Eltek Ltd. Reports First Quarter Results

Net Loss Reduced by 32% From Last Quarter

May 29, 2002, 01:00 ET from Eltek Ltd.

    PETACH-TIKVA, Israel, May 29 /PRNewswire-FirstCall/ --
 Eltek Ltd. (Nasdaq:   ELTK), the leading Israeli manufacturer of advanced
 circuitry solutions, today announced results for the first quarter ended March
 31, 2002.
     Eltek reported revenues for the three months ended March 31, 2002 of NIS
 26.9 million ($5.8 million), compared with NIS 28.8 million ($6.2 million)
 during the fourth quarter of 2001.  Net loss for the quarter totaled NIS 1.1
 million ($240,000) or NIS 0.23 per diluted share ($0.05), compared with net
 loss of NIS 1.6 million ($352,000), or NIS 0.34 per diluted share ($0.07) for
 the fourth quarter of 2001 and net income of NIS 4.8 million ($1.0 million),
 or NIS 0.98 per diluted share ($0.21) for the quarter ended March 31, 2001.
     Gross profit for the quarter was NIS 2.3 million ($486,000), compared with
 NIS 2.4 million ($525,000) during the fourth quarter and NIS 9.2 million ($2.0
 million) during the first quarter of 2001.  Operating loss for the quarter was
 NIS 966,000 ($207,000) compared with NIS 995,000 ($213,000) reported for the
 fourth quarter, and operating income of NIS 5.3 million ($1.1 million)
 reported for the comparable quarter in 2001.
     The Company noted that all dollar amounts mentioned reflect the value of
 the New Israeli Shekel as of March 31, 2002. Any differences in historical
 results between those originally reported and those reported presently are a
 result of fluctuation in the value of the New Israeli Shekel.
     In announcing the results, Arieh Reichart, President and Chief Executive
 Officer of Eltek said, "While we saw a 7% decrease in sequential revenues, we
 managed to reduce our operating expenses by approximately 8%, further evidence
 that the cost control measures we implemented during the fourth quarter have
 proven effective. In addition, our net loss was reduced by approximately 32%
 compared with last quarter."
     Mr. Reichart continued, "In February, the Company announced that it had
 signed a memorandum of understanding to acquire a majority interest in a
 privately held German manufacturer of high-end PCBs. We had initially
 anticipated that the deal would be closed by now, but we have encountered
 several delays which were beyond our control. We continue to make progress
 toward closing the acquisition, and expect to announce the completion of the
 deal shortly.  Despite these delays, our objective remains to expand Eltek's
 presence beyond the markets we currently serve. In addition to the
 acquisition, we are exploring several opportunities that could help to further
 our efforts toward geographic expansion. We will update our shareholders as
 material events transpire."
     TELECONFERENCE:  Eltek will hold a teleconference at 10:00 a.m. EDT on
 Wednesday, May 29 for interested investors, analysts, and stockbrokers.  To
 take part in the Teleconference dial 888-335-6716 in the U.S. and 973-633-1010
 internationally. Participants are asked to begin placing their calls about
 5 to 10 minutes prior to the scheduled start time.  For those unable to
 participate, a replay will be available from 12:00 p.m.-EDT, on May 29, 2002
 through 11:59 p.m. EDT on May 31, 2002.  To access the replay, please dial:
                        Dial:   877-519-4471 (Domestic)
                      Dial:   973-341-3080 (International)
                             Access Code:  3278644
     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.
     You may register to receive Eltek's future press releases or to download a
 complete Digital Investor Kit(TM) including press releases, regulatory filings
 and corporate materials by clicking on the "Digital Investor Kit(TM)" icon at
                                   ELTEK LTD.
                     Consolidated Statements of Operations
                Adjusted to New Israeli Shekels as of March 2002
                     (In thousands, except per share data)
                                Three months      Three months    Three months
                                ended March       ended March     ended March
                                  31, 2001           31, 2002        31, 2002
                                      NIS              NIS            U.S. $
                                  (Unaudited)      (Unaudited)     (Unaudited)
     Revenues                         36,425          26,924         5,769
     Costs of revenues                27,197*         24,654         5,283
     Gross profit                      9,228           2,270           486
     Research and development
      costs, net                         164*              0             0
     Selling, general and
      administrative expenses          3,781           3,236           693
     Operating income (loss)           5,283            (966)         (207)
     Financial expenses, net             475             164            35
     Other incomes, net                    0               8             2
     Income (loss) before
      taxes on income                  4,808          (1,122)         (240)
     Taxes on income                      --              --            --
     Net income (loss)
      for the period                   4,808          (1,122)         (240)
     Basic and diluted earnings
      (loss) per share                  0.98           (0.23)        (0.05)
     Weighted average number of
      ordinary shares used to
      compute basic and diluted
      earnings (loss) per
      ordinary share                   4,967           4,886         4,886
                                   Eltek Ltd.
                     Consolidated Condensed Balance Sheets
                Adjusted to New Israeli Shekels as of March 2002
                                   December 31,                   translation
                                      2001       March 31, 2002  March 31, 2002
                                    Unaudited       Unaudited       Unaudited
                                        NIS            NIS           U.S. $
                                                 (in thousands)
     Current assets
     Cash and cash equivalents         6,438           7,891         1,690
     Receivables: Trade               27,869          24,316         5,209
                  Other                1,590             898           192
     Inventories                      14,229          13,088         2,804
     Prepaid expenses                    984             656           141
     Total current assets             51,110          46,849        10,036
     Other investments                    --               7             1
     Property and equipment, net      53,292          51,851        11,108
     Total assets                    104,402          98,707        21,145
     Liabilities and Shareholder's Equity
     Current liabilities
     Short term credit and current
      installments of
      long-term debts                 17,143          15,745         3,373
     Trade payables                   18,863          17,531         3,756
     Other liabilities
      and accrued expenses             7,550           7,232         1,549
     Total current liabilities        43,556          40,508         8,678
     Long- term liabilities
     Long term debt,
      excluding current portion       14,873          13,269         2,842
     Employee severance benefits         817             896           192
     Total liabilities                59,246          54,673        11,712
     Shareholders' equity
     Ordinary shares, NIS 0.6 par
      value. Authorized 50,000,000
      shares, issued and outstanding
      4,885,651                       28,737          28,737         6,156
     Additional paid in capital       50,927          50,927        10,910
     Capital reserves related to
      loans from controlling
      shareholders                     9,806           9,806         2,101
     Capital reserve                   6,549           6,549         1,403
     Accumulated deficit             (50,863)        (51,985)      (11,137)
     Total shareholders' equity       45,156          44,034         9,433
     Total liabilities and
      shareholders' equity           104,402          98,707        21,145
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SOURCE Eltek Ltd.