Eltek Reports Revenues of $8.7M in 2Q18

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Eltek Ltd., a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards, released its financial results for the quarter ended June 30, 2018.

"Revenues in Q2 2018 were $8.7 million, up 16% from Q2 2017, and we incurred a net loss of $843,000, 22% less than in Q2 2017. We recently appointed Eli Yaffe, who has a proven track record as a CEO in the defense and aerospace industries, as chief executive officer in order to create and implement a turnaround plan that will focus on further improving operating results and cash flow. Yaffe is establishing a new leadership team and has appointed a VP sales and marketing, an operations manager and an IT and procurement manager," said Yitzhak Nissan, chairman of the board.

"I am pleased to join Eltek as its CEO. In accepting this position, I am aware of the challenges that face the company and am determined and committed to returning the Company back to profitability and to renew the industry's recognition of Eltek as a leading high-end PCB manufacturer," said Eli Yaffe, chief executive officer.

Highlights of the Second Quarter of 2018

• Revenues for the second quarter of 2018 were $8.7 million compared to $7.5 million in the second quarter of 2017
• Gross profit was $578,000 (6.7% of revenues) compared to gross profit of $134,000 (1.8% of revenues) in the second quarter of 2017
• Operating loss was $721,000 compared to an operating loss of $1 million in the second quarter of 2017
• Net loss was $843,000 or ($0.42) per fully diluted share compared to a net loss of $1.1 million or ($0.54) per fully diluted share in the second quarter of 2017
• EBITDA was a negative $296,000 (3.4% of revenues) compared to a negative EBITDA of $583,000 (7.8% of revenues) in the second quarter of 2017
• Net cash used in operating activities amounted to $571,000 compared to net cash used in operating activities of $517,000 in the second quarter of 2017. The change is mainly attributable to the operating results in this quarter, and changes in asset and liability accounts
• Cash and cash equivalents as of June 30, 2018 were $991,000 compared to $792,000 as of June 30, 2017

Highlights for the First Six Months of 2018

• Revenues for the first six months of 2018 were $17.6 million compared to $16 million in the first six months of 2017
• Gross profit was $1 million (5.8% of revenues) compared to gross profit of $619,000 (3.9% of revenues) in the first six months of 2017
• Operating loss was $1.3 million compared to an operating loss of $1.6 million in the first six months of 2017
• Net loss was $1.5 million, or ($0.75) per fully diluted share compared to a net loss of $1.9 million, or ($0.94) per fully diluted share in the first six months of 2017
• EBITDA was a negative $481,000 (2.7% of revenues) compared to a negative EBITDA of $794,000 (5% of revenues) in the first six months of 2017
• Net cash used in operating activities amounted to $1.4 million compared to net cash used in operating activities of $1.3 million in the first six months of 2017

Financial Status

As of June 30, 2018, the Company was not in compliance with its financial covenants with its banks and does not expect to be in compliance at December 31, 2018. The Company has initiated discussions with its banks to obtain waivers for such non-compliance. As a result, long term bank loans amounting to $417,000 were reclassified from long term to short term.

In April 2018, Nistec provided a letter of commitment to the Company to provide additional financing in the amount of up to $2.5 million, valid for one year, of which $2.2 million have been utilized. It should be noted that the Company is making efforts to improve operations and its cash position (including applicable waivers), although there is no certainty that the Company will be able to attain these.

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 subsidiaries in North America and in Europe and by agents and distributors in Europe, India, South Africa and South America.

For more information, visit Eltek's website.