BUSINESS NEWS

10 Mar 10. Elbit Systems Ltd. (the “Company”) (NASDAQ: ESLT, TASE: ESLT), the international defense electronics company, today reported its consolidated results for the fourth quarter and full year ended December 31, 2009.
Fourth quarter 2009 results: Revenues for the fourth quarter of 2009 increased by 2.4% to $714.7m, as compared to $697.9m in the fourth quarter of 2008. Gross profit for the fourth quarter of 2009 increased by 5.3% to $212.0m (29.7% of revenues), as compared to gross profit of $201.4m (28.9% of revenues) in the fourth quarter of 2008. Net research and development expenses for the fourth quarter of 2009 were $61.8m (8.7% of revenues), as compared to $63.9m (9.2% of revenues) in the fourth quarter of 2008. Marketing and selling expenses for the fourth quarter of 2009 were $59.4m (8.3% of revenues), as compared to $41.9m (6.0% of revenues) in the fourth quarter of 2008. The increased level of marketing and selling expenses in the quarter reflected increased efforts by the Company in pursuit of a wide range of business opportunities in various international markets. General and administrative expenses for the fourth quarter of 2009 were $32.5m (4.5% of revenues), as compared to $32.4m (4.6% of revenues) in the fourth quarter of 2008. Net financial expenses for the fourth quarter of 2009 were $7.4m, as compared to $3.8m in the fourth quarter of 2008.
Taxes on income for the fourth quarter of 2009 were $0.4m (effective tax rate of 0.8%), as compared to taxes on income of $26.3 m (effective tax rate of 17.7%) in the fourth quarter of 2008. The change in the effective tax rate was attributable mainly to the mix of the tax rates in the various tax jurisdictions in which the Company’s entities generate taxable income, as well as tax adjustments from prior years in some of the Company’s subsidiaries. Equity in net earnings of affiliated companies and partnership for the fourth quarter of 2009 decreased to $4.9m (0.7% of revenues), as compared to $6.4m (0.9% of revenues) in the fourth quarter of 2008. Net income attributable to non-controlling interests for the fourth quarter of 2009 was $3.0m, as compared to $23.3m in the fourth quarter of 2008. The decrease in net income attributable to non-controlling interests was mainly a result of the Company’s purchase during the second quarter of 2009 of the remaining 49% of Kinetics Ltd.’s shares. Subsequently, Kinetics became a wholly-owned subsidiary of Elbit Systems. During the fourth quarter of 2008, the Company sold its holdings in Mediguide Inc., a non-core subsidiary in which the Company owned a 41.3% interest on a fully diluted basis, to St. Jude Medical. The Company recorded a net income of $74.4m in the fourth quarter of 2008 from this sale. In addition, there was a one-time impairment charge of $10.5 m relating to Sandel Avionics, Inc., a U.S. company in which the Company invested $12.4 m in 2007. Thus the aggregate contribution to the 2008 fourth quarter’s results from these one-time effects was an additional $63.9m to net profit. Net income attributable to the Company’s ordinary shareholders for the fourth quarter of 2009 was $53.7m (7.5% of revenues), as compared with $105.3m (15.1% of revenues) in the fourth quarter of 2008. Excluding the gain due to Mediguide’s sale and the Sandel write-off mentioned above, net income for the fourth quarter of 2008 was $41.4m.
Diluted net earnings per share attributable to the Company’s ordinary shareholders for the fourth quarter of 2009 were $1.24, as compared with $2.48 for the fourth quarter of 2008. Excluding the above-mentioned gain due to the Mediguide sale and the Sandel write-off, earnings attributable to the Company’s ordinary shareholders was $0.98 per share for the fourth quarter of 2008.
Full year 2009 results: Revenues for the year ended December 31, 2009 increased by 7.4% to $2,832m, as compared to $2,638m in the year ended December 31, 2008. The growth in the Company’s revenues was driven by an increase