Yitzhak Nissan - Chairman and CEO Amnon Shemer - CFO Roberto Tulman - Deputy CEO, Chief Technology Officer

Ladies and gentlemen thank you for standing by. Welcome to the Eltek Limited Second Quarter 2016 Financial Results Conference Call. All participants are at present in listen-only mode. Following management’s formal presentation, instructions will be given for the question-and-answer session [Operator Instructions]. As a reminder, this conference is being recorded, August 10, 2016. Before I turn the call over to Mr. Yitzhak Nissan, Chairman of the Board and Chief Executive Officer; Roberto Tulman, Deputy CEO and Chief Technology Officer; and Amnon Shemer, Chief Financial Officer, 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 the documents the Company files from time to time with the 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 are forward-looking statements, which the Company urges all investors to consider. Eltek undertakes no obligation to publicly release their 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. Yitzhak Nissan. Mr. Nissan, please go ahead.

Thank you. Good morning everyone. Thank you for joining us and welcome to Eltek 2016 second quarter earnings call. With me is Roberto Tulman, Deputy CEO and Chief Technology officer; and Amnon Shemer, our Chief Financial Officer. We will begin to providing you with an overview of our business and a summary of principal sectors that affects our results in second quarter, followed by the details of our financial results. After our prepared remarks, we will be happy to answer any of your questions. By now, everyone should have access to our second quarter press release which was released earlier today. The release is also available on our Web site at www.nisteceltek.com. I’m happy to share with you our results for the second quarter of 2016. Revenues in the second quarter of 2016 amounted to $9.9 million slightly lower about 5% when revenues in the second quarter of last year. The revenue reflects the continued competition in Israeli market for high end products. Revenues from the North American Market in the second quarter of 2016 grew by 12% as compared to the first quarter of 2016 and amounted to $2 million. Our focus on profitability by improving production processes and closing monitoring expense led us to a net profit of $213,000 in the second quarter of 2016. We remain focused on growth in the global markets, which we expect will continue to have a positive effect on our revenues. I will now turn the call over to Amnon Shemer, our CFO, to discuss our financials. Amnon, please.

Thank you, Yitzhak. Let me please turn your attention to the financials for the second quarter of 2016. I will go into detail on the most important financial segment items. I will be discussing also non-GAAP financial results such as EBITDA. Eltek uses EBITDA as a non-GAAP financial performance measurement. Please see our earnings press release for our definition of and the reasons for its use. Revenue for the second quarter of 2016 were $9.9 million compared to $10.4 million in the second quarter of 2015. Gross profit was $1.5 million, 14.8% of revenues compared to gross profit of $1.9 million, a 10.3% of revenues in the second quarter of 2015. The decrease in gross profit and gross margins reflects the decreased sales and the fixed cost proportion. Operating profit was $244,000 compared to operating profit of $543,000 in the second quarter of 2015. Net profit was $213,000 or $0.02 per fully diluted share compared to net profit of $424,000 or $0.04 per fully diluted share in the second quarter of 2016. EBITDA amounted to $754,000, 7.6% of revenues compared to EBITDA of $1 million, 10% of revenues in the second quarter of 2015. Net cash used in operating activities amounted to $37,000 compared to net cash used in operating activities of $118,000 in the second quarter of 2015. The improvement is mainly attributable to a decrease in working capital requirements. Cash and cash equivalents as of June 30, 2016 were $894,000 compared to $994,000 as of June 30, 2015. That concludes the formal part of our call. We are now ready to take your questions.

This concludes our second quarter 2016 financial results conference call. Thank you for all the participants. Hope to see you all in the future events. Thank you and good evening.

This concludes the Eltek Limited’s second quarter 2016 financial results conference call. Thank you for your participation. You may go ahead and disconnect.