Edgar Filing: ELBIT SYSTEMS LTD

f6k-11162010.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the Month of November 2010

_______________________

Commission File Number 000-28998

ELBIT SYSTEMS LTD.

(Translation of Registrant’s Name into English)

Advanced Technology Center, P.O.B. 539, Haifa 31053, Israel

(Address of Principal Corporate Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F

Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Note : Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Note : Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: o

Yes

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-______________

Attached hereto as Exhibit 1 and incorporated herein by reference is the Registrant’s press release dated November 16, 2010.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ELBIT SYSTEMS LTD. (Registrant)
	By:	/s/ Ronit Zmiri
	Name:	Ronit Zmiri
	Title:	Corporate Secretary

Dated: November 16, 2010

EXHIBIT INDEX

Exhibit No.	Description
1.	Press Release dated November 16, 2010

Exhibit 1

ELBIT SYSTEMS REPORTS

THIRD QUARTER 2010 RESULTS

Backlog of orders increased to $5.38 billion;

Revenues at $649.9 million; Net income at $45.3 million;

Diluted net earnings per share at $1.05

Haifa, Israel, November 16, 2010 – Elbit Systems Ltd. (the "Company") (NASDAQ and TASE: ESLT), the international defense electronics company, today reported its consolidated financial results for the third quarter ended September 30, 2010.

Revenues in the third quarter of 2010 were $649.9 million, as compared to $732.5 million in the third quarter of 2009. The decrease in revenues during the third quarter of 2010, compared with that of the third quarter last year, was mainly in the electro-optics and armored vehicle systems areas of operations, primarily in Europe.

Gross profit amounted to $197.9 million (30.5% of revenues) in the third quarter of 2010, as compared to $217.3 million (29.7% of revenues) in the third quarter of 2009. The decrease in the amount of gross profit from that of the corresponding quarter last year primarily resulted from the reduction in revenues. The improvement in margins was mainly a result of mix of the programs sold in the quarter and improvements in operations.

Research and development expenses, net were $56.1 million (8.6% of revenues) in the third quarter of 2010, as compared to $56.0 million (7.6% of revenues) in the third quarter of 2009.

Marketing and selling expenses were $59.1 million (9.1% of revenues) in the third quarter of 2010, as compared to $67.1 million (9.2% of revenues) in the third quarter of 2009.

General and administrative expenses were $30.2 million (4.7% of revenues) in the third quarter of 2010, as compared to $28.5 million (3.9% of revenues) in the third quarter of 2009.

Financial expenses, net were $5.5 million in the third quarter of 2010, as compared to net financial expenses of $0.6 million in the third quarter of 2009, which were relatively low due to currency hedging related gains.

Taxes on income were $4.8 million (effective tax rate of 10.1%) in the third quarter of 2010, as compared to taxes on income of $11.4 million (effective tax rate of 17.6%) in the third quarter of 2009. The change in the effective tax rate was attributable mainly to the mix of the tax rates in the various jurisdictions in which the Company's entities generate taxable income.

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Equity in net earnings of affiliated companies and partnerships was $3.9 million (0.6% of revenues) in the third quarter of 2010, as compared to $6.2 million (0.8% of revenues) in the third quarter of 2009.

Net income attributable to non-controlling interests was $1.1 million in the third quarter of 2010, as compared to $1.4 million in the third quarter of 2009.

Net income attributable to the Company's ordinary shareholders in the third quarter of 2010 amounted to $45.3 million (7.0% of revenues), as compared to $58.3 million (8.0% of revenues) for the third quarter of 2009.

Diluted net earnings per share attributable to the Company’s ordinary shareholders were $1.05 for the third quarter of 2010, as compared with $1.35 for the third quarter of 2009.

The Company’s backlog of orders increased to $5,381 million as of September 30, 2010, as compared with $5,044 million as of December 31, 2009. Approximately 72% of the backlog relates to orders outside of Israel. Approximately 52% of the Company's backlog as of September 30, 2010, is scheduled to be performed during the last quarter of 2010 and in 2011.

Operating cash flow was $73.6 million in the first nine months of 2010, as compared to $127.0 million in the first nine months of 2009.

Recent Events:

On October 3, 2010, the Company announced that it was awarded an approximately $56 million tank upgrade contract from a customer in Asia. Under the contract, the tank upgrade project will include the installation of advanced battle management systems, as well as cutting edge observation and surveillance systems. The project will be completed within two years.

On October 13, 2010, the Company announced that its wholly-owned U.S. subsidiary, Elbit Systems of America, LLC ("ESA"), was awarded a five-year, $68 million Indefinite Delivery/Indefinite Quantity ("ID/IQ") contract from the U.S. Army Contracting Command in Huntsville, Alabama to supply the U.S. Army, Navy, Marine Corps and Coast Guard with AN/AVS-7 Head-Up Display components including the Company's latest Flat Panel Day and Night Head-Up Display units. Initial delivery orders totaling $23 million were awarded under the ID/IQ contract. This is a follow-on contract to a $75M ID/IQ contract awarded in September 2005.

On October 17, 2010, the Company announced, further to its announcements of June 15, 2009, September 14, 2009 and September 2, 2010, that it completed the acquisition of all the shares of Soltam Systems Ltd. ("Soltam"), Saymar Ltd. ("Saymar") and ITL Optronics Ltd. ("ITL") that were held by Mikal Ltd. ("Mikal") and its subsidiaries. With the completion of the acquisition, the Company now holds a 100% interest in Soltam and Saymar, and an 87.85% interest in ITL. The balance of ITL's shares, which are traded on the Tel Aviv Stock Exchange, is held by the public. An amount of approximately $26 million of the purchase price payable by the Company for the acquisition was placed in escrow with respect to various matters pursuant to the purchase agreement. Simultaneously to the completion of the acquisition, the Company sold its holdings in Mikal (approximately 19%) to the other Mikal's shareholders.

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On October 24, 2010, the Company announced that its UK Company with Thales UK - UAS Tactical Systems Ltd. ("U-TacS"), was awarded by Thales UK a follow-on Urgent Operating Capability ("UOR") contract worth approximately $70 million to provide an Intelligence, Surveillance, Target Acquisition and Reconnaissance support capability for the UK Armed Forces. The contract will be performed over the next one and a half years. As was the case with the previous U-TacS UOR contracts, awarded in 2007 and 2009, this contract also includes the provision and support of Hermes(R) 450 UAS, as well as training for UK Ministry of Defence staff in the use and maintenance of the system, and the provision of contractor logistic support and program management services. This work will be managed by U-TacS located in Leicester, UK.

On October 26, 2010, the Company announced that its wholly-owned U.S. subsidiary, ESA, was awarded a $45.5 million ID/IQ contract from the Naval Surface Warfare Center, Crane Division, Crane, Indiana for the supply of the Night Targeting System Upgrade (NTSU) and associated line items for AH - 1W Cobra helicopters. Work will be performed in Merrimack, New Hampshire and is expected to be completed over the next five years.

Management Comment:

The President and CEO of Elbit Systems, Joseph Ackerman, commented: "2010 has been a challenging year, reflecting the influence of the changing financial climate on our end-customers. Throughout this year, we have invested in our longer-term growth strategy through mergers and acquisitions, which provide us access to new markets and allow us to sell increasingly integrated systems. We have recently completed the acquisition of Soltam, Saymar and ITL, adding to our capabilities in artillery platforms and electro-optics. We will continue to look globally for similar opportunities, in strategic target markets such as the U.S. and others."

Ackerman added, "Over the past challenging months, we have focused our efforts and have successfully maintained and even improved our gross margins, and have also resumed our backlog growth. We believe that these efforts and investments will support renewed growth in future years."

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Dividend:

The Board of Directors declared a dividend of $0.36 per share for the third quarter of 2010. The dividend’s record date is November 30, 2010, and the dividend will be paid on December 13, 2010, net of taxes and levies, at the rate of 20%.

Conference Call:

The Company will be hosting a conference call later the same day, Tuesday November 16, 2010 at 09:00a.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: 1 888 668 9141

UK Dial-in Number: 0 800 917 9141

ISRAEL Dial-in Number: 03 918 0644

INTERNATIONAL Dial-in Number: +972 3 918 0644

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

1 888 326 9310 (US) or +972 3 925 5901 (Israel and International).

About Elbit Systems:

Elbit Systems Ltd. is an international defense electronics company engaged in a wide range of 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 ("UAS"), advanced electro-optics, electro-optic space systems, EW suites, airborne warning systems, SIGINT systems, data links and military communications systems and radios. The Company also focuses on the upgrading of existing military platforms, developing new technologies for defense, homeland security and commercial aviation applications and providing a range of support services.
For additional information, visit: http://www.elbitsystems.com.

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Attachments:

Consolidated balance sheets

Consolidated statements of income

Condensed consolidated statements of cash flow

Consolidated revenue distribution by areas of operation and by geographical regions

Company Contact

Joseph Gaspar, Executive VP & CFO

Dalia Rosen, VP, Head of Corporate Communications

Elbit Systems Ltd.

Tel: +972-4-831-6663 / Fax: +972-4-831-6944

E-mail: j.gaspar@elbitsystems.com

Dalia.rosen@elbitsystems.com

IR Contact

Ehud Helft

Kenny Green

CCG Investor Relations

Tel: 1-646-201-9246

E-mail: elbitsystems@ccgisrael.com

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 1934, 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.

(FINANCIAL TABLES TO FOLLOW)

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ELBIT SYSTEMS LTD.

CONSOLIDATED BALANCE SHEETS

(In thousands of US Dollars)

	September 30,		December 31,
	2010		2009
	Unaudited		Audited
Assets
Cash and cash equivalents	$	255,046	$	140,709
Short-term bank deposits		117,837		115,924
Available for sale marketable securities		15,707		23,639
Trade receivables, net		653,082		659,524
Other receivables and pre-paid expenses		169,307		115,856
Inventories, net of customer advances		620,891		569,848
Total current assets		1,831,870		1,625,500

Investment in affiliated companies, partnership and other companies		100,047		88,759
Available for sale marketable securities		8,161		12,941
Long-term bank deposits and other receivables		71,795		36,338
Deferred income taxes, net		13,052		7,992
Severance pay fund		287,241		274,136
		480,296		420,166
Property, plant and equipment, net		445,167		404,675
Goodwill and other intangible assets, net		614,976		603,336
Total assets	$	3,372,309	$	3,053,677

Liabilities and Shareholders' Equity
Current maturities of long-term loans and Series A Notes	$	39,484	$	2,663
Trade payables		317,005		299,238
Other payables and accrued expenses		547,831		552,806
Customer advances in excess of costs incurred on contracts in progress		333,618		367,137
Total current liabilities		1,237,938		1,221,844

Long-term loans, net of current maturities		295,089		386,534
Series A Notes		270,045		-
Accrued termination liability		368,321		351,278
Deferred income taxes and tax liabilities, net		59,024		59,602
Customer advances in excess of costs incurred on contracts in progress		139,353		142,566
Other long-term liabilities		33,987		34,659
		1,165,819		974,639

Elbit Systems Ltd.'s shareholders' equity		938,040		832,868
Non-controlling interests		30,512		24,326
Total shareholders' equity		968,552		857,194
Total liabilities and shareholders' equity	$	3,372,309	$	3,053,677

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ELBIT SYSTEMS LTD.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands of US Dollars, except for share and per share amounts)

	Nine Months Ended September 30						Three Months Ended September 30						Year Ended December 31
	2010			2009			2010			2009			2009
	Unaudited												Audited
Revenues	$	1,871,384		$	2,117,741		$	649,906		$	732,520		$	2,832,437
Cost of revenues		1,305,372			1,480,302			452,000			515,219			1,982,954
Gross profit		566,012			637,439			197,906			217,301			849,483

Operating expenses:
Research and development, net		165,660			154,910			56,149			56,022			216,752
Marketing and selling		164,053			191,561			59,122			67,096			250,963
General and administrative		90,369			86,805			30,228			28,519			119,311
Other income, net		(4,756	)		-			-			-			-
Total operating expenses		415,326			433,276			145,499			151,637			587,026

Operating income		150,686			204,163			52,407			65,664			262,457

Financial expenses, net		(9,658	)		(8,165	)		(5,521	)		(564	)		(15,585	)
Other income (expenses), net		13,439			(868	)		350			(222	)		458
Income before taxes on income		154,467			195,130			47,236			64,878			247,330
Taxes on income		21,606			37,696			4,791			11,448			38,109
		132,861			157,434			42,445			53,430			209,221

Equity in net earnings of affiliated companies and partnership		13,205			14,395			3,905			6,202			19,292
Consolidated net income	$	146,066		$	171,829		$	46,350		$	59,632		$	228,513

Less: net income attributable to non-controlling interests		(6,254	)		(10,598	)		(1,099	)		(1,377	)		(13,566	)
Net income attributable to Elbit Systems Ltd.'s shareholders	$	139,812		$	161,231		$	45,251		$	58,255		$	214,947
Earnings per share attributable to Elbit Systems Ltd.'s ordinary shareholders:

Basic net earnings per share	$	3.27		$	3.82		$	1.06		$	1.37		$	5.08
Diluted net earnings per share	$	3.23		$	3.76		$	1.05		$	1.35		$	5.00
Weighted average number of shares used in computation of basic earnings per share		42,631			42,241			42,671			42,426			42,305
Weighted average number of shares used in computation of diluted earnings per share		43,226			42,897			43,165			43,233			42,983

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ELBIT SYSTEMS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOW

(In thousands of US Dollars)

	Nine Months Ended September 30,						Year Ended December 31,
	2010			2009			2009
	(Unaudited)						(Audited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	146,066		$	171,829		$	228,513
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		93,669			93,189			123,473
Write-off impairment		717			-			3,017
Stock based compensation		4,254			3,839			5,134
Amortization of Series A Notes discount and deferred financing costs		103			-			-
Deferred income taxes and reserve		(9,068	)		(4,824	)		7,606
Severance, pension and termination indemnities, net		2,129			(13,203	)		(16,773	)
Gain on sale of property, plant and equipment		(1,978	)		(468	)		(723	)
Gain on sale of investments		(19,178	)		(120	)		(2,734	)
Equity in net earnings of affiliated companies and partnership, net of dividend received(*)		(4,735	)		(2,668	)		(1,824	)
Change in operating assets and liabilities:
Increase in short and long-term trade receivables, and prepaid expenses		(65,959	)		(41,871	)		(136,224	)
Decrease (increase) in inventories, net		(48,282	)		44,913			75,431
Decrease (increase) in trade payables, other payables and accrued expenses		12,745			(8,233	)		20,223
Decrease in advances received from customers		(36,843	)		(115,360	)		(95,397	)
Net cash provided by operating activities		73,640			127,023			209,722

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		(105,397	)		(78,054	)		(107,893	)
Acquisition of subsidiaries and business operations		(34,566	)		(124,033	)		(48,234	)
Investments in affiliated companies and other companies		(1,192	)		(21,794	)		(19,415	)
Proceeds from sale of property, plant and equipment		7,732			6,972			9,055
Proceeds from sale of investments		12,751			-			33,026
Investment in available for sales debt-securities and long-term deposits, net		5.006			(11,272	)		(11,010	)
Investment in short-term deposits, net		6,387			(40,946	)		(52,832	)
Net cash used in investing activities		(109,279	)		(269,127	)		(197,303	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options		4,084			11,340			9,871
Purchase of non-controlling interests		-			-			(110,250	)
Repayment of long-term bank loans		(246,146	)		(68,159	)		(148,652	)
Proceeds from issuance of Series A Notes, net		283,213			-			-
Deferred financing costs related to issuance of Senior A Notes		(2,185	)		-			-
Receipt of long-term bank loans		159,000			217,115			256,354
Dividends paid		(47,990	)		(60,897	)		(76,172	)
Change in short-term bank credit and loans, net		-			(7,436	)		(7,531	)
Net cash provided by (used in) financing activities		149,976			91,963			(76,380	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		114,337			(50,141	)		(63,961	)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		140,709			204,670			204,670
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	$	255,046		$	154,529		$	140,709
* Dividend received	$	8,689		$	11,727		$	17,468

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ELBIT SYSTEMS LTD.

DISTRIBUTION OF REVENUES

CONSOLIDATED REVENUE BY AREAS OF OPERATION:

	Nine Months Ended September 30								Three Months Ended September 30
	2010				2009				2010				2009
	$ millions		%		$ millions		%		$ millions		%		$ millions		%
Airborne systems		552.3		29.5		513.3		24.2		194.2		29.9		166.7		22.8
Land systems		312.7		16.7		384.4		18.2		94.2		14.5		132.2		18.0
C4ISR systems		674.1		36.0		819.7		38.7		266.8		41.1		289.6		39.6
Electro-optics		243.3		13.0		307.9		14.5		75.0		11.5		117.5		16.0
Other (mainly non-defense engineering and production services)		89.0		4.8		92.4		4.4		19.7		3.0		26.5		3.6
Total		1,871.4		100.0		2,117.7		100.0		649.9		100.0		732.5		100.0

CONSOLIDATED REVENUES BY GEOGRAPHICAL REGIONS:

	Nine Months Ended September 30								Three Months Ended September 30
	2010				2009				2010				2009
	$ millions		%		$ millions		%		$ millions		%		$ millions		%
Israel		458.8		24.5		468.3		22.1		182.5		28.1		167.5		22.9
United States		589.6		31.5		603.1		28.5		187.8		28.9		209.7		28.6
Europe		390.2		20.9		550.8		26.0		116.4		17.9		201.2		27.5
Other countries		432.8		23.1		495.5		23.4		163.2		25.1		154.1		21.0
Total		1,871.4		100.0		2,117.7		100.0		649.9		100.0		732.5		100.0

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