Elbit Systems Reports First Quarter 2013 Results

               Elbit Systems Reports First Quarter 2013 Results

Backlog of orders grows to $5.8 billion; Revenues at $680 million; Net income
at $41.4 million; Diluted net earnings per share of $0.98

PR Newswire

HAIFA, Israel, May 8, 2013

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

In this release, the Company is providing its usual US-GAAP results as well as
additional non-GAAP financial data, which are intended to provide investors
with a more comprehensive understanding of the Company's business results and
trends. Unless otherwise stated, all financial data presented is GAAP
financial data.

Management Comment:

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

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

First quarter 2013 results:

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

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

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

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

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

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

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

Taxes on income were of $4.6 million (effective tax rate of 10.1%)  in the
first quarter of 2013, as compared to $6.6 million (effective tax rate of
18.9%) in the first quarter of 2012. The effective tax rate is affected by the
mix of the tax rates in the various jurisdictions in which the Company's
entities generate taxable income.

Equity in net earnings of affiliated companies and partnerships was $1.7
million (0.2% of revenues) in the first quarter of 2013, as compared to $4.0
million (0.6% of revenues) in the first quarter of 2012. The equity in net
earnings of affiliated companies and partnerships in the first quarter of 2012
included approximately $1.6 million in capital gain related to the sale of the
Company's interest in an affiliated entity.

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

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

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

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

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

Non-GAAP financial data:

The following non-GAAP financial data is presented to enable investors to have
additional information on the Company's business performance as well as a
further basis for periodical comparisons and trends relating to the Company's
financial results. The Company believes such data provides useful information
to investors by facilitating more meaningful comparisons of the Company's
financial results over time. Such non-GAAP information is used by the
Company's management to make strategic decisions, forecast future results and
evaluate the Company's current performance. However, investors are cautioned
that, unlike financial measures prepared in accordance with GAAP, non-GAAP
measures may not be comparable with the calculation of similar measures for
other companies. 

The non-GAAP financial data includes reconciliation adjustments regarding
non-GAAP gross profit, operating income, net income and diluted EPS. In
arriving at non-GAAP presentations, companies generally factor out items such
as those that have a non-recurring impact on the income statements, various
non-cash items, significant effects of retroactive tax legislation and changes
in accounting guidance and other items which, in management's judgment, are
items that are considered to be outside of the review of core operating
results.

In the Company's non-GAAP presentation, the Company made certain adjustments
as indicated in the table below.

These non-GAAP measures are not based on any comprehensive set of accounting
rules or principles. The Company believes that non-GAAP measures have
limitations in that they do not reflect all of the amounts associated with the
Company's results of operations, as determined in accordance with GAAP, and
that these measures should only be used to evaluate the Company's results of
operations in conjunction with the corresponding GAAP measures. Investors
should consider non-GAAP financial measures in addition to, and not as
replacements for or superior to, measures of financial performance prepared in
accordance with GAAP.

Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental Financial Data:
(US Dollars in millions)
                                                                   Year Ended
                                      Three Months Ended March 31
                                                                   December 31
                                      2013             2012        2012
GAAP gross profit                     192.7            195.8       815.9
Adjustments:
Amortization of intangible assets    5.6              5.1         24.2
Non-GAAP gross profit                198.3            200.9       840.1
Percent of revenues                   29.2%            29.1%       29.1%
GAAP operating income                 53.7             41.7        203.1
Adjustments:
Amortization of intangible assets     11.6             12.2        49.2
Non-GAAP operating income             65.3             53.9        252.3
Percent of revenues                   9.6%             7.8%        8.7%
GAAP net income attributable to      41.4             32.9        167.9
Elbit Systems' shareholders
Adjustments:
Amortization of intangible assets     11.6             12.2        49.2
Gain from change in holdings          -                (2.3)       (2.3)
Adjustment of loss from discontinued  0.2              0.1         0.4
operations, net
Related tax benefits                  (2.1)            (2.1)       (8.9)
Non-GAAP net income attributable to   51.1             40.8        206.3
Elbit Systems' shareholders
Percent of revenues                   7.5%             5.9%        7.1%
Non-GAAP diluted net EPS
                                      1.22             0.96        4.88


Recent Events:

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

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

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

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

Changes to the Board of Directors:

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

Dividend:

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

Conference Call:

The Company will be hosting a conference call today, Wednesday, May 8, 2013 at
9:00 am Eastern Time. On the call, management will review and discuss the
results and will be available to answer questions.

To participate, please call one of the teleconferencing numbers that follow.
If you are unable to connect using the toll-free numbers, please try the
international dial-in number.

US Dial-in Numbers: 1 888 668 9141
UK Dial-in Number: 0 800 917 5108
ISRAEL Dial-in Number: 03 918 0609
INTERNATIONAL Dial-in Number: +972 3 918 0609

at 9:00am Eastern Time; 6:00am Pacific Time; 2:00pm UK Time; 4:00pm Israel
Time

This call will also be broadcast live on Elbit Systems' web-site at
http://www.elbitsystems.com. An online replay will be available from the same
link a few hours after the call ends.

Alternatively, for two days following the call, investors will be able to dial
a replay number to listen to the call. The dial-in numbers are:

1 888 326 9310 (US) or +972 3 925 5900 (Israel and International).

About Elbit Systems

Elbit Systems Ltd. is an international defense electronics company engaged in
a wide range of programs throughout the world. The Company, which includes
Elbit Systems and its subsidiaries, operates in the areas of aerospace, land
and naval systems, command, control, communications, computers, intelligence
surveillance and reconnaissance ("C4ISR"), unmanned aircraft systems ("UAS"),
advanced electro-optics, electro-optic space systems, EW suites, airborne
warning systems, ELINT systems, data links and military communications systems
and radios. The Company also focuses on the upgrading of existing military
platforms, developing new technologies for defense, homeland security and
commercial aviation applications and providing a range of support services.

For additional information, visit: www.elbitsystems.com.

Attachments:

Consolidated balance sheets
Consolidated statements of income
Consolidated statements of cash flow
Consolidated revenue distribution by areas of operation and by geographical
regions

Company Contact:
                                                  IR Contact:

                                                  
Joseph Gaspar, Executive VP & CFO
                                                  Ehud Helft
Tel: +972-4-8316663
                                                  Kenny Green
j.gaspar@elbitsystems.com
                                                  CCG Investor Relations
Dalia Rosen, VP, Head of Corporate Communications
                                                  Tel: 1-646-201-9246
Tel: +972-4-8316784
                                                  elbitsystems@ccgisrael.com
dalia.rosen@elbitsystems.com
                                                  
Elbit Systems Ltd.

This press release contains forward‑looking statements (within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended) regarding Elbit Systems Ltd.
and/or its subsidiaries (collectively the Company), to the extent such
statements do not relate to historical or current fact. Forward Looking
Statements are based on management's expectations, estimates, projections and
assumptions. Forward‑looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995, as
amended. These statements are not guarantees of future performance and
involve certain risks and uncertainties, which are difficult to predict.
Therefore, actual future results, performance and trends may differ materially
from these forward‑looking statements due to a variety of factors, including,
without limitation: scope and length of customer contracts; governmental
regulations and approvals; changes in governmental budgeting priorities;
general market, political and economic conditions in the countries in which
the Company operates or sells, including Israel and the United States among
others; differences in anticipated and actual program performance, including
the ability to perform under long-term fixed-price contracts; and the outcome
of legal and/or regulatory proceedings. The factors listed above are not
all-inclusive, and further information is contained in Elbit Systems Ltd.'s
latest annual report on Form 20-F, which is on file with the U.S. Securities
and Exchange Commission. All forward‑looking statements speak only as of the
date of this release. The Company does not undertake to update its
forward-looking statements.

(FINANCIAL TABLES TO FOLLOW)

ELBIT SYSTEMS LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars)


                                                    March 31,    December 31,
                                                    2013         2012
                                                    Unaudited    Audited
Assets
Current assets:
Cash and cash equivalents                           $  176,368 $  199,241
Short-term bank deposits                            23,562       15,444
Available-for-sale marketable securities            51,127       50,111
Trade and unbilled receivables, net                 765,373      688,129
Other receivables and prepaid expenses              181,245      180,103
Inventories, net of customers advances              771,993      751,247
Total current assets                                1,969,668    1,884,275
Investments in affiliated companies, partnerships   128,869      126,482
and other companies
Long-term trade and unbilled receivables            224,777      229,687
Long-term bank deposits and other receivables       31,610       19,269
Deferred income taxes, net                          30,674       31,465
Severance pay fund                                  308,779      302,680
                                                    724,709      709,583
Property, plant and equipment, net                  493,459      501,286
Goodwill and other intangible assets, net           702,154      715,561
Total assets                                        $ 3,889,990  $ 3,810,705
Liabilities and Equity
Short-term bank credit and loans                    $     49 $     181
Current maturities of long-term loans and Series A  76,804       90,056
Notes
Trade payables                                      252,927      260,975
Other payables and accrued expenses                 733,022      704,450
Customer advances in excess of costs incurred on    463,806      453,382
contracts in progress
                                                    1,526,608    1,509,044
Long-term loans, net of current maturities          175,986      173,745
Series A Notes, net of current maturities           418,616      408,610
Employee benefit liabilities                        414,431      407,661
Deferred income taxes and tax liabilities, net      54,879       48,787
Customer advances in excess of costs incurred on    162,946      156,497
contracts in progress
Other long-term liabilities                         59,657       55,735
                                                    1,286,515    1,251,035
Elbit Systems Ltd. equity                           1,044,185    1,017,115
Non-controlling interests                           32,682       33,511
Total equity                                        1,076,867    1,050,626
Total liabilities and equity                        $ 3,889,990  $ 3,810,705



ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US Dollars, except for share and per share amounts)


                                               Three Months Ended Year Ended

                                               March 31,          December 31,
                                               2013      2012     2012
                                               Unaudited          Audited
Revenues                                       680,188   690,788  2,888,607
Cost of revenues                               487,479   495,037  2,072,742
 Gross profit                                 192,709   195,751  815,865
Operating expenses:
Research and development, net                  51,049    58,766   233,387
Marketing and selling                          55,754    61,361   241,911
General and administrative                     32,167    33,941   137,517
                                               138,970   154,068  612,815
 Operating income                             53,739    41,683   203,050
Financial expenses, net                        (7,922)   (7,815)  (26,086)
Other income (expense), net                    (9)       930      78
Income before income taxes                     45,808    34,798   177,042
Taxes on income                                (4,604)   (6,560)  (17,099)
                                               41,204    28,238   159,943
Equity in net earnings of affiliated companies 1,692     4,038    11,160
and partnerships
Income from continuing operations              42,896    32,276   171,103
Loss from discontinued operations, net         (341)     (156)    (616)
 Net income                                  42,555    32,120   170,487
Less: net loss (income) attributable to        (1,148)   761      (2,608)
non-controlling interests
Net income attributable to Elbit Systems       41,407    32,881   167,879
Ltd.'s shareholders
Earnings per share attributable to Elbit
Systems Ltd.'s shareholders:
 Basic net earnings (losses) per share
 Continuing operations                    0.99      0.77     3.99
 Discontinued operations                  -         -        (0.01)
 Total                                       0.99      0.77     3.98
 Diluted net earnings (losses) per share
 Continuing operations                    0.98      0.77     3.98
 Discontinued operations                  -         -        (0.01)
 Total                                       0.98      0.77     3.97
Weighted average number of shares used in                       
computation of basic
                                               41,906    42,489   42,190
earnings per share (in thousands)
Weighted average number of shares used in                       
computation of diluted earnings per share (in
thousands)                                     42,057    42,663   42,277
Amounts attributable to Elbit Systems Ltd.'s
shareholders
 Income from continuing operations, net of   41,610    32,974   168,245
income tax
 Discontinued operations, net of income tax  (203)     (93)     (366)
Net income attributable to Elbit Systems       41,407    32,881   167,879
Ltd.'s shareholders



ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands of US Dollars)
                                             Nine Months Ended    Year Ended
                                             September 30,        December 31,
                                             2013           2012  2012
                                             Unaudited            Audited
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                   42,555    32,120     170,487
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization                32,831    35,485     138,796
Discontinued operations, net                 341       156        616
Stock based compensation                     190       216        3,326
Amortization of Series A Notes discount and  (23)      87         153
related issuance costs, net
Deferred income taxes and reserve, net       (1,042)   (738)      6,579
Loss (gain) on sale of property, plant and   (121)     115        1,197
equipment
Loss (gain) on sale investment               179       (791)      (829)
Equity in net loss (earnings) of affiliated
companies and partnership, net of dividend   (1,602)   (1,468)    (1,602)
received(*)
Changes in operating assets and liabilities,
net of amounts acquired:
Decrease (increase) in short and long-term   (70,008)  14,726     (91,988)
trade receivables and prepaid expenses
Decrease (increase) in inventories, net      (20,746)  (58,410)   10,022
Increase (decrease) in trade payables, other 13,145    (3,492)    (75,724)
payables and accrued expenses
Severance, pension and termination           1,232     (2,280)    (10,612)
indemnities, net
Increase in advances received from customers 16,873    36,108     47,962
Net cash provided by operating activities    13,804    51,834     198,383
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment    (15,611)  (19,768)   (81,637)
Investments in affiliated companies and      (3,298)   (507)      (4,241)
other companies
Proceeds from sale of property, plant and    1,596     1,557      7,335
equipment
Proceeds from sale of investments            -         705        705
Investment in long-term deposits             (373)     (192)      (779)
Proceed from sale of long-term deposites     86        283        2,849
Investment in short-term deposits and        (10,712)  (275,181)  (340,899)
available for sale securities
Proceed from sale of short-term deposits and 1,779     14,237     299,029
available-for-sale securities
Net cash used in investing activities        (26,533)  (278,866)  (117,638)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options            1,817     554        1,352
Repayment of long-term loans                 (21,879)  (136,638)  (319,601)
Proceeds from long-term loans                10,050    125,254    122,038
Proceeds from issuance of Series A Notes     -         217,420    246,973
Series A Notes issuance costs                -         1,889      (2,035)
Purchase of treasury shares                  -         (10,004)   (26,006)
Repayment of Series A Notes and convertible  -         -          (53,530)
debentures
Dividends paid                               -         -          (50,616)
Tax benefit in respect of options exercised  -         -          161
Change in short- term bank credit and loan, (132)     (14)       (2,817)
net
Net cash used in financing activities        (10,144)  198,328    (84,081)
NET INCREASE (DECREASE) IN CASH AND CASH     (22,873)  (28,704)   3,336
EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE BEGINNING   199,241   202,577    202,577
OF THE PERIOD
CASH AND CASH EQUIVALENTS AT THE END OF THE  176,368   173,873    199,241
PERIOD
* Dividend received from affiliated          90        2,570      9,558
companies and partnership





ELBIT SYSTEMS LTD.
DISTRIBUTION OF REVENUES


CONSOLIDATED REVENUES BY AREAS OF OPERATION:


                            Three Months Ended                Year Ended

                            March 31                          December 31
                            2013             2012             2012
                            $ millions %     $ millions %     $ millions %
Airborne systems            272.4      40.1  281.5      40.8  1,054.5    36.5
Land vehicle systems        58.5       8.6   91.6       13.3  374.5      13.0
C4ISR systems               237.6      34.9  218.8      31.7  1,017.6    35.2
Electro-optic systems       81.0       11.9  68.5       9.8   324.1      11.2
Other (mainly non-defense                                          
engineering and production
services)                   30.7       4.5   30.4       4.4   117.9      4.1
Total                       680.2      100.0 690.8      100.0 2,888.6    100.0



CONSOLIDATED REVENUES BY GEOGRAPHICAL REGIONS(*):


                Three Months Ended                Year Ended

                March 31                          December 31
                2013             2012             2012
                $ millions %     $ millions %     $ millions %
Israel          138.6      20.4  136.2      19.7  519.9      18.0
North America   219.1      32.2  208.9      30.2  909.4      31.5
Europe          120.0      17.6  113.1      16.4  561.1      19.4
Asia Pacific    129.8      19.1  153.4      22.2  568.4      19.7
Latin America   65.5       9.6   56.5       8.2   258.8      9.0
Other countries 7.2        1.1   22.7       3.3   71.0       2.4
Total           680.2      100.0 690.8      100.0 2,888.6    100.0



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

SOURCE Elbit Systems Ltd.

Website: http://www.elbitsystems.com
 
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