Eltek delays production line to July after Q1 revenue decline; targets $60–65 M and 26–28% margins
ELTK•Eltek’s Q1 revenue fell due to six-week Israel plant shutdowns, global fiberglass shortages and shekel devaluation. Management now expects to complete two new production lines by July, targeting $60–65 million in revenue and 26–28% gross margins once stabilization occurs.
1. Q1 Disruptions and Revenue Decline
Eltek reported a significant Q1 revenue decline driven by a six-week plant shutdown in Israel amid regional conflict, compounded by global fiberglass shortages and a weakened shekel against the dollar. These factors eroded output and pricing power, resulting in compressed margins for the quarter.
2. Equipment Integration Delayed Until July
Installation of two new PCB production lines was halted for six weeks as an international engineering team evacuated during the conflict, pushing the go-live date to July 1. Management plans to qualify and ramp these lines immediately upon return to full staffing.
3. Fiberglass Shortage and Logistic Bottlenecks
Global AI-driven demand has led suppliers to allocate fiberglass on quotas, forcing Eltek to pay premium prices to secure material. Ongoing air cargo disruptions to Israel created cooling-chain challenges, though material availability has improved after price concessions.
4. Projected Revenue and Margin Targets
With the new lines operational and assuming stable exchange rates and no further conflict disruptions, Eltek forecasts $60–65 million in revenue and 26–28% gross margins. The company also highlighted a recent win against a US defense contractor as a signal of growing order momentum.
