Elbit Systems Reports Fourth Quarter and Full Year 2009 Results
HAIFA, Israel, March 10, 2010 /PRNewswire-FirstCall/ --
- 2009 Revenues Increased by 7.4% YoY to $2,832 Million;
- Net Profit of $215 Million and EPS of $5.00;
- Backlog of Orders Over $5 Billion
Elbit Systems Ltd. (the "Company") (NASDAQ: ESLT, TASE: ESLT), the international defense electronics company, today reported its consolidated results for the fourth quarter and full year ended December 31, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080408/300441 )
Fourth quarter 2009 results:
Revenues for the fourth quarter of 2009 increased by 2.4% to $714.7 million, as compared to $697.9 million in the fourth quarter of 2008.
Gross profit for the fourth quarter of 2009 increased by 5.3% to $212.0 million (29.7% of revenues), as compared to gross profit of $201.4 million (28.9% of revenues) in the fourth quarter of 2008.
Net research and development expenses for the fourth quarter of 2009 were $61.8 million (8.7% of revenues), as compared to $63.9 million (9.2% of revenues) in the fourth quarter of 2008.
Marketing and selling expenses for the fourth quarter of 2009 were $59.4 million (8.3% of revenues), as compared to $41.9 million (6.0% of revenues) in the fourth quarter of 2008. The increased level of marketing and selling expenses in the quarter reflected increased efforts by the Company in pursuit of a wide range of business opportunities in various international markets.
General and administrative expenses for the fourth quarter of 2009 were $32.5 million (4.5% of revenues), as compared to $32.4 million (4.6% of revenues) in the fourth quarter of 2008.
Net financial expenses for the fourth quarter of 2009 were $7.4 million, as compared to $3.8 million in the fourth quarter of 2008.
Taxes on income for the fourth quarter of 2009 were $0.4 million (effective tax rate of 0.8%), as compared to taxes on income of $26.3 million (effective tax rate of 17.7%) in the fourth quarter of 2008. The change in the effective tax rate was attributable mainly to the mix of the tax rates in the various tax jurisdictions in which the Company's entities generate taxable income, as well as tax adjustments from prior years in some of the Company's subsidiaries.
Equity in net earnings of affiliated companies and partnership for the fourth quarter of 2009 decreased to $4.9 million (0.7% of revenues), as compared to $6.4 million (0.9% of revenues) in the fourth quarter of 2008.
Net income attributable to non-controlling interests for the fourth quarter of 2009 was $3.0 million, as compared to $23.3 million in the fourth quarter of 2008. The decrease in net income attributable to non-controlling interests was mainly a result of the Company's purchase during the second quarter of 2009 of the remaining 49% of Kinetics Ltd.'s shares. Subsequently, Kinetics became a wholly-owned subsidiary of Elbit Systems.
During the fourth quarter of 2008, the Company sold its holdings in Mediguide Inc., a non-core subsidiary in which the Company owned a 41.3% interest on a fully diluted basis, to St. Jude Medical. The Company recorded a net income of $74.4 million in the fourth quarter of 2008 from this sale. In addition, there was a one-time impairment charge of $10.5 million relating to Sandel Avionics, Inc., a U.S. company in which the Company invested $12.4 million in 2007. Thus the aggregate contribution to the 2008 fourth quarter's results from these one-time effects was an additional $63.9 million to net profit.
Net income attributable to the Company's ordinary shareholders for the fourth quarter of 2009 was $53.7 million (7.5% of revenues), as compared with $105.3 million (15.1% of revenues) in the fourth quarter of 2008. Excluding the gain due to Mediguide's sale and the Sandel write-off mentioned above, net income for the fourth quarter of 2008 was $41.4 million.
Diluted net earnings per share attributable to the Company's ordinary shareholders for the fourth quarter of 2009 were $1.24, as compared with $2.48 for the fourth quarter of 2008. Excluding the above-mentioned gain due to the Mediguide sale and the Sandel write-off, earnings attributable to the Company's ordinary shareholders was $0.98 per share for the fourth quarter of 2008.
Full year 2009 results:
Revenues for the year ended December 31, 2009 increased by 7.4% to $2,832 million, as compared to $2,638 million in the year ended December 31, 2008. The growth in the Company's revenues was driven by an increase in sales in the Airborne Systems, Electro-optics and C4I Systems' areas of operations.
Gross profit for the year ended December 31, 2009 increased by 10.7% to $849.5 million (30.0% of revenues), as compared with gross profit of $767.4 million (29.1% of revenues) in the year ended December 31, 2008. The improved gross profit margin in 2009 was a result mainly of the mix of our programs, the Company's focus on improving operating efficiencies and the strengthening of the U.S. dollar against the NIS.
Net research and development expenses for the year ended December 31, 2009 were $216.8 million (7.7% of revenues), as compared to $185.0 million (7.0% of revenues) in the year ended December 31, 2008. The increased rate of R&D expenses in 2009 was primarily a result of accelerated development programs, related to technology and products in all areas of our operations, as well as increased engineering activities to support marketing efforts worldwide.
Marketing and selling expenses for the year ended December 31, 2009 were $251 million (8.9% of revenues), as compared to $198.3 million (7.5% of revenues) in the year ended December 31, 2008. The increase in 2009 is mainly due to enhanced marketing efforts in existing markets, such as the United States and Brazil, as well as development of markets relatively new to us such as Australia and certain European countries.
General and administrative ("G&A") expenses for the year ended December 31, 2009 were $119.3 million 4.2% of revenues), as compared to $134.2 million (5.1% of revenues) in the year ended December 31, 2008. The decrease in the total dollar amount in G&A expenses in 2009 compared to 2008 was due in part to costs incurred in 2008 related to the settlement agreement relating to the lawsuit between IS&S and Kollsman. In general, the Company reduced its G&A expenses due to efficient management of expenses as well as the strengthening of the U.S. dollar against NIS in 2009 compared to 2008.
Net financial expenses for the year ended December 31, 2009 were $15.6 million, as compared to $36.8 million in the year ended December 31, 2008. The net finance expenses in 2008 included the impact of the other-than-temporary decline in the value of our auction rate securities in the amount of $18.7 million. Our net financing expenses in 2009 were also positively impacted by lower interest rates in the market.
Taxes on income for the year ended December 31, 2009 were $38.1 million (effective tax rate of 15.4%), as compared to taxes on income of $54.4 million (effective tax rate of 17.7%) in the year ended December 31, 2008. The change in the effective tax rate was attributable mainly to the mix of the tax rates in the various tax jurisdictions in which the Company's entities generate taxable income, as well as tax adjustments from prior years' in some of the Company's subsidiaries.
Equity in net earnings of affiliated companies and partnership for the year ended December 31, 2009 increased to $19.3 million (0.7% of revenues), as compared to $14.4 million (0.5% of revenues) in the year ended December 31, 2008. This was a result of both growth in revenues and operational improvements in those entities.
Net income attributable to non-controlling interests for the year ended December 31, 2009 was $13.6 million, as compared to $62.4 million in the year ended December 31, 2008. The decrease in net income attributable to non-controlling interests was mainly a result of the Company's purchase of the remaining 49% of Kinetics Ltd.'s shares during the second quarter of 2009, subsequently making Kinetics a wholly-owned subsidiary.
Net income attributable to the Company's ordinary shareholders for the year ended December 31, 2009 increased by 5.3% to $214.9 million (7.6% of revenues), as compared with $204.2 million (7.7% of revenues) in the year ended December 31, 2008. Net income in 2008 included a net gain of $63.9 million related to Mediguide and Sandel, as mentioned above.
Diluted net earnings per share attributable to the Company's ordinary shareholders for the year ended December 31, 2009 were $5.00, as compared with $4.78 for the year ended December 31, 2008, an increase of 4.6%. Excluding the above-mentioned gain due to the Mediguide sale and the Sandel write-off, earnings attributable to the Company's ordinary shareholders were $3.28 per share in 2008.
The Company's backlog of orders for the year ended December 31, 2009 totaled $5,044 million, as compared with $5,030 million as of December 31, 2008. Approximately 65% of the current backlog is due to orders from outside Israel. Approximately 72% of the current backlog is scheduled to be performed during 2010 and 2011.
Operating cash flow for the year ended December 31, 2009 was $209.7 million, as compared to $209.4 million in the year ended December 31, 2008.
Management Comment:
"2009 caps another good year for Elbit Systems," commented Mr. Joseph Ackerman, President and CEO of Elbit Systems. "This was a year of building on our internal competencies while acquiring complementary technologies and broadening our offerings to the defense market. We grew our revenues level, while generating continued strong profitability and cash flow, despite a tough year for the world economy."
Mr. Ackerman continued, "Over the past few years, our R&D efforts and investments were based on our analysis of the direction of the global defense industry. Our read has so far proven us correct and we invested in areas which have become relevant in today's market environment. In particular, we correctly foresaw the shift of defense budgets into unmanned vehicles and systems as well as the digitization of the battlefield, and have built up significant competitive assets in these areas. We continued to broaden our product range, our operations and customer base are becoming even more global, and we are continually enhancing our foundation as one of the leaders in the defense electronics industry. Looking ahead, we believe that Elbit Systems is well positioned strategically, operationally, and financially for the coming years."
Dividend:
The Board of Directors declared a dividend of $0.36 per share for the fourth quarter of 2009. The dividend's record date is March 31, 2010, and the dividend will be paid on April 12, 2010, net of taxes and levies, at the rate of 16.03%.
Conference Call
The Company will host a conference call today, Wednesday, March 10, 2010, at 10:00am EST. On the call, management will review and discuss the Company's fourth quarter and year end 2009 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: 10:00am Eastern Time; 7:00am Pacific Time; 3:00pm UK Time;
5:00pm 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: 1-888-326-9310 (US) or +972-3-925-5925 (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: http://www.elbitsystems.com.
Attachments:
Consolidated balance sheet
Consolidated statements of income
Condense 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 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 US Dollars)
December 31 December 31
2009 2008
Audited Audited
Assets
Current assets:
Cash and cash equivalents 140,709 204,670
Short-term bank deposits 115,924 69,642
Available for sale marketable securities 23,639 3,731
Trade receivables, net 659,524 477,010
Other receivables and pre-paid expenses 115,856 211,988
Inventories, net of advances 569,848 644,107
Total current assets 1,625,500 1,611,148
Investment in affiliated companies,
partnership and other companies 88,759 62,300
Available for sale marketable securities 12,941 2,999
Long-term bank deposits and other receivables 36,338 37,746
Deferred income taxes 7,992 9,201
Severance pay fund 274,136 238,645
420,166 350,891
Property, plant and equipment, net 404,675 384,086
Goodwill and other intangible assets, net 603,336 594,283
Total assets 3,053,677 2,940,408
Liabilities and Shareholders' Equity
Short-term bank credit and loans - 6,331
Current maturities of long-term loans 2,663 9,082
Trade payables 299,238 340,315
Other payables and accrued expenses 552,806 476,222
Customer advances in excess of costs
incurred on contracts in progress 367,137 489,192
1,221,844 1,321,142
Long-term loans, net of current maturities 386,534 269,760
Accrued termination liability 351,278 333,953
Deferred income taxes and tax liabilities, net 59,602 70,068
Customer advances in excess of costs incurred
on contracts in progress 142,566 115,470
Other long-term liabilities 34,659 29,707
974,639 818,958
Elbit Systems Ltd.'s shareholders' equity 832,868 723,833
Non-controlling interests 24,326 76,475
Total shareholders' equity 857,194 800,308
Total liabilities and shareholders' equity 3,053,677 2,940,408
ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US Dollars, except for share and per share amounts)
For the Year Ended Three Months Ended
December 31, December 31,
2009 2008 2009 2008
Audited Unaudited
Revenues 2,832,437 2,638,271 714,696 697,854
Cost of revenues 1,982,954 1,870,830 502,652 496,504
Gross profit 849,483 767,441 212,044 201,350
Operating expenses:
Research and development, 216,752 61,842 63,875
net 184,984
Marketing and selling 250,963 198,274 59,402 41,879
General and administrative 119,311 134,182 32,506 32,416
Acquired IPR&D - 1,000 - 1,000
Total operating expenses 587,026 518,440 153,750 139,170
Operating income 262,457 249,001 58,294 62,180
Financial expenses, net (15,585) (36,815) (7,420) (3,759)
Other income, net 458 94,294 1,326 90,064
Income before taxes on 247,330 52,200 148,485
income 306,480
Taxes on income (38,109) (54,367) (413) (26,278)
209,221 252,113 51,787 122,207
Equity in net earnings of
affiliated companies and
partnership 19,292 14,435 4,897 6,364
Consolidated net income 228,513 266,548 56,684 128,571
Less: net income (13,566) (62,372) (2,968) (23,299)
attributable to
non-controlling interests
Net income attributable to
Elbit Systems Ltd.'s
Shareholders 214,947 204,176 53,716 105,272
Earnings per share
attributable to Elbit
Systems Ltd.'s shareholders:
Basic net earnings per share 5.08 4.85 1.26 2.50
Diluted net earnings per
share 5.00 4.78 1.24 2.48
Weighted average number of
shares used in computation
of basic earnings per share 42,305 42,075 42,497 42,079
Weighted average number of
shares used in computation
of diluted earnings per share 42,983 42,758 43,253 42,475
ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands of US Dollars)
Year Ended December
31,
2009 2008
Audited
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 228,513 266,548
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 123,473 129,437
Write-off impairment 3,017 10,514
Acquired IPR&D - 1,000
Other-than-temporary impairment of available for - 17,885
sale marketable securities
Stock based compensation 5,134 5,067
Deferred income taxes and reserve 7,606 (8,488)
Severance, pension and termination indemnities, (16,773) 15,211
net
Gain on sale of property, plant and equipment (723) (1)
Gain on sale of investment (2,734) (100,031)
Equity in net earnings of affiliated companies and (1,824) (1,866)
partnership, net of dividend received (*)
Change in operating assets and liabilities:
Increase in short and long-term trade receivables,(136,224) (39,698)
and prepaid expenses
Decrease (increase) in inventories, net 75,431 (169,482)
Increase in trade payables, other payables and 20,223 120,734
accrued expenses
Decrease in advances received from customers (95,397) (37,402)
Net cash provided by operating activities 209,722 209,428
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (107,893) (129,241)
Acquisition of subsidiaries and business (48,234) (20,637)
combinations
Investments in affiliated companies (19,415) (4,001)
Proceeds from sale of property, plant and 9,055 8,779
equipment
Proceeds from sale of investment 33,026 50,254
Investment in available-for-sale debt securities (24,004) (19,166)
Proceeds fro sale of long-term bank deposits 12,994 939
Investment in short-term deposits (152,457) (62,518)
Proceeds from sale of short-term deposits 99,625 3,884
Net cash used in investing activities (197,303) (171,707)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options 9,871 188
Purchase of non-controlling interests (110,250) -
Repayment of long-term bank loans (148,652) (333,590)
Proceeds from long-term bank loans 256,354 183,211
Dividends paid (76,172) (32,770)
Tax benefit in respect of options exercised - 116
Change in short-term bank credit and loans, net (7,531) (13,008)
Net cash used in financing activities (76,380) (195,853)
NET DECREASE IN CASH AND CASH EQUIVALENTS (63,961) (158,132)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE 204,670 362,802
PERIOD
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 140,709 204,670
* Dividend received 17,468 12,569
ELBIT SYSTEMS LTD.
DISTRIBUTION OF REVENUES
Consolidated revenues by areas of operation:
For the Year Ended Three Months Ended
December 31, December 31,
2009 2008 2009 2008
$ % $ % $ % $ %
millions millions millions millions
Airborne 716.9 25.3 634.7 24.1 203.7 28.5 160.3 23.0
systems
Land systems 520.0 18.4 699.5 26.5 135.6 19.0 192.0 27.5
C4ISR systems 1,058.7 37.4 844.5 32.0 239.0 33.4 205.5 29.4
Electro-optics 406.2 14.3 336.7 12.8 98.3 13.8 111.5 16.0
Other (mainly
non-defense
engineering 130.6 4.6 122.9 4.6 38.1 5.3 28.6 4.1
and production
services)
Total 2,832.4 100.0 2,638.3 100.0 714.7 100.0 697.9 100.0
Consolidated revenues by geographical regions:
For the Year Ended Three Months Ended
December 31, December 31,
2009 2008 2009 2008
$ % $ % $ % $ %
millions millions millions millions
Israel 627.3 22.2 474.4 18.0 159.0 22.3 115.8 16.6
United States 813.4 28.7 907.1 34.4 210.3 29.4 253.0 36.3
Europe 728.2 25.7 653.1 24.7 177.4 24.8 158.7 22.7
Other 663.5 23.4 603.7 22.9 168.0 23.5 170.4 24.4
countries
Total 2,832.4 100.0 2,638.3 100.0 714.7 100.0 697.9 100.0
Company Contact:
Joseph Gaspar, Executive VP & CFO
Dalia Rosen, VP & Head of Corporate Communications
Elbit Systems Ltd.
Tel: +972-4-831-6663
Fax: +972-4-831-6944
E-mail: [email protected]
[email protected]
IR Contact:
Ehud Helft / Kenny Green
CCG Investor Relations
Tel: +1-646-201-9246
E-mail: [email protected]
SOURCE Elbit Systems Ltd
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