Eltek Reports Full Year and Fourth Quarter 2020 Financial Results

Eltek Reports Full Year and Fourth Quarter 2020 Financial Results

Eltek Ltd., a global manufacturer and supplier of technologically advanced printed circuit board solutions, reported financial results for the full year and the fourth quarter ended December 31, 2020.

Eli Yaffe, President and CEO, said, “We are pleased with the growth in our revenues and profitability in the fourth quarter and the material change in our annual results. The improved results reflect the growth in our revenues and the continuous improvement in operational efficiency. . ”

Eltek successfully managed the COVID pandemic in 2020 through the following actions:

  • Eltek’s Balancing Market Sectors strategy has enabled Eltek to mitigate the downturn in the commercial aerospace market through its involvement in the defense market and the medical device market.
  • Eltek carefully managed its cash flow during the pandemic period by securing a low-rate long-term government guaranteed loan and raising $ 5.7 million as part of a rights offer.
  • Eltek increased its investments in 2020 by capitalizing on falling capital goods prices due to Covid.

In addition, we were able to focus on the following points:

  • Eltek used its strong cash flow in 2020 to repay part of its short-term loans. As a result, the Equity / Total Balance Sheet ratio rose to 43.4% at the end of 2020 against 27.5% at the end of 2019.
  • Eltek accelerated its R&D plans and obtained a grant from the Israel Investment Authority and approval to participate in a special R&D program funded by the Israel Innovation Authority.

“The epidemic and spread of the coronavirus have created new operational and business challenges, including a shortage of some raw materials that we are facing. The Covid pandemic has forced Eltek to launch a new spending reduction plan at the end of 2020 that will further reduce the company’s breakeven point, ”Yaffe concluded.

Highlights of the full year 2020 compared to the full year 2019

  • Revenue for the full year of 2020 was $ 36.7 million compared to revenue of $ 34.8 million in 2019, an increase of 5.5% year-on-year.
  • Gross margin increased 28.3% to $ 7.7 million (21.0% of revenue) in 2020 compared to a gross margin of $ 6.0 million (17.3% of revenue) in 2019 .
  • Operating profit was $ 3.0 million in 2020, compared to operating profit of $ 1.4 million in 2019, an increase of 114.3% year-over-year.
  • Net income was $ 2.6 million, or $ 0.58 per fully diluted share in 2020, compared to net income of $ 1.8 million, or $ 0.48 per fully diluted share in 2019. The net profit grew 44.4% year-over-year.
  • EBITDA was $ 4.6 million in 2020, compared to EBITDA of $ 3.8 million in 2019, an increase of 21.1% year-over-year.
  • Net cash from operating activities was $ 3.3 million in 2020 compared to $ 2.6 million in 2019.
  • Cash and cash equivalents as at December 31, 2020 were $ 4.7 million compared to $ 1.6 million as at December 31, 2019.

Highlights of the fourth quarter of 2020 compared to the fourth quarter of 2019

  • Revenue for the fourth quarter of 2020 was $ 9.5 million compared to revenue of $ 8.6 million in the fourth quarter of 2019, an increase of 10.5% year-over-year.
  • Gross margin increased 46.7%, from $ 1.5 million (17.0% of revenue) in the fourth quarter of 2019 to $ 2.2 million (23.2% of revenue) in the fourth quarter from 2020.
  • Operating income was $ 973,000 in the fourth quarter of 2020, compared to operating income of $ 379,000 in the fourth quarter of 2019, an increase of 156.7% year-over-year.
  • Net income was $ 766,000 or $ 0.16 per fully diluted share in the fourth quarter of 2020, compared to net income of $ 370,000 or $ 0.08 per fully diluted share in the fourth quarter of 2019. Net income fourth quarter grew 107.0% year-over-year.
  • EBITDA was $ 1.4 million in the fourth quarter of 2020, compared to EBITDA of $ 817,000 in the fourth quarter of 2019, an increase of 71.4% year-over-year.
  • Short-term credits and loans fell from 24.5% of the balance sheet total at the end of 2019 to 1.9% at the end of 2020.

About Geraldine Higgins

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