HAIFA, Israel, Nov. 24, 2020 /PRNewswire/ -- Elbit Systems
Ltd. (NASDAQ: ESLT) (TASE: ESLT) (the "Company" or
"Elbit Systems"), the international high technology company,
reported today its consolidated results for the quarter ended
September 30, 2020.
In this release, the Company is providing US-GAAP results as
well as additional non-GAAP financial data, which are intended to
provide investors a more comprehensive understanding of the
Company's business results and trends. Unless otherwise stated, all
financial data presented is GAAP financial data.
Management Comment:
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems,
commented: "I am pleased with the third quarter results,
particularly with the improved operating performance in this
challenging COVID-19 environment and despite the pandemic's impact
on our Commercial Aviation business, which resulted in a
$60 million non-cash impairment of
assets in the quarter. We are encouraged by our backlog of orders
and the volume of opportunities we are facing around the world,
which provides us with confidence in the Company's future
prospects."
Third Quarter 2020 Results:
Revenues in the third quarter of 2020 were
$1,134.2 million, as compared to
$1,101.2 million in the third quarter
of 2019.
Non-GAAP(*) gross profit amounted to
$302.3 million (26.7% of
revenues) in the third quarter of 2020, as compared to $290.0 million (26.3% of revenues) in the third
quarter of 2019. GAAP gross profit in the third quarter of
2020 was $237.4 million (20.9% of
revenues), as compared to $286.2
million (26.0% of revenues) in the third quarter of 2019.
The decrease in GAAP gross profit in the third quarter of 2020 was
a result of non-cash expenses related to impairment of assets and
inventory write-offs due to the impact of COVID-19, in the amount
of approximately $60 million. These
expenses were eliminated in the non-GAAP results.
Research and development expenses, net were
$91.3 million (8.0% of revenues) in
the third quarter of 2020, as compared to $79.5 million (7.2% of revenues) in the third
quarter of 2019.
*see page 4
Marketing and selling expenses, net were $71.6 million (6.3% of revenues) in the third
quarter of 2020, as compared to $75.5
million (6.9% of revenues) in the third quarter of 2019.
General and administrative expenses, net were
$51.0 million (4.5% of revenues) in
the third quarter of 2020, as compared to $57.5 million (5.2% of revenues) in the third
quarter of 2019.
Other operating income, net in the third quarter of
2019 was $28.0 million, resulting
mainly from capital gains related to sale and lease back of
buildings by a subsidiary in Israel.
Non-GAAP(*) operating income was $93.1 million (8.2% of revenues) in the third
quarter of 2020, as compared to $80.7
million (7.3% of revenues) in the third quarter of
2019. GAAP operating income in the third quarter
of 2020 was $23.5 million (2.1%
of revenues), as compared to $101.7
million (9.2% of revenues) in the third quarter of 2019.
Financial expenses, net were $9.7 million in the third quarter of 2020, as
compared to $18.5 million in the
third quarter of 2019. Financial expenses, net in the third quarter
of 2019 included exchange rate differences of approximately
$7 million related to lease
liabilities.
Other income, net in the third quarter of 2020 was
$0.5 million , as compared to other
expenses of $2.8 million in the
third quarter of 2019.
Taxes on income were $2.2
million (effective tax rate of 15.4%) in the third quarter
of 2020, as compared to $7.6 million
(effective tax rate of 9.5%) in the third quarter of
2019.
Equity in net earnings (losses) of affiliated
companies and partnerships were earnings of $4.9 million in the third quarter of 2020, as
compared to losses of $0.5 million in
the third quarter of 2019. The loss in the third quarter of 2019
was a result of the write-off of a $2.3
million investment in an affiliated company in Israel.
Net income attributable to non-controlling
interests in the third quarter of 2020 was
$0.1 million, as compared to
$0.3 million in the third quarter
of 2019.
Non-GAAP(*) net income attributable to the
Company's shareholders in the third quarter of 2020 was
$72.7 million (6.4% of revenues), as
compared to $58.7 million (5.3% of
revenues) in the third quarter of 2019. GAAP net income
attributable to the Company's shareholders in the third quarter
of 2020 was $17.0 million (1.5%
of revenues), as compared to $72.1
million (6.5% of revenues) in the third quarter of 2019.
Non-GAAP(*) diluted net earnings per share
attributable to the Company's shareholders were
$1.64 for the third quarter of 2020,
as compared to $1.33 for the third
quarter of 2019. GAAP diluted earnings per share in the
third quarter of 2020 were $0.38, as
compared to $1.63 for the third
quarter of 2019.
The Company's backlog of orders as of
September 30, 2020 totaled $10,858
million, as compared to $9,796
million as of September 30, 2019. Approximately 65% of
the current backlog is attributable to orders from outside Israel.
Approximately 46% of the current backlog is scheduled to be
performed during the last quarter of 2020 and during 2021.
Operating cash flow in the nine months ended
September 30, 2020 was a positive $106.7 million, as compared to a negative
operating cash flow in the nine months ended September 30,
2019 in the amount of $140.3
million.
*see page 4
Impact of the COVID-19 Pandemic on the Company:
The Coronavirus disease 2019 (COVID-19) was declared a pandemic
by the World Health Organization in March
2020. COVID-19 has had significant negative impacts on the
worldwide economy, resulting in disruptions to supply chains and
financial markets, significant travel restrictions, facility
closures and shelter-in-place orders in various locations. Elbit
Systems is closely monitoring the evolution of the COVID-19
pandemic and its impacts on the Company's employees, customers and
suppliers, as well as on the global economy.
As we last reported on August 13,
2020, we have been taking a number of actions to protect the
safety of our employees as well as maintain business continuity and
secure our supply chain. We also reported on a number of activities
where we are leveraging our technological capabilities to assist
hospital staffs and other first responders protecting our
communities from the impact of the pandemic. All of these actions
remain ongoing.
We have implemented a series of cost control measures to help
limit the financial impact of the pandemic on the Company, in
parallel to the measures we are taking to maintain business
continuity and deliveries to our customers. We also are working on
efficiency initiatives with a number of our suppliers. We continue
to evaluate our operations on an ongoing basis in order to adapt to
the evolving business environment.
During the first three quarters of 2020 our defense activities,
which account for most of our business, were not materially
impacted by the pandemic, although some of our businesses are
experiencing certain disruptions due to government directed safety
measures, travel restrictions and supply chain delays.
The significant slowdown in commercial air traffic, and the
expectation that a commercial air traffic recovery to 2019 levels
will likely take a number of years, have reduced the demand for
products and services for the commercial aviation markets.
Additionally, manufacturers of aircrafts for these markets have
announced plans to reduce production rates to adapt to the lower
demand.
Following a review of the economic impact on the Company's
assets overall, and those assets impacted by the commercial
aviation industry in particular, the Company recorded in the third
quarter of 2020 non-cash expenses related to impairment of assets
and inventory write-offs, due to COVID-19, in the amount of
approximately $60 million. These
expenses were recorded mainly in the 'Cost of Revenues' line item
in the Consolidated Statement of Income and were eliminated in the
non-GAAP results as a category of expenses that are not part of the
Company's recurring business.
We believe that as of September 30,
2020, Elbit Systems had a healthy balance sheet, adequate
levels of cash and access to credit facilities that provide
liquidity when necessary. We have given high priority to cash
management and adequate cash reserves to run the business.
The extent of the impact of COVID-19 on the Company's
performance depends on future developments including the duration
and spread of the pandemic, the measures adopted by governments to
limit the spread of the pandemic and resulting actions that may be
taken by our customers and our supply chain, all of which are
uncertain. As noted in our annual report on Form 20-F, the
preparation of financial reports such as our quarterly financial
results requires us to make judgments, assumptions and estimates
that affect the amounts reported. For our quarterly financial
results for the quarter ended September 30,
2020, we considered the economic impact of the COVID-19
pandemic on our critical and significant accounting estimates. The
expected impact of the COVID-19 pandemic did not have a material
effect on our judgments, assumptions and estimates reflected in the
results. However, our future results may differ materially from our
estimates. As events continue to evolve in connection with the
COVID-19 pandemic, the estimates we use in future periods may
change materially.
*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 including
significant exchange rate differences, significant effects of
retroactive tax legislation, changes in accounting guidance,
financial transactions and other items not considered to be
part of regular ongoing business, 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 certain
adjustments, as indicated in the table below.
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:
(US Dollars in
millions, except for share and per share
amount)
|
Nine Months
Ended September 30,
|
|
Three Months
Ended
September
30,
|
|
Year
Ended December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
807.3
|
|
|
$
|
852.2
|
|
|
$
|
237.4
|
|
|
$
|
286.2
|
|
|
$
|
1,136.5
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
17.5
|
|
|
15.4
|
|
|
5.5
|
|
|
3.8
|
|
|
22.0
|
|
Non-recurring
expenses(*)
|
56.0
|
|
|
—
|
|
|
56.0
|
|
|
—
|
|
|
55.0
|
|
Impairment of
long-lived assets
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
—
|
|
Non-GAAP gross
profit
|
$
|
884.2
|
|
|
$
|
867.6
|
|
|
$
|
302.3
|
|
|
$
|
290.0
|
|
|
$
|
1,213.5
|
|
Percent of
revenues
|
26.9
|
%
|
|
27.2
|
%
|
|
26.7
|
%
|
|
26.3
|
%
|
|
26.9
|
%
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
221.1
|
|
|
$
|
258.0
|
|
|
$
|
23.5
|
|
|
$
|
101.7
|
|
|
$
|
321.6
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
30.2
|
|
|
25.5
|
|
|
9.6
|
|
|
7.0
|
|
|
36.1
|
|
Non-recurring
expenses(*)
|
56.6
|
|
|
—
|
|
|
56.6
|
|
|
—
|
|
|
55.0
|
|
Impairment of
long-lived assets
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
—
|
|
Capital
gain
|
(35.0)
|
|
|
(28.0)
|
|
|
—
|
|
|
(28.0)
|
|
|
(31.8)
|
|
Gain from changes in
holdings
|
—
|
|
|
(1.2)
|
|
|
—
|
|
|
—
|
|
|
(1.2)
|
|
Non-GAAP operating
income
|
$
|
276.3
|
|
|
$
|
254.3
|
|
|
$
|
93.1
|
|
|
$
|
80.7
|
|
|
$
|
379.7
|
|
Percent of
revenues
|
8.4
|
%
|
|
8.0
|
%
|
|
8.2
|
%
|
|
7.3
|
%
|
|
8.4
|
%
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Elbit Systems' shareholders
|
$
|
169.8
|
|
|
$
|
176.3
|
|
|
$
|
17.0
|
|
|
$
|
72.1
|
|
|
$
|
227.9
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
30.2
|
|
|
25.5
|
|
|
9.6
|
|
|
7.0
|
|
|
36.1
|
|
Non-recurring
expenses(*)
|
56.6
|
|
|
—
|
|
|
56.6
|
|
|
—
|
|
|
55.0
|
|
Capital
gain
|
(35.0)
|
|
|
(28.0)
|
|
|
—
|
|
|
(28.0)
|
|
|
(31.8)
|
|
Gain from changes in
holdings
|
—
|
|
|
(1.2)
|
|
|
—
|
|
|
—
|
|
|
(1.2)
|
|
Impairment of
long-lived assets
|
7.8
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.7
|
|
Exchange rate
differences
|
5.6
|
|
|
22.1
|
|
|
(1.2)
|
|
|
6.7
|
|
|
24.6
|
|
Capital gain and
revaluation of investments
|
(21.4)
|
|
|
(4.6)
|
|
|
(2.8)
|
|
|
—
|
|
|
(8.3)
|
|
Related tax
(benefits) expenses, net
|
(0.2)
|
|
|
(1.5)
|
|
|
(9.9)
|
|
|
0.9
|
|
|
(8.2)
|
|
Non-GAAP net
income attributable to Elbit Systems' shareholders
|
$
|
213.4
|
|
|
$
|
188.6
|
|
|
$
|
72.7
|
|
|
$
|
58.7
|
|
|
$
|
297.8
|
|
Percent of
revenues
|
6.5
|
%
|
|
5.9
|
%
|
|
6.4
|
%
|
|
5.3
|
%
|
|
6.6
|
%
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
EPS
|
$
|
3.84
|
|
|
$
|
4.04
|
|
|
$
|
0.38
|
|
|
$
|
1.63
|
|
|
$
|
5.20
|
|
Adjustments,
net
|
0.99
|
|
|
0.28
|
|
|
1.26
|
|
|
(0.30)
|
|
|
1.59
|
|
Non-GAAP diluted
net EPS
|
$
|
4.83
|
|
|
$
|
4.32
|
|
|
$
|
1.64
|
|
|
$
|
1.33
|
|
|
$
|
6.79
|
|
(*) Non-recurring expenses in 2020 are related to COVID-19
write-offs. In 2019 the expenses are related to acquisition of a
subsidiary in the U.S.
Recent Events:
On August 17, 2020, the
Company announced that it was awarded a contract valued at
approximately $27 million to supply
air-to-air combat training systems for the Navy of a South Asian
Country. The contract will be performed over a two-year period, to
be followed by three years of availability-based maintenance.
On August 31, 2020,
the Company announced that its U.S. subsidiary, Elbit Systems of
America, LLC ("Elbit Systems of America"), was awarded an
Indefinite Delivery/Indefinite Quantity ("ID/IQ") contract by the
Defense Logistics Agency Land to supply the U.S. Army with gunner
hand stations, commander hand stations and circuit cards for the
Bradley Infantry Fighting Vehicle. The contract, with a maximum
value of up to approximately $79
million, will be performed over a five-year period. An
initial purchase order of approximately $26
million under the ID/IQ contract followed by a second
purchase order of approximately $12
million have been issued to be executed over a three-year
period.
On September 14, 2020, the
Company announced that its wholly-owned subsidiary, Elbit Systems -
Cyclone Ltd., was awarded a contract by Lockheed Martin (NYSE: LMT)
for the manufacture of assemblies for Forward Equipment Bay
assemblies for the F-35 fighter aircraft. The contract is in an
amount that is not material to Elbit Systems and will be performed
over a period of four years.
On September 29, 2020, the
Company announced that it filed a shelf prospectus with the Israel
Securities Authority and the Tel Aviv Stock Exchange.
On October 1, 2020, the
Company announced that it was awarded a contract valued at
approximately $33 million to supply
tactical radio systems to a customer in Asia-Pacific. The contract will be performed
over a twelve-month period.
On October 5,
2020, the Company announced that Elbit Systems of
America was awarded an approximately $35
million five-year firm-fixed-priced contract by the U.S.
Naval Supply Systems Command for repair of line-replaceable units
in support of the V-22 aircraft. The repairs will be performed in
Fort Worth, Texas and Talladega, Alabama, and the contract will be
performed until October 2025.
On October 7,
2020, the Company announced that Elbit Systems of
America was awarded an ID/IQ contract with a maximum value of
approximately $50 million to produce
spare parts in support of the Aviators' Night Vision Imaging System
Head-Up Display system of the U.S. Army. The contract, that will be
performed over a period of five years, was awarded on behalf of the
United States Army, by the Defense Logistics Agency. An initial
order for $17.9 million was recently
placed under this contract, to be supplied until 2023.
On October 22, 2020, the
Company announced that Elbit Systems of America was awarded an
Other Transaction Authority ("OTA") contract from the U.S. Army for
Enhanced Night Vision Goggle – Binocular systems. The potential
contract value under the OTA contract could reach a maximum of
approximately $442 million. The U.S.
Army did not define an overall time-frame for performance of the
OTA contract. An initial order in the amount of approximately
$22.5 million for low-rate initial
production of systems has been placed under the OTA contract, with
a period of performance through December
2021, to be executed in Roanoke,
Virginia.
On October 26, 2020, the
Company announced that, as a result of the impact of the COVID-19
pandemic, Elbit Systems experienced reduced demand for the products
and services it supplies to the commercial aviation markets. The
significant slowdown in commercial air traffic, and the expectation
that a commercial air traffic recovery to 2019 levels will likely
take a number of years, have reduced the demand for products and
services for the commercial aviation markets. Additionally,
manufacturers of aircraft for these markets have announced plans to
reduce production rates to adapt to the lower demand.
Following a review of the economic impact on the Company's
assets overall, and those assets impacted by the commercial
aviation industry in particular, the Company recorded in the third
quarter of 2020 non-cash expenses related to impairment of assets
and inventory write-offs, due to COVID-19, in the amount of
approximately $60 million. These
expenses were recorded mainly in the "Cost of Revenues" line item
in the Consolidated Statement of Income and were eliminated in the
non-GAAP results as a category of expenses that are not part of the
Company's regular on-going business.
Reorganization of Certain Business Activities:
As part of the Company's ongoing review of its businesses and
portfolio, and in view of the changing business environment and the
need to better serve our customers as well as to leverage the
synergy and inter-operable activities of our areas of operation, a
decision has been made to reorganize some of our business
activities. The major parts of this reorganization include:
(1) integration of our unmanned aircraft systems business with our
manned military aircraft business to leverage synergies across
manned and unmanned military aircraft; (2) integration of our
electro-optical and our electronic warfare and signal intelligence
businesses to provide advanced solutions across the
electro-magnetic spectrum; and (3) integration of the precision
guided munitions activities, currently part of our military
aircraft business, with the IMI munitions portfolio. This
reorganization will begin in the coming months and be completed
during 2021.
Dividend:
The Board of Directors declared a dividend of $0.44 per share for the third quarter of 2020.
The dividend's record date is December 21,
2020. The dividend will be paid from income generated as
Preferred Income (as defined under Israel tax laws), on
January 4, 2021, net of taxes and
levies, at the rate of 20%.
Conference Call:
The Company will be hosting a conference call on Tuesday, November 24, 2020 at 9:00 a.m. Eastern Time. On the call, the
Company's management will review and discuss the results and will
be available to answer questions.
To participate, please call any 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 Number:
1-866-744-5399
Canada Dial-in Number:
1-866-485-2399
Israel
Dial-in Number: 03-918-0610
International Dial-in
Number: +972-3-918-0610
at 9:00am Eastern
Time; 6:00am Pacific Time;
4:00pm Israel Time
The conference 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 and Canada) or +972-3-925-5918 (Israel and
International).
About Elbit Systems
Elbit Systems Ltd. is an international high technology company
engaged in a wide range of defense, homeland security and
commercial 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, advanced
electro-optics, electro-optic space systems, EW suites, signal
intelligence systems, data links and communications systems,
radios, cyber-based systems and munitions. The Company also focuses
on the upgrading of existing platforms, developing new technologies
for defense, homeland security and commercial applications and
providing a range of support services, including training and
simulation systems.
For additional information, visit: https://elbitsystems.com/,
follow us on Twitter or visit our official Facebook, Youtube
and LinkedIn Channels.
Company
Contact:
Joseph Gaspar,
Executive VP & CFO Tel: +972-77-2946663
j.gaspar@elbitsystems.com
Rami Myerson,
Director, Investor Relations
Tel:
+972-77-2948984
rami.myerson@elbitsystems.com
David Vaaknin,
VP, Brand & Corporate Communications
Tel:
+972-77-2946691
david.vaaknin@elbitsystems.com
|
IR
Contact:
Ehud
Helft Kenny
Green
GK Investor
Relations
Tel:
1-646-201-9246
elbitsystems@gkir.com
|
This press release may contain forward–looking statements
(within the meaning of Section 27A of the Securities Act of 1933,
as amended, Section 21E of the Securities Exchange Act of 1934, as
amended and the Israeli Securities Law, 1968) regarding Elbit
Systems Ltd. and/or its subsidiaries (collectively the Company), to
the extent such statements do not relate to historical or current
facts. Forward-looking statements are based on management's current
expectations, estimates, projections and assumptions about future
events. 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, uncertainties and
assumptions about the Company, which are difficult to predict,
including projections of the Company's future financial results,
its anticipated growth strategies and anticipated trends in its
business. 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; changes in
global health and macro-economic conditions; differences in
anticipated and actual program performance, including the ability
to perform under long-term fixed-price contracts; changes in the
competitive environment; 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. Although the Company
believes the expectations reflected in
the forward-looking statements contained herein are
reasonable, it cannot guarantee future results, level of activity,
performance or achievements. Moreover, neither the Company nor any
other person assumes responsibility for the accuracy and
completeness of any of these forward-looking statements.
The Company does not undertake to update its forward-looking
statements.
Elbit Systems Ltd., its logo, brand, product, service and
process names appearing in this Press Release are the trademarks or
service marks of Elbit Systems Ltd. or its affiliated
companies. All other brand, product, service and process
names appearing are the trademarks of their respective
holders. Reference to or use of a product, service or process
other than those of Elbit Systems Ltd. does not imply
recommendation, approval, affiliation or sponsorship of that
product, service or process by Elbit Systems Ltd. Nothing contained
herein shall be construed as conferring by implication, estoppel or
otherwise any license or right under any patent, copyright,
trademark or other intellectual property right of Elbit Systems
Ltd. or any third party, except as expressly granted herein.
ELBIT SYSTEMS LTD.
CONSOLIDATED
BALANCE SHEETS
(In thousands of U.S. Dollars)
|
September 30,
2020
|
|
December 31,
2019
|
|
Unaudited
|
|
Audited
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
287,151
|
|
|
$
|
221,060
|
|
Short-term bank
deposits
|
1,158
|
|
|
2,213
|
|
Trade receivables and
contract assets, net
|
2,301,518
|
|
|
2,067,846
|
|
Other receivables and
prepaid expenses
|
188,267
|
|
|
160,728
|
|
Inventories,
net
|
1,325,800
|
|
|
1,219,920
|
|
Total current
assets
|
4,103,894
|
|
3,671,767
|
|
|
|
|
Investments in
affiliated companies and partnerships and other
companies
|
183,510
|
|
|
201,574
|
|
Long-term trade
receivables and contract assets
|
253,127
|
|
|
259,150
|
|
Long-term bank
deposits and other receivables
|
54,894
|
|
|
58,076
|
|
Deferred income
taxes, net
|
107,928
|
|
|
89,452
|
|
Severance pay
fund
|
275,013
|
|
|
287,104
|
|
|
874,472
|
|
895,356
|
|
|
|
|
Operating lease right
of use assets
|
423,126
|
|
|
365,763
|
|
Property, plant and
equipment, net
|
760,088
|
|
|
766,532
|
|
Goodwill and other
intangible assets, net
|
1,565,582
|
|
|
1,635,940
|
|
Total
assets
|
$
|
7,727,162
|
|
|
$
|
7,335,358
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Short-term bank
credit and loans
|
$
|
290,520
|
|
|
$
|
208,399
|
|
Current maturities of
long-term loans and Series A Notes
|
37,809
|
|
|
199,882
|
|
Operating lease
liabilities
|
60,860
|
|
|
62,565
|
|
Trade
payables
|
893,841
|
|
|
926,338
|
|
Other payables and
accrued expenses
|
1,111,057
|
|
|
1,052,080
|
|
Contract
liabilities
|
943,121
|
|
|
723,581
|
|
|
3,337,208
|
|
3,172,845
|
|
|
|
|
Long-term loans, net
of current maturities
|
538,631
|
|
|
440,124
|
|
Employee benefit
liabilities
|
812,324
|
|
|
836,535
|
|
Deferred income taxes
and tax liabilities, net
|
122,534
|
|
|
114,419
|
|
Operating lease
liabilities
|
380,767
|
|
|
323,287
|
|
Contract
liabilities
|
98,138
|
|
|
62,830
|
|
Other long-term
liabilities
|
180,949
|
|
|
225,478
|
|
|
2,133,343
|
|
2,002,673
|
|
|
|
|
Elbit Systems Ltd.'s
equity
|
2,238,604
|
|
|
2,141,406
|
|
Non-controlling
interests
|
18,007
|
|
|
18,434
|
|
Total
equity
|
2,256,611
|
|
2,159,840
|
Total liabilities
and equity
|
$
|
7,727,162
|
|
|
$
|
7,335,358
|
|
|
|
|
|
|
|
|
|
ELBIT SYSTEMS LTD.
CONSOLIDATED
STATEMENTS OF INCOME
(In thousands of U.S. Dollars, except
for share and per share amount)
|
|
Nine Months
Ended
September
30,
|
|
Three Months
Ended
September
30,
|
|
Year
Ended
December
31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
Revenues
|
|
$
|
3,284,840
|
|
|
$
|
3,186,894
|
|
|
$
|
1,134,169
|
|
|
$
|
1,101,190
|
|
|
$
|
4,508,400
|
|
Cost of
revenues
|
|
2,477,567
|
|
|
2,334,720
|
|
|
896,780
|
|
|
815,032
|
|
|
3,371,933
|
|
Gross
profit
|
|
807,273
|
|
|
852,174
|
|
|
237,389
|
|
|
286,158
|
|
|
1,136,467
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
250,683
|
|
|
234,126
|
|
|
91,282
|
|
|
79,468
|
|
|
331,757
|
|
Marketing and
selling, net
|
|
209,477
|
|
|
220,917
|
|
|
71,557
|
|
|
75,512
|
|
|
301,400
|
|
General and
administrative, net
|
|
161,015
|
|
|
168,385
|
|
|
51,020
|
|
|
57,520
|
|
|
214,749
|
|
Other operating
income, net
|
|
(34,963)
|
|
|
(29,264)
|
|
|
—
|
|
|
(28,030)
|
|
|
(33,049)
|
|
Total operating
expenses
|
|
586,212
|
|
|
594,164
|
|
|
213,859
|
|
|
184,470
|
|
|
814,857
|
|
Operating
income
|
|
221,061
|
|
|
258,010
|
|
|
23,530
|
|
|
101,688
|
|
|
321,610
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net
|
|
(38,745)
|
|
|
(52,715)
|
|
|
(9,673)
|
|
|
(18,461)
|
|
|
(69,072)
|
|
Other income
(expenses), net
|
|
14,740
|
|
|
(4,618)
|
|
|
525
|
|
|
(2,811)
|
|
|
(6,243)
|
|
Income before income
taxes
|
|
197,056
|
|
|
200,677
|
|
|
14,382
|
|
|
80,416
|
|
|
246,295
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
|
(34,565)
|
|
|
(28,543)
|
|
|
(2,215)
|
|
|
(7,619)
|
|
|
(19,414)
|
|
|
|
162,491
|
|
|
172,134
|
|
|
12,167
|
|
|
72,797
|
|
|
226,881
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net
earnings (losses) of affiliated companies and
partnerships
|
7,579
|
|
|
5,272
|
|
|
4,880
|
|
|
(469)
|
|
|
1,774
|
|
Net income
|
|
$
|
170,070
|
|
|
$
|
177,406
|
|
|
$
|
17,047
|
|
|
$
|
72,328
|
|
|
$
|
228,655
|
|
Less: net income
attributable to non-controlling interests
|
|
(235)
|
|
|
(1,063)
|
|
|
(73)
|
|
|
(263)
|
|
|
(798)
|
|
Net income
attributable to Elbit Systems Ltd.'s shareholders
|
|
$
|
169,835
|
|
|
$
|
176,343
|
|
|
$
|
16,974
|
|
|
$
|
72,065
|
|
|
$
|
227,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Elbit Systems Ltd.'s shareholders:
|
|
|
|
|
Basic net earnings
per share
|
|
$
|
3.84
|
|
|
$
|
4.04
|
|
|
$
|
0.38
|
|
|
$
|
1.63
|
|
|
$
|
5.20
|
|
Diluted net earnings
per share
|
|
$
|
3.84
|
|
|
$
|
4.04
|
|
|
$
|
0.38
|
|
|
$
|
1.63
|
|
|
$
|
5.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computation of basic earnings per share
|
|
44,198
|
|
|
43,653
|
|
|
44,198
|
|
|
44,201
|
|
|
43,787
|
|
Shares used in
computation of diluted earnings per share
|
|
44,220
|
|
|
43,702
|
|
|
44,221
|
|
|
44,253
|
|
|
43,848
|
|
ELBIT SYSTEMS LTD.
CONSOLIDATED
STATEMENTS OF CASH FLOW
(In thousands of U.S.
dollars)
|
Nine Months
Ended
September
30,
|
|
Year
Ended
December
31,
|
|
2020
|
|
2019
|
|
2019
|
|
Unaudited
|
|
Audited
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
Net
income
|
$
|
170,070
|
|
|
$
|
177,406
|
|
|
$
|
228,655
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
109,040
|
|
|
98,280
|
|
|
137,146
|
|
Impairment of
assets
|
7,771
|
|
|
—
|
|
|
3,692
|
|
Stock-based
compensation
|
3,064
|
|
|
2,973
|
|
|
3,994
|
|
Amortization of Series
A Notes premium and related issuance costs, net
|
(46)
|
|
|
(69)
|
|
|
(93)
|
|
Deferred income taxes
and reserve, net
|
(12,773)
|
|
|
12,567
|
|
|
(15,059)
|
|
Gain on sale of
property, plant and equipment
|
(32,180)
|
|
|
(28,509)
|
|
|
(34,154)
|
|
Gain on sale of
investments and remeasurement of investment held under
fair
value method, net
|
(23,652)
|
|
|
(4,479)
|
|
|
(7,928)
|
|
Equity in net earnings
of affiliated companies and partnerships, net of dividend
received (*)
|
(5,862)
|
|
|
1,780
|
|
|
8,526
|
|
Changes in operating
assets and liabilities, net of amounts acquired:
|
|
|
|
|
|
Increase in trade
receivables and contract assets and prepaid expenses
|
(242,994)
|
|
|
(121,167)
|
|
|
(267,924)
|
|
Increase in
inventories, net
|
(78,874)
|
|
|
(195,857)
|
|
|
(55,841)
|
|
Increase (decrease) in
trade payables, other payables and accrued expenses
|
(13,739)
|
|
|
6,710
|
|
|
115,621
|
|
Severance, pension and
termination indemnities, net
|
(3,874)
|
|
|
9,000
|
|
|
4,629
|
|
Increase (decrease) in
contract liabilities
|
230,757
|
|
|
(98,892)
|
|
|
(174,582)
|
|
Net cash provided by
(used in) operating activities
|
106,708
|
|
|
(140,257)
|
|
|
(53,318)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
Purchase of property,
plant and equipment and other assets
|
(92,945)
|
|
|
(97,898)
|
|
|
(137,604)
|
|
Acquisition of
subsidiaries and business operations
|
—
|
|
|
(357,144)
|
|
|
(357,144)
|
|
Proceeds from premises
evacuation grants receivables
|
—
|
|
|
344,913
|
|
|
344,913
|
|
Investments in
affiliated companies and other companies
|
(12,316)
|
|
|
(3,350)
|
|
|
(8,567)
|
|
Proceeds from sale of
property, plant and equipment
|
71,918
|
|
|
36,189
|
|
|
36,671
|
|
Proceeds from sale of
investments
|
44,200
|
|
|
—
|
|
|
—
|
|
Investment in long-term
deposits, net
|
(161)
|
|
|
61
|
|
|
(38)
|
|
Investment in
short-term deposits
|
(600)
|
|
|
(15,913)
|
|
|
(2,314)
|
|
Proceeds from sale of
short-term deposits
|
1,663
|
|
|
28,789
|
|
|
17,294
|
|
Net cash provided by
(used in) investing activities
|
11,759
|
|
|
(64,353)
|
|
|
(106,789)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
Issuance of treasury
shares, net
|
—
|
|
|
184,840
|
|
|
184,840
|
|
Repayment of long-term
loans
|
(205,923)
|
|
|
(242,440)
|
|
|
(243,324)
|
|
Proceeds from long-term
loans
|
201,551
|
|
|
350,000
|
|
|
350,000
|
|
Repayment of Series A
Notes
|
(55,532)
|
|
|
(55,532)
|
|
|
(55,532)
|
|
Dividends
paid
|
(74,308)
|
|
|
(58,922)
|
|
|
(62,578)
|
|
Change in short-term
bank credit and loans, net
|
81,836
|
|
|
(16,135)
|
|
|
(718)
|
|
Net cash provided by
(used in) financing activities
|
(52,376)
|
|
|
161,811
|
|
|
172,688
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
66,091
|
|
|
(42,799)
|
|
|
12,581
|
|
Cash and cash
equivalents at the beginning of the year
|
221,060
|
|
|
208,479
|
|
|
208,479
|
|
Cash and cash
equivalents at the end of the period
|
$
|
287,151
|
|
|
$
|
165,680
|
|
|
$
|
221,060
|
|
|
|
|
|
|
|
* Dividend received
from affiliated companies and partnerships
|
$
|
6,117
|
|
|
$
|
7,052
|
|
|
$
|
10,300
|
|
ELBIT SYSTEMS LTD.
DISTRIBUTION OF
REVENUES
Consolidated Revenues by Areas of Operation:
|
Nine Months
Ended
September 30,
|
|
Three Months
Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
Airborne
systems
|
1,170.0
|
|
|
35.6
|
|
|
1,178.8
|
|
|
37.0
|
|
|
393.0
|
|
|
34.7
|
|
|
397.6
|
|
|
36.1
|
|
C4ISR
systems
|
759.6
|
|
|
23.1
|
|
|
804.6
|
|
|
25.2
|
|
|
280.3
|
|
|
24.7
|
|
|
299.2
|
|
|
27.2
|
|
Land
systems
|
916.8
|
|
|
27.9
|
|
|
860.7
|
|
|
27.0
|
|
|
323.9
|
|
|
28.6
|
|
|
295.2
|
|
|
26.8
|
|
Electro-optic
systems
|
359.5
|
|
|
10.9
|
|
|
249.6
|
|
|
7.8
|
|
|
108.2
|
|
|
9.5
|
|
|
78.3
|
|
|
7.1
|
|
Other (mainly
non-defense
engineering and production services)
|
78.9
|
|
|
2.5
|
|
|
93.2
|
|
|
3.0
|
|
|
28.7
|
|
|
2.5
|
|
|
30.9
|
|
|
2.8
|
|
Total
|
3,284.8
|
|
|
100.0
|
|
|
3,186.9
|
|
|
100.0
|
|
|
1,134.1
|
|
|
100.0
|
|
|
1,101.2
|
|
|
100.0
|
|
Consolidated Revenues by Geographical Regions:
|
Nine Months
Ended
September 30,
|
|
Three Months
Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
Israel
|
796.7
|
|
|
24.3
|
|
|
740.2
|
|
|
23.2
|
|
|
284.8
|
|
|
25.1
|
|
|
245.9
|
|
|
22.3
|
|
North
America
|
1,077.1
|
|
|
32.8
|
|
|
908.6
|
|
|
28.5
|
|
|
343.8
|
|
|
30.3
|
|
|
333.4
|
|
|
30.3
|
|
Europe
|
557.1
|
|
|
17.0
|
|
|
583.3
|
|
|
18.3
|
|
|
209.5
|
|
|
18.5
|
|
|
195.3
|
|
|
17.7
|
|
Asia-Pacific
|
683.8
|
|
|
20.8
|
|
|
732.0
|
|
|
23.0
|
|
|
252.6
|
|
|
22.3
|
|
|
248.0
|
|
|
22.5
|
|
Latin
America
|
99.5
|
|
|
3.0
|
|
|
122.0
|
|
|
3.8
|
|
|
25.5
|
|
|
2.2
|
|
|
49.5
|
|
|
4.5
|
|
Other
countries
|
70.6
|
|
|
2.1
|
|
|
100.8
|
|
|
3.2
|
|
|
17.9
|
|
|
1.6
|
|
|
29.1
|
|
|
2.7
|
|
Total
|
3,284.8
|
|
|
100.0
|
|
|
3,186.9
|
|
|
100.0
|
|
|
1,134.1
|
|
|
100.0
|
|
|
1,101.2
|
|
|
100.0
|
|
View original
content:http://www.prnewswire.com/news-releases/elbit-systems-reports-third-quarter-2020-results-301179537.html
SOURCE Elbit Systems Ltd.