Eltek Reports Full Year and Fourth Quarter 2020 Financial Results

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Eltek Ltd., a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards, announced its financial results for the full year and fourth quarter ended December 31, 2020. 

Eli Yaffe, Chief Executive Officer, commented, "We are pleased with the growth in our revenues and profitability in the fourth quarter and the significant change in our full year results. The improved results reflect the growth in our revenues and the continued improved operating efficiencies.” 

Eltek has managed successfully through the COVID pandemic in 2020 because of the following actions:

• Eltek’s balance market sectors strategy enabled Eltek to mitigate the downturn in the commercial aerospace market through its involvement in the defence market and the medical devices market.
• Eltek managed carefully its cash during the pandemic period by obtaining a reduced rate long term loan guaranteed by the government and by raising $5.7 million in a rights offering.
• Eltek increased investments during 2020 capitalizing on the reduced prices of capital equipment due to Covid.

In addition, we were able to emphasis the following:

• Eltek used its strong cash flow during 2020 in order to pay back part of its short-term loans. As a result, the ratio of Equity/Total Balance sheet increased to 43.4% at the end of 2020 compared to 27.5% at the end of 2019.
• Eltek accelerated its R&D plans and was awarded a grant from the Israel Investment Authority and approval for participation in a special R&D program funded by the Israel Innovation Authority.

"The outbreak and spread of the Coronavirus has created new operational and business challenges, including a shortage of certain raw material that we are dealing with. The Covid pandemic forced Eltek to start a new expense reduction plan at the end of 2020 that will reduce further the breakeven point of the company,” concluded Yaffe.

Highlights of the Full Year of 2020 compared to the Full Year of 2019

• Revenues for the full year of 2020 amounted to $36.7 million compared to revenues of $34.8 million in 2019, an increase of 5.5% YoY.
• Gross profit increased by 28.3% to $7.7 million (21.0% of revenues) in 2020 from gross profit of $6.0 million (17.3% of revenues) in 2019.
• Operating profit was $3.0 million in 2020 compared to an operating profit of $1.4 million in 2019, an increase of 114.3% YoY.
• Net profit was $2.6 million, or $0.58 per fully diluted share in 2020, compared to a net profit of $1.8 million, or $0.48 per fully diluted share in 2019. Net profit increased 44.4% YoY.
• EBITDA was $4.6 million in 2020 compared to EBITDA of $3.8 million in 2019, an increase of 21.1% YoY.
• Net cash provided by operating activities amounted to $3.3 million in 2020 compared to $2.6 million in 2019.
• Cash and cash equivalents as of December 31, 2020 were $4.7 million compared to $1.6 million as of December 31, 2019.

Highlights of the Fourth Quarter of 2020 compared to the Fourth Quarter of 2019

• Revenues for the fourth quarter of 2020 were $9.5 million compared to revenues of $8.6 million in the fourth quarter of 2019, an increase of 10.5% YoY.
• Gross profit increased by 46.7% from gross profit of $1.5 million (17.0% of revenues) in the fourth quarter of 2019 to $2.2 million (23.2% of revenues) in the fourth quarter of 2020.
• Operating profit was $973,000 in the fourth quarter of 2020 compared to an operating profit of $379,000 in the fourth quarter of 2019, an increase of 156.7% YoY.
• Net profit was $766,000 or $0.16 per fully diluted share in the fourth quarter of 2020 compared to a net profit of $370,000 or $0.08 per fully diluted share in the fourth quarter of 2019. Fourth quarter net profit increased 107.0% YoY.
• EBITDA was $1.4 million in the fourth quarter of 2020 compared to EBITDA of $817,000 in the fourth quarter of 2019, an increase of 71.4% YoY.
• Short term credit and loans were down from 24.5% of the total balance sheet at the end of 2019 to 1.9% at the end of 2020.