Eltek Ltd. Reports Full year and Fourth Quarter 2023 Financial Results
- Record revenues of $46.7 million in 2023, up by 18% year-over-year.
- Net income reached $6.4 million in 2023, reflecting significant growth.
- EBITDA stood at $8.6 million, a 91% increase compared to 2022.
- Diluted EPS surged to $1.07 in 2023, a 93% increase from 2022.
- Q4 revenue increased to $12.3 million, with net income at $1.3 million.
- Eltek's success attributed to innovation, customer focus, and operational efficiency.
- Industry trends in defense, aerospace, and medical sectors favor Eltek's offerings.
- Management confident in navigating industry shifts and capitalizing on growth opportunities.
- None.
Insights
The announcement by Eltek Ltd. regarding its financial results for the full year and fourth quarter of 2023 presents a robust financial performance, with a significant 18% increase in full-year revenue and an impressive 93% jump in diluted EPS. The company's strategic investment in expanding production capacity and enhancing manufacturing capabilities appears to have paid dividends, as reflected in the doubled net income and a substantial increase in EBITDA. These financial metrics indicate a strong operational efficiency and profitability that could influence the company's stock valuation positively.
From an investment perspective, the doubling of net income and nearly doubling of EBITDA are particularly noteworthy. These figures suggest not only growth in revenue but also enhanced cost management and operational leverage. The reported financial income decrease compared to the previous year might raise questions about non-operational income streams, but it is overshadowed by the overall financial growth. The equity raise of $10 million in February 2024 also indicates confidence from investors and provides the company with additional capital to support its growth initiatives.
Eltek's focus on the defense, aerospace and medical sectors positions it advantageously within the PCB industry, which is witnessing increased demand for advanced electronics. The company's emphasis on innovation and operational efficiency aligns with industry trends that favor high-performance and reliable PCB solutions. The proactive management of global supply chain challenges through strategic partnerships and diversified sourcing is a significant competitive advantage, as it minimizes disruptions in production, which is a critical factor for investors to consider when assessing the resilience and reliability of Eltek's supply chain management.
Furthermore, the company's recent financial results could potentially increase its attractiveness to institutional investors looking for growth opportunities within the technology sector. The positive outlook and confidence expressed by the management in navigating the evolving industry landscape can be reassuring to current and prospective shareholders. The emphasis on long-term customer relationships and the successful implementation of the investment plan could be seen as a commitment to sustainable growth, which may influence market sentiment and stock performance.
Eltek's financial results reflect broader economic trends, such as the increased integration of advanced electronics in defense and aerospace applications and the growing importance of medical technology. The company's ability to nearly double its net income during a period of global economic uncertainty is indicative of strong sectoral growth and effective corporate strategy. The reported erosion of the US Dollar against the New Israeli Shekel (NIS) leading to financial expenses in Q4 2023, however, highlights the exposure to currency risk. This exposure is an important consideration for multinational investors and could impact future earnings.
Looking at the macroeconomic environment, Eltek's strategic decision to invest in production capabilities may also be a response to the anticipated inflationary pressures on manufacturing costs and supply chain constraints. By enhancing operational efficiency and technological capabilities, Eltek is likely aiming to mitigate these pressures and maintain its competitive edge. The company's performance and strategic positioning should be analyzed in the context of these economic factors, which can have significant implications for its long-term growth trajectory and resilience against macroeconomic challenges.
PETACH TIKVA,
Full Year and Fourth Quarter 2023 Highlights
- Revenues: Full-year revenue soared to a record
$46.7 million 18% year-over-year growth. This remarkable growth is attributed to our increased production capacity and to our continued commitment to delivering high-quality PCB solutions to our valued customers. - Profitability: Net income reached
$6.4 million $8.6 million 91% increase compared to$4.5 million - Earnings per Share (EPS): Diluted EPS jumped to
$1.07 93% compared to 2022. This accomplishment reflects the dedication of our team and the effectiveness of our business strategies. - Q4 Highlights: Revenue climbed to
$12.3 million 18% increase from the same period last year. Net income for the quarter reached$1.3 million $2.4 million
Driving Growth and Innovation:
Eltek's success stems from a multi-pronged approach:
- Innovation: Our relentless pursuit of innovation has allowed us to stay at the forefront of technological advancements, meeting the evolving needs of the defense, aerospace, and medical industries.
- Customer Focus: Building strong, long-lasting relationships with our customers has been a cornerstone of our success. We understand the unique challenges faced by the defense, aerospace and medical sectors, and our tailored solutions have contributed to our customers' success.
- Operational Efficiency: Eltek continues to invest in state-of-the-art manufacturing processes and quality control measures, ensuring the production of reliable and high-performance PCBs.
Market Trends and Outlook:
The PCB industry is experiencing dynamic shifts, driven by advancements in technology and evolving market demands. As Eltek primarily operates in the defense, aerospace and medical sectors, we are well-positioned to capitalize on the following market trends:
- Increasing Demand for Advanced Electronics: The defense and aerospace industries are witnessing a growing need for sophisticated electronic components, driving the demand for high-performance PCBs. Eltek's focus on innovation aligns perfectly with this trend.
- Emphasis on Reliability and Quality: With critical applications in defense, aerospace and medical devices, reliability and quality are non-negotiable. Eltek has consistently delivered PCB solutions that meet the stringent standards of these industries, reinforcing our position as a trusted partner.
- Global Supply Chain Challenges: The industry has faced challenges related to the global supply chain. Eltek has proactively managed these challenges through strategic partnerships and diversified sourcing, ensuring minimal impact on our operations.
Management Statement:
Eli Yaffe, CEO of Eltek, stated, "We are thrilled to report a very strong fourth quarter and year, surpassing all financial targets and solidifying our position as a leader in the PCB market. This achievement is a testament to the dedication and expertise of our team, the trust of our valued partners and the unwavering support of our shareholders. Looking ahead, we are confident in our ability to navigate the evolving industry landscape and continue delivering exceptional value to all shareholders. The defense, aerospace and medical industries present significant opportunities and Eltek is well-positioned to capitalize on them.
Our decision at the start of 2022 to allocate
Ron Freund, CFO of Eltek added: "During February 2024, we raised
2023 Full Year GAAP Financial Results
Revenues for 2023 were
Gross profit for 2023 was
Operating profit for 2023 was
Financial income for 2023 was
Net profit for 2023 was
2023 Full Year Non-GAAP Financial Results
EBITDA for 2023 was a
Fourth Quarter 2023 GAAP Financial Results
Revenues for the fourth quarter of 2023 were
Gross profit for the fourth quarter of 2023 was
Operating profit for the fourth quarter of 2023 was
Financial expenses for the fourth quarter of 2023 were
Net profit for the fourth quarter of 2023 was
Fourth Quarter 2023 Non-GAAP Financial Results
EBITDA for the fourth quarter of 2023 was a
Conference Call
Today, Monday, March 11, 2024, at 10:00am Eastern Time (16:00pm Israel Time, 7:00am 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
Eltek was founded in 1970. The Company's headquarters, R&D, production and marketing center are located in
For more information, visit Eltek's web site at www.nisteceltek.com
Forward Looking Statements
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.
About our Non-GAAP Financial Information
The Company reports financial results in accordance with
Investor Contact
Ron Freund
Chief Financial Officer
Investor-Contact@nisteceltek.com
+972-3-939-5023
(Tables follow)
Eltek Ltd. | ||||||||||
Consolidated Statements of Income | ||||||||||
(In thousands US$, except per share data) | ||||||||||
Three months ended | Twelve months ended | |||||||||
December 31, | December 31, | |||||||||
2023 | 2022 | 2023 | 2022 | |||||||
Revenues | 12,321 | 10,479 | 46,695 | 39,650 | ||||||
Costs of revenues | (8,865) | (8,267) | (33,593) | (31,380) | ||||||
Gross profit | 3,456 | 2,212 | 13,102 | 8,270 | ||||||
Selling, general and administrative expenses | (1,405) | (1,348) | (5,722) | (5,207) | ||||||
Research and development expenses, net | (49) | (15) | (85) | (92) | ||||||
Operating profit | 2,002 | 849 | 7,295 | 2,971 | ||||||
Financial income (expenses), net | (334) | 100 | 422 | 887 | ||||||
Profit before income tax | 1,668 | 949 | 7,717 | 3,858 | ||||||
Tax expenses | 337 | 144 | 1,364 | 664 | ||||||
Net Profit | 1,331 | 805 | 6,353 | 3,194 | ||||||
Earnings per share: | ||||||||||
Basic net profit per ordinary share | 0.22 | 0.14 | 1.08 | 0.55 | ||||||
Diluted net profit per ordinary share | 0.22 | 0.14 | 1.07 | 0.55 | ||||||
Weighted average number of ordinary shares used to compute | ||||||||||
basic net profit per ordinary share (in thousands) | 5,977 | 5,850 | 5,902 | 5,848 | ||||||
Weighted average number of ordinary shares used to compute | ||||||||||
diluted net profit per ordinary share (in thousands) | 6,074 | 5,850 | 5,956 | 5,848 | ||||||
Eltek Ltd. | ||||||||||
Consolidated Balance Sheets | ||||||||||
(In thousands US$) | ||||||||||
December 31, | December 31, | |||||||||
2023 | 2022 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 9,278 | 7,366 | ||||||||
Short-term bank deposits | 2,862 | - | ||||||||
Receivables: Trade, net of provision for doubtful accounts | 10,898 | 10,116 | ||||||||
Other | 689 | 282 | ||||||||
Inventories | 6,135 | 5,130 | ||||||||
Prepaid expenses | 245 | 504 | ||||||||
Total current assets | 30,107 | 23,398 | ||||||||
Long term assets: | ||||||||||
Restricted deposits | - | 202 | ||||||||
Severance pay fund | 57 | 59 | ||||||||
Deferred tax assets and long term tax receivables, net | 1,098 | 2,496 | ||||||||
Operating lease right of use assets | 6,555 | 7,156 | ||||||||
Total long term assets | 7,710 | 9,913 | ||||||||
Fixed assets, less accumulated depreciation | 9,354 | 7,674 | ||||||||
Total Assets | 47,171 | 40,985 | ||||||||
Liabilities and Shareholder's equity | ||||||||||
Current liabilities: | ||||||||||
Short-term credit and current maturities of long-term debts | - | 702 | ||||||||
Accounts payable: Trade | 7,503 | 4,793 | ||||||||
Other | 5,689 | 4,133 | ||||||||
Short-term operating lease liabilities | 789 | 846 | ||||||||
Total current liabilities | 13,981 | 10,474 | ||||||||
Long-term liabilities: | ||||||||||
Long term debt, excluding current maturities | - | 2,768 | ||||||||
Employee severance benefits | 447 | 280 | ||||||||
Long-term operating lease liabilities | 5,871 | 6,443 | ||||||||
Total long-term liabilities | 6,318 | 9,491 | ||||||||
Shareholders' equity: | ||||||||||
Ordinary shares, | 5,443 | 5,305 | ||||||||
Additional paid-in capital | 23,587 | 22,862 | ||||||||
Cumulative foreign currency translation adjustments | 783 | 1,189 | ||||||||
Capital reserve | 1,900 | 1,537 | ||||||||
Accumulated deficit | (4,841) | (9,873) | ||||||||
Total shareholders' equity | 26,872 | 21,020 | ||||||||
Total liabilities and shareholders' equity | 47,171 | 40,985 | ||||||||
Eltek Ltd. | |||||||||
Unaudited Non-GAAP EBITDA Reconciliation | |||||||||
(In thousands US$) | |||||||||
Three months ended | Twelve months ended | ||||||||
December 31, | December 31, | ||||||||
2023 | 2022 | 2023 | 2022 | ||||||
GAAP Net Income | 1,331 | 805 | 6,353 | 3,194 | |||||
Add back items: | |||||||||
Financial expenses (income), net | 334 | (100) | (422) | (887) | |||||
Income tax expenses | 337 | 144 | 1,364 | 664 | |||||
Depreciation and amortization | 388 | 357 | 1,317 | 1,541 | |||||
Non-GAAP EBITDA | 2,390 | 1,206 | 8,612 | 4,512 | |||||
Eltek Ltd. | ||||||||||
Consolidated Statements of Cash Flows | ||||||||||
(In thousands US$) | ||||||||||
Three months ended | Twelve months ended | |||||||||
December 31, | December 31, | |||||||||
2023 | 2022 | 2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||||
Net Income | 1,331 | 805 | 6,353 | 3,194 | ||||||
Adjustments to reconcile net income to net cash flows | ||||||||||
provided by operating activities: | ||||||||||
Depreciation and amortization | 388 | 357 | 1,317 | 1,541 | ||||||
Stock-based compensation | 147 | 62 | 363 | 250 | ||||||
Decrease in deferred tax assets and long term tax receivable | 304 | 151 | 1,302 | 653 | ||||||
839 | 570 | 2,982 | 2,444 | |||||||
Decrease (increase) in operating lease right-of-use assets | (1) | 3 | (23) | 11 | ||||||
Decrease (increase) in trade receivables | (211) | (446) | (1,010) | (3,941) | ||||||
Decrease (increase) in other receivables and prepaid expenses | 55 | 42 | (169) | 437 | ||||||
Decrease (increase) in inventories | (283) | (463) | (1,139) | (806) | ||||||
Increase (decrease) in trade payables | 958 | 380 | 989 | 1,543 | ||||||
Increase (decrease) in other liabilities and accrued expenses | (507) | 402 | 707 | 972 | ||||||
Increase (decrease) in employee severance benefits, net | 139 | (36) | 172 | (25) | ||||||
150 | (118) | (473) | (1,809) | |||||||
Net cash provided by operating activities | 2,320 | 1,257 | 8,862 | 3,829 | ||||||
Cash flows from investing activities: | ||||||||||
Purchase of fixed assets | (1,246) | (571) | (2,432) | (3,027) | ||||||
Repayment from insurance | - | - | 2,000 | - | ||||||
Investment in short-term bank deposits | (2,719) | - | (2,719) | - | ||||||
Restricted deposits | - | - | 192 | (2) | ||||||
Net cash used in investing activities | (3,965) | (571) | (2,959) | (3,029) | ||||||
Cash flows from financing activities: | ||||||||||
Exercise of options | 535 | - | 863 | 25 | ||||||
Dividend distribution | (1,321) | (994) | (1,321) | (994) | ||||||
Repayment of long-term loans from bank | - | (227) | (3,348) | (669) | ||||||
Net cash used in financing activities | (786) | (1,221) | (3,806) | (1,638) | ||||||
Effect of translation adjustments | 404 | 54 | (185) | (1,079) | ||||||
Net increase (decrease) in cash and cash equivalents | (2,027) | (481) | 1,912 | (1,917) | ||||||
Cash and cash equivalents at the beginning of the period | 11,305 | 7,847 | 7,366 | 9,283 | ||||||
Cash and cash equivalents at the end of the period | 9,278 | 7,366 | 9,278 | 7,366 | ||||||
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SOURCE Eltek Ltd.
FAQ
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