SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
F O R M 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR
15D-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF MARCH 2006
ELTEK LTD.
(Name of Registrant)
Sgoola Industrial Zone, Petach Tikva, Israel
(Address of Principal Executive Office)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT FILES OR WILL FILE ANNUAL
REPORTS UNDER COVER OF FORM 20-F OR FORM 40-F.
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INDICATE BY CHECK MARK WHETHER BY FURNISHING THE INFORMATION CONTAINED IN
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COMMISSION PURSUANT TO RULE 12G3-2(B) UNDER THE SECURITIES EXCHANGE ACT OF 1934.
YES [_] NO [X]
IF "YES" IS MARKED, INDICATE BELOW THE FILE NUMBER ASSIGNED TO THE
REGISTRANT IN CONNECTION WITH RULE 12G3-2(B): 82-
THIS FORM 6-K IS BEING INCORPORATED BY REFERENCE INTO THE REGISTRANT'S FORM S-8
REGISTRATION STATEMENTS FILE NOS. 333-12012 AND 333-123559.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ELTEK LTD.
(Registrant)
By: /s/ Amnon Shemer
------------------
Amnon Shemer
Chief Financial Officer
Date: March 16, 2006
ELTEK LTD.
Amnon Shemer, CFO
+972-3-9395023
amnons@eltek.co.il
ELTEK ANNOUNCES 2005 FOURTH QUARTER AND YEAR END RESULTS
o RETURNS TO PROFITABILITY IN 2005: 2005 ANNUAL NET INCOME INCREASED TO
$1.1 MILLION FROM A NET LOSS OF $1.3 MILLION IN 2004
o 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
o Q4 2005 OPERATING INCOME $616,000, UP 79% FROM $344,000 IN Q4 2004.
o 2005 OPERATING INCOME INCREASED TO $1.7MILLION FROM AN OPERATING LOSS
OF $838,000 IN 2004
o 2005 EBITDA INCREASED TO $4.2 MILLION, UP 87% FROM $2.3 MILLION IN
2004
PETACH-TIKVA, Israel, March 16, 2006 (BUSINESS WIRE) - 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:
o Sixth consecutive quarter of year-over-year revenue growth - revenues
reached the Company's highest quarterly levels since the first quarter
of 2001
o Fifth consecutive quarter of profitability
o Quarterly net income of $500,000 or $0.07 per share
o 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 totalled 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
o Return to profitability in 2005
o 2005 annual net income increased to $1.1 million from a net loss of
$1.3 million in 2004
o 2005 operating income increased to $1.7 million from an operating loss
of $838,000 in 2004
o 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.
NOTE A: CONVENIENCE TRANSLATION TO DOLLARS
For the convenience of the reader, the reported NIS figures of December 31, 2005
have been presented in U.S. Dollars, translated at the representative rate of
exchange as of December 31, 2005 (NIS 4.603 = U.S. Dollar 1.00). The U.S. Dollar
( $) amounts presented should not be construed as representing amounts
receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless
otherwise indicated.
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
FILINGS WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
ELTEK LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
CONVENIENCE CONVENIENCE
TRANSLATION TRANSLATION
-------- --------
YEAR ENDED THREE MONTHS ENDED
REPORTED AMOUNTS DECEMBER 31, DECEMBER 31,
------------------------------------ ------------------------------------
2004 2005 2005 2004 2005 2005
NIS NIS U.S. $ NIS NIS U.S. $
-------- -------- -------- -------- -------- --------
AUDITED UNAUDITED UNAUDITED
-------- ---------------------- ------------------------------------
Revenues 125,002 144,429 31,378 35,017 39,570 8,596
Costs of revenues (109,998) (115,733) (25,143) (28,238) (30,983) (6,730)
-------- -------- -------- -------- -------- --------
GROSS PROFIT 15,004 28,696 6,235 6,779 8,587 1,866
Research and development
expenses, net - (646) (140) - (161) (35)
Selling, general and
administrative
expense (18,265) (19,862) (4,315) (5,046) (5,445) (1,183)
Amortization of goodwill (593) (593) (129) (152) (146) (32)
-------- -------- -------- -------- -------- --------
OPERATING INCOME (LOSS) (3,854) 7,595 1,651 1,581 2,835 616
Financial expenses, net (2,948) (2,656) (577) (458) (628) (136)
-------- -------- -------- -------- -------- --------
INCOME (LOSS) BEFORE OTHER INCOME,
NET (6,802) 4,939 1,074 1,123 2,207 480
Other income, net 52 103 22 13 69 15
-------- -------- -------- -------- -------- --------
INCOME (LOSS) BEFORE TAX BENEFIT ON INCOME (6,750) 5,042 1,096 1,136 2,276 495
Taxes on income 713 - - 713 - -
-------- -------- -------- -------- -------- --------
INCOME (LOSS) AFTER TAX BENEFIT ON INCOME (6,037) 5,042 1,096 1,849 2,276 495
Minority share in subsidiary's net
results 182 218 47 70 24 5
-------- -------- -------- -------- -------- --------
NET INCOME (LOSS) FOR THE PERIOD (5,855) 5,260 1,143 1,919 2,300 500
======== ======== ======== ======== ======== ========
BASIC AND DILUTED EARNINGS (LOSS) PER
SHARE (0.82) 0.77 0.17 0.28 0.33 0.07
======== ======== ======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF
SHARES USED TO COMPUTE BASIC AND
DILUTED EARNINGS (LOSS) PER SHARE 6,885 7,015 6,885 7,015
======== ======== ======== ======== ======== ========
ELTEK LTD.
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
CONVENIENCE
TRANSLATION
-------
DECEMBER 31, DECEMBER 31,
------- -------
2004 2005 2005
REPORTED (AUDITED) (UNAUDITED) (UNAUDITED)
AMOUNTS NIS NIS U.S. $
------- ------- -------
ASSETS
CURRENT ASSETS
Cash and cash equivalents 4,274 7,258 1,577
Receivables: Trade 23,835 22,743 4,941
Other 1,158 2,173 472
Inventories 13,633 16,051 3,487
Prepaid expenses 563 986 214
------- ------- -------
TOTAL CURRENT ASSETS 43,463 49,211 10,691
------- ------- -------
DEFERRED TAXES 753 697 151
------- ------- -------
PROPERTY AND EQUIPMENT, NET 31,569 32,969 7,163
------- ------- -------
GOODWILL 4,656 3,735 811
------- ------- -------
TOTAL ASSETS 80,441 86,612 18,816
======= ======= =======
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Short-term credit and current
maturities of long-term debts 19,589 17,561 3,815
Trade payables 23,577 25,176 5,470
Other liabilities and accrued
expenses 11,083 10,914 2,371
------- ------- -------
TOTAL CURRENT LIABILITIES 54,249 53,651 11,656
------- ------- -------
LONG- TERM LIABILITIES
Long term debt, excluding current
maturities 6,687 7,607 1,653
Employee severance benefits 1,048 274 60
------- ------- -------
TOTAL LIABILITIES 61,984 61,532 13,369
------- ------- -------
MINORITY INTERESTS 1,900 1,547 335
------- ------- -------
CONVERTIBLE NOTE 1,566 1,820 395
------- ------- -------
SHAREHOLDER'S EQUITY
Ordinary shares, NIS 0.6 par value
Authorized 50,000,000 shares,
issued and outstanding 5,602,511
shares at December 31, 2005 and
5,491,711 shares at December 31, 2004 29,698 29,765 6,466
Additional paid in capital 52,500 54,553 11,852
Capital reserves related to loans
from controlling shareholders 10,010 10,010 2,175
Cumulative foreign currency
translation adjustments 2,574 1,916 416
Capital reserve 6,685 6,685 1,452
Accumulated deficit (86,476) (81,216) (17,644)
------- ------- -------
TOTAL SHAREHOLDER'S EQUITY 14,991 21,713 4,717
------- ------- -------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 80,441 86,612 18,816
======= ======= =======
NON-GAAP EARNINGS YEAR ENDED THREE MONTHS ENDED
RECONCILLIATIONS DECEMBER 31, DECEMBER 31,
------------------------------------ ------------------------------------
2004 2005 2005 2004 2005 2005
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
NIS NIS U.S. $ NIS NIS U.S. $
------- ------- ------- ------- ------- -------
GAAP NET INCOME (LOSS) (5,855) 5,260 1,143 1,919 2,300 500
ADD BACK ITEMS:
Financial expenses, net 2,948 2,656 577 458 628 136
Tax benefit (713) - - (713) - -
Amortization of goodwill 593 593 129 152 146 32
Depreciation 13,428 10,904 2,368 3,191 2,694 585
------- ------- ------- ------- ------- -------
ADJUSTED EBITDA 10,401 19,413 4,217 5,007 5,768 1,253
======= ======= ======= ======= ======= =======