Effective January 1, 2007, The Company’s consolidated financial statements have been prepared in accordance with U.S. GAAP, and the Company’s reporting currency has been changed from NIS to U.S. dollars. The financial statements for all years (or periods) presented are translated into the reporting currency using the current rate method. Under this method, the income statement and the cash flow statement items for each year (or period) are translated into the reporting currency using the rates in effect at the date of the transactions, and assets and liabilities are translated using the exchange rate at the end of that year (or period), except for equity accounts which are translated using historical exchange rates. All resulting exchange differences, which do not affect the Company’s earnings, are reported in the accumulated other comprehensive income as a separate component of shareholders’ equity. In the case of a change in reporting currency, this method of translation results in the financial statements of prior years (or periods) presented for comparison being translated as if the reporting currency used in the current year (or period) had been used for at least all periods shown. The Company believes that presenting the financial statements in U.S. dollars and under US-GAAP delivers more meaningful and relevant financial information to its shareholders.

Management Comments:

“Excluding sales associated with the discontinued customer product, in Q3 we managed to grow our revenues both on a sequential and year – over – year basis,” said Arieh Reichart, President and Chief Executive Officer of Eltek. “This achievement reflects our continued success in gaining new tier-one customers, as well as our strengthened position within our diverse high – end customer base. Furthermore, many of our new serial production engagements are still in the early stages, and represent significant opportunities for future expansion.”

Mr. Reichart continued, “Our recently expanded marketing efforts are progressing very well. Combined with ramped – up production capacity and improved production processes and efficiencies, we feel that we are poised to exploit and operationally leverage the tremendous long – term growth opportunities in the global high-end PCBs market.”

“Looking into the fourth quarter of 2007, we currently expect a sequential revenues growth and an improvement in operational results. We also expect continuation of the trend of year – over – year revenues growth, excluding the impact of sales to the above – mentioned large customer”, he concluded.

Amnon Shemer, CFO of Eltek added “The devaluation of the U.S. dollar against the NIS continued to have a negative impact on our operating margins, as the average exchange rate between the NIS and the U.S. dollar in the third quarter of 2007 was 4.3% lower than that of the third quarter of 2006. On the other hand, we recorded an income of $ 349,000 from hedging transactions that we performed in order to reduce the negative impact of the devaluation of the U.S. dollar against the NIS on our operating margins.”

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