Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2015shares | |
Document And Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2015 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2,015 |
Entity Registrant Name | ELTEK LTD |
Entity Central Index Key | 1,024,672 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Entity Common Stock, Shares Outstanding | 10,142,762 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 1,038 | $ 1,129 |
Trade accounts receivable, net of allowance for doubtful accounts | 8,015 | 8,227 |
Inventories | 4,450 | 4,670 |
Prepaid expenses and other current assets | 460 | 857 |
Total current assets | 13,963 | 14,883 |
Severance pay fund | 49 | 49 |
Fixed assets, net | 10,067 | 10,070 |
Deferred tax assets, net | 1,064 | 1,056 |
Intangible assets | 276 | 208 |
Total assets | 25,419 | 26,266 |
Current liabilities | ||
Short-term credit and current maturities of long-term debt | 1,275 | 2,722 |
Accounts payable: | ||
Trade | 6,112 | 7,077 |
Other current liabilities | 4,594 | 5,156 |
Total Current liabilities | 11,981 | 14,955 |
Long-term liabilities | ||
Long-term debt, excluding current maturities | 2,905 | 1,838 |
Employees' severance benefits | 289 | 249 |
Total long-term liabilities | $ 3,194 | $ 2,087 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
SHAREHOLDERS' EQUITY | ||
Ordinary shares, NIS 0.6 par value Authorized 50,000,000 shares, issued and outstanding 10,142,762 shares as of December 31, 2015 and 10,142,762 as of December 31, 2014 | $ 1,985 | $ 1,985 |
Additional paid-in capital | 17,270 | 17,270 |
Cumulative foreign currency translation adjustments | 1,892 | 1,907 |
Capital reserves | 695 | 695 |
Accumulated deficit | (11,507) | (12,550) |
Total Eltek Ltd. shareholders' equity | 10,335 | 9,307 |
Non-controlling interest | (91) | (83) |
Total equity | 10,244 | 9,224 |
Total liabilities, shareholders' equity and non- controlling interest | $ 25,419 | $ 26,266 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value | ₪ 0.6 | ₪ 0.6 |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 |
Ordinary shares, shares issued | 10,142,762 | 10,142,762 |
Ordinary shares, shares outstanding | 10,142,762 | 10,142,762 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
REVENUES | $ 41,350 | $ 46,626 | $ 50,235 |
Cost of revenues | (34,802) | (40,604) | (42,242) |
Gross profit | 6,548 | 6,022 | $ 7,993 |
Operating expenses | |||
R&D expenses | (90) | (72) | |
Selling, general and administrative expenses | $ (4,961) | (6,773) | $ (6,722) |
Impairment of goodwill | (80) | ||
Operating profit (loss) | $ 1,497 | (903) | $ 1,271 |
Financial expenses, net | (259) | (356) | (439) |
Other income (loss), net | 6 | 38 | (26) |
Profit (loss) before income tax (expense) benefit | 1,244 | (1,221) | 806 |
Income tax (expense) benefit | (218) | (1,634) | 2,975 |
Net profit (loss) | 1,026 | (2,855) | 3,781 |
Net loss attributable to non-controlling interest | 17 | 190 | 42 |
Net profit (loss) attributable to Eltek Ltd. | 1,043 | (2,665) | 3,823 |
Other comprehensive income (loss): Foreign currency translation adjustments | (6) | (1,268) | 487 |
Comprehensive income (loss) | 1,020 | (4,123) | 4,268 |
Comprehensive loss attributable to non-controlling interest | (8) | (179) | (28) |
Comprehensive income (loss) attributable to Eltek Ltd. | $ 1,028 | $ (3,944) | $ 4,296 |
Basic and diluted net profit (loss) per ordinary share attributable to Eltek Ltd. shareholders | $ 0.1 | $ (0.26) | $ 0.53 |
Weighted average number of ordinary shares used to compute basic and diluted net profit (loss) per ordinary share attributable to Eltek Ltd. shareholders | 10,142,762 | 10,142,762 | 7,198,883 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional paid-in capital [Member] | Accumulated Other Comprehensive Income [Member] | Capital Reserves [Member] | Accumulated deficit [Member] | Equity attributed to Eltek Ltd. and subsidiaries [Member] | Non controlling interest [Member] | Total |
Balance at Dec. 31, 2012 | $ 1,384 | $ 14,328 | $ 2,713 | $ 695 | $ (13,708) | $ 5,412 | $ 124 | $ 5,536 |
Balance, shares at Dec. 31, 2012 | 6,610,107 | |||||||
Changes during the year | ||||||||
Foreign currency translation adjustments | $ 473 | 473 | 14 | 487 | ||||
Net income (loss) | $ 3,823 | 3,823 | (42) | 3,781 | ||||
Comprehensive income (loss) | 4,296 | $ (28) | 4,268 | |||||
Issuance of shares, net of costs | $ 601 | $ 2,942 | 3,543 | 3,543 | ||||
Issuance of shares, net of costs, shares | 3,532,655 | |||||||
Balance at Dec. 31, 2013 | $ 1,985 | $ 17,270 | $ 3,186 | $ 695 | $ (9,855) | 13,251 | $ 96 | 13,347 |
Balance, shares at Dec. 31, 2013 | 10,142,762 | |||||||
Changes during the year | ||||||||
Foreign currency translation adjustments | $ (1,279) | (1,279) | 11 | (1,268) | ||||
Net income (loss) | $ (2,665) | (2,665) | (190) | (2,855) | ||||
Comprehensive income (loss) | $ (1,279) | (2,665) | (3,944) | (179) | (4,123) | |||
Balance at Dec. 31, 2014 | $ 1,985 | $ 17,270 | 1,907 | $ 695 | $ (12,550) | 9,307 | (83) | $ 9,224 |
Balance, shares at Dec. 31, 2014 | 10,142,762 | 10,142,762 | ||||||
Changes during the year | ||||||||
Foreign currency translation adjustments | $ (15) | (15) | 9 | $ (6) | ||||
Net income (loss) | $ 1,043 | 1,043 | (17) | 1,026 | ||||
Comprehensive income (loss) | $ (15) | 1,043 | 1,028 | (8) | 1,020 | |||
Balance at Dec. 31, 2015 | $ 1,985 | $ 17,270 | $ 1,892 | $ 695 | $ (11,507) | $ 10,335 | $ (91) | $ 10,244 |
Balance, shares at Dec. 31, 2015 | 10,142,762 | 10,142,762 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net profit (loss) | $ 1,026 | $ (2,855) | $ 3,781 |
Adjustments to reconcile net profit to net cash flows provided by operating activities: | |||
Depreciation and goodwill amortization | 1,731 | 1,893 | 1,739 |
Capital loss on disposal of fixed assets | 85 | 101 | 26 |
Revaluation of long term loans | 10 | 16 | 1 |
Decrease (increase) in deferred tax benefit | 133 | 1,528 | (3,012) |
Changes in employee severance benefits, net | 41 | (59) | 217 |
Decrease (increase) in trade receivables | 171 | (78) | (1,531) |
Decrease (increase) in other receivables and prepaid expenses | 249 | (319) | 46 |
Decrease (increase) in inventories | 213 | 848 | (451) |
Increase (decrease) in trade payables | (1,396) | (1,441) | 655 |
Increase (decrease) in other liabilities and accrued expenses | (543) | 445 | 147 |
Net cash provided by operating activities | 1,720 | 79 | $ 1,618 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of intangible assets | (69) | (212) | |
Purchase of fixed assets, net | (797) | (2,431) | $ (950) |
Net cash used in investing activities | (866) | (2,643) | (950) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Increase (decrease) in short- term credit | (2,063) | 1,352 | (2,577) |
Repayment of long-term loans | (207) | (806) | $ (564) |
Proceeds from long-term loans | $ 1,707 | $ 1,179 | |
Proceeds from issuance of shares | $ 3,543 | ||
Repayment of credit from fixed asset payables | $ (505) | $ (477) | (515) |
Net cash provided by (used in) financing activities | (1,068) | 1,248 | (113) |
Effect of exchange rate on cash and cash equivalents | 123 | (69) | 24 |
Net increase (decrease) in cash | (91) | (1,385) | 579 |
Cash at beginning of the year | 1,129 | 2,514 | 1,935 |
Cash at end of the year | 1,038 | 1,129 | 2,514 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Income tax paid | 43 | 40 | 110 |
Interest paid | 175 | 146 | 356 |
Non-cash activities: | |||
Purchase of fixed assets | $ 984 | $ 523 | $ 514 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1:- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. General: Eltek Ltd. ("the Parent") was organized in Israel in 1970, and the Parent's shares have been publicly traded on the NASDAQ Capital Market since 1997. Eltek Ltd. and its subsidiaries (see below) are collectively referred to as "the Company". The Company manufactures, markets and sells custom made printed circuit boards ("PCBs"), including high density interconnect, flex-rigid and multi-layered boards. The principal markets of the Company are in Israel, Europe and North America. The Company markets its product On August 19, 2013, the Parent entered into an agreement to issue and sell 3,532,655 of its ordinary shares, par value NIS 0.6 each, to Nistec Ltd. ("Nistec"), a private company organized under the laws of the State of Israel, for $ 4.2 million. Nistec is controlled by Yitzhak Nissan, who owns all of the shares of Nistec. Also, on August 19, 2013, Nistec purchased 1,589,440 of the Parent's ordinary shares from Merhav M.N.F. Ltd., a company owned by Mr. Yosef Maiman, which at the time held 24.1% of the Parent's outstanding ordinary shares. The total consideration paid by Nistec in the two transactions was $ 6.5 million, $ 2.3 directly to Merhav M.N.F Ltd. and $ 4.2 million to the Parent. Nistec financed a portion of those funds from a loan extended by Bank Leumi Le'Israel, and the shares that Nistec acquired constitute collateral for the loan. As a result of these transactions, which closed on November 1, 2013, Nistec acquired 50.5% of the Parent's ordinary shares on a fully diluted basis, and Nistec gained control of the Parent. Kubatronik Leiterplatten GmbH In June 2002, the Parent established a wholly-owned subsidiary, EN-Eltek Netherlands 2002 B.V. ("EN-Eltek"), for the purpose of the acquisition of Kubatronik Leiterplatten GmbH ("Kubatronik"). On June 10, 2002, the Parent acquired 76% of the shares of Kubatronik for € 2.6 million ($ 2.4 million as of the date of acquisition). The acquisition resulted in the recognition of goodwill in the amount of € 1.1 million ($ 1 million as of the date of acquisition) see Note 5. The Parent subsequently incurred a goodwill impairment of approximately $ 1 million and the goodwill balance was nil as of December 31, 2015 and December 31, 2014. Pursuant to the Kubatronik acquisition agreement, the seller has the right to require the Parent to purchase ("Put Option"), and the Parent has the right to require the Seller to sell to the Parent ("Call Option") the Seller's remaining 24% interest in Kubatronik. The options periods are until December 31, 2016, and are automatically extended for additional consecutive two-year periods unless otherwise notified in writing by either party upon at least six months prior notice. In May 2012, the seller exercised his option with respect to 3% of the shares of Kubatronik for approximately Euro 69 ($ 89) and reduced his share in Kubatronik from 24% to 21%. The exercise price for the seller's 21% interest in Kubatronik under the Put Option is Euro 483 ($ 587), and the exercise price for the seller's remaining holdings in Kubatronik under the Call Option is Euro 513 ($ 623). As of December 31, 2015 the option is presented at the maximum exercise price of $587 in the short term liabilities. Changes in fair value are recorded in the Consolidated Statement of Comprehensive Income. The fair value of the above options is calculated based on the Binomial model. Changes in fair value are recorded in the Consolidated Statement of Comprehensive income. See Note 15 Eltek USA Inc. In 2007, the Parent established a wholly-owned subsidiary, Eltek USA Inc. for the purpose of sales, promotion and marketing in the North American market. Eltek USA Inc. commenced operations in 2008. Eltek Europe GmbH In 2008, the Parent established a wholly-owned subsidiary, Eltek Europe GmbH for the purpose of sales, promotion and marketing to certain customers in Europe. Eltek Europe GmbH commenced operations in 2009. b. Basis of presentation: The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the accounts of the Parent and its subsidiaries. The Parent sells goods through its subsidiaries that function as distributors. All intercompany transactions and balances were eliminated in consolidation. The consolidated financial statements include the accounts of the Parent Company and its subsidiaries. Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation. Changes in the Parent Company's ownership interest with no change of control are treated as equity transactions, rather than step acquisitions or dilution gains or losses. Non-controlling interests in subsidiaries represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests. Losses are attributed to non-controlling interests even if they result in a negative balance of non-controlling interests in the consolidated statement of financial position. c. Functional and reporting currency: The Parent's functional currency is the New Israeli Shekel ("NIS"). Transactions denominated in foreign currencies are translated into NIS using the prevailing exchange rates at the date of the transaction. Gains and losses from the translation of foreign currency transactions are recorded in financial income or expenses. The Company's reporting currency is the U.S. dollar. Assets and liabilities are translated to the reporting currency using the exchange rate at the end of the year. Revenues and expenses are translated into the reporting currency using the average exchange rate for each quarter. Translation adjustments are reported separately as a component of accumulated other comprehensive income. d. Translation of foreign entity operations: The financial statements of foreign subsidiaries are translated into the Parent's functional currency as follows: 1. Assets and liabilities are translated according to the exchange rate on the consolidated balance sheet date including goodwill arising from the acquisition of the subsidiary. 2. Income and expense items are translated according to the weighted average exchange rate on a quarterly basis. 3. The resulting exchange rate differences are classified as a separate item in shareholders' equity. e. Exchange rates and linkage bases: 1. Balances linked to the Israeli Consumer Price Index ("CPI") are recorded pursuant to contractual linkage terms of the specific assets and liabilities. 2. Details of the CPI and the representative exchange rates are as follows: Exchange rate Exchange rate Israeli CPI of one US dollar of one Euro Points NIS NIS December 31, 2015 221.13 3.902 4.2468 December 31, 2014 219.80 3.889 4.7246 December 31, 2013 220.20 3.471 4.7819 % December 31, 2015 0.6 0.3 (10.1 ) December 31, 2014 (0.2 ) 12.2 (1.2 ) December 31, 2013 1.8 (7.02 ) (2.82 ) f. Use of estimates: The preparation of the consolidated financial statements in accordance with U.S. GAAP requires the management of the Company to make estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from these estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowance for doubtful accounts, valuation of derivatives, deferred tax assets, inventory, goodwill, put/call options, income tax uncertainties and other contingencies. g. Cash and cash equivalents: Cash and cash equivalents are highly-liquid investments which include short-term bank deposits with an original maturity of three months or less from deposit date and which are not restricted by a lien. h. Trade accounts receivable: Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. The allowance for doubtful accounts receivable is calculated on the basis of specific identification of customer balances. The allowance is determined based on management's estimate of the aged receivable balance considered uncollectible, based on historical experience, aging of the receivable and information available about specific customers, including their financial condition and volume of their operations. The activity in the allowance for doubtful accounts for the three years ended December 31, 2015 is as follows: Year ended December 31, 2015 2014 2013 US Dollars in thousands Opening balance 62 82 95 Additions during the year 19 21 - Write off of allowance - (32 ) (9 ) Foreign currency translation adjustments 5 (9 ) (4 ) Closing balance 86 62 82 i. Inventories: Inventories are recorded at the lower of cost or market value. Cost is determined on the weighted average basis for raw materials. For work in progress and finished goods, the cost is determined pursuant to calculation of accumulated actual direct and indirect costs. In the years ended December 31, 2013, 2014 and 2015, the Company wrote off inventories in the amount of $219, $519 and $376, respectively. j. Assets held for employees' severance payments: Assets held for employees' severance payments represent contributions to insurance policies and deposits to a central severance pay fund, and are recorded at their current redemption value. k. Fixed assets: Fixed assets are stated at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the assets at the following annual rates: % Machinery and equipment 5-33 Leasehold improvements 6-14 Motor vehicles 15 Office furniture and equipment 6-33 Machinery and equipment purchased under capital lease arrangements are recorded at the present value of the minimum lease payments at lease inception. Such assets and leasehold improvements are depreciated and amortized respectively, using the straight-line method over the shorter of the lease term or estimated useful life of the asset. Impairment of long-lived assets: Long-lived assets, such as property, plant, and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. As of December 31, 2015 and 2014, the Company had equipment under capital leases of $2.5 and $1.4 million respectively, net of accumulated depreciation of $174 and $215. The future minimum payments under capital leases at December 31, 2015 were as follows: Long-term 2016 651 2017 344 2018 249 2019 185 2020 35 Total minimum capital lease payments 1,464 l. Intangible assets: Intangible assets are amortized over their useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up, in accordance with ASC 350, "Intangibles - Goodwill and Other." The Parent acquired software technology during 2014-2015 which is expected to be amortized starting in 2016. Intangible assets are stated at cost. Depreciation is computed by the straight-line method over the estimated useful life of 10 years. m. Goodwill: Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is reviewed for impairment at least annually. In September 2011, the Financial Accounting Standards Board ("FASB") issued ASU 2011-08, Testing Goodwill for Impairment, which provides an entity the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the two-step goodwill impairment test. If this is the case, the two-step goodwill impairment test is required. If it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. The Company adopted this guidance in 2011. If the two-step goodwill impairment test is required, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying amount, step two does not need to be performed. The Company performs an annual impairment review of goodwill at the beginning of the following year, and when a triggering event occurs between annual impairment tests. For 2013, the Company performed a qualitative assessment of goodwill and determined that it is not more-likely-than-not that the fair values of its reporting units are less than the carrying amounts. Accordingly, no impairment loss was recorded in 2013. Due to ongoing losses of Kubatronik, the Company recorded impairment losses of $80 in 2014. As of December 31, 2015, the Company had no goodwill balance. n. Income taxes: Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more-likely–than- not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. o. Revenue recognition: The Company recognizes revenue upon shipment of the product and after the customer takes ownership and assumes risk of loss, collection of the corresponding receivable is probable, persuasive evidence of an arrangement exists, and the sales price is fixed or determinable. - p. Earnings per ordinary share: Diluted earnings per ordinary share calculation is similar to basic earnings per share except that the weighted average of ordinary shares outstanding is increased to include the number of additional ordinary shares that would have been outstanding if the outstanding options had been exercised, to the extent that these options had a diluted effect. The Company does not presently have such dilutive instruments. q. Derivative financial instruments: The Company may utilize derivative financial instruments principally to manage its exposure resulting from fluctuations in foreign currency exchange rates. The Company holds put/call options with the minority shareholder of Kubatronik for the purchase/sale of the minority holding in Kubatronik (see Note 15). Changes in fair value are recognized in the consolidated statements of comprehensive income as a financing item. The fair value of derivative financial instruments is determined on the basis of their market values or the quotations of financial institutions. In the absence of a market value or financial institution quotation the fair value is determined on the basis of a valuation model. r. Concentration of credit risk: Financial instruments that may subject the Company to significant concentrations of credit risk consist principally of cash and trade accounts receivable. Cash is deposited with major financial institutions in Israel, Europe and the United States. The Company performs ongoing credit evaluations of the financial condition of its customers. The risk of collection associated with trade receivables is reduced by the large number and geographical dispersion of the Company's customer base, and the Company's policy of obtaining credit evaluations of the financial condition of certain customers, requiring collateral or security with respect to certain receivables, or purchase of insurance for certain other receivables. s. Research and development costs: Research and development costs incurred in the process of developing product improvements or new products, are charged to expenses as incurred. t. Commitments and contingencies: Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. u. Fair value measurements: The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: · Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. · Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. · Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. See Note 15. v. Recently issued accounting standards: In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern ("ASU 2014-15"). ASU 2014-15 requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued. If such conditions or events exist, an entity should disclose that there is substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued. Disclosure should include the principal conditions or events that raise substantial doubt, management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations, and management’s plans that are intended to mitigate those conditions or events. ASU 2014-15 will be effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and prior interim periods and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. The Company early adopted this standard in the fourth quarter of 2015 on a prospective basis. |
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS | 12 Months Ended |
Dec. 31, 2015 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS | NOTE 2:- CASH AND CASH EQUIVALENTS December 31, 2015 2014 US Dollars in thousands Denominated in U.S. dollars 537 773 Denominated in NIS 362 150 Denominated in Euro 139 206 1,038 1,129 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2015 | |
Inventory, Net [Abstract] | |
INVENTORIES | NOTE 3:- INVENTORIES December 31, 2015 2014 US Dollars in thousands Raw materials 1,928 1,954 Work-in-process 1,844 1,686 Finished products 678 1,030 4,450 4,670 Raw materials inventory is net of $120 and $59 of obsolete items as of December 31, 2015, and 2014, respectively. |
FIXED ASSETS, NET
FIXED ASSETS, NET | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS, NET | NOTE 4:- FIXED ASSETS, NET December 31, 2015 2014 US Dollars in thousands Cost: Machinery and equipment 35,604 36,735 Leasehold improvements 8,525 8,542 Motor vehicles 45 45 Office furniture and equipment 1,356 1,472 45,530 46,794 Accumulated depreciation: Machinery and equipment (27,489 ) (28,896 ) Leasehold improvements (6,695 ) (6,469 ) Motor vehicles (35 ) (33 ) Office furniture and equipment (1,244 ) (1,326 ) (35,463 ) (36,724 ) Depreciated cost 10,067 10,070 Depreciation expense for the years ended December 31, 2015, 2014 and 2013 were $1,731, $1,813 and $1,827, respectively. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 5:- GOODWILL Changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2014 are as follows: December 31, 2015 2014 US Dollars in thousands Balance at the beginning of the year - 75 Impairment on goodwill - (80 ) Effect of translation adjustments - 5 - - |
SHORT-TERM CREDIT AND CURRENT M
SHORT-TERM CREDIT AND CURRENT MATURITIES OF LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2015 | |
Long-term Debt, Current Maturities [Abstract] | |
SHORT-TERM CREDIT AND CURRENT MATURITIES OF LONG-TERM DEBT | NOTE 6:- SHORT-TERM CREDIT AND CURRENT MATURITIES OF LONG-TERM DEBT Banks: Annual interest rate at December 31 December 31, 2015 2015 2014 % US Dollars in thousands In NIS (linked to the Prime rate) 2.45% – 2.5 % 589 2,674 Current maturities of long-term debt from banks (Note 8) 686 48 1,275 2,722 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities, Current [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 7:- OTHER CURRENT LIABILITIES December 31, 2015 2014 US Dollars in thousands Accrued payroll including amounts due to government authorities 1,066 1,129 Provision for vacation and other employee benefits 1,455 1,416 Written put option (Note 1A) 526 587 Accrued expenses 600 871 Employees' severance benefits (Note 9D) 69 401 Provision for contingent liabilities (Note 10D) 363 298 Other liabilities 515 454 4,594 5,156 |
LONG-TERM DEBT, EXCLUDING CURRE
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES | 12 Months Ended |
Dec. 31, 2015 | |
Long-term Debt, Excluding Current Maturities, Alternative [Abstract] | |
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES | NOTE 8:- LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES Banks and others Annual interest rate at December 31 December 31, 2015 2015 2014 % US Dollars in thousands Linkage terms U.S. dollar 5 - 8.56 844 403 NIS - not linked 5 - 6 55 128 Euro 2.17 394 659 NIS - linked to the Prime rate P+0.9 2,906 1,157 4,199 2,347 Less - current maturities (banks and others) (1,294 ) (509 ) 2,905 1,838 Minimum future payments at December 31, 2015 due under the long-term (including capital lease) debt are as follows: Long-term loan First year 1,337 Second year 1,029 Third year 934 Forth year 846 Fifth year and thereafter 53 4,199 Long-term debt includes capital leases in the amounts of $1,464 and $ 1,190 and current maturities of long-term debt of $492 and $431 at December 31, 2015 and 2014, respectively. The current maturities are classified to the trade payable balance as of December 31, 2015 and 2014, respectively. In April 2014, the Company signed a new financial undertakings letter with one bank and in May 2014 with another bank, effective for the financial statements for the year ended December 31, 2013 and onward. The Company is required to maintain certain financial covenants, including: (i) adjusted shareholders' equity (excluding certain intangible and other assets) equal to the greater of $ 4.5 million or 17% of its consolidated total assets; and (ii) a debt service ratio of 1.5. Debt service ratio is defined as the ratio of EBITDA to current maturities of long-term debt plus interest expenses. As of December 31, 2015, the Company was in compliance with such covenants. As to pledges securing the loans, see Note 10a. |
EMPLOYEE SEVERANCE BENEFITS
EMPLOYEE SEVERANCE BENEFITS | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE SEVERANCE BENEFITS | NOTE 9:- EMPLOYEE SEVERANCE BENEFITS Under Israeli law and labor agreements, the Parent is required to make severance and pension payments to retired, dismissed or resigned employees. a. The Parent has an approval from the Israeli Ministry of Labor and Social Welfare, pursuant to the terms of Section 14 of the Israeli Severance Pay Law, 1963, according to which the Parent's current deposits in the pension fund and/or with the insurance company exempt it from any additional severance obligations to the employees for whom such depository payments were made. b. The Parent's employees participate in a pension plan or individual insurance policies that are purchased by them. The Parent's liability for severance obligations for the employees employed for one year or more is discharged by making regular deposits with a pension fund or the insurance policies. Under Israeli law, there is no liability for severance pay in respect of employees who have not completed one year of employment. The amount deposited with the pension fund or the insurance policies is based on salary components as prescribed in the employment agreement. The custody and management of the amounts so deposited are independent of the Parent and accordingly, such amounts funded and related liabilities are not reflected in the balance sheet. For non-management employees, the Parent deposits 72% of its liability for severance obligations with a pension fund for such employees, and upon completion of one year of employment with the Parent, it makes a one-time deposit with the pension fund for the remaining balance. In 2011, the Parent, pursuant to Section 14 of the Israeli Severance Pay Law, made a transfer of funds from a central severance fund to individual funds in the name of the employees for the unfunded liability and discharged its liability in respect of such employees' severance pay. c. Kubatronik owns an insurance policy and makes regular deposits with an insurance company for securing pension rights on behalf of one of its former employees. Such amounts deposited and the related liabilities are reflected in the consolidated balance sheet. In respect of its other employees, Kubatronik does not make any deposits for pension or retirement rights, since such deposits are not required under German law. d. Total liability for employees' severance benefits as at December 31, 2015 amounted to $ 217. The current portion amounting to $ 17 is recorded in the short-term liabilities. Expenses recorded in respect of the unfunded liability for employee severance payments for the years ended December 31, 2015, 2014, and 2013 were $ 40, $ 284 and $ 231, respectively. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 10:- COMMITMENTS AND CONTINGENT LIABILITIES a. Pledges: 1. The Company has pledged certain items of its equipment and the rights to any insurance claims on such items to secure its indebtedness to banks, as well as placed floating liens on all of its remaining assets in favor of the banks. 2. The Company has pledged certain items of its equipment as a guarantee for the implementation of its benefited enterprise for tax proposes. The Company has determined that it is in compliance with the conditions of the approval (see Note 14a). 3. The Company has also pledged machines to secure its indebtedness to certain suppliers that provided financing for such equipment. b. Operating leases and other agreements: 1. The premises occupied by the Parent and Kubatronik are leased under two operating agreements that expire in December 2022 and May 2019, respectively. 2. The Parent has signed several lease and maintenance agreements for production equipment with suppliers of equipment and software. Of such agreements, the main principal agreement expires in September 2017. 3. Several production machines are leased by Kubatronik under operating agreements which will expire in May 2019. 4. The Parent has an obligation to purchase inventory that is held by a supplier in the total amount of $412. 5. The Parent's motor vehicles are leased under operating lease agreements, mainly for three-year terms. 6. Minimum future payments at December 31, 2015 due under the above agreements over the next five years and thereafter are as follows: Premises leases Other agreements US Dollars in thousands First year 1,007 755 Second year 258 467 Third year 109 165 Fourth year 36 112 Fifth year and thereafter 108 101 1,518 1,600 Payments required under these agreements are charged to expense by the straight-line method over the periods of the respective leases. Expenses recorded under these agreements for the years ended December 31, 2015, 2014, and 2013 were $1,463, $ 1,480 and $ 1,471, respectively. c. Indemnification agreement: The Parent entered into an indemnification agreement with its directors and officers and undertook to enter into the same agreement with future directors and officers, for losses incurred by a director or officer. Such indemnification amount is limited to the lesser of $ 2,000 or 25% of the Parent's shareholders' equity. The Israeli Companies Law provides that an Israeli company cannot exculpate an officer from liability with respect to a breach of his or her duty of loyalty. If permitted by its articles of association, a company may exculpate in advance an officer from his or her liability to the company, in whole or in part, with respect to a breach of his or her duty of care. However, a company may not exculpate in advance a director from his or her liability to the company with respect to a breach of his duty of care with respect to distributions. The Company's articles of association allow it to exculpate any officer from his or her liability for breach of duty of care, to the maximum extent permitted by law, before or after the occurrence giving rise to such liability. The Parent provided an exculpation letter to each of its directors and officers, and agreed to provide the same to future officers. d. Contingent Liabilities: Environmental Related Matters In January 2014, July 2014, September 2015 and February 2016, the Parent received notices from Meitav, the water company of the Petach Tikva municipality, requiring payment of fees totaling $980 excluding VAT, for discharges of industrial wastewater allegedly not meeting the applicable standards into the municipal sewage system. The payment demands were made on the basis of four samplings conducted by Meitav in its premises during the years 2013 through 2015. In December 2015, the Parent's new wastewater treatment facility was completed. The first sample of the plant's wastewater, tested by the Israeli Ministry for Environmental Protection (the "Ministry") in January 2016, indicated that the Parent was in compliance with the environmental laws and regulations. If the Parent is found to be in violation of environmental laws, then in addition to fines, it could be liable for damages, costs of remedial actions and a range of potential penalties, and could also be subject to a shutting down of its factory. Such sanctions could have a material adverse effect on its business, financial condition and results of operations. In connection with the change of control of the Parent that resulted from Nistec’s acquisition of a controlling stake in the Parent, Israeli law requires it to obtain a new business permit in order to continue operating its business. The Parent has submitted an application for this permit, but has not yet received the new permit. The new permit is expected to be subject to certain conditions, especially certain conditions imposed by the Ministry . If the Parent is unable to comply with such requirements, certain sanctions may be imposed, including significant fines and possibly an order shutting down the factory. In October 2015, the Parent filed an application for an emissions permit with the Ministry. In January 2016, the Parent received a notice of non-compliance from the Ministry, stating that the application was incomplete and that the Parent is in breach of the Clean Air Law, 5768-2008 and the Licensing of Businesses Law, 5728-1968. Following communications with the Ministry, the Parent committed to submit an amended application by April 2016. Employee Related Matters Three lawsuits were filed against the Parent in May 2008, in December 2014 and in August 2015 by three employees alleging that they had suffered personal injuries during their employment and are seeking aggregate financial compensation of approximately $173 for past damages and additional amounts for future lost income, pain and suffering as the court may determine. Four other employees notified the Parent, between January 2011 and July 2013, that they allegedly suffered personal injuries during their employment with the Company. Of these four employees, one is seeking compensation of $150 and the others did not state their claim amount. The Parent submitted all these claims to its insurance company, which informed the Parent that it is reviewing the statements of claim without prejudicing its rights to deny coverage. In September 2015, in November 2015, in January 2016, and in February 2016, four former employees have filed law suits seeking additional payments in connection with their employment with the Parent and subsequent termination. The aggregate amount claimed is approximately $1.0 million. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 11:- SHAREHOLDERS' EQUITY Authorized, issued and outstanding share capital in historical terms is as follows: Authorized Issued and outstanding December 31 December 31, 2015 and 2014 2015 2014 Number of shares Ordinary shares of par value NIS 0.6 each 50,000,000 10,142,762 10,142,762 Amount in US$ Ordinary shares of par value NIS 0.6 each 1,985,280 1,985,280 |
ENTITY WIDE DISCLOSURES
ENTITY WIDE DISCLOSURES | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
ENTITY WIDE DISCLOSURES | NOTE 12:- ENTITY WIDE DISCLOSURES a. Customers who accounted for over 10% of the total consolidated revenues: Year ended December 31, 2015 2014 2013 US Dollars in thousands Customer A - Sales of manufactured products 17.9 % 20.6 % 18.4 % b. Revenues by geographic areas: Year ended December 31, 2015 2014 2013 US Dollars in thousands Israel 20,647 24,807 27,992 Europe 8,382 9,383 10,623 North America 7,504 5,892 6,227 India 4,135 5,240 3,294 Rest of the world 682 1,304 2,099 41,350 46,626 50,235 c. Fixed assets, net by geographic areas: Year ended December 31, 2015 2014 2013 US Dollars in thousands Israel 9,388 9,161 9,534 Europe 675 901 561 North America 4 8 13 10,067 10,070 10,108 |
FINANCIAL EXPENSES, NET
FINANCIAL EXPENSES, NET | 12 Months Ended |
Dec. 31, 2015 | |
Interest Expense [Abstract] | |
FINANCIAL EXPENSES, NET | NOTE 13:- FINANCIAL EXPENSES, NET Year ended December 31, 2015 2014 2013 US Dollars in thousands Interest and exchange rate expenses on long-term loans 134 95 106 Expenses on short-term credit and bank charges 143 54 284 Effect of exchange rate differences on other expenses and net loss from derivative instruments (59 ) 117 19 Other financing expenses (income), net 41 90 30 259 356 439 The Company uses forward contracts and options to manage some of its foreign exchange rate exposures. Such transactions were not designated as hedging instruments for accounting purposes. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | NOTE 14:- TAXES ON INCOME a. Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (the "Law"): 1. Beneficiary enterprise: The Parent has production facilities in Israel qualified as "Beneficiary Enterprises" in accordance with the Law, as amended in 2005, which provides certain tax benefits to investment programs of an "Approved Enterprise" or "Beneficiary Enterprise." The Parent's first Beneficiary Enterprise was converted from a previously "Approved Enterprise" program pursuant to the approval of the Israel Tax Authority that the Parent received in September 2006. In the past, certain of the Parent's production facilities were granted approved enterprise status pursuant to the Law; however, the benefit periods for such approved enterprises expired in 2005. Additionally, the Parent has elected 2012 as the year of election. The income generated by the "Beneficiary Enterprise" is exempt from tax over a period of two years, beginning with the year in which the Parent first had taxable income. The period of tax benefit of the first Beneficiary Enterprise has not yet commenced and will expire not later than 2017. The period of tax benefit of the second beneficiary enterprise has not yet commenced and will expire not later than 2024. The benefits are contingent upon compliance with the terms of the Encouragement Law (export rate, etc.). The Parent is currently in compliance with these terms. A company having a Beneficiary Enterprise that distributes a dividend from exempt income, will be required in the tax year of the dividend distribution to pay company tax on the amount of the dividend distributed (including the company tax required as a result of the distribution) at the tax rate that would have been applicable to it in the year the income was produced if it had not been exempt from tax. The Parent did not have exempt income from the above "Beneficiary Enterprise". 2. Amendment to the Law: On December 29, 2010 the Knesset approved the Economic Policy Law for 2011-2012, which includes an amendment to the Law for the Encouragement of Capital Investments – 1959 (hereinafter – "the Amendment"). The Amendment is effective from January 1, 2011 and its provisions apply to preferred income derived or accrued in 2011 and thereafter by a preferred company, per the definition of these terms in the Amendment. Companies can choose not to be included in the scope of the amendment to the Encouragement Law and to stay in the scope of the law before its amendment until the end of the benefits period of its approved/beneficiary enterprise. The 2012 tax year was the last year companies could have chosen as the year of election, providing that the minimum qualifying investment began in 2010. The Amendment provides that only companies in Development Area A will be entitled to the grants track and that they will be entitled to receive benefits under this track and under the tax benefits track at the same time. In addition, the existing tax benefit tracks were eliminated (the tax exempt track, the "Ireland" track and the "Strategic" track) and two new tax tracks were introduced in their place, a preferred enterprise and a special preferred enterprise, which mainly provide a uniform and reduced tax rate for all the company's income entitled to benefits, such as: for a preferred enterprise – in the 2011-2012 tax years – a tax rate of 10% for Development Area A and of 15% for the rest of the country, in the 2013-2014 tax years – a tax rate of 7% for Development Area A and of 12.5% for the rest of the country, and as from the 2015 tax year – 6% for Development Area A and 12% for the rest of the country. On August 5, 2013 the Knesset passed the Law for the Change in National Priorities (Legislative Amendments for Achieving Budget Objectives in the Years 2013 and 2014) – 2013, which cancelled the planned tax reduction so that as from the 2014 tax year the tax rate on preferred income will be 9% for Development Area A and 16% for the rest of the country. The Amendment also provides that no income tax will apply to a dividend distributed out of preferred income to a shareholder that is a company, for both the distributing company and the shareholder. A tax rate of 15% shall apply to a dividend distributed out of preferred income to an individual shareholder or foreign resident, subject to double taxation prevention treaties. The Law for the Change in National Priorities (Legislative Amendments for Achieving Budget Objectives in the Years 2013 and 2014) – 2013 raised to 20% the tax rate on a dividend distributed to an individual and foreign resident out of preferred income as from January 1, 2014. Furthermore, the Amendment provides relief with respect to the non-payment of tax on a dividend received by an Israeli company from profits of an approved/alternative/beneficiary enterprise that accrued in the benefits period according to the version of the law before its amendment, if the company distributing the dividend notifies the tax authorities by June 30, 2015 that it is applying the provisions of the Amendment and the dividend is distributed after the date of the notice (hereinafter – "the relief"). Furthermore, a distribution from profits of the exempt enterprise will be subject to tax by the distributing company. The Parent complies with the conditions provided in the amendment to the Law for the Encouragement of Capital Investments for inclusion in the scope of the tax benefits track. The Parent intends to implement the Amendment in future tax years. Therefore, the deferred tax balance as of December 31, 2013 was calculated based on the rate provided by the Amendment. b. Corporate tax rate: On August 5, 2013, the Knesset passed the Law for the Change in National Priorities (Legislative Amendments for Achieving Budget Objectives in the Years 2013 and 2014) - 2013, by which, among other things, the corporate tax rate would be raised by 1.5% to a rate of 26.5% as from 2014. On January 4 The deferred tax balances included in the financial statements as of December 31, 2015 are calculated according to the tax rates that were in effect as of the reporting date and do not take into account the potential effects of the reduction in the tax rate. Said effects will be included in the financial statements that will be issued starting from the date on which the new tax rate is substantially enacted, namely in the first quarter of 2016. Current taxes for the reported periods are calculated according to the tax rates presented above. c. Tax losses and tax credits carryforwards: As of December 31, 2015, the Parent's tax loss carryforwards were approximately $14.6 million of operating losses and $ 4.2 million of capital losses and Kubatronik's tax loss carryforwards were Euro 1.5 million ($ 1.7 million) for corporate tax and Euro 1.5 million ($ 1.7 million) for municipal corporate tax. Additionally, the Parent's tax credits carryforward was $ 905. The Parent's tax loss carryforward and tax credits carryforward do not have expiration dates. Kubatronik's tax loss carryforward may be subject to restrictions if a change of control in Kubatronik occurs. d. Income tax assessments: The Parent files its income tax return in Israel. Kubatronik and Eltek Europe file their income tax returns in Germany and Eltek USA files its income tax return in the United States. In Israel, the Parent has received final tax assessments through the 1995 tax year. Assessments through the 2010 tax year are considered final due to statute of limitations. The Israeli tax returns of the Parent may be audited by the Israeli Tax Authorities for the tax years beginning in 2011. Kubatronik and Eltek Europe have received final tax assessments through the 2011 tax year. The tax returns of Kubatronik and Eltek Europe remain subject to audit for the tax years beginning in 2012. The tax returns of Eltek USA remain subject to audit for the tax years beginning in 2010. The Parent's other foreign subsidiaries have not yet received any final tax assessments since their incorporation. e. Profit before tax and income tax expense (benefit) included in the consolidated statements of comprehensive income: Year ended December 31, 2015 2014 2013 US Dollars in thousands Profit (loss) before income tax expense: Israel 1,038 (483 ) 782 Foreign jurisdictions 206 (738 ) 24 1,244 (1,221 ) 806 Current tax expense (benefit): Israel (3 ) - (41 ) Foreign jurisdictions 72 19 78 69 19 37 Deferred taxes: Israel 149 1,581 (3,079 ) Foreign jurisdictions - 34 67 149 1,615 (3,012 ) Income tax expense (benefit) 218 1,634 (2,975 ) The deferred tax assets utilized in 2015 and in 2013 were $ 181 and $ 299 respectively. f. Reconciliation of the theoretical income tax expense (benefit) to the actual income tax expense: A reconciliation of the theoretical income tax expense (benefit), assuming all income is taxable at the statutory rates applicable in Israel, and the actual income tax expense, is as follows: Year ended December 31, 2015 2014 2013 US Dollars in thousands Profit (loss) before income tax expense (benefit) as reported in the consolidated statements of comprehensive income 1,244 (1,221 ) 806 Statutory tax rates 26.5 % 26.5 % 25 % Theoretical tax expense calculated 330 (324 ) 202 Other 36 182 (118 ) Changed in liability for undistributed income of subsidiaries 38 29 132 Change in valuation allowance (92 ) 1,724 (2,540 ) Adjustment to net loss carryforward - - 142 Change in effective corporate tax rates - - (757 ) Tax benefit arising from "Beneficiating and Preferred enterprises" (*) (109 ) 40 (70 ) Foreign tax rate differential in subsidiaries 15 (17 ) 34 Total (112 ) 1,958 (3,177 ) Income tax expense (benefit) 218 1,634 (2,975 ) g. Deferred tax assets and liabilities: Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and such amounts for income tax purposes. Significant components of the Company's deferred tax liabilities and assets are as follows: December 31, 2015 2014 US Dollars in thousands Deferred tax assets: Net operating loss carryforwards (in Israel) 2,350 2,532 Net operating loss carryforwards (outside Israel) 492 530 Capital loss carryforwards (in Israel) 1,110 1,113 Severance benefits 27 29 Provision for vacation pay 200 199 Tax credit carryforward 905 869 Allowance for doubtful accounts 14 10 Total gross deferred tax assets 5,098 5,282 Less valuation allowance (3,100 ) (3,192 )** Net deferred tax assets 1,998 2,090 ** Deferred tax liabilities: Undistributed income of subsidiaries (197 ) (156 )** Fixed assets - differences in depreciation (737 ) (721 ) Total gross deferred tax liabilities (934 ) (877 )** Net deferred tax assets 1,064 1,213 Despite the Company's accumulated profits in Israel during the years ended December 31, 2015 and 2014, the Company recorded a full valuation allowance for deferred tax assets with respect to its deferred tax assets in Israel due to uncertainty about its ability to utilize such losses in the future. During the year ended December 31, 2014 the Company recorded a tax expense of $1.6 million compared to a tax benefit of $3 million in 2013. In 2014, the Company reduced certain of its deferred tax assets due to changes in the PCB market conditions and increased uncertainty about its ability to utilize these tax assets in the foreseeable future. Such uncertainty results from a reduced demand for the Company's products, a change in the PCB buying patterns by domestic military customers, which shifted some PCB acquisitions overseas, increased competition coupled with reduced prices in the local market, on-going manufacturing challenges, and the possible devaluation of the US Dollar against the NIS, all of which may adversely affect the Company’s future profitability. Other tax expenses in 2014 were attributable to subsidiaries in the United States and Germany. In 2013, the Parent determined that the deferred tax assets were more-likely–than-not to be realized in future years, based on three years of consistent profits. Accordingly, the Company reversed the valuation allowance, in the amount of $ 2.5 million. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. Management considers the scheduled reversal of deferred tax liabilities, projected taxable income, and tax-planning strategies in making this assessment. The valuation allowance for deferred tax assets as of December 31, 2015 and 2014 was $3,100 and $ 3,192 respectively. The net change in the total valuation allowance for each of the years ended December 31, 2015, 2014 and 2013, was an increase (decrease) of $(192), $1,597 and $(2,540), respectively Certain comparative figures in Notes 14F and 14G have been changed to reflect changes in the deferred tax assets and liabilities and related valuation allowance in order to confirm with current period presentation. h. Accounting for uncertainty in income taxes: For the twelve-month periods ended December 31, 2015, 2014 and 2013, the Company did not have any unrecognized tax benefits and thus, no interest and penalties related to unrecognized tax benefits were recorded. In addition, the Company does not expect that the amount of unrecognized tax benefits will change significantly within the next twelve months. |
FINANCIAL INSTRUMENTS AND RISK
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT | NOTE 15:- FINANCIAL INSTRUMENTS AND RISK MANAGEMENT The Company measures its written put option (see Note 1A) at fair value. In accordance with ASC 820-10, foreign currency derivative contracts are classified within Level 2, because they are valued utilizing market observable inputs. The written put option is classified within Level 3 because it is valued using a B&S model which utilizes significant inputs that are unobservable in the market such as expected stock price volatility, risk-free interest rate and the dividend yield, and remaining period of time the options will be outstanding before they expire. The Company’s outstanding loans as of December 31, 2015 were received during 2014 and 2015, and are presented at book value. In addition to the above, the Company's financial instruments at December 31, 2015 and 2014, consisted of cash and cash equivalents, bank deposits, trade and other accounts receivable, other current assets, short-term credit provided by financial institutions, and trade and other payables. The carrying amounts of all the aforementioned financial instruments, at face value or cost plus accrued interest, approximate fair value due to the short maturity of these instruments. The changes in the Company's liabilities measured at fair value using significant unobservable inputs (Level 3) during the years ended December 31, 2015 and 2014, were changes in the fair value of the net written put option charged to financial expense in the Consolidated Statement of Comprehensive Income, of nil and $ 93, respectively, and translation adjustments included in financial income in the Consolidated Statement of Comprehensive Income of $ (59) and $ 60, respectively. These Consolidated Financial Statements do not include any nonrecurring fair value measurements relating to assets and liabilities for which the Company has adopted the provisions of ASC Topic 820. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY BALANCES AND TRANSACTIONS | NOTE 16:- RELATED PARTY BALANCES AND TRANSACTIONS The Company carries out transactions with related parties as detailed below. Until November 2013, the Company's principal shareholder was also the principal shareholder of an affiliated supplier. One of the Company's customers, Nistec, became a related party in November 2013. The Company sells products to Nistec, pays management fees to Nistec, purchases certain services from Nistec and shares certain expenses with Nistec, for services that it acquires jointly with Nistec. The Company's transactions with its related parties were carried out on an arm's-length basis. a. Balances with related parties: December 31, 2015 2014 US Dollars in thousands Trade accounts receivable 173 74 Trade accounts payable 37 32 b. Transactions with related parties: Year ended December 31, 2015 2014 2013 US Dollars in thousands Revenues 644 370 6 Cost of revenues (*) - - 3,402 Selling, general and administrative expenses 340 339 52 Insurance Expenditures - the Company may share with Nistec costs of insurance consulting and insurance premiums in the event the Company determines that a joint insurance policy with Nistec reduces the Company’s costs as compared to purchasing insurance separately. Insurance expenditures will be divided between the Company and Nistec as follows: (i) insurance consulting services costs will be divided in proportion to the insurance premiums paid by the Company and Nistec in the preceding year; (ii) the joint insurance premiums will be divided in proportions indicated by the insurer for each of the Company and Nistec, had they purchased the insurance separately. The Company will solicit updated insurance proposals at least bi-annually. The decision to enter into such a joint insurance policy with Nistec will be subject to the approval of the Audit Committee and the Board of Directors of Parent. Employees Social Activities - the Company may purchase social activities for the benefit of its employees together with Nistec. The cost of such activities will be divided between the Company and Nistec in accordance with the ratio of the number of Company's employees and Nistec employees to whom the applicable activity was directed, regardless of actual participation. Marketing Activities - the Company may purchase services together with Nistec. Marketing costs will be divided between the Company and Nistec as follows: (i) to the extent the portion of the marketing material applicable to the Company can be quantified, costs will be divided accordingly; (ii) in the event that such costs cannot be quantified, each of Nistec and the Company will bear 50% of the marketing costs. (*) The Company's purchases from such supplier accounted for 23.1% of its raw material costs in 201 |
ORGANIZATION AND SUMMARY OF S23
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | a. General: Eltek Ltd. ("the Parent") was organized in Israel in 1970, and the Parent's shares have been publicly traded on the NASDAQ Capital Market since 1997. Eltek Ltd. and its subsidiaries (see below) are collectively referred to as "the Company". The Company manufactures, markets and sells custom made printed circuit boards ("PCBs"), including high density interconnect, flex-rigid and multi-layered boards. The principal markets of the Company are in Israel, Europe and North America. The Company markets its product On August 19, 2013, the Parent entered into an agreement to issue and sell 3,532,655 of its ordinary shares, par value NIS 0.6 each, to Nistec Ltd. ("Nistec"), a private company organized under the laws of the State of Israel, for $ 4.2 million. Nistec is controlled by Yitzhak Nissan, who owns all of the shares of Nistec. Also, on August 19, 2013, Nistec purchased 1,589,440 of the Parent's ordinary shares from Merhav M.N.F. Ltd., a company owned by Mr. Yosef Maiman, which at the time held 24.1% of the Parent's outstanding ordinary shares. The total consideration paid by Nistec in the two transactions was $ 6.5 million, $ 2.3 directly to Merhav M.N.F Ltd. and $ 4.2 million to the Parent. Nistec financed a portion of those funds from a loan extended by Bank Leumi Le'Israel, and the shares that Nistec acquired constitute collateral for the loan. As a result of these transactions, which closed on November 1, 2013, Nistec acquired 50.5% of the Parent's ordinary shares on a fully diluted basis, and Nistec gained control of the Parent. Kubatronik Leiterplatten GmbH In June 2002, the Parent established a wholly-owned subsidiary, EN-Eltek Netherlands 2002 B.V. ("EN-Eltek"), for the purpose of the acquisition of Kubatronik Leiterplatten GmbH ("Kubatronik"). On June 10, 2002, the Parent acquired 76% of the shares of Kubatronik for € 2.6 million ($ 2.4 million as of the date of acquisition). The acquisition resulted in the recognition of goodwill in the amount of € 1.1 million ($ 1 million as of the date of acquisition) see Note 5. The Parent subsequently incurred a goodwill impairment of approximately $ 1 million and the goodwill balance was nil as of December 31, 2015 and December 31, 2014. Pursuant to the Kubatronik acquisition agreement, the seller has the right to require the Parent to purchase ("Put Option"), and the Parent has the right to require the Seller to sell to the Parent ("Call Option") the Seller's remaining 24% interest in Kubatronik. The options periods are until December 31, 2016, and are automatically extended for additional consecutive two-year periods unless otherwise notified in writing by either party upon at least six months prior notice. In May 2012, the seller exercised his option with respect to 3% of the shares of Kubatronik for approximately Euro 69 ($ 89) and reduced his share in Kubatronik from 24% to 21%. The exercise price for the seller's 21% interest in Kubatronik under the Put Option is Euro 483 ($ 587), and the exercise price for the seller's remaining holdings in Kubatronik under the Call Option is Euro 513 ($ 623). As of December 31, 2015 the option is presented at the maximum exercise price of $587 in the short term liabilities. Changes in fair value are recorded in the Consolidated Statement of Comprehensive Income. The fair value of the above options is calculated based on the Binomial model. Changes in fair value are recorded in the Consolidated Statement of Comprehensive income. See Note 15 Eltek USA Inc. In 2007, the Parent established a wholly-owned subsidiary, Eltek USA Inc. for the purpose of sales, promotion and marketing in the North American market. Eltek USA Inc. commenced operations in 2008. Eltek Europe GmbH In 2008, the Parent established a wholly-owned subsidiary, Eltek Europe GmbH for the purpose of sales, promotion and marketing to certain customers in Europe. Eltek Europe GmbH commenced operations in 2009. |
Basis of presentation | b. Basis of presentation: The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the accounts of the Parent and its subsidiaries. The Parent sells goods through its subsidiaries that function as distributors. All intercompany transactions and balances were eliminated in consolidation. The consolidated financial statements include the accounts of the Parent Company and its subsidiaries. Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation. Changes in the Parent Company's ownership interest with no change of control are treated as equity transactions, rather than step acquisitions or dilution gains or losses. Non-controlling interests in subsidiaries represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests. Losses are attributed to non-controlling interests even if they result in a negative balance of non-controlling interests in the consolidated statement of financial position. |
Functional and reporting currency | c. Functional and reporting currency: The Parent's functional currency is the New Israeli Shekel ("NIS"). Transactions denominated in foreign currencies are translated into NIS using the prevailing exchange rates at the date of the transaction. Gains and losses from the translation of foreign currency transactions are recorded in financial income or expenses. The Company's reporting currency is the U.S. dollar. Assets and liabilities are translated to the reporting currency using the exchange rate at the end of the year. Revenues and expenses are translated into the reporting currency using the average exchange rate for each quarter. Translation adjustments are reported separately as a component of accumulated other comprehensive income. |
Translation of foreign entity operations | d. Translation of foreign entity operations: The financial statements of foreign subsidiaries are translated into the Parent's functional currency as follows: 1. Assets and liabilities are translated according to the exchange rate on the consolidated balance sheet date including goodwill arising from the acquisition of the subsidiary. 2. Income and expense items are translated according to the weighted average exchange rate on a quarterly basis. 3. The resulting exchange rate differences are classified as a separate item in shareholders' equity. |
Exchange rates and linkage bases | e. Exchange rates and linkage bases: 1. Balances linked to the Israeli Consumer Price Index ("CPI") are recorded pursuant to contractual linkage terms of the specific assets and liabilities. 2. Details of the CPI and the representative exchange rates are as follows: Exchange rate Exchange rate Israeli CPI of one US dollar of one Euro Points NIS NIS December 31, 2015 221.13 3.902 4.2468 December 31, 2014 219.80 3.889 4.7246 December 31, 2013 220.20 3.471 4.7819 % December 31, 2015 0.6 0.3 (10.1 ) December 31, 2014 (0.2 ) 12.2 (1.2 ) December 31, 2013 1.8 (7.02 ) (2.82 ) |
Use of estimates | f. Use of estimates: The preparation of the consolidated financial statements in accordance with U.S. GAAP requires the management of the Company to make estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from these estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowance for doubtful accounts, valuation of derivatives, deferred tax assets, inventory, goodwill, put/call options, income tax uncertainties and other contingencies. |
Cash and cash equivalents | g. Cash and cash equivalents: Cash and cash equivalents are highly-liquid investments which include short-term bank deposits with an original maturity of three months or less from deposit date and which are not restricted by a lien. |
Trade accounts receivable | h. Trade accounts receivable: Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. The allowance for doubtful accounts receivable is calculated on the basis of specific identification of customer balances. The allowance is determined based on management's estimate of the aged receivable balance considered uncollectible, based on historical experience, aging of the receivable and information available about specific customers, including their financial condition and volume of their operations. The activity in the allowance for doubtful accounts for the three years ended December 31, 2015 is as follows: Year ended December 31, 2015 2014 2013 US Dollars in thousands Opening balance 62 82 95 Additions during the year 19 21 - Write off of allowance - (32 ) (9 ) Foreign currency translation adjustments 5 (9 ) (4 ) Closing balance 86 62 82 |
Inventories | i. Inventories: Inventories are recorded at the lower of cost or market value. Cost is determined on the weighted average basis for raw materials. For work in progress and finished goods, the cost is determined pursuant to calculation of accumulated actual direct and indirect costs. In the years ended December 31, 2013, 2014 and 2015, the Company wrote off inventories in the amount of $219, $519 and $376, respectively. |
Assets held for employees' severance payments | j. Assets held for employees' severance payments: Assets held for employees' severance payments represent contributions to insurance policies and deposits to a central severance pay fund, and are recorded at their current redemption value. |
Fixed assets | k. Fixed assets: Fixed assets are stated at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the assets at the following annual rates: % Machinery and equipment 5-33 Leasehold improvements 6-14 Motor vehicles 15 Office furniture and equipment 6-33 Machinery and equipment purchased under capital lease arrangements are recorded at the present value of the minimum lease payments at lease inception. Such assets and leasehold improvements are depreciated and amortized respectively, using the straight-line method over the shorter of the lease term or estimated useful life of the asset. Impairment of long-lived assets: Long-lived assets, such as property, plant, and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. As of December 31, 2015 and 2014, the Company had equipment under capital leases of $2.5 and $1.4 million respectively, net of accumulated depreciation of $174 and $215. The future minimum payments under capital leases at December 31, 2015 were as follows: Long-term 2016 651 2017 344 2018 249 2019 185 2020 35 Total minimum capital lease payments 1,464 |
Intangible assets | l. Intangible assets: Intangible assets are amortized over their useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up, in accordance with ASC 350, "Intangibles - Goodwill and Other." The Parent acquired software technology during 2014-2015 which is expected to be amortized starting in 2016. Intangible assets are stated at cost. Depreciation is computed by the straight-line method over the estimated useful life of 10 years. |
Goodwill | m. Goodwill: Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is reviewed for impairment at least annually. In September 2011, the Financial Accounting Standards Board ("FASB") issued ASU 2011-08, Testing Goodwill for Impairment, which provides an entity the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the two-step goodwill impairment test. If this is the case, the two-step goodwill impairment test is required. If it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. The Company adopted this guidance in 2011. If the two-step goodwill impairment test is required, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying amount, step two does not need to be performed. The Company performs an annual impairment review of goodwill at the beginning of the following year, and when a triggering event occurs between annual impairment tests. For 2013, the Company performed a qualitative assessment of goodwill and determined that it is not more-likely-than-not that the fair values of its reporting units are less than the carrying amounts. Accordingly, no impairment loss was recorded in 2013. Due to ongoing losses of Kubatronik, the Company recorded impairment losses of $80 in 2014. As of December 31, 2015, the Company had no goodwill balance. |
Income taxes | n. Income taxes: Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more-likely–than- not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. |
Revenue recognition | o. Revenue recognition: The Company recognizes revenue upon shipment of the product and after the customer takes ownership and assumes risk of loss, collection of the corresponding receivable is probable, persuasive evidence of an arrangement exists, and the sales price is fixed or determinable. - |
Earnings per ordinary share | p. Earnings per ordinary share: Diluted earnings per ordinary share calculation is similar to basic earnings per share except that the weighted average of ordinary shares outstanding is increased to include the number of additional ordinary shares that would have been outstanding if the outstanding options had been exercised, to the extent that these options had a diluted effect. The Company does not presently have such dilutive instruments. |
Derivative financial instruments | q. Derivative financial instruments: The Company may utilize derivative financial instruments principally to manage its exposure resulting from fluctuations in foreign currency exchange rates. The Company holds put/call options with the minority shareholder of Kubatronik for the purchase/sale of the minority holding in Kubatronik (see Note 15). Changes in fair value are recognized in the consolidated statements of comprehensive income as a financing item. The fair value of derivative financial instruments is determined on the basis of their market values or the quotations of financial institutions. In the absence of a market value or financial institution quotation the fair value is determined on the basis of a valuation model. |
Concentration of credit risk | r. Concentration of credit risk: Financial instruments that may subject the Company to significant concentrations of credit risk consist principally of cash and trade accounts receivable. Cash is deposited with major financial institutions in Israel, Europe and the United States. The Company performs ongoing credit evaluations of the financial condition of its customers. The risk of collection associated with trade receivables is reduced by the large number and geographical dispersion of the Company's customer base, and the Company's policy of obtaining credit evaluations of the financial condition of certain customers, requiring collateral or security with respect to certain receivables, or purchase of insurance for certain other receivables. |
Research and development costs | s. Research and development costs: Research and development costs incurred in the process of developing product improvements or new products, are charged to expenses as incurred. |
Commitments and contingencies | t. Commitments and contingencies: Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. |
Fair value measurements | u. Fair value measurements: The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: · Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. · Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. · Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. See Note 15. |
Recently issued accounting standards | v. Recently issued accounting standards: In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern ("ASU 2014-15"). ASU 2014-15 requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued. If such conditions or events exist, an entity should disclose that there is substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued. Disclosure should include the principal conditions or events that raise substantial doubt, management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations, and management’s plans that are intended to mitigate those conditions or events. ASU 2014-15 will be effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and prior interim periods and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. The Company early adopted this standard in the fourth quarter of 2015 on a prospective basis. |
ORGANIZATION AND SUMMARY OF S24
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Exchange Rates And Linkage Bases | Details of the CPI and the representative exchange rates are as follows: Exchange rate Exchange rate Israeli CPI of one US dollar of one Euro Points NIS NIS December 31, 2015 221.13 3.902 4.2468 December 31, 2014 219.80 3.889 4.7246 December 31, 2013 220.20 3.471 4.7819 % December 31, 2015 0.6 0.3 (10.1 ) December 31, 2014 (0.2 ) 12.2 (1.2 ) December 31, 2013 1.8 (7.02 ) (2.82 ) |
Activity In The Allowance For Doubtful Accounts | The activity in the allowance for doubtful accounts for the three years ended December 31, 2015 is as follows: Year ended December 31, 2015 2014 2013 US Dollars in thousands Opening balance 62 82 95 Additions during the year 19 21 - Write off of allowance - (32 ) (9 ) Foreign currency translation adjustments 5 (9 ) (4 ) Closing balance 86 62 82 |
Fixed Assets Depreciation Rates | Fixed assets are stated at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the assets at the following annual rates: % Machinery and equipment 5-33 Leasehold improvements 6-14 Motor vehicles 15 Office furniture and equipment 6-33 |
Schedule of Future Minimum Payments for Assets Held Under Capital Lease | The future minimum payments under capital leases at December 31, 2015 were as follows: Long-term 2016 651 2017 344 2018 249 2019 185 2020 35 Total minimum capital lease payments 1,464 |
CASH AND CASH EQUIVALENTS (Tabl
CASH AND CASH EQUIVALENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Cash and Cash Equivalents [Abstract] | |
Schedule Of Cash and Cash Equivalents | December 31, 2015 2014 US Dollars in thousands Denominated in U.S. dollars 537 773 Denominated in NIS 362 150 Denominated in Euro 139 206 1,038 1,129 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory, Net [Abstract] | |
Schedule Of Inventories | December 31, 2015 2014 US Dollars in thousands Raw materials 1,928 1,954 Work-in-process 1,844 1,686 Finished products 678 1,030 4,450 4,670 |
FIXED ASSETS, NET (Tables)
FIXED ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule Of Net Fixed Assets | December 31, 2015 2014 US Dollars in thousands Cost: Machinery and equipment 35,604 36,735 Leasehold improvements 8,525 8,542 Motor vehicles 45 45 Office furniture and equipment 1,356 1,472 45,530 46,794 Accumulated depreciation: Machinery and equipment (27,489 ) (28,896 ) Leasehold improvements (6,695 ) (6,469 ) Motor vehicles (35 ) (33 ) Office furniture and equipment (1,244 ) (1,326 ) (35,463 ) (36,724 ) Depreciated cost 10,067 10,070 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule Of Goodwill | Changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2014 are as follows: December 31, 2015 2014 US Dollars in thousands Balance at the beginning of the year - 75 Impairment on goodwill - (80 ) Effect of translation adjustments - 5 - - |
SHORT-TERM CREDIT AND CURRENT29
SHORT-TERM CREDIT AND CURRENT MATURITIES OF LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Long-term Debt, Current Maturities [Abstract] | |
Schedule Of Short-Term Credit And Current Maturities Of Long-Term Debt | Annual interest rate at December 31 December 31, 2015 2015 2014 % US Dollars in thousands In NIS (linked to the Prime rate) 2.45% – 2.5 % 589 2,674 Current maturities of long-term debt from banks (Note 8) 686 48 1,275 2,722 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities, Current [Abstract] | |
Schedule Of Other Current Liabilities | December 31, 2015 2014 US Dollars in thousands Accrued payroll including amounts due to government authorities 1,066 1,129 Provision for vacation and other employee benefits 1,455 1,416 Written put option (Note 1A) 526 587 Accrued expenses 600 871 Employees' severance benefits (Note 9D) 69 401 Provision for contingent liabilities (Note 10D) 363 298 Other liabilities 515 454 4,594 5,156 |
LONG-TERM DEBT, EXCLUDING CUR31
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Long-term Debt, Excluding Current Maturities, Alternative [Abstract] | |
Schedule Of Long-Term Debt | Banks and others Annual interest rate at December 31 December 31, 2015 2015 2014 % US Dollars in thousands Linkage terms U.S. dollar 5 - 8.56 844 403 NIS - not linked 5 - 6 55 128 Euro 2.17 394 659 NIS - linked to the Prime rate P+0.9 2,906 1,157 4,199 2,347 Less - current maturities (banks and others) (1,294 ) (509 ) 2,905 1,838 |
Schedule Of Maturities Of Long-Term Debt (Including Capital Lease) | Minimum future payments at December 31, 2015 due under the long-term (including capital lease) debt are as follows: Long-term loan First year 1,337 Second year 1,029 Third year 934 Forth year 846 Fifth year and thereafter 53 4,199 |
COMMITMENTS AND CONTINGENT LI32
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Minimum Future Payments Due Under Operating Leases | Minimum future payments at December 31, 2015 due under the above agreements over the next five years and thereafter are as follows: Premises leases Other agreements US Dollars in thousands First year 1,007 755 Second year 258 467 Third year 109 165 Fourth year 36 112 Fifth year and thereafter 108 101 1,518 1,600 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Authorized, Issued And Outstanding Share Capital | Authorized, issued and outstanding share capital in historical terms is as follows: Authorized Issued and outstanding December 31 December 31, 2015 and 2014 2015 2014 Number of shares Ordinary shares of par value NIS 0.6 each 50,000,000 10,142,762 10,142,762 Amount in US$ Ordinary shares of par value NIS 0.6 each 1,985,280 1,985,280 |
ENTITY WIDE DISCLOSURES (Tables
ENTITY WIDE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Customers Who Accounted For Over 10% Of The Total Consolidated Revenues | Customers who accounted for over 10% of the total consolidated revenues: Year ended December 31, 2015 2014 2013 US Dollars in thousands Customer A - Sales of manufactured products 17.9 % 20.6 % 18.4 % |
Revenues By Geographic Areas | Revenues by geographic areas: Year ended December 31, 2015 2014 2013 US Dollars in thousands Israel 20,647 24,807 27,992 Europe 8,382 9,383 10,623 North America 7,504 5,892 6,227 India 4,135 5,240 3,294 Rest of the world 682 1,304 2,099 41,350 46,626 50,235 |
Assets By Geographic Areas | Fixed assets, net by geographic areas: Year ended December 31, 2015 2014 2013 US Dollars in thousands Israel 9,388 9,161 9,534 Europe 675 901 561 North America 4 8 13 10,067 10,070 10,108 |
FINANCIAL EXPENSES, NET (Tables
FINANCIAL EXPENSES, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Interest Expense [Abstract] | |
Schedule Of Financial Expenses, Net | Year ended December 31, 2015 2014 2013 US Dollars in thousands Interest and exchange rate expenses on long-term loans 134 95 106 Expenses on short-term credit and bank charges 143 54 284 Effect of exchange rate differences on other expenses and net loss from derivative instruments (59 ) 117 19 Other financing expenses (income), net 41 90 30 259 356 439 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Profit Before Income Tax Expense (Benefit) Included In The Statement Of Operations | Profit before tax and income tax expense (benefit) included in the consolidated statements of comprehensive income: Year ended December 31, 2015 2014 2013 US Dollars in thousands Profit (loss) before income tax expense: Israel 1,038 (483 ) 782 Foreign jurisdictions 206 (738 ) 24 1,244 (1,221 ) 806 Current tax expense (benefit): Israel (3 ) - (41 ) Foreign jurisdictions 72 19 78 69 19 37 Deferred taxes: Israel 149 1,581 (3,079 ) Foreign jurisdictions - 34 67 149 1,615 (3,012 ) Income tax expense (benefit) 218 1,634 (2,975 ) |
Reconciliation Of The Theoretical Income Tax Expense To The Actual Income Tax Expense | A reconciliation of the theoretical income tax expense (benefit), assuming all income is taxable at the statutory rates applicable in Israel, and the actual income tax expense, is as follows: Year ended December 31, 2015 2014 2013 US Dollars in thousands Profit (loss) before income tax expense (benefit) as reported in the consolidated statements of comprehensive income 1,244 (1,221 ) 806 Statutory tax rates 26.5 % 26.5 % 25 % Theoretical tax expense calculated 330 (324 ) 202 Other 36 182 (118 ) Changed in liability for undistributed income of subsidiaries 38 29 132 Change in valuation allowance (92 ) 1,724 (2,540 ) Adjustment to net loss carryforward - - 142 Change in effective corporate tax rates - - (757 ) Tax benefit arising from "Beneficiating and Preferred enterprises" (*) (109 ) 40 (70 ) Foreign tax rate differential in subsidiaries 15 (17 ) 34 Total (112 ) 1,958 (3,177 ) Income tax expense (benefit) 218 1,634 (2,975 ) |
Deferred Tax Assets And Liabilities | Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and such amounts for income tax purposes. Significant components of the Company's deferred tax liabilities and assets are as follows: December 31, 2015 2014 US Dollars in thousands Deferred tax assets: Net operating loss carryforwards (in Israel) 2,350 2,532 Net operating loss carryforwards (outside Israel) 492 530 Capital loss carryforwards (in Israel) 1,110 1,113 Severance benefits 27 29 Provision for vacation pay 200 199 Tax credit carryforward 905 869 Allowance for doubtful accounts 14 10 Total gross deferred tax assets 5,098 5,282 Less valuation allowance (3,100 ) (3,192 )** Net deferred tax assets 1,998 2,090 ** Deferred tax liabilities: Undistributed income of subsidiaries (197 ) (156 )** Fixed assets - differences in depreciation (737 ) (721 ) Total gross deferred tax liabilities (934 ) (877 )** Net deferred tax assets 1,064 1,213 |
RELATED PARTY BALANCES AND TR37
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Balances And Transactions | a. Balances with related parties: December 31, 2015 2014 US Dollars in thousands Trade accounts receivable 173 74 Trade accounts payable 37 32 b. Transactions with related parties: Year ended December 31, 2015 2014 2013 US Dollars in thousands Revenues 644 370 6 Cost of revenues (*) - - 3,402 Selling, general and administrative expenses 340 339 52 Insurance Expenditures - the Company may share with Nistec costs of insurance consulting and insurance premiums in the event the Company determines that a joint insurance policy with Nistec reduces the Company’s costs as compared to purchasing insurance separately. Insurance expenditures will be divided between the Company and Nistec as follows: (i) insurance consulting services costs will be divided in proportion to the insurance premiums paid by the Company and Nistec in the preceding year; (ii) the joint insurance premiums will be divided in proportions indicated by the insurer for each of the Company and Nistec, had they purchased the insurance separately. The Company will solicit updated insurance proposals at least bi-annually. The decision to enter into such a joint insurance policy with Nistec will be subject to the approval of the Audit Committee and the Board of Directors of the Company (*) The Company's purchases from such supplier accounted for 23.1% of its raw material costs in 2013. |
ORGANIZATION AND SUMMARY OF S38
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) $ / shares in Units, € in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Apr. 30, 2012 | Jan. 31, 2012USD ($) | Jan. 31, 2012EUR (€) | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2015EUR (€)shares | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||||
Business acquisition, Consideration transferred | $ 6,500 | ||||||
Estimated useful life | 10 years | 10 years | |||||
Impairment on goodwill | $ 80 | ||||||
Goodwill | $ 75 | ||||||
Income tax position measurement and recognition, Likelihood of position being realized, Minimum percentage | 50.00% | 50.00% | |||||
Inventory writedowns | $ 376 | $ 519 | $ 219 | ||||
Kubatronik [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Business acquisition date | Jun. 10, 2002 | Jun. 10, 2002 | |||||
Business acquisition, Percentage acquired | 76.00% | ||||||
Business acquisition, Consideration transferred | $ 89 | $ 2,400 | |||||
Increase due to increase in holding | 1,000 | ||||||
Cumulative impairment of goodwill | $ 1,000 | ||||||
Automatic consecutive extension period for put and call options, years | 2 years | 2 years | |||||
Prior notice cancellation period for put and call options, months | 6 months | 6 months | |||||
Remaining interest of seller, percentage | 24.00% | 21.00% | 21.00% | ||||
Put option aggregate exercise price | $ 587 | ||||||
Call option aggregate exercise price | $ 623 | ||||||
Call option, Exercise notice to sell remaining interest, percentage | 3.00% | 3.00% | |||||
Kubatronik [Member] | EUR [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Business acquisition, Consideration transferred | € | € 69 | € 2,600 | |||||
Increase due to increase in holding | € | 1,100 | ||||||
Put option aggregate exercise price | € | 483 | ||||||
Call option aggregate exercise price | € | € 513 | ||||||
Nistec [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Business acquisition, Percentage acquired | 50.50% | ||||||
Business acquisition, Consideration transferred | $ 4,200 | ||||||
Shares issued in consideration of acquisition | shares | 3,532,655 | 3,532,655 | |||||
Purchase price per share | $ / shares | $ 0.6 | ||||||
Nistec [Member] | Merhav M.N.F. Ltd. [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Business acquisition, Percentage acquired | 24.10% | ||||||
Business acquisition, Consideration transferred | $ 2,300 | ||||||
Shares issued in consideration of acquisition | shares | 1,589,440 | 1,589,440 |
ORGANIZATION AND SUMMARY OF S39
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Exchange Rates And Linkage Bases) (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Exchange Rate [Line Items] | |||
Israeli CPI Points | 221.13 | 219.80 | 220.20 |
Israeli CPI Points, Change in period | 0.6 | (0.2) | 1.8 |
Euro To NIS [Member] | |||
Exchange Rate [Line Items] | |||
Exchange rate | 4.2468 | 4.7246 | 4.7819 |
Exchange rate, Change in period | 10.10% | (1.20%) | (2.82%) |
U.S. Dollar To NIS [Member] | |||
Exchange Rate [Line Items] | |||
Exchange rate | 3.902 | 3.889 | 3.471 |
Exchange rate, Change in period | 0.30% | 12.20% | (7.02%) |
ORGANIZATION AND SUMMARY OF S40
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Activity In The Allowance For Doubtful Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Opening balance | $ 62 | $ 82 | $ 95 |
Additions during the year | $ 19 | 21 | |
Write off of allowance | (32) | $ (9) | |
Foreign currency translation adjustments | $ 5 | (9) | (4) |
Closing balance | $ 86 | $ 62 | $ 82 |
ORGANIZATION AND SUMMARY OF S41
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Annual Rates Of Depreciation Of Fixed Assets) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Motor Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed assets depreciation, Annual percentage rate | 15.00% |
Machinery And Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed assets depreciation, Annual percentage rate | 5.00% |
Machinery And Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed assets depreciation, Annual percentage rate | 33.00% |
Office Furniture and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed assets depreciation, Annual percentage rate | 6.00% |
Office Furniture and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed assets depreciation, Annual percentage rate | 33.00% |
Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed assets depreciation, Annual percentage rate | 6.00% |
Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed assets depreciation, Annual percentage rate | 14.00% |
ORGANIZATION AND SUMMARY OF S42
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Impairment of Long-lived Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Equipment under capital leases, net of accumulated depreciation | $ 2,500 | $ 1,400 |
Equipment under capital leases, accumulated depreciation | 174 | $ 215 |
Future minimum payments of capital leases: | ||
2,016 | 651 | |
2,017 | 344 | |
2,018 | 249 | |
2,019 | 185 | |
2,020 | 35 | |
Total minimum capital lease payments | $ 1,464 |
CASH AND CASH EQUIVALENTS (Deta
CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash and Cash Equivalents [Line Items] | ||||
Cash | $ 1,038 | $ 1,129 | $ 2,514 | $ 1,935 |
Denominated In USD [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash | 537 | 773 | ||
Denominated In NIS [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash | 362 | 150 | ||
Denominated In EUR [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash | $ 139 | $ 206 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory, Net [Abstract] | ||
Raw materials | $ 1,928 | $ 1,954 |
Work-in-process | 1,844 | 1,686 |
Finished products | 678 | 1,030 |
Total inventories | 4,450 | 4,670 |
Obsolete raw material inventory | $ 120 | $ 59 |
FIXED ASSETS, NET (Details)
FIXED ASSETS, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Cost | $ 45,530 | $ 46,794 | |
Accumulated depreciation | (35,463) | (36,724) | |
Depreciated costs | 10,067 | 10,070 | $ 10,108 |
Depreciation expense | 1,731 | 1,813 | $ 1,827 |
Machinery And Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 35,604 | 36,735 | |
Accumulated depreciation | (27,489) | (28,896) | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 8,525 | 8,542 | |
Accumulated depreciation | (6,695) | (6,469) | |
Motor Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 45 | 45 | |
Accumulated depreciation | (35) | (33) | |
Office Furniture and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 1,356 | 1,472 | |
Accumulated depreciation | $ (1,244) | $ (1,326) |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Balance at the begiinning of the year | $ 75 | ||
Impairment of goodwill | (80) | ||
Effect of translation adjustments | $ 5 | ||
Balance at the end of the year | $ 75 |
SHORT-TERM CREDIT AND CURRENT47
SHORT-TERM CREDIT AND CURRENT MATURITIES OF LONG-TERM DEBT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Short-term Debt [Line Items] | ||
Short-term credit and current maturities of long-term debt | $ 1,275 | $ 2,722 |
NIS - linked to Prime Rate [Member] | ||
Short-term Debt [Line Items] | ||
Short-term credit and current maturities of long-term debt | $ 589 | 2,674 |
Annual interest rate, minimum | 2.45% | |
Annual interest rate, maximum | 2.50% | |
Current Maturities Of Long Term Debt From Banks [Member] | ||
Short-term Debt [Line Items] | ||
Short-term credit and current maturities of long-term debt | $ 686 | $ 48 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Liabilities, Current [Abstract] | ||
Accrued payroll including amounts due to government authorities | $ 1,066 | $ 1,129 |
Provision for vacation and other employee benefits | 1,455 | 1,416 |
Written put option (Note 1A) | 526 | 587 |
Accrued expenses | 600 | 871 |
Employees' severance benefits (Note 9D) | 69 | 401 |
Provision for contingent liabilities (Note 10D) | 363 | 298 |
Other liabilities | 515 | 454 |
Other Current Liabilities | $ 4,594 | $ 5,156 |
LONG-TERM DEBT, EXCLUDING CUR49
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Capital leases | $ 1,464 | $ 1,190 | |
Current portions of long-term debt classified as trade payables | $ 492 | $ 431 | |
Creditor Bank One [Member] | |||
Minimum shareholder's equity to be maintained under debt covenants | $ 4,500 | ||
Ratio of shareholders' equity to total assets required to be maintained under debt covenants | 17.00% | ||
Debt service ratio required to be maintained under debt covenants | 1.5 |
LONG-TERM DEBT, EXCLUDING CUR50
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 4,199 | $ 2,347 |
Less - current maturities | (1,337) | (509) |
Long-term debt, excluding current maturities | 2,905 | 1,838 |
U. S. Dollar [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 844 | 403 |
Annual interest rate, minimum | 5.00% | |
Annual interest rate, maximum | 8.56% | |
NIS - Not Linked [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 55 | 128 |
Annual interest rate, minimum | 5.00% | |
Annual interest rate, maximum | 6.00% | |
Euro [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 394 | 659 |
Annual interest rate | 2.17% | |
NIS - linked to Prime Rate [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 2,906 | $ 1,157 |
Annual interest rate, minimum | 2.45% | |
Annual interest rate, maximum | 2.50% | |
Annual interest rate above prime, minimum | 0.90% | |
Annual interest rate above prime, maximum | 0.90% |
LONG-TERM DEBT, EXCLUDING CUR51
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES (Maturities Of Long-Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Long-term Debt, Excluding Current Maturities, Alternative [Abstract] | ||
First year | $ 1,337 | $ 509 |
Second year | 1,029 | |
Third year | 934 | |
Fourth year | 846 | |
Fifth year and thereafter | 53 | |
Total long-term debt | $ 4,199 | $ 2,347 |
EMPLOYEE SEVERANCE BENEFITS (De
EMPLOYEE SEVERANCE BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | |||
Minimum employment period for severance benefit eligibility, years | 1 year | ||
Percentage of liability for severance obligations deposited with pension fund | 72.00% | ||
Unfunded liability for employee severance payments, period expense | $ 40 | $ 284 | $ 231 |
Total Liability for Employees' severance benefits | 217 | ||
Employees' severance benefits current | $ 17 |
COMMITMENTS AND CONTINGENT LI53
COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details) $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Feb. 28, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Number of premises operating leases | 2 | |||
Term of leases of motor vehicles | 3 years | |||
Operating leases expense | $ 1,463 | $ 1,480 | $ 1,471 | |
Indemnification agreement limit | $ 2,000 | |||
Indemnification agreement limit as a percentage of shareholders' equity | 25.00% | |||
Number of lawsuits | 3 | |||
Number of current employees filing lawsuits | 3 | |||
Number of former employees filing lawsuits | 4 | |||
Financial compensation sought for past damages plus additional amounts for future lost income and pain and suffering | $ 1,000 | $ 173 | ||
Obligation to purchase inventory from suppliers | $ 412 | |||
Other Employees [Member] | ||||
Number of current employees filing lawsuits | 4 | |||
Financial compensation sought for past damages plus additional amounts for future lost income and pain and suffering | $ 150 | |||
Meitav [Member] | ||||
Payment of settlement | $ 980 |
COMMITMENTS AND CONTINGENT LI54
COMMITMENTS AND CONTINGENT LIABILITIES (Schedule Of Minimum Future Payments Due Under Operating Leases) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Premises Leases [Member] | |
First year | $ 1,007 |
Second year | 258 |
Third year | 109 |
Fourth year | 36 |
Fifth year and thereafter | 108 |
Total minimum future payments | 1,518 |
Other Agreements [Member] | |
First year | 755 |
Second year | 467 |
Third year | 165 |
Fourth year | 112 |
Fifth year and thereafter | 101 |
Total minimum future payments | $ 1,600 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) $ in Thousands | Dec. 31, 2015USD ($)shares | Dec. 31, 2015₪ / shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2014₪ / shares |
Stockholders' Equity Attributable to Parent [Abstract] | ||||
Ordinary shares, par value | ₪ / shares | ₪ 0.6 | ₪ 0.6 | ||
Number of shares, Authorized | 50,000,000 | 50,000,000 | ||
Number of shares, Issued | 10,142,762 | 10,142,762 | ||
Number of shares, Outstanding | 10,142,762 | 10,142,762 | ||
Ordinary shares, Amount | $ | $ 1,985 | $ 1,985 |
ENTITY WIDE DISCLOSURES (Custom
ENTITY WIDE DISCLOSURES (Customers Who Accounted For Over 10% Of The Total Consolidated Revenues) (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting [Abstract] | |||
Customer A - Sales of manufactured products | 17.90% | 20.60% | 18.40% |
ENTITY WIDE DISCLOSURES (Revenu
ENTITY WIDE DISCLOSURES (Revenues By Geographic Areas) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | $ 41,350 | $ 46,626 | $ 50,235 |
Israel [Member] | |||
Revenues | 20,647 | 24,807 | 27,992 |
Europe [Member] | |||
Revenues | 8,382 | 9,383 | 10,623 |
North America [Member] | |||
Revenues | 7,504 | 5,892 | 6,227 |
India [Member] | |||
Revenues | 4,135 | 5,240 | 3,294 |
Rest Of World [Member] | |||
Revenues | $ 682 | $ 1,304 | $ 2,099 |
ENTITY WIDE DISCLOSURES (Assets
ENTITY WIDE DISCLOSURES (Assets By Geographic Areas) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Fixed assets, net | $ 10,067 | $ 10,070 | $ 10,108 |
Israel [Member] | |||
Fixed assets, net | 9,388 | 9,161 | 9,534 |
Europe [Member] | |||
Fixed assets, net | 675 | 901 | 561 |
North America [Member] | |||
Fixed assets, net | $ 4 | $ 8 | $ 13 |
FINANCIAL EXPENSES, NET (Detail
FINANCIAL EXPENSES, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interest Expense [Abstract] | |||
Interest and exchange rate expenses on long-term loans | $ 134 | $ 95 | $ 106 |
Expenses on short-term credit and bank charges | 143 | 54 | 284 |
Effect of exchange rate differences on other expenses and net loss from derivative instruments | (59) | 117 | 19 |
Other financing expenses (income), net | 41 | 90 | 30 |
Financial expenses, net | $ 259 | $ 356 | $ 439 |
TAXES ON INCOME (Narrative) (De
TAXES ON INCOME (Narrative) (Details) $ in Thousands, € in Millions | 12 Months Ended | |||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015EUR (€) | |
Reduced corporate tax rate in current and next fiscal year | 15.00% | |||
Reduced corporate tax rate in current and next fiscal year if located in certain development zone | 10.00% | |||
Reduced corporate tax rate in fiscal years two and three after current year | 12.50% | |||
Reduced corporate tax rate in fiscal years two and three after current year if located in certain development zone | 7.00% | |||
Reduced corporate tax rate in fiscal years four and thereafter after current year | 12.00% | |||
Reduced corporate tax rate in fiscal years four and thereafter after current year if located in certain development zone | 6.00% | |||
Withholding tax on dividends distributed out of income for Preferred Enterprises | 15.00% | |||
Statutory company tax rate in next fiscal year | 25.00% | |||
Tax loss carryforwards | $ 14,600 | |||
Capital losses | 4,200 | |||
Income tax expense (benefit) | 218 | $ 1,634 | $ (2,975) | |
Valuation allowance for deferred tax assets | 3,100 | 3,192 | ||
Net change in deferred tax asset valuation allowance | (192) | 1,597 | (2,540) | |
Deferred tax assets utilized | 181 | $ 299 | ||
Tax credit carryforward | 905 | $ 869 | ||
Kubatronik [Member] | ||||
Tax loss carryforwards | 1,700 | |||
Kubatronik [Member] | Municipal [Member] | ||||
Tax loss carryforwards | $ 1,700 | |||
Kubatronik [Member] | EUR [Member] | ||||
Tax loss carryforwards | € | € 1.5 | |||
Kubatronik [Member] | EUR [Member] | Municipal [Member] | ||||
Tax loss carryforwards | € | € 1.5 | |||
Zone C [Member] | ||||
Tax exemption period on undistributed income, years | 2 years | |||
Maximum [Member] | ||||
Reduced corporate tax rate if foreign investment ownership threshold is reached or exceeded | 20.00% |
TAXES ON INCOME (Profit (Loss)
TAXES ON INCOME (Profit (Loss) Before Income Tax Expense Included In The Statement Of Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Profit (loss) before income tax expense | $ 1,244 | $ (1,221) | $ 806 |
Current tax expense (benefit) | $ 100 | 19 | 37 |
Deferred taxes | 1,615 | (3,012) | |
Income tax expense (benefit) | $ 218 | 1,634 | (2,975) |
Israel [Member] | |||
Profit (loss) before income tax expense | 1,038 | $ (483) | 782 |
Current tax expense (benefit) | $ 28 | (41) | |
Deferred taxes | $ 1,581 | (3,079) | |
Foreign Jurisdictions [Member] | |||
Profit (loss) before income tax expense | $ 206 | (738) | 24 |
Current tax expense (benefit) | $ 72 | 19 | 78 |
Deferred taxes | $ 34 | $ 67 |
TAXES ON INCOME (Reconciliation
TAXES ON INCOME (Reconciliation Of The Theoretical Income Tax Expense To The Actual Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Profit (loss) before income tax expense (benefit) as reported in the consolidated statements of comprehensive income | $ 1,244 | $ (1,221) | $ 806 |
Statutory tax rates | 26.50% | 26.50% | 25.00% |
Theoretical tax benefit calculated | $ 330 | $ (324) | $ 202 |
Other | 36 | 182 | (118) |
Changed in liability for undistributed income of subsidiaries | 38 | 29 | 132 |
Change in valuation allowance | $ (92) | $ 1,724 | (2,540) |
Adjustment to net loss carryforward | 142 | ||
Change in effective corporate tax rates | (757) | ||
Tax benefit arising from "Beneficiating and Preferred" Enterprises | $ (109) | $ 40 | (70) |
Foreign tax rate differential in subsidiaries | 15 | (17) | 34 |
Total | (112) | 1,958 | (3,177) |
Income tax expense (benefit) | $ 218 | $ 1,634 | $ (2,975) |
TAXES ON INCOME (Deferred Tax A
TAXES ON INCOME (Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards (in Israel) | $ 2,350 | $ 2,532 |
Net operating loss carryforwards (outside Israel) | 492 | 530 |
Capital loss carryforwards (in Israel) | 1,110 | 1,113 |
Severance benefits | 27 | 29 |
Provision for vacation pay | 200 | 199 |
Tax credit carryforward | 905 | 869 |
Allowance for doubtful accounts | 14 | 10 |
Total gross deferred tax assets | 5,098 | 5,282 |
Less valuation allowance | (3,100) | (3,192) |
Net deferred tax assets | 1,998 | 2,090 |
Undistributed income of subsidiaries | (197) | (156) |
Fixed assets - differences in depreciation | (737) | (721) |
Total gross deferred tax liabilities | (934) | (877) |
Net deferred tax assets | $ 1,064 | $ 1,213 |
FINANCIAL INSTRUMENTS AND RIS64
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Risks and Uncertainties [Abstract] | ||
Changes in the fair value of the net written put option | $ 93 | |
Currency translation adjustments included in financial income | $ (59) | $ 60 |
RELATED PARTY BALANCES AND TR65
RELATED PARTY BALANCES AND TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Related Party Transactions [Abstract] | ||||
Trade accounts receivable | $ 173 | $ 74 | ||
Trade accounts payable | 37 | 32 | ||
Revenues | $ 644 | $ 370 | $ 6 | |
Cost of revenues | [1] | 3,402 | ||
Selling, general and administrative expenses | $ 340 | $ 339 | $ 52 | |
Percentage of raw material costs | 23.10% | |||
[1] | The Company's purchases from such supplier accounted for 23.1% of its raw material costs in 2013. |