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


Press Release
 
Eltek Ltd. Reports 2022 Second Quarter Financial Results
 
Petach Tikva, Israel (August 17, 2022) Eltek Ltd. (NASDAQ: ELTK), a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), today announced its financial results for the quarter ended June 30, 2022.
 
Second Quarter 2022 Highlights
 

 ◾
Revenues were $9.1 million
 

 ◾
Operating profit was $0.3 million
 

 ◾
Profit before tax was $1.0 million.
 

 ◾
Net profit was $0.8 million or $0.13 per fully diluted share
 

 ◾
Net cash provided by operating activities amounted to $0.5 million
 

 ◾
Repair of the damaged production line was completed and production has returned to normal capacity
 
“While we were able to record revenues of $9.1 million in the second quarter of 2022, our revenues and operating profit was affected by the fire that broke out at our plant in Petach-Tikvah. The fire was extinguished, but completely shut down the production phase carried out in one of our production departments. Within a period of approximately two weeks we managed to employ an alternative process using other machines and renewed partial deliveries to customers while prioritizing critical orders. As of today, our production levels are at normal volume,” said Eli Yaffe, CEO of Eltek.

"As a result of the fire, our ability to supply finished products to our customers was impaired, resulting in lower than planned sales and increased costs. We are currently discussing with the insurance company the amount of compensation for the damages we incurred," further explained Mr. Yaffe.
 
“During July, we renewed our shelf registration statement which will permit us to raise up to $20 million. The registration statement is intended to enable us to raise capital at a time when market conditions and our share price will be appropriate," concluded Mr. Yaffe.
 
Second Quarter 2022 GAAP Financial Results
 
Revenues for the second quarter of 2022 were $9.1 million, compared to $9.1 million in the second quarter of 2021;
 
Gross profit for the second quarter of 2022 was $1.7 million (18% of revenues) compared to $2.4 (26% of revenues) in the second quarter of 2021;
 
Operating profit for the second quarter of 2022 was $0.3 million compared to operating profit of $1.0 million in the second quarter of 2021;
 
Financial income for the second quarter of 2022 was $0.6 million compared to financial expenses of $0.1 million in the second quarter of 2021. Financial income resulted from the erosion of the NIS against the US dollar.
 
Profit before income tax for the second quarter of 2022 was $1.0 million compared to $1.0 million in the second quarter of 2021;
 
Net profit for the second quarter of 2022 was $0.8 million or $0.13 per fully diluted share compared to net profit of $0.9 million or $0.16 per fully diluted share in the second quarter of 2021;
 
Second Quarter 2022 Non-GAAP Financial Results
 
EBITDA for the second quarter of 2022 was a $0.8 million (9% of revenues) compared to EBITDA of $1.4 million (16% of revenues) in the second quarter of 2021;
 
First six months of 2022 GAAP Financial Results
 
Revenues for the first six months of 2022 were $18.8 million, compared to $16.3 million in the first six months of 2021;
 
Gross profit for the first six months of 2022 was $3.6 million (19% of revenues) compared to $3.5 (22% of revenues) in the first six months of 2021;
 
Operating profit for the first six months of 2022 was $1.0 million compared to operating profit of $1.2 million in the first six months of 2021;
 
Financial income for the first six months of 2022 was $732,000 compared to financial income of $20,000 in the first six months of 2021. Financial income resulted from the erosion of the NIS against the US dollar.
 
Profit before income tax for the first six months of 2022 was $1.7 million compared to $1.2 million in the first six months of 2021;

Net profit for the first six months of 2022 was $1.4 million or $0.24 per fully diluted share compared to net profit of $1.2 million or $0.20 per fully diluted share in the first six months of 2021;
 
First six months of 2022 Non-GAAP Financial Results
 
EBITDA for the first six months of 2022 was a $1.9 million (10% of revenues) compared to EBITDA of $2.1 million (13% of revenues) in the first six months of 2021;
 
Conference Call
 
Today, Wednesday, August 17, 2022, at 8:30am Eastern Time (15:30pm Israel Time, 5:30am Pacific Time), Eltek will conduct a conference call to discuss the results. The call will feature remarks by Eli Yaffe, Chief Executive Officer and Ron Freund, Chief Financial Officer.
 
To participate, please call the following teleconference numbers. Please allow for additional time to connect prior to the call:
 
United States:
1-866-860-9642
Israel:
03-918-0691
International:
+972-3-918-0691

To Access a Replay of the Call
 
A replay of the call will be available for 30 days on the Investor Info section on Eltek’s corporate website at http://www.nisteceltek.com approximately 24 hours after the conference call is completed.
 
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 an Israeli leading company 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.
 
About our 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.
 
Investor Contact
 
Ron Freund
Chief Financial Officer
Investor-Contact@nisteceltek.com
+972-3-939-5023

(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,
  
   
2022
    
2021
    
2022
    
2021
  
                         
Revenues
    
9,089
      
9,132
      
18,844
      
16,337
  
Costs of revenues
    
(7,411
)
    
(6,743
)
    
(15,205
)
    
(12,806
)
Gross profit
    
1,678
      
2,389
      
3,639
      
3,531
  
                                 
Selling, general and administrative expenses
    
(1,306
)
    
(1,332
)
    
(2,598
)
    
(2,332
)
R&D expenses, net
    
(26
)
    
(10
)
    
(44
)
    
(10
)
Operating profit
    
346
      
1,047
      
997
      
1,189
  
                                 
Financial income (expenses), net
    
611
      
(84
)
    
732
      
20
  
Other income (loss), net
     -      
-
       -      
(2
)
Profit before income tax
    
957
      
963
      
1,729
      
1,207
  
                                 
Tax expenses
    
204
      
35
      
344
      
50
  
Net Profit
    
753
      
928
      
1,385
      
1,157
  
                                 
Earnings per share
                                
Basic and diluted net profit per ordinary share
    
0.13
      
0.16
      
0.24
      
0.20
  
                                 
Weighted average number of ordinary shares used to compute
                  
basic net profit per ordinary share (in thousands)
    
5,850
      
5,840
      
5,846
      
5,840
  
                                 
Weighted average number of ordinary shares used to compute
                  
diluted net profit per ordinary share (in thousands)
    
5,850
      
5,871
      
5,846
      
5,868
  

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

   
June 30,
    
December 31,
  
   
2022
    
2021
  
             
Assets
            
             
Current assets
            
Cash and cash equivalents
    
8,246
      
9,283
  
Receivables:   Trade, net of provision for doubtful accounts
    
8,533
      
7,021
  
                     Other
    
762
      
798
  
Inventories
    
5,079
      
4,893
  
Prepaid expenses
    
385
      
586
  
                 
Total current assets
    
23,005
      
22,581
  
                 
Long term assets
                
Restricted deposits
    
202
      
226
  
Severance pay fund
    
59
      
66
  
Deferred tax assets and long term tax receivables, net
    
2,842
      
3,563
  
Operating lease right of use assets
    
7,833
      
8,979
  
Total long term assets
    
10,936
      
12,834
  
                 
Fixed assets, less accumulated depreciation
    
6,213
      
7,368
  
                 
Total Assets
    
40,154
      
42,783
  
                 
Liabilities and Shareholder's equity
                
                 
Current liabilities
                
Short-term credit and current maturities of long-term debts
    
723
      
708
  
Accounts payable: Trade
    
4,310
      
4,044
  
                            Other
    
3,471
      
3,577
  
Short-term operating lease liabilities
    
859
      
931
  
                 
Total current liabilities
    
9,363
      
9,260
  
                 
Long-term liabilities
                
Long term debt, excluding current maturities
    
3,136
      
3,921
  
Employee severance benefits
    
306
      
344
  
Long-term operating lease liabilities
    
7,093
      
8,186
  
                 
Total long-term liabilities
    
10,535
      
12,451
  
                 
Equity
                
Ordinary shares, NIS 3.0 par value authorized 10,000,000 shares, issued and outstanding 5,849,678 at June 30, 2022 and 5,840,357 at December 31, 2021
    
5,305
      
5,296
  
Additional paid-in capital
    
22,862
      
22,846
  
Cumulative foreign currency translation adjustments
    
1,364
      
3,716
  
Capital reserve
    
1,404
      
1,287
  
Accumulated deficit
    
(10,688
)
    
(12,073
)
Shareholders' equity
    
20,247
      
21,072
  
Total liabilities and shareholders' equity
    
40,145
      
42,783
  

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

Non-GAAP EBITDA Reconciliations
  
Three months ended
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2022
    
2021
    
2022
    
2021
  
   
Unaudited
    
Unaudited
  
                         
GAAP net Income
    
753
      
928
      
1,385
      
1,157
  
Add back items:
                                
                                 
Financial expenses (income), net
    
(611
)
    
84
      
(732
)
    
(20
)
Income tax expenses
    
204
      
35
      
344
      
50
  
Depreciation and amortization
    
445
      
442
      
880
      
885
  
Non-GAAP EBITDA
    
791
      
1,489
      
1,877
      
2,072
  


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

   
Three months ended
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2022
    
2021
    
2022
    
2021
  
                         
Cash flows from operating activities:
                        
                         
Net Income
    
753
      
928
      
1,385
      
1,157
  
                                 
Adjustments to reconcile net profit to net
                                
 cash flows provided by operating activities:
                                
Depreciation and amortization
    
445
      
442
      
880
      
886
  
Stock-based compensation
    
64
      
67
      
117
      
73
  
Decrease in deferred tax assets and long term tax receivable
    
194
      
9
      
335
      
16
  
     
703
      
518
      
1,332
      
975
  
                                 
Decrease (increase) in operating lease right-of-use assets
    
(8
)
    
20
      
(4
)
    
24
  
Decrease (increase) in trade receivables
    
(1,140
)
    
(1,482
)
    
(2,300
)
    
1,546
  
Decrease (increase) in other receivables and prepaid expenses
    
165
      
315
      
83
      
95
  
Decrease (increase) in inventories
    
(57
)
    
252
      
(731
)
    
(250
)
Increase (decrease) in trade payables
    
301
      
(211
)
    
786
      
(411
)
Increase (decrease) in other liabilities and accrued expenses
    
(204
)
    
44
      
302
      
(279
)
Increase (decrease)  in employee severance benefits, net
    
(2
)
    
(4
)
    
-
      
(10
)
     
(945
)
    
(1,066
)
    
(1,864
)
    
715
  
                                 
Net cash provided by operating activities
    
511
      
380
      
853
      
2,847
  
                                 
Cash flows from investing activities:
                                
Purchase of fixed assets
    
(326
)
    
(331
)
    
(615
)
    
(538
)
Restricted deposits
    
(1
)
    
(154
)
    
(1
)
    
(154
)
Net cash used in investing activities
    
(327
)
    
(485
)
    
(616
)
    
(692
)
                                 
Cash flows from financing activities:
                                
Short- term bank credit, net
    
-
      
-
      
-
      
(377
)
Exercise of options
    
-
      
-
      
25
      
-
  
Repayment of long-term loans from bank
    
(144
)
    
(38
)
    
(258
)
    
(77
)
Proceeds from long-term loans
    
-
      
3,062
      
-
      
3,062
  
Repayment of credit from fixed asset payables
    
(3
)
    
(274
)
    
(7
)
    
(285
)
Net cash provided by (used in) financing activities
    
(147
)
    
2,750
      
(240
)
    
2,323
  
                                 
Effect of translation adjustments
    
(845
)
    
118
      
(1,034
)
    
(44
)
                                 
Net increase (decrease) in cash and cash equivalents
    
(808
)
    
2,763
      
(1,037
)
    
4,434
  
                                 
Cash and cash equivalents at beginning of the period
    
9,054
      
6,406
      
9,283
      
4,735
  
                                 
Cash and cash equivalents at period end
    
8,246
      
9,169
      
8,246
      
9,169