Eltek Ltd. Reports Fourth Quarter and Year End Results Company to Expand German Presence Through Recently Announced Acquisition



    PETACH-TIKVA, Israel, Feb. 21 /PRNewswire-FirstCall/ --
 Eltek Ltd. (Nasdaq:   ELTK), the leading Israeli manufacturer of advanced
 circuitry solutions, today announced results for the fourth quarter and twelve
 months ended December 31, 2001.
     Eltek reported revenues for the three months ended December 31, 2001 of
 NIS 28.1 million ($6.4 million), an increase of 16% compared with
 NIS 24.3 million ($5.5 million) during the third quarter of 2001.  Net loss
 for the fourth quarter totaled NIS 1.6 million ($364,000) or NIS 0.33 per
 diluted share ($0.07), compared with net loss of NIS 1.2 million ($282,000),
 or NIS 0.26 per diluted share ($0.06) for the third quarter of 2001 and net
 income of NIS 5.8 million ($1.3 million), or NIS 1.10 per diluted share
 ($0.25) for the quarter ended December 31, 2000.
     Gross profit for the quarter was NIS 2.4 million ($542,000), compared with
 NIS 1.5 million ($340,000) during the third quarter and NIS 10.7 million
 ($2.4 million) during the comparable period in 2000.  Operating loss for the
 quarter was NIS 972,000 ($220,000) compared with NIS 1.8 million ($411,000)
 reported for the third quarter, and operating income of NIS 6.1 million
 ($1.4 million) reported for the comparable quarter in 2000.
     For the twelve month period ended December 31, 2001, the company reported
 revenues of NIS 114.8 million ($26.0 million), compared with revenues of NIS
 103 million ($ 23.3 million) during fiscal year 2000. Net income for the year
 was NIS 2.7 million ($614,000), or NIS 0.56 per diluted share ($0.13),
 compared with net income of NIS 14.5 million ($3.3 million), or NIS 2.92 per
 diluted share ($0.66) for the fiscal year ended December 31, 2000.
     Gross profit for the period was NIS 17.8 million ($4.0 million), compared
 with NIS 28.2 million ($6.4 million) during the comparable period in 2000.
 Operating income was NIS 3.7 million ($849,000) compared with NIS 15.6 million
 ($3.5 million) reported during fiscal 2000.
     The Company noted that the results presented for fiscal 2000 are based on
 a nine-month year, as a result of its change in reporting cycle to a calendar
 year.
     In announcing the results, Arieh Reichart, President and CEO of Eltek
 said, "Although Eltek's revenues for the fourth quarter improved over the
 third quarter, our net loss widened. In the third we benefited from
 $167,000 in other income arising from an award in a legal proceeding.
 Excluding this other income, our net loss for the third quarter was $449,000,
 or 24% greater than in this quarter. Our selling, general and administrative
 expenses were down substantially from the third quarter, and we expect to see
 a continued decrease in expenses as a result of the cost control measures
 implemented during the quarter."
     Mr. Reichart continued, "We have recently announced a memorandum of
 understanding to purchase a 76% interest in a privately held German PCB
 manufacturer.  This acquisition should allow us to further penetrate that
 marketplace.  Currently, Eltek has an extremely limited presence in Germany,
 but has long recognized the potential this market holds.  This acquisition
 will give us the opportunity to strengthen our business in Germany.  Following
 the closing of this deal, we plan to utilize and implement this Company's
 sales and marketing capabilities to leverage its existing relationships, and
 fully capitalize on any potential customers in Germany.  We feel strongly
 that, with the technology and infrastructure in place, this is an opportune
 time to invest in our sales and marketing capabilities, which is one of the
 key objectives behind this acquisition."
 
     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
 years.
 
                               (Tables to follow)
 
     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
 www.kcsa.com.
 
 
                                   ELTEK LTD.
                     Consolidated Statements of Operations
              Adjusted to New Israeli Shekels as of December 2001
                     (In thousands, except per share data)
 
             Nine Months    Year       Year    Three months      Three Months
                Ended       Ended      Ended     Ended                  Ended
                  December 31, December 31,   December 31,      December 31,
                 2000*       2001       2001      2000        2001       2001
                   NIS        NIS       U.S.      $NIS         NIS     U.S. $
              (Audited)(Unaudited)(Unaudited)(Unaudited)(Unaudited) (Unaudited)
 
 
     Revenues  102,996    114,770     25,989     37,398      28,146     6,374
     Costs of
      revenues  74,817     96,982     21,961     26,676      25,754     5,832
 
     Gross
      profit    28,179     17,788      4,028     10,722       2,392       542
 
     Research and
      development
       costs, net  341        381         86        109           0         0
 
     Selling, general
      and administrative
       expenses 12,266     13,660      3,093      4,533       3,364       762
 
     Operating
      income
       (loss)   15,572      3,747        849      6,080       (972)     (220)
 
     Financial
      expenses,
       net       1,141      1,722        390        251         634       144
 
     Other incomes
      (expenses),
        net         23        687        155        (5)           0         0
 
     Income (loss)
      before taxes on
       income   14,454      2,712        614      5,824     (1,606)     (364)
     Taxes on
      income        --         --         --         --          --        --
 
     Net income
      (loss) for the
       period   14,454      2,712        614      5,824     (1,606)     (364)
 
     Basic earnings
      (loss) per
       share      2.92       0.56       0.13       1.18      (0.33)    (0.07)
 
     Weighted average
      number of ordinary
      shares used to
      compute basic
      earnings (loss)
      per ordinary
      share      4,967      4,886      4,886      4,967       4,886     4,886
 
     Diluted earnings
      (loss) per
       share      2.92       0.56       0.13       1.10      (0.33)    (0.07)
 
     Weighted average
      number of ordinary
      shares used to
      compute diluted
      earnings (loss)
      per ordinary
      share      4,967      4,886      4,886      5,564       4,886     4,886
 
      * Due to a change in Eltek's reporting cycle, results for "Nine Months
        Ended December 31, 2000" reflect performance for the Company's full
        fiscal 2000
 
 
                                     Eltek Ltd.
                       Consolidated Condensed Balance Sheets
                Adjusted to New Israeli Shekels as of December 2001
 
                                                               Convenience
                                                               translation
                                 December 31,    December 31,   December 31,
                                        2000            2001          2001
                                     Audited       Unaudited     Unaudited
                                         NIS             NIS        U.S. $
                                            (in thousands)
 
     Assets
 
     Current assets
     Cash and cash equivalents         4,478           6,289         1,424
     Receivables: Trade               27,214          27,227         6,165
         Other                         1,780           1,553           352
     Inventories                      13,142          13,901         3,148
     Prepaid expenses                    687             961           218
 
     Total current assets             47,301          49,931        11,307
 
     Investment                           11               0             0
 
     Property and equipment, net      43,967          52,062        11,789
 
     Total assets                     91,279         101,993        23,096
 
     Liabilities and Shareholder's Equity
 
     Current Liabilities
     Short term credit and current
      installments of long-term
       debts                          11,431          16,747         3,792
     Trade payables                   18,766          18,428         4,173
     Other liabilities and
      accrued expenses                 9,017           7,376         1,670
 
     Total current liabilities        39,214          42,551         9,635
 
     Long- term liabilities
     Long term debt, excluding
      current installments            10,288          14,530         3,290
     Employee severance benefits, net    918             798           181
 
     Total liabilities                50,420          57,879        13,106
 
     Shareholders' equity
     Ordinary shares, NIS 0.6 par value.
     Authorized 50,000,000 shares,
      issued and outstanding
       4,885,651 and 4,792,452,
        in 2001 and 2000
         respectively                 28,018          28,074         6,357
     Additional paid in capital      49,239*          49,752        11,266
 
     Capital reserves related to
      loans from controlling
       shareholders                    9,580           9,580         2,169
     Receipt on shares account            25               0             0
     Capital reserve                   6,398           6,398         1,449
 
     Accumulated deficit            (52,401)        (49,690)      (11,251)
 
     Total shareholders' equity       40,859          44,114         9,990
 
     Total liabilities and
      shareholders' equity            91,279         101,993        23,096
 
      *=Reclassified
 
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SOURCE Eltek Ltd.

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