Eltek Ltd. Reports Second Quarter and Six-Month Results

    PETACH-TIKVA, Israel, Aug. 22 /PRNewswire/ -- Eltek Ltd. (Nasdaq:   ELTK),
 the leading Israeli manufacturer of advanced circuitry solutions, today
 announced results for the second quarter and six months ended June 30, 2001.
     Eltek reported revenues for the three months ended June 30, 2001 of NIS
 26.6 million ($6.4 million), compared with compared with NIS 35.5 million
 ($8.5 million) during the first quarter of 2001 and NIS 29.1 million ($7.0
 million) reported for the three month period ended June 30, 2000. Net income
 for the second quarter totaled NIS 866,000 ($208,000), or NIS 0.18 per diluted
 share ($0.04), compared with net income of NIS 4.7 million ($1.1 million), or
 NIS 0.94 per diluted share ($0.22) for the first quarter of 2001 and NIS 3.0
 million ($725,000), or NIS 0.60 per diluted share ($0.14) for the quarter
 ended June 30, 2000.
     Gross profit for the quarter was NIS 4.9 million ($1.2 million), compared
 with NIS 8.8 million ($2.1 million) during the first quarter and NIS 6.7
 million ($1.6 million) during the comparable period in 2000.  Operating income
 was NIS 1.4 million ($329,000) compared with NIS 5.1 million ($1.2 million)
 reported for the first quarter, and NIS 3.5 million ($840,000) reported for
 the comparable quarter in 2000
     For the six month period ended June 30, 2001, the company reported
 revenues of NIS 62.1 million ($14.9 million), compared with revenues of NIS
 58.0 million ($ 13.9 million) during the comparable period in 2000. Net income
 for the six months was NIS 5.5 million ($1.3 million), or NIS 1.13 per diluted
 share ($0.27), compared with net income of NIS 5.3 million ($1.3 million), or
 NIS 1.07 per diluted share ($0.26) for the six months ended June 30, 2000.
     Gross profit for the period was NIS 13.9 million ($3.3 million), compared
 with NIS 12.7 million ($3.1 million) during the comparable period in 2000.
 Operating income was NIS 6.5 million ($1.6 million) compared with NIS
 6.3 million ($1.5 million) reported during the same period in 2000.
     In announcing the results, Arieh Reichart, President and CEO of Eltek
 said, "Our financial results during the second quarter have been impacted by
 the ongoing economic slowdown and the overall decrease in capital spending,
 particularly within the telecommunications sector, which has historically been
 a major component of our customer base. We are working closely with our
 existing customers so as to further strengthen those relationships, while
 actively pursuing new relationships with potential customers. We remain
 committed to producing top quality circuit boards, as well as providing an
 unparalleled level of customer service, and remain confident that we are well
 positioned to capitalize on all opportunities that will arise once the market
 turns around."
 
     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.
 
     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
 http://www.kcsa.com.
 
                                   ELTEK LTD.
                     Consolidated Statements of Operations
                Adjusted to New Israeli Shekels as of June 2001
                     (In thousands, except per share data)
 
 
                                Convenience                        Convenience
                                Translation                        Translation
              Six month ended   Six Months     Three month ended   Three Months
                  June 30,         Ended            June 30,          Ended
                                  June 30,                           June 30,
 
                2000     2001       2001       2000         2001       2001
                 NIS      NIS       U.S. $     NIS          NIS        U.S. $
 
           (Unaudited) (Unaudited)(Unaudited)(Unaudited) (Unaudited)(Unaudited)
 
     Revenues  57,950   62,108     14,912     29,059       26,629     6,394
     Costs
      of
      revenues*45,217   48,255     11,586    *22,333       21,765     5,226
 
     Gross
      profit   12,733   13,853      3,326      6,726        4,864     1,168
 
     Research
      and
      development
      costs, net *199      339         81       *108          179        43
 
     Selling,
      general
      and
      administrative
      expenses  6,248    6,999      1,681     *3,121        3,316       796
 
     Operating
      income    6,286    6,515      1,564      3,497        1,369       329
 
     Financial
      expenses,
      net         945      916        220        477          453       109
 
     Other
      expenses,
      net          19       50         12         *0           50        12
 
     Income
      before
      taxes
      on income 5,322    5,549      1,332      3,020          866       208
     Taxes
      on income    --       --         --         --           --        --
 
     Net income
      for
      period    5,322    5,549      1,332      3,020          866       208
 
     Net
      earnings
      per share  1.07     1.13       0.27       0.60         0.18      0.04
 
     Weighted
      average number
      of ordinary
      shares used
      to compute
      net earnings
      per ordinary
      share     4,977    4,973      4,973      4,977        4,973     4,973
 
     * Reclassified
 
 
                                   Eltek Ltd.
               Consolidated Condensed Balance Sheets (Unaudited)
                Adjusted to New Israeli Shekels as of June 2001
 
                                                          Convenience
                                                          translation
                       June 30, 2000    June 30, 2001     June 30, 2001
                             NIS             NIS              U.S. $
 
                                        (in thousands)
 
     Assets
     Current assets
     Cash and
      cash equivalents      1,656           5,925             1,423
     Receivables: Trade    23,825          24,015             5,766
                  Other    *1,017           1,443               346
     Inventories           12,149          13,333             3,201
     Prepaid expenses        *383           1,141               274
 
     Total current assets  39,030          45,857            11,010
 
     Investment in
      non-marketable
      equity securities        11              11                 3
 
     Property and
      equipment, net       41,197          52,285            12,553
 
     Total assets          80,238          98,153            23,566
 
 
     Liabilities and Shareholder's Equity
 
     Current Liabilities
     Short term credit
      and current
      installments of
      long-term debts      13,211          11,444             2,748
     Trade payables        17,582          15,803             3,794
     Other liabilities
      and accrued
      expenses              7,953           8,033             1,929
 
     Total current
      liabilities          38,746          35,280             8,471
 
     Long-term liabilities
     Long term debt,
      excluding current
      installments         10,693          15,538             3,730
     Employee
      severance
      benefits              1,432             923               222
     Total long-term
      liabilities          12,125          16,461             3,952
     Total liabilities     50,871          51,741            12,423
 
 
     Shareholders' equity
     Ordinary shares,
      NIS 0.6 par value.
      Authorized 50,000,000
      shares, issued and
      outstanding 4,824,485
      and 4,790,452,
      in 2001 and
      2000 respectively    27,935          27,955             6,712
 
     Additional paid
      in capital           48,510          48,624            11,674
     Deferred
      compensation costs      632             599               144
     Capital reserves
      related to
      loans from
      controlling
      shareholders          9,552           9,552             2,293
     Capital reserve        6,379           6,379             1,532
 
     Accumulated deficit  (63,641)        (46,697)          (11,212)
 
     Total shareholders'
      equity               29,367          46,412            11,143
 
     Total liabilities
      and shareholders'
      equity               80,238          98,153            23,566
 
     * Reclassified
 
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SOURCE Eltek Ltd.

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