Benzinga | Oct 26, 2020 05:31AM EDT

Elbit Systems Said Due to Reduced Demand Caused by Covid-19, Expects to Record Q3 2020 Non-cash Expenses Related to Impairment of Assets and Inventory Write-offs of $60M

Elbit Systems Ltd. (NASDAQ:ESLT) (TASE: ESLT) ("Elbit Systems" or "the Company") announced today that, as a result of the impact of the COVID-19 pandemic, Elbit Systems experienced reduced demand for the products and services it supplies to the commercial aviation markets.

The significant slowdown in commercial air traffic, and the expectation that a commercial air traffic recovery to 2019 levels will likely take a number of years, have reduced the demand for products and services for the commercial aviation markets. Additionally, manufacturers of aircraft for these markets have announced plans to reduce production rates to adapt to the lower demand.

Following a review of the economic impact on the Company's assets overall, and those assets impacted by the commercial aviation industry in particular, the Company expects to record in the third quarter of 2020 non-cash expenses related to impairment of assets and inventory write-offs, due to COVID-19, in the amount of approximately $60 million.

These expenses will be recorded mainly in the "Cost of Revenues" line item in the Consolidated Statement of Income and will be eliminated in the non-GAAP results as a category of expenses that are not part of the Company's regular on-going business.

These expenses will be included in the financial results for the third quarter of 2020 to be reported by the Company in its press release for the quarter, which is planned to be released in November 2020.