ELTEK LTD — Regulatory Filings 2006

Aug 16, 2006

6-K 1 zk62835.htm Created by EDGAR Ease Plus (EDGAR Ease+) Project: \backup\office\EDGAR Filing\Eltek Ltd\62835\a62835.eep Control Number: 62835 Rev Number: 1 Client Name: Eltek Ltd Project Name: 6-K Firm Name: Zadok-Keinan Ltd 6-K MARKER FORMAT-SHEET="Scotch Rule Top-TNR" FSL="Workstation" MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation"

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

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F O R M 6-K

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REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

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For the month of August 2006

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ELTEK LTD. (Name of Registrant)

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Sgoola Industrial Zone, Petach Tikva, Israel (Address of Principal Executive Office)

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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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Form 20-F x Form 40-F o

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Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

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Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

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Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

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Yes o No x

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If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-___

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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.

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SIGNATURES

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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.

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ELTEK LTD. (Registrant) By: /s/ Amnon Shemer —————————————— Amnon Shemer Chief Financial Officer

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Date: August 16, 2006

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ELTEK Ltd.

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Amnon Shemer, CFO

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+972-3-9395023

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amnons@eltek.co.il

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Eltek Announces Record Second-Quarter 2006 Financial Results with 338% Net Income Growth and 27% Revenue Growth

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— Quarterly revenues rise 27% year-over-year to $9.7 million on strong organic growth

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— Quarterly EPS up 360% to $ 0.06 per fully diluted share

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— Quarterly net income rises 338% to $ 456,000 - seventh consecutive quarter of profitability

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PETACH-TIKVA, Israel, August 16, 2006 (BUSINESS WIRE) – Eltek Ltd., the leading Israeli manufacturer of advanced flex-rigid circuitry solutions, today announced its financial results for the second quarter of 2006.

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Second – Quarter 2006 Financial Highlights:

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– Revenues of $ 9.7 million, up 27%.

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– Quarterly operating income of $ 563,000, up 126%

– Quarterly net income up 338% to $ 456,000, or $ 0.06 per fully diluted share

– EBITDA of $ 1.2 million in Q2 2006 compared to EBITDA of $ 917,000 in Q2 2005

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Eltek reported revenues for the three months ended June 30, 2006 of NIS 43.1 million ($ 9.7 million) compared with NIS 33.8 million ($ 7.6 million) for the second quarter of 2005. The increase in revenues is attributed to obtaining new customers and new projects with existing customers, along with increased sales for existing projects.

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Net income for the second quarter totalled NIS 2.0 million ($ 456,000), or $ 0.06 per fully diluted share compared with net income of NIS 461,000 ($ 103,000), or $ 0.01 per fully diluted share for the same quarter in 2005. The second quarter of 2006 was the Company’s seventh consecutive quarter of profitability.

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First Six Months 2006 Financial Highlights:

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– Revenues of $ 19.5 million, up 27%.

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– Six months operating income of $ 1.4 million, up 140%

– Six months net income up 275% to $ 1.1 million, or $ 0.16 per fully diluted share

– EBITDA of $ 2.6 million in compared to EBITDA of $ 1.9 million in 2005

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Revenues for the six-month period ended June 30, 2006, were NIS 86.4 million ($ 19.5 million) compared with revenues of NIS 68.2 million ($ 15.4 million) for the comparable period in 2005.

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Net income for the six-month period ended June 30, 2006 was NIS 4.9 million ($ 1.1 million), or $ 0.16 per fully diluted share, compared with a net income of NIS 1.3 million ($ 292 thousand) or $ 0.04 per fully diluted share for the same period in 2005.

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In the second quarter of 2006, Eltek had EBITDA of $ 1.2 million compared to EBITDA of $917,000 in the second quarter of 2005. In the first six months of 2006, Eltek had EBITDA of $ 2.6 million compared with EBITDA of $ 1.9 million in the same period in 2005.

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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.

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Arieh Reichart, President and Chief Executive Officer of Eltek, commented: “Eltek continues to deliver increasing quarterly sales and earnings, and we managed to accelerate our overall growth rate in a quarter that traditionally has the least number of working days.”

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“During the last part of the second quarter and into Q3, we have made further progress towards ramping up the incremental revenue contribution of our emerging U.S. flex – rigid PCB activity. An example is win we previously announced with a major U.S. industrial company for the serial production of flex – rigid PCBs “ he concluded.

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Amnon Shemer, CFO of Eltek commented: “We delivered the best second quarter in Eltek’s history and we grew our quarterly operating and net income by 126% and 338%, respectively, from the corresponding quarter in 2005. We managed to increase our net income although we faced two major challenges: an increase in raw material costs arising from the increase in oil and metal prices world-wide, and a devaluation of the U.S. dollar against the NIS resulting in our receiving less NIS for each dollar nominated sales.”

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“With expansion of high – end production capacity proceeding on schedule, we are well prepared to meet the ramp-up in demand for our flex-rigid PCBs. These incremental higher margin revenue streams will play a significant role in our overall progress towards reaching new levels of revenue, net income and cash flows” he concluded.

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About the Company

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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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ELTEK LTD. Consolidated Statements of Operations (In thousands, except per share data)

Reported amounts	Six months ended June 30,					Three months ended June 30,
	2005 (Unaudited) NIS	2006 (Unaudited) NIS		2006 (Unaudited) U.S. $		2005 (Unaudited) NIS		2006 (Unaudited) NIS		2006 (Unaudited) U.S. $
Revenues	68,237		86,445		19,469		33,842		43,080		9,703
Costs of revenues	(55,829	)	(68,671	)	(15,466	)	(27,746	)	(34,714	)	(7,818	)
Gross profit	12,408		17,774		4,003		6,096		8,366		1,885
Research and development, net	(351	)	(308	)	(69	)	(160	)	(151	)	(34	)
Selling, general and administrative
expenses	(9,205	)	(11,320	)	(2,549	)	(4,686	)	(5,721	)	(1,288	)
Amortization of goodwill	(300	)	-		-		(148	)	-
Operating income	2,552		6,146		1,384		1,102		2,494		563
Financial expenses, net	(1,380	)	(1,260	)	(284	)	(766	)	(501	)	(113	)
Income before other expenses, net	1,172		4,886		1,100		336		1,993		450
Other income (expenses), net	(24	)	31		7		(13	)	41		9
Income before taxes on income	1,148		4,917		1,107		323		2,034		459
Taxes on income	-		-		-		-		-		-
Income after taxes on income	1,148		4,917		1,107		323		2,034		459
Minority share in subsidiary's net
results	152		(36	)	(8	)	138		(14	)	(3	)
Net income for the period	1,300		4,881		1,099		461		2,020		456
Basic earnings per 1 ordinary share	*0.23		0.87		0.20		*0.08		0.36		0.08
Dluted earnings per 1 ordinary share	*0.19		0.70		0.16		*0.06		0.28		0.06
Weighted average share capital used to
compute basic net earnings per share (in
thousands)	*5,547		5,611		5,611		*5,603		5,614		5,614
Weighted average share capital used to
compute diluted net earnings per share
(in thousands)	*6,949		7,023		7,023		*7,006		7,021		7,021

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• The implementation of Israeli Accounting standard no. 21 regarding earnings per share , requires restatement of comparative data, in accordance with the new standard.

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Eltek Ltd. Consolidated Condensed Balance Sheets (In thousands)

	December 31,	June 30,				June 30,
Reported amounts	2005 (Audited) NIS	2005 (Unaudited) NIS		2006 (Unaudited) NIS		2006 (Unaudited) U.S. $
Assets
Current assets
Cash and cash equivalents	4,274		2,309		6,119		1,378
Receivables: Trade	23,835		25,249		31,958		7,198
Other	1,158		1,174		1,267		285
Inventories	13,633		13,788		16,393		3,692
Prepaid expenses	563		1,200		1,707		384
Total current assets	43,463		43,720		57,444		12,937
Deferred taxes	753		708		723		163
Property and equipment, net	31,569		27,155		32,334		7,282
Goodwill	4,656		4,084		3,871		872
Total assets	80,441		75,667		94,372		21,254
Liabilities and Shareholder's equity
Current liabilities
Short-term credit and current
maturities of long-term debts	19,589		18,830		16,139		3,635
Trade payables	23,577		19,338		26,241		5,911
Other liabilities and accrued
expenses	11,083		11,317		12,193		2,746
Total current liabilities	54,249		49,485		54,573		12,292
Long- term liabilities
Long term debt, excluding current
maturities	6,687		3,815		8,237		1,855
Employee severance benefits	1,048		1,131		694		156
Total liabilities	61,984		54,431		63,504		14,303
Minority interests	1,900		1,636		1,676		376
Convertible note	1,566		1,720		1,844		415
Shareholder's equity
Ordinary shares, NIS 0.6 par value
Authorized 50,000,000 shares,
issued and outstanding 5,602,511 shares at
June 30, 2005 and 5,491,711 shares
at June 30, 2004 and at December
31, 2004	29,698		29,765		29,778		6,707
Additional paid in capital	52,500		54,553		54,981		12,383
Capital reserves related to loans
from controlling shareholders	10,010		10,010		10,010		2,255
Cumulative foreign currency
translation adjustments	2,574		2,043		2,229		502
Capital reserve	6,685		6,685		6,685		1,506
Accumulated deficit	(86,476	)	(85,176	)	(76,335	)	(17,193	)
Total shareholder's equity	14,991		17,880		27,348		6,160
Total liabilities and shareholders'
equity	80,441		75,667		94,372		21,254

Non-GAAP Earnings Reconcilliations — 2005 (Unaudited) NIS	2006 (Unaudited) NIS	2006 (Unaudited) U.S. $	2005 (Unaudited) NIS	2006 (Unaudited) NIS	2006 (Unaudited) U.S. $
GAAP net income	1,300	4,881	1,099	461	2,020	456
Add back items:
Financial expenses, net	1,380	1,260	284	766	501	113
Tax benefit	-	-	-	-	-	-
Amortization of goodwill	300	-	-	148	-	-
Depreciation	5,587	5,218	1,174	2,699	2,615	589
Adjusted EBITDA	8,567	11,359	2,557	4,074	5,136	1,158