ESLT Elbit Systems Ltd

HAIFA, Israel, May 8, 2013 /PRNewswire/ -- Elbit Systems Ltd. (the "Company") (NASDAQ: ESLT, TASE: ESLT), the international defense company, reported today its consolidated financial results for the first quarter ended March 31, 2013.

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 GAAP financial data.

Management Comment:

Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: "I am pleased to be reporting a solid start to 2013 with a record backlog of orders. We have demonstrated continuous improvement in profitability, by leveraging our global intercompany synergies as well as our focus on operational efficiency. This has enabled us to reduce our operating expenses and improve our operating margins. Growth in our backlog for the past four consecutive quarters provides us with confidence that we will continue our improved performance in the future."

Mr. Machlis continued: "Yossi Ackerman, the Company's former President and CEO, left the Company with a solid foundation and on the right path to maintain its long-term growth trajectory. I look forward to continuing  to strengthen the Company, in order to be well positioned to meet future challenges and achieve continued growth".

First quarter 2013 results:

Revenues in the first quarter of 2013 were $680.2 million, as compared to $690.8 million in the first quarter of 2012. The leading contributors to the Company's revenues were the airborne systems and C4ISR systems areas of operations. The decrease in the land systems area of operations was mainly due to decline in revenues of fire control and life support systems in North America and Asia Pacific.

Gross profit amounted to $192.7 million (28.3% of revenues) in the first quarter of 2013, as compared with gross profit of $195.8 million (28.3% of revenues) in the first quarter of 2012. The non-GAAP gross profit in the first quarter of 2013 was $198.3 million (29.2% of revenues), compared to $200.9 million (29.1% of revenues) in the first quarter of 2012.

Research and development expenses, net were $51.0 million (7.5% of revenues) in the first quarter of 2013, as compared to $58.8 million (8.5% of revenues) in the first quarter of 2012.

Marketing and selling expenses were $55.8 million (8.2% of revenues) in the first quarter of 2013, as compared to $61.4 million (8.9% of revenues) in the first quarter of 2012.

General and administrative expenses were $32.2 million (4.7% of revenues) in the first quarter of 2013, as compared to $33.9 million (4.9% of revenues) in the first quarter of 2012.

Operating income was $53.7 million (7.9% of revenues) in the first quarter of 2013, as compared to $41.7 million (6.0% of revenues) in the first quarter of 2012. The non-GAAP operating income in the first quarter of 2013 was $65.3 million (9.6% of revenues), as compared to $53.9 million (7.8% of revenues) in the first quarter of 2012.

Financial expenses, net were $7.9 million in the first quarter of 2013, as compared to $7.8 million in the first quarter of 2012.

Taxes on income were of $4.6 million (effective tax rate of 10.1%) in the first quarter of 2013, as compared to $6.6 million (effective tax rate of 18.9%) in the first quarter of 2012. The effective tax rate is affected by 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 $1.7 million (0.2% of revenues) in the first quarter of 2013, as compared to $4.0 million (0.6% of revenues) in the first quarter of 2012. The equity in net earnings of affiliated companies and partnerships in the first quarter of 2012 included approximately $1.6 million in capital gain related to the sale of the Company's interest in an affiliated entity.

Net income attributable to non-controlling interests was $1.1 million in the first quarter of 2013, as compared to net expense of $0.8 million in the first quarter of 2012.

Net income attributable to the Company's ordinary shareholders  was $41.4 million (6.1% of revenues) in the first quarter of 2013, as compared to $32.9 million (4.8% of revenues) in the first quarter of 2012. The non-GAAP net income in the first quarter of 2013 was $51.1 million (7.5% of revenues), as compared to $40.8 million (5.9% of revenues) in the first quarter of 2012.

Diluted net earnings per share attributable to the Company's ordinary shareholders were $0.98 for the first quarter of 2013, as compared with $0.77 for the first quarter of 2012. The non-GAAP earnings per share in the first quarter of 2013 were $1.22, as compared to $0.96 in the first quarter of 2012.

The Company's backlog of orders was $5,777 million as of March 31, 2013, as compared with $5,683 million as of December 31, 2012. Approximately 77% of the backlog relates to orders outside of Israel. Approximately 63% of the Company's backlog as of March 31, 2013, is scheduled to be performed during the upcoming three quarters of 2013 and during 2014.

Operating cash flow was $13.8 million during the first quarter of 2013, as compared to $51.8 million in the first quarter of 2012.

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 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.

Recent Events:

On March 17, 2013, the Company announced that its wholly-owned subsidiary, Elbit Systems EW and SIGINT  Elisra Ltd., was awarded an approximately $115 million contract to supply an Asian customer with Electronic Warfare systems for multi-purpose land missions. The contract will be performed over two years.

On March 20, 2013, the Company announced that its wholly-owned subsidiary, Elbit Systems Electro-optics Elop Ltd. was awarded an approximately $80 million contract to upgrade Armored Fighting Vehicles of an Asian customer. The program will be performed over a two-year period. 

On April 24, 2013, the Company announced that it was awarded an approximately $40 million contract to supply a country in Africa with the Wise Intelligence Technology (WiT^TM) System for Intelligence Analysis and Cyber Defense. The system will be supplied within two years.

On April 25, 2013, the Company announced the establishment of Sharp Elbit Systems Aerospace, Inc., a jointly owned company in South Korea, with Sharp Aviation K Inc., located in Seoul, South Korea. Elbit Systems will own 19% with an option to increase ownership to 50%.

Changes to the Board of Directors:

Further to previous announcements on August 14, 2012, and March 13, 2013, and pursuant to the recommendation of the Board's Nomination and Corporate Governance Committee, the Board of Directors appointed Joseph Ackerman as a member and Vice Chairman of the Board of Directors, effective immediately following the Board meeting on May 7, 2013.  Mr. Ackerman retired as President and CEO of the Company on March 31, 2013.  Mr. Ackerman's appointment to the Board of Directors follows the resignation of Dov Ninveh, who served as a member of the Board of Directors since 2000.  The Board expresses its appreciation to Mr. Ninveh for his many years of valuable service as a director.

Dividend:

The Board of Directors declared a dividend of $0.30 per share for the first quarter of 2013. The dividend's record date is May 21, 2013, and the dividend will be paid on June 3, 2013, net of taxes and levies, at the rate of 25%. 

Conference Call:

The Company will be hosting a conference call today, Wednesday, May 8, 2013 at 9:00 am 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 5108
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 Elbit Systems' web-site at http://www.elbitsystems.com. An online replay will be available from the same link a few 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 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: www.elbitsystems.com.

Attachments:

Consolidated balance sheets
Consolidated statements of income
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)

(*) The distribution of revenues by geographical regions has been modified in certain respects from our reports in prior years. The regions of "Israel" and "Europe" remain unchanged. The "U.S." region has been changed to "North America", which includes the U.S. and Canada. We now also include two new regions: "Latin America" and "Asia-Pacific" (east of the Caspian Sea). The remaining markets are included in "Other countries".

SOURCE Elbit Systems Ltd.