Artificial Intelligence

ELBIT SYSTEMS REPORTS FIRST QUARTER 2022 RESULTS

Published

2 years ago

May 24, 2022

Elbit Systems Ltd. (” Elbit Systems” or the “Company”) (NASDAQ: ESLT) (TASE: ESLT), the international high technology company, reported today its consolidated results for the quarter ended March 31, 2022.

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 4 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: “Elbit Systems is well positioned to benefit from acceleration in defense budget growth, due to its portfolio of leading technological capabilities and positions in key global defense markets. Growth in the first quarter reflects strong demand for our solutions from customers around the world.

Elbit Systems’ employee retention plans include stock price linked compensation, enhancing our ability to realize the long-term growth potential. The stock price appreciation during the first quarter resulted in a sharp increase in compensation costs related to stock price linked compensation plans for employees.

We believe the growing demand for our solutions coupled with a capable and motivated workforce will be the primary drivers of future growth and the long term success of Elbit Systems.”

First quarter 2022 results:

Revenues in the first quarter of 2022 were $1,352.8 million, as compared to $1,118.3 million in the first quarter of 2021. A major part of the growth was organic, in addition to the contribution of Sparton, which was acquired in the second quarter of 2021.

Non-GAAP^(*) gross profit amounted to $333.3 million (24.6% of revenues) in the first quarter of 2022, as compared to $286.2 million (25.6% of revenues) in the first quarter of 2021. GAAP gross profit in the first quarter of 2022 was $326.9 million (24.2% of revenues), as compared to $281.3 million (25.2% of revenues) in the first quarter of 2021. The GAAP and Non-GAAP gross profit in the first quarter of 2022 includes 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.

__________

* see page 4

Research and development expenses, net were $100.7 million (7.4% of revenues) in the first quarter of 2022, as compared to $84.3 million (7.5% of revenues) in the first quarter of 2021.

Marketing and selling expenses, net were $87.0 million (6.4% of revenues) in the first quarter of 2022, as compared to $51.5 million (4.6% of revenues) in the first quarter of 2021.

General and administrative expenses, net were $84.3 million (6.2% of revenues) in the first quarter of 2022, as compared to $61.8 million (5.5% of revenues) in the first quarter of 2021.

Other operating income, net was $3.7 million in the first quarter of 2022, as a result of capital gain from sale of part of the activities of a subsidiary in the UK.

Non-GAAP^(*) operating income was $65.8 million (4.9% of revenues) in the first quarter of 2022, as compared to $92.9 million (8.3% of revenues) in the first quarter of 2021. GAAP operating income in the first quarter of 2022 was $58.6 million (4.3% of revenues), as compared to $83.8 million (7.5% of revenues) in the first quarter of 2021. 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 income, net were $1.1 million in the first quarter of 2022, as compared to financial expenses, net of $0.2 million in the first quarter of 2021.

Other expenses, net were $1.8 million in the first quarter of 2022, as compared to $3.2 million in the first quarter of 2021. Other expenses, net in 2022 and 2021 were mainly related to non-service costs of pension plans.

Taxes on income were $8.0 million in the first quarter of 2022, as compared to $10.8 million in the first quarter of 2021.

Equity in net earnings of affiliated companies and partnerships was $3.0 million in the first quarter of 2022 and 2021.

Non-GAAP^(*) net income attributable to the Company’s shareholders in the first quarter of 2022 was $54.3 million (4.0% of revenues), as compared to $76.2 million (6.8% of revenues) in the first quarter of 2021. GAAP net income attributable to the Company’s shareholders in the first quarter of 2022 was $52.8 million (3.9% of revenues), as compared to $72.5 million (6.5% of revenues) in the first quarter of 2021. Net income in the first quarter of 2022 was reduced by 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 $1.22 for the first quarter of 2022, as compared to $1.72 for the first quarter of 2021. GAAP diluted earnings per share attributable to the Company’s shareholders in the first quarter of 2022 were $1.19, as compared to $1.64 in the first quarter of 2021. 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, 2022 totaled $13.7 billion, similar to the backlog as of December 31, 2021. Approximately 72% of the current backlog is attributable to orders from outside Israel. Approximately 55% of the backlog is scheduled to be performed during the remainder of 2022 and 2023.

Cash flows provided by operating activities in the three months ended March 31, 2022 were $35.5 million, as compared to cash flows used in operating activities in the three months ended March 31, 2021 of $13.1 million.

__________

* see page 4

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 March 29, 2022, 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 2021 and the first three months of 2022 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 March 31, 2022, 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 supply chain, all of which contain uncertainties. As noted in our annual report on Form 20-F, 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 ended March 31, 2022, 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.

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* see page 4

* 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, except for per share amounts)

	Three Months Ended March 31, 2022	Three Months Ended March 31, 2021	Year Ended December 31, 2021
GAAP gross profit	$ 326.9	$ 281.3	$ 1,358.0
Adjustments:
Amortization of purchased intangible assets	6.4	4.9	26.7
Non-GAAP gross profit	$ 333.3	$ 286.2	$ 1,384.7
Percent of revenues	24.6 %	25.6 %	26.2 %

GAAP operating income	$ 58.6	$ 83.8	$ 418.5
Adjustments:
Amortization of purchased intangible assets	10.9	9.1	47.0
Capital gains	(3.7)	—	(14.7)
Non-GAAP operating income	$ 65.8	$ 92.9	$ 450.8
Percent of revenues	4.9 %	8.3 %	8.5 %

GAAP net income attributable to Elbit Systems’ shareholders	$ 52.8	$ 72.5	$ 274.4
Adjustments:
Amortization of purchased intangible assets	10.9	9.1	47.0
Capital gains	(3.7)	—	(24.9)
Revaluation of investments measured under fair value method	—	—	(17.3)
Non-operating foreign exchange losses	(4.8)	(4.2)	10.6
Tax effect and other tax items, net	(0.9)	(1.2)	77.8
Non-GAAP net income attributable to Elbit Systems’ shareholders	$ 54.3	$ 76.2	$ 367.6
Percent of revenues	4.0 %	6.8 %	7.0 %

GAAP diluted net EPS	$ 1.19	$ 1.64	$ 6.20
Adjustments, net	0.03	0.08	2.10
Non-GAAP diluted net EPS	$ 1.22	$ 1.72	$ 8.30

Recent Events:

On May 16, 2022, the Company announced that its U.S. subsidiary, Elbit Systems of America LLC, (“Elbit Systems of America”), was awarded a delivery order valued at $49 million for the supply of Squad Binocular Night Vision Goggle (“SBNVG”) systems to the U.S. Marines Corps. The order will be executed in Roanoke, Virginia and will be supplied through September 2023.

This additional order is part of a $249 million five-year Indefinite Delivery Indefinite Quantity (IDIQ) contract from September 6, 2019.

Dividend:

The Board of Directors declared a dividend of $0.50 per share for the first quarter of 2022. The dividend’s record date is June 27, 2022. The dividend will be paid on July 11, 2022, after deduction of taxes at the source, at the rate of 16.8%.

Conference Call:

The Company will be hosting a conference call on Tuesday, May 24, 2022, at 9:00 a.m. Eastern Time. On the call, the Company’s 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: +972-3-918-0644
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 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:

1-888-782-4291 (US and Canada) or +972-3-925-5900 (Israel and International).

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Wladimir P.

Wladimir P. is a Content Editor at European Gaming Media and at PICANTE Media and covers a large variety of industries.

Artificial Intelligence

JupiterOne and watchTowr announce partnership to protect business critical assets with broad exposure management capabilities

Published

2 hours ago

May 2, 2024

CISION (PR Newswire)

jupiterone-and-watchtowr-announce-partnership-to-protect-business-critical-assets-with-broad-exposure-management-capabilities

SINGAPORE, May 2, 2024 /PRNewswire/ — watchTowr, a leader in external attack surface management (EASM) technology and fuelled by watchTowr Labs, a renowned vulnerability R&D capability, has formed a strategic partnership with JupiterOne. JupiterOne is a leader in cyber asset attack surface management (CAASM) technology. This collaboration enables customers to rapidly prioritize emerging threats within their constantly changing environments, focusing on fixing the most critical risks impacting their business, which enables an end-to-end continuous threat exposure management process (CTEM).

Over 28,000 CVE records were published in 2023; a figure that is expected to increase as attackers shorten the time from known vulnerability to exploit, reducing it from weeks to days. JupiterOne and watchTowr’s integrated solution empowers enterprises to discover their most critical and exploitable vulnerabilities, prioritize them with asset context based on business impact and receive an actionable remediation plan to improve security posture.
This partnership enables a complete continuous threat exposure management program, addressing the full spectrum of cyber risk management. The fully integrated solution provides continuous monitoring and assessment of both internal and external digital assets, allowing for prioritization and effective threat mitigation for a business’s most critical assets. “Our partnership with watchTowr is a game-changer” said Forte. “Combining our data aggregation with real-time asset discovery and automated security testing allows us to offer a unique, all-encompassing approach to exposure management.”
Benjamin Harris, CEO, watchTowr, said, “While the number of reported vulnerabilities continues to rise, the vulnerabilities that matter – in mission-critical, key systems – have exploded at an alarming rate. This reality, combined with the significant shift in speed by attackers to weaponize vulnerabilities – the ability to validate exploitability and prioritise actions based on real business risk has never been more vital. We’re excited to join forces with JupiterOne to give security teams around the globe this much-needed end-to-end capability.”
About JupiterOne:
JupiterOne is a cybersecurity startup delivering powerful software solutions to companies across all industries, providing deep insights to cyber assets and the relationships between, empowering security professionals to have true knowledge and ownership of their attack surfaces.
About watchTowr:
watchTowr is a global cybersecurity technology company, built by former adversaries.
watchTowr’s world-class External Attack Surface Management and Continuous Automated Red Teaming technology is informed by years of experience compromising some of the world’s most targeted organisations and utilised by Fortune 500, financial services and critical infrastructure providers every day.
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Artificial Intelligence

Clarivate Declares Dividend on Mandatory Convertible Preferred Shares

Published

6 hours ago

May 1, 2024

CISION (PR Newswire)

LONDON, May 1, 2024 /PRNewswire/ — Clarivate Plc (NYSE: CLVT; CLVT PR A) (“Clarivate”), a leading global provider of transformative intelligence, today announced that its board of directors declared a quarterly dividend of $1.3125 per share on its 5.25% Series A Mandatory Convertible Preferred Shares (the “Preferred Shares”), payable in cash on June 3, 2024 to shareholders of record at the close of business on May 15, 2024.

On the mandatory conversion date, which is scheduled to occur on June 3, 2024, each Preferred Share will automatically and mandatorily convert into a number of ordinary shares of Clarivate (and cash in lieu of any fractional ordinary shares) based on the average volume weighted average price (“VWAP”) of Clarivate’s ordinary shares over a 30-trading day period that begins on, and includes, April 18, 2024 and is scheduled to end on, and include, May 30, 2024 (the “valuation period”). If such VWAP is (i) greater than $31.20, then the mandatory conversion rate will be 3.2052 ordinary shares of Clarivate per Preferred Share, (ii) less than or equal to $31.20 but equal to or greater than $26.00, then the mandatory conversion rate will be a number of ordinary shares of Clarivate per Preferred Share equal to $100.00 divided by such VWAP and (iii) less than $26.00, then the mandatory conversion rate will be 3.8462 ordinary shares of Clarivate per Preferred Share. The mandatory conversion rate will be announced following the end of the valuation period. The above description of the terms of the Preferred Shares is not complete and is subject to, and qualified in its entirety by reference to, the “Statement of Rights” for the Preferred Shares, which is filed as Exhibit 3.2 to Clarivate’s annual report on Form 10-K for the fiscal year ended December 31, 2023.
Cautionary Note Regarding Forward-Looking Statements
This communication contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management’s current views concerning future business, events, trends, contingencies, financial performance, or financial condition, appear at various places in this communication and may use words like “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “goal,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “see,” “seek,” “should,” “strategy,” “strive,” “target,” “will,” and “would” and similar expressions, and variations or negatives of these words. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. These forward-looking statements involve a number of risks and uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include those factors discussed under the caption “Risk Factors” in our annual report on Form 10-K, along with our other filings with the U.S. Securities and Exchange Commission (“SEC”). However, those factors should not be considered to be a complete statement of all potential risks and uncertainties. Additional risks and uncertainties not known to us or that we currently deem immaterial may also adversely affect our business operations. Forward-looking statements are based only on information currently available to our management and speak only as of the date of this communication. We do not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, except as otherwise required by securities and other applicable laws. Please consult our public filings with the SEC or on our website at www.clarivate.com.
About Clarivate
Clarivate™ is a leading global provider of transformative intelligence. We offer enriched data, insights & analytics, workflow solutions and expert services in the areas of Academia & Government, Intellectual Property and Life Sciences & Healthcare. For more information, please visit www.clarivate.com.
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Artificial Intelligence

CGTN: 3rd CMG Forum in Beijing discusses AI development

Published

10 hours ago

May 1, 2024

CISION (PR Newswire)

BEIJING, May 1, 2024 /PRNewswire/ — Focusing on the development of AI, the third CMG Forum was held on Monday in Beijing.

Li Shulei, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and the head of the Publicity Department of the CPC Central Committee, attended the opening of the event and delivered a speech.
Guests at the forum stressed the role of media in promoting the innovative application of AI as well as its governance.
Efforts should also be made to boost the development of AI in creating positive, healthy, diverse and high-quality content, so that AI can become a force for good and benefit mankind, they agreed.
They also called on media to accelerate intelligent transformation and help bridge international exchanges and cooperation on the governance of AI to facilitate its healthy, orderly and safe development.
Hosted by China Media Group (CMG), the forum attracted more than 200 participants from international organizations, media, think tanks and multinational companies.
“Innovation and breakthroughs in science and technology not only guide the development and progress of human civilization, but also bring uncertainty to the changing world,” said Shen Haixiong, vice minister of the Publicity Department of the CPC Central Committee and president of CMG. He called for efforts to jointly create valuable and responsible artificial intelligence.
AI technology is affecting every aspect of our lives. Thomas Bach, president of the International Olympic Committee (IOC), stated in a video speech that CMG has always been a partner of the IOC, bringing the charm of the Olympic Games to hundreds of millions of Chinese viewers. He said the IOC invites CMG to work together for the creation of a future with the application of AI in Olympic sports.
“From ancient inventions such as silk, printing and the compass to modern technological advances such as robotics, telecommunications and green technology, China has always been committed to innovation and creation,” said Daren Tang, director general of the World Intellectual Property Organization (WIPO). He said WIPO pays close attention to ensuring a balance between the opportunities and risks of artificial intelligence and is committed to strengthening cooperation to ensure that artificial intelligence is properly used.
https://news.cgtn.com/news/2024-04-30/3rd-CMG-Forum-in-Beijing-discusses-AI-development-1tdDcXvCexG/p.html

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