HAIFA, Israel,Ā Aug. 15, 2019Ā /PRNewswire/ —Ā Elbit Systems Ltd.(NASDAQ: ESLT) (TASE: ESLT),Ā (the “Company”)Ā the international high technology company, reported today its consolidated results for the quarter ended JuneĀ 30, 2019.
In this release, the Company is providing US-GAAP results as well as additional non-GAAP financial data, which are intended to provide investors a more comprehensive understanding of the Company’s business results and trends. Unless otherwise stated, all financial data presented is GAAP financial data.
Management Comment:
Bezhalel (Butzi) Machlis, President and CEO ofĀ Elbit Systems, commented:Ā “We are pleased with the results of the second quarter, with an ongoing increase in backlog as well as solid revenue growth of over 19%, diversified across all our main regions of business.
We are also encouragedĀ that, with the IMI consolidation, our ongoing focus on efficient operations enabled us to maintain a similar level of operating margins to that of the second quarter last year.
We continue to integrate and extract synergies from all our recent acquisitions and are looking forward to further growth of our business.”
Second quarter 2019 results:
RevenuesĀ in the second quarter of 2019Ā wereĀ $1,064.0 million, as compared toĀ $892.2 millionĀ in the second quarter of 2018. The strong growth was driven mainly by the consolidation of IMI.
Non-GAAPĀ (*)Ā gross profitĀ amounted toĀ $294.3 millionĀ (27.7% of revenues) in the second quarter of 2019, as compared toĀ $254.8 millionĀ (28.6% of revenues) in the second quarter of 2018.Ā GAAP gross profitĀ in the second quarter of 2019 wasĀ $288.4 millionĀ (27.1% of revenues), as compared toĀ $250.0 millionĀ (28.0% of revenues) in the second quarter of 2018.
Research and development expenses, netĀ wereĀ $77.3 millionĀ (7.3% of revenues) in the second quarter of 2019, as compared toĀ $76.6 millionĀ (8.6% of revenues) in the second quarter of 2018.
Marketing and selling expenses, netĀ wereĀ $73.6 millionĀ (6.9% of revenues) in the second quarter of 2019, as compared toĀ $69.9 millionĀ (7.8% of revenues) in the second quarter of 2018.
_____________
* see page 3
General and administrative expenses, netĀ wereĀ $57.2 millionĀ (5.4% of revenues) in the second quarter of 2019, as compared toĀ $37.0 millionĀ (4.2% of revenues) in the second quarter of 2018.
Other operating income, netĀ in the second quarter of 2018 wasĀ $45.4 million. This was the result of net gains related to valuation of shares in two of our Israeli subsidiaries in the commercial cyber and medical instrument areas, due to third party investments.
Non-GAAP(*)Ā operating incomeĀ wasĀ $89.6 millionĀ (8.4% of revenues) in the second quarter ofĀ 2019, as compared toĀ $73.1 millionĀ (8.2% of revenues) in the second quarter ofĀ 2018.Ā Ā GAAP operating incomeĀ in the second quarter ofĀ 2019 wasĀ $80.3 millionĀ (7.5% of revenues), as compared toĀ $111.8 millionĀ (12.5% of revenues) in the second quarter of 2018.
Financial expenses, netĀ wereĀ $20.3 millionĀ in the second quarter of 2019, as compared toĀ $10.7 millionĀ in the second quarter of 2018. Financial expenses, net in the second quarter of 2019 include exchange rate differences of approximatelyĀ $5.2 millionĀ related to the recognition of lease liabilities denominated in foreign currencies (mainly in New Israeli Shekels) as a result of the adoption of ASC 842, Leases, effectiveĀ January 1, 2019.
Other income, netĀ wasĀ $1.6 millionĀ in the second quarter of 2019,Ā as compared to other expenses, net ofĀ $5.1 millionĀ in the second quarter ofĀ 2018, mainly due to the non-service cost components of pension plans, in accordance with ASU 2017-07 and adjustments to the fair value of our investments in Israeli subsidiaries.
Taxes on incomeĀ wereĀ $10.8 millionĀ (effective tax rate of 17.6%) in the second quarter of 2019, as compared toĀ $7.3 millionĀ (effective tax rate of 7.6%) in the second quarter of 2018. 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 and other income and expenses thatĀ are not a part of the taxable income.
Equity in net earningsĀ of affiliated companies and partnershipsĀ wasĀ $3.5 millionĀ (0.3% of revenues) in the second quarter of 2019, as compared toĀ $3.3 millionĀ (0.4% of revenues) in the second quarter of 2018.
Net income attributable to non-controlling interestsĀ wasĀ $0.4 millionĀ in the second quarter ofĀ 2019, as compared toĀ $0.1 millionĀ in the second quarter of 2018.
Non-GAAP(*)Ā net income attributable to the Company’s shareholdersĀ in the second quarter ofĀ 2019 wasĀ $64.3 millionĀ (6.0% of revenues), as compared toĀ $61.0 millionĀ (6.8% of revenues) in the second quarter ofĀ 2018.Ā GAAP net income attributable to the Company’s shareholdersĀ in the second quarter of 2019 wasĀ $53.8 millionĀ (5.1% of revenues), as compared toĀ $91.9 millionĀ (10.3% of revenues) in the second quarter of 2018.
Non-GAAP(*)Ā diluted net earnings per share attributable to the Company’sĀ shareholdersĀ wereĀ $1.46Ā for the second quarter of 2019, as compared toĀ $1.43Ā for the second quarter of 2018.Ā GAAP diluted earnings per shareĀ in the second quarter of 2019 wereĀ $1.22, as compared toĀ $2.15Ā for the second quarter of 2018.
The Company’s backlog of ordersĀ as of JuneĀ 30, 2019 totaledĀ $9,796 million, as compared toĀ $8,065 millionĀ as of JuneĀ 30, 2018. Approximately 60% of the current backlog is attributable to orders from outsideĀ Israel. Approximately 56% of the current backlog is scheduled to be performed during the second half of 2019 and 2020.
_____________
* see page 3
Operating cash flowsĀ used in the six months ended JuneĀ 30, 2019Ā wasĀ $91.5 million, as compared toĀ $1.1 millionĀ used in the six months ended JuneĀ 30, 2018.
Investing cash flowsĀ include approximatelyĀ $344.9 millionĀ in proceeds from factoring of the premises evacuation asset related to the IMI acquisition.
Financing cash flowsĀ include approximatelyĀ $184.8 millionĀ in proceeds resulting from the issuance of shares to institutional investors.
Adoption of New Accounting Standard:
The Company adopted Accounting Standards Update (ASU) 2016-02, Leases (ASC 842), effectiveĀ January 1, 2019, using a modified retrospective transition method. Consequently, periods prior toĀ January 1, 2019Ā are not restated for the adoption of ASU 2016-02.
Leases (ASC 842), as amended,Ā requires lessees to recognize a Right of Use (ROU) asset and lease liability on the balance sheet for most lease arrangements and expands disclosures about leasing arrangements for both lessees and lessors, among other items. We adopted ASU 2016-02 using the optional transition method whereby we applied the new lease requirements under ASU 2016-02 through a cumulative-effect adjustment.
OnĀ January 1, 2019, we recognized approximatelyĀ $377 millionĀ ofĀ ROU operating lease assets and lease liabilities as a result of adopting this standard. As part of our adoption, we elected all of the available practical expedients with the exception of the practical expedient permitting the use of hindsight when determining the lease term and assessing impairment of ROU assets. The adoption of the standard increased our financial expenses in the first half of 2019 in the amount ofĀ $14.5 millionĀ as a result of exchange rate differences on lease liabilities denominated in foreign currencies (mainly NIS). The comparative periods have not been restated for the adoption of ASU 2016-02.
* 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, the Company factors 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 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.Ā 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, except per share amount)
|
|||||||||||||||||||
|
Six Months Ended |
Three Months Ended |
Year Ended |
|||||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
2018 |
|||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
|
GAAP gross profit |
$ |
566.0 |
$ |
485.4 |
$ |
288.4 |
$ |
250.0 |
$ |
976.2 |
|||||||||
|
Adjustments: |
Ā | Ā | Ā | Ā | Ā | ||||||||||||||
|
Amortization of purchased intangible assets |
11.7 |
9.2 |
5.9 |
4.8 |
19.1 |
||||||||||||||
|
Expenses related to IMI acquisition |
ā |
ā |
ā |
ā |
66.6 |
||||||||||||||
|
Non-GAAPĀ gross profit |
$ |
577.7 |
$ |
494.6 |
$ |
294.3 |
$ |
254.8 |
$ |
1,061.9 |
|||||||||
|
Percent of revenues |
27.7% |
28.9% |
27.7% |
28.6% |
28.8% |
||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
|
GAAP operating income |
$ |
156.3 |
$ |
175.1 |
$ |
80.3 |
$ |
111.8 |
$ |
292.8 |
|||||||||
|
Adjustments: |
Ā | Ā | Ā | Ā | Ā | ||||||||||||||
|
Amortization ofĀ purchased intangible assets |
18.5 |
12.8 |
9.3 |
6.7 |
26.5 |
||||||||||||||
|
Expenses related to IMI acquisition |
ā |
ā |
ā |
ā |
66.8 |
||||||||||||||
|
Gain from changes in holdings |
(1.2) |
(45.4) |
ā |
(45.4) |
(45.4) |
||||||||||||||
|
Non-GAAP operating income |
$ |
173.6 |
$ |
142.5 |
$ |
89.6 |
$ |
73.1 |
$ |
340.7 |
|||||||||
|
Percent of revenues |
8.3% |
8.3% |
8.4% |
8.2% |
9.2% |
||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
|
GAAP net income attributable to Elbit |
$ |
104.3 |
$ |
141.6 |
$ |
53.8 |
$ |
91.9 |
$ |
206.7 |
|||||||||
|
Adjustments: |
Ā | Ā | Ā | Ā | Ā | ||||||||||||||
|
Amortization of purchased intangible assets |
18.5 |
12.8 |
9.3 |
6.7 |
26.5 |
||||||||||||||
|
Expenses related to IMI acquisition |
ā |
ā |
ā |
ā |
66.8 |
||||||||||||||
|
Impairment of investment |
ā |
5.1 |
ā |
5.1 |
17.6 |
||||||||||||||
|
Exchange rate differences (*) |
15.5 |
3.7 |
7.0 |
3.5 |
3.4 |
||||||||||||||
|
Gain from changes in holdings |
(5.8) |
(45.4) |
(4.6) |
(45.4) |
(45.4) |
||||||||||||||
|
Related tax benefits |
(2.4) |
(1.7) |
(1.2) |
(0.8) |
(8.1) |
||||||||||||||
|
Non-GAAPĀ net income attributable to |
$ |
130.1 |
$ |
116.1 |
$ |
64.3 |
$ |
61.0 |
$ |
267.5 |
|||||||||
|
Percent of revenues |
6.2% |
6.8% |
6.0% |
6.8% |
7.3% |
||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
|
GAAP diluted net EPS |
$ |
2.40 |
$ |
3.31 |
$ |
1.22 |
$ |
2.15 |
$ |
4.84 |
|||||||||
|
Adjustments, net |
0.60 |
(0.59) |
0.24 |
(0.72) |
1.42 |
||||||||||||||
|
Non-GAAP diluted net EPS |
$ |
3.00 |
$ |
2.72 |
$ |
1.46 |
$ |
1.43 |
$ |
6.26 |
|||||||||
|
(*) Exchange rate differencesĀ in the first half ofĀ 2019 included exchange rate differences of $ 14.5 million on lease contracts as a result of the implementation of ASC 842, effective as of January 1, 2019, as well as other assets and liabilities denominated in currencies other than U.S. dollars. |
|||||||||||||||||||
Recent Events:
OnĀ June 16, 2019,Ā the Company announced that its wholly-owned subsidiary,Ā Elbit SystemsĀ –Ā Cyclone Ltd., was awarded an approximatelyĀ $50 millionĀ contract for the supply of structural parts from composite materials for an aircraft of a customer inĀ North America. The contract will be performed over six years.
OnĀ June 19, 2019, the Company announced that it was awarded an approximatelyĀ $73 millionĀ contract fromĀ Diehl Defence GmbH & Co. KGĀ to provide J-MUSICā¢ Directed Infrared Counter Measure systems for the German Air Forces’ Airbus A400M aircraft. The contract will be performed over a four-year period.
OnĀ June 25, 2019, the Company announced that its subsidiary,Ā BrightWay Vision Ltd.Ā (BWV), raised aĀ $25 millionĀ investment fromĀ Koito Manufacturing Co, Ltd.Ā andĀ Magenta Venture Partners, following which they hold approximately 38.5% of BWV’s shares, on a fully diluted basis.
OnĀ June 26, 2019, the Company announced, further to its announcement ofĀ August 17, 2017, that onĀ June 25, 2019, theĀ United States Court of Appeals for the Federal CircuitĀ inĀ Washington, DCĀ ruled completely inĀ Elbit Systems’Ā favor againstĀ Hughes Network Systems, LLCĀ for infringing anĀ Elbit SystemsĀ patent relating to high-speed satellite communications, U.S. Patent No. 6,240,073.
OnĀ June 26, 2019, the Company announced that its subsidiary in the U.S.,Ā Elbit Systems of America, LLCĀ (“Elbit SystemsĀ of America”), was awarded an approximatelyĀ $26 millionĀ contract from the United States Customs and Border Protection (CBP) to install anĀ Integrated Fixed TowersĀ (IFT) system in the U.S. Border Patrol Casa Grande Area of Responsibility (AoR) inĀ Arizona. The project will be performed over a one-year period. To date,Ā Elbit SystemsĀ of America has been awarded a number of contracts from CBP to install IFT systems in numerous AoR’s covering a total of approximately 200 miles of theĀ Arizona-MexicoĀ border.
OnĀ August 7, 2019, the Company announced that it was awarded a contract valued at approximatelyĀ $80 millionĀ to upgrade tanks and supply radio systems for anĀ ArmyĀ of a country inĀ South East Asia. The contract will be performed over a period of 32 months.
OnĀ August 12, 2019,Ā the Company announced that its subsidiary,Ā Elbit Systems of America LLC, (“Elbit SystemsĀ of America”) was awarded a contract by theĀ U.S. NavyĀ for the supply of components of the for Color Helmet Mounted Display System of the CV-22 aircraft. The contract is in an amount that is not material toĀ Elbit SystemsĀ and is expected to be completed byĀ October 2020.
Dividend:
The Board ofĀ Directors declared a dividend ofĀ $0.44Ā per share for the second quarter of 2019. The dividend’s record date isĀ September 9, 2019. The dividend will be paid from income generated as Preferred Income (as defined underĀ IsraelĀ tax laws), onĀ September 23, 2019, net of taxes and levies, at the rate of 20%.
Conference Call:
The Company will be hosting a conference call onĀ Thursday, August 15, 2019Ā atĀ 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: 1-888-407-2553
Canada Dial-in Numbers: 1-888-604-5839
UK Dial-in Number: 0-800-917-9141
ISRAEL Dial-in Number: 03-918-0664
INTERNATIONAL Dial-in Number:Ā +972-3-918-0664
at:Ā 9:00 am Eastern Time;Ā 6:00 am Pacific Time;Ā 2:00 pmĀ UK Time;Ā 4:00 pmĀ Israel Time
This call will also be broadcast live onĀ Elbit Systems’Ā web-site atĀ http://www.elbitsystems.comĀ . 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 andĀ Canada) or +972-3-925-5925 (IsraelĀ and International).
AboutĀ Elbit Systems
Elbit Systems Ltd.Ā is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world. The Company, which includesĀ Elbit SystemsĀ and its subsidiaries, operates in the areas of airborne, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (“C4ISR”), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and munitions.Ā The Company also focuses on the upgrading of existing 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:Ā www.elbitsystems.comor follow us onĀ Twitter
Attachments:
Consolidated balance sheets
Consolidated statements of income
Consolidated statements of cash flow
Consolidated revenue distribution by areas of operation and by geographical regions
This press release 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) regardingĀ Elbit Systems Ltd.Ā 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, includingĀ IsraelĀ andĀ the United StatesĀ 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 inĀ Elbit Systems Ltd.’sĀ latest annual report on Form 20-F, which is on file with theĀ 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 ofĀ Elbit Systems Ltd.Ā or its affiliated companies.Ā 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 ofĀ Elbit Systems Ltd.Ā does not imply recommendation, approval, affiliation or sponsorship of that product, service or process byĀ Elbit Systems Ltd.Ā 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 ofĀ Elbit Systems Ltd.Ā or any third party, except as expressly granted herein.
(FINANCIAL TABLES TO FOLLOW)
|
ELBIT SYSTEMS LTD. |
||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||
|
(In thousands of US Dollars)
|
||||||||
|
June 30, 2019 |
December 31, 2018 |
|||||||
|
Unaudited |
Audited |
|||||||
|
Assets |
Ā | Ā | ||||||
|
Current assets: |
Ā | Ā | ||||||
|
Cash and cash equivalents |
$ |
191,810 |
$ |
208,479 |
||||
|
Short-term bank deposits and restricted deposits |
10,825 |
16,447 |
||||||
|
Trade and unbilled receivables and contract assets, net |
1,839,624 |
1,712,915 |
||||||
|
Other receivables and prepaid expenses |
197,671 |
199,148 |
||||||
|
Inventories, net |
1,276,806 |
1,141,996 |
||||||
|
Total current assets |
3,516,736 |
3,278,985 |
||||||
| Ā | Ā | |||||||
|
Investments in affiliated companies and partnerships and other companies |
198,362 |
196,180 |
||||||
|
Long-term trade and unbilled receivables and contract assets |
254,779 |
297,145 |
||||||
|
Premises evacuation |
ā |
365,436 |
||||||
|
Long-term bank deposits and other receivables |
77,531 |
42,962 |
||||||
|
Deferred income taxes, net |
43,316 |
42,804 |
||||||
|
Severance pay fund |
285,646 |
278,732 |
||||||
|
859,634 |
1,223,259 |
|||||||
| Ā | Ā | |||||||
|
Operating lease right of use assets |
368,676 |
ā |
||||||
|
Property, plant and equipment, net |
711,516 |
686,620 |
||||||
|
Goodwill and other intangible assets, net |
1,293,647 |
1,261,921 |
||||||
|
Total assets |
$ |
6,750,209 |
$ |
6,450,785 |
||||
| Ā | Ā | |||||||
| Ā | Ā | |||||||
|
Liabilities and Equity |
Ā | Ā | ||||||
|
Short-term bank credit and loans |
$ |
154,536 |
$ |
208,821 |
||||
|
Current maturities of long-term loans and Series A Notes |
164,006 |
62,546 |
||||||
|
Operating lease liabilities |
63,707 |
ā |
||||||
|
Trade payables |
758,139 |
776,100 |
||||||
|
Other payables and accrued expenses |
1,095,463 |
1,081,992 |
||||||
|
Contract liabilities |
812,704 |
780,994 |
||||||
|
3,048,555 |
2,910,453 |
|||||||
| Ā | Ā | |||||||
|
Long-term loans, net of current maturities |
126,528 |
467,649 |
||||||
|
Series A Notes, net of current maturities |
ā |
56,303 |
||||||
|
Employee benefit liabilities |
748,830 |
736,798 |
||||||
|
Deferred income taxes and tax liabilities, net |
88,310 |
78,677 |
||||||
|
Operating lease liabilities |
319,751 |
ā |
||||||
|
Contract liabilities |
89,769 |
175,890 |
||||||
|
Other long-term liabilities |
202,558 |
170,607 |
||||||
|
1,575,746 |
1,685,924 |
|||||||
| Ā | Ā | |||||||
|
Elbit Systems Ltd.’s equity |
2,103,016 |
1,832,453 |
||||||
|
Non-controlling interests |
22,892 |
21,955 |
||||||
|
Total equity |
2,125,908 |
1,854,408 |
||||||
|
Total liabilities and equity |
$ |
6,750,209 |
$ |
6,450,785 |
||||
|
ELBIT SYSTEMS LTD. |
|||||||||||||||||||
|
CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||||||||
|
(In thousands of US Dollars, except for share and per share amount) |
|||||||||||||||||||
| Ā | |||||||||||||||||||
|
Six Months Ended June 30, |
Three Months Ended |
Year Ended |
|||||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
2018 |
|||||||||||||||
|
Unaudited |
Unaudited |
Audited |
|||||||||||||||||
|
Revenues |
$ |
2,085,704 |
$ |
1,710,694 |
$ |
1,063,981 |
$ |
892,166 |
$ |
3,683,684 |
|||||||||
|
Cost of revenues |
1,519,689 |
1,225,283 |
775,588 |
642,180 |
2,707,505 |
||||||||||||||
|
Gross profit |
566,015 |
485,411 |
288,393 |
249,986 |
976,179 |
||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
|
Operating expenses: |
Ā | Ā | Ā | Ā | Ā | ||||||||||||||
|
Research and development, net |
154,658 |
144,740 |
77,303 |
76,555 |
287,352 |
||||||||||||||
|
Marketing and selling, net |
145,405 |
138,119 |
73,573 |
69,949 |
281,014 |
||||||||||||||
|
General and administrative, net |
110,866 |
72,784 |
57,226 |
37,045 |
160,348 |
||||||||||||||
|
Other operating income, net |
(1,234) |
(45,367) |
ā |
(45,367) |
(45,367) |
||||||||||||||
|
Total operating expenses |
409,695 |
310,276 |
208,102 |
138,182 |
683,347 |
||||||||||||||
|
Operating income |
156,320 |
175,135 |
80,291 |
111,804 |
292,832 |
||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
|
Financial expenses, net(*) |
(34,254) |
(20,994) |
(20,329) |
(10,745) |
(44,061) |
||||||||||||||
|
Other (expenses) income, net |
(1,807) |
(5,088) |
1,623 |
(5,110) |
(11,449) |
||||||||||||||
|
Income before income taxes |
120,259 |
149,053 |
61,585 |
95,949 |
237,322 |
||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
|
Taxes on income |
(20,924) |
(13,639) |
(10,825) |
(7,277) |
(26,445) |
||||||||||||||
|
99,335 |
135,414 |
50,760 |
88,672 |
210,877 |
|||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
|
Equity in net earnings (losses) of |
5,741 |
6,445 |
3,494 |
3,311 |
(2,222) |
||||||||||||||
|
Net income |
$ |
105,076 |
$ |
141,859 |
$ |
54,254 |
$ |
91,983 |
$ |
208,655 |
|||||||||
|
Less: net income attributable to non- |
(800) |
(299) |
(434) |
(53) |
(1,917) |
||||||||||||||
|
Net income attributable to Elbit |
$ |
104,276 |
$ |
141,560 |
$ |
53,820 |
$ |
91,930 |
$ |
206,738 |
|||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
|
Earnings per share attributable to Elbit Systems Ltd.’sĀ shareholders: |
Ā | Ā | |||||||||||||||||
|
Basic net earnings per share |
$ |
2.41 |
$ |
3.31 |
$ |
1.23 |
$ |
2.15 |
$ |
4.84 |
|||||||||
|
Diluted net earnings per share |
$ |
2.40 |
$ |
3.31 |
$ |
1.22 |
$ |
2.15 |
$ |
4.84 |
|||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
| Ā | Ā | Ā | Ā | Ā | |||||||||||||||
|
Weighted average number of shares (in thousands)(**) |
Ā | Ā | Ā | Ā | |||||||||||||||
|
Shares used in computation of basic |
43,340 |
42,752 |
43,927 |
42,753 |
42,753 |
||||||||||||||
|
Shares used in computation of diluted |
43,391 |
42,754 |
44,026 |
42,755 |
42,753 |
||||||||||||||
| Ā | |||||||||||||||||||
|
(*) Financial expenses in the first half ofĀ 2019 included exchange rate differences of $14.5 million on lease contracts as a result of the implementation of ASC 842. (**) During the second quarter of 2019 the Company issued 1,408,921 shares to institutional investors. |
|||||||||||||||||||
|
ELBIT SYSTEMS LTD. |
|||||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOW |
|||||||||||
|
(In thousands of US dollars)
|
|||||||||||
|
Six Months Ended |
Year Ended |
||||||||||
|
2019 |
2018 |
2018 |
|||||||||
|
Unaudited |
Audited |
||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
Ā | Ā | Ā | ||||||||
|
Net income |
$ |
105,076 |
$ |
141,859 |
$ |
208,655 |
|||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
Ā | Ā | Ā | ||||||||
|
Depreciation and amortization |
66,854 |
56,413 |
118,205 |
||||||||
|
Adjustment to fair value investment |
ā |
5,114 |
13,334 |
||||||||
|
Stock-based compensation |
1,951 |
ā |
1,387 |
||||||||
|
Amortization of Series A Notes premium and related issuance costs, net |
(46) |
(46) |
(92) |
||||||||
|
Deferred income taxes and reserve, net |
9,267 |
1,305 |
13,724 |
||||||||
|
Loss (gain) on sale of property, plant and equipment |
(432) |
(89) |
2,080 |
||||||||
|
Loss (gain) on sale and revaluation of investments |
(4,479) |
(43,201) |
(41,822) |
||||||||
|
Equity in net earnings of affiliated companies and partnerships, net of dividend |
411 |
(4,093) |
17,929 |
||||||||
|
Changes in operating assets and liabilities, net of amounts acquired: |
Ā | Ā | Ā | ||||||||
|
Decrease (increase) in short and long-term trade and unbilled receivables and |
(78,562) |
18,077 |
(89,099) |
||||||||
|
Increase in inventories, net |
(134,370) |
(136,949) |
(117,221) |
||||||||
|
Decrease in trade payables, other payables and accrued expenses |
(5,638) |
(91,660) |
(89,956) |
||||||||
|
Severance, pension and termination indemnities, net |
3,012 |
439 |
(31,363) |
||||||||
|
Increase (decrease) in contract liabilities |
(54,515) |
51,689 |
185,898 |
||||||||
|
Net cash provided by (used in) operating activities |
(91,471) |
(1,142) |
191,659 |
||||||||
| Ā | Ā | Ā | |||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
Ā | Ā | Ā | ||||||||
|
Purchase of property, plant and equipment and other assets |
(64,904) |
(48,374) |
(102,301) |
||||||||
|
Acquisition of subsidiaries and business operations |
(5,634) |
(127,569) |
(504,447) |
||||||||
|
Proceeds from premises evacuation |
344,913 |
ā |
ā |
||||||||
|
Investments in affiliated companies and other companies |
(1,350) |
(3,748) |
(7,538) |
||||||||
|
Deconsolidation of subsidiary |
ā |
(2,873) |
(2,873) |
||||||||
|
Proceeds from sale of property, plant and equipment |
1,039 |
1,106 |
4,388 |
||||||||
|
Investment in long-term deposits |
(289) |
(180) |
(183) |
||||||||
|
Proceeds from sale of long-term deposits |
350 |
67 |
82 |
||||||||
|
Investment in short-term deposits and marketable securities |
(15,649) |
(5,072) |
(10,361) |
||||||||
|
Proceeds from sale of short-term deposits and marketable securities |
21,856 |
18,104 |
30,363 |
||||||||
|
Net cash provided by (used in)Ā investing activities |
280,332 |
(168,539) |
(592,870) |
||||||||
| Ā | Ā | Ā | |||||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
Ā | Ā | Ā | ||||||||
|
Proceeds from exercise of options |
ā |
48 |
48 |
||||||||
|
Issuance of shares |
184,840 |
ā |
ā |
||||||||
|
Repayment of long-term loans |
(241,984) |
(28) |
(775) |
||||||||
|
Proceeds from long-term loans |
ā |
340,386 |
342,528 |
||||||||
|
Repayment of Series A Notes |
(55,532) |
ā |
(55,532) |
||||||||
|
Dividends paid |
(38,273) |
(18,827) |
(75,305) |
||||||||
|
Change in short-term bank credit and loans, net |
(54,581) |
(120,995) |
242,652 |
||||||||
|
Net cash (used in) provided by financing activities |
(205,530) |
200,584 |
453,616 |
||||||||
| Ā | Ā | Ā | |||||||||
|
Net increase (decrease) in cash and cash equivalents |
(16,669) |
30,903 |
52,405 |
||||||||
|
Cash and cash equivalents at the beginning of the year |
208,479 |
156,074 |
156,074 |
||||||||
|
Cash and cash equivalents at the end of the period |
$ |
191,810 |
$ |
186,977 |
$ |
208,479 |
|||||
|
* Dividend received from affiliated companies and partnerships |
$ |
6,152 |
$ |
2,352 |
$ |
15,707 |
|||||
|
ELBIT SYSTEMS LTD. DISTRIBUTION OF REVENUES
Consolidated Revenues by Areas of Operation:
|
|||||||||||||||||||||||
|
Six months ended June 30, |
Three months ended June 30, |
||||||||||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||||
|
$ millions |
% |
$ millions |
% |
$ millions |
% |
$ millions |
% |
||||||||||||||||
|
Airborne systems |
781.3 |
37.5 |
678.3 |
39.7 |
412.9 |
38.8 |
367.3 |
41.2 |
|||||||||||||||
|
Land systems |
565.5 |
27.1 |
256.5 |
15.0 |
262.0 |
24.6 |
142.1 |
15.9 |
|||||||||||||||
|
C4ISR systems |
505.4 |
24.2 |
563.1 |
32.9 |
261.9 |
24.6 |
287.9 |
32.3 |
|||||||||||||||
|
Electro-optic systems |
171.3 |
8.2 |
154.8 |
9.0 |
93.4 |
8.8 |
66.8 |
7.5 |
|||||||||||||||
|
Other (mainly non-defense |
62.2 |
3.0 |
58.0 |
3.4 |
33.8 |
3.2 |
28.1 |
3.1 |
|||||||||||||||
|
Total |
2,085.7 |
100.0 |
1,710.7 |
100.0 |
1,064.0 |
100.0 |
892.2 |
100.0 |
|||||||||||||||
|
Consolidated Revenues by Geographical Regions:
|
|||||||||||||||||||||||
|
Six months ended June 30, |
Three months ended June 30, |
||||||||||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||||
|
$ millions |
% |
$ millions |
% |
$ millions |
% |
$ millions |
% |
||||||||||||||||
|
Israel |
494.3 |
23.7 |
351.9 |
20.6 |
232.4 |
21.8 |
166.3 |
18.6 |
|||||||||||||||
|
North America |
575.3 |
27.6 |
461.2 |
27.0 |
299.6 |
28.2 |
252.5 |
28.3 |
|||||||||||||||
|
Europe |
388.0 |
18.6 |
315.7 |
18.5 |
191.5 |
18.0 |
162.9 |
18.3 |
|||||||||||||||
|
Asia-Pacific |
483.9 |
23.2 |
364.0 |
21.3 |
267.3 |
25.1 |
190.4 |
21.3 |
|||||||||||||||
|
Latin America |
72.6 |
3.5 |
91.0 |
5.3 |
40.8 |
3.8 |
50.9 |
5.7 |
|||||||||||||||
|
Other countries |
71.6 |
3.4 |
126.9 |
7.3 |
32.4 |
3.1 |
69.2 |
7.8 |
|||||||||||||||
|
Total |
2,085.7 |
100.0 |
1,710.7 |
100.0 |
1,064.0 |
100.0 |
892.2 |
100.0 |
|||||||||||||||
Company Contact:Ā
Joseph Gaspar, Executive VP & CFO
Tel:Ā +972-772946663
j.gaspar@elbitsystems.comĀ Ā
David Vaaknin, VP, Head of Corporate Communications
Tel: +972-772946691
david.vaaknin@elbitsystems.comĀ Ā
Elbit Systems Ltd.
IR Contact:Ā
Ehud Helft
Kenny Green
GK Investor Relations
Tel: 1-646-201-9246
elbitsystems@gkir.comĀ Ā