Eltek Reports 2016 Second Quarter Financial Results

PETACH-TIKVA, Israel, Aug. 10, 2016

Mr. Yitzhak Nissan, Chairman of the Board and Chief Executive Officer, commented: "Revenues in the second quarter of 2016 amounted to $9.9 million, slightly lower (5%) than revenues in the second quarter of last year. The revenues reflect the continued competition in the Israeli market for high end products. Revenues from the North American market in the second quarter of 2016 grew by 12% as compared to the first quarter of 2016 and amounted to $2.0 million. Our focus on profitability by improving production processes and closely monitoring expenses, led us to a net profit of $213,000 in the second quarter of 2016.

"We remain focused on growth in the global markets, which we expect will continue to have a positive effect on our revenues," Mr. Nissan concluded.

Highlights of the Second Quarter of 2016

• Revenues for the second quarter of 2016 were $9.9 million compared to $10.4 million in the second quarter of 2015
• Gross profit was $1.5 million (14.8% of revenues) compared to gross profit of $1.9 million (18.3% of revenues) in the second quarter of 2015. The decrease in gross profit and gross margins reflects the decreased sales, while a significant portion of our cost of sales remained constant.
• Operating profit was $244,000 compared to operating profit of $543,000 in the second quarter of 2015.
• Net profit was $213,000 or $0.02 per fully diluted share compared to net profit of $424,000 or $0.04 per fully diluted share in the second quarter of 2015.
• EBITDA amounted to $754,000 (7.6% of revenues) compared to EBITDA of $1.0 million (10% of revenues) in the second quarter of 2015.
• Net cash used by operating activities amounted to $37,000 compared to net cash used by operating activities of $118,000 in the second quarter of 2015. The improvement is mainly attributable to a decrease in working capital requirements.
• Cash and cash equivalents as of June 30, 2016 were $894,000 compared to $994,000 as of June 30, 2015.

Highlights for the First Six Months of 2016

• Revenues for the first six months of 2016 were $19.7 million compared to $20.1 million in the first six months of 2015.
• Gross profit was $2.4 million (12.2% of revenues) compared to gross profit of $3.1 million (15.6% of revenues) in the first six months of 2015.
• Operating loss was $48,000 compared to operating profit of $435,000 in the first six months of 2015.
• Net loss was $171,000, or $0.02 per fully diluted share compared to net profit of $190,000 or $0.02 per fully diluted share in the first six months of 2015.
• EBITDA amounted to $921,000 (4.7% of revenues) compared to EBITDA of $1.4 million (6.7% of revenues) in the first six months of 2015.
• Net cash provided by operating activities amounted to $853,000 compared to net cash used by operating activities of $289,000 in the first six months of 2015. The improvement is mainly attributable to a decrease in working capital requirements.

Conference Call

Today, Wednesday, August 10, 2016 at 9:30 a.m. Eastern Time, Eltek will conduct a conference call to discuss the results. The call will feature remarks by Mr. Yitzhak Nissan, Chairman of the Board of Directors and Chief Executive Officer, Roberto Tulman, Deputy CEO and Chief Technology Officer, and Mr. Amnon Shemer, Chief Financial Officer.