HAIFA, Israel, Nov. 26, 2019 /PRNewswire/ -- Elbit
Systems Ltd. (NASDAQ: ESLT) (TASE: ESLT) (the
"Company"), the international high technology company, reported
today its consolidated results for the quarter ended
September 30, 2019.
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:
"We are pleased with the strong growth in our revenues,
especially in North America, a
strategic region for us, where sales in the quarter increased to
30% of our total revenue.
Over the past year we completed a number of important
acquisitions that broadened our product portfolio and increased our
penetration into strategic markets. The integration of recent
acquisitions is progressing as expected, and we continue to explore
additional opportunities to extract revenue and cost synergies.
Elbit Systems has a successful track record of value creation
through both organic and acquisitive growth, and we intend to
continue pursuing this strategy for the foreseeable future."
Third quarter 2019 results:
Revenues in the third quarter of 2019 were
$1,101.2 million, as compared to
$895.2 million in the third quarter
of 2018. The strong growth was driven mainly by the consolidation
of IMI.
Non-GAAP (*) gross profit amounted to
$290.0 million (26.3% of revenues) in
the third quarter of 2019, as compared to $260.7 million (29.1% of revenues) in the third
quarter of 2018. GAAP gross profit in the third quarter of
2019 was $286.2 million (26.0% of
revenues), as compared to $255.9
million (28.6% of revenues) in the third quarter of
2018.
Research and development expenses, net were
$79.5 million (7.2% of revenues) in
the third quarter of 2019, as compared to $69.6 million (7.8% of revenues) in the third
quarter of 2018.
_____________
* see page 4
Marketing and selling expenses, net were $75.5 million (6.9% of revenues) in the third
quarter of 2019, as compared to $69.4
million (7.8% of revenues) in the third quarter of 2018.
General and administrative expenses, net were
$57.5 million (5.2% of revenues) in
the third quarter of 2019, as compared to $37.8 million (4.2% of revenues) in the third
quarter of 2018.
Other operating income, net in the third quarter of
2019 was 28.0 million. This was the result of a capital
gain related to a sale and lease back of buildings by a
subsidiary in Israel.
Non-GAAP(*) operating income was $80.7 million (7.3% of revenues) in the third
quarter of 2019, as compared to $85.7
million (9.6% of revenues) in the third quarter of
2018. GAAP operating income in the third quarter
of 2019 was $101.7 million
(9.2% of revenues), as compared to $79.1
million (8.8% of revenues) in the third quarter of 2018.
Financial expenses, net were $18.5 million in the third quarter of 2019, as
compared to $8.1 million in the third
quarter of 2018. Financial expenses, net in the third quarter of
2019 include exchange rate differences of approximately
$6.6 million related to the
recognition of lease liabilities denominated in foreign currencies
(mainly in New Israeli Shekels) as a result of the adoption of ASC
842, Leases, effective January 1,
2019.
Other expenses, net were $2.8
million in the third quarter of 2019, mainly due to the
non-service cost components of pension plans, in accordance with
ASU 2017-07.
Taxes on income were $7.6
million (effective tax rate of 9.5%) in the third quarter of
2019, as compared to $8.9 million
(effective tax rate of 12.6%) in the third quarter of 2018. 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 and other income and expenses that are not a
part of the taxable income.
Equity in net losses of affiliated companies and
partnerships was $0.5 million in
the third quarter of 2019, as compared to equity in net earnings of
$2.7 million in the third quarter of
2018.
Net income attributable to non-controlling
interests was $0.3 million
in the third quarter of 2019, as compared to $0.7 million in the third quarter of 2018.
Non-GAAP(*) net income attributable to the
Company's shareholders in the third quarter of 2019 was
$58.7 million (5.3% of revenues), as
compared to $67.3 million (7.5% of
revenues) in the third quarter of 2018. GAAP net income
attributable to the Company's shareholders in the third quarter
of 2019 was $72.1 million (6.5% of
revenues), as compared to $64.1
million (7.2% of revenues) in the third quarter of 2018.
Non-GAAP(*) diluted net earnings per share
attributable to the Company's shareholders were
$1.33 for the third quarter of 2019,
as compared to $1.57 for the third
quarter of 2018. GAAP diluted earnings per share in the
third quarter of 2019 were $1.63, as
compared to $1.50 for the third
quarter of 2018.
The Company's backlog of orders as of
September 30, 2019 totaled $9,796 million, as compared
to $8,108 million as of
September 30, 2018. Approximately 62% of the current backlog
is attributable to orders from outside Israel. Approximately 46% of the current
backlog is scheduled to be performed during the fourth quarter of
2019 and during 2020.
____________
* see page 4
Operating cash flows used in the nine months ended
September 30, 2019 were $140.3
million, as compared to $20.3
million used in the nine months ended September 30,
2018.
Investing cash flows in the nine months ended
September 30, 2019 included approximately $345 million in proceeds from factoring of the
premises evacuation asset related to the IMI acquisition, and
approximately $350 million in
subsidiaries and business operations as a result of the acquisition
of the Night Vision business of L3Harris Technologies in the
third quarter of 2019.
Financing cash flows in the nine months ended
September 30, 2019 included approximately $184.8 million in proceeds resulting from the
issuance of shares to institutional investors.
Adoption of New Accounting Standard:
The Company adopted Accounting Standards Update (ASU) 2016-02,
Leases (ASC 842), effective January 1,
2019, using a modified retrospective transition method.
Consequently, periods prior to January 1,
2019 are not restated for the adoption of ASC 842.
ASC 842, as amended, requires lessees to recognize a Right
of Use (ROU) asset and lease liability on the balance sheet for
most lease arrangements and expands disclosures about leasing
arrangements for both lessees and lessors, among other items. We
adopted ASC 842 using the optional transition method whereby we
applied the new lease requirements under ASC 842 through a
cumulative-effect adjustment.
On January 1, 2019, we recognized
approximately $377 million of
ROU operating lease assets and lease liabilities as a result of
adopting this standard. As part of our adoption, we elected all of
the available practical expedients with the exception of the
practical expedient permitting the use of hindsight when
determining the lease term and assessing impairment of ROU assets.
The adoption of the standard increased our financial expenses in
the nine months ended September 30,
2019, in the amount of $21.1
million as a result of exchange rate differences on lease
liabilities denominated in foreign currencies (mainly NIS). The
comparative periods have not been restated for the adoption of ASU
2016-02.
* 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, the Company
factors 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 and changes in accounting guidance and
other items, financial transactions which the Company considers not
to be part of its 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 per share amount)
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
Three Months
Ended
September 30,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
852.2
|
|
|
$
|
741.3
|
|
|
$
|
286.2
|
|
|
$
|
255.9
|
|
|
$
|
976.2
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
15.4
|
|
|
14.0
|
|
|
3.8
|
|
|
4.8
|
|
|
19.1
|
|
Expenses related to
IMI acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66.6
|
|
Non-GAAP
gross profit
|
$
|
867.6
|
|
|
$
|
755.3
|
|
|
$
|
290.0
|
|
|
$
|
260.7
|
|
|
$
|
1,061.9
|
|
Percent of
revenues
|
27.2
|
%
|
|
29.0
|
%
|
|
26.3
|
%
|
|
29.1
|
%
|
|
28.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
258.0
|
|
|
$
|
254.2
|
|
|
$
|
101.7
|
|
|
$
|
79.1
|
|
|
$
|
292.8
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
25.5
|
|
|
19.4
|
|
|
7.0
|
|
|
6.6
|
|
|
26.5
|
|
Other capital
gain
|
(28.0)
|
|
|
—
|
|
|
(28.0)
|
|
|
—
|
|
|
—
|
|
Expenses related to
IMI acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66.8
|
|
Gain from changes in
holdings
|
(1.2)
|
|
|
(45.4)
|
|
|
—
|
|
|
—
|
|
|
(45.4)
|
|
Non-GAAP operating
income
|
$
|
254.3
|
|
|
$
|
228.2
|
|
|
$
|
80.7
|
|
|
$
|
85.7
|
|
|
$
|
340.7
|
|
Percent of
revenues
|
8.0
|
%
|
|
8.8
|
%
|
|
7.3
|
%
|
|
9.6
|
%
|
|
9.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Elbit
Systems' shareholders
|
$
|
176.3
|
|
|
$
|
205.6
|
|
|
$
|
72.1
|
|
|
$
|
64.1
|
|
|
$
|
206.7
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
25.5
|
|
|
19.4
|
|
|
7.0
|
|
|
6.6
|
|
|
26.5
|
|
Expenses related to
IMI acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66.8
|
|
Impairment of
investment
|
—
|
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|
17.6
|
|
Exchange rate
differences (*)
|
22.1
|
|
|
1.2
|
|
|
6.7
|
|
|
(2.5)
|
|
|
3.4
|
|
Other capital
gain
|
(28.0)
|
|
|
—
|
|
|
(28.0)
|
|
|
—
|
|
|
—
|
|
Gain from changes in
holdings
|
(5.8)
|
|
|
(45.4)
|
|
|
—
|
|
|
—
|
|
|
(45.4)
|
|
Related tax
(expenses) benefits
|
(1.5)
|
|
|
(2.5)
|
|
|
0.9
|
|
|
(0.9)
|
|
|
(8.1)
|
|
Non-GAAP net
income attributable to
Elbit Systems' shareholders
|
$
|
188.6
|
|
|
$
|
183.4
|
|
|
$
|
58.7
|
|
|
$
|
67.3
|
|
|
$
|
267.5
|
|
Percent of
revenues
|
5.9
|
%
|
|
7.0
|
%
|
|
5.3
|
%
|
|
7.5
|
%
|
|
7.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
EPS
|
$
|
4.04
|
|
|
$
|
4.81
|
|
|
$
|
1.63
|
|
|
$
|
1.50
|
|
|
$
|
4.84
|
|
Adjustments,
net
|
0.28
|
|
|
(0.52)
|
|
|
(0.30)
|
|
|
0.07
|
|
|
1.42
|
|
Non-GAAP diluted
net EPS
|
$
|
4.32
|
|
|
$
|
4.29
|
|
|
$
|
1.33
|
|
|
$
|
1.57
|
|
|
$
|
6.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Exchange rate
differences in the nine months ended September 30, 2019
included exchange rate differences of $21.1 million on lease
contracts as a result of the implementation of ASC 842, effective
as of January 1, 2019, as well as other assets and liabilities
denominated in currencies other than U.S. dollars.
|
Recent Events:
On September 10, 2019, the
Company announced that its UK subsidiary, Elbit Systems UK Ltd.,
was awarded an approximately $38
million contract from the UK Ministry of
Defence to supply comprehensive JFST systems to
the British Army. The JFST systems will be supplied over a period
of two years following which Elbit Systems UK will provide an
additional four years of maintenance, technical support and on-site
training.
On September 15, 2019, the
Company announced that its U.S. subsidiary, Elbit Systems of
America, LLC, completed the acquisition of the Night Vision
business of L3Harris Technologies (NYSE:LHX) for a purchase price
of $350 million.
On September 26, 2019, the
Company announced that its subsidiary, Elbit Systems of
America LLC, was awarded a $85
million firm-fixed-priced contract, with no option periods,
by the U.S. Navy for the repair of Digital Display Indicator (DDI)
systems aboard F/A-18 aircraft. The contract will be performed in
Talladega, Alabama over a
five-year period.
On October 3, 2019, the
Company announced that its U.S. subsidiary, Elbit Systems of
America LLC, was awarded a delivery order valued at approximately
$23 million for the supply of systems
and various spare components to the U.S. Marine Corps. The order
will be executed in Roanoke,
Virginia and will be supplied over the next 10 months.
On October 6, 2019, the
Company announced that it was awarded a contract valued at
approximately $153 million to supply
an army of a country in Southeast
Asia with a comprehensive, multi-layered array of Unmanned
Aircraft Systems. The contract will be performed over a 22-month
period.
On October 29, 2019, the
Company announced that following extensive testing by Federal
Office for Defence Procurement (Armasuisse) and the Swiss Armed
Forces, the Company was selected by the Swiss Federal Department of
Defence, Civil Protection and Sport ("DDPS") to provide the Swiss
Armed Forces with an army-wide tactical Software Defined Radio
(SDR) solution under the Telecommunications Armed Forces (TK A)
program, Ersa mob Komm. Contract award is subject to Swiss
Parliament approvals.
On October 31,
2019, the Company announced that it was awarded a
contract valued at approximately $50
million from the Portuguese Ministry of Defense (MoD) to
supply the Portuguese Air Force (PtAF) with a complete Electronic
Warfare (EW) suite and Customer Logistics Support for the new
KC-390 multi-mission aircraft. The contract will be performed over
a five-year period.
On November 21, 2019, the
Company announced that at its Extraordinary and Annual General
Meeting of Shareholders held on November 20,
2019 at the Company's offices in Haifa, the proposed resolutions described in
the Proxy Statement to the Shareholders dated October 10, 2019 and detailed hereunder were
approved by the respective required majority:
- To re-elect Mr. M. Federmann, Mrs. Baum, Mr. Ben-Zeev, Mr. D.
Federmann, Mr. Ninveh, Prof. Nisan and Prof. Tamir, as
members of the board of directors of the Company until the close of
next Shareholder's Annual General Meeting of the Company.
- To elect Mrs. Bilha (Billy)
Shapira for a first three-year term as an External Director
of the Company, commencing on the close of the Meeting and ending
on November 20, 2022, inclusive.
- To re-appoint the Company's independent auditor, Kost, Forer,
Gabbay & Kasierer, a member of Ernst & Young Global, as
independent auditor of the Company for the fiscal year 2019 and
until the close of the next Shareholders' Annual General
Meeting of the Company.
Dividend:
The Board of Directors declared a dividend of $0.44 per share for the third quarter of 2019.
The dividend's record date is December 27,
2019. The dividend will be paid from income generated as
Preferred Income (as defined under Israel tax laws), on January 13, 2020, net of taxes and levies, at the
rate of 20%.
Conference Call:
The Company will be hosting a conference call on Tuesday, November 26, 2019 at 9:00 a.m. Eastern Time. On the call, management
will review and discuss the results and will be available to answer
questions.
To participate, please call one of the teleconferencing numbers
that follow. If you are unable to connect using the toll-free
numbers, please try the international dial-in number.
US Dial-in Numbers: 1-888-668-9141
Canada Dial-in Numbers: 1-888-604-5839
UK Dial-in Number: 0-800-917-5108
ISRAEL Dial-in Number:
03-918-0609
INTERNATIONAL Dial-in Number: +972-3-918-0609
at: 9:00 am Eastern
Time; 6:00 am Pacific Time;
2:00 pm UK Time; 4:00 pm Israel Time
This call will also be broadcast live on Elbit
Systems' web-site at http://www.elbitsystems.com. An online
replay will be available from 24 hours after the call ends.
Alternatively, for two days following the call, investors will
be able to dial a replay number to listen to the call. The dial-in
numbers are:
1-888-326-9310 (US and Canada) or +972-3-925-5921 (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 airborne, 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
and munitions. The Company also focuses on the upgrading of
existing platforms, developing new technologies for defense,
homeland security and commercial aviation applications and
providing a range of support services, including training and
simulation systems.
For additional information, visit: www.elbitsystems.com or
follow us on Twitter.
Attachments:
Consolidated balance sheets
Consolidated statements of income
Consolidated statements of cash flow
Consolidated revenue distribution by areas of operation and by
geographical regions
Company
Contact:
Joseph Gaspar,
Executive VP & CFO
Tel:
+972-772946663
j.gaspar@elbitsystems.com
Rami Myerson,
Investor Relations Director
Tel:
+972-77-2948984
rami.myerson@elbitsystems.com
David Vaaknin,
VP, Head of Corporate Communications
Tel:
+972-772946691
david.vaaknin@elbitsystems.com
|
IR
Contact:
Ehud
Helft
Kenny
Green
GK Investor
Relations
Tel:
1-646-201-9246
elbitsystems@gkir.com
|
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 1943, 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.
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.
(FINANCIAL TABLES TO FOLLOW)
ELBIT SYSTEMS
LTD.
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands of US
Dollars)
|
|
|
September 30,
2019
|
|
December 31,
2018
|
|
Unaudited
|
|
Audited
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
165,680
|
|
$
|
208,479
|
Short-term bank
deposits and restricted deposits
|
4,165
|
|
16,447
|
Trade and unbilled
receivables and contract assets, net
|
1,882,518
|
|
1,712,915
|
Other receivables and
prepaid expenses
|
171,994
|
|
199,148
|
Inventories,
net
|
1,375,883
|
|
1,141,996
|
Total current
assets
|
3,600,240
|
|
3,278,985
|
|
|
|
|
Investments in
affiliated companies and partnerships and other
companies
|
199,862
|
|
196,180
|
Long-term trade and
unbilled receivables and contract assets
|
280,039
|
|
297,145
|
Premises
evacuation
|
—
|
|
365,436
|
Long-term bank
deposits and other receivables
|
70,688
|
|
42,962
|
Deferred income
taxes, net
|
44,935
|
|
42,804
|
Severance pay
fund
|
293,611
|
|
278,732
|
|
889,135
|
|
1,223,259
|
|
|
|
|
Operating lease right
of use assets
|
379,496
|
|
—
|
Property, plant and
equipment, net
|
746,470
|
|
686,620
|
Goodwill and other
intangible assets, net
|
1,628,136
|
|
1,261,921
|
Total
assets
|
$
|
7,243,477
|
|
$
|
6,450,785
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term bank
credit and loans
|
$
|
192,982
|
|
$
|
208,821
|
Current maturities of
long-term loans and Series A Notes
|
166,125
|
|
62,546
|
Operating lease
liabilities
|
64,415
|
|
—
|
Trade
payables
|
793,258
|
|
776,100
|
Other payables and
accrued expenses
|
1,090,023
|
|
1,081,992
|
Contract
liabilities
|
786,761
|
|
780,994
|
|
3,093,564
|
|
2,910,453
|
|
|
|
|
Long-term loans, net
of current maturities
|
475,501
|
|
467,649
|
Series A Notes, net
of current maturities
|
—
|
|
56,303
|
Employee benefit
liabilities
|
782,024
|
|
736,798
|
Deferred income taxes
and tax liabilities, net
|
93,445
|
|
78,677
|
Operating lease
liabilities
|
331,941
|
|
—
|
Contract
liabilities
|
75,218
|
|
175,890
|
Other long-term
liabilities
|
208,781
|
|
170,607
|
|
1,966,910
|
|
1,685,924
|
|
|
|
|
Elbit Systems Ltd.'s
equity
|
2,161,030
|
|
1,832,453
|
Non-controlling
interests
|
21,973
|
|
21,955
|
Total
equity
|
2,183,003
|
|
1,854,408
|
Total liabilities
and equity
|
$
|
7,243,477
|
|
$
|
6,450,785
|
ELBIT SYSTEMS
LTD.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(In thousands of US
Dollars, except for share and per share amount)
|
|
|
Nine Months
Ended
September
30,
|
|
Three Months
Ended
September 30,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2018
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
Revenues
|
$
|
3,186,894
|
|
|
$
|
2,605,844
|
|
|
$
|
1,101,190
|
|
|
$
|
895,150
|
|
|
$
|
3,683,684
|
|
Cost of
revenues
|
2,334,720
|
|
|
1,864,515
|
|
|
815,032
|
|
|
639,231
|
|
|
2,707,505
|
|
Gross
profit
|
852,174
|
|
|
741,329
|
|
|
286,158
|
|
|
255,919
|
|
|
976,179
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
234,126
|
|
|
214,366
|
|
|
79,468
|
|
|
69,626
|
|
|
287,352
|
|
Marketing and
selling, net
|
220,917
|
|
|
207,559
|
|
|
75,512
|
|
|
69,442
|
|
|
281,014
|
|
General and
administrative, net
|
168,385
|
|
|
110,582
|
|
|
57,520
|
|
|
37,797
|
|
|
160,348
|
|
Other operating
income, net
|
(29,264)
|
|
|
(45,367)
|
|
|
(28,030)
|
|
|
—
|
|
|
(45,367)
|
|
Total operating
expenses
|
594,164
|
|
|
487,140
|
|
|
184,470
|
|
|
176,865
|
|
|
683,347
|
|
Operating
income
|
258,010
|
|
|
254,189
|
|
|
101,688
|
|
|
79,054
|
|
|
292,832
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net(*)
|
(52,715)
|
|
|
(29,142)
|
|
|
(18,461)
|
|
|
(8,145)
|
|
|
(44,061)
|
|
Other (expenses)
income, net
|
(4,618)
|
|
|
(5,063)
|
|
|
(2,811)
|
|
|
25
|
|
|
(11,449)
|
|
Income before income
taxes
|
200,677
|
|
|
219,984
|
|
|
80,416
|
|
|
70,934
|
|
|
237,322
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
(28,543)
|
|
|
(22,542)
|
|
|
(7,619)
|
|
|
(8,904)
|
|
|
(26,445)
|
|
|
172,134
|
|
|
197,442
|
|
|
72,797
|
|
|
62,030
|
|
|
210,877
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net
earnings (losses) of
affiliated companies and partnerships
|
5,272
|
|
|
9,140
|
|
|
(469)
|
|
|
2,695
|
|
|
(2,222)
|
|
Net income
|
$
|
177,406
|
|
|
$
|
206,582
|
|
|
$
|
72,328
|
|
|
$
|
64,725
|
|
|
$
|
208,655
|
|
Less: net income
attributable to non-
controlling interests
|
(1,063)
|
|
|
(969)
|
|
|
(263)
|
|
|
(670)
|
|
|
(1,917)
|
|
Net income
attributable to Elbit
Systems Ltd.'s shareholders
|
$
|
176,343
|
|
|
$
|
205,613
|
|
|
$
|
72,065
|
|
|
$
|
64,055
|
|
|
$
|
206,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Elbit Systems Ltd.'s shareholders:
|
|
|
|
|
Basic net earnings
per share
|
$
|
4.04
|
|
|
$
|
4.81
|
|
|
$
|
1.63
|
|
|
$
|
1.50
|
|
|
$
|
4.84
|
|
Diluted net earnings
per share
|
$
|
4.04
|
|
|
$
|
4.81
|
|
|
$
|
1.63
|
|
|
$
|
1.50
|
|
|
$
|
4.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares (in thousands)(**)
|
|
|
|
|
|
|
|
|
Shares used in
computation of basic
earnings per share
|
43,614
|
|
|
42,753
|
|
|
44,162
|
|
|
42,753
|
|
|
42,753
|
|
Shares used in
computation of diluted
earnings per share
|
43,666
|
|
|
42,755
|
|
|
44,217
|
|
|
42,755
|
|
|
42,753
|
|
|
(*) Financial
expenses in the first nine months ended September 30, 2019
included exchange rate differences of $21.1 million on lease
contracts as a result of the implementation of ASC 842.
|
(**) During the
second quarter of 2019 the Company issued 1,408,921 shares to
institutional investors.
|
ELBIT SYSTEMS
LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOW
|
(In thousands of US
dollars)
|
|
|
Nine Months
Ended
September 30,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2018
|
|
Unaudited
|
|
Audited
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
Net
income
|
$
|
177,406
|
|
|
$
|
206,582
|
|
|
$
|
208,655
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
98,280
|
|
|
84,974
|
|
|
118,205
|
|
Adjustment to fair
value investment
|
—
|
|
|
5,114
|
|
|
13,334
|
|
Stock-based
compensation
|
2,973
|
|
|
347
|
|
|
1,387
|
|
Amortization of Series
A Notes premium and related issuance costs, net
|
(69)
|
|
|
(69)
|
|
|
(92)
|
|
Deferred income taxes
and reserve, net
|
12,567
|
|
|
6,601
|
|
|
13,724
|
|
Loss (gain) on sale of
property, plant and equipment
|
(28,509)
|
|
|
(30)
|
|
|
2,080
|
|
Gain on sale and
revaluation of investments
|
(4,479)
|
|
|
(42,868)
|
|
|
(41,822)
|
|
Equity in net losses
(earnings) of affiliated companies and partnerships, net of
dividend received (*)
|
1,780
|
|
|
(221)
|
|
|
17,929
|
|
Changes in operating
assets and liabilities, net of amounts acquired:
|
|
|
|
|
|
Increase in short and
long-term trade and unbilled receivables and contract assets and
prepaid expenses
|
(121,167)
|
|
|
(38,460)
|
|
|
(89,099)
|
|
Increase in
inventories, net
|
(195,857)
|
|
|
(131,635)
|
|
|
(117,221)
|
|
Increase (decrease) in
trade payables, other payables and accrued expenses
|
6,710
|
|
|
(157,024)
|
|
|
(89,956)
|
|
Severance, pension and
termination indemnities, net
|
9,000
|
|
|
(7,357)
|
|
|
(31,363)
|
|
Increase (decrease) in
contract liabilities
|
(98,892)
|
|
|
53,790
|
|
|
185,898
|
|
Net cash provided by
(used in) operating activities
|
(140,257)
|
|
|
(20,256)
|
|
|
191,659
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
Purchase of property,
plant and equipment and other assets
|
(97,898)
|
|
|
(66,664)
|
|
|
(102,301)
|
|
Acquisition of
subsidiaries and business operations
|
(357,144)
|
|
|
(127,569)
|
|
|
(504,447)
|
|
Proceeds from premises
evacuation
|
344,913
|
|
|
—
|
|
|
—
|
|
Investments in
affiliated companies and other companies
|
(3,350)
|
|
|
(7,181)
|
|
|
(7,538)
|
|
Deconsolidation of
subsidiary
|
—
|
|
|
(2,873)
|
|
|
(2,873)
|
|
Proceeds from sale of
property, plant and equipment
|
36,189
|
|
|
1,380
|
|
|
4,388
|
|
Investment in long-term
deposits
|
(289)
|
|
|
(120)
|
|
|
(183)
|
|
Proceeds from sale of
long-term deposits
|
350
|
|
|
81
|
|
|
82
|
|
Investment in
short-term deposits
|
(15,913)
|
|
|
(5,132)
|
|
|
(10,361)
|
|
Proceeds from sale of
short-term deposits
|
28,789
|
|
|
18,314
|
|
|
30,363
|
|
Net cash used in
investing activities
|
(64,353)
|
|
|
(189,764)
|
|
|
(592,870)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
Proceeds from exercise
of options
|
—
|
|
|
48
|
|
|
48
|
|
Issuance of
shares
|
184,840
|
|
|
—
|
|
|
—
|
|
Repayment of long-term
loans
|
(242,440)
|
|
|
(39)
|
|
|
(775)
|
|
Proceeds from long-term
loans
|
350,000
|
|
|
340,397
|
|
|
342,528
|
|
Repayment of Series A
Notes
|
(55,532)
|
|
|
(55,532)
|
|
|
(55,532)
|
|
Dividends paid
(**)
|
(58,922)
|
|
|
(56,479)
|
|
|
(75,305)
|
|
Change in short-term
bank credit and loans, net
|
(16,135)
|
|
|
(22,220)
|
|
|
242,652
|
|
Net cash provided by
financing activities
|
161,811
|
|
|
206,175
|
|
|
453,616
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
(42,799)
|
|
|
(3,845)
|
|
|
52,405
|
|
Cash and cash
equivalents at the beginning of the year
|
208,479
|
|
|
156,074
|
|
|
156,074
|
|
Cash and cash
equivalents at the end of the period
|
$
|
165,680
|
|
|
$
|
152,229
|
|
|
$
|
208,479
|
|
* Dividend
received from affiliated companies and partnerships
|
$
|
7,052
|
|
|
$
|
8,919
|
|
|
$
|
15,707
|
|
** Dividend paid
during the nine months ended September 30, 2019, included
approximately $1,203 in a dividend paid by
a subsidiary to non-controlling
interests.
|
ELBIT SYSTEMS
LTD.
|
DISTRIBUTION OF
REVENUES
|
|
Consolidated
Revenues by Areas of Operation:
|
|
|
Nine months ended
September 30,
|
|
Three months ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
$ millions
|
|
%
|
|
$ millions
|
|
%
|
|
$ millions
|
|
%
|
|
$ millions
|
|
%
|
Airborne
systems
|
1,178.8
|
|
37.0
|
|
1,033.4
|
|
39.7
|
|
397.6
|
|
36.1
|
|
355.1
|
|
39.7
|
Land
systems
|
860.7
|
|
27.0
|
|
409.7
|
|
15.7
|
|
295.2
|
|
26.8
|
|
153.2
|
|
17.1
|
C4ISR
systems
|
804.6
|
|
25.2
|
|
855.1
|
|
32.8
|
|
299.2
|
|
27.2
|
|
292.0
|
|
32.6
|
Electro-optic
systems
|
249.6
|
|
7.8
|
|
231.5
|
|
8.9
|
|
78.3
|
|
7.1
|
|
76.7
|
|
8.6
|
Other (mainly
non-defense
engineering and
production services)
|
93.2
|
|
3.0
|
|
76.1
|
|
2.9
|
|
30.9
|
|
2.8
|
|
18.1
|
|
2.0
|
Total
|
3,186.9
|
|
100.0
|
|
2,605.8
|
|
100.0
|
|
1,101.2
|
|
100.0
|
|
895.1
|
|
100.0
|
Consolidated
Revenues by Geographical Regions:
|
|
|
Nine months ended
September 30,
|
|
Three months ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
$ millions
|
|
%
|
|
$ millions
|
|
%
|
|
$ millions
|
|
%
|
|
$ millions
|
|
%
|
Israel
|
740.2
|
|
23.2
|
|
512.8
|
|
19.7
|
|
245.9
|
|
22.3
|
|
160.8
|
|
18.0
|
North
America
|
908.6
|
|
28.5
|
|
691.3
|
|
26.5
|
|
333.4
|
|
30.3
|
|
230.2
|
|
25.7
|
Europe
|
583.3
|
|
18.3
|
|
487.2
|
|
18.7
|
|
195.3
|
|
17.7
|
|
171.5
|
|
19.2
|
Asia-Pacific
|
732.0
|
|
23.0
|
|
588.3
|
|
22.6
|
|
248.0
|
|
22.5
|
|
224.3
|
|
25.1
|
Latin
America
|
122.0
|
|
3.8
|
|
151.4
|
|
5.8
|
|
49.5
|
|
4.5
|
|
60.4
|
|
6.7
|
Other
countries
|
100.8
|
|
3.2
|
|
174.8
|
|
6.7
|
|
29.1
|
|
2.7
|
|
47.9
|
|
5.3
|
Total
|
3,186.9
|
|
100.0
|
|
2,605.8
|
|
100.0
|
|
1,101.2
|
|
100.0
|
|
895.1
|
|
100.0
|
View original
content:http://www.prnewswire.com/news-releases/elbit-systems-reports-third-quarter-2019-results-300965239.html
SOURCE Elbit Systems Ltd.