2014

Eltek Ltd. Reports Second Quarter and First Half 2002 Results

    PETACH-TIKVA, Israel, Aug. 27 /PRNewswire-FirstCall/ --
 Eltek Ltd. (Nasdaq:   ELTK), the leading Israeli manufacturer of advanced
 circuitry solutions, today announced results for the second quarter and six
 months ended June 30, 2002.
     Note:  The Company completed the purchase of a 76% interest in Kubatronik
 on June 10, 2002.  As such, the Company's results for the second quarter and
 the first six months of 2002 include the results of Kubatronik for the period
 June 10 to June 30, 2002.  The Company noted that all dollar amounts mentioned
 reflect the value of the New Israeli Shekel (NIS) as of June 30, 2002.  Any
 differences in historical results between those originally reported and those
 reported presently are a result of fluctuations in the value of the New
 Israeli Shekel.
     Eltek reported revenues for the three months ended June 30, 2002 of NIS
 28.3 million ($5.9 million), compared with NIS 28.0 million ($5.9 million)
 during the first quarter of 2002, and NIS 28.4 million ($6.0 million) during
 the second quarter of 2001.  Net loss for the quarter totaled NIS 1.1 million
 ($233,000), or NIS 0.26 per diluted share ($0.05), compared with a net loss of
 NIS 1.2 million ($244,000), or NIS 0.24 per basic and diluted share ($0.05),
 for the first quarter of 2002, and net income of NIS 923,000 ($194,000), or
 NIS 0.19 per basic and diluted share ($0.04), for the quarter ended June 30,
 2001.
     Gross profit for the quarter was NIS 2.2 million ($465,000), compared with
 NIS2.4 million ($494,000) during the first quarter and NIS 5.2 million ($1.1
 million) during the second quarter of 2001.  Operating loss for the quarter
 was NIS 1.6 million ($333,000), compared with NIS 1.0 million ($211,000)
 reported for the first quarter, and operating income of NIS 1.5 million
 ($306,000) reported for the comparable quarter in 2001.
     For the six-month period ended June 30, 2002, the Company reported
 revenues of NIS 56.2 million ($11.8 million), compared with revenues of NIS
 66.2 million ($13.9 million) for the comparable period in 2001.
     Gross profit for the six-month period ended June 30, 2002 was
 NIS 4.6 million ($959,000), compared with NIS 14.8 million ($3.1 million) for
 the first six months of 2001.  Operating loss for the first half of 2002 was
 NIS 2.6 million ($544,000), compared with operating income of NIS 6.9 million
 ($1.5 million) for the six months ended June 30, 2001.
     Net loss for the six-month period ended June 30, 2002 was NIS 2.3 million
 ($477,000), or NIS 0.47 ($0.10) per share, compared with net income of
 NIS 5.9 million ($1.2 million) or NIS 1.2 ($0.25) per share for the same
 period in 2001.
     Revenues derived from Kubatronik during the period June 10 - June 30, 2002
 were NIS 934,000 ($196,000).
     In announcing the results, Arieh Reichart, President and Chief Executive
 Officer of Eltek said, "Despite continued weakness within our target markets,
 most notably telecom, we were able to report a modest sequential increase in
 revenues for the second quarter, driven by the completion of our purchase of a
 76% interest in Kubatronik.  The successful completion of the Kubatronik
 purchase was the result of lots of hard work on the part of many of the
 Company's dedicated employees."
     Mr. Reichart continued, "I am pleased to report that the integration of
 our new German subsidiary has gone quite well thus far.  We have been speaking
 with several of their major customers concerning ways in which they might
 utilize Eltek Israel for follow-on supply of the prototype PCBs they currently
 purchase from Kubatronik.  In addition to the increased capability to serve
 the European market afforded to us through the Kubatronik acquisition, we have
 been working diligently to establish a presence in the Indian market, having
 reached an agreement with a sales representative in the area.  The preliminary
 feedback from potential customers has been extremely promising, and we have
 already received several small prototype orders."
     Mr. Reichart concluded, "We are excited about the numerous regional
 opportunities that are available to us and believe that we are well positioned
 to take full advantage of them.  This, along with the continued improvement in
 our bottom line, gives us great encouragement as we work to return to
 profitability levels."
 
     TELECONFERENCE:  Eltek will hold a teleconference at 10:00 a.m. EDT on
 Tuesday, August 27, 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. EDT on
 August 27, 2002, through 11:59 p.m. EDT on August 29, 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 33445381.  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.
 
     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 June 2002
                     (In thousands, except per share data)
 
                                        Convenience                 Convenience
                                        translation                 translation
 
                            Six months ended            Three months ended
                                June 30,                     June 30,
                        2001    2002       2002        2001      2002     2002
                        NIS      NIS       U.S.$        NIS       NIS     U.S.$
                   (Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Un-
                                                                       audited)
 
     Revenues         66,215    56,224     11,789     28,391     28,264   5,927
     Costs
      of revenues     51,446    51,648     10,830     23,206     26,045   5,462
 
     Gross profit     14,769     4,576        959      5,185      2,219     465
 
     Research and
      development
      costs, net         361       118         25        191        118      25
 
     Selling, general
      and
      administrative
      expenses         7,462     7,048      1,478      3,535      3,688     773
 
     Operating
      income (loss)    6,946    (2,590)      (544)     1,459     (1,587)  (333)
 
     Financial income
      (expenses), net   (977)      322         68       (483)       492     103
 
     Income (loss)
      before other
      incomes
      (expenses)       5,969    (2,268)      (476)       976     (1,095)  (230)
 
     Other incomes
      (expenses), net    (53)        8          2        (53)         -      -
 
     Income (loss)
      before taxes
      on income        5,916    (2,260)      (474)       923     (1,095)  (230)
     Taxes on income       -        46         10          -         46     10
 
     Net income (loss)
      after taxes
      on income        5,916    (2,214)      (464)       923     (1,049)  (220)
 
     Minority share
      of subsidiary
      net income           -       (60)       (13)         -        (60)   (13)
 
     Net income (loss)
      for the period   5,916    (2,274)      (477)       923     (1,109)  (233)
 
     Basic earnings
      (loss) per
      ordinary share    1.20     (0.47)     (0.10)      0.19      (0.23) (0.05)
 
     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
      earnings (loss)
      per ordinary
      share            4,973     4,886      4,886      4,973      4,886   4,886
 
     Weighted average
      number of ordinary
      shares used to
      compute diluted
      earnings (loss)
      per ordinary
      share            4,973     4,886      4,886      4,973      5,384   5,384
 
 
                                   ELTEK LTD.
                     Consolidated Condensed Balance Sheets
                Adjusted to New Israeli Shekels as of June 2002
 
                                                                Convenience
                                                                translation
 
                                          June 30,                June 30,
                                   2001             2002            2002
                                Unaudited        Unaudited       Unaudited
                                    NIS             NIS            U.S. $
                                               (in thousands)
 
     Assets
 
     Current assets
 
     Cash and cash equivalents     6,317           12,341          2,588
     Receivables: Trade           25,604           31,770          6,661
                  Other            1,538              938            197
     Inventories                  14,215           13,202          2,768
     Prepaid expenses              1,216            1,126            236
     Total current assets         48,890           59,377         12,450
     Property and equipment, net  55,743           58,326         12,230
     Other assets
 
     Goodwill                          -            5,112          1,072
     Investments in
      non-marketable equity
      securities                      12                -              -
     Total other assets               12            5,112          1,072
     Total assets                104,645          122,815         25,752
 
     Liabilities and
      Shareholder's equity
 
     Current liabilities
 
     Short-term credit
      and current installments
      of long-term debts          12,201           23,284          4,883
     Trade payables               16,848           19,707          4,132
     Other liabilities
      and accrued expenses         8,564           11,006          2,308
 
     Total current liabilities    37,613           53,997         11,323
 
     Long-term liabilities
 
     Long-term debt,
      excluding current
      installments                16,566           21,229          4,451
     Employee severance
      benefits                       984              968            203
 
     Total liabilities            55,163           76,194         15,977
 
     Minority interests                -            1,938            406
 
     Shareholders' equity
 
     Ordinary shares, NIS 0.6
      par value. Authorized
      50,000,000 shares, issued
      and outstanding 4,885,651
      and 4,824,485, in 2002
      and 2001 respectively       29,805           29,842          6,257
     Additional paid-in capital  *52,479           52,886         11,090
     Capital reserves related
      to loans from
      controlling shareholders    10,183           10,183          2,135
     Cumulative foreign currency
      translation adjustments         -                65             14
 
     Capital reserves             6,801             6,801          1,426
 
     Accumulated deficit        (49,786)          (55,094)       (11,553)
 
     Total shareholders' equity  49,482            44,683          9,369
 
     Total liabilities
      and shareholders'
      equity                    104,645           122,815         25,752
 
      * Reclassified
 
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SOURCE Eltek Ltd.

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