PETACH-TIKVA, ISRAEL -- Eltek Ltd.'s second-quarter net loss widened to $509,000on currency devaluations and hedging losses.

The printed circuit board fabricator reported a net loss of $183,000 in the year-ago quarter.

June quarter revenues were up 6% year-over-year to $9 million. Gross profit was $1.3 million, flat with the second quarter 2009. The operating loss for the quarter was $203,000 compared with an operating loss of $118,000 in 2009.

In a statement, president and chief executive Arieh Reichart said, "Our disappointment with this quarter’s results is mainly due to our revenues, which were lower than our expectations and internal forecasts." The company said higher finance expenses, mainly due to a sharp decline in the exchange rate of the euro compared to the NIS, and by a net loss recorded from hedging transactions, hurt the quarterly results.

Also, due to ongoing losses in recent periods, the shareholders’ equity is below the required level under the financial covenants with two of its banks, a condition that may likely result in noncompliance at year end, Eltek said. As a result, the company must reclassify $1.4 million in bank debt from long-term to short-term, although it plans to ask for a waiver. Eltek said it is "actively seeking alternatives" to strengthen its capital, either from shareholders or other sources.

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