Eltek Reports Full Year and Q4 2024 Financial Results

Estimated reading time: 4 minutes

Eltek Ltd., a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), today announced its financial results for the full year and fourth quarter ended December 31, 2024.

Full Year and Fourth Quarter 2024 Highlights

• Revenues: Revenues for 2024 were $46.5 million, a slight decline of $0.2 million compared to 2023.
• Profitability: Net income reached $4.2 million in 2024 compared to $6.4 million in 2023. EBITDA reached $5.9 million compared to $8.6 million in 2023.
• Earnings per share (EPS): Diluted EPS was $0.63 in 2024 compared to $1.07 in 2023.
• Q4 Highlights: Revenue for the fourth quarter amounted to $10.8 million, compared to $12.3 million in the corresponding period of the previous year. Net income for the quarter was $0 million, while EBITDA totaled $0.7 million.

Transition Period and Future Growth Outlook:

Eltek is currently undergoing a strategic transition, expected to continue through the mid of 2026. This process was initiated with the launch of an accelerated $15 million investment plan, while the company's annual revenues ranged below $40 million. The primary objective of this initiative was to establish advanced manufacturing capabilities, enhance technological proficiency, and expand annual production capacity to a range of $55 million to $65 million.

The investment plan includes the installation of equipment and production lines, while maintaining ongoing production. Conducting these enhancements within the existing facility has introduced spatial constraints, and logistical complexities, leading to temporary disruptions and inefficiencies which impacted the fourth quarter of 2024. In addition to this plan Eltek is implementing infrastructure upgrades to support the forecasted capacity and beyond.

Eltek remains fully committed to its strategic growth objectives and anticipates improved operational performance as the investment program progresses.

Market Trends and Outlook:

The global PCB industry, particularly in high-end applications such as Defense, Aerospace, Medical, and high-tech industrial markets, continues to experience dynamic shifts driven by geopolitical and economic factors. The ongoing trade tensions between the United States and China have led to supply chain realignments, as companies seek to reduce dependency on Chinese manufacturing. The US administration's new customs regulations and tariffs on Chinese electronic components have further accelerated the trend of reshoring production to North America and US allied countries, creating opportunities for manufacturers with relevant capabilities.

Additionally, the continued geopolitical instability in Eastern Europe due to the Russia-Ukraine conflict and ongoing tensions in the Middle East have heightened demand for defense-related PCBs. Governments worldwide are increasing defense budgets, driving the need for high-reliability PCBs used in advanced military equipment, aerospace systems, and secure communication infrastructure.

Eltek is strategically positioned to leverage these industry trends by enhancing its manufacturing capabilities and strengthening its supply chain resilience. With its continued investments in cutting-edge technology and production efficiency, Eltek remains committed to meeting the growing needs of its defense, medical, and industrial customers while capitalizing on market opportunities arising from global economic shifts.

Management Statement:

Eli Yaffe, CEO of Eltek, stated, "We continue to witness sustained demand, reflected by the tenders issued in recent months for significant quantities of PCBs. We expect these tenders to have a positive long-term impact on the company. Our strategic investments in advanced manufacturing capabilities are aimed at driving operational efficiency and innovation, increasing our capacity and strengthening our ability to serve our customers. While these investments, along with ongoing facility expansion, may introduce some short-term fluctuations in profitability, we remain confident in their long-term value. We anticipate that the benefits of these initiatives will become increasingly evident in the coming quarters."

2024 Full Year GAAP Financial Results

• Revenues for 2024 were $46.5 million compared to $46.7 million in 2023.
• Gross profit for 2024 was $10.3 million (22% of revenues) compared to $13.1 million (28% of revenues) in 2023.
• Operating profit for 2024 was $4.4 million compared to operating profit of $7.3 million in 2023.
• Financial income for 2024 was $0.7 million compared to financial income of $0.4 million in 2023.
• Net profit for 2024 was $4.2 million or $0.63 per fully diluted share compared to net profit of $6.4 million or $1.07 per fully diluted share in 2023.

2024 Full Year Non-GAAP Financial Results

EBITDA for 2024 was a $5.9 million (13% of revenues) compared to EBITDA of $8.6 million (18% of revenues) in 2023.

Fourth Quarter 2024 GAAP Financial Results

• Revenues for the fourth quarter of 2024 were $10.8 million compared to $12.3 million in the fourth quarter of 2023.
• Gross profit for the fourth quarter of 2024 was $1.9 million (18% of revenues) compared to $3.5 million (28% of revenues) in the fourth quarter of 2023.
• Operating profit for the fourth quarter of 2024 was $0.4 million compared to operating profit of $2.0 million in the fourth quarter of 2023.
• Financial expenses for the fourth quarter of 2024 were $0.3 million, the same as in the fourth quarter of 2023. The financial expenses in the fourth quarter of 2024, derive primarily from the erosion of the US Dollar against the NIS during the quarter.
• Net profit for the fourth quarter of 2024 was $0 million compared to net profit of $1.3 million or $0.22 per fully diluted share in the fourth quarter of 2023.

Fourth Quarter 2024 Non-GAAP Financial Results

EBITDA for the fourth quarter of 2024 was $0.8 million (7% of revenues) compared to EBITDA of $2.4 million (19% of revenues) in the fourth quarter of 2023.