Elbit Systems Reports Record Second Quarter 2008 Results

HAIFA, Israel , August 12 /PRNewswire-FirstCall/ -- Elbit Systems Ltd. (the "Company") (NASDAQ: ESLT, TASE: ESLT), the international defense company, today reported its consolidated results for the second quarter ended June 30, 2008 .

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The Company's backlog of orders as of June 30, 2008 totaled $5,050 million, as compared with $4,922 million as of March 31, 2008 . Approximately 71% of the backlog relates to orders outside of Israel . Approximately 63% of the Company's backlog as of June 30, 2008 , is scheduled to be performed during the second half of 2008 and during 2009.

As previously announced, during the second quarter the Company reported two events that in the aggregate had minimal total net effect on net profit. These were a one-time net after tax expense provision of $10 million, related to a court ruling against a U.S. subsidiary of the Company. The other was a significant contribution to net income, due to a high level of revenues generated from the short-term delivery contract revenues in the quarter.

In comparing financial results of the second quarter 2008 to the second quarter in 2007, the following should be noted. During the second quarter of 2007, the Company completed the acquisition of Tadiran Communications Ltd. Following the acquisition, the Company recorded in the second quarter of 2007 expenses of $27.1 million, comprised of $16.6 million in In-Process Research & Development write-off expenses recorded under operating expenses, and $10.5 million in restructuring expenses recorded under cost of goods sold.

Consolidated revenues for the second quarter of 2008 increased by 39.5% to $653.2 million, from $468.2 million in the second quarter of 2007.

Gross profit for the second quarter of 2008 increased by 55.4% to $197.4 million (30.2% of revenues), as compared with gross profit, excluding expenses related to the Tadiran acquisition, of $127.0 million (27.1% of revenues) in the second quarter of 2007.

Consolidated net income for the second quarter of 2008 increased by 31.3% to $31.2 million (4.8% of revenues), as compared with net income, excluding net expenses related to the Tadiran acquisition, of $23.7 million (5.1% of revenues) in the second quarter of 2007. Diluted earnings per share for the second quarter of 2008 were $0.73, as compared with $0.56, excluding expenses related to the Tadiran acquisition, for the second quarter of 2007.

Operating Cash flow during the first six months of 2008 was $129.8 million.

The President and CEO of Elbit Systems, Joseph Ackerman , commented: "I am pleased to report another quarter of strong growth with record financial results, and very significantly, our backlog grew and crossed the $5 billion milestone. While all parts of the business are performing in accordance with plans, our subsidiaries in particular performed well and were an important factor in our improved margins this quarter."

Mr. Ackerman continued, "Company-wide, we continue to improve with sustained growth on both the top and bottom line, driven both by strong organic growth as well as the contribution through our acquisitions. Our goal of building our business into a world-class and globally diversified defense company is ever more becoming an actuality, and we remain confident of our continued success into the long-term future."

The Board of Directors declared a dividend of $0.20 per share for the second quarter of 2008. The dividend's record date is August 26, 2008 , and the dividend will be paid on September 8, 2008 , net of taxes and levies, at the rate of 16.88%.

Conference Call

The Company will also be hosting a conference call on the same day, Tuesday, August 12 , at 9am ET . 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. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

This call will 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 end of the call, investors will be able to dial a replay number to listen to the call.

The dial-in numbers are: 1-877-332-1104 (US) or +972-3-925-5948 ( Israel and International).

About Elbit Systems Ltd.

Elbit Systems Ltd. is an international defense electronics company engaged in a wide range of defense-related 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 air vehicle (UAV) systems, advanced electro-optics, electro-optic space systems, EW suites, airborne warning systems, ELINT systems, data links and military communications systems and radios. The Company also focuses on the upgrading of existing military platforms and developing new technologies for defense, homeland security and commercial aviation applications.

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.

SOURCE Elbit Systems Ltd