On or about July 3, 2007 Eltek Ltd. received a notice from its largest customer regarding the termination of PCB production for its principal product as it reached the end of its lifecycle. Eltek expects a reduction in sales in the second quarter as a result of decreased sales to this customer and because of 11% lower number of working days in the second quarter compared to the first quarter of 2007, mainly due to holidays. Revenues from this customer decreased to 17% of Eltek's total revenues in the first quarter of 2007, as compared with 25% and 31% of total revenues in the years ended December 31, 2006 and 2005, respectively. The impact of the end of the program on total quarterly revenues is expected to occur mainly in the second and the third quarters of 2007.

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."

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