Eltek looses on revenue in 2014

Gross profit for the full year of 2014 was $6 million (12.9% of revenues) compared to gross profit of $8 million (15.9% of revenues) in 2013. Operating loss for the full year of 2014 was $903,000 compared to operating profit of $1.3 million in 2013. During 2014, the Company recorded a decrease in deferred tax assets of USD 1.5 million due to changes in market conditions and increased uncertainty about the Company’s ability to utilize these tax assets in the foreseeable future. In addition, the Company recorded one-time expenses in the amount of USD $680,000 associated with management downsizing, and a goodwill impairment charge associated with our German subsidiary, Kubatronik. Total one-time expenses recorded in 2014 was USD $2.2 million. Net loss for the full year of 2014 was USD 2.7 million, compared to net profit of USD 3.8 million. For the full year of 2014, Eltek had EBITDA of USD 1.2 million compared with EBITDA of USD 3 million in 2013. Mr. Yitzhak Nissan, Chairman of the Board and Chief Executive Officer, commented: “Eltek’s revenues in 2014 suffered mostly due to a decline in sales to the defense sector and reduced global demand for printed circuit boards of the type we manufacture. We have also faced increased pricecompetition in our marketplace. We have adopted efficiency measures, which significantly reduced our operating costs. The savings were partially reflected in 2014 and are expected to positively impact our results in 2015. In addition, new equipment that we recently purchased is expected to allow us to enhance our solution offerings."