Elbit Systems in Q2 2017: Backlog of Orders at $7.3B; Revenues at $818M
The company has released its financial results for the second quarter of 2017, with revenues exceeding $818 million. President & CEO Bezhalel (Butzi) Machlis says the results represent ongoing improvements in revenue, profit and backlog
IsraelDefense
| 15/08/2017
Elbit Systems Modern Soldier C4I Suite (Photo courtesy of the company)
Elbit Systems reported today its consolidated results for the quarter ended June 30, 2017. Revenues in the second quarter of 2017 were $818.3 million, as compared to $804.5 million in the second quarter of 2016. The Company’s backlog of orders totaled $7,329 million, as compared to $6,818 million as of June 30, 2016. Approximately 72% of the current backlog is attributable to orders from outside Israel. Approximately 57% of the current backlog is scheduled to be performed during 2017 and 2018.
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: "Our results represent ongoing improvements in revenue, profit and especially backlog, which grew strongly, particularly the longer-term component. Our increased focus on sales and marketing in recent quarters, as well as R&D, is enabling us to take advantage of the growth in the opportunities we see in many of our end markets. Furthermore, the diversified portfolio of technologies and products as well as a worldwide balanced market presence reflected by the breakdown of revenue streams and backlog, provides for the potential of continuing the long-term trend of growth and profitability."
Recent Events
On May 17, 2017, the company announced that its US subsidiary, Elbit Systems of America LLC., was awarded an approximately $166 million contract from a prime contractor to provide operator interface and computer processing capabilities for a US Army platform. The contract will be performed primarily in Fort Worth, Texas, over a five-year period.
On May 24, 2017, the company announced that it was awarded a $25 million contract for the supply of J-Music™ DIRCM (Direct Infrared Countermeasures) self-protection systems to an international organization. The contract will be performed over a three-year period.
On May 28, 2017, the Company announced that it was awarded a contract, in an amount of approximately $390 million, to supply an array of ground electronic intelligence capabilities to a European country. The contract, which includes various intelligence capabilities, as well as communications and command and control solutions, will be performed over a three-year period.
On June 21, 2017, the Company announced that it was awarded a contract of more than $20 million by an African-based customer to equip a VIP Gulfstream G650 aircraft with J-Music™ DIRCM systems that include Elbit Systems’ advanced infrared-based Passive Airborne Warning System. The contract will be performed over a one-year period.
On July 5, 2017, the Company announced that one of its subsidiaries in Europe was awarded a contract from a European country, for the supply of thousands of advanced Electro-Optic systems for individual infantry soldiers, in a total amount of an approximately $35 million. The contract will be performed over a two-year period.
Other Q2 2017 Results
Non-GAAP gross profit amounted to $248.3 million (30.4% of revenues) in the second quarter of 2017, as compared to $244.0 million (30.3% of revenues) in the second quarter of 2016. GAAP gross profit in the second quarter of 2017 was $242.3 million (29.6% of revenues), as compared to $236.1 million (29.4% of revenues) in the second quarter of 2016.
Research and development expenses, net were $67.1 million (8.2% of revenues) in the second quarter of 2017, as compared to $67.2 million (8.4% of revenues) in the second quarter of 2016.
Marketing and selling expenses, net were $66.3 million (8.1% of revenues) in the second quarter of 2017, as compared to $60.3 million (7.5% of revenues) in the second quarter of 2016. The increase in marketing and selling expenses in the second quarter of 2017 was mainly related to the mix of countries and types of marketing activities for projects in which we invest our marketing efforts.
General and administrative expenses, net were $33.6 million (4.1% of revenues) in the second quarter of 2017, as compared to $38.7 million (4.8% of revenues) in the second quarter of 2016. The decrease in general and administrative expenses in the second quarter of 2017 resulted from revaluation of liabilities related to assets and activities acquired in prior years.
Non-GAAP operating income was $82.7 million (10.1% of revenues) in the second quarter of 2017, as compared to $80.5 million (10.0% of revenues) in the second quarter of 2016. GAAP operating income in the second quarter of 2017 was $75.3 million (9.2% of revenues), as compared to $69.9 million (8.7% of revenues) in the second quarter of 2016.
Financial expenses, net were $6.8 million in the second quarter of 2017, as compared to $5.5 million in the second quarter of 2016.
Taxes on income were $10.3 million (effective tax rate of 15.1%) in the second quarter of 2017, as compared to $14.3 million (effective tax rate of 22.2%) in the second quarter of 2016. 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 and the decrease in tax rates in Israel.
Equity in net earnings of affiliated companies and partnerships was $4.8 million (0.6% of revenues) in the second quarter of 2017, as compared to $4.4 million (0.5% of revenues) in the second quarter of 2016.
Net income attributable to non-controlling interests was $0.4 million in the second quarter of 2017, as compared to $0.5 million in the second quarter of 2016.
Non-GAAP net income attributable to the Company's shareholders in the second quarter of 2017 was $68.8 million (8.4% of revenues), as compared to $62.9 million (7.8% of revenues) in the second quarter of 2016. GAAP net income in the second quarter of 2017 was $62.6 million (7.6% of revenues), as compared to $54.1 million (6.7% of revenues) in the second quarter of 2016.
Non-GAAP diluted net earnings per share attributable to the Company's shareholders were $1.61 for the second quarter of 2017, as compared to $1.47 for the second quarter of 2016. GAAP diluted earnings per share in the second quarter of 2017 were $1.46, as compared to $1.27 for the second quarter of 2016.
Operating cash flow provided in the six months ended June 30, 2017, was $2.7 million, as compared to $14.2 million used in the six months ended June 30, 2016.
The company has released its financial results for the second quarter of 2017, with revenues exceeding $818 million. President & CEO Bezhalel (Butzi) Machlis says the results represent ongoing improvements in revenue, profit and backlog
Elbit Systems Modern Soldier C4I Suite (Photo courtesy of the company)
Elbit Systems reported today its consolidated results for the quarter ended June 30, 2017. Revenues in the second quarter of 2017 were $818.3 million, as compared to $804.5 million in the second quarter of 2016. The Company’s backlog of orders totaled $7,329 million, as compared to $6,818 million as of June 30, 2016. Approximately 72% of the current backlog is attributable to orders from outside Israel. Approximately 57% of the current backlog is scheduled to be performed during 2017 and 2018.
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: "Our results represent ongoing improvements in revenue, profit and especially backlog, which grew strongly, particularly the longer-term component. Our increased focus on sales and marketing in recent quarters, as well as R&D, is enabling us to take advantage of the growth in the opportunities we see in many of our end markets. Furthermore, the diversified portfolio of technologies and products as well as a worldwide balanced market presence reflected by the breakdown of revenue streams and backlog, provides for the potential of continuing the long-term trend of growth and profitability."
Recent Events
On May 17, 2017, the company announced that its US subsidiary, Elbit Systems of America LLC., was awarded an approximately $166 million contract from a prime contractor to provide operator interface and computer processing capabilities for a US Army platform. The contract will be performed primarily in Fort Worth, Texas, over a five-year period.
On May 24, 2017, the company announced that it was awarded a $25 million contract for the supply of J-Music™ DIRCM (Direct Infrared Countermeasures) self-protection systems to an international organization. The contract will be performed over a three-year period.
On May 28, 2017, the Company announced that it was awarded a contract, in an amount of approximately $390 million, to supply an array of ground electronic intelligence capabilities to a European country. The contract, which includes various intelligence capabilities, as well as communications and command and control solutions, will be performed over a three-year period.
On June 21, 2017, the Company announced that it was awarded a contract of more than $20 million by an African-based customer to equip a VIP Gulfstream G650 aircraft with J-Music™ DIRCM systems that include Elbit Systems’ advanced infrared-based Passive Airborne Warning System. The contract will be performed over a one-year period.
On July 5, 2017, the Company announced that one of its subsidiaries in Europe was awarded a contract from a European country, for the supply of thousands of advanced Electro-Optic systems for individual infantry soldiers, in a total amount of an approximately $35 million. The contract will be performed over a two-year period.
Other Q2 2017 Results
Non-GAAP gross profit amounted to $248.3 million (30.4% of revenues) in the second quarter of 2017, as compared to $244.0 million (30.3% of revenues) in the second quarter of 2016. GAAP gross profit in the second quarter of 2017 was $242.3 million (29.6% of revenues), as compared to $236.1 million (29.4% of revenues) in the second quarter of 2016.
Research and development expenses, net were $67.1 million (8.2% of revenues) in the second quarter of 2017, as compared to $67.2 million (8.4% of revenues) in the second quarter of 2016.
Marketing and selling expenses, net were $66.3 million (8.1% of revenues) in the second quarter of 2017, as compared to $60.3 million (7.5% of revenues) in the second quarter of 2016. The increase in marketing and selling expenses in the second quarter of 2017 was mainly related to the mix of countries and types of marketing activities for projects in which we invest our marketing efforts.
General and administrative expenses, net were $33.6 million (4.1% of revenues) in the second quarter of 2017, as compared to $38.7 million (4.8% of revenues) in the second quarter of 2016. The decrease in general and administrative expenses in the second quarter of 2017 resulted from revaluation of liabilities related to assets and activities acquired in prior years.
Non-GAAP operating income was $82.7 million (10.1% of revenues) in the second quarter of 2017, as compared to $80.5 million (10.0% of revenues) in the second quarter of 2016. GAAP operating income in the second quarter of 2017 was $75.3 million (9.2% of revenues), as compared to $69.9 million (8.7% of revenues) in the second quarter of 2016.
Financial expenses, net were $6.8 million in the second quarter of 2017, as compared to $5.5 million in the second quarter of 2016.
Taxes on income were $10.3 million (effective tax rate of 15.1%) in the second quarter of 2017, as compared to $14.3 million (effective tax rate of 22.2%) in the second quarter of 2016. 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 and the decrease in tax rates in Israel.
Equity in net earnings of affiliated companies and partnerships was $4.8 million (0.6% of revenues) in the second quarter of 2017, as compared to $4.4 million (0.5% of revenues) in the second quarter of 2016.
Net income attributable to non-controlling interests was $0.4 million in the second quarter of 2017, as compared to $0.5 million in the second quarter of 2016.
Non-GAAP net income attributable to the Company's shareholders in the second quarter of 2017 was $68.8 million (8.4% of revenues), as compared to $62.9 million (7.8% of revenues) in the second quarter of 2016. GAAP net income in the second quarter of 2017 was $62.6 million (7.6% of revenues), as compared to $54.1 million (6.7% of revenues) in the second quarter of 2016.
Non-GAAP diluted net earnings per share attributable to the Company's shareholders were $1.61 for the second quarter of 2017, as compared to $1.47 for the second quarter of 2016. GAAP diluted earnings per share in the second quarter of 2017 were $1.46, as compared to $1.27 for the second quarter of 2016.
Operating cash flow provided in the six months ended June 30, 2017, was $2.7 million, as compared to $14.2 million used in the six months ended June 30, 2016.
