Eltek Announces Preliminary Second Quarter Results

Receives Letter of Intent for $1.2 Million Order From Major European Customer

Jun 26, 2001, 01:00 ET from Eltek Ltd.

    PETACH-TIKVA, Israel, June 26 /PRNewswire/ -- Eltek Ltd. (Nasdaq:   ELTK),
 the leading Israeli manufacturer of advanced circuitry solutions, today
 announced that it expects revenues for the quarter ended June 30, 2001 to be
 between $6.3 million and $6.5 million, a decrease of 4% to 8% compared with
 the same quarter last year. The company attributed the decrease in revenues to
 the continued slowdown in technology spending, particularly among
 telecommunications and data communications companies.
     Additionally, the Company announced that it has received a letter of
 intent from one of its major European customers for the additional purchase of
 approximately $1.2 million of Eltek's PCB products. The boards have begun
 shipping, and will continue through the fourth quarter of 2001.
     Arieh Reichart, President and CEO of Eltek commented, "The ongoing
 economic downturn has modestly impacted our financial performance during the
 second quarter. We continue to see demand for our products, particularly for
 our higher end boards, as witnessed by our continued new order flow. These new
 orders however, are mainly for prototypes. To this point we have seen a
 decrease in the demand of ongoing orders for pre-production stage products,
 likely as a result of an inventory backlog on the customer end. We continue to
 hear positive feedback from customers about Eltek's capabilities and
 technology behind our products on a regular basis, and are confident in our
 ability to work through this economic slowdown." Mr. Reichart Continued, "We
 are working diligently to improve efficiency through all facets of our
 business. Additionally, we recently completed our investment of approximately
 $6 million in equipment and infrastructure to support the development of HDI
 technology. We believe that this investment, coupled with increasing interest
 in Eltek's products from our Israeli and European customers have positioned us
 for long-term success, and that we will be able to fully capitalize on
 opportunities once this slowdown has subsided."
     About Eltek
     Eltek is one of Israel's leading manufacturers of printed circuit boards,
 the core circuitry of most electronic devices.  It specializes in the complex
 high-end of PCB manufacturing, i.e., HDI, multi-layered and flex-rigid boards.
 Eltek's technologically advanced circuitry solutions are used in today's
 increasingly sophisticated and compact electronic products.  The Company has
 invested heavily in upgrading its production facilities over the past five
     Certain matters discussed in this news release are forward-looking
 statements that involve a number of risks and uncertainties including, but not
 limited to statements regarding expected results in future quarters, risks in
 product and technology development and rapid technological change, product
 demand, the impact of competitive products and pricing, market acceptance, the
 sales cycle, changing economic conditions and other risk factors detailed in
 the Company's United States Securities and Exchange Commission filings.
     This release and prior releases are available on the KCSA Public Relations
 Worldwide Web site at http://www.kcsa.com.

SOURCE Eltek Ltd.