Eltek Reports Full Year and Fourth Quarter 2021 Financial Results

Mar 23rd, 2022 7:30 EST
  • Revenues of $33.8 million in 2021 compared to $36.7 million in 2020.
  • Net profit of $5.0 million in 2021 compared to a net profit of $2.6 million in 2020.
  • Revenues of $9.5 million in the fourth quarter of 2021 compared to $9.5 million in the fourth quarter of 2020.
  • Net profit of $3.8 million in the fourth quarter of 2021 compared to net profit of $0.8 million in the fourth quarter of 2020.
  • Gross margin of 20% for 2021.
  • $3.8 million EBITDA in the year, or 11% of total sales.
  • Cash flow provided by operating activities of $3.9 million for the year.

PETACH-TIKVA, Israel, March 23, 2022 /PRNewswire/ — Eltek Ltd. (NASDAQ: ELTK), a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards, announced today its financial results for the full year and fourth quarter ended December 31, 2021.

Mr. Eli Yaffe, Chief Executive Officer, commented: “2021 was a challenging year in which we had to deal with a shortage of raw materials and the devaluation of the US Dollar against the Israeli Shekel. These two challenges impacted our results of operations. Despite this, we managed to end the year with $1.5 million of pre-tax income. In the fourth quarter we released the tax loss carryforward valuation allowance recorded in prior years, which resulted in income of $3.5 million. This release was based on our conclusion that it is more likely than not that our company will realize its deferred tax losses in the future. Thus, our net profit for 2021 was $5.0 million.”

“In the fourth quarter and the beginning of 2022 Eltek succeeded in building a strong backlog for 2022. I am also glad to report that we received the $1.4 million purchase order from a defense customer which we reported earlier on February 7, 2022. We are continuing with our R&D programs in order to maintain our position as an Industry Innovation leader as well as to streamline and improve production processes and increase operational efficiency,” Mr. Yaffe added.

“We ended 2021 with a strong balance sheet. The company’s cash balances as of the end of 2021 amounted to approximately $9.3 million and we had working capital of $13.3 million. Our improved financial condition allows us to continue to invest in equipment and machinery.

During 2021, we were able to increase the company’s customer base and we hope to continue this positive trend during 2022 as well,” Mr. Yaffe concluded.

Highlights of the Full Year of 2021 compared to the Full Year of 2020

  • Revenues for the full year of 2021 amounted to $33.8 million compared to revenues of $36.7 million in 2020, a decrease of 8% YoY.
  • Gross profit was $6.9 million (20% of revenues) in 2021 compared to a gross profit of $7.7 million (21% of revenues) in 2020.
  • Operating profit was $1.9 million in 2021 compared to operating profit of $3.0 million in 2020.
  • Net profit was $5.0 million or $0.86 per fully diluted share in 2021, compared to a net profit of $2.6 million, or $0.58 per fully diluted share in 2020.
  • EBITDA was $3.8 million in 2021 compared to EBITDA of $4.6 million in 2020.
  • Net cash provided by operating activities amounted to $3.9 million in 2021 compared to $3.3 million in 2020.
  • Cash and cash equivalents as of December 31, 2021 were $9.3 million compared to $4.7 million as of December 31, 2020.

Highlights of the Fourth Quarter of 2021 compared to the Fourth Quarter of 2020

  • Revenues for the fourth quarter of 2021 were $9.5 million the same as in the fourth quarter of 2020.
  • Gross profit was $2.0 million (21% of revenues) in the fourth quarter of 2021 compared to $2.2 million (23% of revenues) in the fourth quarter of 2020.
  • Operating profit was $0.6 million in the fourth quarter of 2021 compared to operating profit of $1.0 million in the fourth quarter of 2020.
  • Net profit was $3.8 million or $0.65 per fully diluted share in the fourth quarter of 2021 compared to a net profit of $0.8 million or $0.16 per fully diluted share in the fourth quarter of 2020.
  • EBITDA was $1.1 million in the fourth quarter of 2021 compared to $1.4 million in the fourth quarter of 2020.

Use of 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

Eltek will conduct a conference call to discuss the results today, Thursday, March 23, 2021, at 8:30 a.m. Eastern Time. 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:                                    03-9180691 International:                        +972-3-9180691

                  At:

                  8:30 a.m. Eastern Time                  5:30 a.m. Pacific Time                   14:30 p.m. Israel Time

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

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 the Israeli leader 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 FreundChief Financial Officer[email protected] +972-3-9395023

Eltek Ltd.

Consolidated Statements of Operations

(In thousands US$, except per share data)

Three months ended

Twelve months ended

December  31,

December  31,

2021

2020

2021

2020

Revenues

9,521

9,501

33,823

36,707

Costs of revenues

(7,565)

(7,290)

(26,926)

(28,969)

Gross profit

1,956

2,211

6,897

7,738

R&D expenses, net

(23)

(2)

(78)

(2)

Selling, general and administrative expenses

(1,310)

(1,236)

(4,870)

(4,704)

Operating profit

623

973

1,949

3,032

Financial expenses, net

(387)

(179)

(488)

(337)

Other income (expenses), net

(6)

41

(16)

Profit before income tax 

236

788

1,502

2,679

Tax income (expenses), net

3,600

(22)

3,537

(71)

Net Profit 

3,836

766

5,039

2,608

Earnings per share

Basic net profit per ordinary share

0.66

0.16

0.86

0.58

Diluted net profit per ordinary share

0.65

0.16

0.86

0.58

Weighted average number of ordinary shares used to compute

basic net profit per ordinary share (in thousands)

5,840

4,841

5,840

4,495

Weighted average number of ordinary shares used to compute

diluted net profit per ordinary share (in thousands)

5,860

4,852

5,869

4,501

Eltek Ltd.

Consolidated Balance Sheets

(In thousands US$)

December  31,

December 31,

2021

2020

Assets

Current assets

Cash and cash equivalents

9,283

4,735

Receivables:   Trade, net of provision for doubtful accounts

7,021

9,062

                     Other

798

700

Inventories 

4,893

3,704

Prepaid expenses 

586

619

Total current assets

22,581

18,820

Long term assets

Restricted deposits

226

62

Severance pay fund

66

64

Deferred tax assets and long term tax receivables, net

3,563

Operating lease right of use assets

8,979

8,948

Total long term assets

12,834

9,074

Fixed assets, less accumulated depreciation

7,368

7,263

Total Assets

42,783

35,157

Liabilities and Shareholder’s equity

Current liabilities

Short-term credit and current maturities of long-term debts

708

676

Accounts payable: Trade

4,044

4,452

                            Other

3,577

3,831

Short-term operating lease liabilities

931

742

Total current liabilities

9,260

9,701

Long-term liabilities

Long term debt, excluding current maturities

3,921

1,495

Employee severance benefits

344

338

Deferred tax liabilities, net

84

Long-term operating lease liabilities

8,186

8,272

Total long-term liabilities

12,451

10,189

Equity

Ordinary shares, NIS 3.0  par value authorized 10,000,000 shares, issued and outstanding 5,840,357 at December 31, 2021 and December 31, 2020

5,296

5,296

Additional paid-in capital

22,846

22,846

Cumulative foreign currency translation adjustments

3,716

3,153

Capital reserve

1,287

1,084

Accumulated deficit

(12,073)

(17,112)

Shareholders’ equity

21,072

15,267

Total liabilities and shareholders’ equity

42,783

35,157

Eltek Ltd.

Unaudited Non-GAAP EBITDA Reconciliations

(In thousands US$)

Non-GAAP EBITDA Reconciliations

Three months ended

Twelve months ended

December  31,

December  31,

2021

2020

2021

2020

Unaudited

Unaudited

GAAP net Income

3,836

766

5,039

2,608

Add back items:

Financial expenses, net 

387

179

488

337

Income tax expense (income)

(3,600)

22

(3,537)

71

Depreciation and amortization

450

415

1,781

1,592

Non-GAAP EBITDA

1,073

1,382

3,771

4,608

Eltek Ltd.

Consolidated Statement of  Cash flow

(In thousands US$)

Three months ended

Twelve months ended

December  31,

December  31,

2021

2020

2021

2020

Cash flows from operating activities:

Net Income

3,836

766

5,039

2,608

Adjustments to reconcile net profit to net

 cash flows provided by operating activities:

Depreciation and amortization

450

415

1,781

1,592

Capital (gain) loss on disposal of fixed assets, net

14

(2)

Stock-based compensation

74

30

203

121

Revaluation of long term loans 

2

Increase in long term tax receivables

(1,013)

(1,013)

Decrease (increase) in deferred tax assets, net

(2,572)

15

(2,550)

33

(3,061)

474

(1,579)

1,746

Decrease (increase) in operating lease right-of-use assets

25

79

66

74

Decrease (increase) in trade receivables

(301)

(2,054)

2,260

(956)

Decrease (increase) in other receivables and prepaid expenses

(161)

334

(18)

(556)

Decrease (increase) in inventories

(499)

93

(1,023)

290

Increase (decrease)  in trade payables

424

(476)

(451)

(449)

Increase (decrease) in other liabilities and accrued expenses

164

267

(414)

448

Increase (decrease) in employees severance benefits, net

20

(5)

47

(348)

(1,737)

415

(1,102)

Net cash provided by (used in) operating activities

427

(497)

3,875

3,252

Cash flows from investing activities:

Purchase of fixed assets

(173)

(279)

(1,535)

(1,082)

Restricted deposits

(156)

(58)

Repayment from insurance

44

44

Net cash used in investing activities

(129)

(279)

(1,647)

(1,140)

Cash flows from financing activities:

Short- term bank credit, net

328

(377)

(1,600)

Repayment of short- term shareholder loan

(3,090)

(3,661)

Issuance of shares in rights offering, net

5,594

5,594

Repayment of long-term loans from bank

(114)

(38)

(301)

(183)

Proceeds from long-term loans

3,063

1,141

Repayment of credit from fixed asset payables

25

(86)

(261)

(477)

Net cash provided by (used in) financing activities

(89)

2,708

2,124

814

Effect of translation adjustments

189

152

196

181

Net increase in cash and cash equivalents

398

2,084

4,548

3,107

Cash and cash equivalents at beginning of the period

8,885

2,651

4,735

1,628

Cash and cash equivalents at period end

9,283

4,735

9,283

4,735

SOURCE Eltek Ltd.

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