HAIFA, Israel, Aug. 11, 2015 /PRNewswire/ -- Elbit Systems Ltd. (the "Company") (NASDAQ and TASE: ESLT), the international high technology company, reported today its consolidated results for the quarter ended June 30, 2015.

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: "We are pleased that the growth in our backlog over the last two years has led to our current positive revenue growth and that the past quarter saw growth both in revenue and in backlog. In addition, we see a continuation of solid performance in geographic regions with strong emerging defense requirements, that have been a strategic focus for us in recent years, particularly Asia-Pacific and Latin America, that together accounted for 39% of our revenues in the quarter.

We also continue to focus on adapting ourselves to market trends in order to meet future customer needs. Just after the close of the quarter, we completed the acquisition of the Cyber & Intelligence division of Nice Systems, and our recently established subsidiary Cyberbit is in the process of integrating the acquired operations into our organization. The acquisition is an important part of our strategy to enhance our cyber capabilities, a sector in which we see strong growth potential over the coming years."

Second quarter 2015 results:

Revenues in the second quarter of 2015 were $749.6 million, as compared to $702.6 million in the second quarter of 2014, a growth of 6.7% mainly due to growth in revenues of Land Systems to Asia Pacific.

Gross profit amounted to $219.3 million (29.2% of revenues) in the second quarter of 2015, as compared to $199.4 million (28.4% of revenues) in the second quarter of 2014. The non-GAAP gross profit in the second quarter of 2015 was $224.7 million (30.0% of revenues), as compared to $204.8 million (29.1% of revenues) in the second quarter of 2014. The increase in the gross profit rate was mainly due to the mix of programs sold in the quarter.

Research and development expenses, net were $57.5 million (7.7% of revenues) in the second quarter of 2015, as compared to $52.2 million (7.4% of revenues) in the second quarter of 2014.

Marketing and selling expenses, net were $60.6 million (8.1% of revenues) in the second quarter of 2015, as compared to $50.3 million (7.2% of revenues) in the second quarter of 2014. The increase in marketing and selling expenses in the second quarter of 2015 was mainly a result of marketing efforts in the U.S. and Asia-Pacific.

General and administrative expenses, net were $35.7 million (4.8% of revenues) in the second quarter of 2015, as compared to $34.3 million (4.9% of revenues) in the second quarter of 2014.

Operating income was $65.5 million (8.7% of revenues) in the second quarter of 2015, as compared to operating income of $62.6 million (8.9% of revenues) in the second quarter of 2014.  The non-GAAP operating income in the second quarter of 2015 was $75.4 million (10.1% of revenues), as compared to $73.1 million (10.4% of revenues) in the second quarter of 2014.

Financial expenses, net were $6.2 million in the second quarter of 2015, as compared to $8.3 million in the second quarter of 2014.

Taxes on income were $12.0 million (effective tax rate of 20.2%) in the second quarter of 2015, as compared to $9.9 million (effective tax rate of 18.1%) in the second quarter of 2014.  The effective tax rate is affected by the mix of the tax rates in the various jurisdictions in which the Company's entities generate taxable income.

Equity in net earnings (losses) of affiliated companies and partnerships was a net loss of $0.4 million in the second quarter of 2015, as compared to net earnings of $1.7 million in the second quarter of 2014.

Net income attributable to non-controlling interests was $1.7 million in the second quarter of  2015, as compared to $2.3 million in the second quarter of 2014.

Net income attributable to the Company's shareholders in the second quarter of  2015 was $45.3 million (6.0% of revenues), as compared to $43.9 million (6.2% of revenues) in the second quarter of 2014. The non-GAAP net income in the second quarter of 2015 was $53.5 million (7.1% of revenues), as compared to $52.6 million (7.5% of revenues) in the second quarter of 2014.

Diluted net earnings per share attributable to the Company'sshareholders were $1.06 for the second quarter of 2015, as compared with diluted net earnings per share of $1.03 for the second quarter of 2014. The non-GAAP diluted earnings per share in the second quarter of 2015 were $1.25 as compared to $1.23 for the second quarter of 2014.

The Company's backlog of orders for the quarter ended June 30, 2015, totaled $6,305 million as compared to $6,174 million as of June 30, 2014. Approximately 69% of the current backlog is attributable to orders from outside Israel. Approximately 60% of the current backlog is scheduled to be performed during the second half of 2015 and 2016.

Operating cash flow for the six months ended June 30, 2015, was $116.5 million, as compared to $15.8 million in the six months ended June 30, 2014.

Non-GAAP financial data:

The following non-GAAP financial data is presented to enable investors to have additional information on the Company's business performance as well as a further basis for periodical comparisons and trends relating to the Company's financial results. The Company believes such data provides useful information to investors by facilitating more meaningful comparisons of the Company's financial results over time. Such non-GAAP information is used by the Company's management to make strategic decisions, forecast future results and evaluate the Company's current performance. However, investors are cautioned that, unlike financial measures prepared in accordance with GAAP, non-GAAP measures may not be comparable with the calculation of similar measures for other companies.

The non-GAAP financial data includes reconciliation adjustments regarding non-GAAP gross profit, operating income, net income and diluted EPS. In arriving at non-GAAP presentations, companies generally factor out items such as those that have a non-recurring impact on the income statements, various non-cash items, significant effects of retroactive tax legislation and changes in accounting guidance and other items, which in management's judgment, are items that are considered to be outside of the review of core operating results.

In the Company's non-GAAP presentation, the Company made certain adjustments, as indicated in the table below.

These non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations, as determined in accordance with GAAP, and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures. Investors should consider non-GAAP financial measures in addition to, and not as replacements for or superior to, measures of financial performance prepared in accordance with GAAP.   

Recent Events:

On May 21, 2015, the Company announced that it signed an agreement to acquire NICE Systems Ltd.'s (NICE) Cyber and Intelligence division for a total amount of up to $157.9 million, subject to certain customary adjustments. Out of the total amount, $117.9 million will be paid in cash at the time of the closing, expected to take place in the third quarter of 2015, subject to certain closing conditions. An additional amount of up to $40 million will be paid as earn-out, based upon the future business performance of the acquired division's activities.

On July 1, 2015, the Company announced, further to its announcement of May 21, 2015 that it completed the acquisition of the NICE's Cyber and Intelligence division.

On July 2, 2015, the Company announced that its subsidiary, Elbit Systems Land and C4I Ltd. was awarded a contract from the Dutch Ministry of Defense, to supply advanced systems for the infantry soldiers in the Benelux countries - Netherlands, Belgium and Luxemburg. The contract, valued at approximately $150 million, will be performed over a five-year period. Elbit Systems will serve as the program prime contractor, and Thales Netherlands B.V will be its main sub-contractor. Other local companies will take part in the project, providing support and immediate response to the customer's needs.

On August 3, 2015, the Company announced that it recently was awarded two contracts for its MUSIC™ family of directed infra-red countermeasures airborne multi-spectral self-protection systems, representing expansion of the customer base in this strategic business area for Elbit Systems. The first contract is a follow-on contract from an Asian country, to supply its mini MUSIC systems for the customer's Blackhawk helicopter fleet. This is the second order awarded by this customer this year. An additional order, received from a NATO member European country, calls for the supply of C-MUSIC systems. Both contracts will be performed during 2015 and are in amounts that are not material to Elbit Systems.

On August 5, 2015, the Company announced that it was awarded an approximately $45 million contract from a European country for the supply of military communications systems. The contract will be performed over a two-year period.

Dividend:

The Board of Directors declared a dividend of $0.37 per share for the second quarter of 2015. The dividend's record date is August 21, 2015. The dividend will be paid from income generated as Preferred Income (as defined under Israeli tax laws), on September 7, 2015, net of taxes and levies, at the rate of 20%. 

Conference Call:

The Company will be hosting a conference call today, Tuesday, August 11, 2015 at 9:00 a.m. Eastern Time. On the call, management will review and discuss the results and will be available to answer questions.

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

US Dial-in Numbers: 1 888 407 2553
UK Dial-in Number: 0 800 917 9141
ISRAEL Dial-in Number: 03 918 0610
INTERNATIONAL Dial-in Number:  +972 3 918 0610

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

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

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

1 888 782 42941 (US) or +972 3 925 5925 (Israel and International).

About Elbit Systems
Elbit Systems Ltd. is an international high technology company engaged in a wide range of defense, homeland security and commercial 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, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems. The Company also focuses on the upgrading of existing platforms, developing new technologies for defense, homeland security and commercial applications and providing a range of support services, including training and simulation systems. For additional information, visit: www.elbitsystems.com

Attachments:

Consolidated balance sheets
Consolidated statements of income
Consolidated statements of cash flow
Consolidated revenue distribution by areas of operation and by geographical regions

This press release contains forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1943, as amended) regarding Elbit Systems Ltd. and/or its subsidiaries (collectively the Company), to the extent such statements do not relate to historical or current fact. Forward-looking statements are based on management's expectations, estimates, projections and assumptions. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results, performance and trends may differ materially from these forward-looking statements due to a variety of factors, including, without limitation: scope and length of customer contracts; governmental regulations and approvals; changes in governmental budgeting priorities; general market, political and economic conditions in the countries in which the Company operates or sells, including Israel and the United States among others; differences in anticipated and actual program performance, including the ability to perform under long-term fixed-price contracts; and the outcome of legal and/or regulatory proceedings. The factors listed above are not all-inclusive, and further information is contained in Elbit Systems Ltd.'s latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission. All forward-looking statements speak only as of the date of this release. The Company does not undertake to update its forward-looking statements.

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

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SOURCE Elbit Systems Ltd.