Eltek Announces 2005 Fourth Quarter and Year End Results.PETACH-TIKVA, Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. -- Eltek Ltd. (Nasdaq:ELTK): --Returns to profitability in 2005: 2005 annual net income increased to $1.1 million from a net loss of $1.3 million in 2004 --Sixth consecutive quarter of year-over-year revenue growth - revenues increase to $8.6 million in the fourth quarter, up 13%, with EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. $0.07 and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $1.3 million --Q4 2005 operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. $616,000, up 79% from $344,000 in Q4 2004. --2005 operating income increased to $1.7 million from an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $838,000 in 2004 --2005 EBITDA increased to $4.2 million, up 87% from $2.3 million in 2004 Eltek Ltd., the leading Israeli manufacturer of advanced Flex-Rigid circuitry solutions, today announced its financial results for the fourth quarter and fiscal year ended December December: see month. 31, 2005. Fourth Quarter 2005 Highlights: --Sixth consecutive quarter of year-over-year revenue growth - revenues reached the Company's highest quarterly levels since the first quarter of 2001 --Fifth consecutive quarter of profitability --Quarterly net income of $500,000 or $0.07 per share --EBITDA of $1.3 million in Q4 2005 compared to EBITDA of $1.1 million in Q4 2004 Eltek reported revenues for the three months ended December 31, 2005 of NIS Niš or Nish (both: nēsh), city (1991 pop. 175,391), SE Serbia, on the Nišava River. An important railway and industrial center, it has industries that manufacture textiles, electronics, spirits, and locomotives. 39.6 million ($8.6 million) compared with NIS 35.0 million ($7.6 million) for the fourth quarter of 2004. The increase in revenues primarily reflects the growth of Eltek's internationally sourced flex - rigid This article is about mathematics. For the materials sense, see Stiffness. In mathematics, suppose C is a collection of mathematical objects (for instance sets or functions). PCBs sales in general, and in the U.S. in particular. Net income for the fourth quarter totaled NIS 2.3 million ($500,000), or NIS 0.33 per share ($0.07) compared with a net income of NIS 1.9 million ($417,000), or NIS 0.28 per share ($0.06) for the same quarter in 2004. The fourth quarter of 2005 was the Company's fifth consecutive quarter of profitability. Fiscal Year Highlights --Return to profitability in 2005 --2005 annual net income increased to $1.1 million from a net loss of $1.3 million in 2004 --2005 operating income increased to $1.7 million from an operating loss of $838,000 in 2004 --EBITDA of $4.2 million in 2005 compared to EBITDA of $2.3 million in 2004 Revenues for the year ended December 31, 2005, were NIS 144.4 million ($31.4 million) compared with revenues of NIS125.0 million ($27.2 million) in 2004. The increase in revenues primarily reflects the growth of Eltek's internationally sourced flex - rigid PCBs sales. Net income for the year ended December 31, 2005 was NIS 5.3 million ($1.1 million), or NIS 0.77 per share ($ 0.17) compared with a net loss of NIS 5.9 million ($1.3 million) or NIS (0.82) per share ($ (0.18)) in 2004. Arieh Arieh (ārī`ə), in the Bible, one of the two guards murdered with King Pekahiah. Reichart, President and Chief Executive Officer of Eltek, commented: "Our excellent fourth quarter was a robust finish to a successful turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. year, in which we returned to profitability. During 2005, we delivered consistent year-over-year revenues growth and four consecutive quarters of profitability". "Our continuously improving results were driven by the growing recognition and market acceptance we have been gaining in the flex - rigid PCB PCB: see polychlorinated biphenyl. PCB in full polychlorinated biphenyl Any of a class of highly stable organic compounds prepared by the reaction of chlorine with biphenyl, a two-ring compound. market, the increased contribution of new multi - quarter engagements across many industries and, in the latter part of the year, our penetration The successful unauthorized breach of a security perimeter. See penetration test. into the strategic U.S. flex-rigid PCB market." Mr. Reichart concluded, "Moving forward, Eltek expects to achieve continued year-over-year revenues growth in 2006. We believe that the combination of the higher margin nature of our incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. revenues with the Company's favourable operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. will enable us to deliver strong net income growth in 2006." Amnon Amnon. In the Bible, David's eldest son. He raped his half sister Tamar and was killed for it by her brother Absalom. Amnon ravishes his sister, Tamar. [O.T.: II Samuel 13:14] See : Incest Shemer Shemer (shē`mər), in the Bible. 1 Owner and eponym of the hill of Samaria. 2 Founder of a clan in the tribe of Asher. Alternate forms are Shamer and Shomer. , CFO See Chief Financial Officer. of Eltek commented: "We closed out 2005 on an encouraging note, as quarterly sales reached a new level in the fourth quarter and we managed to grow our quarterly operating and pre tax income by 79% and 100%, respectively, from the corresponding quarter in 2004. In 2005, Eltek's gross margin improved to 20%, from 12 % in 2004, operating income increased to $1.7 million from an operating loss of $838,000, and net income increased to $1.1 million from a net loss of $1.3 million in 2004. Contributing to these improvements in the results are purchase orders Eltek received pursuant to long term projects, which tend to be supplied on a weekly basis over scheduled periods of time, thus increasing production efficiency as well as our overall corporate productivity." "International sourced revenues in 2005 accounted for 58% of our revenues, compared to 46% in 2004 and 33% in 2003," he added. "In order to meet accelerating demand, in 2005 we invested $2.6 million in new advanced manufacturing equipment to increase our high end production capacity. These investments were financed mainly by new bank loans, reflecting our bank's confidence in our business model and our improving cash generation capabilities. The successful installation and integration of the new equipment enables us to establish a strong manufacturing base for continued growth in 2006 and beyond." ELTEK uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income interest, taxes, depreciation and amortization. EBITDA is provided to investors to complement results provided in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , as management believes the measure helps illustrate underlying operating trends in the Company's business and uses the measure to establish internal budgets and goals, manage the business, and evaluate performance. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. Eltek has provided a quantitative quantitative /quan·ti·ta·tive/ (kwahn´ti-ta?tiv) 1. denoting or expressing a quantity. 2. relating to the proportionate quantities or to the amount of the constituents of a compound. reconciliation of EBITDA with net income. About the Company Eltek is Israel's leading manufacturers of printed circuit boards, the core circuitry of most electronic devices. It specializes in the complex high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. of PCB manufacturing, i.e., HDI HDI Human Development Index (UNDP yardstick of human welfare) HDI Help Desk Institute HDI Humpty Dumpty Institute (New York, New York) HDI High Density Interconnect , multi-layered and flex-rigid boards. Eltek's technologically advanced circuitry solutions are used in today's increasingly sophisticated and compact electronic products. For more information, visit Eltek's World Wide Web site at www.eltekglobal.com. NOTE A: Convenience Translation to Dollars For the convenience of the reader, the reported NIS figures of December 31, 2005 have been presented in U.S. Dollars, translated at the representative rate of exchange as of December 31, 2005 (NIS 4.603 = U.S. Dollar 1.00). The U.S. Dollar ( $) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated. Certain matters discussed in this news release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve a number of risks and uncertainties including, but not limited to statements regarding expected results in future quarters, risks in product and technology development and rapid technological change, product demand, the impact of competitive products and pricing, market acceptance, the sales cycle, changing economic conditions and other risk factors detailed in the Company's filings with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission.
ELTEK LTD.
Consolidated Statements of Operations
(In thousands, except per share data)
Convenience Convenience
Translation Translation
----------- -----------
Reported Year ended Three months ended
amounts December 31, December 31,
---------------------------- -------------------------
2004 2005 2005 2004 2005 2005
NIS NIS U.S. $ NIS NIS U.S. $
--------- --------- -------- -------- -------- -------
Audited Unaudited Unaudited
--------- ------------------ -------------------------
Revenues 125,002 144,429 31,378 35,017 39,570 8,596
Costs of
revenues (109,998) (115,733) (25,143) (28,238) (30,983) (6,730)
--------- --------- -------- -------- -------- -------
Gross profit 15,004 28,696 6,235 6,779 8,587 1,866
Research and
development
expenses, net - (646) (140) - (161) (35)
Selling,
general and
administrative
expense (18,265) (19,862) (4,315) (5,046) (5,445) (1,183)
Amortization of
goodwill (593) (593) (129) (152) (146) (32)
--------- --------- -------- -------- -------- -------
Operating
income (loss) (3,854) 7,595 1,651 1,581 2,835 616
Financial
expenses, net (2,948) (2,656) (577) (458) (628) (136)
--------- --------- -------- -------- -------- -------
Income (loss)
before other
income,
net (6,802) 4,939 1,074 1,123 2,207 480
Other income,
net 52 103 22 13 69 15
--------- --------- -------- -------- -------- -------
Income (loss)
before tax
benefit on
income (6,750) 5,042 1,096 1,136 2,276 495
Taxes on income 713 - - 713 - -
--------- --------- -------- -------- -------- -------
Income (loss)
after tax
benefit on
income (6,037) 5,042 1,096 1,849 2,276 495
Minority share
in
subsidiary's
net results 182 218 47 70 24 5
--------- --------- -------- -------- -------- -------
Net income
(loss) for the
period (5,855) 5,260 1,143 1,919 2,300 500
========= ========= ======== ======== ======== =======
Basic and
diluted
earnings
(loss) per
share (0.82) 0.77 0.17 0.28 0.33 0.07
========= ========= ======== ======== ======== =======
Weighted
average number
of shares used
to compute
basic and
diluted
earnings
(loss) per
share 6,885 7,015 6,885 7,015
========= ========= ======== ======== ======== =======
Eltek Ltd.
Consolidated Condensed Balance Sheets
(In thousands)
Convenience
Translation
-----------
December 31, December 31,
--------------- -------------
2004 2005 2005
Reported amounts (Audited) (Unaudited) (Unaudited)
NIS NIS U.S. $
--------------- ------------- -----------
Assets
Current assets
Cash and cash equivalents 4,274 7,258 1,577
Receivables: Trade 23,835 22,743 4,941
Other 1,158 2,173 472
Inventories 13,633 16,051 3,487
Prepaid expenses 563 986 214
--------------- ------------- -----------
Total current assets 43,463 49,211 10,691
--------------- ------------- -----------
Deferred taxes 753 697 151
--------------- ------------- -----------
Property and equipment, net 31,569 32,969 7,163
--------------- ------------- -----------
Goodwill 4,656 3,735 811
--------------- ------------- -----------
Total assets 80,441 86,612 18,816
=============== ============= ===========
Liabilities and Shareholder's
equity
Current liabilities
Short-term credit and current
maturities of long-term
debts 19,589 17,561 3,815
Trade payables 23,577 25,176 5,470
Other liabilities and accrued
expenses 11,083 10,914 2,371
--------------- ------------- -----------
Total current liabilities 54,249 53,651 11,656
--------------- ------------- -----------
Long- term liabilities
Long term debt, excluding
current maturities 6,687 7,607 1,653
Employee severance benefits 1,048 274 60
--------------- ------------- -----------
Total liabilities 61,984 61,532 13,369
--------------- ------------- -----------
Minority interests 1,900 1,547 335
--------------- ------------- -----------
Convertible note 1,566 1,820 395
--------------- ------------- -----------
Shareholder's equity
Ordinary shares, NIS 0.6 par
value. Authorized 50,000,000
shares, issued and
outstanding 5,602,511 shares
at December 31, 2005 and
5,491,711 shares at
December 31, 2004 29,698 29,765 6,466
Additional paid in capital 52,500 54,553 11,852
Capital reserves related to
loans from controlling
shareholders 10,010 10,010 2,175
Cumulative foreign currency
translation adjustments 2,574 1,916 416
Capital reserve 6,685 6,685 1,452
Accumulated deficit (86,476) (81.216) (17,644)
--------------- ------------- -----------
Total shareholder's equity 14,991 21,713 4,717
--------------- ------------- -----------
Total liabilities and
shareholders' equity 80,441 86,612 18,816
=============== ============= ===========
Non-GAAP Earnings Year ended
Reconcilliations December 31,
--------------------------------------
2004 2005 2005
(Unaudited) (Unaudited) (Unaudited)
NIS NIS U.S. $
------------ ------------ ------------
GAAP net income (loss) (5,855) 5,260 1,143
Add back items:
-------------------------------
Financial expenses, net 2,948 2,656 577
Tax benefit (713) - -
Amortization of goodwill 593 593 129
Depreciation 13,428 10,904 2,368
------------ ------------ ------------
Adjusted EBITDA 10,401 19,413 4,217
============ ============ ============
Non-GAAP Earnings Three months ended
Reconcilliations December 31,
--------------------------------------
2004 2005 2005
(Unaudited) (Unaudited( (Unaudited)
NIS NIS U.S. $
------------ ------------ ------------
GAAP net income (loss) 1,919 2,300 500
Add back items:
---------------
Financial expenses, net 458 628 136
Tax benefit (713) - -
Amortization of goodwill 152 146 32
Depreciation 3,191 2,694 585
------------ ------------ ------------
Adjusted EBITDA 5,007 5,768 1,253
============ ============ ============
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