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14.08.2017 13:05:00
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Eltek Reports 2017 Second Quarter Financial Results
PETACH-TIKVA, Israel, Aug. 14, 2017 /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, 2017.
Mr. Yitzhak Nissan, Chairman of the Board and Chief Executive Officer, commented: "Our sales in the second quarter were $7.5 million, 14.6% lower than the second quarter of 2016, excluding Kubatronik. The decrease was primarily attributable to the continued competition in the local market and weakness in our global operations.
The Company is vigorously continuing the implementation of efficiency measures to its operating systems, which now support a higher sales rate relative to the rate prior to such implementation. Furthermore, the market is indicating a positive momentum with an increase in the frequency of incoming orders beginning this July. This increase includes a significant order from a governmental authority that we announced on July 24, 2017.
As previously released, we have enhanced our marketing and sales forces in Israel, Europe and the United States, alongside our efforts made to streamline expenses.
We are determined to bring the Company back to profitability in the near future. I believe that our actions to date, along with the renewal of manufacturing equipment that we are currently implementing, will assist us to reach these goals quickly and efficiently.
"When comparing the results to the second quarter and the first six months of 2017, please note that the operations of Kubatronik Leiterplatten GmbH were included in Eltek's results during the comparable period in 2016. Therefore, selected financial information is also presented on a proforma basis, excluding Kubatronik's results in 2016 (first six months and second quarter)," Mr. Nissan concluded.
Highlights of the Second Quarter of 2017
- Revenues for the second quarter of 2017 were $7.5 million compared to $9.9 million in the second quarter of 2016 ($8.8 million excluding Kubatronik);
- Gross profit was $134,000 (1.8% of revenues) compared to gross profit of $1.5 million (14.8% of revenues) in the second quarter of 2016 ($1.4 million or 16.3% of revenues excluding Kubatronik); The decrease in gross profit and gross profit margins reflects the decreased sales, while a significant portion of our cost of sales remained constant.
- Operating loss was $1 million compared to operating profit of $244,000 in the second quarter of 2016 ($373,000 excluding Kubatronik);
- Net loss was $1.1 million or $0.11 per fully diluted share compared to net profit of $213,000 or $0.02 per fully diluted share in the second quarter of 2016 ($327,000 or $0.03 per fully diluted share excluding Kubatronik);.
- EBITDA amounted to $(583,000) compared to EBITDA of $754,000 in the second quarter of 2016 ($809,000 excluding Kubatronik);
- Net cash used by operating activities amounted to $516,000 compared to net cash used by operating activities of $37,000 in the second quarter of 2016. The decline is mainly attributable to the operating results in this quarter.
- Cash and cash equivalents as of June 30, 2017 were $792,000 compared to $894,000 as of June 30, 2016.
Highlights for the First Six Months of 2017
- Revenues for the first six months of 2017 were $16 million compared to $19.7 million in the first six months of 2016 ($17.4 million excluding Kubatronik);
- Gross profit was $619,000 (3.9% of revenues) compared to gross profit of $2.4 million (12.2% of revenues) in the first six months of 2016 ($2.2 million or 12.5% of revenues excluding Kubatronik);
- Operating loss was $1.6 million compared to operating loss of $49,000 in the first six months of 2016 ($31,000 profit excluding Kubatronik);
- Net loss was $1.9 million, or $0.19 per fully diluted share compared to net loss of $171,000, or $0.02 per fully diluted share in the first six months of 2016 ($82,000 or $0.01 per fully diluted share excluding Kubatronik);
- EBITDA amounted to $(794,000) compared to EBITDA of $921,000 in the first six months of 2016 ($871,000 excluding Kubatronik);
- Net cash used by operating activities amounted to $1.3 million compared to net cash provided by operating activities of $853,000 in the first six months of 2016. The decline is mainly attributable to the operating results in this period.
Conference Call
Today, Monday August 14, 2017 at 9:30 a.m. Eastern Time, Eltek will conduct a conference call to discuss the results. The call will feature remarks by Yitzhak Nissan, Chairman of the Board of Directors and Chief Executive Officer, Roberto Tulman, Deputy CEO and Chief Technology Officer and Amnon Shemer, Chief Financial Officer.
To participate, please call the following teleconference numbers. Please allow for additional time to connect prior to the call:
United States: 1-888-668-9141
Israel: 03-9180610
International: +972-3-9180610
At:
9:30 a.m. Eastern Time
6:30 a.m. Pacific Time
16:30 p.m. Israel Time
A replay of the call will be available through the Investor Info section on Eltek's corporate website at www.nisteceltek.com approximately 24 hours after the conference call is completed and will be archived for 30 days.
(Tables follow)
Eltek Ltd. | |||||||||
Consolidated Statements of Operations | |||||||||
(In thousands US$, except per share data) | |||||||||
Three months ended | Six months ended | ||||||||
June 30, | June 30, | ||||||||
2017 | 2016 | 2017 | 2016 | ||||||
Revenues | 7,492 | 9,904 | 15,960 | 19,705 | |||||
Costs of revenues | (7,358) | (8,442) | (15,341) | (17,305) | |||||
Gross profit | 134 | 1,462 | 619 | 2,400 | |||||
Selling, general and administrative expenses | (1,138) | (1,186) | (2,233) | (2,384) | |||||
R&D expenses, net | (15) | (32) | (34) | (64) | |||||
Operating profit (loss) | (1,019) | 244 | (1,649) | (49) | |||||
Financial expenses, net | (41) | (37) | (218) | (98) | |||||
Profit (loss) before other income, net | (1,060) | 207 | (1,867) | (146) | |||||
Other income, net | 0 | (0) | 15 | 0 | |||||
Profit (loss) before income tax expenses | (1,060) | 207 | (1,852) | (146) | |||||
Tax expenses | (27) | (25) | (50) | (48) | |||||
Net Profit (loss) | (1,087) | 182 | (1,901) | (194) | |||||
Net loss attributable to non controlling interest | 0 | (31) | 0 | (23) | |||||
Net Profit (loss) attributable to Eltek Ltd. | (1,087) | 213 | (1,901) | (171) | |||||
Earnings per share | |||||||||
Basic and diluted net gain (loss) per ordinary share | (0.11) | 0.02 | (0.19) | (0.02) | |||||
Weighted average number of ordinary shares | |||||||||
used to compute basic and diluted net gain (loss) per | |||||||||
ordinary share (in thousands) | 10,143 | 10,143 | 10,143 | 10,143 | |||||
Eltek Ltd. | |||||||||
Consolidated Balance Sheets | |||||||||
(In thousands US$) | |||||||||
June 30, | June 30, | ||||||||
2017 | 2016 | ||||||||
Assets | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 792 | 894 | |||||||
Receivables: Trade, net of provision for doubtful accounts | 6,097 | 7,548 | |||||||
Other | 171 | 222 | |||||||
Inventories | 4,305 | 4,618 | |||||||
Prepaid expenses | 394 | 227 | |||||||
Total current assets | 11,759 | 13,509 | |||||||
Deferred taxes | 0 | 1,066 | |||||||
Assets held for employees' severance benefits | 55 | 49 | |||||||
Fixed assets, less accumulated depreciation | 8,966 | 9,747 | |||||||
Intangible asset | 355 | 301 | |||||||
Total assets | 21,135 | 24,672 | |||||||
Liabilities and Shareholder's equity | |||||||||
Current liabilities | |||||||||
Short-term credit and current maturities of long-term debts | 4,570 | 1,373 | |||||||
Accounts payable: Trade | 5,382 | 5,778 | |||||||
Other | 4,008 | 4,611 | |||||||
Total current liabilities | 13,960 | 11,762 | |||||||
Long-term liabilities | |||||||||
Long term debt, excluding current maturities | 1,692 | 2,423 | |||||||
Employee severance benefits | 157 | 296 | |||||||
Total long-term liabilities | 1,849 | 2,719 | |||||||
Equity | |||||||||
Ordinary shares, NIS 0.6 par value authorized 50,000,000 shares, issued and outstanding 10,142,762 | 1,985 | 1,985 | |||||||
Additional paid-in capital | 17,270 | 17,270 | |||||||
Cumulative foreign currency translation adjustments | 2,408 | 2,037 | |||||||
Capital reserve | 695 | 695 | |||||||
Accumulated deficit | (17,032) | (11,679) | |||||||
Shareholders' equity | 5,326 | 10,308 | |||||||
Non controlling interest | 0 | (117) | |||||||
Total equity | 5,326 | 10,191 | |||||||
Total liabilities and shareholders' equity | 21,135 | 24,672 | |||||||
Eltek Ltd. | |||||||||
Unaudited Non-GAAP EBITDA Reconciliations | |||||||||
(In thousands US$) | |||||||||
Non-GAAP EBITDA Reconciliations | Three months ended | Six months ended | |||||||
June 30, | June 30, | ||||||||
2017 | 2016 | 2017 | 2016 | ||||||
GAAP net Income (loss) | (1,087) | 213 | (1,901) | (171) | |||||
Add back items: | |||||||||
Financial expenses (income), net | 41 | 37 | 218 | 98 | |||||
Income tax expense | 27 | 25 | 50 | 48 | |||||
Depreciation and amortization | 436 | 479 | 840 | 946 | |||||
Adjusted EBITDA | (583) | 754 | (794) | 921 | |||||
Eltek Ltd. | |||||||||
Consolidated Statement of Cash flow | |||||||||
(In thousands US$, except per share data) | |||||||||
Three months ended | Six months ended | ||||||||
June 30, | June 30, | ||||||||
2017 | 2016 | 2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||||
Net Income (loss) | (1,087) | 182 | (1,901) | (194) | |||||
- | |||||||||
Adjustments to reconcile net loss to net | - | ||||||||
cash flows provided by operating activities: | - | ||||||||
Depreciation and amortization | 436 | 479 | 852 | 946 | |||||
Capital lose on disposal of fixed assets, net | - | - | (13) | - | |||||
Revaluation of long term loans | - | - | (0) | 1 | |||||
Decrease (increase) in Deferred Tax | (12) | 7 | 3 | 14 | |||||
424 | 487 | 842 | 961 | ||||||
Decrease (increase) in trade receivables | 1,152 | (15) | 209 | 575 | |||||
Decrease (increase) in other receivables and prepaid expenses | (122) | (17) | (64) | 18 | |||||
Decrease (increase) in inventories | (154) | (232) | 6 | (106) | |||||
Increase (decrease) in trade payables | (735) | (435) | (206) | (354) | |||||
Increase (decrease) in other liabilities and accrued expenses | 7 | (11) | (176) | (49) | |||||
Increase (decrease) in employee severance benefits, net | (1) | 5 | (2) | 3 | |||||
147 | (706) | (233) | 86 | ||||||
Net cash provided by operating activities | (516) | (37) | (1,292) | 853 | |||||
Three months ended | Six months ended | ||||||||
June 30, | June 30, | ||||||||
2017 | 2016 | 2016 | 2015 | ||||||
Cash flows from investing activities: | |||||||||
Owners investment | |||||||||
Purchase of fixed assets | (70) | (238) | (161) | (330) | |||||
Purchase of Intangible asset | - | (14) | - | (21) | |||||
Net cash used in investing activities | (70) | (251) | (161) | (351) | |||||
Cash flows from financing activities: | |||||||||
Increase (decrease) in short- term credit | (1,020) | 577 | (161) | 91 | |||||
Increase (decrease) in short- term shareholder loan | 1,430 | - | 1,430 | - | |||||
Repayment of long-term loans from bank | (207) | (175) | (407) | (330) | |||||
Proceeds from long-term loans | 131 | - | 167 | - | |||||
Repayment of credit from fixed asset payables | (24) | (137) | (129) | (394) | |||||
Net cash provided by (used in) financing activities | 309 | 265 | 901 | (634) | |||||
Effect of translation adjustments | 316 | (20) | 111 | (12) | |||||
Net increase (decrease) in cash and cash equivalents | (237) | (44) | (441) | (144) | |||||
Cash and cash equivalents at beginning of the period | 1,029 | 938 | 1,234 | 1,038 | |||||
- | - | ||||||||
Cash and cash equivalents at period end | 792 | 894 | 792 | 894 | |||||
792 | 894 | 792 | 894 | ||||||
Eltek ltd. | |||||||||
Proforma (Non-GAAP) Statements of Operations | |||||||||
(In thousands US$, except per share data) | |||||||||
Excluding Kubatronik's operation in 2016 | |||||||||
Solo | Solo | ||||||||
Three months ended | Six months ended | ||||||||
June 30, | June 30, | ||||||||
2017 | 2016 | 2017 | 2016 | ||||||
Unaudited | Unaudited | ||||||||
Revenues | 7,492 | 8,777 | 15,960 | 17,370 | |||||
Costs of revenues | (7,358) | (7,347) | (15,341) | (15,206) | |||||
Gross profit | 134 | 1,431 | 619 | 2,165 | |||||
Research and development income, net | (15) | (32) | (34) | (64) | |||||
Selling, general and administrative expenses | (1,138) | (1,026) | (2,233) | (2,070) | |||||
Operating profit (loss) | (1,019) | 373 | (1,649) | 31 | |||||
Financial expenses, net | (41) | (21) | (218) | (65) | |||||
Profit (loss) before other income, net | (1,060) | 352 | (1,867) | (34) | |||||
Other income, net | 0 | 0 | 15 | 0 | |||||
Profit (loss) before income tax expenses | (1,060) | 352 | (1,852) | (34) | |||||
Income tax (expenses), net | (27) | (25) | (50) | (48) | |||||
Net Profit (loss) | (1,087) | 327 | (1,901) | (82) | |||||
Diluted net loss per ordinary share | (0.11) | 0.03 | (0.19) | (0.01) | |||||
Weighted average number of ordinary shares | |||||||||
used to compute diluted net loss per | |||||||||
ordinary share (in thousands) | 10,143 | 10,143 | 10,143 | 10,143 | |||||
Eltek ltd. | |||||||||
Proforma (Non-GAAP) Balance Sheets | |||||||||
(In thousands US$) | |||||||||
Excluding Kubatronik's operation in 2016 | |||||||||
June 30, | |||||||||
2017 | 2016 | ||||||||
Unaudited | |||||||||
Assets | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 792 | 891 | |||||||
Receivables: Trade, net of provision for doubtful accounts | 6,097 | 7,108 | |||||||
Other | 171 | 1,287 | |||||||
Inventories | 4,305 | 4,324 | |||||||
Prepaid expenses | 394 | 227 | |||||||
Total current assets | 11,759 | 13,837 | |||||||
Deferred taxes | 0 | 1,066 | |||||||
Assets held for employees' severance benefits | 55 | 49 | |||||||
Fixed assets, less accumulated depreciation | 8,966 | 9,118 | |||||||
Investment | (440) | ||||||||
Intangible asset | 355 | 301 | |||||||
Total assets | 21,135 | 23,931 | |||||||
Liabilities and Shareholder's equity | |||||||||
Current liabilities | |||||||||
Short-term credit and current maturities of long-term debts | 4,570 | 1,373 | |||||||
Accounts payable: Trade | 5,382 | 5,366 | |||||||
Other | 4,008 | 4,403 | |||||||
Total current liabilities | 13,960 | 11,142 | |||||||
Long-term liabilities | |||||||||
Long term debt, excluding current maturities | 1,692 | 2,236 | |||||||
Employee severance benefits | 157 | 246 | |||||||
Total long-term liabilities | 1,849 | 2,482 | |||||||
Equity | |||||||||
Ordinary shares, NIS 0.6 par value authorized 50,000,000 shares, issued and outstanding 6,610,107 as of December 31, 2011. | 1,985 | 1,985 | |||||||
Additional paid-in capital | 17,270 | 17,270 | |||||||
Cumulative foreign currency translation adjustments | 2,408 | 2,036 | |||||||
Capital reserve | 695 | 695 | |||||||
Accumulated deficit | (17,032) | (11,679) | |||||||
Shareholders' equity | 5,326 | 10,307 | |||||||
Non controlling interest | 0 | 0 | |||||||
Total equity | 5,326 | 10,307 | |||||||
Total liabilities and shareholders' equity | 21,135 | 23,931 | |||||||
Eltek Ltd. | ||||||||
Proforma Unaudited Non-GAAP EBITDA Reconciliations | ||||||||
(In thousands US$) | ||||||||
Excluding Kubatronik's operation in 2016 | ||||||||
Non-GAAP EBITDA Reconciliations | Three months ended | six months ended | ||||||
June 30, | June 30, | June 30, | June 30, | |||||
2017 | 2016 | 2017 | 2016 | |||||
GAAP net Income (loss) | (1,087) | 327 | (1,901) | (82) | ||||
Add back items: | ||||||||
Financial expenses (income), net | 41 | 21 | 218 | 65 | ||||
Income tax expense | 27 | 25 | 50 | 48 | ||||
Depreciation and amortization | 436 | 436 | 840 | 840 | ||||
Adjusted EBITDA | (583) | 809 | (794) | 871 | ||||
Eltek Ltd. | ||||||||
Consolidated Statement of Cash flow | ||||||||
(In thousands US$, except per share data) | ||||||||
Excluding Kubatronik's operation in 2016 | ||||||||
Three months ended | Six months ended | |||||||
June 30, | June 30, | |||||||
2017 | 2016 | 2017 | 2016 | |||||
Cash flows from operating activities: | ||||||||
Net Income (loss) | (1,087) | 213 | (1,901) | (171) | ||||
Adjustments to reconcile net loss to net | ||||||||
cash flows provided by operating activities: | ||||||||
Depreciation and amortization | 436 | 441 | 852 | 870 | ||||
Capital lose on disposal of fixed assets, net | - | (13) | - | |||||
Revaluation of long term loans | - | 7 | (0) | 14 | ||||
Decrease (increase) in Deferred Tax | (12) | - | 3 | 1 | ||||
Impairment of goodwill | - | 111 | - | 85 | ||||
424 | 559 | 842 | 971 | |||||
Decrease (increase) in trade receivables | 1,152 | (38) | 209 | 662 | ||||
Decrease (increase) in other receivables and prepaid expenses | (122) | (4) | (64) | 10 | ||||
Decrease (increase) in inventories | (154) | (303) | 6 | (154) | ||||
Increase (decrease) in trade payables | (735) | (440) | (206) | (448) | ||||
Increase (decrease) in other liabilities and accrued expenses | 7 | (7) | (176) | (82) | ||||
Increase (decrease) in employee severance benefits, net | (1) | 4 | (2) | 4 | ||||
147 | (789) | (233) | (8) | |||||
Net cash provided by operating activities | (516) | (17) | (1,292) | 792 | ||||
Three months ended | Six months ended | |||||||
June 30, | June 30, | |||||||
2017 | 2016 | 2016 | 2015 | |||||
Cash flows from investing activities: | ||||||||
Owners investment | ||||||||
Purchase of fixed assets | (70) | (235) | (161) | (335) | ||||
Purchase of Intangible asset | - | - | - | - | ||||
Purchase of Intangible asset | - | (14) | - | (21) | ||||
Net cash used in investing activities | (70) | (249) | (161) | (356) | ||||
Cash flows from financing activities: | ||||||||
Increase (decrease) in short- term credit | (1,020) | 577 | (161) | 91 | ||||
Increase (decrease) in short- term shareholder loan | 1,430 | - | 1,430 | - | ||||
Repayment of long-term loans from bank | (207) | (175) | (407) | (330) | ||||
Proceeds from long-term loans | 131 | - | 167 | - | ||||
Repayment of credit from fixed asset payables | (24) | (100) | (129) | (324) | ||||
Net cash provided by (used in) financing activities | 309 | 301 | 901 | (564) | ||||
Effect of translation adjustments | 316 | (17) | 111 | 21 | ||||
Net increase (decrease) in cash and cash equivalents | (237) | 18 | (441) | (107) | ||||
Cash and cash equivalents at beginning of the period | 1,029 | 872 | 1,234 | 998 | ||||
Cash and cash equivalents at period end | 792 | 891 | 792 | 891 | ||||
About Eltek
Eltek – "Innovation across the board", is a global manufacturer and supplier of technologically advanced solutions in the field of Printed Circuit Boards, 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 has ITAR, AS-9100 and NADCAP Electronics permits and its customers include top-of-the-line 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, and R&D, production and marketing center are located in Israel. Eltek also operates through its subsidiaries, Eltek USA (100%) in North America and Kubatronik (79%) in Europe, and by agents and distributors in Europe, India, South Africa and South America.
For additional 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 includes some non-GAAP measures, such as EBITDA and proforma financial information. These non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. The 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 EBITDA to evaluate and manage its internal operations and 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, 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:
Amnon Shemer
Chief Financial Officer
amnons@nisteceltek.com
+972-3-9395023
View original content:http://www.prnewswire.com/news-releases/eltek-reports-2017-second-quarter-financial-results-300503652.html
SOURCE Eltek Ltd.
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