Arieh Reichart - President and CEO Amnon Shemer - VP, Finance and CFO

Shimmy Brandes - Master Plan Management

Ladies and gentlemen, thank you for standing-by. Welcome to the Eltek Limited Second Quarter 2013 Financial Results Conference Call. All participants are present in a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded August 29, 2013. Before I turn the call over to Mr. Arieh Reichart, President and CEO, and Mr. Amnon Shemer, CFO, I would like to remind participants that comments made during this conference call may contain projections or other forward-looking statements regarding future events or the future financial performance of Eltek Limited. These statements are only projections and reflect the current beliefs and expectations of the Company. Actual events or results may differ materially. With that said, it is routine for internal projections and expectations to change as quarters progress. All forward-looking statements are based on information available to the Company on the date hereof and the Company assumes no obligation to update such statements. Please refer to documents the Company files from time-to-time with SEC, specifically the Company’s annual report on Form 20-F, its periodic reports on Form 6-K and the Safe Harbor language contained in the Company’s press releases. These documents contain and identify important factors that could cause the Company’s actual results to differ materially from those contained in its projections or forward-looking statements, which the Company urges all investors to consider. Eltek undertakes no obligation to publicly release the revisions to such forward-looking statements that may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. I will now turn the call over to Mr. Amnon Shemer. Mr. Shemer, please go ahead.

Good morning. Thank you for joining us and welcome to Eltek’s 2013 second quarter earnings call. Presenting on today’s call will be Arieh Reichart, the CEO of the Company and myself. Right now, everyone should have access to our second quarter press release, which was released earlier today. Our call today will begin with an overview of our business and the summary of the principle factors that affected Eltek’s operating results during the second quarter of 2013 by our CEO, Mr. Arieh Reichart. I will then follow Arieh, with a presentation on Eltek’s financial results for the second quarter. At the conclusion of this presentation, there will be an opportunity for questions. During this conference call, we will be discussing non-GAAP financial results such as EBITDA. Eltek uses EBITDA as a non-GAAP financial performance measurement. Please see our earnings release for our definition of and (inaudible). I will now turn the call over to Arieh Reichart for his overview of our business and the key factors that affected our second quarter operating results. Arieh?

Thank you, Amnon. And we are pleased to share with you all our results. For three consecutive quarters, Eltek has seen growing demand from its current customer base, but production capacity constrains prevented the full exploitation of this potential. Our customers continue to see the value proposition of our products and have a great deal of trust in our Company. Specifically in our local market, we have seen greater interests from our local customers, reflecting the continued market recognition of our high quality and reliable products. We are pleased with Nistec's decision to invest in Eltek. This significant investment is an important validation of our vision and achievements and will support our long-term growth plans. This investment will enable Eltek to fully realize its growth potential, as well as other opportunities in the diverse markets we serve. Amnon, please.

Thank you, Arieh. Revenues for the second quarter of 2013 were $12.4 million, compared to revenues of $11.5 million in the second quarter of 2012. Gross profit for the second quarter of 2013 was $2.1 million, 17% of revenues, compared to gross profit of $1.9 million, 17% of revenues in the second quarter of 2012. Operating profit for the second quarter of 2013 was $491,000 compared to operating profit of $465,000 in the second quarter of 2012. Net profit for second quarter of 2013 was $339,000 or $0.05 per share, compared to net a profit of $351,000 or $0.05 per share in the second quarter of 2012. EBITDA; in the second quarter of 2013, Eltek had EBITDA of $932,000 compared to EBITDA of $928,000 in the second quarter of 2012. The record revenues in this quarter and the 10 consecutive quarters of profitability, demonstrate Eltek's potential for growth and profitability, which we could not fully capitalize on due to the lack of capital expenditures. We believe that Nistec's capital investment in the Company will enable us to invest in sophisticated manufacturing equipment, which is expected to assist us in the growing business of manufacturing high-end products and improve production efficiency. We believe that such investments will not only increase revenues, but also improve gross margins and net income. In addition, the capital infusion into the Company will improve our cash position and strengthen our balance sheet through increasing shareholders' equity. We are now ready to take your questions.

Thank you. Ladies and gentlemen at this time we will begin the question-and-answer session. (Operator Instructions) The first question is from Shimmy Brandes of Master Plan Management. Please go ahead. Shimmy Brandes - Master Plan Management: I was curious as to the use of funds. You mentioned that you’re going to be purchasing some more equipment. I’m wondering so what the timing is on that purchase and when you think it’s going to be set up in your facility? And when you do purchase this equipment, what sectors or what sort of clients are you going to be first looking at servicing with this upgraded facility.

In regard of what will we do with the money that we will receive, for the matter of fact, we have one of our processors which is placed in line is relatively an old one. It served us now for more than 30 years. We are producing with this, let me say old line now and we are producing more than $40 million a year with this line, but the efficiency is not the one that we want to have and that we need to have. The reason why we didn't order yet such a line is because it's too big investment for one system that we can afford to do it ourselves without financial backing. It's more than $2 million investment and such a big investment for one piece it's a little bit danger in the situation of the Company prior to the investment to go and try to order and then if there's going to be a problem in financing it we would have been in big troubles. So almost everything is prepared, I mean all the plans and quotations and so on and the moment that we will see the money in our accounts we will be prepared to put an order at the supplier. This line is not only a big investment in one process it also takes quite a longer time to implement it. It’s a trope until we can say that if it works for us, it takes about a year, about 12 months. So, I can say that the fruits of this business of equipment or this line we will enjoy from it in year 2015, but we will have a lot of many other efficiencies as where we can now acquire additional equipment that we need for more efficiency, for little bit more capacity because we mentioned that the demand from us is higher than what we can do. So, in 2014 we will have without this splendid line more efficiency in the lines, which will increase, it should increase our margins of profitability and add additional capacity so we can sell more of the same on the current basis that we have here. So, in 2014 we believe we will enjoy from growth and efficiency which both have the positive influence on the bottom-line. And the last question was, which kind of customers, it’s all of them. There’s an additional mental dimension that we can, that we plan to improve in growing the part of the business as quick turnarounds, which means quick deliveries to customers, the customers are ready to pay a premium for quick deliveries in case they need it. Okay so, but there is a need in the market. I believe that especially in 2015, we will be much more prepared to supply this kind of service assuming those kinds of premiums which once again will improve our margins and bottom-line. I hope that it covers everything that you asked?

(Operator Instructions) There are no further questions at this time. Before I ask Mr. Reichart to go ahead with his closing statements, I would like to remind participants that a replay of this call will be available tomorrow on Eltek's website, www.eltek.co.il. Mr. Reichart, would you like to make your concluding statements?

Yes, thank you. Thank you all for your participation and your interest in Eltek. We hope to see you all in our future events. Thank you and (inaudible) to all of you.

This concludes the Eltek Limited’s second quarter 2013 financial results conference call. Thank you for your participation. You may go ahead and disconnect.