Arotech Corporation (NASDAQ:ARTX)

Third Quarter 2013 Results

• Revenues for the third quarter reached $23.2 million, compared to $21.4 million for the corresponding period in 2012, an increase of 8.2%.
• The Company's net income from continuing operations for the third quarter was $861,000, or $0.05 per share, compared to net income of $498,000, or $0.03 per share, for the corresponding period last year.

"We are very happy with our results for the quarter, particularly our continued growth in revenue and solid gross margin of 27.5%. We continue on the path to achieving our strongest ever year in 2013," stated Robert Ehrlich, Chairman and CEO Arotech Corporation. "As a result, we are again increasing the guidance for 2013, with expectations of full-year revenues growing to between $89 and $90 million and full-year EBITDA increasing to between $6.1 and $6.3 million," concluded Mr. Ehrlich.

Business Outlook

For the full year 2013, Arotech's management anticipates that revenues will range from $89 million to $90 million. This is an increase from the former guidance range of between $87 million and $89 million. Management also expects adjusted EBITDA for 2013 to be in the range of between $6.1 million and $6.3 million, an increase from the formerly expected range of between $4.5 million and $5.0 million. The financial guidance provided is as of today and Arotech undertakes no obligation to update its estimates in the future.

ANN ARBOR, Mich., Oct. 31, 2013 /PRNewswire/ --Arotech Corporation (NasdaqGM: ARTX), a provider of quality defense and security products for the military, law enforcement and homeland security markets, announced today that its Battery and Power Systems Division has recently received $3.2 million in new orders. Of this amount, $2.2 million was repeat orders for batteries and chargers for military applications. The remaining $1 million in orders was for water activated batteries, used primarily for lifejackets.

"We're very pleased with the strong momentum in our battery sales," commented Arotech's Chairman and Chief Executive Officer, Robert S. Ehrlich. "Our batteries are designed for use in critical military and commercial applications, and these types of repeat sales demonstrate that our customers appreciate the quality and durability of the products we provide them. Our technological leadership in batteries is the result of many years of R&D investment. We are focused on maintaining and building that technological edge, and we see significant future potential for Arotech in this realm."

ANN ARBOR, Mich., Sept. 18, 2013 /PRNewswire/ -- FAAC Incorporated, part of Arotech Corporation's (Nasdaq GM: ARTX) Training and Simulation Division, has received a contract modification exercising options on its Virtual Clearance Training Suites (VCTS) contract. The exercised options amount to $8.9 million to continue to support the US Army's simulation based training requirements.

VCTS simulates the wide array of large and small technical devices, purpose-built mine-protected detection and clearing vehicles, and ever-evolving tactics and techniques used by the U.S. Army to combat improvised explosive devices.

"We're very pleased to win this follow on order for our VCTS project, reflecting the strong value and ROI our customer has already gained with our system deliveries to date," commented Arotech's Chairman and Chief Executive Officer, Robert S. Ehrlich. "This is another example of how our client engagements have significant inherent potential, which very often lead to additional orders down the road."

About Arotech's Training and Simulation Division

Arotech's Training and Simulation Division (ATSD) provides world-class simulation based training solutions. ATSD develops, manufactures, and markets advanced high-tech multimedia and interactive digital solutions for engineering, use-of-force, and driver training simulations for military, law enforcement, security, municipal and private industry personnel. The division's fully interactive driver-training systems feature state-of-the-art vehicle simulator technology enabling training in situation awareness, risk analysis and decision-making, emergency reaction and avoidance procedures, and conscientious equipment operation. The division's use-of-force training products and services allow organizations to train their personnel in safe, productive, and realistic environments. The division provides consulting and developmental support for engineering simulation solutions. The division also supplies pilot decision-making support software for the F-15, F-16, F-18, F-22, and F-35 aircraft, as well as simulation models for the ACMI/TACTS air combat training ranges.

ANN ARBOR, Michigan, September 3, 2013 /PRNewswire/ --

Arotech Corporation (NasdaqGM: ARTX), a provider of quality defense and security products for the military, law enforcement and homeland security markets, announced today that its Battery and Power Systems Division received a $2 million follow on order from the United States Army for its award-winning SWIPES^[TM] System.

The Soldier Wearable Integrated Power Equipment System, or SWIPES^[TM] enables extended mission times without the burden of power source swaps or charging due to their high energy density. It also reduces battery weight that soldiers are carrying by up to 30%. The batteries continuously charge the secondary batteries inside various devices, such as two way radios, GPS units and shot detection systems. The SWIPES^[TM] product allows for individual tailoring for a soldier and is designed to accept new applications as they become available.

"We're very pleased to win this additional order from the US army, reflecting the products increasing acceptance among US Ground Forces," commented Arotech's Chairman and Chief Executive Officer, Robert S. Ehrlich. "The US army is the world's leading military force, especially when it comes to the use of technology on the battlefield. The fact that they repeatedly choose our SWIPES system as well as awarding it a 'Top-Ten Best Army Inventions' upon its launch, is testament to the effectiveness and the value our product adds. Since developing the SWIPES product, we have realized over $6 million in sales from the US army. We see significant future growth potential for this product- not only for the various divisions of the US military, but also for ground forces of other armies."

Second Quarter 2013 Conference Call

Now pointing on to few of the quarter's highlights, let me go on. Revenues were at an all-time high, a record of $22.4 million, up 10% over last year. Additionally, we recorded a GAAP net income of $1.5 million and adjusted EBITDA of $2.5 million, all outstanding achievements for Arotech. Part of this growth is due to strong improvement in our gross margins in the quarter. Our gross margins came in at 28% versus 17% in the same quarter last year. In addition, while we were growing steadily, we have managed to keep our operating expenses low. Our operating expenses of $4.4 million in the quarter is lower than the average we have reported in the past 2 years and this effort is allowing us to unleash the operating leverage in our business model, resulting in increased operating profitability.

Our momentum and financial performance is strong as we move through 2013. And the scope of our business is significantly larger than it was a year ago. Given all this good news, it's quite clear that we will blow past the guidance we've set for 2013 that we issued at the start of the year and this is why we have announced today in our press release an increase in our guidance for 2013. As stated in our release, we now expect between $4.5 million and $5 million of EBITDA for 2013, a significant increase from the earlier range of $2.9 million to $3.4 million. We are now projecting revenue to increase to between $87 million and $89 million for the full year, whereas our earlier range was $85 million to $87 million.

It is important to bear in mind that this guidance is conservative. And based on what we see today, there is still further potential for upside from our strong pipeline of projects that we are currently pursuing. Our backlog has remained strong, standing at $66 million at the end of the quarter.

Second Quarter 2013 Results

• Revenues for the second quarter reached $22.4 million, compared to $20.4 million for the corresponding period in 2012, an increase of 9.9%.
• The Company's net income from continuing operations for the second quarter was $1.5 million, or $0.09 per diluted share, compared to a net loss of $(1.3) million, or $(0.09) per share, for the corresponding period last year.

"We are proud to report a record quarter for Arotech with solid profitability, and I note that Arotech now has a trailing twelve-month profit of approximately $2.3 million," stated Robert Ehrlich, Chairman and CEO Arotech Corporation. "All parts of our business are performing well and ahead of our expectations. As a result, we are increasing our 2013 guidance, with expectations of full-year revenues growing to between $87 and $89 million and full-year EBITDA increasing to between $4.5 and $5.0 million," concluded Mr. Ehrlich.

Backlog

Backlog of orders totaled approximately $65.7 million as of June 30, 2013, as compared to $87.3 million at June 30, 2012.

Revised Guidance

For the full year 2013, Arotech's management anticipates that revenues will range from $87 million to $89 million. This is an increase from the former guidance range of between $85 million and $87 million.

Management also expects adjusted EBITDA for 2013 to be in the range of between $4.5 million and $5.0 million, a significant increase from the formerly expected range of between $2.9 million and $3.4 million.