Eltek Ltd (ELTK) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $0.45 million, or $ 0.04 a share in the quarter, against a net profit of $0.62 million, or $0.06 a share in the last year period. Revenue during the quarter dropped 14.67 percent to $9.25 million from $10.84 million in the previous year period. Gross margin for the quarter contracted 643 basis points over the previous year period to 9.51 percent. Operating margin for the quarter stood at negative 3.65 percent as compared to a positive 5.60 percent for the previous year period.
Operating loss for the quarter was $0.34 million, compared with an operating income of $0.61 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $0.16 million compared with $1.04 million in the prior year period. At the same time, adjusted EBITDA margin contracted 783 basis points in the quarter to 1.77 percent from 9.60 percent in the last year period.
Mr. Yitzhak Nissan, chairman of the board and chief executive officer, commented: "Third quarter revenues ($9.3 million) were lower than the revenues in the third quarter of 2015 ($10.8 million). The decrease was due to competitive pressures in Israel and certain European countries, and a continued weakness in the German PCB market, which led to a decline in sales of our subsidiary, Kubatronik. We have also experienced operational difficulties that impeded our ability to meet the demand for our products. We have recently made several changes in our manufacturing operations to address these difficulties. The demand for our products in Italy and the Netherlands was strong. We believe that the growing need for complex PCBs in the defense industry will benefit us in the long run. We remain focused on our target to become the leading company in our field in terms of technology, on-time delivery and product quality," Mr. Nissan concluded.
Operating cash flow improves significantly
Eltek Ltd has generated cash of $1.50 million from operating activities during the nine month period, up 328.37 percent or $1.15 million, when compared with the last year period. Cash flow from investing activities was almost stable for the quarter at $0.60 million, when compared with the previous year period.
The company has spent $1.12 million cash to carry out financing activities during the nine month period as against cash inflow of $0.26 million in the last year period.
Cash and cash equivalents stood at $0.84 million as on Sep. 30, 2016, down 30.87 percent or $0.38 million from $1.22 million on Sep. 30, 2015.
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