Elbit Systems Ltd. (the "Company") (NASDAQ: ESLT, TASE: ESLT), the
international defense company, today reported its consolidated financial
results for the first quarter ended
March 31, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080408/300441 )
Consolidated revenues increased by 6.6% to $656.9 million, as compared to
$616.1 million in the first quarter of 2008. The Company's revenues in the
C4ISR area of operations increased significantly in the first quarter of 2009
compared to the first quarter of 2008, as a result of increased sales of
communication equipment and unmanned air vehicle systems to a number of
customers. Other than relatively minor fluctuations, the percentage mix of
revenues derived from the various geographical regions remained steady, as
compared to the first quarter of 2008.
Gross profit increased by 22% to $208.3 million (31.7% of revenues) for
the first quarter of 2009, as compared with gross profit of $170.7 million
(27.7% of revenues) in the first quarter of 2008. The strong gross profit
margin was primarily the result of a mix of projects performed with higher
gross profit, and in part due to the strength of the U.S. Dollar versus the
Israeli Shekel during the first quarter of 2009, which affected the labor
costs incurred in Shekels.
Research and development ("R&D") - The Company continually invests in R&D
in order to maintain and further advance its technologies, in accordance with
its long-term plans. In the quarter ended March 31, 2009 net R&D expenses
totaled $45.9 million (7.0% of revenues), as compared to $38.0 million (6.2%
of revenues) in the quarter ended March 31, 2008.
Marketing and selling expenses - The Company incurs marketing and selling
expenses in developing new markets and pursuing from time to time various
business opportunities according to the Company's plan. Marketing and selling
expenses in the quarter ended March 31, 2009 were $56.9 million (8.7% of
revenues), as compared to $52.5 million (8.5% of revenues) in the quarter
ended March 31, 2008.
General and administrative ("G&A") expenses were $28.9 million (4.4% of
revenues) in the quarter ended March 31, 2009, as compared to $31.6 million
(5.1% of revenues) in the quarter ended March 31, 2008.
Net financial expenses were $19 million in the quarter ended March 31,
2009, as compared to $4.6 million in the quarter ended March 31, 2008. The
increase in net financial expenses was mainly a result of the strengthening
of the U.S. Dollar against the Israeli Shekel, which affected the value of
the Company's currency hedge derivatives in Israeli Shekels.
Provision for taxes was $12.2 million (effective tax rate of 21.3%) in
the quarter ended March 31, 2009, as compared to a provision for taxes of
$7.9 million (effective tax rate of 16.5%) in the quarter ended March 31,
2008. The change in the effective tax rate is attributable mainly to the mix
of the tax rates in the various tax jurisdictions in which the Company
entities generating the taxable income operate.
Net income attributable to the Company increased by 34.5% to $43.3
million (6.6% of revenues) for the first quarter of 2009, as compared with
$32.2 million (5.2% of revenues) in the first quarter of 2008. According to
SFAS No. 160, which is applicable to the Company's results for the first time
in the first quarter of 2009, consolidated net income attributable to the
Company is calculated after eliminating net income or loss attributable to
non-controlling interests.
Diluted net earnings per share attributable to the Company for the first
quarter of 2009 was $1.02, as compared with $0.75 for the first quarter of
2008, an increase of 36%.
The Company's backlog of orders totaled $5,091 million as of March 31,
2009, as compared with $5,030 million as of December 31, 2008. Approximately
67% of the backlog relates to orders outside of Israel. Approximately 72% of
the Company's backlog as of March 31, 2009, is scheduled to be performed
during the upcoming three quarters of 2009 and during 2010.
Operating Cash flow was $5.4 million during the first quarter of 2009, as
compared to $66.3 million in the first quarter of 2008. The decrease in the
operating cash flow in the first quarter of 2009 was mainly a result of a
reduction in the overall amount of advanced payments from customers.
Recent Events:
On April 7, 2009, the Company completed the purchase of the minority
shares of its previously 51%-owned subsidiary Kinetics Ltd. ("Kinetics"). The
Company purchased the remaining 49% of the shares from Kinetics' minority
shareholders for a maximum total consideration of $118 million, of which $110
million was paid upon closing, and the balance is subject to Kinetics' 2009
financial results.
On May, 5, 2009, the Company's wholly-owned subsidiary Elbit Systems of
America, LLC, was selected as part of an industry team led by Rockwell
Collins for the system integration and prototype phase of the Ground Soldier
Ensemble (GSE) program for the U.S. Army. Elbit Systems of America and
Rockwell Collins together formed "Team Spartan". The team was selected, as
one of three teams, in a competition among several U.S. companies to develop
the next-generation soldier-worn computer system. The system will provide
situational awareness to soldiers during intense operations in a
configuration that optimizes size, weight and power and can be customized for
different missions.
On May 7, 2009, the Company's subsidiary, Elisra Electronic Systems Ltd.
(Elisra), was awarded a contract by Lockheed Martin Canada Ltd. valued at
approximately $55 million to supply Electronic Warfare (EW) equipment for the
Canadian Navy's Halifax Frigate Modernization program. Elisra's systems were
selected after meeting the strict standards and challenges required by the
customer.
On May 14, 2009, the Company's wholly owned U.S. subsidiary, Elbit
Systems of America announced the award of a contract from the U.S. Army for
the Mortar Fire Control (MFC) Systems Integration program. The contract is a
hybrid Indefinite Delivery /Indefinite Quantity-Time and Materials
(ID/IQ-T&M) type contract, which provides for orders up to $197.5 million
amount over a five-year period. The initial order under the contract is
valued at approximately $22 million and is expected shortly.
On May 17, 2009, the Company's subsidiary, Elbit Systems of America, and
General Dynamics Armament and Technical Products announced the formation of a
new joint venture named UAS Dynamics, LLC, to provide unmanned aerial systems
(UAS) to the Department of Defense and other potential U.S. government
customers through programs such as the recently announced U.S. Marine Corps'
Small Tactical Unmanned Aircraft Systems (STUAS)/Tier II program. The
solutions that UAS Dynamics will offer are based on advanced, mature UAS
designs that accumulated more than 150,000 operational flight hours to date:
the combat-proven Hermes(R) and Skylark(R) systems, developed and fielded by
the Company. UAS Dynamics will adapt those proven designs to incorporate new
logistics resources to rapidly field and satisfy evolving U.S. requirements.
On May 18, 2009, the Company announced it was awarded a contract valued
at EUR25 million to supply the Austrian Army with Elbit Systems' new 12.7mm
unmanned Electrically Remote Controlled Weapon Stations. The systems will be
delivered over the course of the next four years. The contract for the
Austrian Army was signed between Elbit Systems and IVECO S.p.A., a subsidiary
of the Fiat Group, prime contractor for the program. The Weapon Stations
provided by Elbit Systems will be integrated into IVECO Defence Vehicles'
Light Multi-role Vehicles (LMV) 4X4.
Management Comment:
The President and CEO of Elbit Systems, Joseph Ackerman, commented: "We
are satisfied with the first quarter's profitability, which resulted in part
from our efficient management of business synergies. The growth in the C4ISR
area of operations is encouraging and a good example of our ability to
successfully foresee our customers' needs. We have also witnessed continued
demand in other areas of our activity. Based on all these factors, we expect
a double digit growth in revenues in 2009, as compared to 2008."
Mr. Ackerman added: "Based on our recent acquisitions, as well as our
recent announcements regarding cooperation with industry leaders, we continue
to feel confident about our future success."
Dividend:
The Board of Directors declared a dividend of $0.30 per share for the
first quarter of 2009. The dividend's record date is June 2, 2009, and the
dividend will be paid on June 15, 2009, net of taxes and levies, at the rate
of 16.61%.
Conference Call
The Company will also be hosting a conference call today, Wednesday, May
20, 2009 at 9:30am ET. On the call, management will review and discuss its
first quarter 2009 results and will be available to answer questions.
To participate, please call one of the following teleconferencing
numbers. Please begin placing your calls at least 10 minutes before the
conference call commences. If you are unable to connect using the toll-free
numbers, please try the international dial-in number.
US Dial-in Numbers: 1-888-723-3164
UK Dial-in Number: 0-808-101-2717
ISRAEL Dial-in Number: 03-918-0650
INTERNATIONAL Dial-in Number: +972-3-918-0650
at:
9:30am Eastern Time; 6:30am Pacific Time; 2:30pm UK time and
4:30pm Israel time
This call will be broadcast live on Elbit Systems' web-site at
http://www.elbitsystems.com. An online replay will be available from 24 hours
after the call ends.
Alternatively, for two days following the end of the call, investors will
be able to dial a replay number to listen to the call. The dial-in numbers:
1-888-269-0005 (US) or +972-3-925-5951 (Israel and
International).
About Elbit Systems Ltd.
Elbit Systems Ltd. Is an international defense electronics company
engaged in a wide range of defense-related programs throughout the world. The
Company, which includes Elbit Systems and its subsidiaries, operates in the
areas of aerospace, land and naval systems, command, control, communications,
computers, intelligence surveillance and reconnaissance ("C4ISR"), unmanned
air vehicle (UAV) systems, advanced electro-optics, electro-optic space
systems, EW suites, airborne warning systems, ELINT systems, data links and
military communications systems and radios. The Company also focuses on the
upgrading of existing military platforms and developing new technologies for
defense, homeland security and commercial aviation applications.
Attachments:
Consolidated balance sheet
Consolidated statements of income
Condense consolidated statements of cash flow
Consolidated revenue distribution by areas of operation and by
geographical regions
This press release contains forward-looking statements (within the
meaning of Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended) regarding Elbit
Systems Ltd. And/or its subsidiaries (collectively the Company), to the
extent such statements do not relate to historical or current fact. Forward
Looking Statements are based on management's expectations, estimates,
projections and assumptions. Forward-looking statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995, as amended. These statements are not guarantees of future performance
and involve certain risks and uncertainties, which are difficult to predict.
Therefore, actual future results, performance and trends may differ
materially from these forward-looking statements due to a variety of factors,
including, without limitation:scope and length of customer contracts;
governmental regulations and approvals; changes in governmental budgeting
priorities; general market, political and economic conditions in the
countries in which the Company operates or sells, including Israel and the
United States among others;differences in anticipated and actual program
performance, including the ability to perform under long-term fixed-price
contracts; and the outcome of legal and/or regulatory proceedings. The
factors listed above are not all-inclusive, and further information is
contained in Elbit Systems Ltd.'s latest annual report on Form 20-F, which is
on file with the U.S. Securities and Exchange Commission. All forward-looking
statements speak only as of the date of this release. The Company does not
undertake to update its forward-looking statements.
ELBIT SYSTEMS LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars)
March 31 December 31
2009 2008
Assets
Current assets:
Cash short term deposits and marketable securities 268,760 278,043
Trade receivables 478,986 477,010
Other receivables and pre-paid expenses 190,213 203,990
Inventories, net of advances 637,860 644,107
Total current assets 1,575,819 1,603,150
Investment in affiliated companies and a
partnership 64,898 62,300
Long-term deposits and marketable securities 40,632 34,355
Long-term receivables and others 233,616 252,519
Property and equipment, net 384,508 384,086
Goodwill and other intangible assets, net 601,802 594,283
Total assets 2,901,275 2,930,693
Liabilities and Shareholder's Equity
Short-term bank credit and loans 6,542 15,413
Other current liabilities 1,259,541 1,297,731
Long-term loans 303,114 269,760
Other long-term liabilities 511,868 547,481
2,081,065 2,130,385
Elbit Systems Ltd.'s shareholders' equity 737,124 723,833
Non-controlling interests(*) 83,086 76,475
Total shareholders' equity 820,210 800,308
Total liabilities and shareholders' equity 2,901,275 2,930,693
(*) The Company has adopted SFAS No. 160, "Non-controlling Interests in
Consolidated Financial Statements, an amendment to ARB No. 51," as of January
1, 2009. Pursuant to SFAS No. 160, net income attributable to non-controlling
interests is presented in the statement of income as part of consolidated net
income and then shown on a separate line item as a reduction to arrive at net
income attributable to Elbit Systems Ltd., which is the equivalent of "net
income" presented in previous statements of income. Cumulative net income
attributable to non-controlling interests is presented on the balance sheets
as part of total shareholders' equity and is else shown on a separate line
item. Total shareholders equity ,net of the comulative net income
attributable to non-controling interests,represents the shareholders' equity
attributable to the company's ordinary shareholders equity,which is the
equivalent of "shareholders equity" presented in previous balance sheets.
ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US Dollars, except for share and per share
amounts)
Three Months Ended Year Ended
March 31 December 31
2009 2008 2008
Revenues 656,932 616,063 2,638,271
Cost of revenues 448,664 445,390 1,870,830
Gross profit 208,268 170,673 767,441
Operating expenses:
Research and development, net 45,880 38,035 184,984
Marketing and selling 56,916 52,504 198,274
General and administrative 28,888 31,629 134,182
Acquired IPR&D - - 1,000
Total operating expenses 131,684 122,168 518,440
Operating income 76,584 48,505 249,001
Financial expenses, net (19,039) (4,600) (36,815)
Other income (expenses), net (95) 4,096 94,294
Income before taxes on income 57,450 48,001 306,480
Taxes on income (12,212) (7,922) (54,367)
45,238 40,079 252,113
Equity in net earnings of affiliated
companies
and partnership 4,776 2,565 14,435
Consolidated net income 50,014 42,644 266,548
Less: net income attributable to
non-controlling interests(*) (6,760) (10,491) (62,372)
Net income attributable to Elbit Systems
Ltd. 43,254 32,153 204,176
Earnings per share attributable to Elbit
Systems Ltd.'s
ordinary shareholders:
Basic net earnings per share 1.03 0.76 4.85
Diluted net earnings per share 1.02 0.75 4.78
Weighted average number of shares used in
computation of basic earnings per share 42,097 42,067 42,075
Weighted average number of shares used in
computation of diluted earnings per share 42,534 42,876 42,758
(*) The Company has adopted SFAS No. 160, "Non-controlling Interests in
Consolidated Financial Statements, an amendment to ARB No. 51," as of January
1, 2009. Pursuant to SFAS No. 160, net income attributable to non-controlling
interests is presented in the statement of income as part of consolidated net
income and then shown on a separate line item as a reduction to arrive at net
income attributable to Elbit Systems Ltd., which is the equivalent of "net
income" presented in previous statements of income. Cumulative net income
attributable to non-controlling interests is presented on the balance sheets
as part of total shareholders' equity and is else shown on a separate line
item. Total shareholders equity ,net of the comulative net income
attributable to non-controling interests,represents the shareholders' equity
attributable to the company's ordinary shareholders equity,which is the
equivalent of "shareholders equity" presented in previous balance sheets.
ELBIT SYSTEMS LTD.
CONDENSE CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands of US Dollars)
Three months ended Year ended
March 31 December 31
2009 2008 2008
Cash flow from operating activities
Net income 43,254 32,153 204,176
Depreciation and amortization 30,031 30,645 129,437
Other adjustments to reconcile net
income to net cash (3,577) 23,244 1,663
Changes in net operating assets (64,259) (19,750) (125,848)
Net cash provided by operating
activities 5,449 66,292 209,428
Net cash used in investing activities (99,833) (56,794) (171,707)
Net cash provided by (used in) financing
activities 24,101 (47,197) (195,853)
Net increase (decrease) in cash and
cash equivalents (70,283) (37,699) (158,132)
Cash and cash equivalent at the
beginning of the period 204,670 362,802 362,802
Cash and cash equivalent at the end of
the period 134,387 325,103 204,670
ELBIT SYSTEMS LTD.
DISTRIBUTION OF REVENUES
Consolidated revenue by areas of operation:
Three Months Ended Year Ended
March 31 December 31
2009 2008 2008
$ millions % $ millions % $ millions %
Airborne systems 172.9 26.3 155.3 25.2 634.7 24.1
Land systems 141.8 21.6 156.0 25.3 699.5 26.5
C4ISR systems 230.1 35.0 181.9 29.5 844.5 32.0
Electro-optics 82.7 12.6 88.1 14.3 336.7 12.7
Other (mainly
non-defense engineering
and production
services) 29.4 4.5 34.8 5.7 122.9 4.7
Total 656.9 100.0 616.1 100.0 2,638.3 100.0
Consolidated revenues by geographical regions:
Three Months Ended Year Ended
March 31 December 31
2009 2008 2008
$ millions % $ millions % $ millions %
Israel 124.5 18.9 123.1 20.0 474.4 18.0
United States 210.7 32.1 215.1 34.9 907.1 34.4
Europe 162.2 24.7 137.1 22.2 653.1 24.7
Other countries 159.5 24.3 140.8 22.9 603.7 22.9
Total 656.9 100.0 616.1 100.0 2,638.3 100.0
Company Contact:
Joseph Gaspar, Executive VP & CFO
Dalia Rosen, Head of Corporate Communications
Elbit Systems Ltd.
Tel: +972-4 831-6663
Fax: +972-4-831-6944
E-mail: j.gaspar@elbitsystems.com
dalia.rosen@elbitsystems.com
IR Contact:
Ehud Helft / Kenny Green
GK Investor Relations
Tel: +1-646-201-9246
E-mail: info@gkir.com
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