Elbit Systems Reports Third Quarter 2009 Results
Copyright 2010 PR Newswire. All Rights Reserved
2009-11-18
HAIFA, Israel, November 18 /PRNewswire-FirstCall/ --
- Revenues Increased by 9.1% YoY to $732.5 Million;
- Net income Increased by 63.7% YoY to $58.3 Million;
- Diluted net Earnings per Share Increased by 62.7% to $1.35
Elbit Systems Ltd. (the "Company") (NASDAQ: ESLT, TASE: ESLT), the international
defense electronics company, today reported its consolidated financial results
for the third quarter ended September 30, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080408/300441 )
Revenues increased by 9.1% to $732.5 million in the third quarter of 2009, as
compared to $671.2 million in the third quarter of 2008. The Company's revenues
in the Electro-optics area of operations increased in the third quarter of 2009
compared with that of the third quarter of 2008, mainly as a result of increased
sales of night vision equipment.
Gross profit increased by 8.9% to $217.3 million (29.7% of revenues) in the
third quarter of 2009, as compared with gross profit of $199.5 million (29.7% of
revenues) in the third quarter of 2008.
Net research and development ("R&D") expenses were $56 million (7.6% of
revenues) in the third quarter of 2009, as compared to $45 million (6.7% of
revenues) in the third quarter of 2008. The higher level of R&D expenses in the
third quarter of 2009 reflected increased efforts on development and adaptations
of products and systems to market requirements.
Marketing and selling expenses were $67.1 million (9.2% of revenues) in the
third quarter of 2009, as compared to $50.3 million (7.5% of revenues) in the
third quarter of 2008. The increased level of marketing and selling expenses in
the quarter reflected enhanced efforts by the Company in pursuit of a wide range
of business opportunities in various markets.
General and administrative ("G&A") expenses were $28.5 million (3.9% of
revenues) in the third quarter of 2009, as compared to $25.8 million (3.9% of
revenues) in the third quarter of 2008.
Net financial expenses were $0.6 million in the third quarter of 2009, as
compared to $16.1 million in the third quarter of 2008. The decrease in 2009 was
affected by the Company's hedging activity, which reduced the Company's exposure
to changes in the value of U.S. Dollar versus the Israeli Shekel, as well as by
decreased interest rates in the market. Since our reporting currency is the U.S.
Dollar, the weakening of the U.S, Dollar against the Israeli Shekel negatively
impacted the Company's gross and operating income; however, it also increased
the value of the Company's currency hedge derivatives in Israeli Shekels. Net
financial expenses in the third quarter of 2008 included the impact of a
write-off related to Auction Rate Securities ("ARS") in the amount of
approximately $6 million.
Taxes on income were $11.4 million (effective tax rate of 17.6%) in the third
quarter of 2009, as compared to taxes on income of $16.4 million (effective tax
rate of 26.3%) in the third quarter of 2008. The change in the effective tax
rate was attributable mainly to the mix of the tax rates in the various tax
jurisdictions in which the Company's entities generate taxable income.
Equity in net earnings of affiliated companies and partnership increased in the
third quarter of 2009 to $6.2 million (0.8% of revenues), as compared to $2.1
million (0.3% of revenues) in the third quarter of 2008. This was a result of
both growth in revenues and operational improvements in those entities.
Net income attributable to non-controlling interests was $1.4 million in the
third quarter of 2009, as compared to $12.4 million in the third quarter of
2008. The decrease in net income attributable to non-controlling interests was
mainly a result of the Company's purchase during the second quarter of 2009 of
the remaining 49% of Kinetics Ltd.'s shares, making Kinetics a wholly-owned
subsidiary.
Net income attributable to the Company's ordinary shareholders increased in the
third quarter of 2009 by 63.7% to $58.3 million (8.0% of revenues), as compared
with $35.6 million (5.3% of revenues) in the third quarter of 2008.
It should also be noted that according to ASC 810-10 "Consolidation", which is
applicable to the Company's results starting from January 1, 2009, consolidated
net income attributable to the Company's ordinary shareholders is calculated
after eliminating net income or loss attributable to non-controlling interests.
Diluted net earnings per share attributable to the Company's ordinary
shareholders were $1.35 for the third quarter of 2009, as compared with $0.83
for the third quarter of 2008, an increase of 62.7%.
The Company's backlog of orders totaled $5,008 million as of September 30, 2009,
as compared with $5,030 million as of December 31, 2008. Approximately 66% of
the current backlog is due to orders from outside Israel. Approximately 57% of
the current backlog is scheduled to be performed during the remainder of 2009
and during 2010.
Operating cash flow was $127 million in the nine months ended September 30,
2009, as compared to $112.9 million in the nine months ended September 30, 2008.
Management Comment:
"Our quarterly results reflect continued growth in sales and revenues,"
commented Joseph Ackerman, President and CEO of Elbit Systems. "We continued our
strategic process of enhancing our R&D activities, in order to bring to market a
broad range of mature and operationally ready products and systems. This was in
response to market demand for mature products and systems allowing for rapid
deployment. We are seeing the fruits of our previous investments, which are
strengthening our competitive position in our areas of activities."
Mr. Ackerman continued, "We see emerging opportunities in existing and new
markets. We have increased our sales and marketing efforts to capitalize on
these opportunities through the realization of business and operational
synergies among the companies we have acquired in recent years both in Israel
and internationally. We believe these efforts will help us maintain our
continued growth and technological leadership while achieving improved
profitability in the years ahead."
Dividend:
The Board of Directors declared a dividend of $0.36 per share for the third
quarter of 2009. The dividend's record date is December 1, 2009, and the
dividend will be paid on December 14, 2009, net of taxes and levies, at the rate
of 16.03%.
Conference Call
The Company will host a conference call today, Wednesday, November 18, 2009, at
9:00am EST. On the call, management will review and discuss the Company's third
quarter 2009 results and will be available to answer questions.
To participate, please call one of the teleconferencing numbers that follow.
Please begin placing your call 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: 1-888-407-2553
UK Dial-in Number: 0-800-917-9141
ISRAEL Dial-in Number: 03-918-0609
INTERNATIONAL Dial-in Number: +972-3-918-0609
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 the Company's 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 +972-3-925-5900 (Israel and
International).
About Elbit Systems
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 the development of new technologies for defense, homeland
security and commercial aviation applications.
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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, the outcome of which is 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
2009 2008
Unaudited Audited
Assets
Current assets:
Cash and cash equivalents 154,529 204,670
Short term bank deposits 101,099 69,642
Available for sale marketable securities 26,464 3,731
Trade receivables, net 559,373 477,010
Other receivables and pre-paid expenses 170,900 203,990
Inventories, net of advances 600,509 644,107
Total current assets 1,612,874 1,603,150
Investment in affiliated companies and a
partnership 84,486 62,300
Long-term deposits and marketable securities 38,628 34,355
Long-term receivables 5,699 6,390
Deferred income taxes 8,558 9,201
Severance pay fund 268,232 236,928
405,603 349,174
Property and equipment, net 398,018 384,086
Goodwill and other intangible assets, net 580,700 594,283
Total assets 2,997,195 2,930,693
Liabilities and Shareholders' Equity
Short-term bank credit and loans 833 15,413
Trade payables 286,287 340,315
Other payables and accrued expenses 528,272 468,224
Advances from customers, net 381,444 489,192
1,196,836 1,313,144
Long-term loans 429,203 269,760
Accrued termination liability 351,487 332,236
Deferred income taxes 67,593 70,068
Advances from customers 108,296 115,470
Other long-term liabilities 35,058 29,707
991,637 817,241
Elbit Systems Ltd.'s shareholders' equity 787,559 723,833
Non-controlling interests(*) 21,163 76,475
Total shareholders' equity 808,722 800,308
Total liabilities and shareholders' equity 2,997,195 2,930,693
(*) The Company has adopted ASC 810-10 "Consolidation," as of January 1, 2009.
Pursuant to ASC 810-10, 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 shown on a separate line item. Total shareholders
equity, net of the cumulative 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)
Nine Months Ended Three Months Year
Ended Ended
September 30 September 30 December 31
2009 2008 2009 2008 2008
Unaudited Audited
Revenues 2,117,741 1,940,417 732,520 671,187 2,638,271
Cost of revenues 1,480,302 1,374,326 515,219 471,691 1,870,830
Gross profit 637,439 566,091 217,301 199,496 767,441
Operating expenses:
Research and
development, net 154,910 121,109 56,022 44,985 184,984
Marketing and selling 191,561 156,395 67,096 50,336 198,274
General and
administrative 86,805 101,766 28,519 25,842 134,182
Acquired IPR&D - - - - 1,000
Total operating expenses 433,276 379,270 151,637 121,163 518,440
Operating income 204,163 186,821 65,664 78,333 249,001
Financial expenses, net (8,165) (33,056) (564) (16,083) (36,815)
Other income
(expenses),net (868) 4,230 (222) 17 94,294
Income before
taxes on income 195,130 157,995 64,878 62,267 306,480
Taxes on income 37,696 28,089 11,448 16,405 54,367
157,434 129,906 53,430 45,862 252,113
Equity in net earnings
of affiliated companies
and partnership 14,395 8,071 6,202 2,125 14,435
Consolidated net income 171,829 137,977 59,632 47,987 266,548
Less: net income
attributable to
non-controlling
interests(*) (10,598) (39,073) (1,377) (12,391) (62,372)
Net income attributable
to Elbit Systems Ltd. 161,231 98,904 58,255 35,596 204,176
Earnings per share
attributable to
Elbit Systems Ltd.'s
ordinary shareholders:
Basic net earnings
per share 3.82 2.35 1.37 0.85 4.85
Diluted net earnings
per share 3.76 2.31 1.35 0.83 4.78
Weighted average number
of shares used in
computation of basic
earnings per share 42,241 42,073 42,426 42,078 42,075
Weighted average number
of shares used in
computation of diluted
earnings per share 42,897 42,852 43,233 42,813 42,758
(*) The Company has adopted ASC 810-10 "Consolidation," as of January 1, 2009.
Pursuant to ASC 810-10, 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 shown on a separate line item. Total shareholders
equity, net of the cumulative 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 CASH FLOW
(In thousands of US Dollars)
Nine Months Ended Year Ended
September 30, December 31,
2009 2008 2008
Unaudited Audited
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 161,231 98,904 204,176
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 93,189 95,256 129,437
Write-off impairment - - 10,514
Acquired IPR&D - - 1,000
Other-than-temporary impairment of - 8,236 17,885
available for sale marketable
securities
Stock based compensation 3,839 3,766 5,067
Deferred income taxes and reserve (4,824) (5,715) (8,488)
Severance, pension and termination
indemnities, net (13,203) 14,692 15,211
Gain on sale of property, plant and
equipment (468) (152) (1)
Minority interests in earnings (loss)
of subsidiaries 10,598 39,073 62,372
Gain on sale of investments (120) - (100,031)
Equity in net losses (earnings) of
affiliated companies and partnership,
net of dividend received (*) (2,668) 1,718 (1,866)
Changes in operating assets and
liabilities:
Decrease (increase) in short and
long-term receivables and prepaid
expenses (41,871) 32,320 (39,698)
Decrease (increase) in inventories, net 44,913 (177,424) (169,482)
Increase in trade payables, other
payables and accrued expenses (8,233) 103,589 120,734
Decrease in advances received
from customers (115,360) (101,356) (37,402)
Net cash provided by operating
activities 127,023 112,907 209,428
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant
and equipment (78,054) (103,391) (129,241)
Acquisition of subsidiaries (124,033) (4,785) (20,637)
Investments in affiliated companies (21,794) (811) (4,001)
Proceeds from sale of property,
plant and equipment 6,972 6,132 8,779
Proceeds from sale of investment - - 50,254
Investment in short-term
bank deposits, net (40,946) (6,659) (58,634)
Investment in long-term
bank deposits, net (11,272) (7,054) (18,227)
Net cash used in investing activities (269,127) (116,568) (171,707)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options 11,340 238 188
Repayment of long-term bank loans (68,159) (223,255) (333,590)
Receipt of long-term bank loans 217,115 168,211 183,211
Dividends paid (60,897) (23,765) (32,770)
Tax benefit in respect of
options exercised - - 116
Change in short-term bank credit
and loans, net (7,436) - (13,008)
Net cash provided by (used in)
financing activities 91,963 (78,571) (195,853)
NET DECREASE IN CASH AND CASH
EQUIVALENTS (50,141) (82,232) (158,132)
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE PERIOD 204,670 362,802 362,802
CASH AND CASH EQUIVALENTS AT THE
END OF THE PERIOD 154,529 280,570 204,670
* Dividend received 11,727 9,789 12,569
ELBIT SYSTEMS LTD.
DISTRIBUTION OF REVENUES
Consolidated revenues by areas of operation:
Nine Months Ended Three Months Ended
September 30 September 30
2009 2008 2009 2008
$ % $ % $ % $ %
millions millions millions millions
Airborne 513.3 24.2 474.5 24.5 166.7 22.8 161.7 24.1
systems
Land systems 384.4 18.2 432.0 22.2 132.2 18.1 122.7 18.3
C4ISR systems 819.7 38.7 714.3 36.8 289.6 39.5 297.8 44.3
Electro-optics 307.9 14.5 225.3 11.6 117.5 16.0 63.7 9.5
Other (mainly
non-defense
engineering
and production
services) 92.4 4.4 94.3 4.9 26.5 3.6 25.3 3.8
Total 2,117.7 100.0 1,940.4 100.0 732.5 100.0 671.2 100.0
Consolidated revenues by geographical regions:
Nine Months Ended Three Months Ended
September 30 September 30
2009 2008 2009 2008
$ % $ % $ % $ %
millions millions millions millions
Israel 468.3 22.1 358.6 18.5 167.5 22.9 131.8 19.6
United States 603.1 28.5 654.2 33.7 209.7 28.6 221.4 33.0
Europe 550.8 26.0 494.3 25.5 201.2 27.5 157.8 23.5
Other
countries 495.5 23.4 433.3 22.3 154.1 21.0 160.2 23.9
Total 2,117.7 100.0 1,940.4 100.0 732.5 100.0 671.2 100.0
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
SOURCE Elbit Systems Ltd
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