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Elbit Systems Reports Q1 2023 Results
May 30, 2023 | PRNewswireEstimated reading time: 4 minutes
Elbit Systems Ltd., the international high technology defense company, reported its consolidated results for the quarter ended March 31, 2023.
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 3 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:
"The financial results in the first quarter reflect the demand for our portfolio of technologically advanced and relevant solutions that resulted in a record order backlog of $15.8 Billion, an increase of 16% compared to the first quarter of 2022.
We continue to invest in our people, new and legacy facilities, and R&D to deliver the order backlog and realize the significant potential created by the growth in defense budgets around the world.
I am confident that the sustained demand for our solutions and our operational improvement activities will support the successful implementation of Elbit Systems' long term strategy."
First quarter 2023 results:
Revenues in the first quarter of 2023 were $1,393.5 million, as compared to $1,352.8 million in the first quarter of 2022.
Aerospace revenues decreased by 10%, to $420.8 million in the first quarter of 2023 from $465.0 million in the first quarter of 2022, mainly due to lower airborne precision guided munition sales partially offset by growth of Training & Simulation sales.
C4I and Cyber revenues increased by 19%, to $175.7 million in the first quarter of 2023 from $148.0 million in the first quarter of 2022, mainly due to growth in Command & Control systems sales.
ISTAR and EW revenues increased by 17%, to $294.7 million in the first quarter of 2023 from $251.5 million in the first quarter of 2022, mainly due to Electronic Warfare systems sales.
Land revenues increased by 8%, to $301.4 million in the first quarter of 2023 from $279.4 million in the first quarter of 2022, mainly due to armored vehicle upgrade sales.
Elbit Systems of America's revenues were $345.3 million in the first quarter of 2023 compared to $343.9 million in the first quarter of 2022.
For distribution of revenues by segments and geographic regions see the tables on page 11.
Non-GAAP gross profit amounted to $368.5 million (26.4% of revenues) in the first quarter of 2023, as compared to $333.3 million (24.6% of revenues) in the first quarter of 2022. GAAP gross profit in the first quarter of 2023 was $361.5 million (25.9% of revenues), as compared to $326.9 million (24.2% of revenues) in the first quarter of 2022. The GAAP and Non-GAAP gross profit in the first quarter of 2022 included expenses of approximately $20 million related to the effect of the significant increase in the Company's share price on employees' stock price linked compensation plans.
Research and development expenses, net were $110.3 million (7.9% of revenues) in the first quarter of 2023, as compared to $100.7 million (7.4% of revenues) in the first quarter of 2022.
Marketing and selling expenses, net were $80.2 million (5.8% of revenues) in the first quarter of 2023, as compared to $87.0 million (6.4% of revenues) in the first quarter of 2022.
General and administrative expenses, net were $77.1 million (5.5% of revenues) in the first quarter of 2023, as compared to $84.3 million (6.2% of revenues) in the first quarter of 2022.
Non-GAAP operating income was $105.1 million (7.5% of revenues) in the first quarter of 2023, as compared to $65.8 million (4.9% of revenues) in the first quarter of 2022. GAAP operating income in the first quarter of 2023 was $93.9 million (6.7% of revenues), as compared to $58.6 million (4.3% of revenues) in the first quarter of 2022. GAAP and Non-GAAP(*) operating income in the first quarter of 2022 was reduced by expenses of approximately $35 million related to the Company's stock price linked compensation plans.
Financial expenses, net were $24.2 million in the first quarter of 2023, as compared to financial income of $1.1 million in the first quarter of 2022. The financial expenses in 2023 were higher as a result of the increase in interest rates. The financial income in the first quarter of 2022 included gains from changes in fair value of financial assets and exchange rate differences.
Taxes on income were $8.7 million in the first quarter of 2023, as compared to $8.0 million in the first quarter of 2022.
Non-GAAP net income attributable to the Company's shareholders in the first quarter of 2023 was $75.6 million (5.4% of revenues), as compared to $54.3 million (4.0% of revenues) in the first quarter of 2022. GAAP net income attributable to the Company's shareholders in the first quarter of 2023 was $62.1 million (4.5% of revenues), as compared to $52.8 million (3.9% of revenues) in the first quarter of 2022. Net income in the first quarter of 2022 was reduced by net expenses of approximately $32 million related to the Company's stock price linked compensation plans.
Non-GAAP diluted net earnings per share attributable to the Company's shareholders were $1.70 for the first quarter of 2023, as compared to $1.22 for the first quarter of 2022. GAAP diluted earnings per share attributable to the Company's shareholders in the first quarter of 2023 were $1.40, as compared to $1.19 in the first quarter of 2022. Diluted net earnings per share in the first quarter of 2022, were reduced by $0.72 as a result of the expenses related to the Company's stock price linked compensation plans.
The Company's backlog of orders as of March 31, 2023 totaled $15.8 billion. Approximately 75% of the current backlog is attributable to orders from outside Israel. Approximately 54% of the backlog is scheduled to be performed during the remainder of 2023 and 2024.
Cash flows used in operating activities in the three months ended March 31, 2023 were $73.0 million, as compared to cash flows provided by operating activities of $35.5 million in the three months ended March 31, 2022. The cash flows in the first quarter of 2023 was affected by the increase in inventories and trade receivables, offset by increased customer advances and trade payables.
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