Eltek Ltd. (NASDAQ: ELTK), the leading Israeli manufacturer of advanced flex-rigid circuitry solutions, announced today its financial results for the first quarter of 2010.

Revenues for the quarter ended March 31, 2010 were $9.6 million, compared with revenues of $9.5 million in the first quarter of 2009.

Gross profit for the first quarter of 2010 was $1.0 million (11% of revenues), compared with gross profit of $1.6 million in the first quarter of 2009 (17% of revenues). The decrease in gross profit is attributable mainly to the lower exchange rates of the US dollar and the Euro against the NIS compared to the first quarter of 2009 (by 8.7% and 2.3%, respectively), and costs of revenues.

Operating loss for the first quarter of 2010 was $559,000 compared with an operating profit of $165,000 in the first quarter of 2009.

Net loss for the first quarter of 2010 was $682,000 or ($0.10) per fully diluted share, compared with a net profit of $105,000 or $0.02 per fully diluted share in the first quarter of 2009. The decrease in net income is mainly attributable to the decrease in gross profit and increase in financial expenses, mainly as a result of the impact of the devaluation of the US dollar and the Euro against the NIS compared to the first quarter of 2009.

EBITDA:

In the first quarter ended March 31, 2010, Eltek had EBITDA of $16,000 compared with EBITDA of $646,000 in the first quarter of 2009.

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

Management Comments:

Arieh Reichart, President and Chief Executive Officer of Eltek commented: "The global economic slowdown continued in the first quarter of 2010, thus we did not see the anticipated increase in revenues. Our cost reduction plans continue, mainly through a reduction in the number of employees and increased emphasis on our manufacturing efficiency program, which includes eliminating activities that do not provide added value to our products. The impact of these cost reduction measures has not been fully reflected in our results yet.”

Mr. Reichart continued: “Since the beginning of 2010, Eltek has received orders from several new U.S. customers, including a first order from a major U.S. medical equipment manufacturer. We continue to see sales opportunities in the U.S. military market with regard to the ITAR (International Traffic in Arms Regulations) approval and expect to increase our business in the U.S. market in 2010," Mr. Reichart concluded.

About the Company

Eltek is Israel's leading manufacturer of printed circuit boards, the core circuitry of most electronic devices. It specializes in the complex high-end of PCB manufacturing, i.e., HDI, multilayered and flex-rigid boards. Eltek's technologically advanced circuitry solutions are used in today's increasingly sophisticated and compact electronic products. For more information, visit Eltek's web site at www.eltekglobal.com.

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.
 

Eltek Ltd.
Unaudited Consolidated Statements of Operations
(In thousands US$, except per share data)
     
Three months ended

Year ended
March 31,

December 31,
2010 2009 2009
 
Revenues 9,633 9,492 36,442
Costs of revenues (8,594 ) (7,869 ) (30,882 )
 
Gross profit 1,039 1,623 5,560
 
Research and development income, net 0 0 0
 
Selling, general and administrative expenses (1,598 ) (1,458 ) (6,016 )
 
     
Operating loss (559 ) 165 (456 )
 
Financial expenses, net (169 ) (24 ) (424 )
 
Other income, net (2 ) 4   4  
 
Loss before income tax expenses (730 ) 145 (876 )
 
Income tax (expenses), net (6 ) (36 ) (34 )
 
Net Profit (loss) (736 ) 109 (910 )
 
Net profit (loss) attributable to non controlling shareholders 54   (4 ) 30  
 
Net loss attributable to shareholders (682 ) 105   (880 )
 
Earning per share
 
Basic net loss per ordinary share (0.10 ) 0.02   (0.13 )
 
Diluted net loss per ordinary share (0.10 ) 0.02   (0.13 )
 

Weighted average number of ordinary shares used to compute basic net loss per ordinary share (in thousands)
6,610   6,610   6,610  
 

Weighted average number of ordinary shares used to compute diluted net loss per ordinary share (in thousands)
6,610   6,610   6,610  
 

Eltek Ltd.
Unaudited Consolidated Balance Sheets
(In thousands US$)
     
March 31, December 31,
2010 2009 2009
Assets
 
Current assets
Cash and cash equivalents 754 1,264 1,258

Receivables:

Trade, net of provision for doubtful accounts
8,183 7,620 6,932
Other 595 244 222
Inventories 3,732 3,778 3,938
Prepaid expenses 394   270   241  
 
Total current assets 13,658   13,176   12,591  
 
Assets held for employees' severance benefits 1,489   1,162   1,432  
 
Fixed assets, less accumulated depreciation 8,882   8,881   9,175  
 
Goodwill 534   529   573  
 
Total assets 24,563   23,748   23,771  
 
 
Liabilities and Shareholder's equity
 
Current liabilities
Short-term credit and current maturities of long-term debts 5,926 5,525 5,638

Accounts payable:

Trade
5,490 5,189 4,666
Related parties 599 522 713
Other 4,247   3,603   3,558  
 
Total current liabilities 16,262   14,839   14,575  
 
Long-term liabilities
Long term debt, excluding current maturities 2,493 2,056 2,617
Employee severance benefits 1,470   1,250   1,440  
 
Total long-term liabilities 3,965   3,305   4,057  
 
Equity
Ordinary shares, NIS 0.6 par value authorized 50,000,000 shares, issued and outstanding 6,610,107 as of September 30, 2009, 6,610,107 as of September 30, 2008 and 6,610,107 as of December 31, 2008 1,384 1,384 1,384
Additional paid-in capital 14,328 14,328 14,328
Cumulative translation adjustment related to change in reporting currency 2,396 2,072 2,635
Cumulative foreign currency translation adjustments 186 346 309
Capital reserve 695 695 695
Accumulated deficit (14,888 ) (13,537 ) (14,522 )
Shareholders' equity 4,101 5,288 4,829
Non controlling interest 235   316   310  
Total equity 4,336   5,604   5,139  
Total liabilities and shareholders' equity 24,563   23,748   23,771  
 

Non-GAAP EBITDA Reconciliations
  Three months ended   Year ended
March 31, December 31,
2010   2009 2009

Unaudited
 
GAAP net loss (682 ) 105 (880 )

Add back items:
 
Financial expenses, net 169 24 424
Tax expenses (income) 6 36 34
Impairment loss on goodwill 0 0 0
Depreciation 523   481 2,030  
Adjusted EBITDA 16   646 1,608  

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX