HAIFA, Israel, November 13, 2012 /PRNewswire/ --
Elbit Systems Ltd.
(the "Company") (NASDAQ: ESLT,
TASE: ESLT), the international defense electronics company,
reported today its consolidated financial results for the third
quarter ended September 30, 2012.
In this release, the Company is providing its usual US-GAAP
results as well as additional non-GAAP financial data, which are
intended to provide investors with a more comprehensive
understanding of the Company's business results and trends. Unless
otherwise stated, all financial data presented is US- GAAP
financial data.
Management Comment:
Joseph Ackerman, President and
CEO of Elbit Systems, commented: "I am encouraged by the third
quarter results, which reflect improvements in some parameters,
resulting in part from our ongoing cost-reduction and
cost-effectiveness efforts. Concurrently, the increase in backlog
reflects Elbit Systems' long-term strategy achievements in
increasing our customer base".
Ackerman added: "We have recently been awarded a number of
important projects in Asia-
Pacific and Latin America,
some in new fields and others in new countries. We will continue to
increase our activity in these markets as well as in additional
potential growing markets in order to balance the situation in
other markets that currently are experiencing decreasing budgets.
The third quarter results continue our trend of stability and I
believe that Elbit Systems is well positioned and prepared for the
challenges ahead".
Third quarter 2012 results:
Revenues were $677.5
million in the third quarter of 2012, as compared to
$663.7 million in the third quarter
of 2011. The main contributors to the Company's revenues were the
Airborne and C4ISR systems areas of operations.
Gross profit was $191.5
million (28.3% of revenues) in the third quarter of 2012, as
compared to $204.1 million (30.8% of
revenues) in the third quarter of 2011. The non-GAAP gross profit
in the third quarter of 2012 was $196.6
million (29.0% of revenues), compared to $211.6 million (31.9% of revenues) in the third
quarter of 2011.
Research and development expenses, net were $50.7 million (7.5% of revenues) in the third
quarter of 2012, as compared to $55.5
million (8.4% of revenues) in the third quarter of 2011.
Marketing and selling expenses were $59.0 million (8.7% of revenues) in the third
quarter of 2012, as compared to $58.4
million (8.8% of revenues) in the third quarter of 2011.
General and administrative expenses were $32.7 million (4.8% of revenues) in the third
quarter of 2012, as compared to $34.0
million (5.1% of revenues) in the third quarter of 2011.
This continues the trend of reduction in general and administrative
expenses we have experienced over several quarters, partially due
to cost cutting and efficiency measures.
Operating Income was $49.0
million (7.2% of revenues), compared to $56.2 million (8.5% of revenues) in the third
quarter of 2011. The non-GAAP operating income in the third quarter
of 2012 was $61.0 million (9.0% of
revenues), as compared to $70.3
million (10.6% of revenues) in the third quarter of
2011.
Financial expenses, net were $5.5
million in the third quarter of 2012, as compared to
$3.1 million in the third quarter of
2011.
Taxes on income were $4.9
million (effective tax rate of 11.2%) in the third quarter
of 2012, as compared to taxes on income of $9.8 million (effective tax rate of 18.2%) in the
third quarter of 2011. The lower effective tax rate in the quarter
was attributable mainly to adjustments related to tax positions
taken during prior periods and 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 $1.0 million
(0.2% of revenues) in the third quarter of 2012, as compared to
$4.0 million (0.6% of revenues) in
the third quarter of 2011.
Net income attributable to non-controlling interests was
$0.4 million in the third quarter of
2012, as compared to a net expense of $3.4
million in the third quarter of 2011.
Net income, attributable to the Company's ordinary
shareholders, was $39.5 million
(5.8% of revenues) in the third quarter of 2012, as compared to
$36.5 million (5.5% of revenues) in
the third quarter of 2011. The non-GAAP net income in the third
quarter of 2012 was $49.4 million
(7.3% of revenues), as compared to $56.4
million (8.5% of revenues) in the third quarter of 2011.
Diluted net earnings per shareattributable to the
Company'sordinary shareholders were $0.95 for the third quarter of 2012, as compared
with $0.85 for the third quarter of
2011. The non-GAAP diluted net earnings per share in the third
quarter of 2012 were $1.18, as
compared to $1.31 in the third
quarter of 2011.
The Company's backlog of orders as of
September 30, 2012 was $5,529 million, as compared with $5,465 million as of June
30, 2012 and $5,528 million as
of December 31, 2011. Approximately
74% of the backlog relates to orders outside of Israel. Approximately 54% of the Company's
backlog as of September 30, 2012 is
scheduled to be performed during the fourth quarter of 2012 and in
2013.
Operating cash flow was $61.0
million during the first nine months of 2012, as compared to
$11.2 million in the first nine
months of 2011.
Non-GAAP financial data:
The following non-GAAP financial data is presented to enable
investors to have additional information on the Company's business
performance as well as a further basis for periodical comparisons
and trends relating to the Company's financial results. The Company
believes such data provides useful information to investors by
facilitating more meaningful comparisons of the Company's financial
results over time. Such non-GAAP information is used by the
Company's management to make strategic decisions, forecast future
results and evaluate the Company's current performance. However,
investors are cautioned that, unlike financial measures prepared in
accordance with GAAP, non-GAAP measures may not be comparable with
the calculation of similar measures for other companies.
The non-GAAP financial data includes reconciliation adjustments
regarding non-GAAP gross profit, operating income, net income and
diluted EPS. In arriving at non-GAAP presentations, companies
generally factor out items such as those that have a non-recurring
impact on the income statements, various non-cash items,
significant effects of retroactive tax legislation and changes in
accounting guidance and other items which, in management's
judgment, are items that are considered to be outside of the review
of core operating results.
In the Company's non-GAAP presentation, the Company made the
following adjustments, in each or some of the applicable periods:
(1) added back amortization of purchased intangible assets, (2)
added back significant reorganization, restructuring and other
related expenses, (3) added back impairment of investments,
including impairment of auction rate securities, (4) subtracted
gain from changes in holdings, including revaluation of the
previously held shares at the acquisition date when a business
combination is achieved in stages (step-up), (5) added back
impairment loss from discontinued operations, (6) excluded the
impact of the cessation of a program with a foreign customer and
(7) excluded the income tax effects of the foregoing.
These non-GAAP measures are not based on any comprehensive set
of accounting rules or principles. The Company believes that
non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with the Company's results of operations,
as determined in accordance with GAAP, and that these measures
should only be used to evaluate the Company's results of operations
in conjunction with the corresponding GAAP measures.
Investors should consider non-GAAP financial measures in
addition to, and not as replacements for or superior to, measures
of financial performance prepared in accordance with GAAP.
Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental Financial Data:
(U.S. Dollars in millions)
Nine Months Three Months
Ended Ended Year Ended
September 30 September 30 December 31
2012 2011 2012 2011 2011
GAAP gross profit 576.8 590.3 191.4 204.1 732.0
Adjustments:
Amortization of
purchased intangible
assets 15.6 23.0 5.2 7.5 30.9
Cessation of program (*) - - - - 72.8
Non-GAAP gross profit 592.4 613.3 196.6 211.6 835.7
Percent of revenues 29.0% 31.0% 29.0% 31.9% 29.7%
GAAP operating income 132.8 149.8 49.0 56.2 115.7
Adjustments:
Amortization of
intangible assets 36.2 42.7 12.0 14.1 57.3
Cessation of program (*) - - - - 72.8
Non-GAAP operating
income 169.0 192.5 61.0 70.3 245.8
Percent of revenues 8.3% 9.7% 9.0% 10.6% 8.7%
GAAP net income
attributable to Elbit
Systems' shareholders 110.7 103.3 39.5 36.5 90.3
Adjustments:
Amortization of
intangible assets 36.2 42.7 12.0 14.1 57.3
Cessation of program (*) - - - - 72.8
Impairment of
investments - 0.5 - - 0.5
Gain from changes in
holdings (2.3) - - - -
Loss from discontinued
operations, net 0.3 9.3 0.1 9.0 9.4
Related tax benefits (6.5) (9.8) (2.2) (3.2) (23.7)
Non-GAAP net income
attributable to
Elbit Systems'
shareholders 138.4 146.0 49.4 56.4 206.6
Percent of revenues 6.8% 7.4% 7.3% 8.5% 7.3%
Non-GAAP diluted net EPS 3.26 3.38 1.18 1.31 4.80
(*) Adjustment of expenses related to cessation of program,
which resulted in write-off of inventories and other related
costs.
Recent Events:
On August 13, 2012, the Company
announced that the Company's Board of Directors accepted the
request of Joseph Ackerman, the
Company's President and CEO, to retire from his position on
March 31, 2013, and the Board
confirmed the appointment of Bezhalel (Butzi) Machlis as his
successor.
On September 10, 2012, the Company
announced that TOR - Advanced Flight Training, its partnership with
Israel Aerospace Industries Ltd. established in order to perform
the Israeli Air Force's future trainer program, reached an
agreement with the Israel Ministry of Defense regarding a contract
in a total amount of approximately $603
million. The Company's share in this contract is valued at
$420 million of which approximately
$110 million will be preformed over
three years, and approximately $310
million will be preformed over approximately twenty years.
On September 13, 2012, the Company
announced that its Brazilian subsidiary AEL Sistemas S.A. was
awarded an initial production order valued at $15 million as part of the Guarani Project.
On September 23, 2012, the Company
announced that it was awarded a contract valued at $18.5 million for the establishment of a Mission
Training Center (MTC) for fighter aircraft of a Latin American Air
Force.
On October 2, 2012, the Company
announced that it was awarded a contract from the Australian
Defense Force for the supply of Battle Management Systems (BMS) for
the Royal Australian Navy's landing craft.
On October 14, 2012, the Company
announced that it was awarded two contracts from a Far Eastern
country to supply defense systems at a total value of approximately
$50 million.
On October 21, 2012, the Company
announced that Elbit Systems of America, LLC, a wholly-owned
subsidiary of Elbit Systems, was awarded a $17.5 million contract by The Boeing Company to
redesign and upgrade the Apache Block III AH-64D Mission Processor
over a five-year period.
On October 24, 2012, the Company
announced that Ares Aeroespacial e Defesa S.A., its Brazilian
subsidiary, was awarded an initial production order valued at
approximately $25 million to supply
12.7/7.62mm Remote Controlled Weapon Stations (RCWS) to the
Brazilian Army.
On November 8, 2012, the Company
announced that its subsidiary, Elbit Systems Electro-Optics - Elop
Ltd., was compelled to file a lawsuit, in the amount of
approximately $74 million, against
the Government of Israel, for
damages and expenses caused in connection with the cancellation of
export licenses for a project of a foreign customer.
Dividend:
The Board of Directors declared a dividend of $0.30 per share for the third quarter of 2012.
The dividend's record date is November 20,
2012, and the dividend will be paid on December 3, 2012, net of taxes and levies, at the
rate of 25%.
Conference Call:
The Company will also be hosting a conference call later today,
November 13, 2012 at 10:00am 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: 1-888-407-2553
UK Dial-in Number:
0-800-917-9141
ISRAEL Dial-in
Number: 03-918-0644
INTERNATIONAL
Dial-in Number: +972-3-918-0644
At 10:00am Eastern Time; 7:00am Pacific Time; 3:00pm UK Time; 5:00pm 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:
1-888-782-4291
(US) or +972-3-925-5904 (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, ELINT 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 sheet
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 U.S. Dollars)
September
30, December 31,
2012 2011
Unaudited Audited
Assets
Current assets:
Cash and cash equivalents 144,929 202,577
Short-term bank deposits and available for sale
securities 74,369 21,693
Trade and unbilled receivables, net 695,420 669,524
Other receivables and prepaid expenses 158,181 180,024
Inventories, net of customers advances 782,985 761,269
Total current assets 1,855,884 1,835,087
Investments in affiliated companies, partnership
and other companies 117,622 110,159
Long-term trade and unbilled receivables 173,187 162,762
Long-term bank deposits and other receivables 7,382 12,215
Deferred income taxes, net 33,483 36,130
Severance pay fund 287,062 283,477
618,736 604,743
Property, plant and equipment, net 504,802 517,608
Goodwill and other intangible assets, net 728,228 763,072
Total assets 3,707,650 3,720,510
Liabilities and Equity
Short-term bank credits and loans - 2,998
Current maturities of long-term loans and Series
A Notes 139,811 127,627
Trade payables 240,445 316,264
Other payables and accrued expenses 717,066 743,866
Customer advances in excess of costs incurred on
contracts in progress 408,464 407,222
1,505,786 1,597,977
Long-term loans, net of current maturities 174,722 302,255
Series A Notes, net of current maturities 387,468 235,319
Employee benefit liabilities 384,699 394,115
Deferred income taxes and tax liabilities, net 50,358 48,467
Customer advances in excess of costs incurred on
contracts in progress 153,158 154,696
Other long-term liabilities 66,682 59,961
1,217,087 1,194,813
Elbit Systems Ltd.'s equity 952,880 898,337
Non-controlling interests 31,897 29,383
Total equity 984,777 927,720
Total liabilities and equity 3,707,650 3,720,510
ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. Dollars, except for share and per share amounts)
Year
Three Months Ended
Nine Months Ended Ended December
September 30 September 30 31
2012 2011 2012 2011 2011
Unaudited Audited
Revenues 2,044,690 1,975,602 677,470 663,712 2,817,465
Cost of revenues 1,467,863 1,385,287 486,023 459,577 2,085,451
Gross profit 576,827 590,315 191,447 204,135 732,014
Operating expenses:
Research and development,
net 165,114 165,136 50,703 55,533 241,092
Marketing and selling 180,325 170,829 59,044 58,401 235,909
General and administrative 98,580 104,587 32,677 33,992 139,349
444,019 440,552 142,424 147,926 616,350
Operating income 132,808 149,763 49,023 56,209 115,664
Financial expenses, net (15,524) (23,120) (5,456) (3,108) (13,569)
ther income, net 76 1,355 260 981 1,909
Income before income taxes 117,360 127,998 43,827 54,082 104,004
Taxes on income 14,203 20,565 4,890 9,846 13,624
103,157 107,433 38,937 44,236 90,380
Equity in net earnings of
affiliated companies and
partnership 8,866 10,626 1,049 4,025 15,377
Income from continuing
operations 112,023 118,059 39,986 48,261 105,757
Loss from discontinued
operations, net (519) (15,630) (93) (15,180) (15,977)
Net income 111,504 102,429 39,893 33,081 89,780
Less: net loss (income)
attributable to
non-controlling interests (835) 901 (369) 3,425 508
Net income attributable to
Elbit Systems Ltd.'s
shareholders 110,669 103,330 39,524 36,506 90,288
Earnings per share
attributable to Elbit
Systems Ltd.'s ordinary
shareholders:
Basic net earnings per
share
Continuing operations 2.63 2.63 0.95 1.06 2.33
Discontinued operations (0.01) (0.22) (0.00) (0.21) (0.22)
Total 2.62 2.41 0.95 0.85 2.11
Diluted net earnings per
share
Continuing operations 2.62 2.61 0.95 1.06 2.31
Discontinued operations (0.01) (0.22) (0.00) (0.21) (0.22)
Total 2.61 2.39 0.95 0.85 2.09
Weighted average number of
shares used in
Computation of basic
earnings per share 42,296 42,774 41,693 42,809 42,764
Weighted average number of
shares used in
Computation of diluted
earnings per share 42,374 43,179 41,693 43,074 43,131
Amounts attributable to
Elbit Systems Ltd.'s common
shareholders
Income from continuing
operations, net of income
tax 110,977 112,614 39,579 45,523 99,778
Discontinued operations,
net of income tax (308) (9,284) (55) (9,017) (9,490)
Net income attributable to
Elbit Systems Ltd.'s
shareholders 110,669 103,330 39,524 36,506 90,288
ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands of U.S. Dollars)
Year
Nine Months Ended Ended
December
September 30, 31,
2012 2011 2011
Unaudited Audited
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 111,504 102,429 89,780
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 103,300 112,007 150,618
Write-off impairment and discontinued
operations, net 519 15,630 15,977
Stock based compensation 494 831 1,996
Amortization of Series A Notes
discount and related issuance costs 1,215 330 422
Deferred income taxes and reserve,
net 5,485 (12,183) (8,777)
Gain on sale of property, plant and
equipment (556) (1,088) (1,645)
Loss (gain) on sale of investment (994) 520 2,189
Equity in net loss (earnings) of
affiliated companies and partnership,
net of dividend received(*) (2,454) 3,679 (270)
Changes in operating assets and
liabilities, net of amounts acquired:
Increase in short and long-term trade
receivables and prepaid expenses (17,442) (76,827) (65,062)
Increase in inventories, net (21,716) (123,555) (95,363)
Increase (decrease) in trade
payables, other payables and accrued
expenses (105,834) (68,129) 17,225
Severance, pension and termination
indemnities, net (12,176) (5,056) 1,879
Increase (decrease) in advances
received from customers (296) 62,594 81,946
Net cash provided by operating
activities 61,049 11,182 190,915
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and
equipment (59,753) (92,484) (121,977)
Acquisition of subsidiaries and
business operations - (12,173) (12,173)
Investments in affiliated companies
and other companies (507) (13,401) (13,555)
Proceeds from sale of property, plant
and equipment 6,106 11,232 15,059
Proceeds from sale of investments 705 - 329
Investment in long-term deposits, net 184 23,102 39,787
Investment in short-term deposits and
available for sale securities (49,008) 36,347 37,464
Net cash used in investing activities (102,273) (47,377) (55,066)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options 739 2,974 3,833
Purchase of non-controlling interests - (71,000) (71,000)
Repayment of long-term loans (195,624) (66,930) (73,666)
Proceeds from long-term loans 53,038 139,893 172,303
Proceeds from issuance of Series A
Notes 246,000 - -
Purchase of treasury shares (26,006) - (10,101)
Repayment of Series A Notes and
convertible debentures (53,530) (29,998) (29,998)
Purchase of convertible debentures of
a subsidiary - (2,121) (2,121)
Dividends paid (38,043) (46,235) (61,633)
Tax benefit in respect of options
exercised
- - 169
Change in short- term bank credit and
loan, net (2,998) 49,782 (12,117)
Net cash used in financing activities (16,424) (23,635) (84,331)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (57,648) (59,830) 51,518
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE PERIOD 202,577 151,059 151,059
CASH AND CASH EQUIVALENTS AT THE END
OF THE PERIOD 144,929 91,229 202,577
* Dividend received from affiliated
companies and partnership 6,412 14,107 15,107
ELBIT SYSTEMS LTD.
DISTRIBUTION OF REVENUES
CONSOLIDATED
REVENUES BY AREAS OF OPERATION:
Nine Months Ended Three Months Ended
September 30 September 30
2012 2011 2012 2011
$ millions % $ millions % $ millions % $ millions %
Airborne systems 793.5 38.8 695.2 35.2 267.9 39.5 235.6 35.4
Land systems 264.3 12.9 284.1 14.4 105.5 15.6 100.9 15.2
C4ISR systems 676.7 33.1 704.7 35.7 197.8 29.2 235.4 35.5
Electro-optics 211.5 10.4 197.9 10.0 66.8 9.9 60.8 9.2
Other (mainly
non-defense
engineering and
production
services) 98.7 4.8 93.7 4.7 39.5 5.8 31.0 4.7
Total 2,044.7 100 1,975.6 100 677.5 100 663.7 100
CONSOLIDATED
REVENUES BY GEOGRAPHICAL REGIONS:
Nine Months Ended Three Months Ended
September 30 September 30
2012 2011 2012 2011
$ millions % $ millions % $ millions % $ millions %
Israel 355.4 17.4 511.4 25.9 104.8 15.5 155.5 23.4
United States 642.1 31.4 652.1 33.0 229.0 33.8 225.0 33.9
Europe 367.0 18.0 352.9 17.9 125.6 18.5 111.9 16.9
Other countries 680.2 33.2 459.2 23.2 218.1 32.2 171.3 25.8
Total 2,044.7 100 1,975.6 100 677.5 100 663.7 100
Company Contact:
Joseph Gaspar, Executive VP &
CFO
Tel: +972-4-8316663
j.gaspar@elbitsystems.com
Dalia Rosen, VP, Head of
Corporate Communications
Tel: +972-4-8316784
dalia.rosen@elbitsystems.com
Elbit Systems Ltd.
IR Contact:
Ehud Helft
Kenny Green
CCG Investor Relations
Tel: 1-646-201-9246
elbitsystems@ccgisrael.com
SOURCE Elbit Systems Ltd