Elbit Systems Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Elbit Systems' first quarter 2024 results conference call. All participants are present in 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. I would now like to hand over the call to David Revere, Elbit Systems' Investor Relations Director. David, please go ahead.

Thank you, operator. Good day, everyone, and welcome to our first quarter 2024 earnings call. On the call with me today are Kuti Mahlis, our president and CEO, and Kobi Kagan, our CFO. Before we begin, I would like to point out that the safe hours 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 of the detailed GAAP financial data as well as the non-GAAP information and their reconciliation in today's press release. Bobby will begin by providing 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 question and answer session. With that, I would like now to turn the call over to Kobi. Kobi, please.

Thank you, David. Hello, everyone, and thank you for joining us today. The financial results of the first quarter of 2024 reflect the significant increase in demand and the opportunities the company has. This demand supported the growth of our order backlog to more than $20 billion. As we mentioned in our previous quarter investment conference, we can see the continuous improvement in our profitability. I will now highlight and discuss some of the key figures and trends in our financial results. First quarter revenues, were $1,554,000,000 compared to $1,394,000,000 in the first quarter of 2023. Our diverse geographic revenue base is important to the long-term sustainability of our business. In the first quarter of 2024, Europe contributed 25 percent, North America 21 percent, Asia Pacific 20 percent, and Israel contributed 29% of revenues. Growth in Israeli revenues reflects the increased demand for a broad range of our solutions following the breakout of the sorts of iron war. The non-GAAP growth margin for the first quarter was 24.7% compared to 26.5% in the first quarter of 2023. gross margin in the first quarter was 24.1 percent of revenues compared to 25.9 percent in the first quarter of 2023. The first quarter non-GAAP operating income was $121.6 million or 7.8 percent of revenues compared with $108.5 million or 7.8 percent of revenues in the first quarter of last year. GAAP operating income for the first quarter was $105.4 million, or 6.8% of revenues, versus $93.9 million, or 6.7% of revenues, in the first quarter of 2023. The operating expense breakdown in the first quarter was as follows. Net R&D expenses were 28%, 98.5 million dollars or 6.3 percent of revenues compared to 110.3 million dollars or 7.9 percent of revenues in the first quarter of 2023. Marketing and selling expenses were 89.1 million dollars or 5.7 percent of revenues versus 80.2 million dollars or 5.8 percent in the first quarter of 2023. G&A expenses were $81.2 million or 5.2% of revenues compared to $77.1 million or 5.5% of revenues in the first quarter of 2023. Financial expenses were $31.2 million in the first quarter compared to $24.2 million in the first quarter of 2023. Financial expenses in the first quarter reflect the high interest rate environment as well as required increase in net working capital. We recorded the tax expense of $11.6 million in the first quarter, compared to $8.7 million in the first quarter of 2023. The effective tax rate in the first quarter of 2024 was 14.6% compared to 12.8% in the first quarter of 2023. Our non-GAAP diluted EPS was $1 and 81 cents for the first quarter of 2024 compared to $1.78 in the first quarter of 2023. GAAP diluted EPS was $1.65 for the first quarter of 2024 compared to $1.40 in the first quarter of 2023. I will now review our business segments first quarter of 2024 financial results And we note that our segmental disclosure of operational income is provided on a gap basis. T4I and cyber revenues increased by 12% year-over-year, mainly due to increase in ready system sales in Israel. ISAR and EW revenues increased by 17% in the first quarter of 2024, mainly due to electronic warfare and electro-optic system sales in Israel. Land revenues increased by 26% in the first quarter of 2024, mainly due to increased ammunition and munition sales in Israel. Aerospace and Albit Systems of America revenues were similar year over year. Our older backlog is March 31st, 2024, was $20.4 billion, a $4.5 billion higher than the backlog at the end of the first quarter of 2023, Almost $2 billion of the increase is from Israel. Out of the new orders of the first quarter, $1.5 billion is from Israel. Approximately 71% of the current backlog is attributable to orders from outside of Israel. Approximately 51% of the current backlog is scheduled to be performed during 2024 and 2025. and the rest is scheduled for 2026 and beyond. Operating cash flow for the first quarter was a $6.4 million outflow compared to $73 million outflow in the same quarter last year. The cash flows in the three months ended March 31st, 2024 were affected mainly by the increase in inventories and trade receivables offset by the increase in contract liabilities. The Board of Directors has declared a dividend of 50 cents per share. I will now turn the call over to Mr. Maklis, Elbit's CEO. Bootsy, please go ahead.