Elbit Systems Ltd. (NASDAQ:ESLT) Q3 2020 Earnings Conference Call - Final Transcript
Nov 24, 2020 • 09:00 am ET
Ladies and gentlemen, thank you for standing by. Welcome to Elbit Systems Third Quarter 2020 Results Conference Call. [Operator Instructions] Following management's formal presentation, instructions will be given for the question-and-answer session. [Operator Instructions] 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 over the call to Rami Myerson, Elbit Systems Investor Relations Director. Rami, please go ahead.
Thank you, Elena. Good day, everyone, and welcome to our third quarter 2020 earnings call. On the call with me today are Butzi 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. Yossi will begin by providing a discussion of the financial results, followed by Butzi, 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 Yossi. Yossi, please.
Thank you, Rami. Hello, everyone, and thank you for joining us today. The results of our third quarter reflect the resilience of Elbit Systems, the sustained demand for our products and services, and the operational improvement that is a result of the initiatives we have discussed with you in the past.
As you are all familiar with COVID-19 has resulted in a significant slowdown in commercial air traffic and industry experts forecast that the commercial air traffic recovery to the 2019 level will likely take a number of years, Elbit System's commercial aviation exposure is relatively small as a percentage of revenues, but we are not immune to the slowdown in the market. Our third quarter results include a $60 million non-cash expense for the impairment of commercial aerospace assets and inventory write-offs as a result of the impact of the COVID-19 on demand for products and services that Elbit Systems supplies to the commercial aviation markets. These expenses have been recorded mainly in the cost of revenues line item in the P&L and have been excluded from our non-GAAP results as we believe these expenses are not representative of Elbit's regular ongoing business.
The recent news on COVID-19 vaccine are encouraging, and we continue to monitor the situation closely, while adhering to the instructions of the governments of the various countries in which we operate.
Turning now to our results. 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 non-GAAP information is particularly relevant this quarter, as the