EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1

Press Release
 
Eltek Ltd. Reports 2023 Second Quarter Financial Results
 
Petach Tikva, Israel (August 21, 2023) Eltek Ltd. (NASDAQ: ELTK), a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), today announced its financial results for the quarter ended June 30, 2023.
 
Second Quarter 2023 Highlights
 

 ◾
Revenues were $11.0 million, 21% up over Q2 2022
 

 ◾
Operating profit was $1.4 million, 300% up over Q2 2022
 

 ◾
Profit before tax was $1.6 million (2022 Q2 - $1.0 million)
 

 ◾
Net income was $1.3 million or $0.22 per fully diluted share, 74% up over Q2 2022
 

 ◾
As of June 30, 2023 cash and cash equivalents amounted $8.3 million, after full repayment of bank loans.
 
"We are proud to announce our strong second quarter results for 2023, with a growth of 21% in sales compared to the same quarter last year. The second quarter is characterized by a relatively low number of working days due to holidays. Despite this, we managed to achieve $11 million in sales," said Eli Yaffe, CEO of Eltek.

"Throughout the quarter, we continued to experience the demand for our high-end, high-reliability products. In light of the continued demand for our products, we continue our efforts to recruit employees and to procure and install new machines that will enable us to increase manufacturing capacity," continued Mr. Yaffe.

"Earlier this month, we were informed by the Ministry of Environmental Protection that it rejected our claim to reduce the clean air penalty imposed on us. Therefore, we have provided a full allowance for this penalty in our Q2 interim financial statements and recorded a one-time expense in the amount of $0.35 million," concluded Mr. Yaffe.


Second Quarter 2023 GAAP Financial Results
 
Revenues for the second quarter of 2023 were $11.0 million, compared to $9.1 million in the second quarter of 2022;
 
Gross profit for the second quarter of 2023 was $3.0 million (27% of revenues) compared to $1.7 million (18% of revenues) in the second quarter of 2022;
 
Operating profit for the second quarter of 2023 was $1.4 million compared to operating profit of $0.3 million in the second quarter of 2022;
 
Profit before income tax for the second quarter of 2023 was $1.6 million compared to $1.0 million in the second quarter of 2022;
 
Net income for the second quarter of 2023 was $1.3 million or $0.22 per fully diluted share compared to net income of $0.8 million or $0.13 per fully diluted share in the second quarter of 2022;
 
Second Quarter 2023 Non-GAAP Financial Results
 
EBITDA for the second quarter of 2023 was $1.7 million (15.3% of revenues) compared to EBITDA of $0.8 million (8.7% of revenues) in the second quarter of 2022;
 
First Six Months 2023 GAAP Financial Results
 
Revenues for the first six months of 2023 were $22.5 million compared to $18.8 million in the first six months of 2022;
 
Gross profit for the first six months of 2023 was $6.0 million (26% of revenues) compared to $3.6 million (19% of revenues) in the first six months of 2022;
 
Operating profit for the first six months of 2023 was $3.0 million compared to operating profit of $1.0 million in the first six months of 2022;
 
Financial income for the first six months of 2023 was $0.4 million compared to financial income of $0.7 million in the first six months of 2022. Financial income primarily results from the erosion of the NIS against the US dollar.
 
Profit before income tax for the first six months of 2023 was $3.5 million compared to $1.7 million in the first six months of 2022;


 
Net profit for the first six months of 2023 was $2.9 million or $0.49 per fully diluted share compared to net profit of $1.4 million or $0.24 per fully diluted share in the first six months of 2022;
 
First Six Months 2023 Non-GAAP Financial Results
 
EBITDA for the first six months of 2023 was a $3.6 million (16% of revenues) compared to EBITDA of $1.9 million (10% of revenues) in the first six months of 2022;
 
About our Non-GAAP Financial Information
 
The Company reports financial results in accordance with U.S. GAAP and herein provides some non-GAAP measures, including EBITDA. These non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. These 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 the non-GAAP measures presented to evaluate and manage the Company’s operations internally. The Company 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.
 
Conference Call
 
Today, Monday, August 21, 2023, at 8:30am Eastern Time (15:30pm Israel Time, 5:30am Pacific Time), Eltek will conduct a conference call to discuss the results. The call will feature remarks by Eli Yaffe, Chief Executive Officer and Ron Freund, Chief Financial Officer.
 
To participate, please call the following teleconference numbers. Please allow for additional time to connect prior to the call:
 
United States:
1-866-860-9642
Israel:  
03-918-0691
International: 
+972-3-918-0691

To Access a Replay of the Call
 
A replay of the call will be available for 30 days on the Investor Info section on Eltek’s corporate website at http://www.nisteceltek.com approximately 24 hours after the conference call is completed.

 
About Eltek
 
Eltek – ”Innovation Across the Board”, is a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), and is an Israeli leading company 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 is ITAR compliant and has AS-9100 and NADCAP Electronics certifications. Its customers include leading 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, R&D, production and marketing center are located in Israel. Eltek also operates through its subsidiary in North America and by agents and distributors in Europe, India, South Africa and South America.
 
For more information, visit Eltek's web site at www.nisteceltek.com

Forward Looking Statement
 
Some of the statements included in this press release may be forward-looking statements that involve a number of risks and uncertainties including, but not limited to expected results in future quarters, the impact of the Coronavirus on the economy and our operations, 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. Any forward-looking statements set forth in this press release speak only as of the date of this press release. The information found on our website is not incorporated by reference into this press release and is included for reference purposes only.
 
Investor Contact
 
Ron Freund
Chief Financial Officer
Investor-Contact@nisteceltek.com
+972-3-939-5023

(Tables follow)

Eltek Ltd.
Consolidated Statements of Income
(Unaudited, in thousands US$, except per share data)

   
Three months ended
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2023
    
2022
    
2023
    
2022
  
                         
Revenues
    
11,043
      
9,089
      
22,513
      
18,844
  
Costs of revenues
    
(8,091
)
    
(7,411
)
    
(16,546
)
    
(15,205
)
                                 
Gross profit
    
2,952
      
1,678
      
5,967
      
3,639
  
                                 
Selling, general and administrative expenses
    
(1,543
)
    
(1,306
)
    
(2,960
)
    
(2,598
)
R&D expenses, net
    
(15
)
    
(26
)
    
(24
)
    
(44
)
                                 
Operating profit
    
1,394
      
346
      
2,983
      
997
  
                                 
Financial income (expenses), net
    
190
      
611
      
477
      
732
  
                                 
Income before income tax
    
1,584
      
957
      
3,460
      
1,729
  
                                 
Taxes on income
    
271
      
204
      
585
      
344
  
                                 
Net income
    
1,313
      
753
      
2,875
      
1,385
  
                                 
Earnings per share:
                                
Basic and diluted net profit per ordinary share
    
0.22
      
0.13
      
0.49
      
0.24
  
                                 
Weighted average number of ordinary shares used to compute
                          
basic net profit per ordinary share (in thousands)
    
5,908
      
5,850
      
5,879
      
5,846
  
Weighted average number of ordinary shares used to compute
                          
diluted net profit per ordinary share (in thousands)
    
5,943
      
5,850
      
5,897
      
5,846
  

Eltek Ltd.
Consolidated Balance Sheets
(Unaudited, in thousands US$)

   
June 30,
    
December 31,
  
   
2023
    
2022
  
             
Assets
            
             
Current assets:
            
Cash and cash equivalents
    
8,330
      
7,366
  
Receivables:   Trade, net of provision for doubtful accounts
    
11,383
      
10,116
  
                       Other
    
733
      
282
  
Inventories
    
5,688
      
5,130
  
Prepaid expenses
    
326
      
504
  
                 
Total current assets
    
26,460
      
23,398
  
                 
Long term assets:
                
Restricted deposits
    
-
      
202
  
Severance pay fund
    
56
      
59
  
Deferred tax assets and long term tax receivables, net
    
1,808
      
2,496
  
Operating lease right of use assets
    
6,742
      
7,156
  
Total long term assets
    
8,606
      
9,913
  
                 
Fixed assets, less accumulated depreciation
    
6,399
      
7,674
  
                 
Total Assets
    
41,465
      
40,985
  
                 
Liabilities and Shareholder's equity
                
                 
Current liabilities:
                
Short-term credit and current maturities of long-term debts
    
-
      
702
  
Accounts payable: Trade
    
4,690
      
4,793
  
                              Other
    
6,352
      
4,133
  
Short-term operating lease liabilities
    
788
      
846
  
                 
Total current liabilities
    
11,830
      
10,474
  
                 
Long-term liabilities:
                
Long term debt, excluding current maturities
    
-
      
2,768
  
Employee severance benefits
    
288
      
280
  
Long-term operating lease liabilities
    
6,058
      
6,443
  
                 
Total long-term liabilities
    
6,346
      
9,491
  
                 
Shareholders' equity:
                
Ordinary shares of NIS 3.0 par value – Authorized: 10,000,000 shares at June 30, 2023 and December 31, 2022; Issued and outstanding: 5,907,715 shares at June 30, 2023 and 5,849,678 shares at December 31, 2022
    
5,353
      
5,305
  
Additional paid-in capital
    
23,113
      
22,862
  
Cumulative foreign currency translation adjustments
    
140
      
1,189
  
Capital reserve
    
1,681
      
1,537
  
Accumulated deficit
    
(6,998
)
    
(9,873
)
Total shareholders' equity
    
23,289
      
21,020
  
Total liabilities and shareholders' equity
    
41,465
      
40,985
  


Eltek Ltd.
Unaudited Non-GAAP EBITDA Reconciliations
(In thousands US$)

   
Three months ended
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2023
    
2022
    
2023
    
2022
  
                         
GAAP net Income
    
1,313
      
753
      
2,875
      
1,385
  
Add back items:
                                
                                 
Financial expenses (income), net
    
(190
)
    
(611
)
    
(477
)
    
(732
)
Income tax expenses
    
271
      
204
      
585
      
344
  
Depreciation and amortization
    
301
      
445
      
630
      
880
  
Non-GAAP EBITDA
    
1,695
      
791
      
3,613
      
1,877
  

Eltek Ltd.
Consolidated Statement of  Cash flow
(Unaudited, in thousands US$)

   
Three months ended
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2023
    
2022
    
2023
    
2022
  
                         
Cash flows from operating activities:
                        
                         
Net Income
    
1,313
      
753
      
2,875
      
1,385
  
Adjustments to reconcile net income to net cash flows
                          
provided by operating activities:
                                
Depreciation and amortization
    
301
      
445
      
630
      
880
  
Stock-based compensation
    
72
      
64
      
144
      
117
  
Decrease in deferred tax assets and long term tax receivable
    
260
      
194
      
566
      
335
  
     
633
      
703
      
1,340
      
1,332
  
                                 
Decrease (increase) in operating lease right-of-use assets
    
11
      
(8
)
    
(22
)
    
(4
)
Decrease (increase) in trade receivables
    
(1,896
)
    
(1,140
)
    
(1,784
)
    
(2,300
)
Decrease (increase) in other receivables and prepaid expenses
    
214
      
165
      
(311
)
    
83
  
Decrease (increase) in inventories
    
(496
)
    
(57
)
    
(809
)
    
(731
)
Increase (decrease) in trade payables
    
(307
)
    
301
      
105
      
786
  
Increase (decrease) in other liabilities and accrued expenses
    
629
      
(204
)
    
1,477
      
302
  
Increase (decrease)  in employee severance benefits, net
    
17
      
(2
)
    
22
      
-
  
     
(1,828
)
    
(945
)
    
(1,322
)
    
(1,864
)
                                 
Net cash provided by operating activities
    
118
      
511
      
2,893
      
853
  
                                 
Cash flows from investing activities:
                                
Purchase of fixed assets
    
(406
)
    
(326
)
    
(711
)
    
(615
)
Insurance Proceeds
    
2,000
      
-
      
2,000
      
-
  
Restricted deposits
    
192
      
(1
)
    
192
      
(1
)
Net cash provided by (used in) investing activities
    
1,786
      
(327
)
    
1,481
      
(616
)
                                 
Cash flows from financing activities:
                                
Exercise of options
    
299
      
-
      
299
      
25
  
Repayment of long-term loans from bank
    
(1,768
)
    
(144
)
    
(3,348
)
    
(258
)
Repayment of credit from fixed asset payables
    
-
      
(3
)
    
-
      
(7
)
Net cash provided by (used in) financing activities
    
(1,469
)
    
(147
)
    
(3,049
)
    
(240
)
                                 
Effect of translation adjustments
    
(164
)
    
(845
)
    
(361
)
    
(1,034
)
                                 
Net increase (decrease) in cash and cash equivalents
    
271
      
(808
)
    
964
      
(1,037
)
                                 
Cash and cash equivalents at the beginning of the period
    
8,059
      
9,054
      
7,366
      
9,283
  
                                 
Cash and cash equivalents at the end of the period
    
8,330
      
8,246
      
8,330
      
8,246