HAIFA, Israel, March 25, 2020 /PRNewswire/
-- Elbit Systems Ltd. (the "Company") (NASDAQ:
ESLT) (TASE: ESLT), the international high technology
company, reported today its consolidated results for the fourth
quarter and full year ended December 31, 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. For a description of the
Company's non-GAAP definitions see page 6 below, "Non-GAAP
financial data". Unless otherwise stated, all financial data
presented is US-GAAP financial data.
Management Comment:
Bezhalel (Butzi) Machlis, President and CEO of Elbit
Systems, commented:
"We are pleased with the solid revenue growth across all our
major end-markets in 2019 and a record backlog that grew by 7% to
over $10 billion for the first
time.
To date we have not experienced a material impact on our ongoing
business from the Covid-19 pandemic. However, we continue to
monitor the situation, including its macro-economic impacts, and
have initiated a series of measures to protect our employees while
maintaining our ongoing commitments to our customers.
Looking forward into 2020 and beyond, Elbit Systems is a
strong and stable business, with a healthy balance sheet and a
broad long-term backlog that should support our globally
diversified sales."
Acquisition of Elbit Night Vision
On September 2019, we completed
the acquisition of the night vision business of L3Harris
Technologies (the Night Vision Business) for a purchase price
of approximately $350
million. Located in Roanoke,
Virginia, the Night Vision Business is engaged in the
development, production and supply of night vision technology for
the U.S. and allied military and security forces and for the U.S.
federal homeland security market. Following the acquisition,
the Night Vision Business operates as Elbit Night Vision ("ENV").
The financial results of ENV were included in our consolidated
reports commencing the date of the acquisition.
In the fourth quarter of 2019, following the completion of the
acquisition of ENV we recorded expenses of $55 million in our Cost of Revenues. These
expenses were mainly related to inventory write-offs. The expenses
were eliminated in the non-GAAP results due to their non-recurring
nature.
Fourth quarter 2019 results:
Revenues in the fourth quarter of 2019 were
$1,321.5 million, as compared to
$1,077.8 million in the fourth
quarter of 2018. Growth in the quarter was driven by the
contributions of ENV and IMI Systems Ltd. ("IMI"), as well as
growth in our legacy businesses.
Non-GAAP(*) gross profit amounted to
$345.8 million (26.2% of revenues) in
the fourth quarter of 2019, as compared to $306.7 million (28.5% of revenues) in the fourth
quarter of 2018. GAAP gross profit in the fourth quarter of
2019 was $284.3 million (21.5% of
revenues), as compared to $234.9
million (21.8% of revenues) in the fourth quarter of 2018.
The gross profit in the fourth quarter of 2019 and 2018 included
expenses of $55.0 and $66.6 million, respectively, related to the
acquisition of ENV in 2019 and IMI in 2018.
Research and development expenses, net were
$97.6 million (7.4% of revenues) in
the fourth quarter of 2019, as compared to $73.0 million (6.8% of revenues) in the fourth
quarter of 2018.
Marketing and selling expenses, net were $80.5 million (6.1% of revenues) in the fourth
quarter of 2019, as compared to $73.5
million (6.8% of revenues) in the fourth quarter of
2018.
General and administrative expenses, net were
$46.4 million (3.5% of revenues) in
the fourth quarter of 2019, as compared to $49.8 million (4.6% of revenues) in the fourth
quarter of 2018. The lower level of general and administrative
expenses in the fourth quarter of 2019 resulted mainly from income
related to settlement of litigation in the U.S.
Non-GAAP(*) operating income was $125.4 million (9.5% of revenues) in the fourth
quarter of 2019, as compared to $112.5
million (10.4% of revenues) in the fourth quarter of 2018.
GAAP operating income in the fourth quarter of 2019 was
$63.6 million (4.8% of revenues), as
compared to $38.6 million (3.6% of
revenues) in the fourth quarter of 2018. GAAP operating income in
the fourth quarter of 2019 and 2018 were reduced by $55 and $66.6
million, respectively, due to expenses related to the
acquisitions of ENV and IMI.
Financial expenses, net were $16.4 million in the fourth quarter of 2019, as
compared to $14.9 million in the
fourth quarter of 2018. The increase in financial expenses in
the fourth quarter of 2019 was mainly a result of the revaluation
of lease liabilities.
Other expenses net were $1.6
million in the fourth quarter of 2019, as compared to
$6.4 million in the fourth quarter of
2018. Other expenses in the fourth quarter of 2018 included
expenses of $2.7 million related to
the acquisitions of IMI.
Taxes on income were a tax benefit of $9.1 million in the fourth quarter of 2019, as
compared to a tax expense of $3.9
million in the fourth quarter of 2018. The tax benefit in
the fourth quarter of 2019 was related mainly to adjustments for
prior years following tax assessments in the Company and some of
its subsidiaries in Israel.
The net losses of affiliated companies and partnerships
was $3.5 million in the fourth
quarter of 2019, as compared to $11.4
million the fourth quarter of 2018. The loss in the fourth
quarter of 2018 was mainly a result of a fair value re-evaluation
of holdings in an affiliated company.
Net losses attributable to non-controlling
interests was a loss of $0.3
million in the fourth quarter of 2019, as compared to income
of $0.9 million in the fourth quarter
of 2018.
__________
* see page 6
Non-GAAP(*) net income attributable to the
Company's shareholders in the fourth quarter of 2019 was
$109.3 million (8.3% of revenues), as
compared to $84.0 million (7.8% of
revenues) in the fourth quarter of 2018. GAAP net income
attributable to the Company's shareholders in the fourth
quarter of 2019 was $51.5 million
(3.9% of revenues), as compared to $1.1
million (0.1% of revenues) in the fourth quarter of
2018.
Non GAAP(*) diluted net earnings per share
attributable to the Company's shareholders were
$2.47 for the fourth quarter of 2019,
as compared to $1.96 for the fourth
quarter of 2018. GAAP diluted earnings per share attributable to
the Company's shareholders in the fourth quarter of 2019 were
$1.16, as compared to $0.03 in the fourth quarter of 2018.
Full year 2019 results:
Revenues for the year ended December 31, 2019 were $4,508.4 million, as compared to $3,683.7 million in the year ended December 31, 2018.
For distribution of revenues by areas of operation and by
geographic regions see the tables on page 16.
The leading contributors to revenue growth were the airborne
systems and land systems areas of operation. The increase in
revenues in the airborne systems area of operation was primarily
due to increased sales of commercial avionics equipment in the U.S.
of a subsidiary that was acquired in the second quarter of 2018.
Additionally there was an increase of sales in the U.S. of military
avionic equipment for airborne platforms. Revenues from land
systems increased primarily due to an increase in sales of land
electronic warfare systems and armored vehicle systems in
Europe and the revenues of IMI to
Israel.
On a geographic basis, the increase in North America was mainly a result of higher
sales of airborne systems and revenues of commercial avionics and
programs for military airborne platforms. The increase in
Israel was mainly a result of
revenues of IMI. The increase in Asia-Pacific was mainly a result of higher
sales of remote weapon systems, radios and artillery systems.
Cost of revenues for the year ended December 31, 2019 was $3,371.9 million (74.8% of revenues), as compared
to $2,707.5 million (73.5% of
revenues) in the year ended December 31,
2018. Cost of revenues in 2019 and 2018 included expenses of
$55.0 and $66.6 million, respectively, related to the
acquisition of ENV in 2019 and of IMI in 2018.
Non-GAAP(*) gross profit for the year ended
December 31, 2019 was
$1,213.5 million (26.9% of revenues),
as compared to $1,061.9 million
(28.8% of revenues) in the year ended December 31, 2018. GAAP gross profit in
2019 was $1,136.5 million
(25.2% of revenues), as compared to $976.2
million (26.5% of revenues) in 2018. The decline in 2019
gross margins relative to 2018 was due to a less favorable sales
mix and a lower gross margin at IMI.
Research and development expenses, net for the year
ended December 31, 2019 were
$331.8 million (7.4% of revenues), as
compared to $287.4 million (7.8% of
revenues) in the year ended December 31,
2018.
Marketing and selling expenses, net for the year ended
December 31, 2019 were
$301.4 million (6.7% of revenues), as
compared to $281.0 million (7.6% of
revenues) in the year ended December 31,
2018.
__________
* see page 6
General and administrative expenses, net for the year
ended December 31, 2019 were
$214.7 million (4.8% of revenues), as
compared to $160.3 million (4.4% of
revenues) in the year ended December 31,
2018. The higher level of general and administrative
expenses in 2019 was mainly a result of consolidation of expenses
in subsidiaries that were acquired in 2018 and 2019, which was
partly offset by income related to settlement of litigation in the
U.S.
Other operating income, net for the year ended
December 31, 2019 amounted to
$33.0 million as compared to
$45.4 million for the year ended
December 31, 2018. Other operating
income in 2019 was mainly a result of a capital gain related to the
sale and lease back of buildings by a subsidiary in Israel. Other operating income in 2018 was the
result of net gains related to deconsolidation of two of our
Israeli subsidiaries in the commercial cyber and medical
instrumentation areas, due to third party investments.
Non-GAAP(*) operating income for the year ended
December 31, 2019 was $379.7 million (8.4% of revenues), as compared to
$340.7 million (9.2% of revenues) in
the year ended December 31, 2018.
GAAP operating income in 2019 was $321.6 million (7.1% of revenues), as compared to
$292.8 million (7.9% of revenues) in
2018.
Financial expenses, net for the year ended
December 31, 2019 were
$69.1 million, as compared to
$44.1 million in the year ended
December 31, 2018. Financial
expenses, net in 2019 included exchange rate differences of
approximately $23.1 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 $6.2
million in 2019 as compared to $11.4
million in 2018. Other expenses in 2018 included write-off
impairment of $7.8 million in
investments in two affiliated Israeli companies. Other expenses in
2019 were mainly due to the non-service cost components of pension
plans, in accordance with ASU 2017-07.
Taxes on income for the year ended December 31, 2019 were $19.4 million (effective tax rate of 7.9%), as
compared to $26.4 million (effective
tax rate of 11.1%) in the year ended December 31, 2018. The effective tax rate was
affected by the mix of the tax rates in the various jurisdictions
in which the Company's entities generate taxable income and other
income that is not part of the taxable income mainly related to
non-cash items such as impairment of assets. Taxes on income in
2019 were reduced by a tax benefit related to adjustments for prior
years following a tax settlement of the Company and some of its
subsidiaries in Israel with
Israeli tax authorities.
Equity in net earnings (losses) of affiliated companies and
partnerships for the year ended December
31, 2019 was income of $1.8
million (0.1% of revenues), as compared to equity in net
losses of $2.2 million (0.1% of
revenues) in the year ended December 31,
2018. The loss in 2018 was mainly a result of a $9.7 million re-evaluation of the fair value of
an investment in an affiliated company.
Net income attributable to non-controlling
interests for the year ended December 31, 2019 was $0.8
million, as compared to $1.9
million in the year ended December
31, 2018.
Non-GAAP(*) net income attributable to the
Company's shareholders for the year ended December 31, 2019 was $297.8 million (6.6% of revenues), as compared to
$267.5 million (7.3% of revenues) in
the year ended December 31, 2018.
GAAP net income attributable to the Company's
shareholders in the year ended December
31, 2019 was $227.9 million
(5.1% of revenues), as compared to $206.7
million (5.6% of revenues) in the year ended December 31, 2018.
__________
* see page 6
Non-GAAP(*) diluted net earnings per
share attributable to the Company's
shareholders for the year ended December 31, 2019 were $6.79, as compared to $6.25 for the year ended December 31, 2018. GAAP diluted net
earnings per share attributable to the Company's
shareholders in the year ended December
31, 2019 were $5.20, as
compared to $4.83 in the year ended
December 31, 2018.
Backlog of orders for the year ended December 31, 2019 totaled $10,029 million, as compared to $9,399 million as of December 31, 2018. Approximately 61% of the
current backlog is attributable to orders from outside Israel. Approximately 65% of the current
backlog is scheduled to be performed during 2020 and 2021.
Operating cash flow used in the year ended December 31, 2019 was $53.3 million, as compared to $191.7 million net cash provided in the year
ended December 31, 2018. The lower
level of operating cash flow in 2019 was mainly a result of lower
collection of receipts and advances received from customers mainly
in Israel.
Adoption of new standards:
- On January 1, 2019, the Company
adopted ASC 842 and elected the available practical expedient to
recognize the cumulative effect of initially adopting ASC 842 as an
adjustment to the opening balance sheet of the period of adoption
(i.e., January 1, 2019). The Company
also elected the other available practical expedients, and will not
separate lease components from non-lease components, and will not
reassess whether contracts are or contain leases, lease
classification, or initial direct costs for existing leases as of
January 1, 2019. Only the minimum
lease payments in accordance with ASC 840 were included in the
calculation of the right-of-use ("ROU") and liability for existing
leases as of January 1, 2019. The
condensed consolidated balance sheets and results from operations
for reporting periods beginning after January 1, 2019 are presented under ASC 842,
while prior period amounts are not adjusted and continue to be
reported in accordance with the historic accounting under ASC
840.
The adoption of this new standard materially affected the Company's
consolidated balance sheets by recognizing new ROU assets and lease
liabilities for operating leases.
As part of the implementation efforts, the Company implemented a
new lease accounting system including the requirement to provide
significant disclosures about the Company's leasing
activities.
- In June 2016, the FASB issued
ASU 2016-13, Financial Instruments-Credit Losses (Topic
326)-Measurement of Credit Losses on Financial Instruments. This
guidance replaces the current incurred loss impairment methodology.
Under the new guidance, on initial recognition and at each
reporting period, an entity is required to recognize an allowance
that reflects its current estimate of credit losses expected to be
incurred over the life of the financial instrument based on
historical experience, current conditions and reasonable and
supportable forecasts. In November
2018, the FASB issued ASU 2018-19, Codification
Improvements to Topic 326, Financial Instruments - Credit Losses.
The guidance will be effective beginning on January 1,
2020, including interim periods within that year and requires
a modified retrospective transition approach through a
cumulative-effect adjustment to retained earnings as of the
beginning of the period of adoption. Under the modified
retrospective method of adoption, prior year reported results are
not restated.
The Company has analyzed the impact of its financial instruments
that are within the scope of this guidance, and believes that
the cumulative adjustment to retained earnings will have an
immaterial effect on its consolidated financial statements.
__________
* see page 6
* 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)
|
|
|
|
|
|
Three Months
ended
December
31,
|
|
Year
ended
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
284.3
|
|
|
$
|
234.9
|
|
|
$
|
1,136.5
|
|
|
$
|
976.2
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
6.5
|
|
|
5.2
|
|
|
22.0
|
|
|
19.1
|
|
Expenses related to
acquisition
|
55.0
|
|
|
66.6
|
|
|
55.0
|
|
|
66.6
|
|
Non-GAAP
gross profit
|
$
|
345.8
|
|
|
$
|
306.7
|
|
|
$
|
1,213.5
|
|
|
$
|
1,061.9
|
|
Percent of
revenues
|
26.2
|
%
|
|
28.5
|
%
|
|
26.9
|
%
|
|
28.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
63.6
|
|
|
$
|
38.6
|
|
|
$
|
321.6
|
|
|
$
|
292.8
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
10.6
|
|
|
7.1
|
|
|
36.1
|
|
|
26.5
|
|
Expenses related to
acquisition
|
55.0
|
|
|
66.8
|
|
|
55.0
|
|
|
66.8
|
|
Capital
gain
|
(3.8)
|
|
|
—
|
|
|
(31.8)
|
|
|
—
|
|
Changes in
holdings
|
—
|
|
|
—
|
|
|
(1.2)
|
|
|
(45.4)
|
|
Non-GAAP operating
income
|
$
|
125.4
|
|
|
$
|
112.5
|
|
|
$
|
379.7
|
|
|
$
|
340.7
|
|
Percent of
revenues
|
9.5
|
%
|
|
10.4
|
%
|
|
8.4
|
%
|
|
9.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Elbit Systems' shareholders
|
$
|
51.5
|
|
|
$
|
1.1
|
|
|
$
|
227.9
|
|
|
$
|
206.7
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
10.6
|
|
|
7.1
|
|
|
36.1
|
|
|
26.5
|
|
Expenses related to
acquisition
|
55.0
|
|
|
66.8
|
|
|
55.0
|
|
|
66.8
|
|
Capital
gain
|
(3.8)
|
|
|
—
|
|
|
(31.8)
|
|
|
—
|
|
Changes in
holdings
|
—
|
|
|
—
|
|
|
(1.2)
|
|
|
(45.4)
|
|
Impairment of
investments
|
3.7
|
|
|
12.4
|
|
|
3.7
|
|
|
17.6
|
|
Revaluation of
investment measured under fair value option
|
(3.7)
|
|
|
—
|
|
|
(8.3)
|
|
|
—
|
|
Non-operating foreign
loss
|
2.5
|
|
|
2.2
|
|
|
24.6
|
|
|
3.4
|
|
Tax effect and other
tax items, net
|
(6.5)
|
|
|
(5.6)
|
|
|
(8.2)
|
|
|
(8.1)
|
|
Non-GAAP net
income attributable to Elbit Systems' shareholders
|
$
|
109.3
|
|
|
$
|
84.0
|
|
|
$
|
297.8
|
|
|
$
|
267.5
|
|
Percent of
revenues
|
8.3
|
%
|
|
7.8
|
%
|
|
6.6
|
%
|
|
7.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
EPS
|
$
|
1.16
|
|
|
$
|
0.03
|
|
|
$
|
5.20
|
|
|
$
|
4.83
|
|
Adjustments,
net
|
1.31
|
|
|
1.93
|
|
|
1.59
|
|
|
1.42
|
|
Non-GAAP diluted
net EPS
|
$
|
2.47
|
|
|
$
|
1.96
|
|
|
$
|
6.79
|
|
|
$
|
6.25
|
|
Recent Events:
On December 16, 2019, the
Company announced that following a contract signed between the
Israeli Ministry of Defense ("IMOD") and the Ministry of Defense of
Montenegro, the Company was
awarded a contract of approximately $35
million, to supply the Montenegrin Armed Forces with Remote
Controlled Weapon Stations ("RCWS") for the new Oshkosh Defense 4X4
Joint Light Tactical Vehicles ("JLTV"). In this contract Elbit
Systems will perform full integration of the RCWS onboard the JLTV
over a three-year period and will provide logistic support for a
seven-year period.
On December 19, 2019, the
Company announced, further to its announcement of June 26, 2019, that it received payment in the
amount of $33 million as full and
final settlement under a settlement agreement with Hughes Network
Systems, LLC, of litigation in the U.S. Federal Courts for
infringement of an Elbit Systems' patent relating to high-speed
satellite communications.
On December 22,
2019, the Company announced that it was awarded an
approximately $65 million follow-on
contract from the Dutch Ministry of Defence to supply additional
soldier systems to the Armed Forces of the Netherlands, as part of the VOSS program
(the Dutch program for improved operational soldier systems). The
contract will be performed over a two-year period.
On January 1, 2020, the
Company announced that it was awarded a contract by the Production
and Procurement Directorate of the IMOD valued at approximately
$144 million (approximately
NIS 500 million) for the supply of
small caliber ammunition to the Israeli Defense Forces. This
five-year contract, work on which will commence in 2021, will be a
continuation of the existing multi-year contract with the IMOD.
On January 7,
2020, the Company announced that it was awarded an
initial contract from the Production and Procurement Directorate of
the IMOD valued at approximately $31
million (NIS 109 million), to
provide Iron Fist Active Protection Systems for the Eitan Armored
Fighting Vehicles of the Israeli Defense Forces. The contract
will be performed over a five-year
period.
On February 6, 2020, the
Company announced the completion of its review of certain expenses
and expected synergies resulting from the acquisition by its
subsidiary, Elbit Systems of America LLC, of the Night Vision
business of L3Harris Technologies (NYSE:LHX) . The Company expects
to record in the fourth quarter of 2019 expenses relating to the
acquisition estimated in the amount of approximately $55 million. These expenses will be recorded
mainly in the "Cost of Revenues" line item in the Consolidated
Statement of Income and will be eliminated in the Non-GAAP results
due to the non-recurring nature of the expense. The overall impact
of these expenses on the financial results for the fourth quarter
of 2019 will be included in the Company's report for the quarter,
which is planned to be released in March
2020.
On February 6,
2020, the Company announced that it was
awarded a $43 million contract from
Hanwha Systems Co. Ltd. (272210:Korea SE) to equip the Next
Generation Korean fighter jets in development, with embedded
Terrain Following-Terrain Avoidance (TF/TA) systems. The contract
will be performed over a six-year period.
On February 10, 2020, the
Company announced that it was awarded contracts worth approximately
$136 million to provide customers in
Asia-Pacific with airborne laser
Direct Infra-Red Counter Measure systems. The contracts will be
performed over a four-year period.
On February 18, 2020, the
Company announced that it was awarded an approximately $670 million contract to supply defense solutions
to a country in Asia-Pacific. The
contract will be performed over a 25-month period.
On February 24 ,
2020, the Company announced that Midroog Ltd., the Israeli
rating agency, issued its monitoring report regarding the Series
"A" Notes, issued by the Company in 2010 and in 2012 (the "Notes")
and reaffirmed the Notes' "Aa1.il" (on a local scale) rating with
negative rating outlook.
On February 27, 2020, the
Company announced that at its Extraordinary General Meeting of
Shareholders held on February 26,
2020, at the Company's offices in Haifa, the proposed resolution described in
the Proxy Statement to the Shareholders dated January 22, 2020 and described below, was
approved by the required majority:
"To approve an amendment to the Company's compensation policy to
increase the maximum coverage that the Company is authorized to
procure under, and the maximum annual premium that the Company is
authorized to pay for, policies of directors and officers liability
insurance."
On March 9, 2020, the
Company announced that the U.S. Air Force has awarded its
subsidiary, Elbit Systems of America LLC., a firm-fixed-price
contract with a ceiling of approximately $471 million over a 10-year period, to equip F-16
aircraft of the U.S. Air National Guard and Air Force Reserve
Command, with pylon-based infrared missile warning systems. The
contract includes an initial order valued at approximately
$17 million. The work will be
performed in Fort Worth,
Texas.
On March 15, 2020, the
Company announced further to the Company's announcement dated
March 27, 2019, that its U.S.
subsidiary, Elbit Systems of America, LLC, was awarded a
$200 million contract as part of the
IMOD automatic self-propelled howitzer gun systems program. The
contract will be performed over a 12-year period.
On March 18, 2020, the
Company announced that at its Extraordinary General Meeting of
Shareholders (the "Meeting") held on March
17, 2020, at the Company's offices in Haifa, the proposed resolution described in
the Proxy Statement to the Shareholders dated February 11, 2020, and described below, was
approved by the required majority: "To elect Mr. Moshe Kaplinsky as an External Director of the
Company for a first three-year term commencing on the close of the
Meeting."
Dividend:
The Board of Directors declared a dividend of $0.44 per
share for the fourth quarter of 2019. The dividend's record date is
April 6, 2020. The dividend will be
paid from income generated as Preferred Income (as defined under
Israeli tax laws), on April 20, 2020,
net of taxes, at the rate of 20%.
Conference Call:
The Company will be hosting a conference call today,
Wednesday, March 25, 2020, at
09:00 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 Number: 1-888-668-9141
Canada Dial-in Number: 1-866-485-2399
UK Dial-in
Number: 0-800-917-5108
ISRAEL Dial-in Number: 03-918-
0610
INTERNATIONAL Dial-in Number: 972-3-
918- 0610
at 9:00am Eastern
Time; 6:00am Pacific Time;
1:00pm UK Time; 3:00pm 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:
+1-888-326-9310 (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 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
and 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.
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 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; 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.
(FINANCIAL TABLES TO FOLLOW)
ELBIT SYSTEMS
LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollar)
|
|
|
|
As of December
31,
|
|
2019
|
|
2018
|
|
Audited
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
221,060
|
|
|
$
|
208,479
|
|
Short-term bank
deposits and restricted deposits
|
2,213
|
|
|
16,447
|
|
Trade and unbilled
receivables and contract assets, net
|
2,067,846
|
|
|
1,712,915
|
|
Other receivables and
prepaid expenses
|
160,728
|
|
|
199,148
|
|
Inventories,
net
|
1,219,920
|
|
|
1,141,996
|
|
Total current
assets
|
3,671,767
|
|
|
3,278,985
|
|
|
|
|
|
Investments in
affiliated companies, partnerships and other companies
|
201,574
|
|
|
196,180
|
|
Long-term trade and
unbilled receivables and contract assets
|
259,150
|
|
|
297,145
|
|
Long-term bank
deposits and other receivables
|
58,076
|
|
|
42,962
|
|
Premises evacuation
grants
|
—
|
|
|
365,436
|
|
Deferred income
taxes, net
|
89,452
|
|
|
42,804
|
|
Severance pay
fund
|
287,104
|
|
|
278,732
|
|
|
895,356
|
|
|
1,223,259
|
|
|
|
|
|
Operating lease right
of use assets
|
365,763
|
|
|
—
|
|
Property, plant and
equipment, net
|
766,532
|
|
|
686,620
|
|
Goodwill and other
intangible assets, net
|
1,635,940
|
|
|
1,261,921
|
|
Total
assets
|
$
|
7,335,358
|
|
|
$
|
6,450,785
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term bank
credit and loans
|
$
|
208,399
|
|
|
$
|
208,821
|
|
Current maturities of
long-term loans and Series A Notes
|
199,882
|
|
|
62,546
|
|
Operating lease
liability
|
62,565
|
|
|
—
|
|
Trade
payables
|
926,338
|
|
|
776,100
|
|
Other payables and
accrued expenses
|
1,052,080
|
|
|
1,081,992
|
|
Contract liabilities
(customer advances)
|
723,581
|
|
|
780,994
|
|
|
3,172,845
|
|
|
2,910,453
|
|
|
|
|
|
Long-term loans, net
of current maturities
|
440,124
|
|
|
467,649
|
|
Series A Notes, net
of current maturities
|
—
|
|
|
56,303
|
|
Employee benefit
liabilities
|
836,535
|
|
|
736,798
|
|
Deferred income taxes
and tax liabilities, net
|
114,419
|
|
|
78,677
|
|
Contract liabilities
(customer advances)
|
62,830
|
|
|
175,890
|
|
Operating lease
liability
|
323,287
|
|
|
—
|
|
Other long-term
liabilities
|
225,478
|
|
|
170,607
|
|
|
2,002,673
|
|
|
1,685,924
|
|
|
|
|
|
Elbit Systems Ltd.'s
equity
|
2,141,406
|
|
|
1,832,453
|
|
Non-controlling
interests
|
18,434
|
|
|
21,955
|
|
Total
equity
|
2,159,840
|
|
|
1,854,408
|
|
Total liabilities and
equity
|
$
|
7,335,358
|
|
|
$
|
6,450,785
|
|
ELBIT SYSTEMS
LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US Dollars, except for share and per share
amounts)
|
|
|
|
|
|
Year
Ended
December
31,
|
|
Three Months
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Audited
|
|
Unaudited
|
Revenues
|
$
|
4,508,400
|
|
|
$
|
3,683,684
|
|
|
$
|
1,321,506
|
|
|
$
|
1,077,840
|
|
Cost of
revenues
|
3,371,933
|
|
|
2,707,505
|
|
|
1,037,211
|
|
|
842,988
|
Gross
profit
|
1,136,467
|
|
|
976,179
|
|
|
284,295
|
|
|
234,852
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development, net
|
331,757
|
|
|
287,352
|
|
|
97,631
|
|
|
72,986
|
Marketing and
selling, net
|
301,400
|
|
|
281,014
|
|
|
80,484
|
|
|
73,455
|
General and
administrative, net
|
214,749
|
|
|
160,348
|
|
|
46,363
|
|
|
49,767
|
|
Other operating
income, net
|
(33,049)
|
|
|
(45,367)
|
|
|
(3,785)
|
|
|
—
|
|
Total operating
expenses
|
814,857
|
|
|
683,347
|
|
|
220,693
|
|
|
196,208
|
|
|
|
|
|
|
|
|
Operating
income
|
321,610
|
|
|
292,832
|
|
|
63,602
|
|
|
38,644
|
|
|
|
|
|
|
|
|
Financial expenses,
net
|
(69,072)
|
|
|
(44,061)
|
|
|
(16,357)
|
|
|
(14,919)
|
|
Other expense,
net
|
(6,243)
|
|
|
(11,449)
|
|
|
(1,625)
|
|
|
(6,386)
|
|
Income before income
taxes
|
246,295
|
|
|
237,322
|
|
|
45,620
|
|
|
17,339
|
Taxes on
income
|
(19,414)
|
|
|
(26,445)
|
|
|
9,129
|
|
|
(3,902)
|
|
|
226,881
|
|
|
210,877
|
|
|
54,749
|
|
|
13,437
|
Equity in net
earnings (losses) of affiliated companies and
partnerships
|
1,774
|
|
|
(2,222)
|
|
|
(3,498)
|
|
|
(11,362)
|
|
Net
income
|
$
|
228,655
|
|
|
$
|
208,655
|
|
|
$
|
51,251
|
|
|
$
|
2,075
|
|
|
|
|
|
|
|
|
|
Less: net income
attributable to non-controlling interests
|
(798)
|
|
|
(1,917)
|
|
|
265
|
|
|
(948)
|
Net income
attributable to Elbit Systems Ltd.'s shareholders
|
$
|
227,857
|
|
|
$
|
206,738
|
|
|
$
|
51,516
|
|
|
$
|
1,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Elbit Systems Ltd.'s shareholders:
|
|
|
|
|
|
|
Basic net earnings
per share
|
$
|
5.20
|
|
|
$
|
4.83
|
|
|
$
|
1.17
|
|
|
$
|
0.03
|
|
Diluted net earnings
per share
|
$
|
5.20
|
|
|
$
|
4.83
|
|
|
$
|
1.16
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computation of:
|
|
|
|
|
|
|
|
Basic earnings per
share (in thousands)
|
43,787
|
|
|
42,789
|
|
|
44,198
|
|
|
42,789
|
|
Diluted earnings per
share (in thousands)
|
43,848
|
|
|
42,789
|
|
|
44,287
|
|
|
42,789
|
|
ELBIT SYSTEMS
LTD.
CONSOLIDATED STATEMENTS OF CASH FLOW (In thousands of
US Dollars)
|
|
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
Audited
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Net income
|
$
|
228,655
|
|
|
$
|
208,655
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
137,146
|
|
|
118,205
|
|
Write-off
impairment
|
3,692
|
|
|
13,334
|
|
Stock-based
compensation
|
3,994
|
|
|
1,387
|
|
Amortization of Series
A Notes discount (premium) and related issuance costs,
net
|
(93)
|
|
|
(92)
|
|
Deferred income taxes
and reserve, net
|
(15,059)
|
|
|
13,724
|
|
Loss (gain) on sale of
property, plant and equipment
|
(34,154)
|
|
|
2,080
|
|
Gain on sale of
investment, remeasurement of investment held under fair value
method and deconsolidation of subsidiary
|
(7,928)
|
|
|
(41,822)
|
|
Equity in net earnings
of affiliated companies and partnerships, net of dividend
received(*)
|
8,526
|
|
|
17,929
|
|
Changes in operating
assets and liabilities, net of amounts acquired:
|
|
|
|
Increase in short and
long-term trade and unbilled receivables and prepaid
expenses
|
(267,924)
|
|
|
(89,099)
|
|
Increase in
inventories, net
|
(55,841)
|
|
|
(117,221)
|
|
Increase
(decrease) in trade payables and other payables and accrued
expenses
|
115,621
|
|
|
(89,956)
|
|
Severance, pension and
termination indemnities, net
|
4,629
|
|
|
(31,363)
|
|
Increase (decrease) in
contract liabilities (customer advances)
|
(174,582)
|
|
|
185,898
|
|
Net cash provided by
(used for) operating activities
|
(53,318)
|
|
|
191,659
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
Purchase of property,
plant and equipment and other assets
|
(137,604)
|
|
|
(102,301)
|
|
Acquisition of
subsidiaries and business operations
|
(357,144)
|
|
|
(504,447)
|
|
Proceeds from premises
evacuation grants
|
344,913
|
|
|
—
|
|
Investments in
affiliated companies and other companies
|
(8,567)
|
|
|
(7,538)
|
|
Deconsolidation of
subsidiary
|
—
|
|
|
(2,873)
|
|
Proceeds from sale of
property, plant and equipment
|
36,671
|
|
|
4,388
|
|
Investment in long-term
deposits
|
(289)
|
|
|
(183)
|
|
Proceeds from sale of
long-term deposits
|
251
|
|
|
82
|
|
Investment in
short-term deposits and available-for-sale marketable
securities
|
(2,314)
|
|
|
(10,361)
|
|
Proceeds from sale of
short-term deposits and available-for-sale marketable
securities
|
17,294
|
|
|
30,363
|
|
Net cash used in
investing activities
|
(106,789)
|
|
|
(592,870)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
Proceeds from exercise
of options
|
—
|
|
|
48
|
|
Issuance of
shares
|
184,840
|
|
|
—
|
|
Repayment of long-term
loans
|
(243,324)
|
|
|
(775)
|
|
Proceeds from long-term
loans
|
350,000
|
|
|
342,528
|
|
Repayment of Series A
Notes
|
(55,532)
|
|
|
(55,532)
|
|
Dividends
paid
|
(62,578)
|
|
|
(75,305)
|
|
Change in short-term
bank credit and loans, net
|
(718)
|
|
|
242,652
|
|
Net cash provided by
financing activities
|
172,688
|
|
|
453,616
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
12,581
|
|
|
52,405
|
|
CASH AND CASH
EQUIVALENTS AT THE BEGINNING OF THE YEAR
|
$
|
208,479
|
|
|
$
|
156,074
|
|
CASH AND CASH
EQUIVALENTS AT THE END OF THE YEAR
|
$
|
221,060
|
|
|
$
|
208,479
|
|
|
|
|
|
* Dividend received
from affiliated companies and partnerships
|
$
|
10,300
|
|
|
$
|
15,707
|
|
ELBIT SYSTEMS
LTD.
DISTRIBUTION OF REVENUES
|
|
|
Consolidated
Revenues by Areas of Operation:
|
|
|
|
|
|
Year
Ended
|
|
Three Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
Airborne
systems
|
$
|
1,617.2
|
|
|
35.9
|
|
|
$
|
1,470.1
|
|
|
39.9
|
|
|
$
|
438.4
|
|
|
33.2
|
|
|
$
|
436.7
|
|
|
40.5
|
|
C4ISR
systems
|
1,161.5
|
|
|
25.8
|
|
|
1,130.1
|
|
|
30.7
|
|
|
356.9
|
|
|
27.0
|
|
|
275.0
|
|
|
25.5
|
|
Land
systems
|
1,228.3
|
|
|
27.2
|
|
|
649.1
|
|
|
17.6
|
|
|
367.7
|
|
|
27.8
|
|
|
239.4
|
|
|
22.2
|
|
Electro-optic
systems
|
374.4
|
|
|
8.3
|
|
|
333.9
|
|
|
9.1
|
|
|
124.7
|
|
|
9.4
|
|
|
102.4
|
|
|
9.5
|
|
Other (mainly
non-defense engineering and production services)
|
127.0
|
|
|
2.8
|
|
|
100.5
|
|
|
2.7
|
|
|
33.8
|
|
|
2.6
|
|
|
24.3
|
|
|
2.3
|
|
Total
|
$
|
4,508.4
|
|
|
100.0
|
|
|
$
|
3,683.7
|
|
|
100.0
|
|
|
$
|
1,321.5
|
|
|
100.0
|
|
|
$
|
1,077.8
|
|
|
100.0
|
|
|
|
|
|
|
|
|
|
Consolidated
Revenues by Geographical Regions:
|
|
|
|
|
|
Year
Ended
|
|
Three Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
Israel
|
$
|
1,064.8
|
|
|
23.6
|
|
|
$
|
740.2
|
|
|
20.1
|
|
|
$
|
324.6
|
|
|
24.6
|
|
|
$
|
227.5
|
|
|
21.1
|
|
North
America
|
1,260.5
|
|
|
28.0
|
|
|
979.2
|
|
|
26.6
|
|
|
351.8
|
|
|
26.6
|
|
|
287.8
|
|
|
26.7
|
|
Europe
|
853.7
|
|
|
18.9
|
|
|
737.1
|
|
|
20.0
|
|
|
270.4
|
|
|
20.5
|
|
|
249.8
|
|
|
23.2
|
|
Asia-Pacific
|
1,029.6
|
|
|
22.8
|
|
|
791.8
|
|
|
21.5
|
|
|
297.7
|
|
|
22.5
|
|
|
203.5
|
|
|
18.9
|
|
Latin
America
|
158.0
|
|
|
3.5
|
|
|
192.4
|
|
|
5.2
|
|
|
36.0
|
|
|
2.7
|
|
|
41.0
|
|
|
3.8
|
|
Other
countries
|
141.8
|
|
|
3.2
|
|
|
243.0
|
|
|
6.6
|
|
|
41.0
|
|
|
3.1
|
|
|
68.2
|
|
|
6.3
|
|
Total
|
$
|
4,508.4
|
|
|
100.0
|
|
|
$
|
3,683.7
|
|
|
100.0
|
|
|
$
|
1,321.5
|
|
|
100.0
|
|
|
$
|
1,077.8
|
|
|
100.0
|
|
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, Head of Corporate Communications
Tel:
+972-77-2946691
david.vaaknin@elbitsystems.com
|
IR
Contact:
Ehud
Helft
Gavriel
Frohwein
GK Investor
Relations
Tel:
1-646-201-9246
elbitsystems@gkir.com
|
View original
content:http://www.prnewswire.com/news-releases/elbit-systems-reports-fourth-quarter-and-full-year-2019-results-301029523.html
SOURCE Elbit Systems Ltd.