HAIFA, Israel, March 24, 2021 /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, 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 view of the Company's
business results and trends. For a description of the Company's
non-GAAP definitions see 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:
"2020 saw our employees around the world successfully address
the challenges presented by the global Covid-19 pandemic and
enabled Elbit Systems to achieve positive results for both the
fourth quarter and the year.
Our year-end backlog increased by 10% relative to the end of
2019 demonstrating sustained demand for our systems and services
from our customers around the world. I am pleased with our
operational performance in a challenging year, particularly the
improved cash generation.
Our solid backlog, combined with ongoing worldwide demand for
our broad portfolio of technologies and solutions, provides us with
confidence in the Company's future prospects".
Fourth quarter 2020 results:
Revenues in the fourth quarter of 2020 were
$1,377.7 million, as compared to
$1,321.5 million in the fourth
quarter of 2019.
Non-GAAP(*) gross profit amounted to
$363.0 million (26.3% of revenues) in
the fourth quarter of 2020, as compared to $345.8 million (26.2% of revenues) in the fourth
quarter of 2019. GAAP gross profit in the fourth quarter of
2020 was $357.8 million (26.0% of
revenues), as compared to $284.3
million (21.5% of revenues) in the fourth quarter of 2019.
The gross profit in the fourth quarter of 2019 included expenses of
$55.0, related to the acquisition of
a U.S. subsidiary, Elbit Night Vision ("ENV").
Research and development expenses, net were
$109.1 million (7.9% of revenues) in
the fourth quarter of 2020, as compared to $97.6 million (7.4% of revenues) in the fourth
quarter of 2019.
Marketing and selling expenses, net were $81.2 million (5.9% of revenues) in the fourth
quarter of 2020, as compared to $80.5
million (6.1% of revenues) in the fourth quarter of
2019.
General and administrative expenses, net were
$62.9 million (4.6% of revenues) in
the fourth quarter of 2020, as compared to $46.4 million (3.5% of revenues) in the fourth
quarter of 2019. 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 $113.8 million (8.3% of revenues) in the fourth
quarter of 2020, as compared to $125.4
million (9.5% of revenues) in the fourth quarter of 2019.
GAAP operating income in the fourth quarter of 2020 was
$104.6 million (7.6% of revenues), as
compared to $63.6 million (4.8% of
revenues) in the fourth quarter of 2019. GAAP operation income in
the fourth quarter of 2019 were reduced by $55.0 million due to expenses related to the
acquisition of ENV.
Financial expenses, net were $32.5 million in the fourth quarter of 2020, as
compared to $16.4 million in the
fourth quarter of 2019. The increase in financial expenses in
the fourth quarter of 2020 was mainly a result of the revaluation
of lease liabilities due to the strengthening of the New
Israeli Shekel versus the U.S. Dollar.
Other expenses net were $7.3
million in the fourth quarter of 2020, as compared to
$1.6 million in the fourth quarter of
2019. Other expenses in the fourth quarter of 2020 were mainly due
to the non-service cost components of pension plans.
Taxes on income were a tax expense of $1.9 million in the fourth quarter of 2020, as
compared to a tax benefit of $9.1
million in the fourth quarter of 2019. The tax benefit in
the fourth quarter of 2019 was related mainly to adjustments for
prior years following tax assessments in some of the Company's
subsidiaries in Israel.
Equity in net earnings of affiliated companies and
partnerships was $5.0 million in
the fourth quarter of 2020, as compared to a net loss of
$3.5 million the fourth quarter of
2019. The loss in the fourth quarter of 2019 was mainly a result of
a fair value re-evaluation of holdings in an affiliated
company.
Net income attributable to non-controlling
interests was $0.1 million
in the fourth quarter of 2020, as compared to a loss of
$0.3 million in the fourth quarter of
2019.
Non-GAAP(*) net income attributable to the
Company's shareholders in the fourth quarter of 2020 was
$105.0 million (7.6% of revenues), as
compared to $109.3 million (8.3% of
revenues) in the fourth quarter of 2019. GAAP net income
attributable to the Company's shareholders in the fourth
quarter of 2020 was $67.8 million
(4.9% of revenues), as compared to $51.5
million (3.9% of revenues) in the fourth quarter of
2019.
Non GAAP(*) diluted net earnings per share
attributable to the Company's shareholders were
$2.38 for the fourth quarter of 2020,
as compared to $2.47 for the fourth
quarter of 2019. GAAP diluted earnings per share attributable to
the Company's shareholders in the fourth quarter of 2020 were
$1.53, as compared to $1.16 in the fourth quarter of 2019.
Full year 2020 results:
Revenues for the year ended December 31, 2020 were $4,662.6 million, as compared to $4,508.4 million in the year ended December 31, 2019.
For distribution of revenues by areas of operation and by
geographic regions see the tables on page 16.
The majority of the revenues in 2020 were in
the airborne systems and land systems areas of operation. The
strength in the electro-optics area of operation was mainly
due to the revenues of ENV, a U.S. subsidiary acquired during
2019.
On a geographic basis, the increase in North America was mainly a result of higher
sales of airborne systems and revenues of ENV products. The
increase in Israel was mainly a
result of revenues of IMI Systems Ltd. (IMI), that was acquired at
the end of 2018. The decrease in Asia-Pacific was mainly a result of lower
sales of radios and airborne systems.
Cost of revenues for the year ended December 31, 2020 was $3,497.5 million (75.0% of revenues), as compared
to $3,371.9 million (74.8% of
revenues) in the year ended December 31,
2019. Cost of revenues in 2020 included non-cash expenses of
approximately $60.0 million, related
to impairment of assets and inventory write-offs due to the impact
of COVID-19. Cost of revenues in 2019 included expenses of
$55.0 million, related to the
acquisition of ENV.
Non-GAAP(*) gross profit for the year ended
December 31, 2020 was
$1,247.2 million (26.7% of revenues),
as compared to $1,213.5 million
(26.9% of revenues) in the year ended December 31, 2019. GAAP gross profit in
2020 was $1,165.1 million
(25.0% of revenues), as compared to $1,136.5
million (25.2% of revenues) in 2019.
Research and development expenses, net for the year
ended December 31, 2020 were
$359.7 million (7.7% of revenues), as
compared to $331.8 million (7.4% of
revenues) in the year ended December 31,
2019.
Marketing and selling expenses, net for the year ended
December 31, 2020 were
$290.7 million (6.2% of revenues), as
compared to $301.4 million (6.7% of
revenues) in the year ended December 31,
2019.
General and administrative expenses, net for the year
ended December 31, 2020 were
$223.9 million (4.8% of revenues), as
compared to $214.7 million (4.8% of
revenues) in the year ended December 31,
2019.
Other operating income, net for the year ended
December 31, 2020 amounted to
$35.0 million, as compared to
$33.0 million for the year ended
December 31, 2019. Other operating
income in 2020 resulted mainly from capital gains related to sale
and lease back of buildings by a subsidiary in the U.S. 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.
Non-GAAP(*) operating income for the year ended
December 31, 2020 was $390.1 million (8.4% of revenues), as compared to
$379.7 million (8.4% of revenues) in
the year ended December 31, 2019.
GAAP operating income in 2020 was $325.7 million (7.0% of revenues), as compared to
$321.6 million (7.1% of revenues) in
2019.
Financial expenses, net for the year ended
December 31, 2020 were
$71.3 million, as compared to
$69.1 million in the year ended
December 31, 2019. Financial
expenses, net in 2020 and 2019 included exchange rate differences
of approximately $21.0 and
$23.1 million, respectively, related
to lease liabilities denominated in foreign currencies (mainly in
New Israeli Shekels).
Other income, net was $7.4
million in 2020, as compared to other expenses of
$6.2 million in 2019. Other income in
2020 was a result of revaluation and capital gain related to the
sale of shares in a subsidiary in Israel, net of expenses related to non-service
costs of pension plans. Other expenses in 2019 were mainly due to
the non-service cost components of pension plans.
Taxes on income for the year ended December 31, 2020 were $36.4 million (effective tax rate of 13.9%), as
compared to $19.4 million (effective
tax rate of 7.9%) in the year ended December
31, 2019. 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 2020 and 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, 2020 was $12.6
million, as compared $1.8
million in the year ended December
31, 2019.
Net income attributable to non-controlling
interests for the year ended December 31, 2020 was $0.3
million, as compared to $0.8
million in the year ended December
31, 2019.
Non-GAAP(*) net income attributable to the
Company's shareholders for the year ended December 31, 2020 was $318.5 million (6.8% of revenues), as compared to
$297.8 million (6.6% of revenues) in
the year ended December 31, 2019.
GAAP net income attributable to the Company's
shareholders in the year ended December
31, 2020 was $237.7 million
(5.1% of revenues), as compared to $227.9
million (5.1% of revenues) in the year ended December 31, 2019.
Non-GAAP(*) diluted net earnings per
share attributable to the Company's
shareholders for the year ended December 31, 2020 were $7.20, as compared to $6.79 for the year ended December 31, 2019. GAAP diluted net
earnings per share attributable to the Company's
shareholders in the year ended December
31, 2020 were $5.38, as
compared to $5.20 in the year ended
December 31, 2019.
Backlog of orders for the year ended December 31, 2020 totaled $11,024 million, as compared to $10,029 million as of December 31, 2019. Approximately 65% of the
current backlog is attributable to orders from outside Israel. Approximately 65% of the current
backlog is scheduled to be performed during 2021 and 2022.
Net cash provided by operating activities in the
year ended December 31, 2020 was
$278.8 million, as compared to
$53.3 million net cash used for
operating activities in the year ended December 31, 2019. 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.
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 November 24,
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 2020 our defense activities, which account for most of
our business, were not materially impacted by the pandemic,
although some of our businesses experienced certain disruptions due
to government directed safety measures, travel restrictions and
supply chain delays.
The significant slow-down 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 recurring business.
We believe that as of December 31,
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, including the
roll-out of vaccinations, and resulting actions that may be
taken by our customers and our supply chain, all of which contain
uncertainties. As noted in our annual report on Form 20-F, the
preparation of financial reports requires us to make judgments,
assumptions and estimates that affect the amounts reported. For our
financial results for the year ended December 31, 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)
|
|
|
Three Months
ended
December 31,
|
|
Year
ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
357.8
|
|
|
$
|
284.3
|
|
|
$
|
1,165.1
|
|
|
$
|
1,136.5
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
5.2
|
|
|
6.5
|
|
|
22.7
|
|
|
22.0
|
|
Covid-19 related
expenses and write-offs
|
—
|
|
|
—
|
|
|
56.0
|
|
|
—
|
|
Expenses related to
acquisition
|
—
|
|
|
55.0
|
|
|
—
|
|
|
55.0
|
|
Impairment of
long-lived assets
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
Non-GAAP
gross profit
|
$
|
363.0
|
|
|
$
|
345.8
|
|
|
$
|
1,247.2
|
|
|
$
|
1,213.5
|
|
Percent of
revenues
|
26.3
|
%
|
|
26.2
|
%
|
|
26.7
|
%
|
|
26.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
104.6
|
|
|
$
|
63.6
|
|
|
$
|
325.7
|
|
|
$
|
321.6
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
9.2
|
|
|
10.6
|
|
|
39.4
|
|
|
36.1
|
|
Covid-19 related
expenses and write-offs
|
—
|
|
|
—
|
|
|
56.6
|
|
|
—
|
|
Expenses related to
acquisition
|
—
|
|
|
55.0
|
|
|
—
|
|
|
55.0
|
|
Capital
gain
|
—
|
|
|
(3.8)
|
|
|
(35.0)
|
|
|
(31.8)
|
|
Changes in
holdings
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.2)
|
|
Impairment of
long-lived assets
|
—
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
Non-GAAP operating
income
|
$
|
113.8
|
|
|
$
|
125.4
|
|
|
$
|
390.1
|
|
|
$
|
379.7
|
|
Percent of
revenues
|
8.3
|
%
|
|
9.5
|
%
|
|
8.4
|
%
|
|
8.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Elbit Systems' shareholders
|
$
|
67.8
|
|
|
$
|
51.5
|
|
|
$
|
237.7
|
|
|
$
|
227.9
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
9.2
|
|
|
10.6
|
|
|
39.4
|
|
|
36.1
|
|
Covid-19 related
expenses and write-offs
|
—
|
|
|
—
|
|
|
56.6
|
|
|
—
|
|
Expenses related to
acquisition
|
—
|
|
|
55.0
|
|
|
—
|
|
|
55.0
|
|
Capital
gain
|
—
|
|
|
(3.8)
|
|
|
(35.0)
|
|
|
(31.8)
|
|
Changes in
holdings
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.2)
|
|
Impairment of
investments and long-lived assets
|
—
|
|
|
3.7
|
|
|
7.9
|
|
|
3.7
|
|
Revaluation of
investment measured under fair value option
|
0.6
|
|
|
(3.7)
|
|
|
(20.8)
|
|
|
(8.3)
|
|
Non-operating foreign
exchange losses
|
27.9
|
|
|
2.5
|
|
|
33.4
|
|
|
24.6
|
|
Tax effect and other
tax items, net
|
(0.5)
|
|
|
(6.5)
|
|
|
(0.7)
|
|
|
(8.2)
|
|
Non-GAAP net
income attributable to Elbit Systems' shareholders
|
$
|
105.0
|
|
|
$
|
109.3
|
|
|
$
|
318.5
|
|
|
$
|
297.8
|
|
Percent of
revenues
|
7.6
|
%
|
|
8.3
|
%
|
|
6.8
|
%
|
|
6.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
EPS
|
$
|
1.53
|
|
|
$
|
1.16
|
|
|
$
|
5.38
|
|
|
$
|
5.20
|
|
Adjustments,
net
|
0.85
|
|
|
1.31
|
|
|
1.82
|
|
|
1.59
|
|
Non-GAAP diluted
net EPS
|
$
|
2.38
|
|
|
$
|
2.47
|
|
|
$
|
7.20
|
|
|
$
|
6.79
|
|
Recent Events:
On November 26, 2020, the
Company announced that it was awarded a contract to supply the
E-LynX™ Software Defined
Radio ("SDR") solution for the combat battalion level of the
Spanish Army. The new radio network for the battalion level is a
first step in the Spanish combat radio network modernization
program. The solution to be supplied comprises hundreds of handheld
E-LynX™ SDR
systems for dismounted soldiers and vehicular systems that will be
installed onboard a range of combat platforms. The contract, which
is in an amount that is not material to Elbit Systems, will be
performed in cooperation with Telefonica, S.A. (NYSE: TEF, BMD:
TEF), within a period of six-months.
On November 29, 2020, the
Company announced that it was awarded a contract valued at
approximately $96 million to supply a
European country with a Rotary-Wing Mission Training Center and
support services to train its Air Force, Army and Navy helicopter
pilots and crews. The contract will be performed over a nine-year
period, with an option to extend the maintenance services for an
additional 10-year period.
On December 3, 2020, the
Company announced that at its Extraordinary and Annual General
Meeting of Shareholders held on December 2,
2020 at the Company's offices in Haifa, the proposed resolutions described in
the Proxy Statement to the Shareholders dated October 28, 2020 and detailed hereunder were
approved by the respective required majority:
1. "To re-elect to the Board the following seven members who are
not "External Directors" as defined in the Israeli Companies Law
5759-1999, to serve until the close of the next Annual General
Meeting of Shareholders: Mr. Michael
Federmann, Mrs. Rina Baum,
Mr. Yoram Ben-Zeev, Mr. David Federmann, Mr. Dov Ninveh, Prof. Ehood
(Udi) Nisan and Prof. Yuli
Tamir;
2. To approve the extension of the indemnification letters of
Mr. M. Federmann and Mr. D. Federmann, for an additional three
years commencing on December 1, 2020;
and
3. To re-appoint Kost, Forer, Gabbay & Kasierer, a member of
Ernst & Young Global, as the Company's independent auditor for
the fiscal year 2020 and until the close of the next Annual General
Meeting of Shareholders."
On December 14, 2020, the
Company announced that it was awarded a contract valued at
approximately $27 million from the
Romanian-based company, Avioane Craiova S.A., for the first phase
of the upgrade program of the Romanian Air Force's IAR-99 standard
trainer aircraft. The contract will be performed over a four-year
period and includes integrated logistic support.
On December 16, 2020, the
Company announced that it was awarded an approximately $15 million initial contract from the Dutch
Ministry of Defense to supply XACT nv32 micro night vision
monocular systems for the Armed Forces of the Netherlands. The initial contract will be
performed over a period of two years, with the potential for
additional follow-on orders over a period of seven years.
On December 16, 2020, the
Company announced that it was awarded an approximately $50 million follow-on contract from the Dutch
Ministry of Defence ("Dutch MOD") to supply the Royal Netherlands
Army ("RNLA") with additional digital soldier and vehicular
systems, expanding the soldier modernization program of the RNLA.
The contract will be performed over a three-year period.
On December 17,
2020, the Company announced, further to the
Company's announcement on October 29,
2019, that it was awarded an approximately $338 million contract by the Swiss Federal
Department of Defense, Civil Protection and Sport, to provide the
Swiss Armed Forces with an army-wide tactical mobile Software
Defined Radio network solution under the Telecommunications Armed
Forces digitization program, Ersa mob Komm. The contract will be
performed over a period of six years.
On December 23, 2020, the
Company announced that its U.S. subsidiary, Elbit Systems of
America, LLC ("Elbit Systems of America"), signed a definitive
agreement with an affiliate of Cerberus Capital Management, L.P.
for the acquisition of Sparton Corporation for a purchase price of
$380 million. The transaction is
conditioned on various closing conditions, including receipt of
U.S. regulatory approvals.
On January 5, 2021, the
Company announced that following a competitive process, and as part
of an agreement between the Israeli Ministry of Defense ("IMOD")
and the Hellenic Ministry of National Defense, the Company was
selected to establish and operate the International Flight Training
Center ("Flight Training Center") of the Hellenic Air Force.
The Hellenic Government approved the establishment and operation
of the Flight Training Center by the IMOD and Elbit Systems for an
amount of approximately $1.68 billion
(approximately €1.375 billion) for a period of approximately 20
years.
The anticipated contract award is contingent on completion of
commercial negotiations with the Hellenic Ministry of
National Defence.
On January 6, 2021, the
Company announced that it was awarded an approximately $24 million contract from the Dutch MOD to supply
the RNLA with new vehicular tactical computers. The contract will
be performed over a 30-month period.
On January 11,
2021, the Company announced that its subsidiary,
Elbit Systems UK Ltd. ("Elbit Systems UK"), was awarded a contract
valued at approximately $166 million
(approximately £123 million) from the UK Ministry of Defence for
the Royal Navy Future Naval Training Program as part of the Fisher
consortium led by Capita plc. ("the Consortium"). The contract will
be performed over a 12-year period.
On January 13, 2021, the
Company announced that it was awarded a contract to supply Seagull™
USVs (Unmanned Surface Vehicles) to the navy of a country in
Asia-Pacific. The contract, that
is in an amount that is not material to Elbit Systems, will be
performed over a 17-month period.
On January 21, 2021, the
Company announced that Elbit Systems UK was awarded an
approximately $137 million
(approximately £100 million) contract by the UK Ministry of Defence
to provide the British Armed Forces with the future target
acquisition solution for Joint Terminal Attack Controllers and Fire
Support Teams under the Dismounted Joint Fires Integrators program.
The contract will be performed over a five-year period.
On January 26, 2021, the
Company announced, that it was awarded a contract valued at
approximately $172 million to supply
light tanks to the Army of a country in Asia-Pacific. The contract will be performed
over a three-year period.
On February 7, 2021, the
Company announced that it was awarded an approximately $82 million contract from BAE Systems Hägglunds
AB ("BAE Systems Hägglunds") to supply the RNLA with Active
Protection Systems and electro-optical commander sights. The
contract will be performed over a period of four and a half
years.
On February 7, 2021, the
Company announced that it was awarded a contract valued at
approximately $46 million to supply
VBTP 6X6 Armored Personnel Carriers to the army of a country in
Asia-Pacific. The contract will be
performed over a three-year period.
On March 2, 2021, the
Company announced that it was awarded an approximately $300 million contract by a country in
Asia to provide
HermesTM 900 Unmanned Aircraft Systems. The contract
will be performed over a period of five years.
Dividend:
The Board of Directors declared a dividend of $0.44 per share for the fourth quarter of 2020.
The dividend's record date is April 12,
2021. The dividend will be paid from income generated as
Preferred Income (as defined under Israeli tax laws), on
April 26, 2021, net of taxes, at the
rate of 20%.
Conference Call:
The Company will be hosting a conference call today,
Wednesday, March 24, 2021, at
10:00 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: 1-888-281-1167
Canada Dial-in Number: 1-866-485-2399
ISRAEL Dial-in Number:
03-918- 0610
INTERNATIONAL Dial-in
Number: 972-3- 918- 0610
at 10:00am Eastern
Time; 7:00am Pacific Time;
4:00pm Israel Time
The conference call will also be broadcast live on Elbit
Systems' website at
https://www.elbitsystems.com/investor-relations/. 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 +972-3-925-5900 (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, 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
|
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.
(FINANCIAL TABLES TO FOLLOW)
ELBIT SYSTEMS
LTD.
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands of US
Dollar)
|
|
|
As of December
31,
|
|
2020
|
|
2019
|
|
Audited
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
278,794
|
|
|
$
|
221,060
|
|
Short-term bank
deposits and restricted deposits
|
1,524
|
|
|
2,213
|
|
Trade and unbilled
receivables and contract assets, net
|
2,519,562
|
|
|
2,067,846
|
|
Other receivables and
prepaid expenses
|
156,330
|
|
|
160,728
|
|
Inventories,
net
|
1,316,688
|
|
|
1,219,920
|
|
Total current
assets
|
4,272,898
|
|
|
3,671,767
|
|
|
|
|
|
Investments in
affiliated companies, partnerships and other companies
|
184,338
|
|
|
201,574
|
|
Long-term trade and
unbilled receivables and contract assets
|
312,097
|
|
|
259,150
|
|
Long-term bank
deposits and other receivables
|
69,269
|
|
|
58,076
|
|
Deferred income
taxes, net
|
118,513
|
|
|
89,452
|
|
Severance pay
fund
|
293,716
|
|
|
287,104
|
|
|
977,933
|
|
|
895,356
|
|
|
|
|
|
Operating lease right
of use assets
|
423,088
|
|
|
365,763
|
|
Property, plant and
equipment, net
|
786,972
|
|
|
766,532
|
|
Goodwill and other
intangible assets, net
|
1,597,006
|
|
|
1,635,940
|
|
Total
assets
|
$
|
8,057,897
|
|
|
$
|
7,335,358
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term bank
credit and loans
|
$
|
312,993
|
|
|
$
|
208,399
|
|
Current maturities of
long-term loans and Series A Notes
|
17,972
|
|
|
199,882
|
|
Operating lease
liability
|
65,520
|
|
|
62,565
|
|
Trade
payables
|
1,007,237
|
|
|
926,338
|
|
Other payables and
accrued expenses
|
1,218,273
|
|
|
1,052,080
|
|
Contract liabilities
(customer advances)
|
1,000,159
|
|
|
723,581
|
|
|
3,622,154
|
|
|
3,172,845
|
|
|
|
|
|
Long-term loans, net
of current maturities
|
408,820
|
|
|
440,124
|
|
Employee benefit
liabilities
|
914,364
|
|
|
836,535
|
|
Deferred income taxes
and tax liabilities, net
|
132,442
|
|
|
114,419
|
|
Contract liabilities
(customer advances)
|
169,073
|
|
|
62,830
|
|
Operating lease
liability
|
397,936
|
|
|
323,287
|
|
Other long-term
liabilities
|
181,741
|
|
|
225,478
|
|
|
2,204,376
|
|
|
2,002,673
|
|
|
|
|
|
Elbit Systems Ltd.'s
equity
|
2,218,154
|
|
|
2,141,406
|
|
Non-controlling
interests
|
13,213
|
|
|
18,434
|
|
Total
equity
|
2,231,367
|
|
|
2,159,840
|
|
Total liabilities and
equity
|
$
|
8,057,897
|
|
|
$
|
7,335,358
|
|
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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Audited
|
|
Unaudited
|
Revenues
|
$
|
4,662,572
|
|
|
$
|
4,508,400
|
|
|
$
|
1,377,732
|
|
|
$
|
1,321,506
|
|
Cost of
revenues
|
3,497,465
|
|
|
3,371,933
|
|
|
1,019,899
|
|
|
1,037,211
|
|
Gross
profit
|
1,165,107
|
|
|
1,136,467
|
|
|
357,833
|
|
|
284,295
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development, net
|
359,745
|
|
|
331,757
|
|
|
109,062
|
|
|
97,631
|
|
Marketing and
selling, net
|
290,703
|
|
|
301,400
|
|
|
81,226
|
|
|
80,484
|
|
General and
administrative, net
|
223,935
|
|
|
214,749
|
|
|
62,920
|
|
|
46,363
|
|
Other operating
income, net
|
(34,963)
|
|
|
(33,049)
|
|
|
—
|
|
|
(3,785)
|
|
Total operating
expenses
|
839,420
|
|
|
814,857
|
|
|
253,208
|
|
|
220,693
|
|
|
|
|
|
|
|
|
|
Operating
income
|
325,687
|
|
|
321,610
|
|
|
104,625
|
|
|
63,602
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net
|
(71,270)
|
|
|
(69,072)
|
|
|
(32,525)
|
|
|
(16,357)
|
|
Other income
(expense), net
|
7,408
|
|
|
(6,243)
|
|
|
(7,332)
|
|
|
(1,625)
|
|
Income before income
taxes
|
261,825
|
|
|
246,295
|
|
|
64,768
|
|
|
45,620
|
|
Taxes on
income
|
(36,443)
|
|
|
(19,414)
|
|
|
(1,878)
|
|
|
9,129
|
|
|
225,382
|
|
|
226,881
|
|
|
62,890
|
|
|
54,749
|
|
Equity in net
earnings (losses) of affiliated companies and
partnerships
|
12,604
|
|
|
1,774
|
|
|
5,025
|
|
|
(3,498)
|
|
Net
income
|
$
|
237,986
|
|
|
$
|
228,655
|
|
|
$
|
67,915
|
|
|
$
|
51,251
|
|
|
|
|
|
|
|
|
|
Less: net income
attributable to non-controlling interests
|
(328)
|
|
|
(798)
|
|
|
(93)
|
|
|
265
|
|
Net income
attributable to Elbit Systems Ltd.'s shareholders
|
$
|
237,658
|
|
|
$
|
227,857
|
|
|
$
|
67,822
|
|
|
$
|
51,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Elbit Systems Ltd.'s shareholders:
|
|
|
|
|
|
|
Basic net earnings
per share
|
$
|
5.38
|
|
|
$
|
5.20
|
|
|
$
|
1.53
|
|
|
$
|
1.17
|
|
Diluted net earnings
per share
|
$
|
5.38
|
|
|
$
|
5.20
|
|
|
$
|
1.53
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computation of:
|
|
|
|
|
|
|
Basic earnings per
share (in thousands)
|
44,198
|
|
|
43,787
|
|
|
44,198
|
|
|
44,198
|
|
Diluted earnings per
share (in thousands)
|
44,215
|
|
|
43,848
|
|
|
44,198
|
|
|
44,287
|
|
ELBIT SYSTEMS
LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOW
|
(In thousands of US
Dollars)
|
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
Audited
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Net income
|
$
|
237,986
|
|
|
$
|
228,655
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
144,420
|
|
|
137,146
|
|
Write-off
impairment
|
7,932
|
|
|
3,692
|
|
Stock-based
compensation
|
4,086
|
|
|
3,994
|
|
Amortization of Series
A Notes discount (premium) and related issuance costs,
net
|
(46)
|
|
|
(93)
|
|
Deferred income taxes
and reserve, net
|
(5,345)
|
|
|
(15,059)
|
|
Gain on sale of
property, plant and equipment
|
(34,926)
|
|
|
(34,154)
|
|
Gain on sale of
investment, remeasurement of investment held under fair value
method and deconsolidation of subsidiary
|
(23,572)
|
|
|
(7,928)
|
|
Equity in net
(earnings) losses of affiliated companies and partnerships, net of
dividend received(*)
|
(7,853)
|
|
|
8,526
|
|
Changes in operating
assets and liabilities, net of amounts acquired:
|
|
|
|
Increase in short and
long-term trade and unbilled receivables and prepaid
expenses
|
(508,057)
|
|
|
(267,924)
|
|
Increase in
inventories, net
|
(69,762)
|
|
|
(55,841)
|
|
Increase in
trade payables and other payables and accrued expenses
|
143,847
|
|
|
115,621
|
|
Severance, pension and
termination indemnities, net
|
31,394
|
|
|
4,629
|
|
Increase (decrease) in
contract liabilities (customer advances)
|
358,730
|
|
|
(174,582)
|
|
Net cash provided by
(used for) operating activities
|
278,834
|
|
|
(53,318)
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
Purchase of property,
plant and equipment and other assets
|
(132,210)
|
|
|
(137,604)
|
|
Acquisition of
subsidiaries and business operations
|
218
|
|
|
(357,144)
|
|
Proceeds from premises
evacuation grants
|
—
|
|
|
344,913
|
|
Investments in
affiliated companies and other companies
|
(8,212)
|
|
|
(8,567)
|
|
Proceeds from sale of
property, plant and equipment
|
71,933
|
|
|
36,671
|
|
Proceeds from sale of
investments
|
44,200
|
|
|
—
|
|
Proceeds from sale of
long-term deposits
|
221
|
|
|
(38)
|
|
Investment in
short-term deposits
|
(683)
|
|
|
(2,314)
|
|
Proceeds from sale of
short-term
|
1,666
|
|
|
17,294
|
|
Net cash used in
investing activities
|
(22,867)
|
|
|
(106,789)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
Issuance of treasury
shares
|
—
|
|
|
184,840
|
|
Repayment of long-term
loans
|
(370,367)
|
|
|
(243,324)
|
|
Proceeds from long-term
loans
|
201,551
|
|
|
350,000
|
|
Repayment of Series A
Notes
|
(55,532)
|
|
|
(55,532)
|
|
Dividends
paid
|
(78,194)
|
|
|
(62,578)
|
|
Change in short-term
bank credit and loans, net
|
104,309
|
|
|
(718)
|
|
Net cash provided by
(used for) financing activities
|
(198,233)
|
|
|
172,688
|
|
NET INCREASE IN
CASH AND CASH EQUIVALENTS
|
57,734
|
|
|
12,581
|
|
CASH AND CASH
EQUIVALENTS AT THE BEGINNING OF THE YEAR
|
$
|
221,060
|
|
|
$
|
208,479
|
|
CASH AND CASH
EQUIVALENTS AT THE END OF THE YEAR
|
$
|
278,794
|
|
|
$
|
221,060
|
|
|
|
|
|
* Dividend received
from affiliated companies and partnerships
|
$
|
9,151
|
|
|
$
|
10,300
|
|
ELBIT SYSTEMS
LTD.
|
DISTRIBUTION OF
REVENUES
|
|
Consolidated
Revenues by Areas of Operation:
|
|
|
Year
Ended
|
|
Three Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
Airborne
systems
|
$
|
1,650.4
|
|
|
35.4
|
|
|
$
|
1,617.2
|
|
|
35.9
|
|
|
$
|
480.4
|
|
|
34.9
|
|
|
$
|
438.4
|
|
|
33.2
|
|
C4ISR
systems
|
1,145.7
|
|
|
24.6
|
|
|
1,161.5
|
|
|
25.8
|
|
|
386.1
|
|
|
28.0
|
|
|
356.9
|
|
|
27.0
|
|
Land
systems
|
1,258.9
|
|
|
27.0
|
|
|
1,228.3
|
|
|
27.2
|
|
|
342.1
|
|
|
24.8
|
|
|
367.7
|
|
|
27.8
|
|
Electro-optic
systems
|
475.9
|
|
|
10.2
|
|
|
374.4
|
|
|
8.3
|
|
|
116.4
|
|
|
8.5
|
|
|
124.7
|
|
|
9.4
|
|
Other (mainly
non-defense
engineering and production
services)
|
131.7
|
|
|
2.8
|
|
|
127.0
|
|
|
2.8
|
|
|
52.8
|
|
|
3.8
|
|
|
33.8
|
|
|
2.6
|
|
Total
|
$
|
4,662.6
|
|
|
100.0
|
|
|
$
|
4,508.4
|
|
|
100.0
|
|
|
$
|
1,377.8
|
|
|
100.0
|
|
|
$
|
1,321.5
|
|
|
100.0
|
|
|
|
Consolidated
Revenues by Geographical Regions:
|
|
|
Year
Ended
|
|
Three Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
Israel
|
$
|
1,106.4
|
|
|
23.7
|
|
|
$
|
1,064.8
|
|
|
23.7
|
|
|
$
|
309.6
|
|
|
22.4
|
|
|
$
|
324.6
|
|
|
24.6
|
|
North
America
|
1,500.6
|
|
|
32.2
|
|
|
1,260.5
|
|
|
28.0
|
|
|
423.5
|
|
|
30.7
|
|
|
351.8
|
|
|
26.6
|
|
Europe
|
819.0
|
|
|
17.6
|
|
|
853.6
|
|
|
18.9
|
|
|
261.9
|
|
|
19.0
|
|
|
270.4
|
|
|
20.5
|
|
Asia-Pacific
|
961.8
|
|
|
20.6
|
|
|
1,029.6
|
|
|
22.8
|
|
|
278.0
|
|
|
20.2
|
|
|
297.7
|
|
|
22.5
|
|
Latin
America
|
140.1
|
|
|
3.0
|
|
|
158.1
|
|
|
3.5
|
|
|
40.7
|
|
|
3.0
|
|
|
36.0
|
|
|
2.7
|
|
Other
countries
|
134.7
|
|
|
2.9
|
|
|
141.8
|
|
|
3.1
|
|
|
64.1
|
|
|
4.7
|
|
|
41.0
|
|
|
3.1
|
|
Total
|
$
|
4,662.6
|
|
|
100.0
|
|
|
$
|
4,508.4
|
|
|
100.0
|
|
|
$
|
1,377.8
|
|
|
100.0
|
|
|
$
|
1,321.5
|
|
|
100.0
|
|
View original
content:http://www.prnewswire.com/news-releases/elbit-systems-reports-fourth-quarter-and-full-year-2020-results-301254729.html
SOURCE Elbit Systems Ltd.