cover.htm
 
FORM 6 - K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a - 16 or 15d -16
Under the Securities Exchange Act of 1934

For the Month of December 2018

Commission file number 000-28884

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 Form 20-F or Form 40-F.

Form 20-F ☒          Form 40-F ☐
 
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): ___________
 
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): ___________

This Form 6-K is being incorporated by reference into the Registrant’s Form S-8 Registration Statements File Nos. 333-130611 and 333-123559.

 
Signature
 
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  
   
Vice President, Finance and
Chief Financial Officer
  
       

Dated:  December 20, 2018
 

Press Release
 
Eltek Reports 2018 Third Quarter Financial Results

·
Revenues of $8.5 million
·
Gross profit of $973,000
·
Net loss of $463,000

PETACH-TIKVA, Israel, December 20, 2018 - Eltek Ltd. (NASDAQ: ELTK), a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards, announced today its financial results for the quarter ended September 30, 2018.

Mr. Eli Yaffe, Chief Executive Officer, commented: “The third quarter of 2018 was the first quarter in my role as the CEO of Eltek. During this quarter our revenues were $8.5 million, up 10% from Q3-2017 and the net loss decreased to $463,000 from a net loss of $1.2 million in Q3-2017.
 
"As recently announced, we have established a new leadership team to implement our turnaround plan. We have begun a process of identifying the products that were underpriced and  they  are being addressed. In addition .efficiency measures have been implemented in order to reduce our break-even-point. Though there may be an initial reduction in sales volume, this should improve our on-time delivery performance, increase customer satisfaction and build sales from there and return to profitability."
 
"I see significant potential for Eltek in the high-end PCB market with our skilled engineers and experienced management. I am optimistic that we will be able to capitalize on our strengths in returning the Company to profitability and to renew our position as a leading high-end PCB manufacturer,” Mr. Yaffe concluded.

Highlights of the Third Quarter of 2018

·
Revenues for the third quarter of 2018 were $8.5 million, compared to $7.7 million in the third quarter of 2017;
 
·
Gross profit was $973,000 (11.4% of revenues), compared to gross loss of $32,000 (0.4% of revenues), in the third quarter of 2017. Excluding a $348,000 one-time amortization of a software system in Q3-2017 gross profit for the third quarter of 2017 was $316.000.
 
·
Operating loss was $307,000, compared to an operating loss of $1.2 million, in the third quarter of 2017;
 
·
Net loss was $463,000, or $0.23 per fully diluted share, compared to a net loss of $1.2 million, or $0.59 per fully diluted share in the third quarter of 2017;
 
·
EBITDA was $109,000 (1.3% of revenues), compared to a negative EBITDA of $422,000 (5.5% of revenues) in the third quarter of 2017;
 
·
Net cash provided by operating activities amounted to $164,000, compared to net cash used in operating activities of $1.3 million in the third quarter of 2017. The change is mainly attributable to the operating results in this quarter and changes in asset and liability accounts.
 
·
Cash and cash equivalents as of September 30, 2018 were $1.2 million, compared to $1.0 million as of September 30, 2017.

Highlights for the First Nine Months of 2018

·
Revenues for the first nine months of 2018 were $26.1 million, compared to $23.7 million in the first nine months of 2017;
 
·
Gross profit was $2.0 million (7.6% of revenues), compared to gross profit of $587,000 (2.5% of revenues) in the first nine months of 2017;
 
·
Operating loss was $1.7 million, compared to an operating loss of $2.9 million in the first nine months of 2017;
 
·
Net loss was $2 million, or $0.97 per fully diluted share, compared to a net loss of $3.1 million, or $1.53 per fully diluted share, in the first nine months of 2017;
 
·
EBITDA was a negative $374,000 (1.4% of revenues) compared to a negative EBITDA of $1.2 million (5.1% of revenues) in the first nine months of 2017;
 
·
Net cash used in operating activities amounted to $951,000 million compared to net cash used in operating activities of $2.6 million in the first nine months of 2017.
 
Financial Status
 
As of September 30, 2018, the Company was not in compliance with its financial covenants with its banks and does not expect to be in compliance at December 31, 2018. The Company has initiated discussions with its banks to obtain waivers for such non-compliance. As a result, long term bank loans amounting to $215,000 were reclassified from long term to short term.

In April 2018, Nistec, our controlling shareholder, provided a letter of commitment to the Company to provide additional financing in the amount of up to $2.5 million, valid for one year, of which $2.2 million has been utilized. It should be noted that the Company is making efforts to improve operations and its cash position (including applicable waivers), although there is no certainty that the Company will be able to attain these goals.
 
Nasdaq Continued Listing Status
 
On December 11, 2018, the Company announced that it intends to increase its shareholders' equity through a rights offering to shareholders, as part of the plan submitted to Nasdaq Listing Qualifications Department to regain compliance with the Nasdaq minimum stockholders’ equity of $2.5 million requirement for continued listing. As reported, NASDAQ has notified the Company that it has until March 31, 2019, to regain compliance. We also announced that Nistec Ltd., the Company's controlling shareholder, intends to exercise the rights to be offered to it in the rights offering, by converting approximately $2.5 million of debt owed to it by the Company, into ordinary shares of the Company. As is customary in rights offerings, it is expected that the rights offering will be made at a discount to market.
 
The Ordinary Shares to be issued by Eltek in the proposed rights offering have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Company intends to file a registration statement with the Securities and Exchange Commission for purposes of registering the Ordinary Shares issuable in connection with the proposed rights offering.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these ordinary shares in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Conference Call
 
Today, Thursday, December 20, 2018, at 8:30 a.m. Eastern Time, Eltek will conduct a conference call to discuss the results. The call will feature remarks by Eli Yaffe, Chief Executive Officer and Amnon Shemer, Chief Financial Officer.
 
To participate, please call the following teleconference numbers. Please allow for additional time to connect prior to the call:
 
United States:
1-888- 668-9141
Israel:
03- 9180609
International:
+972-3-9180609

                                  At:
                  8:30 a.m. Eastern Time
                  5:30 a.m. Pacific Time
                 15:30 p.m. Israel Time

A replay of the call will be available through the Investor Info section on Eltek’s corporate website at http://www.nisteceltek.com approximately 24 hours after the conference call is completed and will be archived for 30 days.
 
(Tables follow)

 
About Eltek
 
Eltek – "Innovation Across the Board", is a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), and is the Israeli leader in this industry. PCBs are the core circuitry of most electronic devices. Eltek specializes in the manufacture and supply of complex and high quality PCBs, HDI, multilayered and flex-rigid boards for the high-end market. Eltek is ITAR compliant and has AS-9100 and NADCAP Electronics certifications. Its customers include leading companies in the defense, aerospace and medical industries in Israel, the United States, Europe and Asia.

Eltek was founded in 1970. The Company’s headquarters, R&D, production and marketing center are located in Israel. Eltek also operates through its subsidiaries in North America and in Europe and by agents and distributors in Europe, India, South Africa and South America.

For more information, visit Eltek's web site at www.nisteceltek.com.
 
Use of Non-GAAP Financial Information
 
The Company reports financial results in accordance with U.S. GAAP and herein provides some non-GAAP measures, including EBITDA. These non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. These non-GAAP measures are intended to supplement the Company’s presentation of its financial results that are prepared in accordance with GAAP. The Company uses the non-GAAP measures presented to evaluate and manage the Company’s operations internally. The Company is also providing this information to assist investors in performing additional financial analysis. Reconciliation between the company's results on a GAAP and non-GAAP basis is provided in a table below.
 
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.
 
Investor Contact:

Eli Yaffe
  
Amnon Shemer
Chief Executive Officer
  
Chief Financial Officer
eliy@nisteceltek.com
  
amnons@nisteceltek.com
+972-3-9395023
  
+972-3-9395023

Eltek Ltd.
Consolidated Statements of Operations
(In thousands US$, except per share data)
 
   
Three months ended
    
Nine months ended
  
   
Sep 30,
    
Sep 30,
  
   
2018
    
2017
    
2018
    
2017
  
                         
Revenues
    
8,503
      
7,703
      
26,112
      
23,662
  
Costs of revenues
    
(7,530
)
    
(7,734
)
    
(24,118
)
    
(23,075
)
                                 
Gross profit
    
973
      
(32
)
    
1,994
      
587
  
     
11.4
%
    
(0.4
)%
    
7.6
%
    
2.5
%
Selling, general and administrative expenses
    
(1,280
)
    
(1,166
)
    
(3,648
)
    
(3,399
)
                                 
R&D expenses, net
    
0
      
(3
)
    
(1
)
    
(38
)
                                 
Operating profit (loss)
    
(307
)
    
(1,201
)
    
(1,655
)
    
(2,850
)
                                 
Financial expenses, net
    
(132
)
    
(3
)
    
(264
)
    
(221
)
                                 
Profit (loss) before other income, net
    
(439
)
    
(1,204
)
    
(1,919
)
    
(3,071
)
                                 
Other income, net
    
0
      
0
      
0
      
16
  
                                 
Profit (loss) before income tax expenses
    
(439
)
    
(1,204
)
    
(1,919
)
    
(3,055
)
                                 
Tax expenses
    
(24
)
    
(2
)
    
(57
)
    
(52
)
                                 
Net Profit (loss)
    
(463
)
    
(1,206
)
    
(1,976
)
    
(3,107
)
                                 
Net loss attributable to non controlling interest
    
0
      
0
      
0
      
0
  
                                 
Net Profit (loss) attributable to Eltek Ltd.
    
(463
)
    
(1,206
)
    
(1,976
)
    
(3,107
)
                                 
Earnings per share
                                
                                 
Basic and diluted net gain (loss) per ordinary share
    
(0.23
)
    
(0.59
)
    
(0.97
)
    
(1.53
)
     
(0.23
)
    
(0.59
)
    
(0.97
)
    
(1.53
)
Weighted average number of ordinary shares
                                
used to compute basic and diluted net gain (loss) per
                                
ordinary share (in thousands)
    
2,029
      
2,029
      
2,029
      
2,029
  

 
Eltek Ltd.
Consolidated Balance Sheets
(In thousands US$)
 
   
Sep 30,
    
Sep 30,
  
   
2018
    
2017
  
Assets
            
             
Current assets
            
Cash and cash equivalents
    
1,201
      
1,003
  
Receivables:   Trade, net of provision for doubtful accounts
    
7,055
      
5,871
  
                         Other
    
1,060
      
956
  
Inventories
    
4,330
      
4,342
  
Prepaid expenses
    
367
      
348
  
                 
Total current assets
    
14,013
      
12,520
  
                 
Deferred taxes
    
0
      
0
  
                 
Assets held for employees' severance benefits
    
54
      
54
  
                 
Fixed assets, less accumulated depreciation
    
7,634
      
8,624
  
                 
Intangible asset
    
0
      
0
  
                 
Total assets
    
21,701
      
21,198
  
                 
Liabilities and Shareholder's equity
                
                 
Current liabilities
                
Short-term credit and current maturities of long-term debts
    
9,799
      
6,482
  
Accounts payable: Trade
    
6,300
      
5,242
  
                                   Other
    
3,805
      
3,852
  
                 
Total current liabilities
    
19,904
      
15,576
  
                 
Long-term liabilities
                
Long term debt, excluding current maturities
    
151
      
1,402
  
Employee severance benefits
    
252
      
159
  
                 
Total long-term liabilities
    
403
      
1,561
  
                 
Equity
                
Ordinary shares, NIS 0.6  par value authorized 50,000,000 shares, issued and outstanding 10,142,762
    
1,985
      
1,985
  
Additional paid-in capital
    
17,270
      
17,270
  
Cumulative foreign currency translation adjustments
    
2,298
      
2,348
  
Capital reserve
    
723
      
695
  
Accumulated deficit
    
(20,882
)
    
(18,237
)
Shareholders' equity
    
1,394
      
4,061
  
Non controlling interest
    
0
      
0
  
Total equity
    
1,394
      
4,061
  
Total liabilities and shareholders' equity
    
21,701
      
21,198
  

 
Eltek Ltd.
Unaudited Non-GAAP EBITDA Reconciliations
(In thousands US$)
 
Non-GAAP EBITDA Reconciliations
  
Three months ended
    
Nine months ended
  
   
Sep 30,
    
Sep 30,
  
   
2018
    
2017
    
2018
    
2017
  
                         
GAAP net Income (loss)
    
(463.24
)
    
(1,206
)
    
(1,976
)
    
(3,107
)
Add back items:
                                
                                 
Financial expenses (income), net
    
131.94
      
3
      
264
      
221
  
Income tax expense
    
24.38
      
2
      
57
      
52
  
Depreciation and amortization
    
415.64
      
780
      
1,282
      
1,619
  
Adjusted EBITDA
    
108.72
      
(422
)
    
(374
)
    
(1,215
)

 
Eltek Ltd.
Consolidated Statement of  Cash flow
(In thousands US$, except per share data)
 
   
Three months ended
    
Nine months ended
  
   
Sep 30,
    
Sep 30,
  
   
2018
    
2017
    
2018
    
2017
  
                         
Cash flows from operating activities:
                        
                         
Net Income (loss)
    
(463
)
    
(1,206
)
    
(1,976
)
    
(3,107
)
                     
 
          
Adjustments to reconcile net loss to net
                    
 
          
 cash flows provided by operating activities:
                    
 
          
Depreciation and amortization
    
416
      
432
      
1,282
      
1,284
  
Capital lose on disposal of fixed assets, net
    
-
      
-
      
-
      
(13
)
Amortization of Intangible asset
    
-
      
348
      
-
      
348
  
Revaluation of long term loans
    
(1.00
)
    
2
      
-
      
(0
)
Decrease (increase) in Deferred Tax
    
-
      
-
      
23
      
5
  
     
415
      
782
      
1,305
      
1,624
  
                                 
Decrease (increase) in trade receivables
    
1,016
      
168
      
(474
)
    
377
  
Decrease (increase) in other receivables and prepaid expenses
    
(538
)
    
(738
)
    
313
      
(802
)
Decrease (increase) in inventories
    
253
      
(76
)
    
(661
)
    
(70
)
Increase (decrease) in trade payables
    
(440
)
    
(99
)
    
645
      
(305
)
Increase (decrease) in other liabilities and accrued expenses
    
(84
)
    
(118
)
    
(134
)
    
(294
)
Increase (decrease) in employee severance benefits, net
    
5
      
3
      
32
      
2
  
     
212
      
(860
)
    
(279
)
    
(1,092
)
                                 
Net cash provided by (used in) operating activities
    
164
      
(1,283
)
    
(951
)
    
(2,575
)
 
   
Three months ended
    
Nine months ended
  
   
Sep 30,
    
Sep 30,
  
   
2018
    
2017
    
2018
    
2017
  
                         
Cash flows from investing activities:
                        
Owners investment
                        
Purchase of fixed assets
    
(86
)
    
(71
)
    
(196
)
    
(232
)
Purchase of Intangible asset
            
-
      
-
          
Net cash used in investing activities
    
(86
)
    
(71
)
    
(196
)
    
(232
)
                                 
Cash flows from financing activities:
                                
Increase (decrease) in short- term credit
    
113
      
2,109
      
956
      
1,948
  
Increase (decrease) in short- term shareholder loan
    
275
      
-
      
1,431
      
1,430
  
Repayment of long-term loans from bank
    
(225
)
    
(230
)
    
(690
)
    
(636
)
Proceeds from long-term loans
    
0
      
(36
)
    
1
      
167
  
Repayment of credit from fixed asset payables
    
(74
)
    
(8
)
    
(233
)
    
(173
)
Net cash provided by (used in) financing activities
    
89
      
1,836
      
1,465
      
2,736
  
                                 
Effect of translation adjustments
    
43
      
(271
)
    
(5
)
    
(160
)
                                 
Net increase (decrease) in cash and cash equivalents
    
210
      
211
      
314
      
(230
)
                                 
Cash and cash equivalents at beginning of the period
    
991
      
792
      
887
      
1,234
  
                     
 
      
 
  
Cash and cash equivalents at period end
    
1,201
      
1,003
      
1,201
      
1,003