Eltek Ltd., the leading Israeli manufacturer of advanced flex-rigid circuitry solutions, today announced its financial results for the third quarter of 2009 and the nine-month period ended September 30, 2009.

Revenues for the third quarter ended September 30, 2009 were $9.6 million, a 13% increase from the $8.4 million revenues recorded in the second quarter of 2009. The impact of the global economy slowdown is reflected in a 22% decrease in revenues compared with the third quarter of 2008, when the company reached record revenues of $12.3 million. Although the German subsidiary's revenues improved in the third quarter after a major decline in the second quarter, the company is continuing to closely monitor its operations, as it is uncertain as to when such operations will return to their former levels of activity.

Gross profit for the third quarter of 2009 was $1.4 million (15% of revenues), compared with gross profit of $1.3 million (16% of revenues) in the second quarter of 2009 and gross profit of $2.0 million (17% of revenues) in the third quarter of 2008.

Operating profit for the third quarter of 2009 was $40,000 compared with an operating loss of $118,000 in the second quarter of 2009 and an operating profit of $319,000 in the third quarter of 2008.

Net loss for the third quarter of 2009 was $73,000 or ($0.01) per fully diluted share, compared with a net loss of $183,000 or ($0.03) per fully diluted share in the second quarter of 2009 and a net loss of $21,000 or ($0.00) per fully diluted share in the third quarter of 2008.

First Nine-Months 2009

Revenues for the first nine months of 2009 were $27.5 million, a decrease of 19% compared to revenues of $34.2 million for the first nine months of 2008.

Gross profit for the first nine months of 2009 was $4.4 million (16% of revenues) compared with gross profit of $4.8 million (14% of revenues) in the same period in 2008. Gross profit margins increased despite the decrease in revenues, mainly due to cost-cutting measures the company has undertaken, especially in payroll and raw material consumption, and the positive impact of the higher U.S. dollar exchange rate in 2009 compared to 2008.

Operating profit for the first nine months of 2009 was $86,000 compared with an operating loss of $532,000 in the same period in 2008.

Net loss for the first nine months of 2009 was $151,000 or ($0.02) per fully diluted share, compared with a net loss of $1.2 million or ($0.17) per fully diluted share in the same period in 2008.

EBITDA

In the third quarter ended September 30, 2009 Eltek had EBITDA of $537,000 compared with EBITDA of $411,000 in the second quarter of 2009, and $848,000 in the third quarter of 2008. In the first nine months of 2009, Eltek's EBITDA was $1.6 million compared with EBITDA of $1.2 million in the same period in 2008.

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. Reconciliation between the company's results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statement of Operations.