2014

Eltek Ltd. Reports Results for the Third Quarter and First Nine Months of 2002

    PETACH-TIKVA, Israel, Nov. 21 /PRNewswire-FirstCall/ --
 Eltek Ltd. (Nasdaq:   ELTK), the leading Israeli manufacturer of advanced
 circuitry solutions, today announced results for the third quarter and nine
 months ended September 30, 2002.
     Eltek reported revenues for the three months ended September 30, 2002 of
 NIS 26.0 million ($5.3 million), compared with NIS 28.4 million ($5.8 million)
 during the second quarter of 2002, and NIS 26.0 million ($5.3 million) during
 the third quarter of 2001.  Net loss for the quarter totaled NIS 6.8 million
 ($1.4 million), or NIS 1.40 per basic and diluted share ($0.29), compared with
 a net loss of NIS 1.1 million ($229,000), or NIS 0.23 per basic and
 NIS 0.26 per diluted share ($0.05), for the second quarter of 2002, and a net
 loss of NIS 1.3 million ($274,000), or NIS 0.28 per basic and diluted share
 ($0.06), for the quarter ended September 30, 2001.
     For the nine-month period ended September 30, 2002, the Company reported
 revenues of NIS 82.6 million ($17.0 million), compared with revenues of
 NIS 92.7 million ($19.0 million) for the comparable period in 2001.
     Net loss for the nine-month period ended September 30, 2002 was
 NIS 9.1 million ($1.9 million), or NIS 1.86 ($0.38) per basic and diluted
 share, compared with net income of NIS 4.6 million ($948,000) or
 NIS 0.95 ($0.20) per basic and diluted share for the same period in 2001.
     The Company noted that the results for the third quarter of 2002 reflect
 those of both Eltek and its Kubatronik subsidiary. Eltek completed an
 acquisition of 75% of Kubatronik in June 2002.
     In announcing the results, Arieh Reichart, President and Chief Executive
 Officer of Eltek said, "Although the global market for electronic components
 remains extremely weak, we continue to work diligently to pursue all potential
 sales opportunities. We have seen continued interest in the marketplace for
 our products, although the timing for orders remains uncertain.  To address
 the current market environment we have determined it was necessary to better
 align our operating structure to our anticipated lower level of activity as
 well as better position the company for growth and profitability as the market
 recovers.  To that end, following the conclusion of the third quarter, we
 initiated a cost cutting program which includes a company-wide reduction in
 salaries of up to 10% per employee, in addition to reductions in several other
 areas, including outsourcing. While this was a difficult decision, we feel
 that these measures will decrease our operating expenses to bring them more in
 line with the market, and feel that these changes leave us better positioned
 to benefit from an upturn in the market.
     "Given the short turnaround time that is customary in our business, it is
 difficult to provide formal guidance going forward. We do however believe that
 the results of the third quarter represent somewhat of an aberration, as
 seasonal factors played a part in our results for the quarter. July and August
 were particularly weak in Europe as a result of customer down time.  We do not
 feel that these results accurately reflect the underlying strength of our
 business."
 
     TELECONFERENCE:  Eltek will hold a teleconference at 10:00 a.m. EST on
 Thursday, November 21, 2002 for interested investors, analysts, and
 stockbrokers.  To take part in the teleconference, please dial 888-858-4066
 the U.S. and 973-935-2101 internationally. Participants are asked to begin
 placing their calls about 5 to 10 minutes prior to the scheduled start time.
 For those unable to participate, a replay will be available from 12:00 p.m.
 EST on November 21, 2002, through 11:59 p.m. EST on November 23, 2002.  To
 access the replay, please dial:  877-519-4471 in the U.S. and 973-341-3080
 internationally. The access code for the replay is 3598197.  The call will
 also be available as a listen-only webcast at www.kcsa.com.
 
     About Eltek
     Eltek is one of 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, multi-layered and flex-rigid boards.
 Eltek's technologically advanced circuitry solutions are used in today's
 increasingly sophisticated and compact electronic products. The Company has
 invested heavily in upgrading its production facilities over the past five
 years.
 
                               (Tables to Follow)
 
     Certain matters discussed in this news release are forward-looking
 statements that involve a number of risks and uncertainties including, but not
 limited to statements regarding expected results in future quarters, 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 United States Securities and Exchange Commission filings.
     You may register to receive Eltek's future press releases or to download a
 complete Digital Investor Kit TM including press releases, regulatory filings
 and corporate materials by clicking on the "KCSA Interactive Platform" icon at
 www.kcsa.com.
 
 
                                   Eltek Ltd.
                     Consolidated Statements of Operations
              Adjusted to New Israeli Shekels as of September 2002
                     (In thousands, except per share data)
 
 
                                    Convenience                    Convenience
                                    translation                    translation
                        Nine months ended              Three months ended
                          September 30,                 September 30,
                     2001     2002     2002         2001      2002      2002
                     NIS      NIS     U.S. $        NIS       NIS      U.S. $
                    (Un-     (Un-      (Un-        (Un-      (Un-      (Un-
                   audited) audited)  audited)    audited)  audited)  audited)
 
     Revenues      92,676   82,623    16,962      26,032    26,034     5,345
     Costs of
      revenues     76,204   79,363    16,292      24,423    27,381     5,622
 
     Gross profit
      (loss)       16,472    3,260       670       1,609    (1,347)     (277)
 
     Research and
      development
      costs, net      407      119        24          44        --        --
 
     Selling,
      general
      and
      administrative
      expenses     11,016   11,100     2,279       3,506     4,006       822
 
     Amortization
      of goodwill      --      159        33          --       159        33
 
     Operating
      income
      (loss)        5,049   (8,118)   (1,666)     (1,941)   (5,512)   (1,132)
 
     Financial
      expenses,
      net           1,164      766       157         181     1,090       224
 
     Income (loss)
      before other
      income
      (expenses)    3,885   (8,884)   (1,823)     (2,122)   (6,602)   (1,356)
 
     Other incomes
      (expenses),
      net             735       (7)       (1)        788       (15)       (3)
 
     Income (loss)
      before taxes
      on income     4,620   (8,891)   (1,824)     (1,334)   (6,617)   (1,359)
     Taxes on income   --       96        20          --       142        29
 
     Net income
      (loss) after
      taxes on
      income        4,620   (8,987)   (1,844)     (1,334)   (6,759)   (1,388)
 
     Minority
      share of
      subsidiary
      net income       --      120        25          --        60        12
 
     Net income
      (loss) for
      the period    4,620   (9,107)   (1,869)     (1,334)   (6,819)   (1,400)
 
     Basic and
      diluted
      earnings
      (loss) per
      ordinary
      share          0.95    (1.86)    (0.38)      (0.28)    (1.40)    (0.29)
 
     Diluted
      earnings
      (loss) per
      ordinary
      share          1.20    (0.47)    (0.10)       0.19     (0.26)    (0.05)
 
     Weighted
      average
      number of
      ordinary
      shares used
      to compute
      basic and
      diluted
      earnings
      (loss) per
      ordinary
      share         4,855    4,886     4,886       4,855     4,886     4,886
 
 
                                   Eltek Ltd.
                     Consolidated Condensed Balance Sheets
              Adjusted to New Israeli Shekels as of September 2002
 
                                           September 30,          September 30,
                                        2001            2002             2002
                                     Unaudited       Unaudited       Unaudited
                                        NIS             NIS            U.S. $
                                                  (in thousands)
     Assets
 
      Current assets
      Cash and cash equivalents         7,411          10,613         2,179
      Receivables: Trade               23,279          25,775         5,291
      Other                             2,690             791           162
      Inventories                      14,404          13,238         2,718
      Prepaid expenses                  1,360             925           190
 
      Total current assets             49,144          51,342        10,540
 
      Property and equipment, net      56,698          57,066        11,715
 
      Other assets
      Goodwill                             --           5,025         1,032
      Investments in non-marketable
       equity securities                   12              --            --
 
      Total other assets                   12           5,025         1,032
 
      Total assets                    105,854         113,433        23,287
 
      Liabilities and Shareholder's equity
 
      Current liabilities
      Short-term credit and current
       installments of long-term debts 16,930          22,622         4,644
      Trade payables                   16,318          19,246         3,951
      Other liabilities and accrued
       expenses                         7,783           9,513         1,953
 
      Total current liabilities        41,031          51,381        10,548
 
      Long- term liabilities
      Long term debt, excluding
       current installments            15,037          20,841         4,279
      Employee severance benefits       1,063             974           200
 
      Total liabilities                57,131          73,196        15,027
 
      Minority interests                   --           2,024           416
 
      Shareholder's equity
       Ordinary shares, NIS 0.6 par
       value. Authorized 50,000,000
       shares, issued and outstanding
       4,885,651 and 4,850,151, in
       2002 and 2001 respectively      30,013          30,036         6,166
      Additional paid in capital      *53,059          53,229        10,928
      Capital reserves related to
       loans from controlling
       shareholders                    10,249          10,249         2,104
      Cumulative foreign currency
       translation adjustments             --             123            25
      Capital reserve                   6,845           6,845         1,405
 
      Accumulated deficit             (51,443)        (62,269)      (12,784)
 
      Total shareholder's equity       48,723          38,213         7,844
 
      Total liabilities and
       shareholders' equity           105,854         113,433        23,287
 
       * Reclassified
 
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SOURCE Eltek Ltd.

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