Eltek Ltd. (ELTK)

[midastouch017]

Eltek Reports a 241% Growth in Net Income and a 26% Increase in Revenues for the 1st Quarter of 2006
During 'normal' periods, these results would have had
a huge positive impact on the share price. Nowadays, i am
not so sure. Bad results have a harsh negative impact,
but positives are more or less shrugged off

Tuesday June 6, 7:08 am ET

PETACH-TIKVA, Israel--(BUSINESS WIRE)--June 6, 2006--Eltek Ltd. (Nasdaq:ELTK - News):
Seventh consecutive quarter of year-over-year organic revenue growth - Revenues increased to $ 9.3 million, up 26%
sixth consecutive quarter of profitability - Quarterly net income increased by 241% to $ 613 thousand in Q1 2006 from $ 179 thousand in Q1 2005
EPS of $ 0.09 per fully diluted share compare to $ 0.03 per fully diluted share in Q1 2005
New business , mainly in the U.S., leads Company to further expand its production capacity

Eltek Ltd. (Nasdaq:ELTK - News), the leading Israeli manufacturer of advanced flex-rigid circuitry solutions, today announced its financial results for the first quarter of 2006.

First Quarter 2006 Key Financial Highlights:

Revenues increased to $ 9.3 million, up 26%.
Quarterly operating income of $ 783 thousand, up 152%
Quarterly net income grew 241% to $ 613 thousand, or $ 0.09 per fully diluted share
EBITDA of $ 1.3 million in Q1 2006 compared to EBITDA of $ 1 million in Q1 2005
Eltek reported revenues for the three months ended March 31, 2006 of NIS 43.4 million ($ 9.3 million) compared with NIS 34.4 million ($ 7.3 million) for the first quarter of 2005.

The increase in revenues is attributed to the gaining of new customers and new projects with existing customers.

Net income for the first quarter totaled NIS 2.9 million ($ 613 thousand), or $ 0.09 per fully diluted share compared with net income of NIS 839 thousand ($ 180 thousand), or $ 0.03 per fully diluted share for the same quarter in 2005. The first quarter of 2006 was the Company's sixth consecutive quarter of profitability.

Arieh Reichart, President and Chief Executive Officer of Eltek, commented: "Q1 was another strong quarter for Eltek, in which we managed to accelerate our continued organic revenue growth and reached new levels of profitability."

"During the quarter we won some highly contested tenders in Israel and continued to expand our global flex - rigid PCBs customer base, mainly in the U.S. As we are still at the very beginning of the incorporation process of our flex-rigid PCBs in the product lines of our new customers, we feel that we have only begun to scratch the surface of our sizable, high margin growth opportunities in the U.S. flex-rigid PCB space."

Amnon Shemer, CFO of Eltek commented: "We have had a very good start for 2006, as quarterly sales reached another new high in the first quarter and we grew our quarterly operating and net income by 152% and 241%, respectively, from the corresponding quarter in 2005."

"Our previously announced expansion of our high - end production capacity is proceeding on schedule, as we made additional investments in new advanced manufacturing equipment, hired new production employees and commenced the gradual expansion of our production facility. These carefully planned investments are expected to enhance our ability to meet our customers' growing demand for high-end serial production capacity," he added.

In the first quarter of 2006, Eltek had EBITDA of $1.3 million compared to EBITDA of $ 963 thousand in the first quarter of 2005. ELTEK uses EBITDA as a non-GAAP financial performance measurement. EBITDA is calculated by adding back to net income interest, taxes, depreciation and amortization. EBITDA is provided to investors to complement results provided in accordance with GAAP, as management believes the measure helps illustrate underlying operating trends in the Company's business and uses the measure to establish internal budgets and goals, manage the business, and evaluate performance. EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP.

About the Company

Eltek is 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. For more information, visit Eltek's World Wide Web site at www.eltekglobal.com.

http://biz.yahoo.com/bw/060606/20060606005519.html?.v=1

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