Eltek Reports a 241% Growth in Net Income and a 26% Increase in Revenues for the 1st Quarter of 2006.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): --Seventh consecutive quarter of year-over-year organic revenue growth - Revenues increased to $ 9.3 million, up 26% --sixth consecutive quarter of profitability - Quarterly net income increased by 241% to $ 613 thousand in Q1 2006 from $ 179 thousand in Q1 2005 --EPS of $ 0.09 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compare to $ 0.03 per fully diluted share in Q1 2005 --New business , mainly in the U.S., leads Company to further expand its production capacity Eltek Ltd. (Nasdaq:ELTK), the leading Israeli manufacturer of advanced flex-rigid circuitry solutions, today announced its financial results for the first quarter of 2006. First Quarter 2006 Key Financial Highlights: --Revenues increased to $ 9.3 million, up 26%. --Quarterly 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. of $ 783 thousand, up 152% --Quarterly net income grew 241% to $ 613 thousand, or $ 0.09 per fully diluted share --EBITDA of $ 1.3 million in Q1 2006 compared to 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 million in Q1 2005 Eltek reported revenues for the three months ended March 31, 2006 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. 43.4 million ($ 9.3 million) compared with NIS 34.4 million ($ 7.3 million) for the first quarter of 2005. The increase in revenues is attributed to the gaining of new customers and new projects with existing customers. Net income for the first quarter totaled NIS 2.9 million ($ 613 thousand), or $ 0.09 per fully diluted share compared with net income of NIS 839 thousand ($ 180 thousand), or $ 0.03 per fully diluted share for the same quarter in 2005. The first quarter of 2006 was the Company's sixth consecutive quarter of profitability. 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: "Q1 was another strong quarter for Eltek, in which we managed to accelerate our continued organic revenue growth and reached new levels of profitability." "During the quarter we won some highly contested tenders in Israel and continued to expand our global 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 customer base, mainly in the U.S. As we are still at the very beginning of the incorporation process of our flex-rigid PCBs in the product lines of our new customers, we feel that we have only begun to scratch 1. scratch - (From "scratchpad") Describes a data structure or recording medium attached to a machine for testing or temporary-use purposes; one that can be scribbled on without loss. the surface of our sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. , high margin growth opportunities in the U.S. 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. space." 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 have had a very good start for 2006, as quarterly sales reached another new high in the first quarter and we grew our quarterly operating and net income by 152% and 241%, respectively, from the corresponding quarter in 2005." "Our previously announced expansion of our high - end production capacity is proceeding on schedule, as we made additional investments in new advanced manufacturing equipment, hired new production employees and commenced the gradual The Gradual (Latin: graduale, sometimes called the Grail) is a chant in the extraordinary form of the Roman Catholic Mass, sung after the reading or singing of the Epistle and before the Alleluia, or, during penitential seasons, before the Tract. expansion of our production facility. These carefully planned investments are expected to enhance our ability to meet our customers' growing demand for high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. serial production capacity," he added. In the first quarter of 2006, Eltek had EBITDA of $1.3 million compared to EBITDA of $ 963 thousand in the first quarter of 2005. 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. 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 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.
Convenience
translation
-----------
Three months ended
March 31,
-----------------------------------------
2005 2006 2006
NIS NIS U.S. $
(Unaudited) (Unaudited) (Unaudited)
----------------- ----------- -----------
(In
thousands)
Revenues 34,395 43,365 9,296
Costs of revenues (28,083) (33,957) (7,279)
----------------- ----------- -----------
Gross profit 6,312 9,408 2,017
Research and development,
net (191) (157) (34)
Selling, general and
administrative
expenses (4,519) (5,599) (1,200)
Amortization of goodwill (152) - -
----------------- ----------- -----------
Operating income 1,450 3,652 783
Financial expenses, net (614) (759) (163)
----------------- ----------- -----------
Income before other
expenses, net 836 2,893 620
Other expenses, net (11) (10) (2)
----------------- ----------- -----------
Income before taxes on
income 825 2,883 618
Taxes on income - - -
----------------- ----------- -----------
Net income after taxes on
income 825 2,883 618
Minority share in
subsidiary's net
results 14 (22) (5)
----------------- ----------- -----------
Net income for the period 839 2,861 613
================= =========== ===========
Basic earnings per 1
ordinary share (a)0.15 0.51 0.11
================= =========== ===========
Diluted earnings per 1
ordinary share (a)0.13 0.41 0.09
================= =========== ===========
Weighted average share
capital used to compute
basic net earnings per
share (a)5,492 5,608 5,608
================= =========== ===========
Weighted average share
capital used to compute
diluted net earnings per
share (a)6,893 7,024 7,024
================= =========== ===========
(a)Restated
Eltek Ltd.
Consolidated Condensed Balance Sheets
Convenience
Translation
------------
December 31, March 31, March 31,
--------------------------- ------------
2006 2006
2005 Unaudited Unaudited
NIS NIS U.S. $
------------ -------------- ------------
(in thousands)
Assets
Current assets
Cash and cash equivalents 7,258 5,080 1,089
Receivables: Trade 22,743 31,080 6,662
Other 2,173 1,199 257
Inventories 16.051 16.416 3,519
Prepaid expenses 986 1.020 219
------------ -------------- ------------
Total current assets 49,211 54,795 11,746
------------ -------------- ------------
Deferred taxes 697 725 155
------------ -------------- ------------
Property and equipment, net 32,969 31,766 6,810
------------ -------------- ------------
Goodwill 3,735 3,883 832
------------ -------------- ------------
Total assets 86,612 91,169 19,543
============ ============== ============
Liabilities and Shareholder's
equity
Current liabilities
Short-term credit and current
maturities of long-term
debts 17,561 15,630 3,351
Trade payables 25,176 26,285 5,335
Other liabilities and accrued
expenses 10,914 12,179 2,610
------------ -------------- ------------
Total current liabilities 53,651 54,094 11,596
------------ -------------- ------------
Long- term liabilities 7,607 8,006 1,716
Long term debt, excluding
current maturities
Employee severance benefits 274 433 93
Convertible debenture note - 1,890 405
------------ -------------- ------------
Total liabilities 61,532 64,423 13,510
------------ -------------- ------------
Minority interests 1,547 1,650 353
------------ -------------- ------------
Convertible debenture note 1,820 - -
------------ -------------- ------------
Shareholders' equity
Ordinary shares, NIS 0.6 par
value. Authorized 50,000,000
shares, issued
and outstanding 5,611,111
shares at March 31, 2006
and 5,602,511 shares at
December 31, 2005 29,765 29,770 6,382
Additional paid in capital 54,553 54,727 11,731
Capital reserves related to
loans from controlling
shareholders 10,010 10,010 2,146
Cumulative foreign currency
translation adjustments 1,916 2,259 484
Capital reserve 6,685 6,685 1,433
Accumulated deficit (81,216) (78,355) (16,796)
------------ -------------- ------------
Total shareholders' equity 21,713 25,096 5,380
------------ -------------- ------------
Total liabilities and
shareholders' equity 86,612 91,169 19,543
============ ============== ============
Non-GAAP Earnings Three months ended
Reconcilliations March 31,
-------------------------------------
2006
(Unaudited)
2005 2006 Convenience
(Unaudited) (Unaudited) Translation
NIS NIS U.S. $
------------ ----------- ------------
GAAP net income 839 2,861 613
Add back items:
--------------------------------
Financial expenses, net 614 759 163
Tax benefit - - -
Amortization of goodwill 152 - -
Depreciation 2,889 2,603 558
------------ ----------- ------------
Adjusted EBITDA 4,493 6,223 1,334
============ =========== ============
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