Eltek Reports Net Profit Of $125,000 For Third Quarter 2010
Please replace the release with the following corrected version due to multiple revisions in the Unaudited Consolidated Statements of Operations table.
The corrected release reads:
ELTEK REPORTS NET PROFIT OF $125,000 FOR THIRD QUARTER 2010
Eltek Ltd. (NASDAQ: ELTK), the leading Israeli manufacturer of advanced flex-rigid circuitry solutions, announced today its financial results for the quarter ended September 30, 2010.Third Quarter 2010: Revenues for the quarter ended September 30, 2010 were $9.0 million, the same as the revenues for the second quarter of 2010 and a decrease of 6% from the $9.6 million revenues reported in the third quarter of 2009. Gross profit for the third quarter of 2010 was $1.4 million (15.2% of revenues), an increase over the gross profit of $1.3 million (14.2% of revenues) in the second quarter of 2010 and similar to the gross profit of $1.4 million (14.9% of revenues) in the third quarter of 2009. Operating profit for the third quarter of 2010 was $57,000 compared to an operating loss of $203,000 in the second quarter of 2010 and operating profit of $40,000 in the third quarter of 2009. Net profit for the third quarter of 2010 was $125,000 or $0.02 per fully diluted share, compared with a net loss of $509,000 or ($0.08) per fully diluted share in the second quarter of 2010 and a net loss of $73,000 or ($0.01) per fully diluted share in the third quarter of 2009. The increase in net profit is mainly attributable to reduced financial and selling expenses. First nine months of 2010: Revenues for the nine months ended September 30, 2010 were $27.5 million, similar to the revenues of $27.5 million, recorded in the first nine months of 2009. Gross profit for the first nine months of 2010 was $3.7 million (13.4% of revenues), compared to gross profit of $4.4 million (16.0% of revenues) in the first nine months of 2009. Operating loss for the first nine months of 2010 was $704,000 compared with an operating profit of $86,000 in the first nine months of 2009. Net loss for the first nine months of 2010 was $1.1 million or ($0.13) per fully diluted share compared with a net loss of $151,000, or ($0.02) per fully diluted share in the first nine months of 2009. While the Company reported a net profit in the third quarter of 2010, as a result of the losses recorded in the first two quarters of the year the Company’s shareholders’ equity has fallen below the required level under the financial covenants in respect of the Company’s loans and lines of credit with two of its banks. Although compliance with the financial covenants will next be measured based on the Company’s audited financial statements as of December 31, 2010, the cumulative losses for the first nine months of 2010 may likely result in non compliance at year end. As a result, accounting standards require the Company to re-classify at this time $1.3 million of its bank debt from long term to short term. Based on past experience, where the company was granted waivers from these banks under similar circumstances, the Company intends to seek waivers from the banks. There can be no assurance that the banks will grant the requested waivers. Failure to successfully obtain the waivers or additional capital may have a material adverse effect on the Company’s business, results of operations and financial position.
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