Eltek Reports Full Year, Q4 2023 Financial Results

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Eltek Ltd., a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), announced its financial results for the full year and fourth quarter ended December 31, 2023.

Full Year and Fourth Quarter 2023 Highlights

• Revenues: Full-year revenue soared to a record $46.7 million in 2023, representing 18% year-over-year growth. This remarkable growth is attributed to our increased production capacity and to our continued commitment to delivering high-quality PCB solutions to our valued customers.
• Profitability: Net income reached $6.4 million in 2023, reflecting almost two times 2022 net income. EBITDA reached $8.6 million, a 91% increase compared to $4.5 million in 2022. This substantial growth underscores the efficiency of our operations, strategic initiatives, and the unwavering trust our customers place in Eltek.
• Earnings per Share (EPS): Diluted EPS jumped to $1.07 in 2023, an increase of 93% compared to 2022. This accomplishment reflects the dedication of our team and the effectiveness of our business strategies.
• Q4 Highlights: Revenue climbed to $12.3 million in Q4, marking an 18% increase from the same period last year. Net income for the quarter reached $1.3 million and EBITDA for the quarter reached $2.4 million.

Driving Growth and Innovation:

Eltek's success stems from a multi-pronged approach:

• Innovation: Our relentless pursuit of innovation has allowed us to stay at the forefront of technological advancements, meeting the evolving needs of the defense, aerospace, and medical industries.
• Customer Focus: Building strong, long-lasting relationships with our customers has been a cornerstone of our success. We understand the unique challenges faced by the defense, aerospace and medical sectors, and our tailored solutions have contributed to our customers' success.
• Operational Efficiency: Eltek continues to invest in state-of-the-art manufacturing processes and quality control measures, ensuring the production of reliable and high-performance PCBs.

Market Trends and Outlook:

The PCB industry is experiencing dynamic shifts, driven by advancements in technology and evolving market demands. As Eltek primarily operates in the defense, aerospace and medical sectors, we are well-positioned to capitalize on the following market trends:

Increasing Demand for Advanced Electronics: The defense and aerospace industries are witnessing a growing need for sophisticated electronic components, driving the demand for high-performance PCBs. Eltek's focus on innovation aligns perfectly with this trend.

Emphasis on Reliability and Quality: With critical applications in defense, aerospace and medical devices, reliability and quality are non-negotiable. Eltek has consistently delivered PCB solutions that meet the stringent standards of these industries, reinforcing our position as a trusted partner.

Global Supply Chain Challenges: The industry has faced challenges related to the global supply chain. Eltek has proactively managed these challenges through strategic partnerships and diversified sourcing, ensuring minimal impact on our operations.

Management Statement:

Eli Yaffe, CEO of Eltek, stated, "We are thrilled to report a very strong fourth quarter and year, surpassing all financial targets and solidifying our position as a leader in the PCB market. This achievement is a testament to the dedication and expertise of our team, the trust of our valued partners and the unwavering support of our shareholders. Looking ahead, we are confident in our ability to navigate the evolving industry landscape and continue delivering exceptional value to all shareholders. The defense, aerospace and medical industries present significant opportunities and Eltek is well-positioned to capitalize on them.

Our decision at the start of 2022 to allocate $15 million in an investment plan for expanding and enhancing our manufacturing capabilities aligns seamlessly with the existing robust demand for our products. Presently, a material portion of the investment plan has either been implemented or is currently in the installation phase. These investments will facilitate the augmentation of our production capacity, improve our operational efficiency and enhance our technological capabilities."

Ron Freund, CFO of Eltek added: "During February 2024, we raised $10 million in equity before expenses. We are grateful for the trust given by the investors who participated in the offering. We are committed to the continued growth of the Company, and we intend to use the funds raised for the expansion of our production capabilities as well as for working capital needs."

2023 Full Year GAAP Financial Results

Revenues for 2023 were $46.7 million compared to $39.7 million in 2022.

Gross profit for 2023 was $13.1 million (28% of revenues) compared to $8.3 million (21% of revenues) in 2022.

Operating profit for 2023 was $7.3 million compared to operating profit of $3.0 million in 2022.

Financial income for 2023 was $0.4 million compared to financial income of $0.9 million in 2022.

Net profit for 2023 was $6.4 million or $1.07 per fully diluted share compared to net profit of $3.2 million or $0.55 per fully diluted share in 2022.

2023 Full Year Non-GAAP Financial Results

EBITDA for 2023 was a $8.6 million (18% of revenues) compared to EBITDA of $4.5 million (11% of revenues) in 2022.

Fourth Quarter 2023 GAAP Financial Results

Revenues for the fourth quarter of 2023 were $12.3 million compared to $10.5 million in the fourth quarter of 2022.

Gross profit for the fourth quarter of 2023 was $3.5 million (28% of revenues) compared to $2.2 million (21% of revenues) in the fourth quarter of 2022.

Operating profit for the fourth quarter of 2023 was $2.0 million compared to operating profit of $0.8 million in the fourth quarter of 2022.

Financial expenses for the fourth quarter of 2023 were $0.3 million compared to financial income of $0.1 million in the fourth quarter of 2022. The financial expenses in the fourth quarter of 2023, derive primarily from the erosion of the US Dollar against the NIS during the quarter.

Net profit for the fourth quarter of 2023 was $1.3 million or $0.22 per fully diluted share compared to net profit of $0.8 million or $0.14 per fully diluted share in the fourth quarter of 2022.

Fourth Quarter 2023 Non-GAAP Financial Results

EBITDA for the fourth quarter of 2023 was a $2.4 million (19% of revenues) compared to EBITDA of $1.2 million (12% of revenues) in the fourth quarter of 2022.