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Eltek Ltd. Reports 2024 Second Quarter Financial Results

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Eltek (NASDAQ: ELTK) reported its Q2 2024 financial results, showing a decline in performance compared to the previous year. Revenues decreased to $10.5 million from $11.0 million in Q2 2023. Operating profit fell to $0.4 million from $1.4 million, while net income dropped to $0.8 million ($0.11 per diluted share) from $1.3 million ($0.22 per diluted share).

The company attributed the decline to a shift in customer orders towards medium-technology PCBs, resulting in lower prices and margins. However, CEO Eli Yaffe expressed confidence in the company's long-term strategy, citing a 30% increase in backlog since the beginning of 2024 and expectations of improved profitability in Q3.

Eltek (NASDAQ: ELTK) ha pubblicato i risultati finanziari per il secondo trimestre del 2024, mostrando un calo delle prestazioni rispetto all'anno precedente. I ricavi sono scesi a 10,5 milioni di dollari rispetto agli 11,0 milioni di dollari del secondo trimestre del 2023. Il profitto operativo è diminuito a 0,4 milioni di dollari da 1,4 milioni di dollari, mentre il reddito netto è calato a 0,8 milioni di dollari (0,11 dollari per azione diluita) rispetto a 1,3 milioni di dollari (0,22 dollari per azione diluita).

La società ha attribuito il declino a un cambiamento negli ordini dei clienti verso PCB a tecnologia media, portando a prezzi e margini inferiori. Tuttavia, il CEO Eli Yaffe ha espresso fiducia nella strategia a lungo termine dell'azienda, citando un aumento del 30% del portafoglio ordini dall'inizio del 2024 e aspettative di una redditività migliorata nel terzo trimestre.

Eltek (NASDAQ: ELTK) reportó sus resultados financieros del segundo trimestre de 2024, mostrando una disminución en el rendimiento en comparación con el año anterior. Los ingresos cayeron a 10.5 millones de dólares desde 11.0 millones en el segundo trimestre de 2023. El beneficio operativo se redujo a 0.4 millones de dólares desde 1.4 millones, mientras que el ingreso neto disminuyó a 0.8 millones de dólares (0.11 dólares por acción diluida) desde 1.3 millones (0.22 dólares por acción diluida).

La empresa atribuyó la disminución a un cambio en los pedidos de los clientes hacia PCBs de tecnología media, lo que resultó en precios y márgenes más bajos. Sin embargo, el CEO Eli Yaffe expresó confianza en la estrategia a largo plazo de la empresa, citando un aumento del 30% en la cartera de pedidos desde principios de 2024 y expectativas de una mejor rentabilidad en el tercer trimestre.

엘텍( NASDAQ: ELTK)이 2024년 2분기 재무 결과를 발표하였으며, 지난해에 비해 성과가 감소하였음을 보여주었습니다. 수익은 2023년 2분기의 1,100만 달러에서 1,050만 달러로 감소하였습니다. 운영 이익은 140만 달러에서 40만 달러로 떨어졌고, 순이익은 130만 달러(주당 희석 기준 0.22달러)에서 80만 달러(주당 희석 기준 0.11달러)로 줄었습니다.

회사는 고객 주문이 중간 기술 PCB로 전환되면서 가격과 마진이 낮아진 것을 감소의 원인으로 꼽았습니다. 하지만 CEO인 Eli Yaffe는 2024년 초 이후 백로그가 30% 증가했으며 3분기에는 수익성이 개선될 것으로 예상된다고 언급하며 회사의 장기 전략에 대한 자신감을 표현했습니다.

Eltek (NASDAQ: ELTK) a publié ses résultats financiers pour le deuxième trimestre 2024, montrant une baisse de performance par rapport à l'année précédente. Les revenus ont diminué, passant de 11,0 millions de dollars au deuxième trimestre 2023 à 10,5 millions de dollars. Le bénéfice d'exploitation est tombé à 0,4 million de dollars, contre 1,4 million de dollars, tandis que le revenu net a chuté à 0,8 million de dollars (0,11 dollar par action diluée) contre 1,3 million de dollars (0,22 dollar par action diluée).

L'entreprise a attribué ce déclin à un changement dans les commandes des clients vers des PCB de technologie intermédiaire, entraînant des prix et des marges plus bas. Cependant, le PDG Eli Yaffe a exprimé sa confiance dans la stratégie à long terme de l'entreprise, citant une augmentation de 30 % du carnet de commandes depuis le début de 2024 et des attentes d'amélioration de la rentabilité au troisième trimestre.

Eltek (NASDAQ: ELTK) hat seine finanziellen Ergebnisse für das zweite Quartal 2024 veröffentlicht und einen Rückgang der Leistung im Vergleich zum Vorjahr verzeichnet. Die Einnahmen sanken von 11,0 Millionen Dollar im zweiten Quartal 2023 auf 10,5 Millionen Dollar. Der Betriebsgewinn fiel von 1,4 Millionen Dollar auf 0,4 Millionen Dollar, während der Nettogewinn von 1,3 Millionen Dollar (0,22 Dollar pro verwässerter Aktie) auf 0,8 Millionen Dollar (0,11 Dollar pro verwässerter Aktie) zurückging.

Das Unternehmen führte den Rückgang auf eine Verschiebung der Kundenbestellungen hin zu mittleren Technologie-PCBs zurück, was zu niedrigeren Preisen und Margen führte. CEO Eli Yaffe äußerte jedoch Zuversicht in die langfristige Strategie des Unternehmens und verwies auf einen Anstieg des Auftragsbestands um 30 % seit Jahresbeginn 2024 sowie auf die Erwartung einer verbesserten Rentabilität im dritten Quartal.

Positive
  • Backlog increased by 30% since the beginning of 2024
  • Cash and cash equivalents amounted to $18.3 million as of June 30, 2024
  • Financial income increased to $0.5 million from $0.2 million in Q2 2023
Negative
  • Revenues decreased to $10.5 million from $11.0 million in Q2 2023
  • Operating profit fell to $0.4 million from $1.4 million in Q2 2023
  • Net income dropped to $0.8 million from $1.3 million in Q2 2023
  • Gross profit margin decreased to 16% from 27% in Q2 2023
  • EBITDA declined to $0.8 million (7.6% of revenues) from $1.7 million (15.3% of revenues) in Q2 2023

Insights

Eltek's Q2 2024 results show a concerning decline in key financial metrics. Revenues dropped to $10.5 million, down from $11.0 million in Q2 2023. More alarmingly, gross profit margin fell to 16% from 27% year-over-year. The company attributes this to a shift in customer demand towards lower-margin products.

Despite these challenges, Eltek maintains a strong cash position of $18.3 million. The 30% increase in backlog since the start of 2024 is a positive indicator for future growth. However, investors should closely monitor whether the company can successfully pivot back to higher-margin products in Q3 as projected.

The PCB industry is experiencing a notable shift in demand patterns. Eltek's Q2 results reflect a temporary prioritization of medium-technology PCBs by key customers, impacting prices and margins. This trend, if persistent, could signal broader market changes affecting the entire PCB sector.

However, Eltek's 30% backlog growth suggests strong underlying demand. The company's ability to adapt to these market dynamics will be crucial. Investors should watch for industry-wide trends and Eltek's success in realigning its product mix to capitalize on the anticipated return to complex, higher-margin PCBs in Q3.

Eltek's focus on "technologically advanced solutions" in PCBs positions it well in a rapidly evolving tech landscape. The temporary shift to medium-tech PCBs might reflect supply chain adjustments or cost-saving measures by clients. However, the projected return to complex, higher-margin PCBs in Q3 aligns with the broader trend towards more sophisticated electronic devices.

The company's ability to maintain a diverse product portfolio, catering to both medium and high-tech needs, demonstrates adaptability. This flexibility could be a key strength in navigating future market fluctuations and technological advancements in the PCB industry.

PETACH TIKVA, Israel, Aug. 15, 2024 /PRNewswire/ -- Eltek Ltd. (NASDAQ: ELTK), a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), today announced its financial results for the quarter ended June 30, 2024.

 

Eltek Logo

 

Second Quarter 2024 Highlights

  • Revenues were $10.5 million
  • Operating profit was $0.4 million
  • Profit before tax was $0.9 million
  • Net income was $0.8 million or $0.11 per fully diluted share
  • As of June 30, 2024 cash and cash equivalents amounted $18.3 million.

"Eltek has demonstrated consistent growth over the past several quarters, driven by our commitment to innovation and customer satisfaction. However, this quarter, we experienced a decrease in revenues and profits compared to the previous quarter and the corresponding quarter last year. This decline is attributed to a significant timing shift by some key customers, who prioritized orders for PCBs with medium technology requirements, resulting in lower prices and margins. Orders for more complex, higher-margin PCBs were pushed back and are scheduled to be produced in the third quarter. While this has impacted our short-term financial performance, we remain confident in our long-term strategy and market position," said Eli Yaffe, CEO of Eltek. 

"We expect to return in in the third quarter to the profitability parameters of previous quarters, as product mix strategies are realigned. Our backlog as of today increased by 30% since the beginning of 2024. This increase will support our planned growth in revenues and profitability. We remain committed to delivering value to our shareholders and are taking the necessary steps to ensure that we continue our growth trend. Our team is focused on optimizing our product offerings and operational efficiencies to drive profitability and sustain our market leadership," concluded Mr. Yaffe.

Second Quarter 2024 GAAP Financial Results

Revenues for the second quarter of 2024 were $10.5 million compared to $11.0 million in the second quarter of 2023.

Gross profit for the second quarter of 2024 was $1.6 million (16% of revenues) compared to $3.0 million (27% of revenues) in the second quarter of 2023.

Operating profit for the second quarter of 2024 was $0.4 million compared to operating profit of $1.4 million in the second quarter of 2023.

Financial income for the second quarter of 2024 was $0.5 million compared to financial income of $0.2 million in the second quarter of 2023. Financial income primarily results from the erosion of the NIS against the US dollar.

Profit before income tax for the second quarter of 2024 was $0.9 million compared to $1.6 million in the second quarter of 2023.

Net income for the second quarter of 2024 was $0.8 million or $0.11 per fully diluted share compared to net income of $1.3 million or $0.22 per fully diluted share in the second quarter of 2023.

Second Quarter 2024 Non-GAAP Financial Results

EBITDA for the second quarter of 2024 was $0.8 million (7.6% of revenues) compared to EBITDA of $1.7 million (15.3% of revenues) in the second quarter of 2023;

First Six Months 2024 GAAP Financial Results

Revenues for the first six months of 2024 were $22.2 million compared to $22.5 million in the first six months of 2023.

Gross profit for the first six months of 2024 was $4.9 million (22% of revenues) compared to $6.0 million (26% of revenues) in the first six months of 2023.

Operating profit for the first six months of 2024 was $2.1 million compared to operating profit of $3.0 million in the first six months of 2023.

Financial income for the first six months of 2024 was $0.8 million compared to financial income of $0.5 million in the first six months of 2023. Financial income primarily results from the erosion of the NIS against the US dollar.

Profit before income tax for the first six months of 2024 was $3.0 million compared to $3.5 million in the first six months of 2023.

Net profit for the first six months of 2024 was $2.5 million or $0.38 per fully diluted share compared to net profit of $2.9 million or $0.49 per fully diluted share in the first six months of 2023.

First Six Months 2024 Non-GAAP Financial Results

EBITDA for the first six months of 2024 was a $2.9 million (13% of revenues) compared to EBITDA of $3.6 million (16% of revenues) in the first six months of 2023.

About our Non-GAAP Financial Information

The Company reports financial results in accordance with U.S. GAAP and herein provides some non-GAAP measures, including EBITDA. These non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. These non-GAAP measures are intended to supplement the Company's presentation of its financial results that are prepared in accordance with GAAP. The Company uses the non-GAAP measures presented to evaluate and manage the Company's operations internally. The Company is also providing this information to assist investors in performing additional financial analysis. Reconciliation between the Company's results on a GAAP and non-GAAP basis is provided in the table below.

Conference Call

Today, Thursday, August 15, 2024, at 9:30am Eastern Time (16:30pm Israel Time, 6:30am Pacific Time), Eltek will conduct a conference call to discuss the results. The call will feature remarks by Eli Yaffe, Chief Executive Officer and Ron Freund, Chief Financial Officer.

To participate, please call the following teleconference numbers. Please allow for additional time to connect prior to the call:

United States: 1-866-860-9642

Israel: 03-918-0691

International: +972-3-918-0691

To Access a Replay of the Call

A replay of the call will be available for 30 days on the Investor Info section on Eltek's corporate website at http://www.nisteceltek.com approximately 24 hours after the conference call is completed.

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 an Israeli leading company 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 is ITAR compliant and has AS-9100 and NADCAP Electronics certifications. Its customers include leading 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, R&D, production and marketing center are located in Israel. Eltek also operates through its subsidiary in North America and by agents and distributors in Europe, India, South Africa and South America.

For more information, visit Eltek's web site at www.nisteceltek.com

Forward Looking Statement

Some of the statements included in this press release may be forward-looking statements that involve a number of risks and uncertainties including, but not limited to expected results in future quarters, the impact of the Coronavirus on the economy and our operations, 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 Annual Report on Form 20-F and other filings with the United States Securities and Exchange Commission. Any forward-looking statements set forth in this press release speak only as of the date of this press release. The information found on our website is not incorporated by reference into this press release and is included for reference purposes only.

Logo: https://mma.prnewswire.com/media/881148/Eltek_Logo.jpg

Investor Contact
Ron Freund
Chief Financial Officer
Investor-Contact@nisteceltek.com
+972-3-939-5023

 

 

Eltek Ltd.

Consolidated Statements of Income

U.S dollars in thousands (except per share data)




































Three months ended


Six months ended





June 30,


June 30,





2024


2023


2024


2023























Revenues


10,466


11,043


22,249


22,513



Costs of revenues


(8,830)


(8,091)


(17,361)


(16,546)














Gross profit


1,636


2,952


4,888


5,967














Research and development expenses, net


(47)


(15)


(62)


(24)



Selling, general and administrative expenses


(1,184)


(1,543)


(2,700)


(2,960)














Operating profit


405


1,394


2,126


2,983














Financial income, net


489


190


839


477














Income before income tax 


894


1,584


2,965


3,460














Income tax expenses


143


271


475


585














Net income 


751


1,313


2,490


2,875

























Earnings per share:











Basic and diluted net profit per ordinary share


0.11


0.22


0.38


0.49














Weighted average number of ordinary shares used to compute











basic net profit per ordinary share (in thousands)


6,706


5,908


6,541


5,879














Weighted average number of ordinary shares used to compute











diluted net profit per ordinary share (in thousands)


6,764


5,943


6,628


5,897














 

 

Eltek Ltd.

Consolidated Balance Sheets

U.S dollars in thousands 

























      June 30,     


December 31,









2024


2023
















Assets






















Current assets:











Cash and cash equivalents


8,877


9,278







Short-term bank deposits


9,396


2,862







Receivables:   Trade, net of provision for doubtful accounts        


9,948


10,898







                       Other


287


689







Inventories 


6,440


6,135







Prepaid expenses 


306


245


















Total current assets


35,254


30,107


















Long term assets:











Severance pay fund


55


57







Deferred tax asset, net


964


1,098







Operating lease right of use assets


5,965


6,555







Total long term assets


6,984


7,710


















Fixed assets, less accumulated depreciation


12,669


9,354


















Total Assets


54,907


47,171


















Liabilities and Shareholder's equity






















Current liabilities:











Accounts payable: Trade


5,273


7,503







                              Other


5,214


5,689







Short-term operating lease liabilities


763


789


















Total current liabilities


11,250


13,981


















Long-term liabilities:











Employee severance benefits


399


447







Long-term operating lease liabilities


5,306


5,871


















Total long-term liabilities


5,705


6,318


















Shareholders' equity:











Ordinary shares of NIS 3.0 par value – Authorized:
10,000,000 shares at June 30, 2024 and December 31,
2023; Issued and outstanding: 6,708,522 shares at June
30, 2024 and 6,020,693 shares at December 31, 2023


6,006


5,443







Additional paid-in capital


32,597


23,587







Cumulative foreign currency translation adjustments


(486)


783







Capital reserve


2,186


1,900







Accumulated deficit


(2,351)


(4,841)







Total shareholders' equity


37,952


26,872







Total liabilities and shareholders' equity


54,907


47,171





























 

 

Eltek Ltd.

Unaudited Non-GAAP EBITDA Reconciliations

U.S dollars in thousands 

























Three months ended


Six months ended




June 30,


June 30,




2024


2023


2024


2023




















GAAP net income 


751


1,313


2,490


2,875


Add back items:




















Financial income, net 


(489)


(190)


(839)


(477)


Income tax expenses 


143


271


475


585


Depreciation and amortization


388


301


753


630


Non-GAAP EBITDA


793


1,695


2,879


3,613
































 

 

Eltek Ltd.

Consolidated Statement of  Cash flow

U.S dollars in thousands 

























Three months ended


Six months ended





June 30,


June 30,





2024


2023


2024


2023














Cash flows from operating activities:






















Net Income


751


1,313


2,490


2,875



Adjustments to reconcile net income to net cash flows











provided by operating activities:











Depreciation and amortization


388


301


753


630



Accrued interest


(98)


-


(186)


-



Stock-based compensation


154


72


286


144



Decrease in deferred tax assets and long term tax receivable


(100)


260


91


566





344


633


944


1,340














Decrease (increase) in operating lease right-of-use assets


2


11


3


(22)



Decrease (increase) in trade receivables


(219)


(1,896)


517


(1,784)



Decrease (increase) in other receivables and prepaid expenses


234


214


309


(311)



Decrease (increase) in inventories


(169)


(496)


(565)


(809)



Increase (decrease) in trade payables


955


(307)


(536)


105



Increase (decrease) in other liabilities and accrued expenses


(48)


629


(249)


1,477



Increase (decrease)  in employee severance benefits, net


(48)


17


(30)


22





707


(1,828)


(551)


(1,322)














Net cash provided by operating activities


1,802


118


2,883


2,893

























Cash flows from investing activities:











Purchase of property and equipment


(3,215)


(406)


(5,947)


(711)



Insurance Proceeds


-


2,000


-


2,000



Investment in short-term bank deposits, net


(132)


-


(6,534)


-



Restricted deposits


-


192


-


192



Net cash provided by (used in) investing activities


(3,347)


1,786


(12,481)


1,481

























Cash flows from financing activities:











Exercise of options


16


299


261


299



Repayment of long-term loans from bank


-


(1,768)


-


(3,348)



Issuance of shares, net


-


-


9,312


-



Net cash provided by (used in) financing activities


16


(1,469)


9,573


(3,049)














Effect of translation adjustments


(204)


(164)


(376)


(361)














Net increase (decrease) in cash and cash equivalents


(1,733)


271


(401)


964














Cash and cash equivalents at the beginning of the period


10,610


8,059


9,278


7,366














Cash and cash equivalents at the end of the period


8,877


8,330


8,877


8,330



 

 

Cision View original content:https://www.prnewswire.com/news-releases/eltek-ltd-reports-2024-second-quarter-financial-results-302223390.html

SOURCE Eltek Ltd.

FAQ

What were Eltek's (ELTK) Q2 2024 revenue and earnings?

Eltek reported revenues of $10.5 million and net income of $0.8 million ($0.11 per diluted share) for Q2 2024.

Why did Eltek's (ELTK) financial performance decline in Q2 2024?

The decline was due to a shift in customer orders towards medium-technology PCBs, resulting in lower prices and margins.

What is Eltek's (ELTK) outlook for Q3 2024?

Eltek expects to return to the profitability parameters of previous quarters in Q3 2024, supported by a 30% increase in backlog since the beginning of the year.

How much cash does Eltek (ELTK) have as of June 30, 2024?

Eltek reported cash and cash equivalents of $18.3 million as of June 30, 2024.

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