Eltek Implements Reorganization Plan

May 01, 2003, 01:00 ET from Eltek Ltd.

    PETACH-TIKVA, Israel, May 1 /PRNewswire-FirstCall/ --
 Eltek Ltd., (Nasdaq:   ELTK) the leading Israeli manufacturer of advanced
 circuitry solutions, today announced a further stage implementation of its
 comprehensive re-organization plan aimed at bringing the Company's current
 structure and level of activity more closely in line with market conditions.
     This reorganization includes personnel reduction, progressive wage
 reduction, and cost savings.  The initiatives included in this plan fall
 within the broader framework of a reorganization strategy, which the Company
 began to implement several months ago.
     Mr. Arieh Reichart, President and CEO of Eltek, said, "The actions that we
 implemented today represent a difficult step, but one that is essential due to
 the ongoing weakness in the global technology sector.
     "We believe that this plan will significantly decrease Eltek's expenses,
 and will allow us to achieve positive cash flow. This will allow us to focus
 our efforts on promoting renewed Company growth."
     Mr. Reichart added, "In spite of the difficulties and the uncertainties
 that characterize the market in which the Company operates, Eltek is
 encouraged by the initial results of its efforts to increase exports to Europe
 and the United States.
     "In June, 2002 we completed the acquisition of 76% of Kubatronik, a German
 Company that specializes in manufacturing of multi-layer, flex-rigid and High
 Density Interconnect (HDI) printed circuit boards. This acquisition allows
 Eltek to leverage Kubatronik's marketing capabilities as we work to increase
 our presence in Europe.
     Mr. Reichart concluded by saying, "We believe that the implementation of
 the latest step in our comprehensive re-organization plan which we are
 announcing today, coupled with the expected completion of capital raise of
 $500,000 in mid-May, and progress in negotiations with our banks to refinance
 part of our outstanding debt, will improve our financial condition and give us
 the necessary financial platform that will allow Eltek to grow its business as
 market conditions improve."
     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.

SOURCE Eltek Ltd.