Arotech Corporation Reports Record Results For The Third Quarter And First Nine Months, 2013

  Arotech Corporation Reports Record Results For The Third Quarter And First
                              Nine Months, 2013

Revenues, operating profit, EBITDA and net profit all continue to increase;
Year to date net income for continuing operations up to $0.18/share; 2013
guidance again increased

PR Newswire

ANN ARBOR, Mich., Nov. 12, 2013

ANN ARBOR, Mich., Nov. 12, 2013 /PRNewswire/ -- Arotech Corporation (NasdaqGM:
ARTX), a provider of quality defense and security products for the military,
law enforcement and security markets, today reported results for the quarter
and nine months ended September 30, 2013.

Third Quarter 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%.

Gross profit for the quarter was $6.4 million, or 27.5% of revenues, compared
to $5.0 million, or 23.1% of revenues, for the corresponding period last year,
a 4.4 point improvement in the gross margin percentage.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(adjusted EBITDA) for the quarter was $2.2 million, compared to $1.4 million
for the correspondingperiod in 2012. Arotech believes that information
concerning adjusted EBITDA enhances overall understanding of its current
financial performance. Arotech computes adjusted EBITDA, which is a non-GAAP
financial measure, as reflected in the table below.

The Company reported an operating profit for the third quarter of 2013 of $1.4
million, compared to an operating profit of $737,000 for the corresponding
period in 2012.

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.

First Nine Months Results

Revenues for the first nine months of 2013 reached $67.6 million, compared to
$57.9 million for the corresponding period last year, an increase of 16.8%.

Gross profit for the first nine months of 2013 was $18.0 million, or 26.5% of
revenues, compared to $12.6 million, or 21.8% of revenues, for the
corresponding period last year, a 4.7 point improvement in the gross margin
percentage.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(adjusted EBITDA) for the first nine months of 2013 was $6.2 million, compared
to $1.8 million for the corresponding period last year. Arotech believes that
information concerning adjusted EBITDA enhances overall understanding of its
current financial performance. Arotech computes adjusted EBITDA, which is a
non-GAAP financial measure, as reflected in the table below.

The Company reported an operating profit for the first nine months of 2013 of
$3.8 million, compared to an operating loss of $(877,000) for the
corresponding period in 2012.

The Company's net income from continuing operations for the first nine months
of 2013 was $2.7 million, or $0.18 per share, versus a net loss of $(3.5)
million, or $(0.13) per share, for the corresponding period last year.

Backlog

Backlog of orders totaled approximately $74.4 million as of September 30,
2013, $8.7 million ahead of the $65.7 million in backlog reported at the end
of June 30, 2013.

Cash Position at Quarter End

As of September 30, 2013, the Company had $4.9 million in cash and $528,000 in
restricted collateral deposits, as compared to December 31, 2012, when the
Company had $1.6 million in cash and $186,000 in restricted collateral
deposits.

The Company also had $9.1 million in available, unused bank lines of credit
with its main bank as of September 30, 2013, under a $15.0 million credit
facility under its FAAC subsidiary, which was secured by the Company's assets
and the assets of the Company's other subsidiaries and guaranteed by the
Company.

The Company had trade receivables of $13.8 million as of September 30, 2013,
compared to $9.6 million as of December 31, 2012. The Company had a current
ratio (current assets/current liabilities) of 2.01 as of September 30, 2013
and 1.37 as of December 31, 2012.

Revised Guidance

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.

Conference Call

The Company will host a conference call today, Tuesday, November 12, 2013 at
9:30 a.m. EST. Those wishing to access the conference call should dial
1-888-281-1167 (U.S.) or+1-347-293-1926 (international) a few minutes before
the 9:30 a.m. EST start time. For those unable to participate, the
teleconference will be available for replay on Arotech's website at
http://www.arotech.com/ beginning 24 hours after the call.

About Arotech Corporation

Arotech Corporation is a leading provider of quality defense and security
products for the military, law enforcement and homeland security markets.
Arotech provides multimedia interactive simulators/trainers and advanced
zinc-air and lithium batteries and chargers. Arotech operates through two
major business divisions: Training and Simulation, and Batteries and Power
Systems.

Arotech is incorporated in Delaware, with corporate offices in Ann Arbor,
Michigan and research, development and production subsidiaries in Alabama,
Michigan and Israel.



Investor Relations Contacts:

Ehud Helft & Kenny Green

CCG Investor Relations

Tel: 1 646 201 9246

arotech@gkir.com



Except for the historical information herein, the matters discussed in this
news release include forward-looking statements, as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements reflect
management's current knowledge, assumptions, judgment and expectations
regarding future performance or events. Although management believes that the
expectations reflected in such statements are reasonable, readers are
cautioned not to place undue reliance on these forward-looking statements, as
they are subject to various risks and uncertainties that may cause actual
results to vary materially. These risks and uncertainties include, but are not
limited to, risks relating to: product and technology development; the
uncertainty of the market for Arotech's products; changing economic
conditions; delay, cancellation or non-renewal, in whole or in part, of
contracts or of purchase orders (including as a result of budgetary cuts
resulting from automatic sequestration under the Budget Control Act of 2011);
and other risk factors detailed in Arotech's most recent Annual Report on Form
10-K for the fiscal year ended December 31, 2012, as amended, and other
filings with the Securities and Exchange Commission. Arotech assumes no
obligation to update the information in this release. Reference to the
Company's website above does not constitute incorporation of any of the
information thereon into this press release.

TABLES TO FOLLOW



CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(U.S. Dollars, except share data)
                                                                                                                             Nine months ended September 30,               Three months ended September 30,
                                                                                                                             2013                  2012                    2013                  2012
Revenues.................................................................................................................... $                   $                     $                   $  
                                                                                                                             67,637,517           57,915,901             23,187,544           21,435,063
Cost of revenues.......................................................................................................      49,681,174            45,307,654              16,816,012            16,475,160
Research and development expenses....................................................................                        1,935,958             1,657,056               807,788               610,095
Selling and marketing expenses..............................................................................                 3,849,483             3,868,531               1,229,225             1,255,337
General and administrative expenses.....................................................................                     7,539,580             7,066,080               2,685,522             2,064,695
Amortization of intangibles.....................................................................................             821,097               893,743                 270,985               292,438
Total operating costs and expenses.......................................................................                    63,827,292            58,793,064              21,809,532            20,697,725
Operating income (loss)...........................................................................................           3,810,225             (877,163)               1,378,012             737,338
Other income..............................................................................................................  261,222               9,894                   (7,460)               9,141
Financial expenses, net.............................................................................................         (475,448)             (565,301)               (172,569)             (186,301)
Total other expense...................................................................................................       (214,226)             (555,407)               (180,029)             (177,160)
Income (loss) from continuing operations before                                                                             3,595,999             (1,432,570)             1,197,983             560,178
income tax expense.............
Income tax expense...................................................................................................        (765,962)             (524,091)               (337,060)             (126,937)
Income (loss) from continuing operations............................................................                         2,830,037             (1,956,661)             860,923               433,241
Income (loss) from discontinued operations, net of                                                                           (87,278)              (1,506,353)             652                   64,848
 income tax........................
Net income (loss).......................................................................................................     2,742,759             (3,463,014)             861,575               498,089
Other comprehensive income, net of income tax
Foreign currency translation adjustment...............................................................                       472,767               (189,414)               202,844               (17,903)
Comprehensive income (loss).................................................................................                 $                  $                     $                  $     
                                                                                                                             3,215,526            (3,652,428)             1,064,419            480,186
Basic net income/loss per share – continuing operations..................................                                    $                $                  $                $     
                                                                                                                              0.18                (0.13)                  0.05                 0.03
Basic net income/loss per share – discontinued operations..............................                                      $                $                  $                $     
                                                                                                                             (0.01)               (0.10)                  –                    –
Basic net income/loss per share..............................................................................                $                $                  $                $     
                                                                                                                              0.17                (0.23)                  0.05                 0.03
Diluted net income/loss per share – continuing operations...............................                                     $                $                  $                $     
                                                                                                                              0.18                (0.13)                  0.05                 0.03
Diluted net income/loss per share – discontinued operations...........................                                       $                $                  $                $     
                                                                                                                             (0.01)               (0.10)                  –                    –
Diluted net income/loss per share..........................................................................                  $                $                  $                $     
                                                                                                                              0.17                (0.23)                  0.05                 0.03
Weighted average number of shares used in computing
 basic net income/loss per                                                                                                  15,521,974            15,308,724              15,951,602            15,336,947
share............................................................................................
Weighted average number of shares used in computing
 diluted net income/loss per                                                                                                16,124,714            15,911,464              16,554,342            15,939,687
share............................................................................................
Reconciliation of Non-GAAP Financial Measure – Continuing Operations
To supplement Arotech's consolidated financial statements presented in accordance with U.S. GAAP, Arotech uses a non-GAAP measure, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted
EBITDA). This non-GAAP measure is provided to enhance overall understanding of Arotech's current financial performance. Reconciliation of Adjusted EBITDA to the nearest GAAP measure follows:
                                                                                                                                         Nine months ended September 30,               Three months ended September 30,
                                                                                                                                         2013                  2012                    2013                  2012
Net Income (loss) continuing (GAAP measure)............................                                                                 $                  $                      $                    $  
                                                                                                                                         2,830,037             (1,956,661)             860,923              433,241
Add back:
Financial (income) expense – including interest...........................                                                               475,448               565,301                 172,569               186,301
Income tax expenses (benefit).....................................................                                                       765,962               524,091                 337,060               126,937
Depreciation and amortization expense........................................                                                            1,688,105             1,726,574               555,087               571,865
Other adjustments^*........................................................................                                              392,913               912,977                 226,381               61,555
Total adjusted EBITDA...................................................................                                                 $                  $                     $                     $
                                                                                                                                         6,152,465             1,772,282               2,152,020             1,379,899
^* Includes stock compensation expense, one-time transaction expenses and other non-cash expenses.





SOURCE Arotech Corporation

Website: http://www.arotech.com