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

Ladies and gentlemen, thank you for standing by. Welcome to the Eltek Ltd. Fourth Quarter 2017 Financial Results Conference Call. All participants are present in a 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 April 30, 2018. 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, it’s 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 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’s 2017 full year and fourth quarter earnings call. With me are, Amnon Shemer, our Chief Financial Officer and Roberto Tulman, Deputy CEO and Chief Technology Officer. We will begin by providing you with an overview of our business and a summary of the principal factors that affected our results in the fourth 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 fourth quarter press release which was released earlier today, the release will also be available on our website at www.nisteceltek.com. Our revenues in the full year of 2017 decreased to $32.8 million from $33.2 million in the 2016 excluding Kubatronik. Our revenues increased in fourth quarter of 2017 to a $9.1 million compared to revenue of $7.3 million in the fourth quarter of 2016 excluding Kubatronik. We continue the implementation of the improvements we made in our manufacturing process in order to supply our increased backlog of volumes. We see an increase demand for our products. Our backlog of orders was grown significantly I believe that the adjustments made to our manufacturing and marketing operations will assist the Company to reach its goals quickly and efficiency. I’m determined to bring the Company back to profitability in the near future. In March 2018, Nistec, Ltd. the Company's controlling shareholder extended the Company a bridge financing of NIS4 billion approximately $1.1 million. For working capital in addition in April 2018, Nistec provided the Company a Letter of Commitment to provide additional financial income amount of up to $2.5 million valid for one-year following the date of our approval of its 2017 financial statements. This supports along with the financial support provided by the Nistec in 2017 reflect my confidence in the Company and my belief that Eltek has the potential to overcome the manufacturing challenges and return into profitability. The results for the fourth quarter and the full year ended December 31, 2017, do not include the operations of Kubatronik which were included in Eltek results for the comparative period in 2016. Therefore, we have provided selected financial information on a pro forma basis excluding Kubatronik results for 2016. I will now turn the call over Amnon Shemer, our Chief Financial Officer to discuss our financials. Amnon, please?

Thank you, Yitzhak, Ultimately, I’ll turn your attention to the financials for the full year and the fourth quarter of 2017. During this call, 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 release for our definition of and our results for it. First, the highlights for the full year of 2017, revenues for the full year of 2017 were $32.8 million compared to revenues of $37.1 million in 2016 and $33.2 million excluding Kubatronik. Gross profit was $1.3 million, 4.1% of revenues, compared to gross profit of $2.8 million, 7.6% of revenues in 2016 and $2.8 million or 8.3% of revenue excluding Kubatronik. Net loss was $3.8 million or $1.86 per share compared to a net loss $3.6 million or $1.79 per share in 2016 and net loss of $3.2 million or $1.6 million per share excluding Kubatronik. EBITDA was a negative amount of $1.3 million compared to a negative amount of $313,000 in 2016 and a negative amount of $124,000 excluding Kubatronik. Net cash used in operating activities amounted to $3.4 million compared to $165,000 of net cash provided by operating activities in 2016. Cash and cash equivalents as of December 31, 2017 were $887,000 compared to $1.2 million as of December 31, 2016. Now, I will go over the highlights for the fourth quarter of 2017 compared to the fourth quarter of 2016. Revenues for the fourth quarter of 2017 were $9.1 million compared to revenues of $8.1 million in the fourth quarter of 2016 and $7.3 million excluding Kubatronik. Gross profit was $740,000, 8.1% of revenues compared to gross loss of $463,000, 5.7% of revenues in the fourth quarter of 2016 and gross loss of $283,000 or 3.9% of revenues excluding Kubatronik. Net loss was $669,000 or $0.33 per share compared to net loss of $3 million or $1.48 per share in the fourth quarter of 2016 and net loss of $2.8 million or $1.4 per share excluding Kubatronik. EBITDA was a negative amount of $130,000 compared to a negative amount of $1.4 million in the fourth quarter of 2016 and a negative amount of $1.2 million excluding Kubatronik. Net cash used in operating activities amounted to $775,000 compared to $1.3 million of cash used in operating activities in the fourth quarter of 2016. We are now ready to take your questions.

Before I ask Mr. Nissan to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available tomorrow on Eltek’s website at www.nisteceltek.com. Mr. Nissan would you like to make your concluding statement.

I would like to thanks all of you for joining us on today’s call. Before we conclude our call, I would like to thank once again all our customers, partners, investors and Eltek team for their continued support. Have a good day. Thank you very much.

This concludes the Eltek, Ltd fourth quarter 2017 financial results conference call. Thank you for your participation. You may go ahead and disconnect.