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ELBIT SYSTEMS REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS
USA - English
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Elbit Systems Ltd.
Mar 29, 2022, 02:43 ET
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Backlog of orders at $13.7 billion; Revenues of $5.3 billion; Non-GAAP net income of $368 million; GAAP net income of $274 million; Non-GAAP net EPS of $8.30; GAAP net EPS of $6.20
HAIFA, Israel, March 29, 2022 /PRNewswire/ -- Elbit Systems Ltd. ("Elbit Systems" or the "Company") (NASDAQ: ESLT) (TASE: ESLT), the international high technology company, reported today its consolidated results for the fourth quarter and full year ended December 31, 2021.
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 view of the Company's business results and trends. For a description of the Company's non-GAAP definitions see page 6 below, "Non-GAAP financial data". Unless otherwise stated, all financial data presented is US-GAAP financial data.
Management Comment:
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented:
"2021 was a solid year for Elbit Systems, and the financial results indicate the sustained demand for our products and systems from customers around the world. Revenues increased by 13% year over year to $5.3 billion, and a record backlog of $13.7 billion provides us with good visibility.
Elbit Systems' 2021 results are an outcome of the significant investments we have made in recent years to develop leading technological capabilities and expand our positions in key global defense markets to sustain through cycle growth.
I believe that Elbit Systems is well positioned to benefit from the growth in the defense sector around the world."
Fourth quarter 2021 results:
Revenues in the fourth quarter of 2021 were $1,494.3 million, as compared to $1,377.7 million in the fourth quarter of 2020.
Non-GAAP(*) gross profit amounted to $381.1 million (25.5% of revenues) in the fourth quarter of 2021, as compared to $363.0 million (26.3% of revenues) in the fourth quarter of 2020. GAAP gross profit in the fourth quarter of 2021 was $374.3 million (25.1% of revenues), as compared to $357.8 million (26.0% of revenues) in the fourth quarter of 2020.
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* see page 6
Research and development expenses, net were $114.0 million (7.6% of revenues) in the fourth quarter of 2021, as compared to $109.1 million (7.9% of revenues) in the fourth quarter of 2020.
Marketing and selling expenses, net were $80.8 million (5.4% of revenues) in the fourth quarter of 2021, as compared to $81.2 million (5.9% of revenues) in the fourth quarter of 2020.
General and administrative expenses, net were $72.4 million (4.8% of revenues) in the fourth quarter of 2021, as compared to $62.9 million (4.6% of revenues) in the fourth quarter of 2020. The higher level of general and administrative expenses in the fourth quarter of 2021 included the expenses of Sparton Corporation ("Sparton") which was acquired and consolidated commencing the second quarter of 2021.
Non-GAAP(*) operating income was $120.1 million (8.0% of revenues) in the fourth quarter of 2021, as compared to $113.8 million (8.3% of revenues) in the fourth quarter of 2020. GAAP operating income in the fourth quarter of 2021 was $107.3 million (7.2% of revenues), as compared to $104.6 million (7.6% of revenues) in the fourth quarter of 2020.
Financial expenses, net were $19.6 million in the fourth quarter of 2021, as compared to $32.5 million in the fourth quarter of 2020. The lower level of financial expenses in the fourth quarter of 2021 was mainly a result of exchange rate differences related to the revaluation of lease liabilities.
Other income, net was $9.7 million in the fourth quarter of 2021, as compared to other expenses, net of $7.3 million in the fourth quarter of 2020.
Taxes on income were $92.2 million in the fourth quarter of 2021, as compared to $1.9 million in the fourth quarter of 2020. Tax expenses in the fourth quarter of 2021 included a one-time expense of approximately $80.0 million related to the amendment of legislation regarding exempt earnings from "Approved Enterprises" and "Privileged Enterprises" in Israel ("Exempt Earnings").
Equity in net earnings of affiliated companies and partnerships was $3.1 million in the fourth quarter of 2021, as compared to $5.0 million the fourth quarter of 2020.
Non-GAAP(*) net income attributable to the Company's shareholders in the fourth quarter of 2021 was $94.9 million (6.4% of revenues), as compared to $105.0 million (7.6% of revenues) in the fourth quarter of 2020. GAAP net income attributable to the Company's shareholders in the fourth quarter of 2021 was $8.2 million (0.5% of revenues), as compared to $67.8 million (4.9% of revenues) in the fourth quarter of 2020. The decrease in the fourth quarter of 2021 mainly was a result of the tax expense mentioned in "Taxes on income" above.
Non GAAP(*) diluted net earnings per share attributable to the Company's shareholders were $2.14 for the fourth quarter of 2021, as compared to $2.38 for the fourth quarter of 2020. GAAP diluted earnings per share attributable to the Company's shareholders in the fourth quarter of 2021 were $0.18, as compared to $1.53 in the fourth quarter of 2020.
___________
* see page 6
Full year 2021 results:
Revenues for the year ended December 31, 2021 were $5,278.5 million, as compared to $4,662.6 million in the year ended December 31, 2020.
For distribution of revenues by areas of operation and by geographic regions see the tables on page 14.
The majority of the revenues in 2021 were in the Airborne systems and C4ISR systems areas of operation. The increase in revenues in the area of Airborne systems was mainly a result of sales of airborne precision guided munitions in Asia-Pacific. The growth in revenues in the C4ISR systems area was mainly due to Sparton, a U.S. subsidiary acquired and consolidated in the Company's results from the second quarter of 2021.
On a geographic basis, the increase in North America was mainly a result of higher sales of airborne systems and Sparton's products, as well as growth in sales of medical instrumentation. The increase in Asia-Pacific was due to sales of airborne precision guided munitions.
Cost of revenues for the year ended December 31, 2021 was $3,920.5 million (74.3% of revenues), as compared to $3,497.5 million (75.0% of revenues) in the year ended December 31, 2020. Cost of revenues in 2020 included non-cash expenses of approximately $60.0 million, related to impairment of assets and inventory write-offs due to the impact of COVID-19.
Non-GAAP(*) gross profit for the year ended December 31, 2021 was $1,384.7 million (26.2% of revenues), as compared to $1,247.2 million (26.7% of revenues) in the year ended December 31, 2020. GAAP gross profit in 2021 was $1,358.0 million (25.7% of revenues), as compared to $1,165.1 million (25.0% of revenues) in 2020.
Research and development expenses, net for the year ended December 31, 2021 were $395.1 million (7.5% of revenues), as compared to $359.7 million (7.7% of revenues) in the year ended December 31, 2020.
Marketing and selling expenses, net for the year ended December 31, 2021 were $291.8 million (5.5% of revenues), as compared to $290.7 million (6.2% of revenues) in the year ended December 31, 2020.
General and administrative expenses, net for the year ended December 31, 2021 were $267.4 million (5.1% of revenues), as compared to $223.9 million (4.8% of revenues) in the year ended December 31, 2020. The increase in general administrative expenses in 2021 was mainly as a result of general and administrative expenses related to the acquisition and consolidation of Sparton in the Company's results as of the second quarter of 2021.
Other operating income, net for the year ended December 31, 2021 amounted to $14.7 million, as compared to $35.0 million for the year ended December 31, 2020. Other operating income in 2021 resulted mainly from capital gain related to the sale of a building by a subsidiary in Israel. Other operating income in 2020 was mainly a result of capital gain related to the sale and lease back of buildings by a subsidiary in the U.S.
Non-GAAP(*) operating income for the year ended December 31, 2021 was $450.8 million (8.5% of revenues), as compared to $390.1 million (8.4% of revenues) in the year ended December 31, 2020. GAAP operating income in 2021 was $418.5 million (7.9% of revenues), as compared to $325.7 million (7.0% of revenues) in 2020, which included non-cash expenses of approximately $60 million related to impairment of assets and inventory write-offs due to the impact of Covid-19.
___________
* see page 6
Financial expenses, net for the year ended December 31, 2021 were $40.4 million, as compared to $71.3 million in the year ended December 31, 2020. Financial expenses, net in 2021 included a gain from changes in fair value of financial assets of approximately $18.8 million. Financial expenses, net in 2021 and 2020 included expenses of approximately $10.2 and $33.4 million, respectively, related to revaluation of lease liabilities and exchange rate differences.
Other income, net was $5.3 million in 2021, as compared to other income, net of $7.4 million in 2020. Other income, net in 2021 and 2020, resulted mainly from revaluation of holdings in affiliated companies, net of expenses related to non-service costs of pension plans.
Taxes on income for the year ended December 31, 2021 were $131.4 million (effective tax rate of 34.3%), as compared to $36.4 million (effective tax rate of 13.9%) in the year ended December 31, 2020. Taxes on income in 2021 included a one-time expense of approximately $80.0 million related to the "release" of Exempt Earnings. Taxes on income in 2020 were reduced by a tax benefit related to adjustments for prior years following a tax settlements of the Company and some of its subsidiaries in Israel with the Israeli tax authorities.
Equity in net earnings of affiliated companies and partnerships for the year ended December 31, 2021 was $22.6 million, which included a gain of approximately $10.9 million related to the sale of affiliated company, as compared to $12.6 million in the year ended December 31, 2020.
Non-GAAP(*) net income attributable to the Company's shareholders for the year ended December 31, 2021 was $367.6 million (7.0% of revenues), as compared to $318.5 million (6.8% of revenues) in the year ended December 31, 2020. GAAP net income attributable to the Company's shareholders in the year ended December 31, 2021 was $274.4 million (5.2% of revenues), as compared to $237.7 million (5.1% of revenues) in the year ended December 31, 2020.
Non-GAAP(*) diluted net earnings per share attributable to the Company's shareholders for the year ended December 31, 2021 were $8.30, as compared to $7.20 for the year ended December 31, 2020. GAAP diluted net earnings per share attributable to the Company's shareholders in the year ended December 31, 2021 were $6.20, as compared to $5.38 in the year ended December 31, 2020.
Backlog of orders for the year ended December 31, 2021 totaled $13,661 million, as compared to $11,024 million as of December 31, 2020. Approximately 72% of the current backlog is attributable to orders from outside Israel. Approximately 60% of the current backlog is scheduled to be performed during 2022 and 2023.
Net cash provided by operating activities in the year ended December 31, 2021 was $416.9 million, as compared to $278.8 million in the year ended December 31, 2020. The higher level of operating cash flow in 2021 was mainly a result of payment of outstanding debts by customers, mainly the Israeli Ministry of Defense, as well as higher advances received from customers, mainly in Israel and Europe.
___________
* see page 6
Impact of the Covid-19 Pandemic on the Company:
The Coronavirus disease 2019 (Covid-19) was declared a pandemic by the World Health Organization in March 2020. Covid-19 has had significant negative impacts on the worldwide economy, resulting in disruptions to supply chains and financial markets, significant travel restrictions, facility closures and shelter-in place orders in various locations. Such disruptions also led to global shortages of electronics and other components, increased costs and extended lead times. Elbit Systems is closely monitoring the evolution of the Covid-19 pandemic and its impacts on the Company's employees, customers and suppliers, as well as on the global economy.
As we last reported on November 23, 2021, we have been taking a number of actions to protect the safety of our employees as well as maintain business continuity and secure our supply chain. We also reported on a number of activities where we are leveraging our technological capabilities to assist hospital staffs and other first responders protecting our communities from the impact of the pandemic. All of these actions remain ongoing.
We have implemented a series of cost control measures to help limit the financial impact of the pandemic on the Company, in parallel to the measures we are taking to maintain business continuity and deliveries to our customers. We also are working on efficiency initiatives with a number of our suppliers. We continue to evaluate our operations on an ongoing basis in order to adapt to the evolving business environment.
During 2020 and 2021 our defense activities, which account for most of our business, were not materially impacted by the pandemic, although some of our businesses experienced certain disruptions due to government directed safety measures, travel restrictions and supply chain delays.
We believe that as of December 31, 2021, Elbit Systems had a healthy balance sheet, adequate levels of cash and access to credit facilities that provide liquidity when necessary. We have given high priority to cash management and adequate cash reserves to run the business.
The extent of the impact of Covid-19 on the Company's performance depends on future developments including the duration and spread of the pandemic, the measures adopted by governments to limit the spread of the pandemic, including implementation of vaccinations, and resulting actions that may be taken by our customers and our suppliers, all of which contain uncertainties. As will be noted in our annual report on Form 20-F for 2021 that will be filed in April 2022, the preparation of financial reports requires us to make judgments, assumptions and estimates that affect the amounts reported. For our financial results for the quarter and the year ended December 31, 2021, we considered the economic impact of the Covid-19 pandemic on our critical and significant accounting estimates. The expected impact of the Covid-19 pandemic did not have a material effect on our judgments, assumptions and estimates reflected in the results. However, our future results may differ materially from our estimates. As events continue to evolve in connection with the Covid-19 pandemic, the estimates we use in future periods may change materially.
Potential Impact of Increase in Company's Share Price on Employee Compensation Plan Costs:
Over the last several weeks, there has been a significant increase in the price of the Company's shares. Should such share price levels continue, or further increase, there would be a significant impact on the costs to the Company under its various stock price linked compensation plans for employees.
* 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 including significant exchange rate differences, significant effects of retroactive tax legislation, changes in accounting guidance, financial transactions and other items not considered to be part of regular ongoing business, 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.
| Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental Financial Data: | |||||||
| (US Dollars in millions) | |||||||
| Three Months Ended December 31, 2021 | Three Months Ended December 31, 2020 | Year Ended December 31, 2021 | Year Ended December 31, 2020 | ||||
| GAAP gross profit | $ 374.3 | $ 357.8 | $ 1,358.0 | $ 1,165.1 | |||
| Adjustments: | |||||||
| Amortization of purchased intangible assets | 6.8 | 5.2 | 26.7 | 22.7 | |||
| Covid-19 related expenses and write-offs | — | — | — | 56.0 | |||
| Impairment of long-lived assets | — | — | — | 3.4 | |||
| Non-GAAP gross profit | $ 381.1 | $ 363.0 | $ 1,384.7 | $ 1,247.2 | |||
| Percent of revenues | 25.5 % | 26.3 % | 26.2 % | 26.7 % | |||
| GAAP operating income | $ 107.3 | $ 104.6 | $ 418.5 | $ 325.7 | |||
| Adjustments: | |||||||
| Amortization of purchased intangible assets | 12.8 | 9.2 | 47.0 | 39.4 | |||
| Covid-19 related expenses and write-offs | — | — | — | 56.6 | |||
| Capital gain | — | — | (14.7) | (35.0) | |||
| Impairment of long-lived assets | — | — | — | 3.4 | |||
| Non-GAAP operating income | $ 120.1 | $ 113.8 | $ 450.8 | $ 390.1 | |||
| Percent of revenues | 8.0 % | 8.3 % | 8.5 % | 8.4 % | |||
| GAAP net income attributable to Elbit Systems' shareholders | $ 8.2 | $ 67.8 | $ 274.4 | $ 237.7 | |||
| Adjustments: | |||||||
| Amortization of purchased intangible assets | 12.8 | 9.2 | 47.0 | 39.4 | |||
| Covid-19 related expenses and write-offs | — | — | — | 56.6 | |||
| Capital gain | — | — | (24.9) | (35.0) | |||
| Impairment of investments and long-lived assets | — | — | — | 7.9 | |||
| Revaluation of investment measured under fair value method | (12.5) | 0.6 | (17.3) | (20.8) | |||
| Non-operating foreign exchange losses | 7.2 | 27.9 | 10.6 | 33.4 | |||
| Tax effect and other tax items, net | 79.2 | (0.5) | 77.8 | (0.7) | |||
| Non-GAAP net income attributable to Elbit Systems' shareholders | $ 94.9 | $ 105.0 | $ 367.6 | $ 318.5 | |||
| Percent of revenues | 6.4 % | 7.6 % | 7.0 % | 6.8 % | |||
| GAAP diluted net EPS | $ 0.18 | $ 1.53 | $ 6.20 | $ 5.38 | |||
| Adjustments, net | 1.96 | 0.85 | 2.10 | 1.82 | |||
| Non-GAAP diluted net EPS | $ 2.14 | $ 2.38 | $ 8.30 | $ 7.20 |
On December 15, 2021, the Company announced that it was awarded a contract valued at approximately $350 million to supply an array of land systems to an international customer. The contract will be fulfilled over a three-year period.
On December 15, 2021, the Company announced that at its Annual General Meeting of Shareholders held on December 14, 2021, the proposed resolutions described in the Proxy Statement to the Shareholders dated November 4, 2021 and detailed hereunder were approved by the respective required majority:
- "To re-elect to the Board the following seven members who are not "External Directors" as defined in the Israeli Companies Law 5759-1999, to serve until the close of the next Annual General Meeting of Shareholders: Mr. Michael Federmann, Mrs. Rina Baum, Mr. Yoram Ben-Zeev, Mr. David Federmann, Mr. Dov Ninveh, Prof. Ehood (Udi) Nisan and Prof. Yuli Tamir; and
- "To re-appoint Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global, as the Company's independent auditor for the fiscal year ending December 31, 2021, and until the close of the next Annual General Meeting of Shareholders."
On January 5 2022, the Company announced that its Brazilian subsidiary, AEL Sistemas S.A., was awarded a contract to supply additional HermesTM 900 Unmanned Aircraft Systems to the Brazilian Air Force. The contract is in an amount that is not material to Elbit Systems and will be performed over a period of 16 months.
On January 10, 2022, the Company announced that its UK subsidiary, Elbit Systems UK Ltd., sold the Power and Control Business of its subsidiary Ferranti Technologies Ltd., to TT Electronics (UK) Plc. (LSE: TTG.L) for approximately $12 million (approximately £9 million) in cash, subject to customary post-completion working capital adjustments.
On January 13, 2022, the Company announced that following a competitive tender process, its Swedish subsidiary, Elbit Systems Sweden AB was awarded a contract from the Swedish Defence Material Administration to supply the Albatross Combat Management Systems for the Royal Swedish Navy. The contract, that is in an amount that is not material to Elbit Systems, will be performed over a period of 34 months.
On January 26, 2022, the Company announced that it was awarded a contract valued at approximately $16 million to supply a space telescope to the Weizmann Institute of Science under Israel's Ultraviolet Transient Astronomy Satellite ("ULTRASAT") program to observe and research deep space. The ULTRASAT program is jointly managed and funded by the Weizmann Institute of Science and the Israeli Space Agency and is carried out in association with the German DESY research center. The contract will be performed over a period of two years.
On February 22, 2022, the Company announced that as a result of an amendment to the Law for the Encouragement of Capital Investments and the implementation of an arrangement to pay reduced tax on selected accumulated income, the Company will include a one-time expense of approximately $80 million (approximately NIS 250 million) in its financial results for the fourth quarter of 2021, which are planned to be published in March, 2022.
On March 21, 2022, the Company announced that it was awarded a contract in the amount of approximately $27 million by the Swedish Defence Material Administration, to provide the Swedish Armed Forces with M339 rounds, a 120mm ammunition, and Data Setting Units, for its Leopard Main Battle Tanks. The contract will be performed over a period of ten months.
On March 27, 2022, the Company announced that it was awarded contracts with an aggregate value of approximately $130 million to deliver an artillery munitions production line in a country in Asia-Pacific. The contracts will be performed over a period of 2.5 years.
Dividend:
The Board of Directors declared a dividend of $0.50 per share for the fourth quarter of 2021. The dividend's record date is April 11, 2022. The dividend will be paid on April 25, 2022, after deduction of taxes at the source, at the rate of 16.8%.
Conference Call:
The Company will be hosting a conference call today, Wednesday, March 29, 2022, 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 Number: 1-866-744-5399
Canada Dial-in Number: 1-866-485-2399
ISRAEL Dial-in Number: 03-918- 0644
INTERNATIONAL Dial-in Number: 972-3- 918- 0644
at 9:00am Eastern Time; 6:00am Pacific Time; 4:00pm Israel Time
The conference call will also be broadcast live on Elbit Systems' website at https://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: 1-888-782-4291 (US and Canada) or +972-3-925-5900 (Israel and International).
Investor conference
Starting at 10:00am Israel time (3:00am Eastern Time) today, March 29, 2022, Elbit Systems will host an investor conference in Israel. The event will be streamed live in Hebrew with a simultaneous English translation. A recording of the event will be available shortly after the event concludes. The live webcast and recording will be available in the Investor Relations section of Elbit Systems' website at http://www.elbitsystems.com.
Investors and analysts that wish to ask questions related to topics discussed at the investor conference are welcome to present their questions during the Q&A part of the financial results conference call.
Annual Report
The Company's Annual Report on Form 20-F (including its financial statements for the fiscal year ended December 31, 2021) will be filed in April, 2022.
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, cyber-based systems and munitions. 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: https://elbitsystems.com/, follow us on Twitter or visit our official Facebook, Youtube and LinkedIn Channels.
Attachments:
Consolidated balance sheets
Consolidated statements of income
Consolidated statements of cash flow
Consolidated revenue distribution by areas of operation and by geographical regions
| Company Contact: Joseph Gaspar, Executive VP & CFO, Tel: +972-77-2946663, j.gaspar@elbitsystems.com Rami Myerson, Director, Investor Relations, Tel: +972-77-2948984, rami.myerson@elbitsystems.com David Vaaknin, VP, Head of Corporate Communications, Tel: +972-77-2946691, david.vaaknin@elbitsystems.com | IR Contact: Ehud Helft, Gavriel Frohwein, GK Investor Relations, Tel: 1-646-201-9246, elbitsystems@gkir.com |
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.
(FINANCIAL TABLES TO FOLLOW)
| ELBIT SYSTEMS LTD. | |||
| CONSOLIDATED BALANCE SHEETS | |||
| (In thousands of US Dollar) | |||
| As of December 31, 2021 Audited | As of December 31, 2020 Audited | ||
| Assets | |||
| Cash and cash equivalents | $ 258,993 | $ 278,794 | |
| Short-term bank deposits | 1,185 | 1,524 | |
| Trade and unbilled receivables and contract assets, net | 2,770,124 | 2,519,562 | |
| Other receivables and prepaid expenses | 279,228 | 156,330 | |
| Inventories, net | 1,670,474 | 1,316,688 | |
| Total current assets | 4,980,004 | 4,272,898 | |
| Investments in affiliated companies, partnerships and other companies | 182,553 | 184,338 | |
| Long-term trade and unbilled receivables and contract assets | 316,074 | 312,097 | |
| Long-term bank deposits and other receivables | 133,505 | 69,269 | |
| Deferred income taxes, net | 65,274 | 118,513 | |
| Severance pay fund | 301,192 | 293,716 | |
| Total | 998,598 | 977,933 | |
| Operating lease right of use assets | 416,383 | 423,088 | |
| Property, plant and equipment, net | 902,684 | 786,972 | |
| Goodwill and other intangible assets, net | 2,019,675 | 1,597,006 | |
| Total assets | $ 9,317,344 | $ 8,057,897 | |
| Liabilities and Equity | |||
| Short-term bank credit and loans | $ 27,676 | $ 312,993 | |
| Current maturities of long-term loans and Series B, C and D Notes | 78,682 | 17,972 | |
| Operating lease liabilities | 76,778 | 65,520 | |
| Trade payables | 1,023,679 | 1,007,237 | |
| Other payables and accrued expenses | 1,314,321 | 1,218,273 | |
| Contract liabilities | 1,502,955 | 1,000,159 | |
| Total | 4,024,091 | 3,622,154 | |
| Long-term loans, net of current maturities | 356,624 | 408,820 | |
| Series B, C and D Notes, net of current maturities | 528,324 | — | |
| Employee benefit liabilities | 884,353 | 914,364 | |
| Deferred income taxes and tax liabilities, net | 141,451 | 132,442 | |
| Contract liabilities | 293,984 | 169,073 | |
| Operating lease liabilities | 386,644 | 397,936 | |
| Other long-term liabilities | 155,610 | 181,741 | |
| Total | 2,746,990 | 2,204,376 | |
| Elbit Systems Ltd.'s equity | 2,531,635 | 2,218,154 | |
| Non-controlling interests | 14,628 | 13,213 | |
| Total equity | 2,546,263 | 2,231,367 | |
| Total liabilities and equity | $ 9,317,344 | $ 8,057,897 |
| ELBIT SYSTEMS LTD. | |||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||
| (In thousands of US Dollars, except for share and per share amounts) | |||||||
| Year ended December 31, 2021 Audited | Year ended December 31, 2020 Audited | Three months ended December 31, 2021 Unaudited | Three months ended December 31, 2020 Unaudited | ||||
| Revenues | $ 5,278,521 | $ 4,662,572 | $ 1,494,273 | $ 1,377,732 | |||
| Cost of revenues | 3,920,473 | 3,497,465 | 1,119,924 | 1,019,899 | |||
| Gross profit | 1,358,048 | 1,165,107 | 374,349 | 357,833 | |||
| Operating expenses: | |||||||
| Research and development, net | 395,087 | 359,745 | 113,950 | 109,062 | |||
| Marketing and selling, net | 291,751 | 290,703 | 80,754 | 81,226 | |||
| General and administrative, net | 267,362 | 223,935 | 72,373 | 62,920 | |||
| Other operating income, net | (14,660) | (34,963) | — | — | |||
| Total operating expenses | 939,540 | 839,420 | 267,077 | 253,208 | |||
| Operating income | 418,508 | 325,687 | 107,272 | 104,625 | |||
| Financial expenses, net | (40,393) | (71,270) | (19,614) | (32,525) | |||
| Other income (expense), net | 5,336 | 7,408 | 9,677 | (7,332) | |||
| Income before income taxes | 383,451 | 261,825 | 97,335 | 64,768 | |||
| Taxes on income | (131,387) | (36,443) | (92,175) | (1,878) | |||
| Income after taxes on income | 252,064 | 225,382 | 5,160 | 62,890 | |||
| Equity in net earnings of affiliated companies and partnerships | 22,599 | 12,604 | 3,123 | 5,025 | |||
| Net income | $ 274,663 | $ 237,986 | $ 8,283 | $ 67,915 | |||
| Less: net income attributable to non-controlling interests | (313) | (328) | (96) | (93) | |||
| Net income attributable to Elbit Systems Ltd.'s shareholders | $ 274,350 | $ 237,658 | $ 8,187 | $ 67,822 | |||
| Earnings per share attributable to Elbit Systems Ltd.'s shareholders: | |||||||
| Basic net earnings per share | $ 6.21 | $ 5.38 | $ 0.19 | $ 1.53 | |||
| Diluted net earnings per share | $ 6.20 | $ 5.38 | $ 0.18 | $ 1.53 | |||
| Weighted average number of shares used in computation of: | |||||||
| Basic earnings per share (in thousands) | 44,204 | 44,198 | 44,213 | 44,198 | |||
| Diluted earnings per share (in thousands) | 44,278 | 44,215 | 44,350 | 44,198 |
| ELBIT SYSTEMS LTD. | |||
| CONSOLIDATED STATEMENTS OF CASH FLOW | |||
| (In thousands of US Dollars) | |||
| Year ended December 31, 2021 Audited | Year ended December 31, 2020 Audited | ||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net income | $ 274,663 | $ 237,986 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 153,091 | 144,420 | |
| Write-off impairment | — | 7,932 | |
| Stock-based compensation | 5,312 | 4,086 | |
| Amortization of Series A, B, C and D related issuance costs, net | 399 | (46) | |
| Deferred income taxes and reserve, net | 39,095 | (5,345) | |
| Gain on sale of property, plant and equipment | (14,457) | (34,926) | |
| Gain on sale of investment, remeasurement of investment held under fair value method | (15,153) | (23,572) | |
| Equity in net (earnings) losses of affiliated companies and partnerships, net of dividend received (*) | 7,724 | (7,853) | |
| Changes in operating assets and liabilities, net of amounts acquired: | |||
| Increase in short and long-term trade and unbilled receivables and prepaid expenses | (430,296) | (508,057) | |
| Increase in inventories, net | (336,221) | (69,762) | |
| Increase in trade payables and other payables and accrued expenses | 105,201 | 143,847 | |
| Severance, pension and termination indemnities, net | 9,834 | 31,394 | |
| Increase in contract liabilities | 617,740 | 358,730 | |
| Net cash provided by operating activities | 416,932 | 278,834 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Purchase of property, plant and equipment and other assets | (188,624) | (132,210) | |
| Acquisition of subsidiaries and business operations, net of cash consumed | (385,011) | 218 | |
| Deferred payment on acquisition | (60,560) | — | |
| Investments in affiliated companies and other companies, net | (1,828) | (8,212) | |
| Proceeds from sale of property, plant and equipment | 25,745 | 71,933 | |
| Proceeds from sale of investments | 16,177 | 44,200 | |
| Proceeds from sale of (investment in) long-term deposits, net | 481 | 221 | |
| Investment in short-term deposits | (435) | (683) | |
| Proceeds from sale of short-term | 6,334 | 1,666 | |
| Net cash used in investing activities | (587,721) | (22,867) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Proceeds from exercise of options | 20 | — | |
| Repayment of long-term loans | (536,062) | (370,367) | |
| Proceeds from long-term bank loans | 476,273 | 201,551 | |
| Issuance of series B, C, D Notes, net of issuance costs | 575,249 | — | |
| Repayment of Series A Notes | — | (55,532) | |
| Dividends paid | (79,175) | (78,194) | |
| Change in short-term bank credit and loans, net | (285,317) | 104,309 | |
| Net cash provided by (used in) financing activities | 150,988 | (198,233) | |
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (19,801) | 57,734 | |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR | 278,794 | 221,060 | |
| CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR | 258,993 | 278,794 | |
| (*) Dividend received from affiliated companies and partnerships | $ 30,323 | $ 9,151 |
| ELBIT SYSTEMS LTD. |
| DISTRIBUTION OF REVENUES |
| (In millions of US Dollars) |
ELBIT SYSTEMS REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS
/PRNewswire/ -- Elbit Systems Ltd. ("Elbit Systems" or the "Company") (NASDAQ: ESLT) (TASE: ESLT), the international high technology company, reported today...
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Rafael concludes FY 2021 with a high in sales of $3.1 billion
Rafael Advanced Defense Systems has released its financial results for the 2021 fiscal year as was approved by the company's Board of Directors, with a total of $3.075 billion in sales, and a net profit of $133 million.
In 2021, Rafael registered over 4.7 billion dollars in orders, and its order backlog was 7.1 billion dollars, equivalent to 2.5 years of sales activity. For the first time, Rafael incorporated the financial reports of its subsidiaries Aeronautics and Controp.
Rafael's chairman, Dr. Uzi Landau: "Rafael succeeded also in the challenging and complex year to continue serving as a key pillar in the country's security, with a crucial contribution to the IDF and the entire defence establishment. Our investment in R&D and our coveted human resources - our employees – is what allows us to achieve the technological, operational breakthroughs alongside the marketing and business related achievements around the world; For all of the aforementioned, we are grateful and appreciate the work of our employees and partners in Israel and around the world. On behalf of the board of directors, I would like to thank the company's employees and their families for this successful year."
Rafael's President & CEO, Maj. Gen. Yoav Har-Even said: "2021 was a very successful year in all industry related aspects which was well demonstrated in the financial achievements recorded even in light of the challenging circumstances; whether it be the impact of the ongoing COVID-19 pandemic on the global economy, the disruption of the global supply chain, or the erosion of the Shekel-to-Dollar exchange rates. Continued investment in restoration and improvements, in the support and recruitment of manpower, the investment in research and development together with the right approach to the marketing and operational issues, allowed us to realise our goals and face the global and national challenges set before us, and will certainly better our ability to operate in light of the security and political situation we are currently experiencing. But more than all else, Rafael is the central anchor of the State of Israel's national security and a significant contributor to the economy, the society and to employment, especially in the country's north.
“Also this year, we continued to ensure and enable the technical-operational superiority of the IDF and the defence establishment as a whole; which was further reflected in the fact that during Operation Guardian of the Walls, we once again saw the extraordinary commitment, dedication and professionalism of Rafael's employees. Our employees have been and will continue to be the driving force powering the machine that is the spirit and energy of Rafael."
Press Releases
Israel Aerospace Industries Marks Most Profitable Year in Company History
Mar 16, 2022IAI sets record profit margin for 3rd year straight
Highest annual sales since Company inception of approx. USD 4.5 billionRecord annual income of USD 148 million
Highest growth in Company history in EBITDA of 10% to approx. USD 436 million
Leap in order backlog to approx. USD 13.4 billion
- Growth in sales to approx. USD 4,477 million compared with approx. USD 4,184 million in 2020
- 11% increase in net income to approx. USD 148 million compared with net income of approx. USD 133 million in 2020
- 10% growth in annual EBITDA to approx. USD 436 million compared with approx. USD 397 million in 2020
- Gross profit in 2021 increased by USD 31 million, to approx. USD 696 million in 2021 compared with approx. USD 665 million in 2020
- 11% growth in annual operating profit to approx. USD 217 million compared with approx. USD 195 million in 2020
- 5% increase in R&D activity (in-house and contracted) in 2021 to approx. USD 1,083 million compared with approx. USD 1,036 million in 2020
- Leap in order backlog to approx. USD 13.4 billion, representing 3 years of operation, compared with approx. USD 12.6 billion at the end of 2020
- Free cash flow of approx. USD 905 million
Boaz Levy, IAI President and CEO: "This is the third consecutive year of record profit at IAI. This past year, the company has deepened its business activities in new markets and strengthened its position as a global leader in providing advanced technological solutions. This is a challenging period across the world. Despite the business challenges that emerged from the COVID-19 pandemic, we maintained close relations with our partners worldwide and built new global collaborations. Yet the world is currently facing challenges that will have a long-term impact. At this time, the importance and necessity for advanced and operational air defense systems is rising, and we are working closely with our customers to deliver our products as quickly as possible. IAI is a security and economic anchor for the State of Israel, and a source of innovation and technological know-how for our customers across the world. During this period, the responsibility imposed on the company management and employees is doubled, changing according to global needs and the pandemic, and we will lead the company to more growth. Together, we have achieved IAI's most profitable year since its inception.”
Israel Aerospace Industries Ltd., a leader in the Israeli military and commercial defense and aerospace markets, issues its consolidated financial statements for the year which ended December 31, 2021:
The Company's revenues in 2021 amounted to approx. USD 4,477 million compared with approx. USD 4,184 million in 2020, an increase of approx. USD 293 million (approx. 7%), mainly deriving from the increased sales in the Systems Missiles & Space Group and in the Military Aircraft Group.
The sales of the Military Groups (*) in 2021 increased by about 10% to approx. USD 3,867 million compared with approx. USD 3,508 million in 2020, an increase of approx. USD 359 million. The sales of the Aviation Group in 2021 increased by about 1% to approx. USD 1,196 million compared with approx. USD 1,187 million in 2020, an increase of approx. USD 9 million.
Sales for export in 2021 totaled approx. USD 3,219 million (about 72%) and sales to the local market totaled approx. USD 1,258 million (about 28%), compared with approx. USD 2,991 million (about 71%) and approx. USD 1,193 million (about 29%) in 2020, respectively.
Net income in 2021 increased by 11% to approx. USD 148 million (about 3.3% of sales), compared with net income of approx. USD 133 million in 2020 – the highest net income in IAI history. The net income of the Military Groups (*) in 2021 increased by about 8% to approx. USD 268 million compared with approx. USD 248 million in 2020, an increase of approx. USD 20 million. The net loss of the Aviation Group (*) in 2021 amounted to approx. USD 27 million compared with a net loss of approx. USD 32 million in 2020.
EBITDA in 2021 amounted to approx. USD 436 million, compared with approx. USD 397 million in 2020, an increase of 10% since 2020.
Gross profit in 2021 amounted to approx. USD 696 million (about 16% of sales), compared with approx. USD 665 million in 2020 (about 16% of sales), an increase of approx. USD 31 million, mostly deriving from the increased sales and profit of the Systems Missiles & Space Group, partly offset by the decrease in the profits of the Aviation Group. The gross profit of the Military Groups (*) in 2021 increased by about 10% to approx. USD 659 million compared with approx. USD 598 million in 2020 – an increase of approx. USD 61 million. The gross profit of the Aviation Group (*) in 2021 decreased to approx. USD 59 million compared with approx. USD 78 million in 2020.
Operating profit in 2021 increased by about 11% to approx. USD 217 million (about 4.8% of sales), compared with operating profit of approx. USD 195 million in 2020 (about 4.7% of sales), an increase of approx. USD 22 million, mostly deriving from the increase in gross profit and in other income and the decrease in employee retirement expenses. The operating profit of the Military Groups (*) in 2021 increased by 7% to approx. USD 306 million compared with approx. USD 285 million in 2020, an increase of approx. USD 21 million. The operating loss of the Aviation Group (*) in 2021 amounted to approx. USD 15 million compared with a loss of approx. USD 10 million in 2020.
Net financial expenses amounted to approx. USD 29 million in 2021, compared with net financial expenses of approx. USD 21 million in 2020, an increase of approx. USD 8 million. The increase in expenses mainly stems from recording exchange rate valuation losses in 2021 compared with exchange rate valuation gains in 2020 and from a decrease on the return on marketable financial assets and deposits. This increase was partly offset by a decrease in bank commissions and a decrease in interest expenses on bonds, as well as by income recorded on an investee investment component measured at fair value.
Research and Development activity (in-house and contracted) in 2021 grew to approx. USD 1,083 million, compared with approx. USD 1,036 million in 2020, an increase of about 5% since 2020.
In-house R&D expenses in 2021 grew to approx. USD 204 million, compared with approx. USD 196 million in 2020 (accounting for about 4.6% and 4.7% of sales, respectively), an increase of approx. USD 8 million.
Net tax expenses in 2021 amounted to approx. USD 46 million, similarly to 2020. It should be noted that the Company’s income is subject to ordinary corporate tax rate of 23% in Israel and the Company is not entitled to any tax benefits pursuant to the Israeli Law for the Encouragement of Capital Investments, 1959, as it is a wholly government-owned company. The divestiture of any interests in the Company, even at a miniscule rate, to a non-government party will render the Company eligible for a reduced corporate income tax rate as per said Law.
The order backlog at the end of 2021 amounted to approx. USD 13.4 billion, compared to approx. USD 12.6 billion at the end of 2020. 78% of the order backlog is held for sale to foreign customers that are widely geographically dispersed, based on a large variety of projects, and secures 3 years of operations given the current sales volumes.
Cash flows: in 2021, the Company recorded positive cash flows from operating activities of approx. USD 146 million compared with positive cash flows from operating activities of approx. USD 40 million in 2020.
Main data for Q4 2021
The Company's sales in Q4 2021 amounted to USD 1,272 million, compared with USD 1,100 million in Q4 2020, an increase of approx. 16%.Gross profit in Q4 2021 amounted to USD 196 million (15.4% of sales), compared with USD 200 million (18.2% of sales) in Q4 2020.
Operating profit in Q4 2021 amounted to USD 27 million (2.1% of sales), compared with operating profit of about USD 32 million (2.9% of sales) in Q4 2020.
R&D expenses in Q4 2021 amounted to approx. USD 77 million, compared with USD 79 million in Q4 2020.
Net finance expenses in Q4 2021 amounted to USD 7 million, similarly to Q4 2020.
Net income in Q4 2021 amounted to USD 17 million (1.3% of sales), compared with net income of USD 21 million (1.9% of sales) in Q4 2020.
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