Eltek Announces 2005 Fourth Quarter and Year End Results
Thursday March 16, 6:51 am ET
PETACH-TIKVA, Israel--(BUSINESS WIRE)--March 16, 2006--Eltek Ltd. (Nasdaq:ELTK - News): Returns to profitability in 2005: 2005 annual net income increased to $1.1 million from a net loss of $1.3 million in 2004 Sixth consecutive quarter of year-over-year revenue growth - revenues increase to $8.6 million in the fourth quarter, up 13%, with EPS $0.07 and EBITDA of $1.3 million Q4 2005 operating income $616,000, up 79% from $344,000 in Q4 2004. 2005 operating income increased to $1.7 million from an operating loss of $838,000 in 2004 2005 EBITDA increased to $4.2 million, up 87% from $2.3 million in 2004 Eltek Ltd., the leading Israeli manufacturer of advanced Flex-Rigid circuitry solutions, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2005.
Fourth Quarter 2005 Highlights:
Sixth consecutive quarter of year-over-year revenue growth - revenues reached the Company's highest quarterly levels since the first quarter of 2001 Fifth consecutive quarter of profitability Quarterly net income of $500,000 or $0.07 per share EBITDA of $1.3 million in Q4 2005 compared to EBITDA of $1.1 million in Q4 2004 Eltek reported revenues for the three months ended December 31, 2005 of NIS 39.6 million ($8.6 million) compared with NIS 35.0 million ($7.6 million) for the fourth quarter of 2004. The increase in revenues primarily reflects the growth of Eltek's internationally sourced flex - rigid PCBs sales in general, and in the U.S. in particular.
Net income for the fourth quarter totaled NIS 2.3 million ($500,000), or NIS 0.33 per share ($0.07) compared with a net income of NIS 1.9 million ($417,000), or NIS 0.28 per share ($0.06) for the same quarter in 2004. The fourth quarter of 2005 was the Company's fifth consecutive quarter of profitability.
Fiscal Year Highlights
Return to profitability in 2005 2005 annual net income increased to $1.1 million from a net loss of $1.3 million in 2004 2005 operating income increased to $1.7 million from an operating loss of $838,000 in 2004 EBITDA of $4.2 million in 2005 compared to EBITDA of $2.3 million in 2004 Revenues for the year ended December 31, 2005, were NIS 144.4 million ($31.4 million) compared with revenues of NIS125.0 million ($27.2 million) in 2004. The increase in revenues primarily reflects the growth of Eltek's internationally sourced flex - rigid PCBs sales.
Net income for the year ended December 31, 2005 was NIS 5.3 million ($1.1 million), or NIS 0.77 per share ($ 0.17) compared with a net loss of NIS 5.9 million ($1.3 million) or NIS (0.82) per share ($ (0.18)) in 2004.
Arieh Reichart, President and Chief Executive Officer of Eltek, commented: "Our excellent fourth quarter was a robust finish to a successful turnaround year, in which we returned to profitability. During 2005, we delivered consistent year-over-year revenues growth and four consecutive quarters of profitability".
"Our continuously improving results were driven by the growing recognition and market acceptance we have been gaining in the flex - rigid PCB market, the increased contribution of new multi - quarter engagements across many industries and, in the latter part of the year, our penetration into the strategic U.S. flex-rigid PCB market."
Mr. Reichart concluded, "Moving forward, Eltek expects to achieve continued year-over-year revenues growth in 2006. We believe that the combination of the higher margin nature of our incremental revenues with the Company's favourable operating leverage will enable us to deliver strong net income growth in 2006."
Amnon Shemer, CFO of Eltek commented: "We closed out 2005 on an encouraging note, as quarterly sales reached a new level in the fourth quarter and we managed to grow our quarterly operating and pre tax income by 79% and 100%, respectively, from the corresponding quarter in 2004.
In 2005, Eltek's gross margin improved to 20%, from 12 % in 2004, operating income increased to $1.7 million from an operating loss of $838,000, and net income increased to $1.1 million from a net loss of $1.3 million in 2004. Contributing to these improvements in the results are purchase orders Eltek received pursuant to long term projects, which tend to be supplied on a weekly basis over scheduled periods of time, thus increasing production efficiency as well as our overall corporate productivity."
"International sourced revenues in 2005 accounted for 58% of our revenues, compared to 46% in 2004 and 33% in 2003," he added. "In order to meet accelerating demand, in 2005 we invested $2.6 million in new advanced manufacturing equipment to increase our high end production capacity. These investments were financed mainly by new bank loans, reflecting our bank's confidence in our business model and our improving cash generation capabilities. The successful installation and integration of the new equipment enables us to establish a strong manufacturing base for continued growth in 2006 and beyond."
ELTEK uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income interest, taxes, depreciation and amortization. EBITDA is provided to investors to complement results provided in accordance with GAAP, as management believes the measure helps illustrate underlying operating trends in the Company's business and uses the measure to establish internal budgets and goals, manage the business, and evaluate performance. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. Eltek has provided a quantitative reconciliation of EBITDA with net income.
About the Company
Eltek is 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. For more information, visit Eltek's World Wide Web site at www.eltekglobal.com
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