Ladies and gentlemen, thank you for standing by. Welcome to the Eltek Ltd. Second Quarter 2019 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, September 04, 2019. Before I turn the call over to Mr. Eli Yaffe, Chief Executive Officer; and Alon Mualem, 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 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 events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events. I would now turn the call over to Mr. Eli Yaffe. Mr. Yaffe, please go ahead.

Thank you. Good morning, everyone. Thank you for joining us and welcome to Eltek's 2019 second quarter earning call. With me is Alon Mualem, our Chief Financial Officer. We will begin by providing you with an overview of our business and summary of the principal factors that affected our results in the second quarter of 2019, 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 will also be available on our website at www.nisteceltek.com. Our revenue in the second quarter of 2019 were $8.2 million as compared to revenue of $8.7 million in the second quarter of 2018. We are glad that this quarter results continue to reflect the implementation of the turnaround plan, which was started during the last quarter of 2018. The implementation of step one of the turnaround plan includes both identifying those products that were underpriced and optimizing our pricing model, as well as affecting cost reduction and operational efficiencies. We are ready to move forward into step two of the turnaround plan, and we will be striving to increase our sales volume as market condition allows. The macro environment and tariffs in the U.S. marked for the products imported from China may provide a positive backwind for the segment of military product that Eltek produces. This quarter results were also positively affected by a receipt of $870,000 on an insurance claim made in 2018 for damage to one of our manufacturing machine, and the resulting losses that occurred as a result of this event in previous quarters. We are still facing challenges in our business and operation but I'm optimistic that we will be able to capitalize on our strengths and renew our position as the leading high-end PCB manufacturer. I will now turn the call over to Alon Mualem, our CFO, to discuss our financials.

Thank you, Eli. I would like to draw your attention through the financials for the second quarter of 2019. During this call, I will also be discussing EBITDA non-GAAP financial results. Eltek uses EBITDA as a non-GAAP financial performance measurement. Please see our earnings release for this definition and reasons for its use. As Eli mentioned, revenues for the second quarter of 2019 were $8.2 million, compared to revenues of $8.7 million in the second quarter of 2018. Gross profit increased from $578,000 or 6.7% of revenues in the second quarter of 2018 to $1.3 million or 15.3% of revenues in the second quarter of 2019. During the second quarter of 2019, we had an operating profit of $7,000 as compared to an operating loss of $721,000 in the second quarter of 2018. As Eli mentioned, this quarter, we recorded other income of $871,000 mainly related to receipt of an insurance payment associated with damage incurred during 2018 to one of our manufacturing machines. Net profit was $790,000 or $0.19 per fully diluted share, compared to a net loss of $843,000 or a loss of $0.42 per share in the second quarter of 2018. During the second quarter of 2018, we had a positive EBITDA of $1,260,000 or 15.2% of revenues, compared to a negative EBITDA of $296,000 in the second quarter of 2018. During this quarter, net cash used in operating activities amounted to $301,000 compared to cash used in operating activities of $570,000 in the second quarter of 2018. During the first half of 2019, the company achieved a positive operating cash flow of $1.3 million as compared to cash used in operating activities of $1.4 million in the first half of 2018. As previously announced, during the second quarter, we completed the rights offering to our shareholders and raised a net amount of $3.3 million. The proceeds from the offering improved our working capital and were used in part to reduce our line of credit as well as the general corporate purposes. The remaining proceeds may be invested in plant and equipment. We are now ready to take your questions.

Thank you. [Operator Instructions]. The first question is from [Michael Megalli] of [Wood LLC]. Please go ahead.

Yes. You mentioned some future positive backwind from what I'm understanding is supply change shifts, given the trade dynamics. Can you provide some color around the production and factory utilization levels and ability to onboard new 10% level category customers given that backwind?

Yes. Thank you, Michael, for your question. What I meant when I speak about backwind is tariff that was changed in United States mainly for import from China for military products, not for mobile. And since we are partners and player in the defense market, it's a backwind for us.

Thank you very much. And congratulations on a great second quarter.

Thank you very much, Michael.

[Operator Instructions]. There are no further questions at this time. Before I ask Mr. Yaffe to go ahead with his closing statement, I would like to remind the participants that a replay of this call will be available tomorrow on Eltek’s website www.nisteceltek.com. Mr. Yaffe, we have an additional question. Would you like to take it?

Yes.

The next question is from [Erik Mazminan]. Please go ahead. The caller has disconnected. Mr. Yaffe, would you like to make your concluding statement?

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

This concludes the Eltek Ltd. second quarter 2019 financial results conference call. Thank you for your participation. You may go ahead and disconnect.