Elbit Systems Reports Third Quarter 2013 Results

               Elbit Systems Reports Third Quarter 2013 Results

Backlog of orders at $5.7 billion;

Revenues at $731 million; Net income at $49.6 million;

Diluted net earnings per share at $1.17

PR Newswire

HAIFA, Israel, Nov. 14, 2013

HAIFA, Israel, Nov. 14, 2013 /PRNewswire/ --Elbit Systems Ltd. (the
"Company") (NASDAQ: ESLT, TASE: ESLT), the international defense electronics
company, reported today its consolidated financial results for the third
quarter ended September 30, 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 US- GAAP
financial data.

Management Comment:

Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: "The
solid third quarter results reflect the year-over-year trend of improvements
in revenue and profitability resulting from our ongoing focus on efficiency
and on realizing the business-wide synergies of our global organization. In
line with our decision to further enhance the effectiveness of our
technological capabilities, we are placing increased efforts in R&D as well as
in sales and marketing, in order to capitalize on the opportunities we are
seeing."

Machlis added: "We are encouraged by the global markets' recognition of our
innovative solutions, and we believe that, together with our efficiency
measures, will maintain future growth."

Third quarter 2013  results:

Revenues were $730.6 million in the third quarter of 2013, as compared to
$677.5 million in the third quarter of 2012. The main contributors to the
Company's revenues were the Airborne and the C4ISR systems areas of
operations. 

Gross profit was $207.4 million (28.4% of revenues) in the third quarter of
2013, as compared to $191.5 million (28.3% of revenues)  in the third quarter
of 2012. The non-GAAP gross profit in the third quarter of 2013 was $212.9
million (29.1% of revenues), compared to $196.6 million (29.0% of revenues) in
the third quarter of 2012.

Research and development expenses, net were $54.0 million (7.4% of revenues)
in the third quarter of 2013, as compared to $50.7 million (7.5% of revenues)
in the third quarter of 2012.

Marketing and selling expenses were $61.9 million (8.5% of revenues) in the
third quarter of 2013, as compared to $59.0 million (8.7% of revenues) in the
third quarter of 2012.

General and administrative expenses, net were $30.5 million (4.2% of revenues)
in the third quarter of 2013, as compared to $32.7 million (4.8% of revenues)
in the third quarter of 2012.

Operating income was $61.1 million (8.4% of revenues), as compared to $49.0
million (7.2% of revenues) in the third quarter of 2012. The non-GAAP
operating income in the third quarter of 2013 was $72.3 million (9.9% of
revenues), as compared to $61.0 million (9.0% of revenues) in the third
quarter of 2012. The increase in the operating income was mainly due to cost
savings and improved efficiency measures taken by the Company.

Financial expenses, net were $6.6 million in the third quarter of 2013, as
compared to $5.5 million in the third quarter of 2012.

Taxes on income were $7.5 million (effective tax rate of 13.6%) in the third
quarter of 2013, as compared to taxes on income of $4.9 million (effective tax
rate of 11.2%) in the third quarter of 2012.

Equity in net earnings of affiliated companies and partnerships was $3.4
million (0.5% of revenues) in the third quarter of 2013, as compared to $1.0
million (0.2% of revenues) in the third quarter of 2012.

Net income attributable to non-controlling interests was $1.6 million in the
third quarter of 2013, as compared to a net income of $0.4 million in the
third quarter of 2012.

Net income attributable to the Company's ordinary shareholders was $49.6
million (6.8% of revenues) in the third quarter of 2013, as compared to $39.5
million (5.8% of revenues) in  the third quarter of 2012. The non-GAAP net
income in the third quarter of 2013 was $55.8 million (7.7% of revenues), as
compared to $49.4 million (7.3% of revenues) in the third quarter of 2012.

Diluted net earnings per share attributable to the Company's ordinary
shareholders were $1.17 for the  third quarter of 2013, as compared with $0.95
for the  third quarter of 2012. The non-GAAP diluted net earnings per share in
the third quarter of 2013 were $1.32, as compared to $1.18 in the third
quarter of 2012.

The Company's backlog of orders as of September 30, 2013 was $5,697 million,
as compared with $5,804 million as of June 30, 2013 and $5,683 million as of
December 31, 2012. Approximately 68% of the backlog relates to orders outside
of Israel. Approximately 49% of the Company's backlog as of September 30, 2013
is scheduled to be performed during the fourth quarter of 2013 and in 2014.

Operating cash flow was $24.1 million  during the first nine months of 2013,
as compared to $61.0 million  in the first nine months 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:
(U.S. Dollars in millions)
                            Nine Months Ended  Three Months Ended  Year Ended

                            September 30       September 30        December 31
                            2013       2012    2013       2012     2012
GAAP gross profit           603.3      576.8   207.4      191.4    815.9
Adjustments:
Amortization of intangible 16.4       15.6    5.5        5.2      24.2
assets
Non-GAAP gross profit       619.7      592.4   212.9      196.6    840.1
Percent of revenues         29.3%      29.0%   29.1%      29.0%    29.1%
GAAP operating income       181.5      132.8   61.1       49.0     203.1
Adjustments:
Amortization of intangible  34.2       36.2    11.2       12.0     49.2
assets
                            (7.6)      -       -          -        -
Legal settlement, net
Non-GAAP operating income   208.1      169.0   72.3       61.0     252.3
Percent of revenues         9.8%       8.3%    9.9%       9.0%     8.7%
GAAP net income                                               
attributable to Elbit
Systems' shareholders       140.6      110.7   49.6       39.5     167.9
Adjustments:
Amortization of intangible  34.2       36.2    11.2       12.0     49.2
assets
Legal settlement, net       (7.6)      -       -          -        -
Gain from changes in        (0.9)      (2.3)   (0.9)      -        (2.3)
holdings
Adjustment of loss (gain)                                      
from discontinued
operations, net             (0.8)      0.3     -          0.1      0.4
Related tax benefits        (8.1)      (6.5)   (4.1)      (2.2)    (8.9)
Non-GAAP net income                                            
attributable to
Elbit Systems' shareholders 157.4      138.4   55.8       49.4     206.3
Percent of revenues         7.4%       6.8%    7.7%       7.3%     7.1%
Non-GAAP diluted net EPS    3.73       3.26    1.32       1.18     4.88



Recent Events:

On September 25, 2013 the Company announced that its subsidiary in the U.S.,
Elbit Systems of America, LLC. was awarded a $44.8 million Indefinite
Delivery/Indefinite Quantity contract to be performed over the next five years
for the ongoing depot level service and support of the AH-1W Super Cobra
helicopter's Night Targeting System (NTS).

On October 6, 2013 the Company announced that its wholly-owned subsidiary,
Elbit Systems Electro-optics - Elop Ltd., was awarded a follow-on contract to
supply its advanced Digital CoMPASS^® electro-optical payload systems to an
Asia-Pacific air force to be installed onboard helicopters. The contract will
be performed over a three-year period.

On October 16, 2013 the Company announced that it was awarded a follow-on
contract to supply advanced Helmet Mounted Display (HMD) systems for the
Republic of Korea Army's SURION helicopter. The contract will be performed
over a four-year period.

Dividend:

The Board of Directors declared a dividend of $0.30 per share for the third
quarter of 2013. The dividend's record date is November 26, 2013, and the
dividend will be paid on December 9, 2013. The dividend will be distributed
from preferred enterprise profits (as defined in the Israeli tax law) net of
taxes and levies of 15%.

Conference Call:

The Company will also be hosting a conference call later today, November 14,
2013 at 9:00am 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 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) or +972 3 925 5921 (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 operations and by geographical
regions

Company Contact:

                                                   IR Contact:

Joseph Gaspar, Executive VP & CFO                   

Tel: +972-4-8316663                                Ehud Helft

j.gaspar@elbitsystems.com                           Kenny Green

                                                   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.

                                                ELBIT SYSTEMS LTD.
                                                CONSOLIDATED BALANCE SHEETS
                                                (In thousands of U.S. Dollars)
                                                September 30,     December 31,
                                                2013              2012
                                                Unaudited         Audited
Assets
Current assets:
Cash and cash equivalents                       148,333           199,241
Short-term bank deposits                        17,266            15,444

Available-for-sale marketable securities        49,971            50,111
Trade and unbilled receivables, net             873,644           688,129
Other receivables and prepaid expenses          172,574           180,103
Inventories, net of customers advances          782,038           751,247
Total current assets                            2,043,826         1,884,275
Investments in affiliated companies,            135,227           126,482
partnerships and other companies
Long-term trade and unbilled receivables        250,755           229,687
Long-term bank deposits and other receivables   43,932            19,269
Deferred income taxes, net                      31,446            31,465
Severance pay fund                              317,327           302,680
                                                778,687           709,583
Property, plant and equipment, net              488,958           501,286
Goodwill and other intangible assets, net       681,154           715,561
Total assets                                    3,992,625         3,810,705
Liabilities and Equity
Short-term bank credits and loans               121               181
Current maturities of long-term loans and       61,684            90,056
Series A Notes
Trade payables                                  304,822           260,975
Other payables and accrued expenses             700,602           704,450
Customer advances in excess of costs incurred   401,780           453,382
on contracts in progress
                                                1,469,009         1,509,044
Long-term loans, net of current maturities      283,275           173,745
Series A Notes, net of current maturities       369,285           408,610
Employee benefit liabilities                    423,513           407,661
Deferred income taxes and tax liabilities, net  57,723            48,787
Customer advances in excess of costs incurred   180,980           156,497
on contracts in progress
Other long-term liabilities                     57,716            55,735
                                                1,372,492         1,251,035
Elbit Systems Ltd.'s equity                     1,121,172         1,017,115
Non-controlling interests                       29,952            33,511
Total equity                                    1,151,124         1,050,626
Total liabilities and equity                    3,992,625         3,810,705



ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of U.S. Dollars, except for share and per share amounts)
                            Nine Months Ended   Three Months Ended Year Ended

                            September 30        September 30       December 31
                            2013      2012      2013      2012     2012
                            Unaudited                              Audited
Revenues                    2,113,694 2,044,690 730,631   677,470  2,888,607
Cost of revenues            1,510,393 1,467,863 523,187   486,023  2,072,742
 Gross profit              603,301   576,827   207,444   191,447  815,865
Operating expenses:
 Research and development, 156,555   165,114   54,012    50,703   233,387
net
 Marketing and selling     174,755   180,325   61,906    59,044   241,911
 General and               90,449    98,580    30,468    32,677   137,517
administrative, net
                            421,759   444,019   146,386   142,424  612,815
 Operating income         181,542   132,808   61,058    49,023   203,050
Financial expenses, net     (27,274)  (15,524)  (6,634)   (5,456)  (26,086)
Other income, net           925       76        881       260      78
 Income before income      155,193   117,360   55,305    43,827   177,042
taxes
Taxes on income             17,199    14,203    7,532     4,890    17,099
                            137,994   103,157   47,773    38,937   159,943
Equity in net earnings of
affiliated companies and    7,567     8,866     3,393     1,049    11,160
partnerships
 Income from continuing    145,561   112,023   51,166    39,986   171,103
operations
Income (loss) from
discontinued operations,    681       (519)     -         (93)     (616)
net
 Net income                146,242   111,504   51,166    39,893   170,487
Less: net income
attributable to             (5,690)   (835)     (1,577)   (369)    (2,608)
non-controlling interests
 Net income attributable
to Elbit Systems Ltd.'s     140,552   110,669   49,589    39,524   167,879
shareholders
Earnings per share
attributable to Elbit
Systems Ltd.'s
shareholders:
 Basic net earnings per
share
 Continuing operations   3.32      2.63      1.18      0.95     3.99
 Discontinued operations 0.02      (0.01)    -         (0.00)   (0.01)
 Total                   3.34      2.62      1.18      0.95     3.98
 Diluted net earnings per
share
 Continuing operations   3.31      2.62      1.17      0.95     3.98
 Discontinued operations 0.02      (0.01)    -         (0.00)   (0.01)
 Total                   3.33      2.61      1.17      0.95     3.97
Weighted average number of
shares used in                                                 

 computation of basic      42,044    42,296    42,178    41,693   42,190
earnings per share
Weighted average number of
shares used in                                                 

 computation of diluted    42,213    42,374    42,348    41,693   42,277
earnings per share
Amounts attributable to
Elbit Systems Ltd.'s
shareholders
 Income from continuing
operations, net of income   139,733   110,977   49,589    39,579   168,245
tax
 Discontinued operations,  819       (308)     -         (55)     (366)
net of income tax
Net income attributable to
Elbit Systems Ltd.'s        140,552   110,669   49,589    39,524   167,879
shareholders



ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands of U.S. Dollars)
                                            Nine Months Ended     Year Ended
                                            September 30,         December 31,
                                            2013           2012   2012
                                            Unaudited             Audited
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                  146,242    111,504    170,487
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization               96,571     103,300    138,796
Discontinued operations, net               (681)      519        616
Stock-based compensation                    1,096      494        3,326
Amortization of Series A Notes discount     (69)       1,215      153
(premium) and related issuance costs, net
Deferred income taxes and reserve, net      1,545      5,485      6,579
Loss (gain) on sale of property, plant and  (133)      (556)      1,197
equipment
Gain on sale of investment                  (425)      (994)      (829)
Equity in net earnings of affiliated
companies and partnerships, net of dividend (2,067)    (2,454)    (1,602)
received(*)
Changes in operating assets and
liabilities, net of amounts acquired:
Increase in short and long-term trade       (195,656)  (17,442)   (91,988)
receivables and prepaid expenses
Decrease (increase) in inventories, net     (30,791)   (21,716)   10,022
Increase (decrease) in trade payables,      32,407     (105,834)  (75,724)
other payables and accrued expenses
Severance, pension and termination          3,184      (12,176)   (10,612)
indemnities, net
Increase (decrease) in advances received    (27,118)   (296)      47,962
from customers
Net cash provided by operating activities   24,105     61,049     198,383
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment   (54,987)   (59,753)   (81,637)
Investments in affiliated companies and     (5,046)    (507)      (4,241)
other companies
Proceeds from sale of property, plant and   4,264      6,106      7,335
equipment
Proceeds from sale of investments           2,000      705        705
Investment in long-term deposits            (1,171)    (318)       (779)

Proceeds from sale of long-term deposits    246        502        2,849
Investment in short-term deposits and
available-for-sale securities               (33,050)   (336,360)  (340,899)

Proceeds from sale of short-term deposits   30,543     287,352    299,029
and available-for-sale securities
Net cash used in investing activities       (57,201)   (102,273)  (117,638)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options           11,159     739        1,352
Repayment of long-term loans                (143,547)  (195,624)  (319,601)
Proceeds from long-term loans               217,100    53,038     122,038
Proceeds from issuance of Series A Notes    -          246,000    246,973
Series A Notes issuance costs               -          -          (2,035)

Purchase of treasury shares                 -          (26,006)   (26,006)
Repayment of Series A Notes                 (55,535)   (53,530)   (53,530)
Dividends paid (**)                         (46,928)   (38,043)   (50,616)
Tax benefit in respect of options exercised -          -          161

Change in short-term bank credit and loan,  (61)       (2,998)    (2,817)
net
Net cash used in financing activities       (17,811)   (16,424)   (84,081)
NET DECREASE IN CASH AND CASH EQUIVALENTS   (50,908)   (57,648)   (3,336)
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 148,333    144,929    199,241
PERIOD
* Dividend received from affiliated         5,500      6,412      9,558
companies and partnerships
**Dividends paid to the Company's shareholders and a minority shareholder of a
subsidiary.



ELBIT SYSTEMS LTD.
DISTRIBUTION OF REVENUES
CONSOLIDATED REVENUES BY AREAS OF OPERATION:
                       Nine Months Ended           Three Months Ended
                       September 30                September 30
                       2013          2012          2013          2012
                       $        %    $        %    $        %    $        %
                       millions      millions      millions      millions
Airborne systems       849.3    40.2 793.5    38.8 287.2    39.3 267.9    39.5
Land vehicles systems  195.4    9.2  264.3    12.9 75.5     10.3 105.5    15.6
C4ISR systems   771.8    36.5 676.7    33.1 273.4    37.4 197.8    29.2
Electro-optic systems  227.4    10.8 211.5    10.4 67.9     9.3  66.8     9.9
Other (mainly                                                      
non-defense
                                                                   
engineering and
production services)   69.8     3.3  98.7     4.8  26.6     3.7  39.5     5.8
Total                  2,113.7  100  2,044.7  100  730.6    100  677.5    100
CONSOLIDATED REVENUES BY GEOGRAPHICAL REGIONS:
                       Nine Months Ended           Three Months Ended
                       September 30                September 30
                       2013          2012          2013          2012
                       $        %    $        %    $        %    $        %
                       millions      millions      millions      millions
Israel                 470.6    22.3 355.9    17.4 181.7    24.9 104.1    15.4
North America  630.9    29.8 663.5    32.5 217.0    29.7 236.0    34.8
Europe                 397.9    18.8 368.1    18.0 127.3    17.4 127.7    18.9

Asia Pacific           357.5    16.9 423.4    20.7 97.0     13.3 133.3    19.7

Latin America 210.9    10.0 175.9    8.6  78.3     10.7 55.5     8.2
Other countries        45.9     2.2  57.9     2.8  29.3     4.0  20.9     3.0
Total                  2,113.7  100  2,044.7  100  730.6    100  677.5    100





SOURCE Elbit Systems Ltd.

Website: http://www.elbitsystems.com
 
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