Arieh Reichart, President and Chief Executive Officer of Eltek, commented: “This customer’s principal product reached the end of its lifecycle sooner than had been anticipated, therefore this end – production specific notice is going to have a short term negative impact on our overall revenues, mainly in Q2 and Q3 of 2007. Our working relationship with this customer continues to be strong, as we have been awarded an initial $240,000 order for PCBs for the next generation of this product”.

“Nevertheless, we have been preparing to deal with the continued decline in sales of this customer’s specific product. As we previously addressed in the Company’s press release announcing our first quarter results, we have managed to successfully expand early stage business relationships to long – term substantial serial production engagements with major Tier 1 customers. We continue to pursue long term opportunities with both existing and new customers, and I am very optimistic that we will be able to announce additional new serial – production projects during the second half of 2007. Our fundamentals continue to strengthen as we plan to maintain, reinforce and aggressively leverage our market leading position for high end PCBs” Mr. Reichart concluded.

Amnon Shemer, CFO of Eltek commented “Excluding the inevitable impact of the decline in sales to this single large customer, we expect Q2 revenues to continue to demonstrate year – over – year organic growth, reflecting the strength of our underlying business model and enhanced customer diversification. We are continuing to work on obtaining orders from new and existing customers to compensate for the reduction in business from this customer. We plan to further diversify our serial production customer base, and expect our top ten customers to account for a lower percentage of our total sales in 2007 as compared with 60% and 63% in the years ended December 31,2006 and 2005, respectively, thus obtaining a healthier and more stable revenue base.”