Q3 2004 Elbit Systems Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Welcome to the Elbit Systems Ltd. third-quarter 2004 results conference call. All participants are at 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 November 16th, 2004.

I would like to remind everyone that the Safe Harbor language contained in today's press release also pertains to all content of this conference call. If you have not yet received a copy of today's release and would like to do so, please call Gelbart Kahana Investor Relations at 1866-704-6710 or 972-3607 4717.

I would now like to hand over the call to Mr. Ehud Helft of Gelbart Kahana Investor Relations. Ehud, please go ahead.

EHUD HELFT, HOST, GELBART KAHANA INVESTOR RELATIONS: Good morning, and good afternoon to everybody. Thank you for joining us today for the Elbit Systems third-quarter results conference call. Before we begin, I would like to thank Elbit's management for hosting this call.

With me on the call today are Mr. Joseph Ackerman, President and CEO, and Mr. Ilan Pacholder, VP, Finance. Mr. Pacholder will begin with a brief financial review of the third quarter and then Mr. Ackerman will follow on with an overview. We will then open the call for questions. Ilan, would you like to begin please?

ILAN PACHOLDER, VP, FINANCE, ELBIT SYSTEMS: Thank you, Ehud. Good morning and good afternoon. Thank you for joining us today to discuss our results for the first quarter ended September 30th, 2004. Our third-quarter revenues were $223.8 million as compared with $214.3 million for the third quarter of last year. Revenues for the first nine months of 2004 reached $669.2 million as compared to $635.2 million during the same period last year.

Our results in the third quarter were not significantly affected by the non-cash expense that is recorded in connection with our employees phantom option plan. Although the (indiscernible) effect in the first nine months is more significant. To be consistent with a regular reporting I should inform you both of our reported U.S. GAAP numbers and of the results excluding the phantom option plan effect for both this year and last year.

Our reported gross profit for the third quarter of 2004 was $61.5 million over 27.5 percent of revenues compared with reported gross profit of $57.1 million or 26.7 percent of revenues in the corresponding period last year. Excluding the phantom option plan effect, gross profit in the third quarter of 2004 was $61.8 million or 27.6 percent of revenues compared with gross profit of $55.5 million or 25.9 percent of revenues in the third quarter last year.

Reported operating profit in the third quarter of 2004 was $17.4 million over 7.8 percent of revenues compared with $60 million or 7.5 percent of revenues in the same quarter last year. Excluding the phantom option plan effect, operating profit in the third quarter of 2004 was $17.8 million or 8…