Elbit Systems Ltd. announces fourth quarter and full year 1996 results.

HAIFA, Israel--(BUSINESS WIRE)--March 4, 1997--Elbit Systems Ltd. (NASDAQ/NM symbol: ESLTF) today announced fourth quarter and full year 1996 results.

The company began operations as a separate entity as a result of the demerger of Elbit Ltd. effective January 1, 1996. In the context of the demerger, the company received the defense related assets, liabilities and activities of Elbit Ltd.

Revenues for the fourth quarter of 1996 were $96.7 million versus $73.3 million, last year. Revenues for the full year 1996, increased to $307.5 million from $300.0 million in 1995.

Gross profits for the fourth quarter were $27.6 million compared with $19.7 million in the same quarter last year, an increase of $7.9 million. This increase derives from, among other factors, the completion of the development and start of production of a number of projects in the area of airborne systems.

Net profits for the fourth quarter were $6.5 million compared with $7.3 million for the same quarter last year. The decrease in net profits in the quarter, despite the increase in sales and gross profits, is primarily the result of increased expenditures in R&D, selling and administrative costs, due to increased efforts in the development of important new products for future markets and reorganization expenses associated with the demerger.

Gross profits for 1996 were $76.1 million versus $80.4 million in 1995. The decrease in gross profits was due to the continuous freeze of the US Dollar/Israeli Shekel exchange rate, and mix of types of projects.

Net profits for 1996 were $18 million or $0.84 per share, compared with net profits of $24.2 million or $1.14 per share in 1995.

The decrease in net profits for the year was the result of increased R&D expenditures invested to maintain the company's technological advantages in future markets, and the result of investments in new electronic systems developed in response to customer's anticipated needs. Similarly, net profits were influenced by expenses incurred in the reorganization of the company relating to the demerger, and the continued freeze of the US dollar/Israeli Shekel exchange rate.

The Board of Directors declared a dividend for the fourth quarter of 1996 of $0.05 per share. The record date for the dividend is April 30th 1997, and will be paid on May 14th net of taxes and levies to be withheld at source at the rate of 25%. The dividend paid for the first nine months was $0.0324 per share, in proportion to the company's share in the equity capital of Elbit Ltd. as of the effective date of the demerger.

The backlog as of December 31, 1996 was $614 million of which 76% is for markets outside of Israel, compared with a backlog of $599 million at the end of 1995, of which 66% was for markets outside of Israel.

Commenting on the results, Mr. Joseph Ackerman, President and Chief Executive Officer said, "We are pleased to report our full year results as an independent company. Our primary goal in the demerger from Elbit Ltd. was to increase our defense business by enhancing our focus on upgrades, advanced electronics development and manufacture, and by providing strategic solutions to defense customers in Israel and abroad. These steps are reflected in our increased expenditures in the fourth quarter in R&D and marketing."

Mr. Ackerman concluded, "We believe we are in the "right market" at the "right time." Our unique expertise in upgrading defense platforms makes us particularly well positioned in one of the most dynamic and promising segments in the defense electronics marketplace. We are pleased to participate in such a dynamic area and look forward to a productive 1997."

Forward looking statements in this release involve a number of risks and uncertainties including, but not limited to, product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development, the effect of the Company's accounting policies as well as certain other risk factors which are detailed in the Company's SEC filings.

Elbit Systems Ltd. is engaged in a wide range of defense-related airborne, ground and command, control and communications ("C3") programs throughout the world. They focus on upgrading of existing military platforms and developing new technologies for defense applications. -0-

                         ELBIT SYSTEMS LTD.
                        STATEMENT OF INCOME
       (In thousands of US Dollars, except for per share amounts)


                           For the Three Months         For the Year
                               Ended Dec. 31,           Ended Dec. 31,
                              1996        1995         1996        1995

Revenues                      96,656      73,348      307,508     299,858
Cost of revenues              69,037      53,605      231,418     219,442
                              ------      ------      -------     -------
Gross profit                  27,619      19,743       76,090      80,416
                              ------      ------      -------     -------

Operating expenses:
 Research and
  development, net             8,609       4,848       21,768      18,243
 Selling and marketing         7,637       4,082       21,573      24,064
 General and administrative    3,046       2,234        9,690       8,870
                              ------      ------       ------      ------
Total operating expenses      19,292      11,164       53,031      51,177
                              ------      ------       ------      ------

Operating income               8,327       8,579       23,059      29,239
Financial income                  45       1,579          595       1,349
Other income (expense)          (176)         44           12         324
Income before income taxes     8,196      10,202       23,666      30,912
Provision for income taxes     1,842       2,716        5,812       6,579
                               -----      ------       ------      ------
                               6,354       7,486       17,854      24,333
Company's share of
 partnership income (loss)       128        (138)         155        (160)
                               -----       -----       ------      ------
Net income                     6,482       7,348       18,009      24,173
                               -----      ------       ------      ------
                               -----      ------       ------      ------

Earnings per share             $0.30       $0.35        $0.84       $1.14
                               -----      ------       ------      ------
                               -----      ------       ------      ------

Shares outstanding            21,386      21,294       21,386      21,294
                              ------      ------       ------      ------

-0-

                        ELBIT SYSTEMS LTD.
                    CONSOLIDATED BALANCE SHEETS
                   (In thousands of U.S. Dollars)

                                                    December 31,
 Assets                                         1996            1995
 ------                                        ------          ------
 CURRENT ASSETS:
 Cash and short term deposits                  23,374          21,153
 Trade receivables and others                  66,721          48,512
 Inventories, net of advances                  73,280          51,721
                                              -------         -------
 Total current assets                         163,375         121,386

 Deposits and long-term loans                  40,531          40,307
 Investments long-term receivables and others  11,044          13,672
 Fixed assets, net                             25,508          24,054
 Other assets, net                                896           2,418
                                              -------         -------
                                              241,354         201,837
                                              -------         -------
                                              -------         -------


Liabilities and Shareholder's Equity

 Current liabilities                          145,968         120,765
 Long-term liabilities                         17,760          19,706
 Shareholders' equity, net                     77,626          61,366
                                              -------         -------
                                              241,354         201,837
                                              -------         -------
                                              -------         -------

CONTACT: Arie Tal, Corporate Secretary

Ilan Pacholder, Finance Director

Elbit Systems Ltd.

Tel: [phone]

(972-4) 831-6319

Fax: [phone]

or

Jody Burfening

Lippert/Heilshorn & Associates, Inc.

212-838-3777 (ext. 106)

[e-mail]