Eltek Reports Full Year and Fourth Quarter 2020 Financial Results

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    <br /> Eltek Reports Full Year and Fourth Quarter 2020 Financial Results<br />

    – 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.

    PR Newswire

    PETACH-TIKVA,

    Israel

    ,

    March 25, 2021

    /PRNewswire/ — 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

    .

    Eltek Logo


    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

    Home



    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



    [email protected]



    +972-3-9395023



    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

    Cision
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    http://www.prnewswire.com/news-releases/eltek-reports-full-year-and-fourth-quarter-2020-financial-results-301255853.html

    SOURCE Eltek Ltd.

    PR Newswire
    March 25, 2021 – 4:30 AM PDT