Elbit Systems Reports First Quarter Of 2014 Results

             Elbit Systems Reports First Quarter Of 2014 Results

Backlog of orders at record $6.1 billion; Revenues at $683 million; Net income
of $48 million; EPS of $1.13

PR Newswire

HAIFA, Israel, May 13, 2014



HAIFA, Israel, May 13, 2014 /PRNewswire/ --Elbit Systems Ltd. (the "Company")
(NASDAQ and TASE: ESLT), the international defense electronics company,
reported today its consolidated results for the quarter ended March 31, 2014.

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

Management Comment:

Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: "I am
pleased to report a positive start to 2014, highlighted by solid growth in our
backlog, surpassing the $6 billion milestone for the first time, and strong
cash flow. The results of the quarter underscore the strength of our business
base. In particular, the growth in backlog, including recent contract awards
in the Asia-Pacific and Latin America regions, is an indication of stability
and has the potential to support revenue growth over the coming years."

First quarter 2014 results:

Revenues in the first quarter of 2014  were $682.6 million, as compared to
$680.2 million in the first quarter of 2013.

Gross profit amounted to $193.2 million (28.3% of revenues) in the first
quarter of 2014, as compared to $192.7 million (28.3% of revenues) in the
first quarter of 2013. The non-GAAP gross profit in the first quarter of 2014
was $198.6 million (29.1% of revenues), as compared to $198.3 million (29.2%
of revenues) in the first quarter of 2013.

Research and development expenses, net were $48.9 million (7.2% of revenues)
in the first quarter of 2014, as compared to $51.0 million (7.5% of revenues)
in the first quarter of 2013. The lower net expenses in the quarter is a
result primarily of higher research and development income from the Office of
the Chief Scientist and the Israeli Ministry of Defense.

Marketing and selling expenses were $55.0 million (8.1% of revenues) in the
first quarter of 2014, as compared to $55.8 million (8.2% of revenues) in the
first quarter of 2013.

General and administrative expenses were $35.3 million (5.2% of revenues) in
the first quarter of 2014, as compared to $32.2 million (4.7% of revenues) in
the first quarter of 2013. The increase in general and administrative
expenses in the first quarter of 2014 was mainly a result of higher expenses
related to the Company's phantom option retention plan.

Other income, net in the first quarter of 2014 amounted to $6.0 million. The
amount reflects a net gain related to the revaluation of the previously held
investment in Pearls of Wisdom Ltd.'s shares at the acquisition date due to
its accounting treatment as a business combination achieved in stages. As a
result of this acquisition the Company increased its holdings in Pearls of
Wisdom from 49% to 90%.

Operating income was $59.9 million (8.8% of revenues) in the first quarter of
2014, as compared to operating income of $53.7 million (7.9% of revenues) in
the first quarter of 2013. The non-GAAP operating income in the first quarter
of 2014 was $65.0 million (9.5% of revenues), as compared to $65.3 million
(9.6% of revenues) in the first quarter of 2013.

Financial expenses, net were $4.7 million in the first quarter of 2014, as
compared to $7.9 million in the first quarter of 2013. The higher level of
financial expenses in the first quarter of 2013 was mainly related to exchange
rate differences.

Taxes on income were $6.2 million (effective tax rate of 11.2%) in the first
quarter of 2014, as compared to $4.6 million (effective tax rate of 10.1%) in
the first quarter of 2013.

Equity in net earnings of affiliated companies and partnerships was $1.1
million (0.2% of revenues) in the first quarter of 2014, as compared to $1.7
million (0.2% of revenues) in the first quarter of 2013.

Net income attributable to non-controlling interests was $2.0 million in the
first quarter of 2014, as compared to $1.1 million in the first quarter of
2013.

Net income attributable to the Company's shareholders in the first quarter of
2014 was $48.2 million (7.1% of revenues), as compared to $41.4 million (6.1%
of revenues) in the first quarter of 2013. The non-GAAP net income in the
first quarter of 2014 was $51.9 million (7.6% of revenues), as compared to
$51.1 million (7.5% of revenues) in the first quarter of 2013.

Diluted net earnings per share attributable to the Company's shareholders were
$1.13 for the first quarter of 2014, as compared with diluted net earnings per
share of $0.98 for the first quarter of 2013. The non-GAAP diluted earnings
per share in the first quarter of 2014 were $1.22, same as for the first
quarter of 2013.

The Company's backlog of orders for the quarter ended March31, 2014 totaled
$6,064 million, as compared to $5,777 million as of March31, 2013.
Approximately 72% of the current backlog is attributable to orders from
outside Israel. Approximately 66% of the current backlog is scheduled to be
performed during 2014 and 2015.

Operating cash flow for the quarter ended March31, 2014  was $80.8 million,
as compared to $13.8 million in the quarter ended March31, 2013.

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)
                                              Three Months Ended  Year Ended
                                              March 31,          December 31,
                                              2014       2013     2013
GAAP gross profit                             193.2      192.7    824.8
Adjustments:
Amortization of purchased intangible assets   5.4        5.6      22.2
Impairment of long-lived assets               —          —        0.9
Non-GAAP gross profit                        198.6      198.3    847.9
Percent of revenues                           29.1 %     29.2 %   29.0 %
GAAP operating income                         59.9       53.7     239.4
Adjustments:
Amortization of purchased intangible assets  11.1       11.6     45.9
Impairment of long-lived assets               —          —        0.9
Legal settlements                             —          —        (7.6)
Gain from changes in holdings                 (6.0)      —        —
Non-GAAP operating income                     65.0       65.3     278.6
Percent of revenues                           9.5 %      9.6 %    9.5 %
GAAP net income attributable to Elbit         48.2       41.4     183.4
Systems' shareholders
Adjustments:
Amortization of purchased intangible assets  11.1       11.6     45.9
Impairment of long-lived assets               —          —        0.9
Legal settlements                             —          —        (7.6)
Gain from changes in holdings                 (6.0)      —        (0.9)
Adjustment of loss (gain) from discontinued   —          0.2      (0.8)
operations, net
Related tax benefits                          (1.4)      (2.1)    (10.1)
Non-GAAP net income attributable to Elbit    51.9       51.1     210.8
Systems' shareholders
Percent of revenues                           7.6 %      7.5 %    7.2 %
Non-GAAP diluted net EPS                      1.22       1.22     4.99

Recent Events:

On March 20, 2014, the Company announced that it was awarded a contract by a
customer in the Asia-Pacific region to perform a tank upgrade program. The
contract, valued at approximately $290 million, will be performed over a
three-year period.

On March 26, 2014, the Company announced that it was awarded a contract by the
Brazilian Air Force ("FAB") for the supply of a Hermes™ 900 Unmanned Aircraft
System ("UAS"). The Hermes 900, which will be equipped with a new and advanced
intelligence gathering system considered as a breakthrough operational
solution, will be operated by FAB in combined missions with the Hermes 450
fleet, already in operational use. Both UAS will carry safety and security
missions in the 2014 FIFA World Cup Games. The contract is in an amount that
is not material to Elbit Systems, and the Hermes 900 will be supplied within
two months.

On March 30, 2014, the Company announced that it was awarded an approximately
$163 million contract from a European country for the supply of defense
electronic systems for ground applications. The contract will be performed
over a three-year period.

On April 8, 2014, the Company announced that it was awarded a contract in the
Latin American region, in an amount of approximately $100 million, for the
supply of a homeland security solution.

On April 23, 2014, the Company announced that it was awarded an approximately
$123 million contract from a European country for the supply of defense
electronic systems for airborne applications. The contract will be performed
over a four-year period.

Dividend:

The Board of Directors declared a dividend of $0.32 per share for the first
quarter of 2014. The dividend's record date is May 27, 2014. The dividend will
be paid from income generated as Preferred Income, on June 9, 2014, net of
taxes and levies, at the rate of 20%.

Conference Call:

The Company will be hosting a conference call today, Tuesday, May 13, 2014 at
9:00 a.m. Eastern Time. On the call, management will review and discuss the
results and will be available to answer questions.

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

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

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

This call will also be broadcast live on Elbit Systems' web-site at
http://www.elbitsystems.com. An online replay will be available from 24 hours
after the call ends.

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

1 888 326 9310 (US) 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, signal
intelligence ("SIGINT") systems, data links and 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,
including training and simulation systems.

For additional information, visit: www.elbitsystems.comor follow us on
Twitter.

Attachments:

Consolidated balance sheet
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

Tel: +972-4-8316663                              Ehud Helft

j.gaspar@elbitsystems.com                         Kenny Green

Dalia Rosen, VP, Head of Corporate Communications GK Investor Relations

Tel: +972-4-8316784                               Tel: 1-646-201-9246

dalia.rosen@elbitsystems.com                      elbitsystems@gkir.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 1943, as amended) regarding Elbit Systems Ltd.
and/or its subsidiaries (collectively the Company), to the extent such
statements do not relate to historical or current fact. Forward Looking
Statements are based on management's expectations, estimates, projections and
assumptions. Forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995, as
amended. These statements are not guarantees of future performance and involve
certain risks and uncertainties, which are difficult to predict. Therefore,
actual future results, performance and trends may differ materially from these
forward-looking statements due to a variety of factors, including, without
limitation: scope and length of customer contracts; governmental regulations
and approvals; changes in governmental budgeting priorities; general market,
political and economic conditions in the countries in which the Company
operates or sells, including Israel and the United States among others;
differences in anticipated and actual program performance, including the
ability to perform under long-term fixed-price contracts; and the outcome of
legal and/or regulatory proceedings. The factors listed above are not
all-inclusive, and further information is contained in Elbit Systems Ltd.'s
latest annual report on Form 20-F, which is on file with the U.S. Securities
and Exchange Commission. All forward-looking statements speak only as of the
date of this release. The Company does not undertake to update its
forward-looking statements.

Elbit Systems Ltd. , its logo, brand, product, service, and process names
appearing in this Press Release are the trademarks or service marks of Elbit
Systems Ltd. or its affiliated companies. All other brand, product, service,
and process names appearing are the trademarks of their respective holders.
Reference to or use of a product, service, or process other than those of
Elbit Systems Ltd. does not imply recommendation, approval, affiliation, or
sponsorship of that product, service, or process by Elbit Systems Ltd. Nothing
contained herein shall be construed as conferring by implication, estoppel, or
otherwise any license or right under any patent, copyright, trademark, or
other intellectual property right of Elbit Systems Ltd. or any third party,
except as expressly granted herein.



ELBIT SYSTEMS LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars)
                                                    March 31,     December 31,
                                                    2014          2013
                                                    Unaudited     Audited
Assets
Current assets:
Cash and cash equivalents                           $ 189,531     $  193,737
Short-term bank deposits and marketable securities  53,080        71,625
Trade and unbilled receivables, net                 800,094       823,245
Other receivables and prepaid expenses              162,017       151,367
Inventories, net of customers advances              788,668       756,032
Total current assets                                1,993,390     1,996,006
Investments in affiliated companies and             130,513       131,362
partnerships
Long-term trade and unbilled receivables            213,428       242,576
Long-term bank deposits and other receivables       56,818        52,983
Deferred income taxes, net                          35,747        35,695
Severance pay fund                                  314,097       323,388
                                                    750,603       786,004
Property, plant and equipment, net                  473,346       481,408
Goodwill and other intangible assets, net           673,364       669,750
Total assets                                        $ 3,890,703   $  3,933,168
Liabilities and Equity
Current maturities of long-term loans and Series A  $ 63,753      $  63,111
Notes
Trade payables                                      319,290       301,480
Other payables and accrued expenses                 721,930       720,544
Customer advances in excess of costs incurred on   355,333       349,998
contracts in progress
                                                    1,460,306     1,435,133
Long-term loans, net of current maturities          130,190       224,209
Series A Notes, net of current maturities           381,638       377,812
Employee benefit liabilities                        398,319       407,855
Deferred income taxes and tax liabilities, net      73,500        73,502
Customer advances in excess of costs incurred on    155,012       164,854
contracts in progress
Other long-term liabilities                         60,450        55,634
                                                    1,199,109     1,303,866
Elbit Systems Ltd.'s equity                         1,210,410     1,177,012
Non-controlling interests                           20,878        17,157
Total equity                                        1,231,288     1,194,169
Total liabilities and equity                        $ 3,890,703   $  3,933,168



ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US Dollars, except for share and per share amount)
                                          Three Months Ended      Year Ended
                                          March 31,              December 31,
                                          2014        2013        2013
                                          Unaudited               Audited
Revenues                                  $ 682,613   $ 680,188   $  2,925,151
Cost of revenues                          489,415     487,479     2,100,304
Gross profit                              193,198     192,709     824,847
Operating expenses:
Research and development, net             48,942      51,049      220,482
Marketing and selling                     54,978      55,754      235,466
General and administrative                35,314      32,167      129,507
Other income, net                         (5,951)     —           —
                                          133,283     138,970     585,455
Operating income                          59,915      53,739      239,392
Financial expenses, net                   (4,662)     (7,922)     (37,310)
Other income (loss), net                  34          (9)         937
Income before income taxes                55,287      45,808      203,019
Taxes on income                           (6,186)     (4,604)     (25,313)
                                          49,101      41,204      177,706
Equity in net earnings of affiliated      1,097       1,692       13,032
companies and partnerships
Income from continuing operations         50,198      42,896      190,738
Income (loss) from discontinued           —           (341)       681
operations, net
 Net income                             50,198      42,555      191,419
Less: net income attributable to          (2,045)     (1,148)     (8,002)
non-controlling interests
Net income attributable to Elbit Systems  $ 48,153    $ 41,407    $  183,417
Ltd.'s shareholders
Earnings per share attributable to Elbit Systems
Ltd.'s shareholders:
Basic net earnings per share
Continuing operations                     $ 1.13      $ 0.99      $  4.34
Discontinued operations                   —           0.00        0.01
Total                                     $ 1.13      $ 0.99      $  4.35
Diluted net earnings per share
Continuing operations                     $ 1.13      $ 0.98      $  4.33
Discontinued operations                   —           0.00        0.01
Total                                     $ 1.13      $ 0.98      $  4.34
Weighted average number of shares used
in computation of basic earnings per      42,614      41,906      42,139
share (in thousands)
Weighted average number of shares used
in computation of diluted earnings per    42,639      42,057      42,295
share (in thousands)
Amounts attributable to Elbit Systems
Ltd.'s shareholders
Income from continuing operations, net    $ 48,153    $ 41,610    $  182,598
of income tax
Discontinued operations, net of income   —           (203)       819
tax
Net income attributable to Elbit Systems  $ 48,153    $ 41,407    $  183,417
Ltd.'s shareholders



ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands of US Dollars)
                                          Three Months Ended      Year Ended
                                          March 31,              December 31,
                                          2014        2013        2013
                                          Unaudited               Audited
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                $ 50,198    $ 42,555    $   191,419
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization             32,015      32,831      129,348
Write-off of impairment and discontinued —           341         254
operations, net
Stock-based compensation                  92          190         440
Amortization of Series A Notes premium    (23)        (23)        (92)
and related issuance costs, net
Deferred income taxes and reserve, net    847         (1,042)     221
Gain on sale of property, plant and       (735)       (121)       (147)
equipment
Loss (gain) on sale of investment         (5,811)     179         873
Equity in net loss (earnings) of
affiliated companies and partnerships,    403         (1,602)     468
net of dividend received (*)
Changes in operating assets and
liabilities, net of amounts acquired:
Decrease (increase) in short and
long-term trade receivables, and prepaid  42,782      (70,008)    (108,337)
expenses
Increase in inventories, net              (32,617)    (20,746)    (4,785)
Increase in trade payables, other         916         13,145      55,935
payables and accrued expenses
Severance, pension and termination        (86)        1,232       (3,595)
indemnities, net
Increase (decrease) in advances received  (7,207)     16,873      (95,027)
from customers
Net cash provided by operating activities 80,774      13,804      166,975
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (13,916)    (15,611)    (63,019)
and other assets
Acquisition of subsidiaries and business  787         —           —
operations
Investments in affiliated companies and   (3,312)     (3,298)     (6,222)
other companies
Proceeds from sale of property, plant and 3,095       1,596       3,755
equipment
Proceeds from sale of investments         —           —           3,550
Investment in long-term deposits          (288)       (373)       (2,076)
Proceeds from sale of long-term deposits  224         86          795
Investment in short-term deposits and     (7,328)     (10,712)    (50,975)
marketable securities
Proceeds from sale of short-term deposits 28,068      1,779       42,899
and marketable securities
Net cash provided by (used in) investing  7,330       (26,533)    (71,293)
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options         2,690       1,817       18,364
Repayment of long-term loans              (95,000)    (21,879)    (230,532)
Proceeds from long-term loans             —           10,050      242,247
Repayment of Series A Notes               —           —           (55,535)
Dividends paid                            —           —           (75,549)
Change in short-term bank credit and      —           (132)       (181)
loans, net
Net cash used in financing activities     (92,310)    (10,144)    (101,186)
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,206)     (22,873)    (5,504)
Cash and cash equivalents at the          193,737     199,241     199,241
beginning of the year
Cash and cash equivalents at the end of   $ 189,531   $ 176,368   $   193,737
the period
* Dividend received from affiliated       $ 1,500     $ 90        $   13,500
companies and partnerships



ELBIT SYSTEMS LTD.
DISTRIBUTION OF REVENUES
Consolidated Revenues by Areas of Operation:
                  Three Months Ended                       Year Ended
                  March 31,                                December 31,
                  2014                 2013                2013
                  $ millions   %       $ millions   %      $ millions   %
Airborne systems  290.0        42.5    283.2        41.6   1,133.1      38.8
Land systems      58.3         8.5     56.4         8.3    309.3        10.6
C4ISR systems     250.1        36.6    240.2        35.3   1,071.4      36.6
Electro-optic     65.6         9.6     81.0         11.9   313.9        10.7
systems
Other (mainly
non-defense
engineering and   18.6         2.8     19.4         2.9    97.5         3.3
production
services)
Total             682.6        100.0   680.2        100.0  2,925.2      100.0
Consolidated Revenues by Geographical Regions:
                  Three Months Ended                       Year Ended
                  March 31,                                December 31,
                  2014                 2013                2013
                  $ millions   %       $ millions   %      $ millions   %
Israel            163.0        23.9    138.6        20.4   705.7        24.1
North America     194.8        28.5    219.1        32.2   860.7        29.4
Europe            107.7        15.8    120.1        17.7   546.7        18.7
Latin America     69.3         10.2    65.5         9.6    283.0        9.7
Asia-Pacific      117.4        17.2    129.8        19.1   448.1        15.3
Other countries   30.4         4.4     7.1          1.0    81.0         2.8
Total             682.6        100.0   680.2        100.0  2,925.2      100.0





SOURCE Elbit Systems Ltd.

Website: http://www.elbitsystems.com
 
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