-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K7iOR7Otk6xBQcSV9HCWbt+1AKjtZJs5xgTNAWH/ErgaZbUcRoNlMdboE25aUeAX XaGOatA4ThFSTNNxITwUFw== 0000910680-03-000955.txt : 20031112 0000910680-03-000955.hdr.sgml : 20031111 20031112093820 ACCESSION NUMBER: 0000910680-03-000955 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031111 FILED AS OF DATE: 20031112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELBIT SYSTEMS LTD CENTRAL INDEX KEY: 0001027664 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] IRS NUMBER: 000000000 STATE OF INCORPORATION: L3 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28998 FILM NUMBER: 03991038 BUSINESS ADDRESS: STREET 1: ADVANCED TECHNOLOGY CENTER STREET 2: PO BOX 539 CITY: HAIFA, ISRAEL STATE: L3 ZIP: 31053 BUSINESS PHONE: 01197248316626 6-K 1 form6k-11102003.txt NOVEMBER 11, 2003 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM 6-K Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the Month of November 2003 _______________________ ELBIT SYSTEMS LTD. (Translation of Registrant's Name into English) Advanced Technology Center, P.O.B. 539, Haifa 31053, Israel (Address of Principal Corporate Offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: |X| Form 20-F |_| Form 40-F Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): |_| NOTE: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): |_| NOTE: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: |_| Yes |X| No If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-______________ Attached hereto as Exhibit 1 and incorporated herein by reference is the Registrant's management report for the quarter ended September 30, 2003. Attached hereto as Exhibit 2 and incorporated herein by reference is the report of the Registrant's auditors for the quarter ended September 30, 2003. Attached hereto as Exhibit 3 and incorporated herein by reference is the Registrant's press release dated November 11, 2003. SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ELBIT SYSTEMS LTD. (Registrant) By: /s/ Ilan Pacholder ---------------------------------- Name: Ilan Pacholder Title: Corporate Secretary Dated: November 11, 2003. EXHIBIT INDEX ------------- EXHIBIT NO. DESCRIPTION ----------- ----------- 1. Management report for the quarter ended September 30, 2003. 2. Auditor's report for the quarter ended September 30, 2003. 3. Press release dated November 11, 2003. EX-99 3 exhibit-1.txt EXHIBIT 1 EXHIBIT 1 --------- ELBIT SYSTEMS LTD. ------------------ MANAGEMENT'S REPORT ------------------- FOR THE THREE AND NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2003 ------------------------------------------------------------ This report should be read together with the Company's unaudited financial statements for the quarter ended September 30, 2003 and the Company's Form 20-F for the year ended December 31, 2002, filed by the Company with the U.S. Securities and Exchange Commission and with the Israeli Securities Authority. A. THE COMPANY'S BUSINESS OVERVIEW ------------------------------- Elbit Systems Ltd. ("Elbit Systems") and its subsidiary companies (together the "Company" or the "Group") operate in the area of upgrading existing airborne, ground and naval defense platforms and are engaged in projects involving the design, development, manufacture, integration and marketing of advanced integrated defense systems, electronic systems, electro-optic systems and products and software intensive programs and products for the defense and homeland security sectors. In addition, the Company provides support services for such platforms, systems and products. The Company is engaged in leading projects in Israel and worldwide, in areas such as air, ground and naval Command, Control, Communication, Computers, Intelligence, Surveillance and Reconnaissance ("C4ISR") systems, digital maps, night vision systems, pilot helmet mounted systems, display and data processing systems, unmanned air vehicles ("UAVs"), computerized simulators, communication systems, thermal imaging products, laser products, optical systems for space applications, airborne reconnaissance systems, optic communication systems and products, security systems and products, surveillance products and systems and electric drive systems. The Company provides a wide range of logistic support services, including operation of pilot training services for the Israeli Air Force on a private financing initiative ("PFI") basis. Several of the Group's companies also provide advanced engineering and manufacturing services to various customers, utilizing their significant manufacturing capabilities. The Company often cooperates with industries in Israel and in various other countries. B. BACKLOG OF ORDERS ----------------- The Company's backlog of orders as of September 30, 2003 reached $1,702 million, of which 64.0% were for orders outside of Israel. The Company's backlog as of December 31, 2002 was $1,689 million, out of which 62% were for orders outside of Israel. Approximately 58% of the Company's backlog as of September 30, 2003 is scheduled to be performed in the forth quarter of 2003 and during 2004. The majority of the 42% balance is scheduled to be performed in 2005 and 2006. The relatively small increase in the Company's backlog resulted mainly from a slowdown in orders received from the Israeli Ministry of Defense ("IMOD") due to the budgetary considerations and continued postponement in placing new orders made by the IMOD. C. MAJOR SUBSIDIARIES AND AFFILIATED COMPANIES ------------------------------------------- o Elop Electro-Optics Industries Ltd. ("El-Op") - a wholly owned subsidiary registered in Israel, is engaged in the field of advanced electro-optical products for defense, homeland security and civil applications. El-Op's main areas of activity include development and production of thermal imaging products, laser products, optical systems for space applications, airborne reconnaissance systems, optical communications systems, fire control systems for combat vehicles, homeland security products and other systems for defense applications. o EFW Inc. ("EFW") - a wholly owned subsidiary registered in the United States, serves as the base for the Group's activities in the United States, mainly in the area of development, production and maintenance of advanced defense products and systems. o Vision Systems International LLC ("VSI") - an affiliated company in the United States, owned 50% each by EFW and Rockwell Collins Inc., is engaged in the area of helmet mounted systems primarily for fighter aircraft. o Cyclone Aviation Products Ltd. ("Cyclone") - a wholly owned subsidiary registered in Israel, provides logistic support and maintenance services for aircraft and helicopters and manufactures structure components and sub-assemblies for aircraft. o Silver Arrow LP - a wholly owned limited partnership registered in Israel, is engaged in the business of UAV systems and products. o Ortek Ltd. ("Ortek") - a wholly owned subsidiary registered in Israel, is engaged mainly in the area of security products and systems and night vision equipment. o Kinetics Ltd. ("Kinetics") - a 51% owned subsidiary registered in Israel, is involved mainly in the development and production of systems and components for combat vehicles. o Semi-Conductor Devices ("SCD") - an Israeli affiliated partnership, owned 50% each by the Company and Rafael Armaments Development Authority Ltd. ("Rafael"), is engaged in the development and production of infrared detectors and laser diodes. o Opgal Optronic Industries Ltd. ("Opgal") - an Israeli affiliated company, owned 50.1% by the Company and 49.9% by Galram Technologies Ltd., a wholly owned subsidiary of Rafael, is engaged mainly in the area of thermal imaging systems for commercial applications. o The Company has holdings, directly and indirectly, in several relatively small companies in various countries. These companies are engaged mainly in the manufacturing, marketing and servicing of defense avionics and electronics as well as defense related software. The Company also has holdings, directly and indirectly, in several non-defense technology spin-off companies whose activities are based on technologies that were developed by the Company. The spin-off companies are involved primarily in the areas of medical equipment, optical communications and space satellites. The Company evaluates investments in affiliates, partnerships and other companies, and when relevant factors indicate other than temporary decline in the fair value of the investments below their carrying value, the Company adjusts the investment to the estimated fair value. The value of these companies is subject to ongoing changes resulting from their business conditions. D. CRITICAL ACCOUNTING POLICIES AND ESTIMATES ------------------------------------------ The Company's significant accounting policies are described in Note 2 to the audited consolidated financial statements included in Elbit Systems' annual report form 20-F for the year ended December 31, 2002. The Company's results of operations and financial condition are based on the preparation of consolidated financial statements in conformity with generally accepted accounting principles in the U.S. ("U.S. GAAP"). The preparation of the consolidated financial statements requires management to select accounting policies for critical accounting areas as well as estimates and assumptions that affect the amounts reported in the consolidated financial statements. Significant changes in assumptions and/or conditions and changes in critical accounting policies could materially impact the Company's operating results and financial condition. In the Company's opinion, its most critical accounting policy relates to revenue recognition based on SOP 81-1 "Accounting for Performance of Construction Type and Certain Production Type Contracts", which is relevant to most of its revenues. Under SOP 81-1, the Company has adopted the "percentage of completion" accounting method. Under this method, the Company recognizes revenues and profits on long-term fixed price contracts generally based on the ratio of costs incurred to estimates of costs to be incurred for the total contract. Under this approach, the Company compares estimated costs to complete an entire contract to total revenues for the term of the contract in order to arrive at an estimated gross margin percentage for each contract. The updated estimated gross margin percentage is applied, and the current period gross profit is the difference between the cumulative earned gross profit and gross profit reported for prior periods. Management reviews these estimates periodically and the effect of any change in the estimated gross margin percentage for a contract is reflected in cost of sales in the period in which the change becomes known. If increases in projected costs to complete a contract are sufficient to create a loss in completing the contract, the entire estimated loss is charged to cost of sales in the period the loss first becomes known. A number of internal and external factors affect the Company's cost estimates, including labor rates, estimated future material prices, revised estimates of uncompleted work, efficiency variances, linkage to indices and exchange rates, customer specifications and requirements and testing requirement changes. If any of the above factors were to change, or if different assumptions were used in the application of this and other accounting policies, it is likely that materially different amounts would be reported in the Company's consolidated financial statements. E. IMPAIRMENT OF GOODWILL AND OTHER LONG-LIVED ASSETS -------------------------------------------------- Consistent with Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets," goodwill is not amortized, and is tested at least annually for impairment. As of September 30, 2003, the Company's goodwill and assembled work force amounted to $32.6 million. Consistent with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the Company evaluates long-lived assets for impairment and assesses their recoverability based upon anticipated future cash flows. As of September 30, 2003, the Company's long-lived assets amounted to $289.4 million, including $69.5 million in intangible assets, and the Company concluded that no assessment of impairment loss was necessary. Should future impairment tests made by the Company determine that impairment has occurred in the value of the Company's goodwill or long-lived assets, such impairment may have a material effect on the financial results of the Company in the period in which the impairment is determined. F. SPECIAL EVENTS THAT AFFECTED THE BUSINESS RESULTS ------------------------------------------------- The change in the Company's share price affected the Company's financial results due to the impact of the employee stock option plan for key employees adopted in 2000. The program was comprised of options for 5 million shares, divided into options to purchase up to 2.5 million shares and additional 2.5 million "phantom" options. The phantom options grant the option holders a number of shares corresponding to the benefit component of the options exercised, as calculated on the exercise date, in consideration for their par value only, and are considered as a variable option plan. The actual number of options granted as of September 30, 2003 was approximately 4.5 million. Under U.S. GAAP, the change in the share price is recorded periodically as compensation expense, or income, based on the vesting period of the options. The effect is allocated mainly to the Company's cost of goods sold and general and administrative expenses, with smaller amounts allocated to R&D and sales and marketing expenses. I. SUMMARY OF FINANCIAL RESULTS ---------------------------- The following table sets forth the reported consolidated statements of operations of the Company for the three and nine-month periods ended September 30, 2003 and September 30, 2002.
For the nine months ended For the three months ended September 30 September 30 ------------------------------------------ ------------------------------------------- 2003 2002 2003 2002 -------------------- ------------------ ----------------- ------------------ $ % $ % $ % $ % --------- -------- -------- ------- --------- ------ --------- ------- (In thousands of U.S. dollars except per share data) Total revenues 635,223 100.0 589,143 100.0 214,275 100.0 210,155 100.0 Cost of revenues 464,882 73.2 434,216 73.7 158,078 73.8 150,738 71.7 ------- ----- ------- ----- ------- ----- ------- ----- Gross profit 170,341 26.8 154,927 26.3 56,197 26.2 59,417 28.3 ------- ----- ------- ----- ------- ----- ------- ----- Research and development expenses, net 43,006 6.8 39,710 6.8 14,518 6.8 14,785 7.0 Marketing and selling expenses 50,696 8.0 47,289 8.0 15,573 7.3 17,346 8.3 General and administrative expenses 33,924 5.3 30,741 5.2 11,035 5.1 10,760 5.1 ------- ----- ------- ----- ------- ----- ------- ----- 127,626 20.1 117,740 20.0 41,126 19.2 42,891 20.4 ------- ----- ------- ----- ------- ----- ------- ----- Operating income 42,715 6.7 37,187 6.3 15,071 7.0 16,526 7.9 Finance expenses, net (3,467) (0.5) (690) (0.1) (161) (0.1) (595) (0.3) Other income (expenses), net 332 0.1 (524) (0.1) 241 0.1 (115) (0.1) ------- ----- ------- ----- ------- ----- ------- ----- Income before income taxes 39,580 6.3 35,973 6.1 15,151 7.0 15,816 7.5 Taxes on income 10,502 1.7 6,810 1.1 3,900 1.8 1,565 0.7 ------- ----- ------- ----- ------- ----- ------- ----- 29,078 4.6 29,163 5.0 11,251 5.2 14,251 6.8 Minority interest in losses (gains) of subsidiaries 456 0.1 269 0.0 (234) (0.1) 139 0.1 Equity in net earnings of affiliated companies and partnership 3,938 0.6 2,554 0.4 989 0.5 1,114 0.5 ------- ----- ------- ----- ------- ----- ------- ----- Net earnings 33,472 5.3 31,986 5.4 12,006 5.6 15,504 7.4 ====== === ====== === ====== === ====== === Diluted earnings per share 0.83 0.80 0.30 0.39 ==== ==== ==== ====
NON -US GAAP DISCLOSURE ----------------------- The following table sets forth the Company's results of operations excluding the effect of the Company's phantom stock option plan ("phantom plan") in 2003 and 2002, the non-recurring charge related to the agreement reached by El-Op with the Office of the Israeli Chief Scientist ("OCS") and the tax adjustment in 2002.
For the nine months For the three months ended September 30 ended September 30 ----------------------------------- --------------------------------- 2003 2002 2003 2002 $ % $ % $ % $ % ------- ---- ------- ---- ------ ---- ------ ---- (In thousands of U.S. dollars except per share data) GROSS PROFIT AS REPORTED 170,341 26.8 154,927 26.3 56,197 26.2 59,417 28.3 Non-recurring charge due to OCS agreement - - 9,801 1.7 - - - - Non-cash expense (income) related to phantom plan 1,863 0.3 (510) (0.1) (1,669) (0.8) (173) (0.1) ------- ---- ------- ---- ------ ---- ------ ---- Gross profit excluding phantom plan effect in 2003 and 2002, and non-recurring OCS charge in 2002 172,204 27.1 164,218 27.9 54,528 25.4 59,244 28.2 ======= === ====== === ===== === ====== === OPERATING INCOME AS REPORTED 42,715 6.7 37,187 6.3 15,071 7.0 16,526 7.9 Non-recurring charge due to OCS agreement - - 9,801 1.7 - - - - Non-cash expense (income) related to phantom plan 3,387 0.6 (928) (0.2) (3,034) (1.4) (314) (0.2) ------- ---- ------- ---- ------ ---- ------ ---- Operating profit excluding phantom plan effect in 2003 and 2002, and non-recurring OCS charge in 2002 46,102 7.3 46,060 7.8 12,037 5.6 16,212 7.7 ======= === ====== === ===== === ====== === NET EARNINGS AS REPORTED 33,472 5.3 31,986 5.4 12,006 5.6 15,504 7.4 Non-recurring charge due to OCS agreement, net - - 7,840 1.3 - - - - Tax adjustment - - (2,800) (0.5) - - (2,800) (1.3) Non-cash expense (income) related tophantom plan, net 2,710 0.4 (687) (0.1) (2,427) (1.1) (208) (0.1) ------- ---- ------- ---- ------ ---- ------ ---- Net earnings excluding phantom plan effect in 2003 and 2002, non-recurring OCS charge and tax adjustment in 2002 36,182 5.7 36,339 6.2 9,579 4.5 12,496 5.9 ====== === ====== === ===== === ====== === DILUTED EARNINGS PER SHARE AS REPORTED 0.83 0.80 0.30 0.39 Diluted earnings per share excluding phantom plan effect in 2003 and 2002, non-recurringOCS charge and tax adjustment in 2002 0.90 0.91 0.24 0.31 ==== ==== ==== ====
REVENUES -------- NINE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED ---------------------------------------------------------------------- ON SEPTEMBER 30, 2002 --------------------- The Company's consolidated revenues increased by 7.8%, from $589.1 million in the nine months ended September 30, 2002, to $635.2 million in the nine months ended September 30, 2003. The following table sets forth the Company's revenue distribution by areas of operation:
Nine-Month Period ended --------------------------------------------------------- September 30, 2003 September 30, 2002 --------------------------- --------------------------- $ millions % $ millions % Airborne systems 304.8 48.0 274.8 46.7 Combat vehicle systems 118.4 18.6 96.2 16.3 C4I systems 95.4 15.0 86.1 14.6 Electro-optics 79.1 12.5 101.1 17.2 Other (mainly non-defense engineering and production services) 37.5 5.9 30.9 5.2 ---- --- ---- --- Total 635.2 100.0 589.1 100.0 ===== ===== ===== =====
Some of the Electro-optics products are incorporated in the higher level systems, primarily in the Combat vehicle systems and sold as such. The following table sets forth the Company's distribution of revenues by geographical regions:
Nine-Month Period ended --------------------------------------------------------- September 30, 2003 September 30, 2002 --------------------------- --------------------------- $ millions % $ millions % Israel 186.3 29.3 149.9 25.5 United States 244.7 38.5 196.8 33.4 Europe 71.7 11.3 102.7 17.4 Other countries 132.5 20.9 139.7 23.7 ----- ---- ----- ---- Total 635.2 100.0 589.1 100.0 ===== ===== ===== =====
THREE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ------------------------------------------------------------------ ENDED ON SEPTEMBER 30, 2002 --------------------------- The consolidated revenues increased by 2.0% from $210.2 million in the third quarter of 2002 to $214.3 million in the third quarter of 2003. The following table sets forth the Company's revenue distribution by areas of operation:
Three-Month Period ended --------------------------------------------------------- September 30, 2003 September 30, 2002 --------------------------- --------------------------- $ millions % $ millions % Airborne systems 103.6 48.3 104.9 49.9 Combat vehicle systems 42.6 19.9 26.1 12.4 C4I systems 30.8 14.4 30.1 14.3 Electro-optics 24.4 11.4 36.9 17.6 Other (mainly non-defense engineering and production services) 12.9 6.0 12.2 5.8 ---- --- ---- --- Total 214.3 100.0 210.2 100.0 ===== ===== ===== =====
The following table sets forth the Company's distribution of revenues by geographical regions:
Three-Month Period ended --------------------------------------------------------- September 30, 2003 September 30, 2002 --------------------------- --------------------------- $ millions % $ millions % Israel 74.5 34.8 53.1 25.3 United States 85.1 39.7 69.6 33.1 Europe 22.7 10.6 37.9 18.0 Other countries 32.0 14.9 49.6 23.7 ---- ---- ---- ---- Total 214.3 100.0 210.2 100.0 ===== ===== ===== =====
The Company's sales are made primarily to governmental entities and prime contractors under government defense programs. Accordingly, the level of the Company's revenues is subject to governmental budgetary constraints. The recent economic situation in Israel has created some uncertainty with respect to the Israeli Government's general and defense budgets. The third quarter sales were effected by delays in receipt of new orders, which were planned to be sold during the quarter, as well as by delays in reaching milestones in technologicaly advanced programs. GROSS PROFIT ------------ The Company's gross profit represents the aggregate results of the Company's activities and projects, and is based on the mix of programs in which the Company is engaged during the reported period. NINE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED ---------------------------------------------------------------------- ON SEPTEMBER 30, 2002 --------------------- Reported gross profit in the nine months ended September 30, 2003 was $170.3 million as compared to $154.9 million in the nine months ended September 30, 2002. The reported gross profit margin in the nine months ended September 30, 2003 was 26.8% as compared to 26.3% in the corresponding period of the previous year. The Company's cost of goods sold in the nine months ended September 30, 2003 included $1.9 million in non-cash expenses resulting from its phantom option plan, as compared to an income of $0.5 million in the nine months ended September 30, 2002. Excluding non-cash expenses related to the Company's phantom option, gross profit in the nine months ended September 30, 2003 was $172.2 million, or 27.1% of revenues. Excluding the non-recurring charge under the OCS agreement and the phantom option plan effect, gross profit in the nine-month period ended September 30, 2002 was $164.2 million, or 27.9% of revenues. THREE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ------------------------------------------------------------------ ENDED ON SEPTEMBER 30, 2002 --------------------------- Reported gross profit in the quarter ended September 30, 2003 was $56.2 million as compared to $59.4 million in the quarter ended September 30, 2002. The reported gross profit margin in the third quarter of 2003 was 26.2% as compared to 28.3% in the same period last year. The Company's cost of goods sold in the third quarter of 2003 included $1.7 million in non-cash income resulting from its phantom option plan, as compared to an immaterial amount in the third quarter of 2002. Excluding non-cash expenses related to the Company's phantom option compensation costs, gross profit in the quarter ended September 30, 2003 was $54.5 million, or 25.4% of revenues. The decrease in gross profit resulted mainly from the mix in revenues and increased costs required to complete milestones in certain fixed price programs. RESEARCH AND DEVELOPMENT ("R&D") -------------------------------- The Company continually invests in R&D in order to maintain and further advance its technologies, in accordance with a long-term plan, based on its estimate of future market needs. The Company's R&D activities in the reported period were in accordance with its plans. NINE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED ---------------------------------------------------------------------- ON SEPTEMBER 30, 2002 --------------------- Gross R&D expenses in the nine months ended September 30, 2003 totaled $47.1 million (7.4% of revenues), as compared to $42.7 million (6.8% of revenues) in the nine months ended September 30, 2002. Net R&D expenses (after deduction of the OCS participation) in the nine months ended September 30, 2003 totaled $43.0 million (7.2% of revenues), as compared to $39.7 million (6.7% of revenues) in the nine months ended September 30, 2002. THREE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ------------------------------------------------------------------ ENDED ON SEPTEMBER 30, 2002 --------------------------- Gross R&D expenses in the quarter ended September 30, 2003 totaled $16.2 million (7.6% of revenues), as compared to $15.9 million (7.5% of revenues) in the quarter ended September 30, 2002. Net R&D expenses (after deduction of the OCS participation) in the quarter ended September 30, 2003 totaled $14.5 million (6.8% of revenues), as compared to $14.8 million (7.0% of revenues) in the third quarter of 2002. R&D expenses in the quarter ended September 30, 2003 included an immaterial amount of non-cash income related to the Company's phantom option plan. MARKETING AND SELLING EXPENSES ------------------------------ The Company invests significantly in developing new markets and pursues at any given time various business opportunities. The continued investment in developing new business opportunities, as well as the reflected increased length of time required for marketing efforts until orders are received, is related to marketing and selling expanses. NINE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED ---------------------------------------------------------------------- ON SEPTEMBER 30, 2002 --------------------- Marketing and selling expenses in the nine months ended September 30, 2003 were $50.7 million (8.0% of revenues), as compared to $47.3 million (8.0% of revenues) in the nine months ended September 30, 2002. Excluding the phantom option plan non-cash expenses in 2003, marketing and selling expenses in the nine months ended September 30, 2003 were $50.2 million (7.9% of revenues). THREE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ------------------------------------------------------------------ ENDED ON SEPTEMBER 30, 2002 --------------------------- Marketing and selling expenses in the quarter ended September 30, 2003 were $15.6 million (7.3% of revenues), as compared to $17.3 million (8.3% of revenues) in the quarter ended September 30, 2002. Excluding the phantom option plan non-cash income in 2003, marketing and selling expenses in the quarter ended September 30, 2003 were $16.0 million (7.5% of revenues). GENERAL AND ADMINISTRATIVE ("G&A") Expenses ------------------------------------------- NINE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED ---------------------------------------------------------------------- ON SEPTEMBER 30, 2002 --------------------- G&A expenses were $33.9 million (5.3% of revenues) in the nine months ended September 30, 2003, as compared to $30.7 million (5.2% of revenues) in the nine months ended September 30, 2002. Excluding the phantom option plan non-cash expenses in 2003, G&A expenses in the nine months ended September 30, 2003 were $33.1 million (5.2% of revenues). THREE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ------------------------------------------------------------------ ENDED ON SEPTEMBER 30, 2002 --------------------------- G&A expenses were $11.0 million (5.1% of revenues) in the quarter ended September 30, 2003, as compared to $10.8 million (5.1% of revenues) in the quarter ended September 30, 2002. Excluding the phantom option plan non-cash income in 2003, G&A expenses in the quarter ended September 30, 2003 were $11.8 million (5.5% of revenues). OPERATING INCOME ---------------- The majority of the Company's operating expenses are related to the Company's investment in the development of future technologies and products, and in generating new business. These expenses are included in the Company's R&D and marketing and sales expenses, which together accounted for 73.4% and 73.2% of the operating expenses during the nine and three-month periods ended September 30, 2003, respectively. NINE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED ---------------------------------------------------------------------- ON SEPTEMBER 30, 2002 --------------------- As a result of all of the above, reported operating income in the nine months ended September 30, 2003 was $42.7 million (6.7% of revenues), as compared to $37.2 million (6.3% of revenues) in the nine months ended September 30, 2002. For the nine months ended September 30, 2003, the Company's operating profit included $3.4 million in non-cash expenses associated with the Company's phantom option plan, as compared to an income of $0.9 million in the nine months ended September 30, 2002. Excluding phantom share compensation costs, operating income totaled $46.1 million (7.3% of revenues) in the nine months ended September 30, 2003. Excluding the non-recurring charge under the OCS agreement and the phantom option plan effect, operating income in the nine-month period ended September 30, 2002 was $46.1 million, or 7.8% of revenues. THREE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ------------------------------------------------------------------ ENDED ON SEPTEMBER 30, 2002 --------------------------- As a result of all of the above, reported operating income in the quarter ended September 30, 2003 was $15.1 million (7.0% of revenues), as compared to $16.5 million (7.9% of revenues) in the quarter ended September 30, 2002. During the third quarter of 2003, the Company's operating profit included $3.0 million in non-cash income associated with the Company's phantom option plan, as compared to an immaterial amount in the second quarter of 2002. Excluding phantom share compensation income in 2003, operating income totaled $12.0 million (5.6% of revenues) in the quarter ended September 30, 2003. FINANCE EXPENSE (NET) --------------------- NINE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED ---------------------------------------------------------------------- ON SEPTEMBER 30, 2002 --------------------- Net finance expense in the nine months ended September 30, 2003 was $3.5 million, as compared to $0.7 million of finance expense in the nine months ended September 30, 2002. The increase in the net finance expense during the nine-month period ended September 30, 2003 as compared to the respective period in 2002 resulted mainly from a higher level of short-term loans from banks, and from the effect of the devaluation of the US dollar against the New Israeli Shekel ("NIS") on NIS denominated loans, which occurred in the first and second quarters of 2003. THREE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ------------------------------------------------------------------ ENDED ON SEPTEMBER 30, 2002 --------------------------- Net finance expense in the quarter ended September 30, 2003 was $0.2 million, as compared to $0.6 million of finance expense in the quarter ended September 30, 2002. TAXES ON INCOME --------------- The Company's tax rate represents a weighted average of the tax rates to which the various companies in the Group are subject. The changes in the effective tax rate are attributable mainly to the mix of the tax rates in the various tax jurisdictions in which the Group's companies generating the taxable income operate. NINE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED ---------------------------------------------------------------------- ON SEPTEMBER 30, 2002 --------------------- Provision for taxes in the nine months ended September 30, 2003 was $10.5 million (effective tax rate of 26.5%), as compared to a provision for taxes of $6.8 million (effective tax rate of 18.9%) in the nine months ended September 30, 2002. The provision for taxes in the third quarter of 2002 include reduction of tax expenses in the amount of $2.8 million, due to adjustment of estimated taxes and completion of tax assessments for prior years in respect of various Group companies. Excluding the tax reduction mentioned above, the Company tax rate for the nine-months ended September 30, 2002 would have been 27.5%. THREE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ------------------------------------------------------------------ ENDED ONSEPTEMBER 30, 2002 -------------------------- Provision for taxes in the quarter ended September 30, 2003 was $3.9 million (effective tax rate of 25.7 %), as compared to a provision for taxes of $1.6 million (effective tax rate of 9.9%) in the quarter ended September 30, 2002. Excluding the tax reduction mentioned above, the tax rate for the third quarter of 2002 would have been 27.6%. COMPANY'S SHARE IN EARNINGS OF AFFILIATED COMPANIES AND PARTNERSHIP ------------------------------------------------------------------- NINE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED ---------------------------------------------------------------------- ON SEPTEMBER 30, 2002 --------------------- In the nine months ended September 30, 2003 the Company had net income of $3.9 million from its share in earnings of affiliated companies and partnership, as compared to $2.6 million in the nine months ended September 30, 2002. THREE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ------------------------------------------------------------------ ENDED ON SEPTEMBER 30, 2002 --------------------------- In the third quarter of 2003 the Company had net income of $1.0 million from its share in earnings of affiliated companies and partnership, as compared to $1.1 million in the third quarter of 2002. The affiliated companies and partnership in which the Company holds 50% or less in shares or voting rights and are therefore not consolidated in the Company's financial statements, operate mainly in the Company's core business areas, including electro-optics and airborne systems. NET EARNINGS AND EARNINGS PER SHARE ("EPS") ------------------------------------------- NINE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO NINE MONTHS ENDED ---------------------------------------------------------------------- ON SEPTEMBER 30, 2002 --------------------- Reported net earnings in the nine months ended September 30, 2003 were $33.5 million (5.3% of revenues), as compared to reported net earnings of $32.0 million (5.4% of revenues) in the nine months ended September 30, 2002. Diluted EPS in the nine months ended September 30, 2003 was $0.83, as compared to $0.80 per share in the nine months ended September 30, 2002. Excluding the phantom option plan non-cash expenses in 2003, net earnings in the nine months ended September 30, 2003 were $36.2 million (5.7% of revenues) and the EPS was $0.90. Excluding the non-recurring charge under the OCS agreement, the phantom option plan effect and the tax adjustment, net earnings in the nine-month period ended September 30, 2002 were $36.3 million (6.8% of revenues) and the EPS was $0.91. The number of shares used for computation of diluted EPS in the nine months ended September 30, 2003 was 40,198 thousand shares, as compared to 39,896 thousand shares in the nine months ended September 30, 2002. The increase in the number of shares used for computation of diluted EPS was due mainly to the exercise of options by employees during the period. THREE MONTHS ENDED ON SEPTEMBER 30, 2003, COMPARED TO THREE MONTHS ------------------------------------------------------------------ ENDED ON SEPTEMBER 30, 2002 --------------------------- Reported net earnings in the quarter ended September 30, 2003 were $12.0 million (5.6% of revenues), as compared to reported net earnings of $15.5 million (7.4% of revenues) in the quarter ended September 30, 2002. Diluted EPS in the quarter ended September 30, 2003 was $0.30, as compared to $0.39 in the quarter ended September 30, 2002. Excluding the phantom option plan non-cash income in 2003, net earnings in the quarter ended September 30, 2003 were $9.6 million (4.5% of revenues), and the EPS was $0.24. Excluding the phantom option plan effect and the tax adjustment, net earnings in the third quarter of 2002 were $12.5 million (5.9% of revenues) and the EPS was $0.31. The number of shares used for computation of diluted EPS in the quarter ended September 30, 2003 was 40,406 thousand shares, as compared to 39,772 thousand shares in the quarter ended September 30, 2002. The increase in the number of shares used for computation of diluted EPS was due mainly to exercise of options by employees during the period. J. LIQUIDITY AND CAPITAL RESOURCES ------------------------------- The Company's cash flows are effected by the cumulative cash flows of its various projects in the reported periods. Project cash flows are affected by the timing of the receipt of advances and the collection of accounts receivable from customers, which relate to specific events during the project, while expenses are on-going. As a result, the Company's cash flows may vary from one period to another. The Company's policy is to invest its cash surplus primarily in interest bearing deposits in accordance with its projected needs. The resources available to the Company include mainly profits, collection of accounts receivable, advances from customers, as well as Government of Israel grants and participation and bank financing in Israel and elsewhere based on the Company's capital, assets and activities. In addition, the Company has the ability to raise funds through the offering of shares and debentures to the public from time to time. The Company's net cash flows generated from operating activities in the nine-month period ended September 30, 2003 were $12.7 million. Net cash flows used for investment activities in the nine-month period ended September 30, 2003 were $37.4 million, which were used mainly for procurement of property, plant and equipment. The investments were primarily in equipment for the Group's various manufacturing plants and in buildings being constructed at Elbit Systems' facility in Haifa, Israel and El-Op's site in Rehovot, Israel. Net cash flows used for financing activities in the nine-month period ended September 30, 2003 were $5.7 million. The cash flows were used mainly for reduction of long-term loans, which were partially offset by proceeds from share options exercised. On September 30, 2003, the Company had total borrowings in the amount of $107.8 million, including $41.0 million in short-term loans, and $394.0 million in guarantees issued on its behalf by banks, mainly in respect of advance payment and performance guarantees provided in the regular course of business. On September 30, 2003, the Company had a cash balance amounting to $45.9 million. As of September 30, 2003, the Company had working capital of $185.4 million and its current ratio was 1.47. The Company's ratio of equity to total assets was 46.6%. K. DERIVATIVES AND HEDGE --------------------- Market risks relating to the Company's operations result primarily from changes in interest rates and exchange rates, and the Company may use financial instruments to limit exposure. The Company typically enters into forward contracts in connection with transactions that are denominated in currencies other than US dollars and NIS. The Company may enter from time to time into forward contracts related to NIS. On September 30, 2003, the Company's liquid assets were comprised of bank deposits, and it had no investments in liquid equity securities that were subject to market fluctuations. The Company's deposits and loans are based on variable interest rates, and their value as of September 30, 2003 was therefore not exposed to changes in interest rates. Should interest rates either increase or decrease, such change may affect the Company's results of operations due to changes in the cost of its liabilities and the return on its assets that are based on variable rates. The Company's functional currency is the U.S. dollar. On September 30, 2003, the Company had exposure due to liabilities denominated in NIS of $41.4 million in excess of its NIS denominated assets. These liabilities represent mostly wages, trade payables and loans. The amount of the Company's exposure to the changes in the NIS/US$ exchange rate may vary from time to time. In order to hedge against certain expected NIS payments, the Company entered into forward contracts designated as hedging. As of September 30, 2003, the results of then existing derivatives were being deferred until payments are realized, which is expected to occur during 2003. On September 30, 2003, the Company had forward contracts covering NIS exposure in the amount of $6.9 million. Most of the Company's assets and liabilities which are denominated in currencies other than the NIS and the U.S. dollar were covered as of September 30, 2003 by forward contracts. On September 30, 2003, the Company had contracts for the sale and purchase of such foreign currencies totaling $28.2 million. L. DIVIDENDS --------- The Board of Directors declared on November 10, 2003 a dividend of $0.10 per share. * * * ----------------------------------------------------------------------- Forward looking statements with respect to the Company's business, financial condition and results of operations in this document are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements, including, but not limited to, product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development, the effect of the Company's accounting policies as well as certain other risk factors which are detailed from time to time in the Company's SEC filings. EX-99 4 exhbit2.txt EXHIBIT 2 EXHIBIT 2 --------- - -------------------------------------------------------------------------------- ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES - -------------------------------------------------------------------------------- CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2003 ------------------------ (Unaudited) (In thousands of U.S. dollars) - -------------------------------------------------------------------------------- ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES - -------------------------------------------------------------------------------- C O N T E N T S P a g e ------- CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Consolidated Balance Sheets 2 - 3 Consolidated Statements of Operations 4 Consolidated Statements of Changes in Shareholders' Equity 5 - 6 Consolidated Statements of Cash Flows 7 - 8 Notes to the Consolidated Financial Statements 9 - 13 # # # # # # ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars)
September 30, December 31, 2003 2002 ---------------- ----------------- (Unaudited) (Audited) CURRENT ASSETS Cash and cash equivalents $45,947 $76,280 Short-term bank deposits 1,509 1,650 Trade receivables, net of allowance for doubtful accounts of $3,622 and $3,411 as of September 30, 2003 and December 31, 2002, respectively. 211,818 227,724 Other receivables and prepaid expenses 40,892 34,376 Inventories, net of advances 280,542 220,399 ---------------- ----------------- Total current assets 580,708 560,429 ---------------- ----------------- INVESTMENTS AND LONG-TERM RECEIVABLES Investments in affiliated companies and partnership 24,265 21,947 Investments in other companies 11,092 11,104 Long-term receivables 315 20,859 Long-term bank deposits and loan 1,972 3,686 Severance pay fund 7,626 6,641 ---------------- ----------------- 45,270 64,237 ---------------- ----------------- PROPERTY, PLANT AND EQUIPMENT, NET 219,882 202,961 ---------------- ----------------- OTHER ASSETS, NET Goodwill, net 32,559 32,162 Know-how and other intangible assets, net 69,525 73,607 ---------------- ----------------- 102,084 105,769 ---------------- ----------------- $947,944 $933,396 ================ =================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars except share data)
September 30, December 31, 2003 2002 ---------------- ----------------- (Unaudited) (Audited) CURRENT LIABILITIES Short-term bank credit and loans $41,049 $30,915 Trade payables 103,244 82,521 Other payables and accrued expenses 156,262 140,981 Customer advances in excess of costs incurred 94,751 108,418 ---------------- ----------------- Total current liabilities 395,306 362,835 ---------------- ----------------- LONG-TERM LIABILITIES Long-term loans 66,792 73,173 Advances from customers 1,766 40,411 Deferred income taxes 14,536 16,413 Accrued severance pay 23,113 24,486 ---------------- ----------------- 106,207 154,483 ---------------- ----------------- MINORITY INTEREST 4,296 4,717 ---------------- ----------------- SHAREHOLDERS' EQUITY Share capital Ordinary shares of NIS 1 par value; Authorized - 80,000,000 shares; Issued- 39,609,547 shares and 39,212,328 shares as of September 30, 2003 and December 31, 2002, respectively; Outstanding - 39,200,726 shares and 38,803,507 shares as of September 30, 2003 and December 31, 2002, respectively 11,242 11,154 Accumulated other comprehensive loss (2,025) (2,882) Additional paid-in capital 255,706 248,387 Retained earnings 181,533 159,023 Treasury stock- 408,821 shares (4,321) (4,321) ---------------- ----------------- 442,135 411,361 ---------------- ----------------- $947,944 $933,396 ================ =================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands of U.S. dollars, except per share data)
NINE MONTHS ENDED THREE MONTHS ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, 2003 2002 2003 2002 2002 ----------- ----------- ----------- ----------- ------------ (UNAUDITED) (UNAUDITED) (AUDITED) ------------------------- -------------------------- ------------ Revenues $ 635,223 $ 589,143 $ 214,275 $ 210,155 $ 827,456 Cost of revenues (464,882) (424,415) (158,078) (150,738) (595,512) Chief Scientist ("OCS") - (9,801) - - (9,801) ----------- ----------- ----------- ----------- ------------ Gross profit 170,341 154,927 56,197 59,417 222,143 ----------- ----------- ----------- ----------- ------------ Research and development costs, net 43,006 39,710 14,518 14,785 57,010 Marketing and selling expenses 50,696 47,289 15,573 17,346 65,691 General and administrative expenses 33,924 30,741 11,035 10,760 41,651 ----------- ----------- ----------- ----------- ------------ 127,626 117,740 41,126 42,891 164,352 ----------- ----------- ----------- ----------- ------------ Operating income 42,715 37,187 15,071 16,526 57,791 Financial expenses, net (3,467) (690) (161) (595) (3,035) Other income (expenses), net 332 (524) 241 (115) (462) ----------- ----------- ----------- ----------- ------------ Income before taxes on income 39,580 35,973 15,151 15,816 54,294 Taxes on income 10,502 6,810 3,900 1,565 9,348 ----------- ----------- ----------- ----------- ------------ 29,078 29,163 11,251 14,251 44,946 Equity in net earnings of affiliated companies and partnership 3,938 2,554 989 1,114 675 Minority interest 456 269 (234) 139 (508) ----------- ----------- ----------- ----------- ------------ Net income $ 33,472 $ 31,986 $ 12,006 $ 15,504 $ 45,113 =========== =========== =========== =========== ============ Earnings per share Basic earnings per share $ 0.86 $ 0.83 $ 0.31 $ 0.40 $ 1.17 =========== =========== =========== =========== ============ Weighted average number of shares used in computation (in thousands) 38,994 38,459 39,168 38,515 38,489 =========== =========== =========== =========== ============ Diluted earnings per share $ 0.83 $ 0.80 $ 0.30 $ 0.39 $ 1.13 =========== =========== =========== =========== ============ Weighted average number of shares used in computation (in thousands) 40,198 39,896 40,406 39,772 39,863 =========== =========== =========== =========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (In thousands of U.S. dollars)
Accumulated Additional other Total Number of Share paid-in comprehensive Retained Treasury comprehensive Shares capital capital loss earnings stock Total income ------ ------- ------- ---- -------- ----- ----- ------ UNAUDITED Balance as of January 1, 2003 38,803,507 $11,154 $248,387 $(2,882) $159,023 $(4,321) $411,361 Exercise of options 397,219 88 3,808 - - - 3,896 Tax benefit in respect of options exercised 477 - - - 477 Amortization of deferred stock compensation - - 3,034 - - - 3,034 Dividend paid - - - - (10,962) - (10,962) Net income - - - - 33,472 - 33,472 $33,472 Unrealized gains on derivative instruments - - - 857 - - 857 857 ---------- ------- -------- ------- -------- ------- -------- ------- BALANCE AS OF SEPTEMBER 30, 2003 39,200,726 $11,242 $255,706 $(2,025) $181,533 $(4,321) $442,135 $34,329 ========== ======= ======== ======= ======== ======= ======== ======= Balance as of January 1, 2002 38,330,272 $11,054 $244,625 - $126,627 $(4,321) $377,985 Exercise of options 205,093 45 1,866 - - - 1,911 Tax benefit in respect of options exercised - - 390 - - - 390 Amortization of deferred stock compensation - - (1,216) - - - (1,216) Dividend paid - - - - (9,249) - (9,249) Net income - - - - 31,986 - 31,986 $31,986 ---------- ------- -------- ------- -------- ------- -------- ------- BALANCE AS OF SEPTEMBER 30, 2002 38,535,365 $11,099 $245,665 - $149,364 $(4,321) $401,807 $31,986 ========== ======= ======== ======= ======== ======= ======== =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CONT.) (In thousands of U.S. dollars)
Accumulated Additional other Total Number of Share paid-in comprehensive Retained Treasury comprehensive Shares capital capital loss earnings stock Total income ------ ------- ------- ---- -------- ----- ----- ------ UNAUDITED BALANCE AS OF JULY 1, 2003 39,152,148 $11,231 $258,580 $(738) $173,438 $(4,321) $438,190 Exercise of options 48,578 11 470 - - - 481 Tax benefit in respect of options exercised - - 43 - - - 43 Amortization of deferred stock compensation - - (3,387) - - - (3,387) Dividend paid - - - - (3,911) - (3,911) Net income - - - - 12,006 - 12,006 12,006 Unrealized losses on derivative instruments - - - (1,287) - - (1,287) (1,287) ---------- ------- -------- ------- -------- ------- -------- ------- BALANCE AS OF SEPTEMBER 30, 2003 39,200,726 $11,242 $255,706 $(2,025) $181,533 $(4,321) $442,135 $10,719 ========== ======= ======== ======= ======== ======= ======== ======= BALANCE AS OF JULY 1, 2002 38,905,182 $11,090 $245,902 - $136,940 $(4,321) $389,611 Exercise of options 39,004 9 312 - - - 321 Tax benefit in respect of options exercised - - 54 - - - 54 Amortization of deferred stock compensation - - (603) - - - (603) Dividend paid - - - - (3,080) - (3,080) Net income - - - - 15,504 - 15,504 $15,504 ---------- ------- -------- ------- -------- ------- -------- ------- BALANCE AS OF SEPTEMBER 30, 2002 38,944,186 $11,099 $245,665 - $149,364 $(4,321) $401,807 $15,504 ========== ======= ======== ======= ======== ======= ======== ======= AUDITED BALANCE AS OF JANUARY 1, 2002 38,330,272 $11,054 $244,625 - $126,627 $(4,321) $377,985 Exercise of options 473,235 100 4,040 - - - 4,140 Tax benefit in respect of options exercised - - 648 - - - 648 Amortization of deferred stock compensation - - (926) - - - (926) Dividend paid - - - - (12,717) - (12,717) Net income - - - - 45,113 - 45,113 $45,113 Minimum pension liability - - - (2,882) - - (2,882) (2,882) ---------- ------- -------- ------- -------- ------- -------- ------- BALANCE AS OF DECEMBER 31, 2002 38,803,507 $11,154 $248,387 $(2,882) $159,023 $(4,321) $411,361 $42,231 ========== ======= ======== ======= ======== ======= ======== =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars)
NINE MONTHS ENDED YEAR ENDED SEPTEMBER 30, DECEMBER 31, 2003 2002 2002 (UNAUDITED) (AUDITED) ------------------------ ------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 33,472 $ 31,986 $ 45,113 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 27,966 25,598 32,937 Amortization of deferred stock compensation 3,034 (1,216) (926) Deferred income taxes (199) 382 (5,620) Severance pay fund (985) 915 (113) Accrued severance pay (1,553) 1,007 6,373 Loss (gain) on disposal of property, plant and equipment (870) 372 743 Tax benefit in respect of options exercised 477 390 648 Minority interests (456) (269) 508 Equity in net earnings of affiliated companies and partnership, net of dividend received (*) (2,773) (2,554) (675) Other adjustments 472 (369) 683 Changes in operating assets and liabilities: Decrease in trade and other receivables and prepaid expenses 35,339 40,572 58,554 Increase in inventories (52,909) (54,826) (55,106) Increase (decrease) in trade and other payables and accrued expenses 27,740 (30,867) (19,321) Increase (decrease) in advances received from customers (55,607) 41,755 42,999 Liabilities to Chief Scientist (447) 9,935 9,197 ------------ ---------- ------------- Net cash provided by operating activities 12,701 62,811 115,994 ------------ ---------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment and other assets (43,494) (30,353) (46,003) Investment grants received for property, plant and equipment - - 119 Acquisition of businesses and subsidiaries (Schedule A) (2,458) (5,280) (5,280) Investments in affiliated companies and subsidiaries - (1,784) (1,681) Proceeds from sale of property, plant and equipment and investments 4,831 805 956 Long-term loan granted - - (714) Long-term loan repaid 2,400 - - Short-term loan repaid (granted) (350) - 1,371 Long-term bank deposits made (1,064) (555) (1,228) Long-term bank deposits redeemed 1,820 818 1,689 Short-term bank deposits, net 955 180 (204) ------------ ---------- ------------- Net cash used in investing activities (37,360) (36,169) (50,975) ------------ ---------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from exercise of options 3,896 1,911 4,140 Repayment of long-term bank loans (23,212) (1,634) (3,249) Proceeds from long-term bank loans 10,000 2,241 2,233 Dividends paid (10,962) (9,249) (12,717) Change in short-term bank credit and loans, net 14,604 (15,092) (19,729) ------------ ---------- ------------- Net cash used in financing activities (5,674) (21,823) (29,322) ------------ ---------- ------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (30,333) 4,819 35,697 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 76,280 40,583 40,583 ------------ ---------- ------------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 45,947 $ 45,402 $ 76,280 ============ ========== ============= (*) Dividend received $ 1,165 $ - $ - ============ ========== =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.) (In thousands of U.S. dollars)
NINE MONTHS ENDED YEAR ENDED SEPTEMBER 30, DECEMBER 31, 2003 2002 2002 ------------ ------------ ------------- (UNAUDITED) (AUDITED) SUPPLEMENTARY CASH FLOWS ACTIVITIES: Cash paid during the period for: Income taxes $11,144 $17,878 $21,730 ============ =========== ============== Interest $2,645 $2,778 $2,947 ============ =========== ============== SCHEDULE A: Acquisition of businesses and subsidiaries Estimated net fair value of assets acquired and liabilities assumed at the date of acquisition: Working capital deficiency (except cash and cash equivalents) $632 $ - $ - Property, plant and equipment (249) (275) (275) Know-how and other intangible assets (1,309) (5,078) (5,078) Deferred income taxes (1,765) - - Long-term liabilities 198 - - Minority interest 35 - - ------------ ------------ ------------ (2,458) (5,353) (5,353) ------------ ------------ ------------ Less- short- term debt incurred on acquisition - 73 73 ------------ ------------ ------------ $(2,458) $(5,280) $(5,280)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED NOTE 1 - GENERAL The accompanying financial statements have been prepared in a condensed format as of September 30, 2003, and for the nine months and three months then ended in accordance with generally accepted accounting principles in the United States (U.S. GAAP) relating to the preparation of financial statements for interim periods. See Note 6 for the reconciliation from US GAAP to accounting principles generally accepted in Israel (Israeli GAAP). THESE FINANCIAL STATEMENTS SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S ANNUAL FINANCIAL STATEMENTS AND ACCOMPANYING NOTES AS OF DECEMBER 31, 2002. The interim financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation. All such adjustments were of a normal recurring nature. Reclassifications have been made to comparative data in the balance sheet as of December 31, 2002, in order to conform with the current year's presentation. Operating results for the nine months ended September 30, 2003, are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES A. The significant accounting policies followed in the preparation of these statements are identical to those applied in preparation of the latest annual financial statements. The accompanying financial statements have been prepared in U.S. dollars since the functional currency of the primary economic environment in which the operations of the Group (which includes Elbit Systems Ltd. and its subsidiaries) are conducted is the U.S. dollar. B. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51 ("the interpretation"). In general, a variable interest entity (VIE) is an entity that has (1) insufficient amount of equity for the entity to carry on its principal operations, without additional subordinated financial support from other parties, (2) a group of equity investors that do not have the ability through voting or similar rights to make decisions about the entity's activities, or (3) a group of equity investors that do not have the obligation to absorb the entity's losses or have the right to receive the benefits of the entity. The ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED (CONT.) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.) B. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Cont.) interpretation requires the consolidation of a VIE by the primary beneficiary. The primary beneficiary is the entity that absorbs a majority of the entity's expected losses, receives a majority of the entity's expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. Presently, entities are generally consolidated by an enterprise that has a controlling financial interest through ownership of a majority voting interest in the entity. Pursuant to FASB Staff Position Fin 46-6, the Company has decided to apply the provisions of this interpretation as of December 31, 2003, in respect of variable interests in VIEs created before February 1, 2003. The provisions of this interpretation apply immediately to variable interests in VIEs created after January 31, 2003. Since the Company has no such interests in VIEs created after January 31, 2003, the application of this interpretation had no impact on the Company's consolidated results of operations or consolidated balance sheet to date. The Company has investments in and loans to various companies that are engaged primarily in the fields of high technology. Most of these companies are in their early stages of development and will require substantial third party investments until they can finance their activities without additional support from other parties. These companies are currently primarily funded with financing from venture capital funds, other holding companies and private investors. The investments in these companies are consolidated or accounted for by the equity or cost method by the Company. The Company is currently evaluating the effects of this interpretation in respect of its investments. It is possible that some of its unconsolidated investees may be considered a VIE in accordance with the interpretation. Accordingly, if it is determined that the Company is the primary beneficiary of a VIE, the Company will be required to consolidate the financial statements of such a VIE with its own financial statements as of December 31, 2003. ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED (CONT.) NOTE 3 - INVENTORIES, NET OF ADVANCES
DECEMBER 31, SEPTEMBER 30, 2003 2002 (UNAUDITED) (AUDITED) ---------------- ----------------- Cost of long-term contracts in progress $268,535 $210,418 Raw materials 80,890 75,579 Advances to suppliers and subcontractors 19,337 25,047 -------- -------- 368,762 311,044 Less- Cost of contracts in progress deducted from customer advances 15,354 10,658 -------- -------- 353,408 300,386 Less - Advances received from customers 59,650 67,624 Provision for losses 13,216 12,363 -------- -------- $280,542 $220,399 ======== ========
NOTE 4 - ACQUISITION OF COMPANY On June 30, 2003, the Company (through El-Op) acquired all of the outstanding ordinary shares of Optronics Instruments & Products N.V. (O.I.P.), a company registered in Belgium, in consideration for Euro 1.6 million ($1,846) in cash. The acquisition was accounted for by the purchase method of accounting. O.I.P. develops, manufactures and supports electro-optical products, mainly for the defense and space markets. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. Current assets $6,896 Property and equipment 168 Deferred tax assets 1,700 ------ Total assets acquired 8,764 Current liabilities (6,918) ------ Net assets acquired $1,846 ====== ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED (CONT.) NOTE 5 - STOCK-BASED COMPENSATION The Company has elected to follow Accounting Principles Board Opinion No. 25, ("APB 25") "Accounting for Stock Issued to Employees" and the FASB Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation" in accounting for its employee stock option plans. According to APB 25, compensation expense is measured under the intrinsic value method, whereby compensation expense is equal to the excess, if any, of the quoted market price of the stock at the grant date of the award or other measurement date over the exercise price. The following pro forma information presents the effect on the Company's consolidated stock-based employee compensation expense, net income and earnings per share as if the fair value based method provided under FASB Statement No. 123 ("SFAS 123") had been applied to all outstanding awards in each period. Under SFAS 123, the fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model.
NINE MONTHS ENDED THREE MONTHS ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, ----------------------------- --------------------------- ----------- 2003 2002 2003 2002 2002 ------------- ---------- ----------- ---------- ----------- (UNAUDITED) (UNAUDITED) (AUDITED) 472 5 Net income as reported $ 33,472 $ 31,986 $ 12,006 $ 15,504 $ 45,113 Stock- based compensation expense (income), net of related tax effects as reported 2,710 (687 (2,427) (209) (767) Stock- based compensation expense under fair value based method of SFAS 123, net of related tax effects (2,217) (2,161 (739) (720) (3,059) ------------- ---------- ----------- ---------- ---------- Pro forma net income $ 33,965 $ 29,138 $ 8,840 $ 14,575 $ 41,287 ============= ========== =========== ========== ========== Basic earnings per share as reported $ 0.86 $ 0.83 $ 0.31 $ 0.40 $ 1.17 ============= ========== =========== ========== ========== Pro forma basic earnings per share $ 0.87 $ 0.76 $ 0.23 $ 0.38 $ 1.07 ============= ========== =========== ========== ========== Diluted earnings per share as reported $ 0.83 $ 0.80 $ 0.30 $ 0.39 $ 1.13 ============= ========== =========== ========== ========== Pro forma diluted earnings per share $ 0.84 $ 0.70 $ 0.22 $ 0.37 $ 1.04 ============= ========== =========== ========== ==========
ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED (CONT.) NOTE 6 - RECONCILIATION TO ISRAELI GAAP As described in Note 1, the Company prepares its financial statements in accordance with U.S. GAAP. See Note 26 to the 2002 annual financial statements for a description of the differences between US GAAP and Israeli GAAP in respect of the Company. The effects of the differences between US GAAP and Israeli GAAP on the Company's financial statements are detailed below. 1. Effect on net income and earnings per share
Nine months ended Year ended September 30, December 31, 2003 2002 2002 (Unaudited) (Audited) Net income as reported according to U.S. GAAP $33,472 $31,986 $45,113 Adjustments to Israeli GAAP 847 (3,163) (4,227) ------- ------- ------- Net income according to Israeli GAAP $34,319 $28,823 $40,886 ======= ======= =======
2. Effect on shareholders' equity
As per As reported Adjustments Israeli GAAP ----------- ----------- ------------ As of September 30, 2003 (Unaudited) Shareholders' equity $442,135 $(10,706) $431,429 ======== ======== ======== As of December 31, 2002 (Audited) Shareholders' equity $411,361 $(11,076) $400,285 ======== ======== ========
# # # # # # # EX-99 5 exhibit3.txt EXHIBIT 3 EXHIBIT 3 --------- [GRAPHICS OMITTED] EARNINGS RELEASE ELBIT SYSTEMS REPORTS THIRD QUARTER 2003 RESULTS ------------------------------------------------ Backlog of Orders Reaches $1.7 billion; Revenues at $214 Million; HAIFA, ISRAEL, NOVEMBER 11, 2003 - ELBIT SYSTEMS LTD. (THE "COMPANY") (NASDAQ: ESLT), the international defense company, today reported its consolidated results for the quarter ended September 30, 2003. CONSOLIDATED REVENUES FOR THE THIRD QUARTER OF 2003 reached $214.3 million as compared to $210.2 million in the corresponding quarter in 2002. CONSOLIDATED REVENUES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 increased 7.8% to $635.2 million from $589.1 million in the same period in 2002. CONSOLIDATED NET INCOME FOR THE THIRD QUARTER OF 2003 was $12 million (5.6% of revenues) as compared with $15.5 million (7.4% of revenues) in the same period in 2002. DILUTED EARNINGS PER SHARE (EPS) FOR THE THIRD QUARTER OF 2003 was $0.30 as compared with $0.39 for the third quarter of 2002. CONSOLIDATED NET INCOME FOR THE FIRST NINE MONTHS OF 2003 was $33.5 million (5.3% of revenues), compared with $32 million (5.4% of revenues) for the same period in 2002. DILUTED EPS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 was $0.83 compared with $0.80 for the corresponding period of 2002. The Company's financial results were affected by the changes in its share price during the first nine months of 2003 and during the third quarter of 2003. The non-cash effect related to the employees "phantom" option plan on the Company's results (net of taxes) resulted in a $2.7 million expense in the first nine months of 2003 and $2.4 million income in the third quarter of 2003. CONSOLIDATED NET INCOME FOR THE THIRD QUARTER OF 2003, EXCLUDING THE PHANTOM OPTION PLAN EFFECT was $9.6 million or $0.24 per share. EXCLUDING THE PHANTOM OPTION PLAN EFFECT, CONSOLIDATED NET INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 was $36.2 million (5.7% of revenues), or $0.90 per share. In 2002, the Company's financial results for nine-month period ending September 30, were affected by a one time charge related to an agreement with the Office of the Chief Scientist ("OCS") amounting to $9.8 million (before tax) and tax credit amounting to $2.8 million. Excluding the Israeli OCS one-time charge the tax adjustment and the phantom option plan effect, net income for the nine-month period ended September 30, 2002 was $36.3 million (6.2% of revenues), and the EPS was $0.91. GROSS PROFIT FOR THE THIRD QUARTER OF 2003 was $56.2 million (26.2% of revenues), as compared with gross profit of $59.4 million (28.3% of revenues) in the third quarter of 2002. EXCLUDING THE COMPANY'S PHANTOM OPTION PLAN EFFECT, GROSS PROFIT IN THE QUARTER ENDED SEPTEMBER 30, 2003, was $54.5 million, or 25.4% of revenues. EXCLUDING THE PHANTOM OPTION PLAN EFFECT, GROSS PROFIT IN THE QUARTER ENDED SEPTEMBER 30, 2002 was $59.2 million, or 28.2% of revenues. Gross profit for the first nine months of 2003 was $170.3 million (26.8% of revenues) as compared with $154.9 million (26.3% of revenues) in the same period of 2002. EXCLUDING THE COMPANY'S PHANTOM OPTION PLAN EFFECT GROSS PROFIT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 was $172.2 million, or 27.1% of revenues. EXCLUDING THE NON-RECURRING CHARGE UNDER THE OCS AGREEMENT, THE PHANTOM OPTION PLAN EFFECT, GROSS PROFIT FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2002 was $164.2 million, or 27.9% of revenues. THE COMPANY'S BACKLOG OF ORDERS AS OF SEPTEMBER 30, 2003 crossed for the first time the $1.7 billion mark, reaching $1,702 million, as compared with $1,689 million at the end of 2002. Approximately 58% of the Company's backlog as of September 30, 2003, is scheduled to be performed in the last quarter of 2003 and during 2004. The growth of the Company's backlog is still being affected by the continued postponement in placing orders by the Israeli Ministry of Defense. The President and CEO of Elbit Systems, Joseph Ackerman, commented: "While our revenues for the first three quarters of this year are 7.8% ahead of last year, and we reached a record level of backlog, we did not meet all of our goals for the third quarter. This was due in part, to delays in receipt of orders we expected to sell in the period, and we hope that the uncertainties existing with regards to the Israel Defense Ministry budget will be resolved. In parallel, we are implementing steps to further reduce costs and improve our efficiency and bottom line." The Board of Directors declared a dividend of $0.10 per share for the third quarter of 2003. The dividend will be paid on December 15, 2003, net of taxes and levies, at the rate of 19%. The record date of the dividend is December 2, 2003. CONFERENCE CALL Elbit Systems will host a conference call today, TUESDAY, NOVEMBER 11, 2003 at 10:30 AM ET. To take part in the conference call, please dial 1-877-332-1104 (U.S. and Canada) or 1-866-500-4953 (U.S.) or +972-3-925-5910 (International) a few minutes before the 10:30 AM ET START TIME. For your convenience, AN INSTANT REPLAY WILL BE AVAILABLE STARTING at 12:30 PM ET the same day until Thursday, November 13, 2003 at 5:00 PM ET. The replay telephone number is 1-866-500-4953 (U.S. and Canada) or +972-3-925-5945 (International). This call will also be broadcasted live on: www.elbit.co.il and an online replay will be available for 30 days. ABOUT ELBIT SYSTEMS LTD. ELBIT SYSTEMS LTD. IS AN INTERNATIONAL DEFENSE ELECTRONICS COMPANY ENGAGED IN A WIDE RANGE OF DEFENSE-RELATED PROGRAMS THROUGHOUT THE WORLD, IN THE AREAS OF AEROSPACE, GROUND AND NAVAL SYSTEMS, COMMAND, CONTROL, COMMUNICATIONS, COMPUTERS AND INTELLIGENCE (C4I) AND ADVANCED ELECTRO-OPTIC TECHNOLOGIES. THE COMPANY FOCUSES ON THE UPGRADING OF EXISTING MILITARY PLATFORMS AND DEVELOPING NEW TECHNOLOGIES FOR DEFENSE APPLICATIONS. FOR FURTHER INFORMATION, PLEASE VISIT THE COMPANY WEB SITE AT . CONTACT Ilan Pacholder, Vice President Marilena LaRosa & Corporate Secretary Elbit Systems Ltd Investor Relations Tel: 972-4 831-6632 The Anne McBride Company Fax: 972-4 831-6659 1212-983-1702 ext. 208 pacholder@elbit.co.il mlarosa@annemcbride.com STATEMENTS IN THIS PRESS RELEASE WHICH ARE NOT HISTORICAL DATA ARE FORWARD-LOOKING STATEMENTS WHICH INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES OR OTHER FACTORS NOT UNDER THE COMPANY'S CONTROL, WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM THE RESULTS, PERFORMANCE OR OTHER EXPECTATIONS IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO, THOSE DETAILED IN THE COMPANY'S PERIODIC FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. (FINANCIAL TABLES FOLLOW) ELBIT SYSTEMS LTD. CONSOLIDATED BALANCE SHEETS --------------------------- (In thousand of US Dollars)
September 30 December 31 2003 2002 ---------------- --------------- Unaudited Audited ASSETS - ------ Current Assets: Cash and short term deposits 47,456 77,930 Trade receivable and others 252,710 262,100 Inventories, net of advances 280,542 220,399 ---------------- --------------- Total current assets 580,708 560,429 Affiliated Companies & other Investments 35,357 33,051 Long-term receivables & others 9,913 31,186 Fixed Assets, net 219,882 202,961 Other Assets, net 102,084 105,769 ---------------- --------------- 947,944 933,396 ================ ================ LIABILITIES AND SHAREHOLDER'S EQUITY - ------------------------------------ Current liabilities 395,306 362,835 Long-term liabilities 106,207 154,483 Minority Interest 4,296 4,717 Shareholder's equity 442,135 411,361 ---------------- --------------- 947,944 933,396 ================ ================
ELBIT SYSTEMS LTD. CONSOLIDATED STATEMENTS OF INCOME --------------------------------------------------------- (In thousand of US Dollars, except for per share amounts)
For the Year Nine Months Ended Three Months Ended Ended September 30 September 30 December 31 2003 2002 2003 2002 2002 ---------- ----------- --------- ---------- ---------- Unaudited Unaudited Audited Revenues 635,223 589,143 214,275 210,155 827,456 Cost of revenues 464,882 434,216 158,078 150,738 605,313 ---------- ----------- --------- ---------- ---------- Gross Profit 170,341 154,927 56,197 59,417 222,143 Research and development, net 43,006 39,710 14,518 14,785 57,010 Marketing and selling 50,696 47,289 15,573 17,346 65,691 General and administrative 33,924 30,741 11,035 10,760 41,651 ---------- ----------- --------- ---------- ---------- Total operating expenses 127,626 117,740 41,126 42,891 164,352 ---------- ----------- --------- ---------- ---------- Operating income 42,715 37,187 15,071 16,526 57,791 Financial expenses, net (3,467) (690) (161) (595) (3,035) Other income (expenses), net 332 (524) 241 (115) (462) ---------- ----------- --------- ---------- ---------- Income before income taxes 39,580 35,973 15,151 15,816 54,294 Provisions for income taxes 10,502 6,810 3,900 1,565 9,348 ---------- ----------- --------- ---------- ---------- 29,078 29,163 11,251 14,251 44,946 Company's share of partnerships and affiliated Companies income (loss), net 3,938 2,554 989 1,114 675 Minority rights 456 269 (234) 139 (508) ---------- ----------- --------- ---------- ---------- Net income 33,472 31,986 12,006 15,504 45,113 ========== =========== ========= ========== ========== Basic Earnings per share 0.86 0.83 0.31 0.40 1.17 ========== =========== ========= ========== ========== Diluted net earnings per share 0.83 0.80 0.30 0.39 1.13 ========== =========== ========= ========== ========== =================================================================================================================== Net earnings excluding phantom plan effect in 2003 and 2002, non-recurring OCS charge and tax adjustment in 2002 36,182 36,339 9,579 12,496 50,153 ========== =========== ========= ========== ========== Diluted earnings per share excluding phantom plan effect in 2003 and 2002, non-recurring OCS charge and tax adjustment in 2002 0.90 0.91 0.24 0.31 1.26 ========== =========== ========= ========== ==========
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