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Elbit Systems Ltd.
Advanced Technology Center
P.O.B 539, Haifa 31053
Israel

Tel: 972-4-8316663
Fax: 972-4-8316944
Listen to Elbit Systems Ltd. Third Quarter 2018 Results Release
Conference Call Scheduled for November 20th, 2018 at 09.00am ET
 
Press Releases
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Elbit Systems Reports Third Quarter 2010 Results
Backlog of Orders Increased to $5.38 Billion; Revenues at $649.9 Million; Net Income at $45.3 Million; Diluted Net Earnings Per Share at $1.05

HAIFA, Israel, November 16, 2010 /PRNewswire via COMTEX/ --

Elbit Systems Ltd. (the "Company") (NASDAQ and TASE: ESLT), the international defense electronics company, today reported its consolidated financial results for the third quarter ended September 30, 2010.

(Logo: http://www.newscom.com/cgi-bin/prnh/20080408/300441 )

Revenues in the third quarter of 2010 were $649.9 million, as compared to $732.5 million in the third quarter of 2009. The decrease in revenues during the third quarter of 2010, compared with that of the third quarter last year, was mainly in the electro-optics and armored vehicle systems areas of operations, primarily in Europe.

Gross profit amounted to $197.9 million (30.5% of revenues) in the third quarter of 2010, as compared to $217.3 million (29.7% of revenues) in the third quarter of 2009. The decrease in the amount of gross profit from that of the corresponding quarter last year primarily resulted from the reduction in revenues. The improvement in margins was mainly a result of mix of the programs sold in the quarter and improvements in operations.

Research and development expenses, net were $56.1 million (8.6% of revenues) in the third quarter of 2010, as compared to $56.0 million (7.6% of revenues) in the third quarter of 2009.

Marketing and selling expenses were $59.1 million (9.1% of revenues) in the third quarter of 2010, as compared to $67.1 million (9.2% of revenues) in the third quarter of 2009.

General and administrative expenses were $30.2 million (4.7% of revenues) in the third quarter of 2010, as compared to $28.5 million (3.9% of revenues) in the third quarter of 2009.

Financial expenses, net were $5.5 million in the third quarter of 2010, as compared to net financial expenses of $0.6 million in the third quarter of 2009, which were relatively low due to currency hedging related gains.

Taxes on income were $4.8 million (effective tax rate of 10.1%) in the third quarter of 2010, as compared to taxes on income of $11.4 million (effective tax rate of 17.6%) in the third quarter of 2009. The change in the effective tax rate was attributable mainly to the mix of the tax rates in the various jurisdictions in which the Company's entities generate taxable income.

Equity in net earnings of affiliated companies and partnerships was $3.9 million (0.6% of revenues) in the third quarter of 2010, as compared to $6.2 million (0.8% of revenues) in the third quarter of 2009.

Net income attributable to non-controlling interests was $1.1 million in the third quarter of 2010, as compared to $1.4 million in the third quarter of 2009.

Net income attributable to the Company's ordinary shareholders in the third quarter of 2010 amounted to $45.3 million (7.0% of revenues), as compared to $58.3 million (8.0% of revenues) for the third quarter of 2009.

Diluted net earnings per share attributable to the Company's ordinary shareholders were $1.05 for the third quarter of 2010, as compared with $1.35 for the third quarter of 2009.

The Company's backlog of orders increased to $5,381 million as of September 30, 2010, as compared with $5,044 million as of December 31, 2009. Approximately 72% of the backlog relates to orders outside of Israel. Approximately 52% of the Company's backlog as of September 30, 2010, is scheduled to be performed during the last quarter of 2010 and in 2011.

Operating cash flow was $73.6 million in the first nine months of 2010, as compared to $127.0 million in the first nine months of 2009.

Recent Events:

On October 3, 2010, the Company announced that it was awarded an approximately $56 million tank upgrade contract from a customer in Asia. Under the contract, the tank upgrade project will include the installation of advanced battle management systems, as well as cutting edge observation and surveillance systems. The project will be completed within two years.

On October 13, 2010, the Company announced that its wholly-owned U.S. subsidiary, Elbit Systems of America, LLC ("ESA"), was awarded a five-year, $68 million Indefinite Delivery/Indefinite Quantity ("ID/IQ") contract from the U.S. Army Contracting Command in Huntsville, Alabama to supply the U.S. Army, Navy, Marine Corps and Coast Guard with AN/AVS-7 Head-Up Display components including the Company's latest Flat Panel Day and Night Head-Up Display units. Initial delivery orders totaling $23 million were awarded under the ID/IQ contract. This is a follow-on contract to a $75M ID/IQ contract awarded in September 2005.

On October 17, 2010, the Company announced, further to its announcements of June 15, 2009, September 14, 2009 and September 2, 2010, that it completed the acquisition of all the shares of Soltam Systems Ltd. ("Soltam"), Saymar Ltd. ("Saymar") and ITL Optronics Ltd. ("ITL") that were held by Mikal Ltd. ("Mikal") and its subsidiaries. With the completion of the acquisition, the Company now holds a 100% interest in Soltam and Saymar, and an 87.85% interest in ITL. The balance of ITL's shares, which are traded on the Tel Aviv Stock Exchange, is held by the public. An amount of approximately $26 million of the purchase price payable by the Company for the acquisition was placed in escrow with respect to various matters pursuant to the purchase agreement.

Simultaneously to the completion of the acquisition, the Company sold its holdings in Mikal (approximately 19%) to the other Mikal's shareholders.

On October 24, 2010, the Company announced that its UK Company with Thales UK - UAS Tactical Systems Ltd. ("U-TacS"), was awarded by Thales UK a follow-on Urgent Operating Capability ("UOR") contract worth approximately $70 million to provide an Intelligence, Surveillance, Target Acquisition and Reconnaissance support capability for the UK Armed Forces. The contract will be performed over the next one and a half years. As was the case with the previous U-TacS UOR contracts, awarded in 2007 and 2009, this contract also includes the provision and support of Hermes(R) 450 UAS, as well as training for UK Ministry of Defence staff in the use and maintenance of the system, and the provision of contractor logistic support and program management services. This work will be managed by U-TacS located in Leicester, UK.

On October 26, 2010, the Company announced that its wholly-owned U.S. subsidiary, ESA, was awarded a $45.5 million ID/IQ contract from the Naval Surface Warfare Center, Crane Division, Crane, Indiana for the supply of the Night Targeting System Upgrade (NTSU) and associated line items for AH - 1W Cobra helicopters. Work will be performed in Merrimack, New Hampshire and is expected to be completed over the next five years.

Management Comment:

The President and CEO of Elbit Systems, Joseph Ackerman, commented: "2010 has been a challenging year, reflecting the influence of the changing financial climate on our end-customers. Throughout this year, we have invested in our longer-term growth strategy through mergers and acquisitions, which provide us access to new markets and allow us to sell increasingly integrated systems. We have recently completed the acquisition of Soltam, Saymar and ITL, adding to our capabilities in artillery platforms and electro-optics. We will continue to look globally for similar opportunities, in strategic target markets such as the U.S. and others."

Ackerman added, "Over the past challenging months, we have focused our efforts and have successfully maintained and even improved our gross margins, and have also resumed our backlog growth. We believe that these efforts and investments will support renewed growth in future years."

Dividend:

The Board of Directors declared a dividend of $0.36 per share for the third quarter of 2010. The dividend's record date is November 30, 2010, and the dividend will be paid on December 13, 2010, net of taxes and levies, at the rate of 20%.

Conference Call:

The Company will be hosting a conference call later the same day, Tuesday November 16, 2010 at 09:00a.m. Eastern Time. On the call, management will review and discuss the results and will be available to answer questions.

To participate, please call one of the teleconferencing numbers that follow. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

                       US Dial-in Numbers: 1-888-668-9141
                        UK Dial-in Number: 0-800-917-9141
                       ISRAEL Dial-in Number: 03-918-0644
                  INTERNATIONAL Dial-in Number: +972-3-918-0644
          at 9:00am Eastern Time; 6:00am Pacific Time; 2:00pm UK Time;
                             4:00pm Israel Time

This call will also 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 call, investors will be able to dial a replay number to listen to the call. The dial-in numbers are:

               1-888-326-9310 (US) or +972-3-925-5901 (Israel and
                               International).

About Elbit Systems:

Elbit Systems Ltd. is an international defense electronics company engaged in a wide range of 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 aircraft systems ("UAS"), advanced electro-optics, electro-optic space systems, EW suites, airborne warning systems, SIGINT systems, data links and military communications systems and radios. The Company also focuses on the upgrading of existing military platforms, developing new technologies for defense, homeland security and commercial aviation applications and providing a range of support services.

    For additional information, visit: http://www.elbitsystems.com.

    Attachments:
    Consolidated balance sheets
    Consolidated statements of income
    Condensed 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.

                          (FINANCIAL TABLES TO FOLLOW)

                               ELBIT SYSTEMS LTD.

                           CONSOLIDATED BALANCE SHEETS

                          (In thousands of US Dollars)


                                                   September 30, December 31,
                                                       2010          2009
                                                     Unaudited     Audited
    Assets

    Cash and cash equivalents                          $ 255,046    $ 140,709
    Short-term bank deposits                             117,837      115,924
    Available for sale marketable securities              15,707       23,639
    Trade receivables, net                               653,082      659,524
    Other receivables and pre-paid expenses              169,307      115,856
    Inventories, net of customer advances                620,891      569,848
    Total current assets                               1,831,870    1,625,500

    Investment in affiliated companies,                  100,047       88,759
    partnership and other companies
    Available for sale marketable securities               8,161       12,941
    Long-term bank deposits and other receivables         71,795       36,338
    Deferred income taxes, net                            13,052        7,992
    Severance pay fund                                   287,241      274,136
                                                         480,296      420,166

    Property, plant and equipment, net                   445,167      404,675
    Goodwill and other intangible assets, net            614,976      603,336
    Total assets                                     $ 3,372,309  $ 3,053,677

    Liabilities and Shareholders' Equity

    Current maturities of long-term loans and           $ 39,484      $ 2,663

    Series A Notes
    Trade payables                                       317,005      299,238
    Other payables and accrued expenses                  547,831      552,806
    Customer advances in excess of costs                 333,618      367,137
    incurred on contracts in progress

    Total current liabilities                          1,237,938    1,221,844

    Long-term loans, net of current maturities           295,089      386,534
    Series A Notes                                       270,045            -
    Accrued termination liability                        368,321      351,278
    Deferred income taxes and tax liabilities, net        59,024       59,602
    Customer advances in excess of costs                 139,353      142,566
    incurred on contracts in progress

    Other long-term liabilities                           33,987       34,659
                                                       1,165,819      974,639

    Elbit Systems Ltd.'s shareholders' equity            938,040      832,868
    Non-controlling interests                             30,512       24,326
    Total shareholders' equity                           968,552      857,194
    Total liabilities and shareholders' equity       $ 3,372,309  $ 3,053,677



                               ELBIT SYSTEMS LTD.

                        CONSOLIDATED STATEMENTS OF INCOME

           (In thousands of US Dollars, except for share and per share
                                  amounts)

                                          Nine Months Ended   Three Months
                                                                    Ended
                                            September 30
                                                              September 30
                                           2010      2009     2010    2009

                                                      Unaudited
    Revenues                                     $         $       $       $
                                         1,871,384 2,117,741 649,906 732,520
    Cost of revenues                     1,305,372 1,480,302 452,000 515,219
    Gross profit                           566,012   637,439 197,906 217,301

    Operating expenses:
    Research and development, net          165,660   154,910  56,149  56,022
    Marketing and selling                  164,053   191,561  59,122  67,096
    General and administrative              90,369    86,805  30,228  28,519
    Other income, net                       (4,756)        -       -       -
    Total operating expenses               415,326   433,276 145,499 151,637

    Operating income                       150,686   204,163  52,407  65,664

    Financial expenses, net                 (9,658)   (8,165) (5,521)   (564)
    Other income (expenses), net            13,439      (868)    350    (222)
    Income before taxes on income          154,467   195,130  47,236  64,878
    Taxes on income                         21,606    37,696   4,791  11,448
                                           132,861   157,434  42,445  53,430
    Equity in net earnings of affiliated
    companies and partnership               13,205    14,395   3,905   6,202
    Consolidated net income               $146,066  $171,829 $46,350 $59,632

    Less: net income attributable to non-
    controlling interests                   (6,254)  (10,598) (1,099) (1,377)
    Net income attributable to Elbit
    Systems Ltd.'s shareholders           $139,812  $161,231 $45,251 $58,255


    Earnings per share attributable to
    Elbit Systems Ltd.'s ordinary shareholders:
    Basic net earnings per share             $3.27     $3.82   $1.06   $1.37
    Diluted net earnings per share           $3.23     $3.76   $1.05   $1.35
    Weighted average number of shares
    used in computation of basic earnings
    per share                               42,631    42,241  42,671  42,426

    Weighted average number of shares
    used in computation of diluted
    earnings per share                      43,226    42,897  43,165  43,233


    Table Continues:

                                                   Year Ended

                                                   December 31
                                                      2009
                                                     Audited
    Revenues                                       $ 2,832,437
    Cost of revenues                                 1,982,954
    Gross profit                                       849,483

    Operating expenses:
    Research and development, net                      216,752
    Marketing and selling                              250,963
    General and administrative                         119,311
    Other income, net                                        -
    Total operating expenses                           587,026

    Operating income                                   262,457

    Financial expenses, net                            (15,585)
    Other income (expenses), net                           458
    Income before taxes on income                      247,330
    Taxes on income                                     38,109
                                                       209,221

    Equity in net earnings of affiliated companies
    and partnership                                     19,292
    Consolidated net income                          $ 228,513

    Less: net income attributable to non-
    controlling interests                              (13,566)
    Net income attributable to Elbit Systems
    Ltd.'s shareholders                              $ 214,947

    Earnings per share attributable to Elbit
    Systems Ltd.'s ordinary shareholders:
    Basic net earnings per share                        $ 5.08
    Diluted net earnings per share                      $ 5.00
    Weighted average number of shares used in
    computation of basic earnings per share             42,305
    Weighted average number of shares used in
    computation of diluted earnings per share           42,983



                               ELBIT SYSTEMS LTD.

                      CONSOLIDATED STATEMENTS OF CASH FLOW

                          (In thousands of US Dollars)


                                           Nine Months Ended         Year
                                                                     Ended
                                             September 30,          December
                                                                       31,
                                          2010             2009       2009
                                              (Unaudited)          (Audited)
    CASH FLOWS FROM OPERATING
    ACTIVITIES
    Net income                       $ 146,066        $ 171,829   $ 228,513
    Adjustments to reconcile net
    income to net cash provided by
    operating activities:
    Depreciation and amortization       93,669           93,189     123,473
    Write-off impairment                   717                -       3,017
    Stock based compensation             4,254            3,839       5,134
    Amortization of Series A Notes         103                -           -
    discount and deferred financing
    costs
    Deferred income taxes and           (9,068)          (4,824)      7,606
    reserve
    Severance, pension and               2,129          (13,203)    (16,773)
    termination indemnities, net
    Gain on sale of property, plant     (1,978)            (468)       (723)
    and equipment
    Gain on sale of investments        (19,178)            (120)     (2,734)
    Equity in net earnings of           (4,735)          (2,668)     (1,824)
    affiliated companies and
    partnership, net of dividend
    received(*)
    Change in operating assets and
    liabilities:
    Increase in short and long-term    (65,959)         (41,871)   (136,224)
    trade receivables, and prepaid
    expenses
    Decrease (increase) in             (48,282)          44,913      75,431
    inventories, net
    Decrease (increase) in trade        12,745           (8,233)     20,223
    payables, other payables and
    accrued expenses
    Decrease in advances received      (36,843)        (115,360)    (95,397)
    from customers
    Net cash provided by operating      73,640          127,023     209,722
    activities

    CASH FLOWS FROM INVESTING
    ACTIVITIES
    Purchase of property, plant and   (105,397)         (78,054)   (107,893)
    equipment
    Acquisition of subsidiaries and    (34,566)        (124,033)    (48,234)
    business operations
    Investments in affiliated           (1,192)         (21,794)    (19,415)
    companies and other companies
    Proceeds from sale of property,      7,732            6,972       9,055
    plant and equipment
    Proceeds from sale of               12,751                -      33,026
    investments
    Investment in available for          5.006          (11,272)    (11,010)
    sales debt-securities and
    long-term deposits, net
    Investment in short-term             6,387          (40,946)    (52,832)
    deposits, net
    Net cash used in investing        (109,279)        (269,127)   (197,303)
    activities

    CASH FLOWS FROM FINANCING
    ACTIVITIES
    Proceeds from exercise of            4,084           11,340       9,871
    options
    Purchase of non-controlling              -                -    (110,250)
    interests
    Repayment of long-term bank       (246,146)         (68,159)   (148,652)
    loans
    Proceeds from issuance of Series   283,213                -           -
    A Notes, net
    Deferred financing costs related    (2,185)               -           -
    to issuance of Senior A Notes
    Receipt of long-term bank loans    159,000          217,115     256,354
    Dividends paid                     (47,990)         (60,897)    (76,172)
    Change in short-term bank credit         -           (7,436)     (7,531)
    and loans, net
    Net cash provided by (used in)     149,976           91,963     (76,380)
    financing activities

    NET INCREASE (DECREASE) IN CASH    114,337          (50,141)    (63,961)
    AND CASH EQUIVALENTS
    CASH AND CASH EQUIVALENTS AT THE   140,709          204,670     204,670
    BEGINNING OF THE PERIOD
    CASH AND CASH EQUIVALENTS AT THE $ 255,046        $ 154,529   $ 140,709
    END OF THE PERIOD
    * Dividend received                $ 8,689         $ 11,727    $ 17,468



                     ELBIT SYSTEMS LTD. DISTRIBUTION OF REVENUES

                     CONSOLIDATED REVENUE BY AREAS OF OPERATION:


                        Nine Months Ended            Three Months Ended
                          September 30                  September 30
                       2010           2009           2010           2009
                     $       %      $       %      $       %      $       %
                      millions       millions       millions       millions
    Airborne         552.3  29.5    513.3  24.2    194.2  29.9    166.7  22.8
    systems
    Land systems     312.7  16.7    384.4  18.2     94.2  14.5    132.2  18.0
    C4ISR systems    674.1  36.0    819.7  38.7    266.8  41.1    289.6  39.6
    Electro-optics   243.3  13.0    307.9  14.5     75.0  11.5    117.5  16.0
    Other (mainly     89.0  4.8      92.4   4.4     19.7   3.0     26.5   3.6
    non-defense
    engineering
    and production
    services)
    Total          1,871.4 100.0  2,117.7 100.0    649.9 100.0    732.5 100.0


                 CONSOLIDATED REVENUES BY GEOGRAPHICAL REGIONS:


                       Nine Months Ended            Three Months Ended
                         September 30                  September 30
                      2010           2009           2010           2009
                    $       %      $       %      $       %      $       %
                     millions       millions       millions       millions
    Israel          458.8  24.5    468.3  22.1    182.5  28.1    167.5  22.9
    United States   589.6  31.5    603.1  28.5    187.8  28.9    209.7  28.6
    Europe          390.2  20.9    550.8  26.0    116.4  17.9    201.2  27.5
    Other           432.8  23.1    495.5  23.4    163.2  25.1    154.1  21.0
    countries
    Total         1,871.4 100.0  2,117.7 100.0    649.9 100.0    732.5 100.0



    Company Contact                       IR Contact
    Joseph Gaspar, Executive VP & CFO     Ehud Helft
    Dalia Rosen, VP, Head of Corporate    Kenny Green
    Communications
    Elbit Systems Ltd.                    CCG Investor Relations
    Tel: +972-4-831-6663                  Tel: +1-646-201-9246
    Fax  +972-4-831-6944                  E-mail: elbitsystems@ccgisrael.com
    E-mail: j.gaspar@elbitsystems.com
            Dalia.rosen@elbitsystems.com


SOURCE Elbit Systems Ltd


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