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PCB | November 23, 2005

Flex-rigids gave profit to Eltek

The successful business of Flex-Rigid PCB's has brought profitability to Eltek which now reports its fourth consecutive quarter of profitability.
Eltek posted revenues of 36,6 million dollars for its third quarter that ended September 30. That is an increase of more than four million dollars compared to the same period 2004. The net income for this years third quarter reached 1,6 million dollars compared to the last years lost of 933 million dollars.

"We are pleased to report our fourth consecutive quarter of profitability. Our sustained quarterly momentum continues to be driven by the growing demand for Eltek's flex-rigid PCBs used for the most demanding applications in many industries," said Arieh Reichart, President and Chief Executive Officer of Eltek.

"I am particularly encouraged by our penetration into the U.S. market. During the third quarter we made initial deliveries to new U.S. customers and we expect that shipments to these customers will increase in Q4 2005 and into 2006. In addition, we have succeeded in passing qualifications by other major U.S. manufacturers. These developments in the strategic U.S. flex-rigid PCB market, coupled with a prospective sales pipeline including new potential customers, lead us to expect further improvement in our results in 2006," said Reichart.

Amnon Shemer, CFO of Eltek commented: "During the third quarter we saw continued improvement in the financial metrics of our business. In the third quarter of 2005 our gross margin improved to 21.0%, from 11.1% in fiscal 2004 and 18.0% in the second quarter of 2005.Our operating income increased to $480,000 in the third quarter from $241,000 in the second quarter, and an operating loss of $120,000 in the third quarter of 2004."

Mr. Shemer continued, "In order to meet increasing demand, we have begun to invest in new advanced manufacturing equipment to increase our high end production capacity. These investments are financed by new bank loans, reflecting their confidence in our business model and cash generation capabilities. The successful installation and integration of the new equipment will enable us to establish a strong manufacturing base for continued growth going forward."

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