Eltek Reports Third Quarter 2012 Financial Results

  Eltek Reports Third Quarter 2012 Financial Results

  *7th consecutive profitable quarter
  *Third quarter revenues totaled $10.8 million
  *Fourth quarter orders indicate an upturn in revenues
  *Signed Corporate Purchasing Agreement with DRS

Business Wire

PETACH-TIKVA, Israel -- November 28, 2012

Eltek Ltd. (NASDAQ:ELTK), a leading Israeli manufacturer of advanced
flex-rigid circuitry solutions, announced today its financial results for the
quarter ended September 30, 2012.

Third Quarter 2012:

Revenues for the quarter ended September 30, 2012 were $10.8 million compared
with revenues of $12.0 million recorded in the third quarter of 2011.

Gross profit for the third quarter of 2012 was $1.7 million (16.1% of
revenues) compared with gross profit of $2.4 million (20.0% of revenues) in
the third quarter of 2011.

Operating profit for the third quarter of 2012 was $285,000 compared to
operating profit of $959,000 in the third quarter of 2011.

Net profit for the third quarter of 2012 was $135,000 or $0.02 per fully
diluted share compared to net profit of $573,000, or $0.09 per fully diluted
share, in the third quarter of 2011.

First nine months of 2012:

Revenues for the nine-month period ended September 30, 2012 were $34.3 million
compared to revenues of $35.3 million recorded in the first nine months of
2011.

Gross profit for the first nine months of 2012 was $6.0 million (17.4% of
revenues) compared to gross profit of $7.0 million (19.7% of revenues) in the
first nine months of 2011.

Operating profit for the first nine months of 2012 was $1.5 million compared
to operating profit of $2.3 million in the first nine months of 2011.

Net profit for the first nine months of 2012 was $1.0 million, or $0.15 per
fully diluted share, compared with net profit of $1.6 million, or $0.24 per
fully diluted share, in the first nine months of 2011.

EBITDA:

In the third quarter of 2012, Eltek had EBITDA of $680,000 compared with
EBITDA of $1.6 million in the third quarter of 2011. In the first nine months
of 2012, Eltek had EBITDA of $2.8 million compared with EBITDA of $3.9 million
in the same period in 2011.

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.
Reconciliation between the company's results on a GAAP and non-GAAP basis is
provided in a table immediately following the Consolidated Statement of
Operations.

Management Comments:

Arieh Reichart, President and Chief Executive Officer of Eltek, commented:
"Eltek was able to report its seventh consecutive quarter of profitable
operations in spite of a temporary production line problem, which reduced our
revenues in the third quarter. I am glad to say that this temporary problem
was resolved and is not expected to affect our ongoing production activity.
The encouraging news is that this issue did not affect our company's business
in its main target market in the US, in which Eltek continues to generate
quarterly growth, despite the uncertainties in the global markets. Based on
our order backlog for the fourth quarter we expect to return to a similar
level of revenues as we have recorded in the previous six quarters."

"We recently signed a corporate purchasing agreement (CPA) with DRS
Technologies, Inc. of the US, a Finmeccanica Company that is a leading
supplier of integrated products, services and support to military forces,
intelligence agencies and prime contractors worldwide, which employs
approximately 70,000 people worldwide. Being selected as a preferred supplier
by an important group like DRS and signing a CPA is very encouraging. It is
evidence of Eltek's high-end technology, capability and reliability, which are
key factors for the defense, aerospace and medical sectors," Mr. Reichart
concluded.

About Eltek

Eltek is Israel's leading manufacturer of printed circuit boards, the core
circuitry of most electronic devices. It specializes in the complex high-end
of PCB manufacturing, i.e., HDI, multilayered 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 web site at www.eltekglobal.com.

Forward Looking Statement:

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 Annual Report on Form 20-F and other filings with the United States
Securities and Exchange Commission.

Eltek Ltd.
Consolidated Statements of Operations
(In thousands US$, except per share data)
                                                              
                   Three months ended        Nine months ended           Year
                                                                         ended
                   September 30,             September 30,               December
                                                                         31,
                   2012         2011         2012          2011          2011
                   Unaudited                 Unaudited                   Audited
                                                                         
Revenues           10,779       11,974       34,291        35,345        46,830
Costs of           (9,045 )     (9,585 )     (28,321 )     (28,389 )     (38,101 )
revenues
                                                                         
Gross profit       1,734        2,389        5,970         6,956         8,729
                                                                         
Selling,
general and        (1,449 )     (1,430 )     (4,503  )     (4,694  )     (6,155  )
administrative
expenses
                                                                     
Operating          285          959          1,467         2,262         2,573
profit (loss)
                                                                         
Financial
income             (128   )     (374   )     (394    )     (590    )     (739    )
(expenses),
net
                                                                         
Profit (loss)
before other       157          585          1,072         1,672         1,834
income, net
                                                                         
Other income,      (4     )     1           5            10           12      
net
                                                                         
Profit (loss)
before income      154          586          1,078         1,682         1,846
tax expenses
                                                                         
Income tax
(expenses),        (9     )     (22    )     (43     )     (45     )     (31     )
net
                                                                         
Net Profit         145          564          1,035         1,637         1,815
(loss)
                                                                         
Net profit
(loss)
attributable       10          9           23           (19     )     31      
to non
controlling
interest
                                                                         
Net Profit
(loss)
attributable       135         573         1,012        1,618        1,846   
to controlling
interest /
Eltek
                                                                         
Earnings per
share
                                                                         
Basic and
diluted net
gain (loss)        0.02        0.09        0.15         0.24         (0.26   )
per ordinary
share

Weighted
average number
of ordinary
shares used to
compute basic      6,610       6,610       6,610        6,610        6,610   
and diluted
net gain
(loss) per
ordinary share
(in thousands)
                                                                         
                                                                         

Eltek Ltd.
Consolidated Balance Sheets
(In thousands US$)

                                    September 30,             December 31,
                                      2012        2011          2011
                                      Unaudited                   Audited
Assets
                                                                  
Current assets
Cash and cash equivalents             1,434         1,310         892
Receivables: Trade, net of            6,808         8,425         8,885
provision for doubtful accounts
Other                                 285           271           116
Inventories                           5,124         5,154         4,434
Prepaid expenses                      212          289          239       
                                                                  
Total current assets                  13,863       15,449       14,566    
                                                                  
Assets held for employees'            44           40           39        
severance benefits
                                                                  
Fixed assets, less accumulated        8,445        7,588        7,746     
depreciation
                                                                  
Goodwill                              486          540          518       
                                                                  
Total assets                          22,838       23,617       22,869    
                                                                  
Liabilities and Shareholder's
equity
                                                                  
Current liabilities
Short-term credit and current         5,167         6,841         4,856
maturities of long-term debts
Accounts payable: Trade               5,940         5,920         6,456
Related parties                       1,035         1,108         1,046
Other                                 4,024        4,439        3,995     
                                                                  
Total current liabilities             16,166       18,308       16,353    
                                                                  
Long-term liabilities
Long term debt, excluding current     898           145           1,604
maturities
Employee severance benefits           138          421          150       
                                                                  
Total long-term liabilities           1,036        566          1,754     
                                                                  
Equity
Ordinary shares, NIS 0.6 par
value authorized 50,000,000
shares, issued and outstanding        1,384         1,384         1,384
6,610,107 as of December 31,
2011.
Additional paid-in capital            14,295        14,328        14,328
Cumulative foreign currency           2,507         2,855         2,622
translation adjustments
Capital reserve                       695           695           695
Accumulated deficit                   (13,386 )     (14,716 )     (14,398   )
Shareholders' equity                  5,495         4,546         4,631
Non controlling interest              141          197          131       
Total equity                          5,636        4,743        4,762     
Total liabilities and                 22,838       23,617       22,869    
shareholders' equity
                                                                            
                                                                            

Eltek Ltd.
Unaudited Non-GAAP EBITDA Reconciliations
For the period ended December 31, 2011
(In thousands US$, except per share data)

Non-GAAP EBITDA      Three months ended   Nine months ended   Year ended
Reconciliations
                       September 30,          September 30,         December
                                                                    31,
                       2012      2011       2012      2011      2011
                                                                    
GAAP net Income        135         573        1,012       1,618     1,846
(loss)
Add back items:
                                                                    
Financial (income)     128         374        394         590       739
expenses, net
Income tax             9           22         43          45        31
(benefit) expense
Depreciation           408         583        1,343       1,642     2,091
Adjusted EBITDA        680         1,552      2,792       3,895     4,707

Contact:

Investor Contact:
Eltek Ltd.
Amnon Shemer, +972-3-9395050
Chief Financial Officer
amnons@eltek.co.il
 
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