Eltek Reports Second Quarter 2012 Financial Results

Eltek Ltd. (NASDAQ: ELTK), a leading Israeli manufacturer of advanced flex-rigid circuitry solutions, announced today its financial results for the quarter ended June 30, 2012.

Second Quarter 2012:

Revenues for the second quarter of 2012 were $11.5 million, the same as in the second quarter of 2011.

Gross profit for the second quarter of 2012 was $1.9 million (17% of revenues) compared to $2.1 million (18% of revenues) in the second quarter of 2011.

Operating profit for the second quarter of 2012 was $465,000 compared to operating profit of $426,000 in the second quarter of 2011.

Net profit for the second quarter of 2012 was $351,000 or $0.05 per fully diluted share, compared to net profit of $257,000, or $0.04 per fully diluted share, in the second quarter of 2011.

First six months of 2012:

Revenues for the first six months of 2012 were $23.5 million compared to revenues of $23.4 million recorded in the first six months of 2011.

Gross profit for the first six months of 2012 was $4.2 million (18% of revenues) compared to gross profit of $4.6 million (20% of revenues) in the first six months of 2011.

Operating profit for the first six months of 2012 was $1.2 million compared to operating profit of $1.3 million in the first six months of 2011.

Net profit for the first six months of 2012 was $877,000 or $0.13 per fully diluted share, compared to net profit of $1.0 million, or $0.16 per fully diluted share, in the first six months of 2011.

EBITDA:

In the quarter ended June 30, 2012, Eltek had EBITDA of $928,000 compared with EBITDA of $966,000 in the second quarter of 2011. In the first six months of 2012, Eltek had EBITDA of $2.1 million compared with EBITDA of $2.3 million in the same period in 2011.

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: "In spite of the uncertainties in the global markets, we managed to maintain the same level of revenues as in the comparable period last year. During the second quarter we received a $4.7 million frame order from a defense customer, which is expected to be delivered in 2012 and 2013. This frame order was in addition to $3.0 million of frame orders that we received from two medical customers earlier this year. These orders reflect our customers' confidence in the high quality and reliability of our products.

"We continue to invest in improving our production lines as we recently announced the purchase of a new Orbotech Paragon™ Laser Direct Imaging (LDI) System for increasing capacity and shortening product time-to-market production. The new LDI system has been successfully installed and we expect that it will assist us in obtaining orders for highly sophisticated products."

"In addition, our Quality Management System has recently received certification for AS 9100C, the international management system standard for the Aircraft, Space and Defense industry. The standard provides suppliers with a comprehensive quality system for providing safe and reliable products to the aerospace industry. Such certification is essential for the sale of printed circuit boards to aviation customers and we expect it to assist us in obtaining more orders from the aerospace industry," Mr. Reichart concluded.

Amnon Shemer, CFO of Eltek, added: “Although our gross profit in the second quarter of 2012 was lower than that of the second quarter of 2011, we managed to compensate for it through reduced selling, general and administrative expenses, as well as financial expenses. As a result our operating profit and net profit were higher than in the second quarter of 2011."

"Our profitability has enabled us to improve our cash balance by $729,000 from the beginning of the year to $1.6 million from $892,000, while we purchased fixed assets in the amount of $406,000 and repaid $392,000 of loans to banks and suppliers during the period," Mr. Shemer concluded.

Conference Call

Eltek will conduct its second quarter 2012 financial results conference call today at 09:30 a.m. Eastern time / 06:30 a.m. Pacific time / 16:30 p.m. Israel time. To participate, please dial +972-3-9180644 (US: 1-888-407-2553) approximately ten minutes prior to the start time.

About the Eltek

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.
Consolidated Statements of Operations
(In thousands US$, except per share data)
 
      Three months ended     Six months ended     Year ended
June 30, June 30, December 31,
2012   2011 2012   2011 2011
Unaudited Unaudited Audited
 
Revenues 11,533 11,532 23,512 23,371 46,830
Costs of revenues (9,620 ) (9,447 ) (19,277 ) (18,804 ) (38,101 )
 
Gross profit 1,914 2,085 4,235 4,567 8,729
 
Selling, general and administrative expenses (1,449 ) (1,659 ) (3,054 ) (3,264 ) (6,155 )
         
Operating profit (loss) 465 426 1,181 1,303 2,573
 
Financial income (expenses), net (98 ) (160 ) (266 ) (216 ) (739 )
 
Profit (loss) before other income, net 367 266 916 1,087 1,834
 
Other income, net 0   9   0   9   12  
 
Profit (loss) before income tax expenses 367 275 916 1,096 1,846
 
Income tax (expenses), net (21 ) (3 ) (25 ) (23 ) (31 )
 
Net Profit (loss) 346 272 890 1,073 1,815
 
Net profit (loss) attributable to non controlling interest (4 ) (15 ) 14   (28 ) 31  
 
Net Profit (loss) attributable to controlling interest / Eltek 351   257   877   1,045   1,846  
 
Earnings per share
 
Basic and diluted net gain (loss) per ordinary share 0.05   0.04   0.13   0.16   (0.26 )
 

Weighted average number of ordinary sharesused to compute basic and diluted net gain (loss) perordinary share (in thousands)
6,610   6,610   6,610   6,610   6,610  
 
 
Eltek Ltd.
Consolidated Balance Sheets
(In thousands US$)
 
      June 30,     December 31,
2012   2011 2011
Unaudited Audited
Assets
 
Current assets
Cash and cash equivalents 1,621 1,865 892
Receivables: Trade, net of provision for doubtful accounts 7,755 8,945 8,885
Other 321 226 116
Inventories 4,540 5,005 4,434
Prepaid expenses 240   294   239  
 
Total current assets 14,477   16,335   14,566  
 
Assets held for employees' severance benefits 43   423   39  
 
Fixed assets, less accumulated depreciation 7,769   8,000   7,746  
 
Goodwill 497   575   518  
 
Total assets 22,786   25,333   22,869  
 
 
 
 
Liabilities and Shareholder's equity
 
Current liabilities
Short-term credit and current maturities of long-term debts 5,036 7,615 4,856
Accounts payable: Trade 6,335 5,884 6,456
Related parties 1,219 963 1,046
Other 4,087   5,691   3,995  
 
Total current liabilities 16,677   20,153   16,353  
 
Long-term liabilities
Long term debt, excluding current maturities 503 55 1,604
Employee severance benefits 145   584   150  
 
Total long-term liabilities 648   639   1,754  
 
Equity

Ordinary shares, NIS 0.6 par value authorized 50,000,000shares, issued and outstanding 6,610,107 as of December31, 2011.
1,384 1,384 1,384
Additional paid-in capital 14,295 14,328 14,328
Cumulative foreign currency translation adjustments 2,484 3,204 2,622
Capital reserve 695 695 695
Accumulated deficit (13,521 ) (15,289 ) (14,398 )
Shareholders' equity 5,337 4,322 4,631
Non controlling interest 124   219   131  
Total equity 5,461   4,541   4,762  
Total liabilities and shareholders' equity 22,786   25,333   22,869  
 
 
Eltek Ltd.
Unaudited Non-GAAP EBITDA Reconciliations
For the period ended December 31, 2011
(In thousands US$, except per share data)
 
Non-GAAP EBITDA Reconciliations       Three months ended     Six months ended     Year ended
June 30, June 30, December 31,
2012   2011 2012   2011 2011
 
GAAP net Income (loss) 351 257 877 1,045 1,846

Add back items:
 
Financial (income) expenses, net 98 160 266 216 739
Income tax (benefit) expense 21 3 25 23 31
Depreciation 459 546 935 1,059 2,091
Adjusted EBITDA 928 966 2,102 2,343 4,707
 

Copyright Business Wire 2010

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