June 30, 2021 were $9.2 million compared to $4.7 million as of December 31, 2020.
 
Highlights for the First Six Months of 2021


 •
Revenues for the first six months of 2021 were $16.3 million compared to $17.9 million in the first six months of 2020;
 

 •
Gross profit was $3.5 million (21.5% of revenues) compared to gross profit of $3.7 million (20.6% of revenues) in the first six months of 2020;
 

 •
Operating profit was $1.1 million compared to operating profit of $1.4 million in the first six months of 2020;
 

 •
Net profit was $1.0 million, or $0.18 per fully diluted share compared to net profit of $1.2 million, or $0.28 per fully diluted share in the first six months of 2020;
 

 •
EBITDA was $2.0 million in the first six months of 2021, compared to EBITDA of $2.2 million in the first six months of 2020;
 

 •
Net cash provided by operating activities amounted to $2.8 million in the first six months of 2021 compared to net cash provided by operating activities of $2.9 million in the first six months of 2020.
 
Conference Call
Today, Wednesday, August 18, 2021, at 8:00 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:
1-888-723-3164
Israel: 03-9180691
International: +972-3-9180691

 
At:
8:00 a.m. Eastern Time
5:00 a.m. Pacific Time
15:00 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 subsidiaries 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.

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 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
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2021
    
2020
    
2021
    
2020
  
                         
Revenues
    
9,132
      
8,792
      
16,338
      
17,949
  
Costs of revenues
    
(6,765
)
    
(6,892
)
    
(12,827
)
    
(14,246
)
Gross profit
    
2,367
      
1,900
      
3,511
      
3,703
  
                                 
Selling, general and administrative expenses
    
(1,413
)
    
(1,095
)
    
(2,421
)
    
(2,284
)
R&D expenses, net
    
(10
)
    
4
      
(10
)
    
2
  
Operating profit
    
944
      
809
      
1,080
      
1,421
  
                                 
Financial expenses, net
    
(84
)
    
(83
)
    
20
      
(139
)
Other income, net
    
-
      
-
      
(3
)
    
-
  
Profit before income tax
    
860
      
726
      
1,097
      
1,282
  
                                 
Tax expenses
    
(35
)
    
(22
)
    
(50
)
    
(38
)
Net Profit
    
825
      
704
      
1,047
      
1,244
  
                                 
Earnings per share
                                
Basic and diluted net profit per ordinary share
    
0.14
      
0.16
      
0.18
      
0.28
  
                                 
Weighted average number of ordinary shares used to compute
                                
basic net profit per ordinary share (in thousands)
    
5,840
      
4,380
      
5,840
      
4,380
  
                                 
Weighted average number of ordinary shares used to compute
                                
diluted net profit per ordinary share (in thousands)
    
5,871
      
4,380
      
5,868
      
4,380
  

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

   
June 30,
    
December 31,
  
   
2021
    
2020
  
             
Assets
            
             
Current assets
            
Cash and cash equivalents
    
9,169
      
4,735
  
Receivables:   Trade, net of provision for doubtful accounts
    
7,388
      
9,062
  
                      Other
    
784
      
700
  
Inventories
    
3,904
      
3,704
  
Prepaid expenses
    
422
      
619
  
                 
Total current assets
    
21,667
      
18,820
  
                 
Long term assets
                
Restricted deposits
    
215
      
62
  
Severance pay fund
    
63
      
64
  
Operating lease right of use assets
    
8,801
      
8,948
  
Total long term assets
    
9,079
      
9,074
  
                 
Fixed assets, less accumulated depreciation
    
6,893
      
7,263
  
                 
Total Assets
    
37,639
      
35,157
  
                 
Liabilities and Shareholder's equity
                
                 
Current liabilities
                
Short-term credit and current maturities of long-term debts
    
502
      
676
  
Accounts payable: Trade
    
3,881
      
4,452
  
                             Other
    
3,499
      
3,831
  
Short-term operating lease liabilities
    
806
      
742
  
                 
Total current liabilities
    
8,688
      
9,701
  
                 
Long-term liabilities
                
Long term debt, excluding current maturities
    
4,125
      
1,495
  
Employee severance benefits
    
323
      
338
  
Deferred tax liabilities
    
99
      
84
  
Long-term operating lease liabilities
    
8,085
      
8,272
  
                 
Total long-term liabilities
    
12,632
      
10,189
  
                 
Equity
                
Ordinary shares, NIS 3.0 par value authorized 10,000,000 shares, issued and outstanding 5,840,357
    
5,296
      
5,296
  
Additional paid-in capital
    
22,846
      
22,846
  
Cumulative foreign currency translation adjustments
    
2,975
      
3,153
  
Capital reserve
    
1,267
      
1,084
  
Accumulated deficit
    
(16,065
)
    
(17,112
)
Shareholders' equity
    
16,319
      
15,267
  
Total liabilities and shareholders' equity
    
37,639
      
35,157
  

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

Non-GAAP EBITDA Reconciliations
  
Three months ended
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2021
    
2020
    
2021
    
2020
  
   
Unaudited
    
Unaudited
  
                         
GAAP net Income (loss)
    
825
      
704
      
1,047
      
1,244
  
Add back items:
                                
                                 
Financial expenses, net
    
84
      
83
      
(20
)
    
139
  
Income tax expense
    
35
      
22
      
50
      
38
  
Depreciation and amortization
    
442
      
391
      
885
      
786
  
Non-GAAP EBITDA
    
1,386
      
1,200
      
1,962
      
2,207
  

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

   
Three months ended
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2021
    
2020
    
2021
    
2020
  
                         
Cash flows from operating activities:
                        
                         
Net Income
    
825
      
704
      
1,047
      
1,244
  
                                 
Adjustments to reconcile net profit to net
                                
 cash flows provided by operating activities:
                                
Depreciation and amortization
    
442
      
391
      
886
      
786
  
Stock-based compensation
    
170
      
17
      
183
      
43
  
Revaluation of long term loans
    
-
      
(6
)
    
-
      
4
  
Increase in deferred tax liabilities
    
9
      
6
      
16
      
12
  
     
621
      
408
      
1,085
      
845
  
                                 
Decrease (increase) in operating lease right-of-use assets
    
20
      
1
      
24
      
(4
)
Decrease (increase) in trade receivables
    
(1,482
)
    
280
      
1,546
      
149
  
Decrease in other receivables and prepaid expenses
    
315
      
49
      
95
      
187
  
Decrease (increase) in inventories
    
252
      
27
      
(250
)
    
248
  
Decrease  in trade payables
    
(211
)
    
(113
)
    
(411
)
    
(370
)
Increase (decrease) in other liabilities and accrued expenses
    
44
      
17
      
(279
)
    
538
  
Increase (decrease) in employee severance benefits, net
    
(4
)
    
24
      
(10
)
    
40
  
     
(1,066
)
    
285
      
715
      
788
  
                                 
Net cash provided by operating activities
    
380
      
1,397
      
2,847
      
2,877
  
                                 
Cash flows from investing activities:
                                
Purchase of fixed assets
    
(331
)
    
(250
)
    
(538
)
    
(454
)
Restricted deposits
    
(154
)
    
(58
)
    
(154
)
    
(58
)
Net cash used in investing activities
    
(485
)
    
(308
)
    
(692
)
    
(512
)
                                 
Cash flows from financing activities:
                                
Short- term bank credit, net
    
-
      
(326
)
    
(377
)
    
(765
)
Repayment of short- term shareholder loan
    
-
      
(571
)
    
-
      
(571
)
Repayment of long-term loans from bank
    
(38
)
    
(35
)
    
(77
)
    
(108
)
Proceeds from long-term loans
    
3,062
      
1,141
      
3,062
      
1,141
  
Repayment of credit from fixed asset payables
    
(274
)
    
(152
)
    
(285
)
    
(304
)
Net cash used in financing activities
    
2,750
      
57
      
2,323
      
(607
)
                                 
Effect of translation adjustments
    
119
      
47
      
(44
)
    
21
  
                                 
Net increase (decrease) in cash and cash equivalents
    
2,764
      
1,193
      
4,434
      
1,779
  
                                 
Cash and cash equivalents at beginning of the period
    
6,406
      
2,214
      
4,735
      
1,628
  
                                 
Cash and cash equivalents at period end
    
9,169
      
3,407
      
9,169
      
3,407