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Elbit Systems - Sophisticated defense technologies for the next decade
I was pleased to finally see the right description given to the business of Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), one of my top picks for the next decade. The right description is International Defense Electronics Company. I would add the word sophisticated after International, but even without it, the description is appropriate. It should be understood that defense electronics will be the big story of the next decade or until they beat terrorism - whichever comes first.
It looks clear to me that as Israel will be staying in the US camp (the other side simply doesn't want us, even though it would be happy to use the products of the Haifa company), Elbit Systems will grow at the expense of the current government-controlled defense industries. It will take time and a lot of convincing and battles with workers' committees and interested parties but eventually Elbit Systems will gobble up fast-growing government companies. So between the ongoing privatization and the company's own organic growth, I feel safe for the next 20 years.
20 years, however, is a long time, so let's take another look at how things are at present. I'll start with the company's orders backlog (which, I was told, is real and is anchored by contracts), which stood at $3.79 billion at the end of 2006, compared with $3.35 billion at the end of 2005. 70% of the orders backlog is scheduled for delivery through 2007-2008, and 68% of it is to customers outside Israel. Elbit Systems' revenue rose by more than 42% to $1.523 billion in 2006, from $1.07 billion in 2005. Net profit soared 122% to $72 million, while diluted earnings per share climbed 120.5% to $1.72 from $0.78. The company accomplished all this despite the burden on its financial statements caused by the acquisition of Elisra Group.
Although I'm very keen about Elbit Systems, especially with regard to its long-term prospects, it nevertheless does have a few weak points. Firstly, the balance sheet is weak in terms of its assets versus its liabilities. A company like Elbit Systems, which could find itself bidding for mega deals, ought to have a stronger balance sheet. There has, however, been a great improvement, compared with the days when I first started following the company many years ago, but I'll be quite happy if this continues to be the only blip on the horizon. Then there is also the company's profit margins which I feel are a tad low. The net profit on sales is too low (certainly when compared with that of the company's US rivals). Having noted all this, I have no doubt that company CEO and president Joseph Ackerman has a good grasp of the issues involved here and that the company will continue its streamlining, strengthening its financial base even further.
Published by Globes [online], Israel business news - www.globes.co.il - on March 15, 2007
http://www.globes.co.il/serveen/globes/docview.asp?did=1000193395&fid=1052
Elbit Systems' looking for new acquisition in Israel and abroad
14.3.07 | 15:29 By Nathan Sheva
Speaking at the Elbit Systems press conference today, company chief executive and president Joseph Ackerman admitted that Elisra Electronic Industries had been in worse shape than they'd realized when Elbit Systems bought the company. "But I do not regret the acquisition or the company's value in it," Ackerman stated. "It's a good company."
If Elbit Systems thought the synergy between the two companies would start yielding fruit in two or three years, well - it was wrong, he confessed. "It may take longer. But it will happen."
Elbit Systems bought 70% of Elisra at a company valuation of $100 million from Koor Industries (NYSE: KOR). In a parallel set of moves it acquired the controlling interest in Tadiran Communications (TASE: TDCM) at the end of 2005.
Elisra lost $26 million on revenues of $219 million in 2006, and remains a millstone around Elbit Systems' neck. Despite that weight, Elbit Systems today reported record results for last year.
"There is no reason why Elisra shouldn't be a profitable company. Elisra has the best electronic warfare technologies in the world," Ackerman says.
What it needs is to become more efficient, he explains. "First of all, the company operates on to sites. It should be consolidated on one. Also, the consent of the workers has to be obtained for efficiency steps planned for the company," he describes. More layoffs are in the offing, though not many.
But more orders poured in than ever before last year, Ackerman says, and also, Elbit Systems has already consolidated the three companies of which Elisra consisted into one.
Unlike most Wall Street-listed companies, Elbit Systems doesn't provide guidance for investors. But Ackerman promises that the year 2007 will be better by all parameters. Also, the trend of merger and acquisition will continue, he said: Elbit Systems means to look for a suitable target in Israel, the U.S. or Europe.
At present 40% of Elbit Systems' sales are to the United States, about $600 million a year. The American defense budget is $600 billion a year, which means there's a lot of potential room for Elbit Systems to grow. Sales to Europe, to which the company hardly sold in the past, comprised 15% of sales last year, Ackerman said. Israel is responsible for 27% of its turnover.
Asked whether Elbit Systems might bid if Israel Military Industries is privatized, he commented that the longer the government remains its owner, the more it deteriorates.
http://www.haaretz.com/hasen/spages/837792.html
Agree, the backlog and revenues show strength. There is a plan (that will cost $16M) regarding Elisira but I don't know how long will it take before it will become profitable.
>The only problem is Elbit's gross margin which was quite low- 21.4%. It is 25.5% excluding Elisra.<
The gross margin will get back to its old level as Elisira becomes fully integrated.
I’m more interested in the top line and the backlog, which are doing great. The bottom line will take care of itself, IMHO.
The only problem is Elbit's gross margin which was quite low- 21.4%. It is 25.5% excluding Elisra.
Ho-hum… another great quarter (eom)
Elbit Systems 2006 revenue up 42% to record $1.5b
Net profit rose 122% to $72.2 million.
Globes’ correspondent 14 Mar 07 10:55
Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) today published its consolidated financial reports for the fourth quarter of 2006 and the year as a whole. 2006 revenue rose 42% over 2005 to $1.52 billion, and its net profit rose 122% to $72.2 million ($1.72 per share).
The company’s orders backlog at the end of 2006 was $3.79 billion, up 13.1% from the end of 2005. 68% of the orders are for international customers, and 70% are slated for delivery in 2007-08.
Elbit Systems posted $467.4 million revenue for the fourth quarter, up 45.3% on the corresponding quarter of 2005. The company posted a net profit of $24 million ($0.57 per share), compared with a net loss of $5.7 million ($0.14 per share) for the corresponding quarter.
The company beat the analysts’ consensus of earnings per share of $0.50 on $388.1 million revenue for the fourth quarter
The company will distribute a dividend of $0.16 per share on its fourth quarter profit.
Elbit Systems president and CEO Joseph Ackerman said, “We have also begun to see the results of our long-term development strategy that enabled us to pass $1.5 billion in revenues for the first time and to deliver another year of record net profit and cash flow. Our results were achieved despite the negative impact from Elisra's financial performance, and we intend to continue the Elisra turn-around in 2007.”
Published by Globes [online], Israel business news - www.globes.co.il - on March 14, 2007
Israel unveils the Viper - a robot for urban warfare and counterrorism
Mar. 08 - An Israeli robot for urban warfare and counterterrorism, the first of its kind in the world, is being unveiled at a military exhibit in the United States, the Israeli paper Yediot Aharonot reported. The Viper, which was developed by Elbit Systems, is capable of shooting bursts of automatic fire and throwing fragmentation, smoke and stun grenades. "What was science fiction until not so long ago is now becoming operational tools that will create a revolution in counterterrorism," an Israeli expert in counterterrorism systems said. The Viper, which is about a foot long and weigh approximately five pounds, is powered by a special electrical engine and operated by remote control or according to a program implanted in its 'brain' in advance. It is capable of climbing stairs, getting past obstacles and at the same time checks what is going on around it by means of a system of sensors. Equipped with a special nine-millimeter caliber Uzi machine gun, on which a laser pointer has been installed. The Viper is carried to the battlefield by a soldier on his back in a special carrier. When it is necessary to infiltrate a building safely where, for example, armed terrorists are hiding, the soldier lowers it to the ground, turns it on and from that moment controls it from a distance.
http://www.israel21c.org/bin/en.jsp?enDispWho=InThePress&enPage=BlankPage&enDisplay=view&...
Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) will set up the “Zofit” simulator system in Israel, and it has also won a handsome contract with the US Marines. The first contract, under which Elbit will train Israeli and foreign pilots referred to it by the Ministry of Defense is worth $15 million, while the second, under which Elbit will provide laser-based target identification systems to the marines is worth $51 million.
These sums are small, relative to the volume of Elbit Systems’ revenue, but anyone who realizes where this can lead will not fail to be impressed. As I have said ever since the 9/11 terror attacks, Elbit Systems, thanks to its management and Israeli know-how in smart defense electronics, is an investment about which I cannot make any predictions as to how long its superior value will last.
Published by Globes [online], Israel business news - www.globes.co.il - on March 1, 2007
http://www.globes.co.il/serveen/globes/docview.asp?did=1000188470&fid=1052
Bulgaria is not exactly hostile to Israel, but of course
Russia's pressure is not something Bulgaria can afford to ignore.
Dubi
From your August 2006 post on the same subject (#msg-12651148):
“...after the contract was signed, Russia applied heavy pressure on Bulgaria to cancel it, and warned Bulgaria that Russia would not provide licenses for helicopters upgraded by Elbit Systems.”
I think it’s a credit to ESLT’s expertise that countries hostile to Israel consider buying from ESLT in the first place.
Elbit Systems and Bulgarian Ministry of Defense are in the Process of Cancellation of Helicopter Modernization Contract
Tuesday January 30, 10:52 am ET
HAIFA, Israel, January 30 /PRNewswire-FirstCall/ -- Elbit Systems Ltd. (the "Company") (NASDAQ:ESLT - News) announced that on January 29, 2007, the Company received notice from the Bulgarian Ministry of Defense for the termination of the contract to the amount of EUR57 million, for the modernization of Mi-24 and Mi-17 helicopters for the Bulgarian Air Force. The Company had previously announced the award of this contract on December 4, 2005. In the cancellation notice, the Bulgarian Ministry of Defense requested a return of a portion of the amounts paid to date to the Company under the contract.
Over the past several weeks, Elbit Systems has been in discussions with the Bulgarian Ministry of Defense regarding a mutually acceptable cancellation of the contract. Moreover, the contract cancellation discussions with the Bulgarian Ministry of Defense have been based on appropriate compensation to the Company, and Elbit Systems does not anticipate that this matter will have a material adverse effect on the Company's results of operations.
http://biz.yahoo.com/prnews/070130/uktu018.html?.v=61
Bulgaria cancels Elbit Systems contract
The company was due to upgrade 18 Bulgarian Air Force Mi-24 and Mi-17 helicopters for €57 million.
Golan Fridenfeld 30 Jan 07 18:50
The Bulgarian Ministry of Defense has cancelled a €57 million contract for Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) for the modernization of helicopters for the Bulgarian Air Force. The Bulgarian Ministry of Defense has requested a return of a portion of the amounts paid to date to the company under the contract.
Elbit Systems announced that it won the contract on December 4, 2005. Over the past several weeks, the company has been negotiating with the Bulgarians on a mutually acceptable cancellation of the contract. The cancellation will include appropriate compensation, and Elbit Systems does not anticipate that cancellation will have a material adverse effect on its results.
Elbit Systems was to upgrade 18 Russian made Mi-24 and Mi-17 over a period of three years. On February 21, the company signed a contract with TEREM aviation repair plant for the upgrade. Under the BGN 13 million contract, the repair work will be executed in TEREM's branches in Sofia and Plovdiv.
Published by Globes [online], Israel business news - www.globes.co.il - on January 30, 2007
Bulgaria cancels 57 million euro contract with Elbit Systems
30.1.07 | 23:09 By Omri Cohen
Elbit Systems (Nasdaq: ESLT) said Tuesday that Bulgarian defense officials have canceled a 57 million euro contract for work on Mi-24 and Mi-17 helicopters.
Elbit had received the contract in December 2005.
The company said it received some compensation from Bulgaria for the canceled contract and does not expect it to have a material impact on company earnings.
In recent weeks Elbit Systems had been negotiating with the Bulgarian defense authorities over the terms of canceling the contract. At the end of the third quarter, Elbit Systems' backlog of orders stood at $3.78 billion. The Bulgarian contract comprises just 2% of that backlog.
http://www.haaretz.com/hasen/spages/819626.html
AeroVironment Soars 41% on First Day
http://biz.yahoo.com/rb/070123/aerovironment_ipo.html?.v=1
>>
Tuesday January 23, 2:36 pm ET
NEW YORK (Reuters) - Shares of AeroVironment Inc. (NASDAQ: AVAV ) on Tuesday soared as much as 54 percent in their U.S. market debut, boosted by prospects for its small unmanned aircraft, despite competition with larger firms, analysts said.
Shares of the company opened 47 percent higher at $25 and rose to $26.22 before retreating to $23.90, up 40.6 percent, in afternoon trading on the Nasdaq.
The Monrovia, California-based company has developed a series of remotely operated aircraft which can be launched by a single person and provide video images for intelligence, surveillance and reconnaissance.
Customers include the U.S. Army, Marine Corps and Special Operations Command. As of October 28, 2006, AeroVironment had a funded backlog of $69.5 million and an estimated unfunded backlog of $491.5 million, according to documents filed with the U.S. Securities and Exchange Commission.
Alongside a call for more troops by President Bush, the company also benefited from a thin calendar of scheduled initial public offerings, said Sal Morreale, who tracks IPOs for Cantor Fitzgerald in Los Angeles.
"This was the first good deal coming out in a fairly good (broader) market," Morreale said.
Only three companies have priced IPOs this year, raising $395 million, during a traditionally slow period for new issuance.
COMPETITION FROM LARGER FIRMS
The $25 opening price valued AeroVironment at about $454 million. The company also trades at 27 times revenue annualized from the six-month period prior to October 28, 2006, said Scott Sweet, managing director for IPO research firm IPOboutique.com.
The multiple is expensive compared with larger defense contractors, such as Israel's Elbit Systems Ltd. (Tel Aviv: ESLT.TA; NASDAQ: ESLT ) and Lockheed Martin Corp. (NYSE: LMT ), which also develop unmanned aircraft. Elbit and Lockheed Martin trade at 20 times and 17 times 2006 revenue.
But AeroVironment's planes, which can be carried by a single soldier, are smaller and serve a specific military need. Continued use of the planes could also spur growth into international markets, Sweet said.
"Their engineering and battlefield success should open up a whole new avenue for sales through allied nations," Sweet said.
AeroVironment also sells a rapid recharge system for electric industrial vehicles, such as forklifts and airport ground support equipment. Customers for the PosiCharge products include Ford Motor Co. (NYSE: F), Sysco Corp. (NYSE: SYY ), Southwest Airlines Co. (NYSE: LUV) and IKEA, the world's largest furniture retailer.
On Monday, the 6.7 million-share initial public offering raised $113.9 million after pricing at $17 apiece, compared with a $14 to $16 forecast. AeroVironment offered about 4.5 million shares, while selling stockholders offered about 2.2 million shares, according to a filing with the U.S. Securities and Exchange Commission.
The company plans to use net proceeds from the offering, which represents a 37 percent stake in the company, for working capital and general corporate purposes, including research and development of new products, sales and marketing, acquisitions and other capital expenditures.
Led by Goldman Sachs & Co., underwriters have the option to purchase an additional 1 million shares to cover overallotments, according to the SEC filing.
<<
U.S. army raises ceiling on contract with Tadiran to $125 million
22.1.07 | 10:01 By Tal Levy
The U.S. army's communications and electronics corps has jacked up its IDIQ (indefinite delivery, indefinite quantity) order from the Israeli defense-systems company Tadiran Communications (TASE: TDCM) , which is a subsidiary of Elbit Systems (Nasdaq: ESLT) .
The army's contact is technically with Tallahassee Technologies, also known as Talla-Tech, which is a fully owned member of the Tadiran group.
The original contract, signed in 2004, was to upgrade and supply parts and maintenance services for advanced communications devices. It determined that Talla-Tech would supply up to $80 million worth of Sincgrass radio devices to the U.S. army over three years.
Now the ceiling has been raised to $125 million.
The principle of IDIQ contracts is that they enable the customer to order products and services from time to time, at short notice, up to the predetermined ceiling. So far the U.S. army has used up about $60 million of its IDIQ contract with Tadiran.
Amos Weizman, CEO-designate of Tadiran, commented that the company's activities in the U.S. via its subsidiaries have been increasing, and that increase in the IDIQ demonstrates the customer's satisfaction with the Tadiran group's products.
http://www.haaretz.com/hasen/spages/816376.html
Rising Pentagon Spending
Quells Talk of Profit Plateau
http://online.wsj.com/article/SB116900861317078646.html
>>
By JONATHAN KARP
January 17, 2007
Defense contractors have enjoyed surging profits in recent years as the government spent heavily to fight wars in Iraq and Afghanistan and combat terrorism in other parts of the world. Recently, some investors have worried that ballooning federal deficits could bring the flush times to an end.
But with the makers of warplanes, tanks and battlefield technology expected to report strong fourth-quarter results beginning next week, the latest Pentagon plans suggest that the long-expected spending plateau is still another year away.
The January financial-reporting season for defense companies traditionally is tricky: It comes just days before the Pentagon unveils its budget for the next fiscal year, a document that frames investor expectations.
Major defense companies are expected to meet or exceed their quarterly targets, given that federal funds spent to buy and develop weapons in the October-to-December quarter rose 19% from the year-earlier period. That surge was in part a result of spending approved for the Iraq war in the previous fiscal year, analysts said.
Record Iraq war funding is likely to boost previously issued conservative profit outlooks for 2007 as well. Despite opposition to the Bush administration's Iraq policy and saber rattling about closer budget scrutiny, Congress's new Democratic leadership doesn't pose an immediate risk for the industry, analysts agree. Democrats are expected to broadly support Pentagon spending, though legislators may make modest trims and modifications to specific weapons programs.
To be sure, even as overall Pentagon spending rises, some of the biggest weapons programs face budget pressure because of cost growth. Potential trims to Boeing Co.'s Future Combat Systems modernization program for the Army or Lockheed Martin Corp.'s Joint Strike Fighter jet are unlikely to have immediate material impact on profits but could influence investors' longer-term outlook.
Even before President Bush announced he is sending extra troops to Iraq, the Pentagon in recent weeks telegraphed an imminent tsunami of spending requests. The fiscal 2008 budget will be followed by two separate emergency war-fund requests, for the current and coming fiscal years. These latest so-called supplemental budgets have wide scope to include weapons development and procurement.
"The outlook for the defense industry in 2007, and probably 2008, is quite good," says Steven Kosiak, director of budget studies at the Center for Strategic and Budgetary Assessments, an independent think tank in Washington. Between the annual Pentagon budget and supplemental war requests, weapons purchases will be "about $135 billion in 2007, the highest level since the late '80s," he says, even when adjusted for inflation.
That leaves breathing room for an industry that approached 2007 cautiously. Lockheed, the biggest contractor by sales, had a stellar 2006, and raised its full-year revenue and profit outlook when it reported third-quarter earnings in October. Yet at the time, the Bethesda, Md., aerospace giant outlined modest performance expectations for this year: up to 7.7% sales growth; up to 8.8% in operating-profit growth and a per-share earnings range from flat to 6.4% growth.
That was before the supplemental budget, which includes funds for two of Lockheed's Joint Strike Fighter and for 17 C-130 cargo planes, part of an Air Force request that will extend the production line of the venerable propeller-driven transport. Analysts expect Lockheed to beat consensus estimates for the fourth quarter and, along with other defense companies, set more ambitious 2007 financial targets.
Counting weapons research and development, the Pentagon's total investment account is expected to rise 22% to $213 billion, compared with $175 billion in fiscal 2006, according to George Shapiro, a defense analyst at Citigroup Inc.'s Citigroup Global Markets Inc. He foresees a solid 8% boost in weapons spending in the fiscal 2008 annual Pentagon budget, compared with the current year, not including supplemental war funding.
Howard Rubel, a Jeffries & Co. analyst, estimates that average operating margins at the 20 aerospace and defense companies he covers rose to 9.5% in 2006, compared with 8.7% in 2005, and he believes there is room to grow. Per-share earnings grew 16% last year, he predicts, compared with estimates of about 12% for the full Standard & Poor's 500-stock index.
Etc.
<<
Tadiran gets $20.5m follow-on Defense Ministry order
The company will supply advanced tactical communications systems to the IDF through its Florida subsidiary, financed by US military aid.
Roee Bergman 16 Jan 07 13:26
Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) subsidiary Tadiran Communications Ltd. (TASE: TDCM) has received a $20.5 million follow-on order from the Ministry of Defense for advanced tactical communications systems for the IDF. The original $19.6 million order was placed in December 2005.
The communications systems support simultaneous high-speed voice and data transmissions, use advanced communications protocols and software-controlled radio features. Deliveries will be made during 2010 by Tadiran Communications’ Florida subsidiary Tallahassee Communications Industries Inc. (Talla-Com), and financed with US military aid. The company said it expects more orders for these systems in the future.
Tadiran Communications saw its business shrink during the third quarter of 2006, although its orders backlog grew. Last August, Tadiran Communications CEO Hezi Hermoni announced that he would leave the company, and Alex Weizman is due to replace him.
Published by Globes [online], Israel business news - www.globes.co.il - on January 16, 2007
Lofty Heights Expected from AeroVironment IPO
[AeroVironment may be one of those corporate names that’s too clever for its own good.]
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070112:MTFH11478_2...
>>
Fri Jan 12, 2007 5:24 PM ET
By Yung Kim
NEW YORK, Jan 12 (Reuters) - AeroVironment Inc.'s initial public offering is set for a strong reception later this month thanks to its military contracts, but there are longer-term risks for the maker of small unmanned aircraft, analysts said.
The Monrovia, California-based company has developed a series of small, remotely operated aircraft that can be launched by a single person and provide video images for intelligence, surveillance and reconnaissance.
The company's products have been boosted by the Iraq war, while prospects should be strong in coming years, with the U.S. military's efforts to improve information gathering, said Philip Finnegan, director of corporate analysis for the Teal Group Corp., a defense and aerospace research firm based in Fairfax, Virginia.
"If you look at the small (unmanned aircraft) used by the military, AeroVironment has really established a dominant position," Finnegan said.
That may explain why the company's valuation is so high in this offering. At $15, the midpoint of the forecast price range, AeroVironment shares would trade at almost 27 times earnings for the 12 months ended Oct. 28, according to calculations from data in the company's IPO filing with the U.S. Securities and Exchange Commission.
That multiple is pricey compared with the shares of defense companies, including Israel's Elbit Systems Ltd. <ESLT> and Lockheed Martin Corp. <LMT>, which trade at about 19.5 times and 17 times 2006 earnings, according to Reuters Estimates.
There are real risks to the AeroVironment story, analysts said. International expansion will play an important role in the company's ability to sustain growth, Finnegan said, noting the company's sales surge started with a small base.
The company needs to develop new relationships with defense departments around the globe, something it has not yet done, Finnegan added.
And it is not clear how strong the IPO market will be this year, analysts said.
"The first few IPOs that get off the ground are going to be somewhat of a litmus test for the appetite of investors," said David Menlow, president of IPOfinancial.com. "The fact that the company is profitable is a positive, but does not put it in the runaway category."
BIG BACKLOG
But to some analysts, the high valuation is entirely justified. "Increased usage of the AeroVironment (products) will likely open up future revenue opportunities with allied nations," said Scott Sweet, managing director for IPO research firm IPOboutique.com.
As of Oct. 28, 2006, AeroVironment had a funded backlog of $69.5 million and estimated unfunded backlog of $491.5 million [a tiny fraction of ESLT’s backlog], with customers that include the U.S. Army, U.S. Marine Corps and the U.S. Special Operations Command, according to the SEC filing.
AeroVironment also sells a rapid recharge system for electric industrial vehicles, such as forklifts and airport ground support equipment. Customers for the PosiCharge products include Ford Motor Co. <F>, Sysco Corp. <SYY>, Southwest Airlines Co. <LUV> and IKEA, the world's largest furniture retailer.
The company, which intends to list on the Nasdaq under the symbol AVAV , is scheduled to price shares on Jan. 22 amid a slow start to the 2007 IPO, despite momentum generated by $20 billion worth of new issues that closed 2006.
The company plans to sell 4.5 million shares, while selling stockholders [i.e. insiders] will offer 2.2 million shares, according to the SEC filing. Underwriters, led by Goldman Sachs & Co., will have the option to purchase an additional 1 million shares to cover overallotments.
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Official: Israeli defense industry losing millions
Israel Antitrust Authority is blocking cooperation between Israel Aerospace Industries and Elbit Systems
Arieh Egozi Published: 12.27.06, 07:42
A senior defense official said Tuesday that the Israel Aerospace Industries Ltd (IAI) and Elbit systems are losing millions of dollars every year over the Israel Antitrust Authority to okay a joint project for the development of sophisticated unmanned vehicles.
"This is causing direct losses in the millions of dollars, a waste of resources, and the loss of international markets," the official said, citing similar problems facing a project to develop new UAVs.
In May it was announced that Elbit, Israel's largest private defense company, and IAI had agreed to cooperate on a project to produce unmanned vehicles for intelligence gathering and patrol missions.
The two companies had planned to compete for a USD 1.9 billion tender by the South Korean government.
The Antitrust Authority said talks are ongoing with both companies to find a formula that will allow them to cooperate on the project.
http://www.ynetnews.com/articles/0,7340,L-3345011,00.html
Koor sells Elbit Systems stake for NIS 112.4m
The sale was transacted through an auction, which was won by investment bank UBS. (Corrected)
Adi Ben Israel 5 Dec 06 17:35
Koor Industries (NYSE: KOR; TASE: KOR) announced yesterday evening that it is selling its remaining 1.9% stake in Elbit Systems (Nasdaq: ESLT; TASE: ESLT) for NIS 112.4 million. The company expects to record a capital gain of NIS 23.8 million on the deal.
Koor sold its stake in Elbit Systems through an auction, which was won by investment bank UBS AG (NYSE; SWX: UBS). Sources inform ''Globes'' that the bank offered NIS 139 per share, 1.4% above yesterday’s closing price.
The sale by Koor of its outstanding stake in Elbit Systems had been widely expected by the market, with Elbit Systems falling 5% over the last five days in response. The closure of the deal is likely to “release” the pressure that the stock has been under during the past week.
Published by Globes [online], Israel business news - www.globes.co.il - on December 5, 2006
Elbit Systems' Subsidiary Elop to Provide Thermal Imaging Sensors for the Korean Tank K1A1
Wednesday November 29, 3:40 am ET
The Order is Valued at Approximately $19 Million
HAIFA, Israel, November 29 /PRNewswire-FirstCall/ -- Elbit Systems Ltd. (NASDAQ:ESLT - News) announced that its subsidiary Elbit Systems Electro-Optics Elop Ltd. ("Elop") will supply Thermal Imaging kits for the Gunner Periscope Sights of the Korean Tank K1A1. The contract is valued at approximately $19 million.
Selected as primary contractor of the project to upgrade Gunner Periscope Sights for the Korean tank K1A1, the Samsung-Thales Company will supply, install and test the systems. Sub contractor, Elop will provide the main components for the thermal sensors - the key element of the Gunner Periscope Sights that provide the night capability to the tank.
Elbit Systems Electro-Optics Elop General Manager, Haim Rousso said: "This latest order testifies to our leading role in the growing market of advanced electro-optical systems for defense and homeland security applications, as much as it reflects our vast experience in the development of advanced solutions for both the Israeli Defense Forces and other customers worldwide".
Elop provides turnkey and tailor-made integrated gunner and commander sight solutions for virtually every Main Battle Tanks (MBT) and Armored Fighting Vehicles (AFV) in service today. The Integrated Sights modular design combines direct view observation, TV channels, eyesafe laser rangefinders and a wide variety of night vision technologies with LOS stabilization and hunter-killer solutions.
http://biz.yahoo.com/prnews/061129/ukw003.html?.v=90
>>Michael Federmann’s Federmann Enterprises Ltd. has bought another 5.5% of Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) from Koor Industries Ltd. (NYSE: KOR; TASE: KOR) in a very smart move, for two reasons. One is that Elbit Systems, in my opinion, is a Number One investment for the next decade, and I’ve said so more than once. The acquisition from Koor also severs Federmann from a partner whom I believe is only a hindrance.
In order to better understand why I’m so hot for Elbit Systems, I turn your attention to a report in Zacks on Tuesday about military electronics in the US. Zacks recommends L3 Communications Holdings Inc. (NYSE:LLL) as the best investment in the sector. I’ve told you before about this company, which is very similar to Elbit Systems. The acquisition should also make it easier for Federmann to sell part of his stake in the future is he wants, and I think he will, albeit not in the near term. >>
http://www.globes.co.il/serveen/globes/docview.asp?did=1000155804&fid=1052
Elbit Systems unveils unmanned patrol boat
The Silver Marlin is 10.6 m long, has a maximum speed of 81 kmh, and has a range of 500 km,
Amnon Barzilai 20 Nov 06 15:57
Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) has revealed to “Globes” its “Silver Marlin”, an unmanned patrol boat with weapons stations and observation and communications systems, and capable of operating within a range of up to 500 kilometers. The company is negotiating with the Israel Navy to test and evaluate the boat’s performance for possible procurement.
Elbit Systems is the third Israeli company to develop an unmanned patrol boat, after Rafael Armament Development Authority Ltd. and Yavne-based Aeronautics Defense Systems Ltd. These unmanned patrol boats are designed for maritime anti-terrorism operations, operations in shallow water, search and rescue, and other missions.
Elbit Systems’ unmanned aerial and naval vehicles division developed the Silver Marlin. It is the company’s second-generation unmanned patrol boat. Unit head Col. (res.) Rami Ben-Ami said the Silver Marlin was different from unmanned patrol boats developed to date. Other unmanned patrol boats are remote controlled, whereas the Silver Marlin is autonomous. While first-generation unmanned patrol boats could operate from received commands, second-generation unmanned patrol boats can handle complete missions, including setting sail and returning to their home port using preset instruction, and maintaining an observation point.
Elbit Systems developed the Silver Marlin as part of the company’s strategic policy to emphasize unmanned platforms. The company is a leader in Israel and worldwide in UAV development, and has also developed the Avant-Guard automatic patrol vehicle.
Elbit Systems has not disclosed how much it spent on developing its unmanned patrol boats, but the figure is estimated at several million dollars. The Silver Marlin is 10.6 meters long, three times the length of first-generation unmanned patrol boats. It has a maximum speed of 81 kmh, weighs four tons, can carry a 2.5-ton payload, remain at sea for 24-36 hours, has an operational range of 500 km, and is equipped with two 315-horsepower diesel engines.
Published by Globes [online], Israel business news - www.globes.co.il - on November 20, 2006
It took 35 minutes on the CC for someone to ask about the U.S. “political situation.” LOL
.... and i have been kicking myself for having built
a position and getting out prematurely....
Regards,
Dubi
>orders backlog rose to $3.76 billion at the end of the third quarter…<
Impressive. When I started following the company, the backlog was only $2B.
Elbit Systems profit
grows 28.7%
The company’s orders backlog reached $3.76 billion at the end of the third quarter.
Roee Bergman 14 Nov 06 10:27
Elbit Systems (Nasdaq: ESLT; TASE: ESLT) has published its financial report for the third quarter of 2006. The company posted $376.7 million revenue, up 37.7% on $273.6 million in the corresponding quarter in 2005.
Elbit Systems’ orders backlog rose to $3.76 billion at the end of the third quarter, from $3.34 billion at the end of the 2005. 73% of orders are for customers outside Israel, of which 46% are due for delivery starting from the fourth quarter of 2006 through 2007.
Gross profit rose 30.5% to $96.1 million, 25.5% of turnover, from $73.7 million, 26.9% of turnover in the corresponding quarter last year. The fall in gross profit margin was caused primarily by lower gross profit for the company’s subsidiary, Elisra Group, which was integrated into Elbit during the course of December 2005.
Elbit Systems posted a net profit of $18.7 million (5% of revenue), up 28.7% on $14.6 million (5.3% of revenue) in the corresponding quarter. Third quarter earnings per share totaled $0.45, up from $0.35 in the corresponding quarter, and higher than the market estimate of $0.42. The figures for the third quarter of 2005 include a one-time expense of $1.2 million for R&D activity.
Following the publication of the third quarter report, the Elbit board approved a dividend of $0.15 per share.
Published by Globes [online], Israel business news - www.globes.co.il - on November 14, 2006
Elbit Systems beats Street Q3 forecast for sales, profit
14.11.06 | 11:59 By Nathan Sheva
Elbit Systems (Nasdaq: ESLT) today reported record results for the third quarter of 2006, noting improvement in all parameters.
The international defense systems maker said that by the quarter's end, its backlog of orders had soared to $3.8 billion, from $3.3 billion at the end of 2005. Almost three-quarters of the backlog is for orders outside Israel and almost half is for execution this year and next.
Consolidated revenues jumped by almost 38% to $376.7 million, from $273.6 million in the third quarter of 2005. Wall Street had expected a far lower $360 million in sales.
Elbit Systems grossed $96.1 million or 25.5% of revenues, a 30.5% jump against the parallel quarter.
Its margin in the third quarter of 2006 was affected mainly by the lower gross profit margin generated by Elisra, which has been consolidated in Elbit Systems' results from December 2005.
The company netted a consolidated $18.7 million or 5% of turnover, up from $14.6 million in the parallel quarter.
Diluted earnings per share for the third quarter of 2006 were $0.45, as compared with $0.35 for the third quarter of 2005. The Street had been looking at earnings per share of 42 cents per share.
http://www.haaretz.com/hasen/spages/787847.html
Canadian Army's Elbit UAV grounded by malfunctions
Use of the Skylark 1 model UAVs was halted after faults "disrupted operations."
Hadas Manor 12 Nov 06 15:20
Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) Skylark unmanned aerial vehicles (UAV), deployed by the Canadian Army in Afghanistan, were grounded following an operational malfunction. Elbit has confirmed the grounding of the UAVs.
British weekly, "Flight International" reported that Canada, one of the allied forces in Afghanistan would halt use of the Skylark 1 model UAVs after a series of operational malfunctions "which disrupted operations".
The deployment of Elbit's Skylark by the Canadian Army in Afghanistan is relatively new. The deal with the Canadian Army for the sale of 15 UAV's was concluded in June.
Elbit notes that it was not the client who decided to ground the planes. "The recommendation came from Elbit. "The Canadians (another unit which deploys the planes H.M.) continue to use the Skylark in the same region and in others."
The British weekly quotes a technical director in the Canadian Army interim small UAV programme, Captain Rob Sanders as saying, "Most of them aren't flying in Afghanistan. For some reason, in some parts of the country it will fly great, or today it will fly. The same one, at a separate time tonight, won't fly. So they have grounded them all trying to figure out what is going on. We are sending a couple of specialists over there to sort that out."
Sanders said the Skylark acquisition has also raised problems over sharing information with the army's Sagem Sperwer tactical UAVs also deployed in Afghanistan. "Skylark and Sperwer don't talk," he says. "Skylark won't talk to any of the other assets we have got over there."
Canadian units have found the Skylark ground-control system susceptible to wash-out, with users required to rig up sun-shields from cardboard. "As soon as they got sunlight on the screen, they couldn't see anything," said Sanders.
Published by Globes [online], Israel business news - www.globes.co.il - on November 12, 2006
>A number of prestigious Israeli figures sit on the company board alongside Ackerman…<
Pretty good article, but Ackerman is not on the BoD anymore (#msg-6897738).
Elbit Systems premium will come
The first of a series on the niches where investors will find the best returns on Israeli companies looks at defense electronics.
Shlomo Greenberg
There will be five leading niches for investment in Israeli companies in the coming years, in my view. They are: defense electronics, alternative energy, water (it’s still not too late to float Mekorot), healthcare (mainly generic drugs and medical equipment), and wireless communications. I will try, in a series of articles, to analyze each field and assess the Israeli potential in it.
I’ll start off with defense electronics. It is clear to me that, over the next decade, this will become the field in which more money is invested than any other, aside perhaps from telecommunications. Elbit Systems (Nasdaq: ESLT; TASE: ESLT), under the leadership of president and CEO Joseph Ackerman, is becoming the most interesting defense electronics company worldwide, (possibly save for possibly L-3 Communications Holdings Inc. (NYSE: LLL), which could compete with Elbit Systems for that title).
A few years ago, Elbit Systems’ management made an extremely smart strategic move. It turned the company into a niche leader. Ackerman has done what Eli Hurvitz did at Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA); he entered a rapidly growing niche while sitting in the drivers seat. The company’s management builds on its contacts within the Israeli defense establishment and abroad, and on the know-how acquired in Israel. A clear example of this can be see in its recent selection as a member of a Boeing Corp (NYSE: BA)-led consortium which won a major tender from the US Department of Homeland Security. Elbit Systems is making firm progress towards achieving recognition in the field of defense electronics.
If it achieves this goal, the future for Elbit Systems’ investors looks fantastic. A good many investors around the world are following the company’s progress for a number of reasons. The first of these is the certainty that the defense electronics niche will continue to expand and that Elbit is becoming more interesting with each day that passes. Very few people envisage a fall in the level of investment in defense electronics and demand for products in the foreseeable future. The only scenario in which investment could come to a halt would be the realization of the biblical verse, “the wolf shall dwell with the lamb, and the leopard shall lie down with the young kid,” and this looks pretty far-fetched at present.
The second reason for following Elbit is its impressive progress and, assuming that it has the necessary resources, its world-class experience and knowledge. Another reason is that, save perhaps for L-3 Communications, almost no other company is so ideally suited to this niche as Elbit Systems is. At all the other leading defense and security companies, defense electronics is but one of many divisions, and that’s why Elbit is interesting. I expect that over time, this company’s valuation will have a premium.
With a market cap of $1.3 billion and sales of $1.23 billion in the year to June, Elbit Systems focuses exclusively on defense electronics. All its acquisitions over the last decade supported this goal. 37% of its sales are to the US, and only 10% in Europe, which has tremendous growth potential and on which Elbit Systems has only just begun to focus. A further 29% of its sales are in Israel, with the remaining 24% to other parts of the world. The company has been extremely busy over the last two years merging the companies it acquired. I think that this process is now coming to an end, following which the company will turn its attention to its sales efforts and will also launch an extensive streamlining process. These measures are likely to significantly boost sales and net profit in the coming years. Incidentally, Elbit Systems’ orders backlog currently stands at $3.6 billion.
I think that we will already see a marked increase in Elbit Systems’ sales and profit margins in 2007, and these will be much higher than analysts’ estimates. Several changes will be needed in order to generate the premium on the stock, that I think we will see. Firstly, global investors need to be made aware of Elbit Systems’ tremendous potential. Those who do know it, still view it as an Israeli defense company, and while most of these investors see it as a company with extensive know-how, technological experience, strong management etc., this is still not enough in itself to create a premium on the stock. This will begin to accumulate once Wall Street understands that this is a different kind of animal, and not just a company whose line of business is defense. Elbit Systems should be given the profile it rightly deserves, as the leader in a rapidly-growing niche. To make this happen, we will have to wait for the breakthrough in sales and profit due in 2007.
Such a breakthrough (which has actually already begun), will eventually bring on board leading analysts and will lead to the appointment of people with international reputations to its board. At present, only four analysts cover Elbit Systems (compared with 20 for L-3 Communications, 24 for General Dynamics (NYSE: GD), and the many who cover leading companies such as Boeing, or Lockheed Martin). The analysts covering Elbit Systems are usually not of the seniority of those covering L-3 Communications.
In addition to the shortage of analysts covering it, Elbit lacks global figures on its board. The composition of the board of a global company amounts to the credentials that it presents when approaching the investment world. A number of prestigious Israeli figures sit on the company board alongside Ackerman, among them chairman and controlling shareholder Michael (Mickey) Federmann a world-renowned figure (not just through his presence on the boards of Elbit and El-Op Electro-Optics Industries, but also through his association with academic institutions such as the Hebrew University of Jerusalem and the Weizmann Institute of Science, where he holds senior positions), Moshe Arad, Avraham Asheri, Yigal Ne’eman, Yaacov Lifshitz (external director), Jonathan B. Kolber, and Rina Baum.
All these are respected figures but the appointment two weeks ago of former US Army under secretary Joe R. Reeder to the Elbit Systems board, was an important step towards creating the premium for the company’s stock. A key figure in the US defense business community, Reeder is chairman of the Panama Canal Board, and graduated from the US Army's Airborne and Ranger Schools. He was a field artilleryman, and served as a member of the 82nd Airborne Division.
This is an important move in the right direction, and it won’t do any harm to have a few more people like Reeder at Elbit Systems’ helm, alongside all the current board members. Alongside such window dressing the company should keep doing what it has been doing for the last decade, and continue its growth and streamlining. Elbit Systems is, in my view, the number one stock Israeli stock for the conservative investor for the next five years.
Published by Globes [online], Israel business news - www.globes.co.il - on October 31, 2006
Elbit Systems wins long-term civilian avionics contract
The company did not disclose the name of the customer or the size of the anticipated revenue, but said that they would be substantial.
Roee Bergman 30 Oct 06 13:25
Elbit Systems (Nasdaq: ESLT; TASE: ESLT) has maintained the positive momentum in its business with an announcement today that it was awarded a contract to supply civil avionics systems. Elbit Systems said that it anticipates that the long-term contract will generate revenues aggregating to a material amount over a period of approximately ten years, but declined to state a specific figure
Last week Elbit reported that its subsidiary Cyclone Aviation Products Ltd. was awarded a $19 million contract by Boeing Co. (NYSE: BA) for structural components for its F-15 aircraft . Another subsidiary Tadiran Communications (TASE: TDCM) also recently won an $18 million contract in Africa.
Published by Globes [online], Israel business news - www.globes.co.il - on October 30, 2006
UBS downgrades Elbit Systems to Neutral
UBS said it would require 20% upside to the current price to keep the stock at a Buy
Globes Correspondent 31 Oct 06 09:19
UBS Investment Research has downgraded its recommendation for Elbit Systems (Nasdaq: ESLT; TASE: ESLT) to Neutral-1 from Buy-1.
UBS says that while it remains a strong supporter of the company and the fundamental story, it does not see sufficient upside in the stock, which has risen 21% this year, to advise putting new money in at these levels.
UBS said it would require 20% upside to the current price to keep the stock at a Buy, implying a PT of ~$38
Published by Globes [online], Israel business news - www.globes.co.il - on October 31, 2006
In my experience, some more negotiations, heated words,
discussions, a short strike, a compromise and finally
the restructure will take place.
Dubi
Elbit Systems said planning Elisra-Spectralink merger
Elisra employees: Elbit System plans to fire 300 workers under the plan.
Shay Niv 29 Oct 06 12:37
Employees of Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) subsidiary Elisra Group claim that Elbit Systems president and CEO Joseph Ackerman is planning to restructure the unit. They also allege that he is threatening to close it down, unless they agree to the restructuring.
Elbit Systems acquired Elisra, which develops and manufactures electronic warfare systems, less than a year ago for $70 million.
Elisra employees claim that the planned merger between Bnei Brak-based Elisra and Holon-based subsidiary, Tadiran Spectralink Ltd., involves the laying off of 300 employees. The employees also claim that Ackerman told Histadrut chairman Ofer Eini, during a tour of Tadiran Spectralink last week, “The situation is bleak,” and added, “Elbit Systems will not invest a shekel in Elisra.”
In a conversation with “Globes”, Eini minimized Ackerman’s comments, saying, “He showed me Elisra’s balance sheet and its losses.” He added kiddingly, “This is not the first time that Ackerman has spoken about the need for streamlining. Managers always talk about streamlining. If I were given a shekel for each time a manager told me that, I’d be a rich man.”
Eini said streamlining plans were legitimate, but he has not yet personally reviewed the Elisra plan.
The main complaint by Elisra’s employees is the alleged threats by Elbit Systems’ management. “We’re told that if we fight the merger or oppose the switch to personal contracts, Elisra will be closed down,” they claim. “This is an empty threat, because a company with $300 million in orders isn't closed down so fast.”
The employees said they had recently agreed to the laying off of 100 veteran employees, of whom 70 had already left.
Published by Globes [online], Israel business news - www.globes.co.il - on October 29, 2006
Israeli Elbit's Cyclone gets $19 mln Boeing order
Mon Oct 23, 2006 4:56am ET
TEL AVIV, Oct 23 (Reuters) - Israel's defence contractor Elbit Systems Ltd. (ESLT.O: Quote, Profile, Research) (ESLT.TA: Quote, Profile, Research) said on Monday its subsidiary Cyclone Aviation Products Ltd. won a $19 million contract from Boeing Co. (BA.N: Quote, Profile, Research).
The contract for structural components for Boeing's F-15 aircraft is for delivery in 2008 and 2009.
The contract is for the supply of components including detachable fuel tanks, pylons, horizontal stabilisers and gun access doors.
"We believe this contract will pave the way for further business in this fast-growing market," Yoram Shmuely, co-general manager of airborne and helmet systems at Elbit, said in a statement.
Shares in Elbit were up 1.8 percent in morning trade, outpacing gains in the broader Tel Aviv market.
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061023:MTFH26868_2...
>For possibly the first time ever, the words Israel and border are in the same sentence and it doesn't have anything to do with its own borders.<
Good lead sentence to get readers to continue reading
Israeli technology to keep US borders safe
By Laura Goldman October 15, 2006
For possibly the first time ever, the words Israel and border are in the same sentence and it doesn't have anything to do with its own borders. The talent and expertise that Elbit Systems (NASDAQ ELST) has employed for years in protecting Israel's borders will now be put to use on US borders to keep Americans safe.
Kollsman Inc., an American-based subsidiary of Elbit, has been selected as a member of the winning consortium by the Department of Homeland Security (DHS) for the Secure Border Initiative (SBI) to supply technology to identify threats, to deter and prevent crossings, and to apprehend intruders along the US borders with Canada and Mexico.
Kollsman, headquartered in Merrimack, New Hampshire, is a development, manufacturing and support organization providing advanced electro-optical and avionics systems to the commercial aerospace, military and homeland security markets. The company's expertise includes enhanced vision systems, flight displays, head-up displays, thermal imaging systems, fire control systems, and advanced security and surveillance solutions.
The Secure Border Initiative is the latest attempt by the United States government to use technology to secure its borders, stop smuggling, and prevent illegal immigration. After September 11, illegal immigration is not just seen as a social problem, but also a national security issue. A unique aspect of this initiative was that Homeland Security gave the bidders total freedom to create new ideas of how to apply both new and old technology to secure the US borders.
The DHS awarded the SBI contract for the border security project to prime contractor Boeing over Lockheed Martin and Northrop Grumman. In addition to Boeing and Elbit, the other members of the $2 billion program are telecommunication heavy-weights Lucent, L3 Communications, Perot Systems and Unisys Global Public Sector.
Elbit was selected because of its ability to bring together global resources with decades of technological experience and capabilities securing borders in extreme cold, mountainous regions, as well as hot, desert terrains.
Kollsman's global parent, Elbit Systems Ltd. has extensive experience with operational border control and management systems combined with command, control and situational awareness for the Israeli government. Elbit's Long Range Reconnaissance and Observation System (LORROS) and advanced turnkey unmanned aerial vehicle systems (UAV) are some of the products and technology that will be utilized.
President and CEO of Elbit Systems of America, Tim Taylor said he was proud of being part of the winning bid and is "motivated to provide the best border protection available."
"US citizens and the federal government are very concerned about the vulnerabilities on the porous US northern and southern borders. The strategic and technological strengths that we bring to the project will help restore the safety and security that Americans have known for so long. Detecting threats along 6,000 miles of border in the US is not the place for experimentation. The experience of our family of companies, along with the substantial credentials of Boeing as a successful prime integrator in the homeland security market enables us to make a significant contribution to protecting the United States."
Wayne Esser, head of the SBInet project for Boeing said: "We are very happy that Elbit is part of the team because there is not one-size-fits-all solution for 6,000 miles of border. Knollsman has the engineering and manufacturing capability to provide at short notice state-of-the-art solutions that will be integrated to support this challenging effort. The result will be a program that safeguards the freedoms that are a cornerstone of our nation."
Based in Haifa, Elbit is the largest non-governmental defense company in Israel.
"Elbit Systems through its Ortek subsidiary is a major player in homeland security in Israel and throughout the world. The electronic deterrence system is key in providing customers in Israel and around the globe with comprehensive solutions for peripheral defense," said Joseph Ackerman, president and CEO of Elbit.
Among its projects are defense systems for Israel's land and sea borders, peripheral security systems of air force bases, major sections of the border security fence, and Jerusalem's detour route.
Sixty percent of Elbit's customers are international. The UK's Ministry of Defense awarded the Watchkeeper program to a consortium that included Elbit Systems. The WK450 air vehicle that was designed, is based on Elbit Systems Hermes 450. The Hermes 450 is a proven system with over 20,000 flying hours. In 2003, the Elbit Hermes 450 system was accepted by the US Naval Air Station Fallon Joint UAV Test and Evaluation Center in Nevada for joint interoperability trials.
Elbit's Peripheral Coastal Security was recently deployed by a country in Asia. It is based on Elbit's advanced night vision sensors, daylight surveillance, and laser rangefinders.
Managing director Eli Venezia said: "Our Coastal Security system is unique in its ability to provide the customer with a comprehensive solution to meet the specific needs of defense against terrorist threats."
For the SBInet project, the Boeing/Elbit consortium proposed the radical idea of 1,800 towers equipped with cameras and motion detectors stretched across the border. The data from the cameras and motion detectors is transmitted to border patrol agents in real time with no delay.
The exact value of this contract is not known yet. The US Congress is still debating the controversial question of whether or not to construct a fence along the Mexican border. Until that decision is made, it is unclear what the total costs for the SBI net will be. If the fence is built, the costs of the fence alone will be as high as $1 billion.
http://www.israel21c.org/bin/en.jsp?enDispWho=Articles%5El1450&enPage=BlankPage&enDisplay=vi...
>>The electronic surveillance and defense sector naturally also includes Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), my number one share pick for the next decade. Elbit Systems is at an all-time high, but its p/e ratios are still a modest 17 for 2006 and 15 for 2007. I won’t wax loquaciously on the company today, and merely note that I checked with the help of Steven’s gang, and could not find even one US company that really resembled Elbit Systems in what I call “readiness for development in smart electronics for the next decade”.
Don’t misunderstand me, I do not mean that Elbit Systems has something the US or French companies lack in the field of smart electronics, and the company unquestionably lacks their market power, but it can offer companies and countries flexibility and creativity that the giants cannot. This is why when a giant like Boeing Co. (NYSE:BA) or Lockheed Martin Co. (NYSE:LMT) wins a huge interdisciplinary tender, whether in the US or in other countries, Elbit Systems has a better chance of participating in the project as a subcontractor than companies doe. >>
http://www.globes.co.il/serveen/globes/docview.asp?did=1000137412&fid=1052
Wise choice, splendid timing,
Dubi
“Stealth” rally:
Without anything dramatic having happened, I’m quietly up 30% in six months on my original purchase of ESLT on March 30 (#msg-10442384). My one mistake was in selling off a portion of the holding in order to buy more IDIX.
This has been almost too easy in that virtually no DD has been required compared to a typical biotech position.
Tadiran agrees to do job for parent company, at a loss
25.9.06 | 12:13 By Omer Sharvit
During the three-way merger of Elbit Systems (Nasdaq: ESLT), Tadiran Communications (TASE: TDCM) and Elisra, the minority shareholders at Tadiran screamed against the price they anticipated Tadiran would be forced to pay for Koor Industries (NYSE: KOR) holdings in Elisra. A year later the deal is long done, Elbit Systems bought out Koor's shares in Elisra instead of Tadiran, and Koor sold some of its Tadiran holdings in Elbit Systems, turning it into an NIS 5.4 billion defense industry colossus.
The upshot is that Tadiran was spared having to buy Elisra. But now the company has new issues.
Tadiran today announced an insider transaction, which involves it carrying out a project for its parent company (Elbit Systems) at a loss.
A foreign company had been supposed to make tactical data radio systems for Israel's Defense Ministry. But "difficulties arose" and Elbit Systems decided that Tadiran should make the systems instead. The contract is worth $23.6 million.
Tadiran had also bid in the Defense Ministry tender back in 2003, as a subcontractor for the Rafael armaments authority. But Rafael and Tadiran elected not to do the tender at a loss, and apparently the price they demanded did not satisfy the ministry, which chose Elbit Systems.
It is therefore rather odd that Tadiran today admits that the project, which it now has anyway, will cost it a gross loss of $4 million.
Tadiran insists that the gross loss will shrink to $2.6 million if the order is extended.
The company has several excuses to offer for accepting the project, even at a loss. One is be that it would be part of the Israeli army's great "digital ground forces" project. It also positions Tadiran to supply future radio-equipment demands for the army, and bolsters its status in world markets.
Tadiran also underscores that it accepted the job for Elbit Systems at the explicit behest of the Defense Ministry, and views it as a form of service to the nation. And anyway, investors in defense-sector companies should keep in mind that even the biggest projects, worth billions, aren't necessarily profitable.
http://www.haaretz.com/hasen/spages/766745.html
Elbit Systems in US border security win
"The Washington Post” reports that the consortium led by Boeing has won the $2.1 billion Secure Border Initiative project.
Gil Shlomo 20 Sep 06 12:00
“The Washington Post” reported today that the consortium led by Boeing (NYSE: BA), which includes Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), has won a $2.1 billion contract to help the Department of Homeland Security beef up security along more than 7,500 miles of US borders with Mexico and Canada.
In May, Boeing announced that it was participating in the tender, and that it passed the initial screening stage. The company added that Elbit System was a member of the consortium, through its US subsidiary, Kollsman Inc.
The Department of Homeland Security held the tender for the Secure Border Initiative (SBI) project. SBI will first be deployed along the US-Mexican border, especially along the Arizona section, a focus for smugglers of illegal immigrants Boeing said it could deploy the system along both the Canadian and Mexican borders within three years.
“The Washington Post” wrote, “Several congressional and industry sources confirmed that Boeing had defeated four other companies in the intensely fought contract competition. A public announcement was planned on Wednesday. A Boeing spokesman had no immediate comment.”
A The Department of Homeland Security spokesman said a decision was “very close.”
Boeing bid against Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), Raytheon (NYSE: RTN), and Ericsson (Nasdaq: ERICY; SAX: ERIC).
Published by Globes [online], Israel business news - www.globes.co.il - on September 20, 2006
EFW Bolsters Homeland Security Commitment with U.S. Coast Guard Contract for Night-Vision Imaging System
Sunday September 17, 5:02 am ET
Enhanced Helicopter Capability Will Aid in Threat Detection and Response at Borders
FORT WORTH, Texas, Sept. 17 /PRNewswire-FirstCall/ -- EFW Inc. (EFW), an Elbit Systems of America company (Nasdaq: ESLT; TASE: ESLT), has been awarded multiple contracts to supply the U.S. Coast Guard (USCG) with an Aviator's Night Vision Imaging System/Head Up Display, also known as ANVIS/HUD. The systems extend the border patrol, vessel identification and search and rescue capabilities of the USCG's HH-65 and HH-60J helicopters. These initial contracts are valued at $815,000.
The ANVIS/HUD system provides a significant increase in situational awareness and safety by allowing the pilot to fly "head out of the cockpit" during night operations and by projecting critical flight information into the night vision goggles' view. The electro-optic system has been in operational use since the mid-1990s by U.S. Army, U.S. Navy, U.S. Marine Corps and U.S. Air Force rotary wing pilots. It is installed on most of the utility and special operations helicopter platforms, including the UH-60, CH-53, CH-47, CH-46, UH-1, V-22 and others.
Commenting on the award, Raanan Horowitz, executive vice president and general manager of EFW, said "We serve a market where lives are at stake, so nothing short of proven technology is what is needed to safeguard the homeland. This award, combined with so many installations on helicopters in the U.S. fleets, is further recognition that EFW and its affiliated companies represent the standard when it comes to helmet-mounted displays."
EFW and the other companies in the Elbit Systems of America group are prominent participants in defense and homeland security programs. EFW also supplies the Integrated Helmet and Display Sighting System (IHADSS) used to provide U.S. Army Apache attack helicopter pilots with helmet mounted night vision, flight data, and weapons targeting information. Additionally, EFW, through its Vision Systems International (VSI) joint venture, provides subsystems for the Joint Helmet Mounted Cueing System (JHMCS) used in fixed wing fighter aircraft in the US and other allied countries as well as for the helmet mounted system for the U.S. Joint Strike Fighter.
About EFW Inc.
EFW Inc., of Fort Worth, TX, specializes in the design, development, production and life-cycle support of complex military hardware and software solutions for upgrade and integration projects. As a fully accredited US Department of Defense supplier, the company also provides systems support for fixed and rotary wing aircraft, ground vehicles, naval vessels, trainers, simulators, and weapons sensors for military services and leading defense contractors.
http://biz.yahoo.com/prnews/060917/lnsu001.html?.v=11
Elbit's Elisra Group wins $65 mln European contract
Sun Sep 17, 2006 3:29am ET
Elbit's Elisra Group wins $65 mln European contract
Israel's Elbit unit gets German Air Force contract
Israel's IDB plans sale of Elbit shares -paper
TEL AVIV, Sept 17 (Reuters) - Israeli defence firm Elbit Systems Ltd. (ESLT.O: Quote, Profile, Research) (ESLT.TA: Quote, Profile, Research) said on Sunday that Tadiran Electronic Systems, part of the Elisra Group, won a $65 million contract to supply electronic warfare systems to an unnamed European country.
Tadiran Electronic Systems President and Chief Executive Itzhak Beni said the contract would be a springboard to future business and the expansion of the company's activities in Europe.
Elisra is 70 percent owned by Elbit, Israel's biggest publicly traded defence company.
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060917:MTFH99978_2...
>>IMI had been slated for sale to an outside investor, and several Israeli and foreign defense contractors have expressed interest. Reportedly, the state had hoped that Elbit Systems would buy IMI; however, former company chairman Ovadia Eli is believed to have hoped to delay privatization to improve profitability and boost the company's value.>>
(#msg-13223837)
Dubi
Tadiran Spectalink to supply pilot rescue system to Luftwaffe
The first order for personal survival radios is $8 million.
Adi Ben Israel 10 Sep 06 11:14
Tadiran Spectalink Ltd., which develops and manufactures communications systems and search and rescue radios, has received an $8 million first order for supply for Personal Survival Radio (PSR) to the Luftwaffe (German Air Force). The company’s small lightweight PSR-434G/SV is among the most advanced in the world.
Tadiran Spectralink president and CEO Itzhak Beni said the sale was important because Germany was a leading NATO nation, and many other countries in the area based both their doctrine and their equipment purchasing patterns on the example of the German military. “We believe that our field-proven PR/SAR systems are the right answer to the needs of the very sophisticated and demanding European markets,” he said, adding that he anticipated that the company would bid for other large PR/SAR projects in Europe, currently underway or expected to be announced in the near future.
Tadiran Spectralink develops and manufactures electronic warfare, intelligence, and communications systems. Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) systems subsidiary Elisra Group owns 70% of the company, and Israel Aircraft Industries Ltd. (IAI) subsidiary Elta Systems group owns 30%.
Published by Globes [online], Israel business news - www.globes.co.il - on September 10, 2006
Tel Aviv stocks steady; tech is lifted by Elbit Systems
Last Update: 7:43 AM ET Aug 31, 2006
TEL AVIV (MarketWatch) -- The main Tel Aviv stock indexes were little changed with the main tech-stock index again giving the market a lift. The TA-25 index little changed at 804.36, the TA-100 index climbed 0.2% to 820.44, and the Tel-Tech 15 index of technology stocks was 0.5% higher at 350.11. "The market is trading around basis levels on very low volume, with technical support around 800 and with most investors on vacation," said Gil Shilo, equity trader at Israel Brokerage & Investments in Tel Aviv. Volume was $90 million, compared with the daily average through July of $342 million. The Israeli daily Ma'ariv reported that holding company IDB is in advanced talks to sell its 7.8% holding in the defense contractor Elbit Systems for $103 million. The shares, helping lift the Tel-Tech index, were recently up 1.4% in Tel Aviv. The two most-active issues are Bank Leumi, down 0.4%, and Bank Hapoalim, little changed.
>The price values Elbit Systems at about 15% above the current market price…<
Interesting.
IDB in talks to sell 7.8% stake in Elbit Systems: Ma'ariv
By Robert Daniel
Last Update: 2:59 AM ET Aug 31, 2006
TEL AVIV (MarketWatch) -- The Israeli holding company IDB is in advanced talks to sell its 7.8% holding in the defense contractor Elbit Systems (ESLT : elbit sys ltd ord
+1.0%) for 450 million shekels ($103 million), the Israeli daily Ma'ariv reported in its online edition. The price values Elbit Systems at about 15% above the current market price, the paper said. IDB is discussing the sale with a number of entities that have interests in the security field, the paper reported.
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