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


Press Release
 
Eltek Ltd. Reports 2022 Third Quarter Financial Results
 
Petach Tikva, Israel (November 16, 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 September 30, 2022.
 
Third Quarter 2022 Highlights
 

 ◾
Revenues were $10.3 million
 

 ◾
Operating profit was $1.1 million
 

 ◾
Profit before tax was $1.2 million.
 

 ◾
Net profit was $1.0 million or $0.17 per fully diluted share
 

 ◾
Net cash provided by operating activities amounted to $1.7 million
 
“Revenues in the third quarter of 2022 amounted to $10.3 million. This result is in line with the Company's policy to increase production capacity in order to support higher revenues and net income. We estimate that this trend will continue as we will progress in the first phase of our investment program during the years 2023 and 2024. Our backlog continues to be strong as we are benefiting from the growing demand for high-end products, especially in the defense and medical sectors. We believe that this trend of strong demand for high technology products will continue,” said Eli Yaffe, CEO of Eltek.

"In the operational area, we continue to carry out optimization procedures in the production lines and are continuing our efforts to absorb and train new employees. We increased our number of employees by 18% since the beginning of the year. During the quarter, we managed the successful installation and operation of three brand new production machines and during Q4 2022 we will install two additional machines," continued Mr. Yaffe.
 
“The net profit in the quarter amounted to $1 million, most of which was achieved from current activity, without a material impact from financing income as was the case in the previous quarter," concluded Mr. Yaffe.
 
Third Quarter 2022 GAAP Financial Results
 
Revenues for the third quarter of 2022 were $10.3 million, compared to $8.0 million in the third quarter of 2021;
 
Gross profit for the third quarter of 2022 was $2.4 million (23% of revenues) compared to $1.4 (18% of revenues) in the third quarter of 2021;
 
Operating profit for the third quarter of 2022 was $1.1 million compared to operating profit of $0.1 million in the third quarter of 2021;
 
Profit before income tax for the third quarter of 2022 was $1.2 million compared to $0 million in the third quarter of 2021;
 
Net profit for the third quarter of 2022 was $1.0 million or $0.17 per fully diluted share compared to net profit of $0 million or $0.00  per fully diluted share in the third quarter of 2021;
 
Third Quarter 2022 Non-GAAP Financial Results
 
EBITDA for the third quarter of 2022 was a $1.4 million (14% of revenues) compared to EBITDA of $0.6 million (8% of revenues) in the third quarter of 2021;
 
First Nine Months 2022 GAAP Financial Results
 
Revenues for the first nine months of 2022 were $29.2 million compared to $24.3 million in the first nine months of 2021;
 
Gross profit for the first nine months of 2022 was $6.1 million (21% of revenues) compared to $4.9 million (20% of revenues) in the first nine months of 2021;
 
Operating profit for the first nine months of 2022 was $2.1 million compared to operating profit of $1.3 million in the first nine months of 2021;
 
Financial income for the first nine months of 2022 was $0.8 million compared to financial expense of $0.1 million in the first nine months of 2021. Financial income, which was primarily generated in the second quarter of 2022,  resulted from the erosion of the NIS against the US dollar.
 
Profit before income tax for the first nine months of 2022 was $2.9 million compared to $1.3 million in the first nine months of 2021;
 
Net profit for the first nine months of 2022 was $2.4 million or $0.41per fully diluted share compared to net profit of $1.2 million or $0.20 per fully diluted share in the first nine months of 2021;
 
First Nine Months 2022 Non-GAAP Financial Results
 
EBITDA for the first nine months of 2022 was a $3.3 million (11% of revenues) compared to EBITDA of $2.7 million (11% of revenues) in the first nine months of 2021;
 
Conference Call
 
Today, Wednesday, November 16, 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 Income
(Unaudited, in thousands US$, except per share data)

   
Three months ended
    
Nine months ended
  
   
September 30,
    
September 30,
  
   
2022
    
2021
    
2022
    
2021
  
                         
Revenues
    
10,327
      
7,965
      
29,171
      
24,302
  
Costs of revenues
    
(7,908
)
    
(6,555
)
    
(23,113
)
    
(19,361
)
                                 
Gross profit
    
2,419
      
1,410
      
6,058
      
4,941
  
                                 
Selling, general and administrative expenses
    
(1,261
)
    
(1,228
)
    
(3,859
)
    
(3,560
)
R&D expenses, net
    
(33
)
    
(45
)
    
(77
)
    
(55
)
                                 
Operating profit
    
1,125
      
137
      
2,122
      
1,326
  
                                 
Financial income (expenses), net
    
55
      
(121
)
    
787
      
(101
)
Other income (loss), net
    
-
      
44
      
-
      
42
  
                                 
Profit before income tax
    
1,180
      
60
      
2,909
      
1,267
  
                                 
Tax expenses
    
176
      
14
      
520
      
64
  
                                 
Net Profit
    
1,004
      
46
      
2,389
      
1,203
  
                                 
Earnings per share:
                                
Basic and diluted net profit per ordinary share
    
0.17
      
-
      
0.41
      
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
      
5,840
      
5,846
      
5,871
  

Eltek Ltd.
Consolidated Balance Sheets
(Unaudited, in thousands US$)



   
September 30,
    
December 31,
  
   
2022
    
2021
  
             
Assets
            
             
Current assets:
            
Cash and cash equivalents
    
7,847
      
9,283
  
Receivables:   Trade, net of provision for doubtful accounts
    
9,651
      
7,021
  
Other
    
502
      
798
  
Inventories
    
4,635
      
4,893
  
Prepaid expenses
    
320
      
586
  
                 
Total current assets
    
22,955
      
22,581
  
                 
Long term assets:
                
Restricted deposits
    
200
      
226
  
Severance pay fund
    
58
      
66
  
Deferred tax assets and long term tax receivables, net
    
2,629
      
3,563
  
Operating lease right of use assets
    
7,789
      
8,979
  
Total long term assets
    
10,676
      
12,834
  
                 
Fixed assets, less accumulated depreciation
    
7,495
      
7,368
  
                 
Total Assets
    
41,126
      
42,783
  
                 
Liabilities and Shareholder's equity
                
                 
Current liabilities:
                
Short-term credit and current maturities of long-term debts
    
720
      
708
  
Accounts payable: Trade
    
4,469
      
4,044
  
Other
    
3,706
      
3,577
  
Short-term operating lease liabilities
    
856
      
931
  
                 
Total current liabilities
    
9,751
      
9,260
  
                 
Long-term liabilities:
                
Long term debt, excluding current maturities
    
2,896
      
3,921
  
Employee severance benefits
    
313
      
344
  
Long-term operating lease liabilities
    
7,062
      
8,186
  
                 
Total long-term liabilities
    
10,271
      
12,451
  
                 
Shareholders' 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
    
1,146
      
3,716
  
Capital reserve
    
1,475
      
1,287
  
Accumulated deficit
    
(9,684
)
    
(12,073
)
Total shareholders' equity
    
21,104
      
21,072
  
Total liabilities and shareholders' equity
    
41,126
      
42,783
  

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

   
Three months ended
    
Nine months ended
  
   
September 30,
    
September 30,
  
   
2022
    
2021
    
2022
    
2021
  
                         
GAAP net Income
    
1,004
      
46
      
2,389
      
1,203
  
Add back items:
                                
                                 
Financial expenses (income), net
    
(55
)
    
121
      
(787
)
    
101
  
Income tax expenses
    
176
      
14
      
520
      
64
  
Depreciation and amortization
    
325
      
444
      
1,205
      
1,330
  
Non-GAAP EBITDA
    
1,450
      
625
      
3,327
      
2,698
  


Eltek Ltd.
Consolidated Statements of  Cash Flows
(Unaudited, in thousands US$)

   
Three months ended
    
Nine months ended
  
   
September 30,
    
September 30,
  
   
2022
    
2021
    
2022
    
2021
  
                         
Cash flows from operating activities:
                        
                         
Net Income
    
1,004
      
46
      
2,389
      
1,203
  
Adjustments to reconcile net income to net cash flows
                                
provided by operating activities:
                                
Depreciation and amortization
    
325
      
445
      
1,205
      
1,331
  
Stock-based compensation
    
71
      
55
      
188
      
127
  
Decrease in deferred tax assets and long term tax receivable
    
170
      
6
      
499
      
22
  
     
566
      
506
      
1,892
      
1,480
  
                                 
Decrease (increase) in operating lease right-of-use assets
    
12
      
17
      
8
      
41
  
Decrease (increase) in trade receivables
    
(1,208
)
    
1,015
      
(3,488
)
    
2,560
  
Decrease (increase) in other receivables and prepaid expenses
    
311
      
48
      
393
      
143
  
Decrease (increase) in inventories
    
382
      
(275
)
    
(340
)
    
(525
)
Increase (decrease) in trade payables
    
371
      
(464
)
    
1,143
      
(875
)
Increase (decrease) in other liabilities and accrued expenses
    
277
      
(300
)
    
566
      
(579
)
Increase (decrease)  in employee severance benefits, net
    
11
      
5
      
11
      
(5
)
     
156
      
46
      
(1,707
)
    
760
  
                                 
Net cash provided by operating activities
    
1,726
      
598
      
2,574
      
3,443
  
                                 
Cash flows from investing activities:
                                
Purchase of fixed assets
    
(1,841
)
    
(824
)
    
(2,456
)
    
(1,362
)
Restricted deposits
    
-
      
(2
)
    
(2
)
    
(156
)
Net cash used in investing activities
    
(1,841
)
    
(826
)
    
(2,458
)
    
(1,518
)
                                 
Cash flows from financing activities:
                                
Short- term bank credit, net
    
-
      
-
      
-
      
(377
)
Exercise of options
    
-
      
-
      
25
      
-
  
Repayment of long-term loans from bank
    
(181
)
    
(111
)
    
(432
)
    
(188
)
Proceeds from long-term loans
    
-
      
-
      
-
      
3,062
  
Repayment of credit from fixed asset payables
    
(3
)
    
-
      
(10
)
    
(285
)
Net cash provided by (used in) financing activities
    
(184
)
    
(111
)
    
(417
)
    
2,212
  
                                 
Effect of translation adjustments
    
(100
)
    
55
      
(1,135
)
    
13
  
                                 
Net increase (decrease) in cash and cash equivalents
    
(399
)
    
(284
)
    
(1,436
)
    
4,150
  
                                 
Cash and cash equivalents at the beginning of the period
    
8,246
      
9,169
      
9,283
      
4,735
  
                                 
Cash and cash equivalents at the end of the period
    
7,847
      
8,885
      
7,847
      
8,885