American Defense Systems, Inc. Reports Fourth Quarter and Full Year 2007 Financial Results.

Full year revenue increases $11.2 million, or 44%, to a record $36.5 million

Contract backlog as of year end increases 118% to a record $48 million

HICKSVILLE, N.Y. -- American Defense Systems, Inc. "ADSI", offering advanced solutions in the design, fabrication and installation of transparent and opaque armor, security doors, windows and curtain wall systems, today announced financial results for the fourth quarter and full fiscal year 2007, ended December 31, 2007. All results, other than backlog, are prepared in accordance with generally accepted accounting principles (GAAP) in the United States.

Revenues for the fourth quarter of 2007 were a record $12.4 million, an increase of 112 percent from the $5.8 million reported for the same period in 2006. Revenues for the full year 2007 increased $11.2 million, or 44 percent, to a record $36.5 million, up from $25.3 million recorded in the full year 2006 period.

Contract backlog as of December 31, 2007 totaled a record $48 million, up 118 percent compared to the December 31, 2006 contract backlog of $22 million. ADSI expects that $39 million of the 2007 year end backlog will be filled in 2008.

Operating income for the fourth quarter of 2007 was $862 thousand compared to operating income for the fourth quarter 2006 of $900 thousand. For the full year 2007, operating income was a record $3.4 million compared with operating income of $2.5 million for the full year 2006 period.

Net income for the fourth quarter of 2007 was $1.0 million, or $0.01 per basic and diluted share, compared to net income for the fourth quarter 2006 of $1.5 million, or $0.04 per basic and diluted share. For the full year 2007, net income was a record $3.1 million, or $0.08 per basic and diluted share, marginally higher than net income of approximately $3.1 million or $0.08 per basic and diluted share for the full year 2006 period. Full year 2007 net income includes $362 thousand in income tax expense as compared to $534 thousand in income tax benefit in the full year 2006.

Gross margin as a percentage of revenue for the full year 2007 was a record 38.5 percent as compared to 30.6 percent for the full year 2006.

Mr. Anthony J. Piscitelli, Chairman & Chief Executive Officer of American Defense Systems, Inc,, stated, "Fiscal 2007 was a year of significant achievements in terms of advancing our strategic and financial objectives. Increased demand for lightweight ballistic glass and blast resistant as well as opaque armor from various branches of the U.S. military to support overseas combat and rebuilding activities was the primary driver, complemented by contributions from our homeland defense, law enforcement and private sector business. With a 44 percent rise in full year revenue, and a more than doubling of our year end contract backlog, we believe we are seeing the successful execution of our strategy in the fields of armor and physical security delivering strong growth. Equally as important, our full year 2007 results reflect our ability to successfully accommodate higher production levels while maintaining our focus on profitability.

"Looking ahead, we remain focused on increasing our exposure to domestic as well as international military platforms, expanding our strategic partnerships with original equipment manufacturers, capitalizing on increased demand for homeland security and non-military offerings, and continuing to focus on advanced research and development efforts for new armor materials. We believe these aforementioned strategic objectives are the keys to driving ADSI's long-term growth and enterprise value," concluded Mr. Piscitelli.

About American Defense Systems, Inc. (ADSI)

American Defense Systems, Inc. (ADSI) offers advanced solutions in the design, fabrication, and installation of transparent and opaque armor, security doors, windows and curtain wall systems for use by military, law enforcement, homeland defense and corporate customers. ADSI engineers also specialize in developing innovative, functional and aesthetically pleasing security applications for the mobile and fixed infrastructure physical security industry.

For more information about American Defense Systems, Inc. please visit the corporate Web site at http://www.adsiarmor.com

Some of the statements made by American Defense Systems, Inc. ("ADSI") in this press release, including, without limitation, statements regarding ADSI's anticipated future growth, are forward-looking in nature. ADSI intends that any forward-looking statements shall be covered by the safe harbor provisions for such statements contained in the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "may," "will," "should," "expects," "anticipates," "intends," "plans," "believes," "estimates," "predicts," "potential," "continues" and similar expressions are forward-looking statements. ADSI cautions you that forward-looking statements are not guarantees of performance. ADSI undertakes no obligation and disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements involve known and unknown risks and uncertainties that may cause ADSI's actual future results to differ materially from those projected or contemplated in the forward-looking statements. ADSI believes that these risks include, but are not limited to: ADSI's reliance on the U.S. government for a substantial amount of its sales and growth; decreases in U.S. government defense spending; ADSI's ability to contract further with the U.S. Department of Defense; ADSI's ability to comply with complex procurement laws and regulations; competition and other risks associated with the U.S. government bidding process; changes in the U.S. government's procurement practices; ADSI's ability to obtain and maintain required security clearances; ADSI's ability to realize the full amount of revenues reflected in its backlog; ADSI's reliance on certain suppliers; and intense competition and other risks associated with the defense industry in general and the security-related defense sector in particular. Additional information concerning these and other important risk factors can be found under the heading "Risk Factors" in ADSI's filings with the Securities and Exchange Commission, including, without limitation, its registration statement on Form 10. Statements in this press release should be evaluated in light of these important factors.

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