Eltek Ltd. Reports Full Year and Fourth Quarter 2024 Financial Results

Rhea-AI Summary

Eltek (NASDAQ:ELTK) reported its financial results for 2024, showing annual revenues of $46.5 million, a slight decline from $46.7 million in 2023. Net income decreased to $4.2 million from $6.4 million, with diluted EPS of $0.63 compared to $1.07 in 2023.

The company is undergoing a strategic transition through mid-2026, implementing a $15 million investment plan to expand production capacity to $55-65 million annually. The fourth quarter saw temporary disruptions due to facility upgrades, with Q4 revenues at $10.8 million and neutral net income.

Eltek is positioned to benefit from global PCB industry shifts, particularly in Defense, Aerospace, and Medical markets, driven by US-China trade tensions and increased defense spending worldwide.

Positive

• Strategic $15M investment plan to expand production capacity to $55-65M annually
• Strong market positioning in defense and aerospace sectors amid increasing global demand
• Maintained stable annual revenue at $46.5M despite transition challenges
• Positive financial income of $0.7M in 2024, up from $0.4M in 2023

Negative

• Net income declined to $4.2M from $6.4M in 2023
• EPS decreased to $0.63 from $1.07 in 2023
• Q4 2024 showed zero net income compared to $1.3M in Q4 2023
• Gross profit margin dropped to 22% from 28% in 2023
• EBITDA decreased to $5.9M from $8.6M in 2023

Insights

Financial Analyst

Eltek's Q4 and full-year 2024 results reveal a concerning profitability trend despite relatively stable annual revenue. Full-year revenue held nearly steady at $46.5 million (down just $0.2 million from 2023), but net income declined significantly to $4.2 million from $6.4 million in 2023—a 34% decrease. This profitability compression is even more pronounced in Q4, where the company posted $0 net income compared to $1.3 million in Q4 2023.

The gross margin deterioration tells the real story: annual margins contracted to 22% from 28%, while Q4 margins fell to 18% from 28% year-over-year. This reflects the operational disruptions from Eltek's $15 million capacity expansion investment, which has created production inefficiencies and logistical challenges within their existing facility.

While management frames this as a temporary setback in service of expanding capacity to $55-65 million in annual revenue potential, investors should note the execution risk during this transition period, which will continue through mid-2026. The PCB manufacturer operates in attractive end markets (Defense, Aerospace, Medical) benefiting from reshoring trends away from China, but the immediate financial impact of their capacity expansion cannot be ignored.

The zero profit in Q4 despite $10.8 million revenue signals that upcoming quarters may face similar challenges until the expansion begins delivering efficiency improvements. This transition represents a calculated strategy to capitalize on increased defense spending and supply chain realignments, but requires investor patience through potentially volatile quarterly results.

PETACH TIKVA, Israel, March 11, 2025 /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 full year and fourth quarter ended December 31, 2024.

Full Year and Fourth Quarter 2024 Highlights

• Revenues: Revenues for 2024 were $46.5 million, a slight decline of $0.2 million compared to 2023.
• Profitability: Net income reached $4.2 million in 2024 compared to $6.4 million in 2023. EBITDA reached $5.9 million compared to $8.6 million in 2023.
• Earnings per share (EPS): Diluted EPS was $0.63 in 2024 compared to $1.07 in 2023.
• Q4 Highlights: Revenue for the fourth quarter amounted to $10.8 million, compared to $12.3 million in the corresponding period of the previous year. Net income for the quarter was $0 million, while EBITDA totaled $0.7 million. 

Transition Period and Future Growth Outlook:

Eltek is currently undergoing a strategic transition, expected to continue through the mid of 2026. This process was initiated with the launch of an accelerated $15 million investment plan, while the company's annual revenues ranged below $40 million. The primary objective of this initiative was to establish advanced manufacturing capabilities, enhance technological proficiency, and expand annual production capacity to a range of $55 million to $65 million.

The investment plan includes the installation of equipment and production lines, while maintaining ongoing production. Conducting these enhancements within the existing facility has introduced spatial constraints, and logistical complexities, leading to temporary disruptions and inefficiencies which impacted the fourth quarter of 2024. In addition to this plan Eltek is implementing infrastructure upgrades to support the forecasted capacity and beyond.

Eltek remains fully committed to its strategic growth objectives and anticipates improved operational performance as the investment program progresses.

Market Trends and Outlook:

The global PCB industry, particularly in high-end applications such as Defense, Aerospace, Medical, and high-tech industrial markets, continues to experience dynamic shifts driven by geopolitical and economic factors. The ongoing trade tensions between the United States and China have led to supply chain realignments, as companies seek to reduce dependency on Chinese manufacturing. The US administration's new customs regulations and tariffs on Chinese electronic components have further accelerated the trend of reshoring production to North America and US allied countries, creating opportunities for manufacturers with relevant capabilities.

Additionally, the continued geopolitical instability in Eastern Europe due to the Russia-Ukraine conflict and ongoing tensions in the Middle East have heightened demand for defense-related PCBs. Governments worldwide are increasing defense budgets, driving the need for high-reliability PCBs used in advanced military equipment, aerospace systems, and secure communication infrastructure.

Eltek is strategically positioned to leverage these industry trends by enhancing its manufacturing capabilities and strengthening its supply chain resilience. With its continued investments in cutting-edge technology and production efficiency, Eltek remains committed to meeting the growing needs of its defense, medical, and industrial customers while capitalizing on market opportunities arising from global economic shifts.

Management Statement:

Eli Yaffe, CEO of Eltek, stated, "We continue to witness sustained demand, reflected by the tenders issued in recent months for significant quantities of PCBs. We expect these tenders to have a positive long-term impact on the company. Our strategic investments in advanced manufacturing capabilities are aimed at driving operational efficiency and innovation, increasing our capacity and strengthening our ability to serve our customers. While these investments, along with ongoing facility expansion, may introduce some short-term fluctuations in profitability, we remain confident in their long-term value. We anticipate that the benefits of these initiatives will become increasingly evident in the coming quarters." 

2024 Full Year GAAP Financial Results

Revenues for 2024 were $46.5 million compared to $46.7 million in 2023.
Gross profit for 2024 was $10.3 million (22% of revenues) compared to $13.1 million (28% of revenues) in 2023.
Operating profit for 2024 was $4.4 million compared to operating profit of $7.3 million in 2023.
Financial income for 2024 was $0.7 million compared to financial income of $0.4 million in 2023.
Net profit for 2024 was $4.2 million or $0.63 per fully diluted share compared to net profit of $6.4 million or $1.07 per fully diluted share in 2023.

2024 Full Year Non-GAAP Financial Results

EBITDA for 2024 was a $5.9 million (13% of revenues) compared to EBITDA of $8.6 million (18% of revenues) in 2023.

Fourth Quarter 2024 GAAP Financial Results

Revenues for the fourth quarter of 2024 were $10.8 million compared to $12.3 million in the fourth quarter of 2023.
Gross profit for the fourth quarter of 2024 was $1.9 million (18% of revenues) compared to $3.5 million (28% of revenues) in the fourth quarter of 2023.
Operating profit for the fourth quarter of 2024 was $0.4 million compared to operating profit of $2.0 million in the fourth quarter of 2023.
Financial expenses for the fourth quarter of 2024 were $0.3 million, the same as in the fourth quarter of 2023. The financial expenses in the fourth quarter of 2024, derive primarily from the erosion of the US Dollar against the NIS during the quarter.
Net profit for the fourth quarter of 2024 was $0 million compared to net profit of $1.3 million or $0.22 per fully diluted share in the fourth quarter of 2023.

Fourth Quarter 2024 Non-GAAP Financial Results

EBITDA for the fourth quarter of 2024 was $0.8 million (7% of revenues) compared to EBITDA of $2.4 million (19% of revenues) in the fourth quarter 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 a table below.

Conference Call

Today, Tuesday, March 11, 2025, at 9:30am Eastern Time (15:30pm 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 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 Israel's continuing war against Hamas and Hezbollah, 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

Investor Contact

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

Eltek Ltd.
Consolidated Statements of Income
(In thousands US$, except per share data)
		Three months ended				Twelve months ended
		December  31,				December  31,
		2024		2023		2024		2023
Revenues		10,758		12,321		46,527		46,695
Costs of revenues		(8,824)		(8,865)		(36,188)		(33,593)
Gross profit		1,934		3,456		10,339		13,102
Research and development expenses, net		(108)		(49)		(187)		(85)
Selling, general and administrative expenses		(1,468)		(1,405)		(5,760)		(5,722)
Operating profit		358		2,002		4,392		7,295
Financial income (expenses), net		(271)		(334)		705		422
Income before income taxes		87		1,668		5,097		7,717
Income tax expenses		64		337		873		1,364
Net income		23		1,331		4,224		6,353
Earnings per share:
Basic net income per ordinary share		-		0.22		0.64		1.08
Diluted net income per ordinary share		-		0.22		0.63		1.07
Weighted average number of ordinary shares used to compute
basic net income per ordinary share (in thousands)		6,713		5,977		6,626		5,902
Weighted average number of ordinary shares used to compute
diluted net income per ordinary share (in thousands)		6,782		6,074		6,701		5,956

 

Eltek Ltd.
Consolidated Balance Sheets
(In thousands US$)
		December  31,		December  31,
		2024		2023
Assets
Current assets:
Cash and cash equivalents		7,575		9,278
Short-term bank deposits		9,663		2,862
Trade receivables (net of allowance for credit losses)		11,786		10,898
Inventories		9,488		6,135
Other accounts receivable and prepaid expenses		602		934
Total current assets		39,114		30,107
Long term assets:
Severance pay fund		56		57
Deferred tax assets, net		496		1,098
Operating lease right-of-use assets		5,911		6,555
Total long term assets		6,463		7,710
Property and equipment, net		14,578		9,354
Total Assets		60,155		47,171
Liabilities and Shareholder's equity
Current liabilities:
Trade payables		7,367		7,503
Other accounts payable and accrued expenses		5,136		5,689
Short-term operating lease liabilities		827		789
Total current liabilities		13,330		13,981
Long-term liabilities:
Accrued severance pay		443		447
Long-term operating lease liabilities		5,190		5,871
Total long-term liabilities		5,633		6,318
Shareholders' equity:
Ordinary shares, NIS 3.0 par value authorized 10,000,000 shares, issued and outstanding 6,714,040 at December 31, 2024 and 6,020,693 at December 31, 2023		6,011		5,443
Additional paid-in capital		32,627		23,587
Foreign currency translation adjustments		664		783
Capital reserves		2,507		1,900
Accumulated deficit		(617)		(4,841)
Total shareholders' equity		41,192		26,872
Total liabilities and shareholders' equity		60,155		47,171

 

Eltek Ltd.
Unaudited Non-GAAP EBITDA Reconciliation
(In thousands US$)
		Three months ended				Twelve months ended
		December  31,				December  31,
		2024		2023		2024		2023
GAAP Net Income		23		1,331		4,224		6,353
Add back items:
Financial expenses (income), net		271		334		(705)		(422)
Income tax expenses		64		337		873		1,364
Depreciation and amortization		405		388		1,546		1,317
Non-GAAP EBITDA		763		2,390		5,938		8,612

 

Eltek Ltd.
Consolidated Statements of  Cash Flows
(In thousands US$)
		Three months ended				Twelve months ended
		December  31,				December  31,
		2024		2023		2024		2023
Cash flows from operating activities:
Net Income		23		1,331		4,224		6,353
Adjustments to reconcile net income to net cash flows
provided by operating activities:
Depreciation		405		388		1,546		1,317
Accrued interest, net		(392)		-		(463)		-
Share-based compensation		161		147		607		363
Decrease in deferred tax assets		217		304		621		1,302
		391		839		2,311		2,982
Decrease (increase) in operating lease right-of-use assets, net		(2)		(1)		2		(23)
Decrease (increase) in trade receivables		1,230		(211)		(988)		(1,010)
Decrease (increase) in other receivables and prepaid expenses		(260)		55		341		(169)
Decrease (increase) in inventories		(2,711)		(283)		(3,532)		(1,139)
Increase (decrease) in trade payables		378		958		929		989
Increase (decrease) in other liabilities and accrued expenses		966		(507)		1,255		707
Increase (decrease)  in employee severance benefits, net		(4)		139		(2)		172
		(403)		150		(1,995)		(473)
Net cash provided by operating activities		11		2,320		4,540		8,862
Cash flows from investing activities:
Purchase of fixed assets		(1,592)		(1,246)		(9,506)		(2,432)
Insurance Proceeds		-		-		-		2,000
proceeds from (Investment in) short-term bank deposits, net		303		(2,719)		(6,365)		(2,719)
Restricted deposits		-		-		-		192
Net cash used in investing activities		(1,289)		(3,965)		(15,871)		(2,959)
Cash flows from financing activities:
Exercise of options		18		535		296		863
Dividend distribution		-		(1,321)		-		(1,321)
Issuance of shares, net		-		-		9,312
Repayment of long-term loans from bank		-		-		-		(3,348)
Net cash used in financing activities		18		(786)		9,608		(3,806)
Effect of translation adjustments		287		404		20		(185)
Net increase (decrease) in cash and cash equivalents		(973)		(2,027)		(1,703)		1,912
Cash and cash equivalents at the beginning of the period		8,548		11,305		9,278		7,366
Cash and cash equivalents at the end of the period		7,575		9,278		7,575		9,278

 

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SOURCE Eltek Ltd.

FAQ

What were Eltek's (ELTK) key financial metrics for full year 2024?

Eltek reported $46.5M in revenue, $4.2M net income, and $0.63 EPS for 2024, with EBITDA of $5.9M (13% of revenues).

How much is Eltek's (ELTK) investment plan worth and what's its timeline?

Eltek is implementing a $15M investment plan through mid-2026 to expand production capacity to $55-65M annually.

What caused Eltek's (ELTK) performance decline in Q4 2024?

Temporary disruptions from facility upgrades and logistical complexities during the investment plan implementation impacted Q4 performance.

What market opportunities is Eltek (ELTK) targeting in 2024-2025?

Eltek is targeting opportunities in Defense, Aerospace, and Medical markets, driven by US-China trade tensions and increased global defense spending.

How did Eltek's (ELTK) Q4 2024 compare to Q4 2023?

Q4 2024 revenue was $10.8M vs $12.3M in Q4 2023, with net income at $0M compared to $1.3M in Q4 2023.