Elbit Systems Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Elbit Systems' first quarter 2021 result conference call. All participants are present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. As a reminder, this conference is being recorded. You should have all received by now the company's press release that is available in the news section of the company's website at www.elbitsystems.com. I would now like to hand over the call to Rami Meyerson, Elbit Systems Investor Relations Director. Rami, please go ahead.

Thank you, Bracha. Good day, everyone, and welcome to our first quarter 2021 earnings call. On the call with me today are Butsy Machlis, our President and CEO, and Yossi Gaspar, our Chief Financial Officer. Before we begin, I would like to point out that the safe harbor statement in the company's press release issued earlier today also refers to the contents of this conference call. As we do every quarter, we will provide you with both our regular GAAP financial data as well as certain supplemental non-GAAP information. We believe that this non-GAAP information provides additional detail to help understand the performance of the ongoing business. You can find all the detailed GAAP financial data as well as the non-GAAP information and the reconciliation in today's press release. The OC will begin by providing a discussion of the financial results, followed by Bootsy who will talk about some of the significant events during the quarter and beyond. We will then turn the call over to a question and answer session. With that, I would like now to turn the call over to Yossi.

Thank you, Rami. Hello, everyone, and thank you for joining us today. The results of our first quarter reflect the sustained demand for LBIT system solutions and services from our customers around the world as reflected in the growth in revenues and the backlog. The results also reflect the impact of COVID-19 in the quarter that led to lower commercial aerospace sales as well as lower sales and marketing expenses in the quarter. Countries around the world are gradually opening up following the rollout of COVID-19 vaccines. We continue to monitor the situation closely while adhering to the instructions of the governments of the various countries in which we operate. I will now highlight and discuss some of the key figures and trends in our financial results. First quarter revenues of $1,118,000,000 increased 4.4% year-over-year. In terms of annual revenue breakdown across the areas of operation, airborne systems accounted for 37% of total annual sales and increased year-over-year mainly due to precision-guided munition sales. Land system sales accounted for 27% of total revenues, a similar level to 2021. C4ISR, 23% of sales increased year over year, primarily due to UAS sales to Asia Pacific. Electro-optics accounted for 9% of total sales and declined year over year, mainly due to the phasing of LBIT night vision programs in the U.S. Other sales were 4.5% of revenues and increased significantly year over year due to growth at our U.S. medical device subsidiary. Our diverse geographic revenue base is important to the long-term sustainability of our business. In the first quarter, North America was the largest, contributing 31% of our revenues. Israel was 25%, Asia-Pacific 21%, and Europe 17%. The growth in Israel was due primarily to UAS and security systems, and Asia-Pacific sales increased mainly due to sales of UAS and precision-guided information. The decline in North America was primarily due to lower commercial aerospace and night vision sales. The non-GAAP gross margin for the first quarter was 25.6% compared to the first quarter of 2020 at 27.6%. GAAP gross margin in the first quarter of 2021 was 25.2% of revenues compared with 27% in the first quarter of 2020. Low gross margin in the first quarter reflect the impact of a stronger shekel versus the US dollar relative to the first quarter of 2020. and a less favorable program mix of revenues. We continue with our long-term plan of cost control measures to help mitigate the financial impact of the stronger shekel. The first quarter non-GAAP operating income was 92.9 million, or 8.3% of revenues, compared with 90.4 million, or 8.4% of revenues, light years. GAAP operating income for the first quarter was $83.8 million versus $80.4 million in the first quarter of last year. Operating margins in the quarter were similar to the first quarter of 2020, as lower marketing and sales expenses helped offset lower gross margins. The operating expenses breakdown in the first quarter was as follows. Net R&D expenses were 7.5% of revenues, similar to the first quarter of 2020. Marketing and selling expenses declined to 4.6% of revenues versus 6.6% last year due to the reduced level of travel, marketing support, and trade exhibition expenses. G&A expenses were 5.5% of revenues, similar to last year. Financial expenses were $200. in the first quarter compared with $12.5 million in 2020. The lower level of financial expenses was mainly a result of weakening of the Israeli shekel versus the U.S. dollar between December 2020 and March 2021. The recorded tax expense of $10.8 million in the first quarter compared with $8.8 million in 2020. The effective tax rate in the first quarter was 13.4% compared with 12.6% in 2020. Our non-GAAP diluted earnings per share was $1.72 in the first quarter compared with $1.62 last year. The GAAP diluted EPS was $1.64 compared with $1.44 last year. Our backlog of orders as of March 31st, 2021 was approximately 11.8 billion, one billion higher than the backlog at the end of March 2020, and 770 million higher than that at the end of 2020. Approximately 59% of the current backlog is scheduled to be performed during 2021 and 2022. and the rest is scheduled for 2023 and beyond. This ratio is similar to that at the first quarter last year. The order backlog is equivalent to more than two years of revenues and provides good visibility for future revenues. Cash flow from operating activities for the first quarter was 13 million outflow compared with 10 million outflow in the same quarter last year. Cash flow from investing activities included a $61 million deferred payment for the IMI acquired in 2018. The Board of Directors declared a dividend of $0.44 per share for the first quarter of 2021. I will now turn the call over to Mr. Maklis. Putzi, please.