Eltek Ltd. (NASDAQ: ELTK), the leading Israeli manufacturer of advanced flex-rigid circuitry solutions, announced today its financial results for the first quarter of 2011.
Revenues for the first quarter of 2011 were $11.8 million, a 22.9% increase over revenues of $9.6 million recorded in the first quarter of 2010.
Gross Profit for the first quarter of 2011 was $2.5 million (21% of revenues), an increase of 139% compared to the gross profit of $1.0 million (10.8% of revenues) in the first quarter of 2010.
Operating Profit for the first quarter of 2011 was $877,000 compared with an operating loss of $559,000 in the first quarter of 2010.Net Profit for the first quarter of 2011 was $788,000, or $0.12 per fully diluted share, compared with a net loss of $682,000 or ($0.10) per fully diluted share in the first quarter of 2010. EBITDA: In the first quarter of 2011, Eltek had EBITDA of $1.4 million compared with an EBITDA of $16,000 in the first quarter of 2010. ELTEK uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income interest, taxes, depreciation and amortization. EBITDA is provided to investors to complement results provided in accordance with GAAP, as management believes the measure helps illustrate underlying operating trends in the Company's business and uses the measure to establish internal budgets and goals, manage the business and evaluate performance. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. Reconciliation between the company's results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statement of Operations. As of December 31, 2010, the Company was not in compliance with certain of its financial covenants in respect of its credit facilities and long-term debt with its banks. However, in May 2011, one of the banks modified the covenant terms, reducing the requirements to a new compliance level effective from the December 31, 2010, while another bank granted the Company a waiver, stating that the bank would not take any measures against it arising from the breach of the covenants before the release of its financial statements for the year ending December 31, 2011, at which time the Company must return to compliance. The Company has initiated discussions with this bank in order to modify the financial covenants and to agree on terms which the Company believes it will be able to meet. As a result of the uncertainty regarding the successful completion of these discussions and of returning to compliance at December 31, 2011, the accounting standards require the Company to re-classify its debt from long term to short term debt at March 31, 2011. The amount of long term debt re-classified to short-term debt at March 31, 2011 was $1.3 million.