Eltek Reports Q4 and Full Year 2016 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 today its financial results for the fourth quarter and full year ended December 31, 2016.   

Mr. Yitzhak Nissan, Chairman of the Board and Chief Executive Officer, commented: “Our fourth quarter revenues of $8.1 million were lower than the $10.4 million of revenues we had in the fourth quarter of 2015. The decrease was primarily attributable to the lower number of working days in the fourth quarter as compared to last year’s fourth quarter, due to the local holiday season and the continued competition in the local military market. Our bottom line was also affected by two one-time expenses. The first was a $1.1 million write-off of a deferred tax asset, due to uncertainty about our ability to utilize it in the foreseeable future. The second was a $271,000 expense associated with the sale of all of our shares in Kubatronik-Leiterplatten GmbH, our German subsidiary, which had drawn significant resources from us for several years. We believe that the sale of Kubatronik will assist us to focus on improving our future results.  

Although competitive pressures remain strong, we have made positive progress in improving our on-time delivery and manufacturing yields. In addition, we continue to enhance our working relations with our defense customers by providing advanced technological solutions that meet their needs. Eltek is also restructuring its sales organization in order to increase the top line. We believe that these steps will prove fruitful for us and will contribute to achieving our goal of becoming a leading company in our field in terms of technology, on-time delivery and product quality," Mr. Nissan concluded.

Highlights of the Full Year of 2016 compared to the Full Year of 2015

• Revenues for the full year of 2016 amounted to $37.1 million; compared to revenues of $41.4 million in 2015, a decrease of approximately 10.4%. 
• Gross profit was $2.8 million (7.6% of revenues), compared to gross profit of $6.6 million (15.8% of revenues) in 2015;
• Operating loss was $2 million compared to an operating profit of $1.5 million in 2015;
• Net loss was $3.6 million or $0.36 per fully diluted share, compared to net profit of 1.0 million or $0.10 per fully diluted share in 2015. Before the $1.1 million write-off of a deferred tax asset and the $271,000 one-time expenses recorded in connection with our sale of Kubatronik and before the, the net loss for the full year of 2016 (on a non GAAP basis) was $2.3 million, $0.23 per fully diluted share.
• EBITDA amounted to $(313,000) ((0.8%) of revenues) compared to $3.3 million (8.1% revenues) in 2015;
• Net cash provided by operating activities amounted to $165,000 compared to $1.7 million in 2015;
• Cash and cash equivalents as of December 31, 2016 were $1.2 million, compared to $1.0 million as of December 31, 2015. In addition, the Company had un-utilized lines of credit of $1.3 million as of December 31, 2016.

Highlights of the Fourth Quarter of 2016 compared to the Fourth Quarter of 2015

• Revenues for the fourth quarter of 2016 were $8.1 million compared with revenues of $10.4 million in the fourth quarter of 2015; 
• Gross loss was $463,000 ((5.7%) of revenues) compared with a gross profit of $1.7 million (16.3% of revenues) in the fourth quarter of 2015;
• Operating loss was $1.6 million compared to an operating profit of $455,000 in the fourth quarter of 2015;
• Net loss was $3 million or $0.30 per fully diluted share compared to net profit of $228,000 or $0.02 per fully diluted share in the fourth quarter of 2015. The net loss for Q4-2016 (on a non-GAAP basis) was $1.7 million, $0.16 per fully diluted share before the one-time expenses recorded in the fourth quarter of 2016;.
• EBITDA amounted to $(1.4) million ((17.2%) of revenues) compared to EBITDA of $940,000 (9% of revenues) in the fourth quarter of 2015;
• Net cash used in operating activities amounted to $1.3 million, compared to $1.4 million of cash provided by operating activities in the fourth quarter of 2015.   

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 has ITAR, AS-9100 and NADCAP Electronics permits and its customers include top of the line 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, and R&D, production and marketing center is located in Israel. Eltek operates also through its subsidiaries in North America and Europe, and by agents and distributors in Europe, India, South Africa and South America.

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