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 March 31, 2014 totaled $6,064 million, as compared to $5,777 million as of March 31, 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 March 31, 2014 was $80.8 million, as compared to $13.8 million in the quarter ended March 31, 2013.
Source / Author: Elbit Systems