PR Newswire | Aug 18, 2021 07:01AM EDT

08/18 06:00 CDT

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, Aug. 18, 2021

PETACH-TIKVA, Israel, Aug. 18, 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 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 MualemChief Financial Officeralonm@nisteceltek.com+972-3-9395023

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 (1,413) (1,095) (2,421) (2,284)administrative expenses

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 0.14 0.16 0.18 0.28ordinary share

Weighted average number ofordinary shares used to compute

basic net profit per ordinary 5,840 4,380 5,840 4,380share (in thousands)

Weighted average number ofordinary shares used to compute

diluted net profit per ordinary 5,871 4,380 5,868 4,380share (in thousands)

Eltek Ltd.

Consolidated Balance Sheets

(In thousands US$)

June December 31, 30,

2021 2020

Assets

Current assets

Cash and cash equivalents 9,169 4,735

Receivables: Trade, net of 7,388 9,062provision for doubtful accounts

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 8,801 8,948assets

Total long term assets 9,079 9,074

Fixed assets, less accumulated 6,893 7,263depreciation

Total Assets 37,639 35,157

Liabilities and Shareholder'sequity

Current liabilities

Short-term credit and current 502 676maturities of long-term debts

Accounts payable: Trade 3,881 4,452

Other 3,499 3,831

Short-term operating lease 806 742liabilities

Total current liabilities 8,688 9,701

Long-term liabilities

Long term debt, excluding current 4,125 1,495maturities

Employee severance benefits 323 338

Deferred tax liabilities 99 84

Long-term operating lease 8,085 8,272liabilities

Total long-term liabilities 12,632 10,189

Equity

Ordinary shares, NIS 3.0 par valueauthorized 10,000,000 shares, 5,296 5,296issued and outstanding 5,840,357

Additional paid-in capital 22,846 22,846

Cumulative foreign currency 2,975 3,153translation adjustments

Capital reserve 1,267 1,084

Accumulated deficit (16,065) (17,112)

Shareholders' equity 16,319 15,267

Total liabilities and 37,639 35,157shareholders' equity

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 operatingactivities:

Net Income 825 704 1,047 1,244

Adjustments to reconcile netprofit to net

cash flows provided by operatingactivities:

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 9 6 16 12liabilities

621 408 1,085 845

Decrease (increase) in operating 20 1 24 (4)lease right-of-use assets

Decrease (increase) in trade (1,482) 280 1,546 149receivables

Decrease in other receivables and 315 49 95 187prepaid expenses

Decrease (increase) in inventories 252 27 (250) 248

Decrease in trade payables (211) (113) (411) (370)

Increase (decrease) in other 44 17 (279) 538liabilities and accrued expenses

Increase (decrease) in employee (4) 24 (10) 40severance benefits, net

(1,066) 285 715 788

Net cash provided by operating 380 1,397 2,847 2,877activities

Cash flows from investingactivities:

Purchase of fixed assets (331) (250) (538) (454)

Restricted deposits (154) (58) (154) (58)

Net cash used in investing (485) (308) (692) (512)activities

Cash flows from financingactivities:

Short- term bank credit, net - (326) (377) (765)

Repayment of short- term - (571) - (571)shareholder loan

Repayment of long-term loans from (38) (35) (77) (108)bank

Proceeds from long-term loans 3,062 1,141 3,062 1,141

Repayment of credit from fixed (274) (152) (285) (304)asset payables

Net cash used in financing 2,750 57 2,323 (607)activities

Effect of translation adjustments 119 47 (44) 21

Net increase (decrease) in cash 2,764 1,193 4,434 1,779and cash equivalents

Cash and cash equivalents at 6,406 2,214 4,735 1,628beginning of the period

Cash and cash equivalents at 9,169 3,407 9,169 3,407period end

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SOURCE Eltek Ltd.