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Elbit Systems Q4 revenues $1,321.5 million

Christian Fernsby ▼ | March 25, 2020
Elbit Systems reported its consolidated results for the fourth quarter and full year ended December 31, 2019.
Elbit Systems
Elbit Systems   Revenues in the fourth quarter of 2019 were $1,321.5 million
Fourth quarter 2019 results:

Topics: Elbit Systems

Revenues in the fourth quarter of 2019 were $1,321.5 million, as compared to $1,077.8 million in the fourth quarter of 2018. Growth in the quarter was driven by the contributions of ENV and IMI Systems Ltd. ("IMI"), as well as growth in our legacy businesses.

Non-GAAP gross profit amounted to $345.8 million (26.2% of revenues) in the fourth quarter of 2019, as compared to $306.7 million (28.5% of revenues) in the fourth quarter of 2018. GAAP gross profit in the fourth quarter of 2019 was $284.3 million (21.5% of revenues), as compared to $234.9 million (21.8% of revenues) in the fourth quarter of 2018. The gross profit in the fourth quarter of 2019 and 2018 included expenses of $55.0 and $66.6 million, respectively, related to the acquisition of ENV in 2019 and IMI in 2018.

Research and development expenses, net were $97.6 million (7.4% of revenues) in the fourth quarter of 2019, as compared to $73.0 million (6.8% of revenues) in the fourth quarter of 2018.

Marketing and selling expenses, net were $80.5 million (6.1% of revenues) in the fourth quarter of 2019, as compared to $73.5 million (6.8% of revenues) in the fourth quarter of 2018.

General and administrative expenses, net were $46.4 million (3.5% of revenues) in the fourth quarter of 2019, as compared to $49.8 million (4.6% of revenues) in the fourth quarter of 2018. The lower level of general and administrative expenses in the fourth quarter of 2019 resulted mainly from income related to settlement of litigation in the U.S.

Non-GAAP operating income was $125.4 million (9.5% of revenues) in the fourth quarter of 2019, as compared to $112.5 million (10.4% of revenues) in the fourth quarter of 2018. GAAP operating income in the fourth quarter of 2019 was $63.6 million (4.8% of revenues), as compared to $38.6 million (3.6% of revenues) in the fourth quarter of 2018. GAAP operating income in the fourth quarter of 2019 and 2018 were reduced by $55 and $66.6 million, respectively, due to expenses related to the acquisitions of ENV and IMI.

Financial expenses, net were $16.4 million in the fourth quarter of 2019, as compared to $14.9 million in the fourth quarter of 2018. The increase in financial expenses in the fourth quarter of 2019 was mainly a result of the revaluation of lease liabilities.

Other expenses net were $1.6 million in the fourth quarter of 2019, as compared to $6.4 million in the fourth quarter of 2018. Other expenses in the fourth quarter of 2018 included expenses of $2.7 million related to the acquisitions of IMI.

Taxes on income were a tax benefit of $9.1 million in the fourth quarter of 2019, as compared to a tax expense of $3.9 million in the fourth quarter of 2018. The tax benefit in the fourth quarter of 2019 was related mainly to adjustments for prior years following tax assessments in the Company and some of its subsidiaries in Israel.

The net losses of affiliated companies and partnerships was $3.5 million in the fourth quarter of 2019, as compared to $11.4 million the fourth quarter of 2018. The loss in the fourth quarter of 2018 was mainly a result of a fair value re-evaluation of holdings in an affiliated company.

Net losses attributable to non-controlling interests was a loss of $0.3 million in the fourth quarter of 2019, as compared to income of $0.9 million in the fourth quarter of 2018.

Non-GAAP net income attributable to the Company's shareholders in the fourth quarter of 2019 was $109.3 million (8.3% of revenues), as compared to $84.0 million (7.8% of revenues) in the fourth quarter of 2018. GAAP net income attributable to the Company's shareholders in the fourth quarter of 2019 was $51.5 million (3.9% of revenues), as compared to $1.1 million (0.1% of revenues) in the fourth quarter of 2018.

Non GAAP diluted net earnings per share attributable to the Company's shareholders were $2.47 for the fourth quarter of 2019, as compared to $1.96 for the fourth quarter of 2018. GAAP diluted earnings per share attributable to the Company's shareholders in the fourth quarter of 2019 were $1.16, as compared to $0.03 in the fourth quarter of 2018.

Full year 2019 results:

Revenues for the year ended December 31, 2019 were $4,508.4 million, as compared to $3,683.7 million in the year ended December 31, 2018.

Cost of revenues for the year ended December 31, 2019 was $3,371.9 million (74.8% of revenues), as compared to $2,707.5 million (73.5% of revenues) in the year ended December 31, 2018. Cost of revenues in 2019 and 2018 included expenses of $55.0 and $66.6 million, respectively, related to the acquisition of ENV in 2019 and of IMI in 2018.

Non-GAAP gross profit for the year ended December 31, 2019 was $1,213.5 million (26.9% of revenues), as compared to $1,061.9 million (28.8% of revenues) in the year ended December 31, 2018. GAAP gross profit in 2019 was $1,136.5 million (25.2% of revenues), as compared to $976.2 million (26.5% of revenues) in 2018. The decline in 2019 gross margins relative to 2018 was due to a less favorable sales mix and a lower gross margin at IMI.

Research and development expenses, net for the year ended December 31, 2019 were $331.8 million (7.4% of revenues), as compared to $287.4 million (7.8% of revenues) in the year ended December 31, 2018.

Marketing and selling expenses, net for the year ended December 31, 2019 were $301.4 million (6.7% of revenues), as compared to $281.0 million (7.6% of revenues) in the year ended December 31, 2018.


 

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