Elbit Systems Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Elbit Systems' first quarter 2022 results conference call. All participants are present in listen-only mode. Following management 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, www.elbitsystems.com. I would now like to hand the call to Rami Meyerson, Albert Systems Investor Relations Director. Rami, please go ahead.

Thank you, Operator. Good day, everyone, and welcome to our first quarter 2022 earnings call. On the call with me today are Ruti Mahlis, our President and CEO, Kobi Kagana, CFO, and Yossi Gaspar, Senior EVP, Business Management. 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 content 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. Corby will begin by providing a discussion of the financial results. followed by Guti, 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 Kobi.

Kobi, please. Thank you, Rami. Hello, everyone, and thank you for joining us today. It is both an honor and a privilege to present Albit Systems First for the results to you today. I would like to thank Elsie Gaspar for his help in recent months. Yossi has retained responsibility for capital markets and investor relations. I look forward to meeting you, Albit Systems investors and analysts, over the coming weeks and months. The first quarter results reflect a healthy market environment for Albit Systems and sustained demand for our solutions from customers around the world. Revenue growth in the quarter was primarily due to the fulfillment of orders received in previous years and the Spartan acquisition. The Russian invasion of Ukraine in late February and proposed budget increases didn't have a material impact on order intake or revenues in the quarter. Profitability in the quarter includes a sharp increase in expenses related to employee stock price link compensation plans. These plans help align employee compensation with share price performance incentivizing our employees to generate long-term value for all of Elbit Systems' stakeholders. Our gap and non-gap results have always included these expenses. In the first quarter, compensation expenses were significantly larger than normal following the appreciation in the share price after the Russian invasion of Ukraine. Reducing profitability in the quarter is noted in our fourth quarter and full year 2021 results press release published on March 29th, 2022. Assuming a decline in share price volatility, we expect that these stock price link compensation expenses to return to historic levels. I will now highlight and discuss some of the key figures and trends in our financial results. First quarter revenues were $1,353,000,000 and increased by 21% year over year. A major part of the growth was organic in addition to the contribution from Spartan, which was acquired in the second quarter of 2021. In terms of revenue breakdown across our area of operations, airborne system accounted for 37% of total revenues and increased year-over-year mainly due to urban precision-guided munition sales. Land system sales accounted for 22% of total revenues, a similar level of revenues to 2021. C4I ISR at 29% of revenues increased year-over-year primarily due to the acquisition of Spartan and unmanned system sales. Electro-optics accounted for 9% and other sales accounted for 3% of revenues. Our diverse geographic revenue base is important to the long-term sustainability of our business. In the first quarter, North America contributed 27% of our revenues, Asia Pacific 30%, Israel was 21%, and Europe 19%. Asia Pacific revenues increased mainly due to sales of precision-guided munitions and UAS. the growth in European revenues was due primarily to training and simulation sales. The non-GAAP gross margin for the first quarter was 24.6% compared to the first quarter of 2021 at 25.6%. GAAP gross margin in the first quarter was 24.2% of revenues compared to 25.2% in the first quarter of 2021. Gap and non-gap profit in the first quarter include approximately $20 million of expenses related to stock price link compensation plans. The first quarter non-gap operating income was $65.8 million, or 4.9% of revenues, compared with $92.9 million, or 8.3% of revenues last year. Gap operating income for the first quarter was 58.6%, million versus $83.8 million in the first quarter of 2021. Gap and non-gap operating profit in the first quarter included expenses of approximately $35 million related to the stock price link compensation plans. The operating expense breakdown in the first quarter was as follows. Net R&D expenses were 7.4% of revenues versus 7.5 percent in 2021. Marketing and selling expenses increased to 6.4 percent of revenues from 4.6 percent last year due to the Sportman acquisition and the stock price link compensation expense. G&A expenses were 6.2 percent of revenues compared to 5.5 percent last year due to stock price link compensation expenses. Other operating income includes a capital gain of $3.7 million related to the disposal of a non-core business. Financial income was $1.1 million in the first quarter compared to financial expenses of $200,000 in 2021. We recorded a tax expense of $8 million in the first quarter compared to $10.8 million in 2021. The effective tax rate in the first quarter was 13.8% compared to 13.4% in 2021. Our non-GAAP diluted EPS was $1.22 in the first quarter compared with $1.72 last year. The GAAP diluted EPS was $1.19 compared with $1.64 last year. The stock price link compensation expenses in the quarter were equivalent to approximately 72 cents on an EPS basis. Our backlog of orders as of March 31st, 2022 was approximately $13.7 billion, $1.9 billion higher than the backlog at the end of March, 2021. And at the similar level to the backlog at the end of the 2021. Approximately 55% of the current backlog is scheduled to be performed during 2022 and 2023, and the rest is scheduled for 2024 and beyond. The percentage of short-term backlog declined in recent years following the receipt of more long-term contracts, improving our visibility for future revenues. Operating cash flow for the first quarter was $36 million, inflow compared to a $30 million inflow outflow in the same quarter last year. The Board of Directors declared a dividend of $0.50 per share for the first quarter of 2022. I will now turn the call over to Mr. Smahlis, LBIT CEO. Butri, please go ahead.