Arotech Corporation Posts Record Year End and Fourth Quarter 2002 Revenues with Sharp Reduction in Loss Per Share.Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 27, 2003 Year-end revenues tripled to $6.4 million; gross profit increased to $2.0 million; loss per share for continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the reduced to $0.15 Fourth quarter revenues quadrupled to $2.1 million; gross profit increased to $155,525; loss per share for continuing operations at $0.06 Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of orders in excess of $8 million with cash-on-hand at beginning of 2003 at $5.0 million Arotech Corporation (NasdaqNM: ARTX), a provider of quality advanced zinc-air batteries Zinc-air batteries, also called “zinc-air fuel cells,“ are non-rechargeable electro-chemical batteries powered by the oxidation of zinc with oxygen from the air. These batteries have very high energy densities and are relatively inexpensive to produce. , multimedia interactive simulators/trainers and lightweight armoring armoring (ärˑ·m  ·ring),n for the military, law enforcement and homeland security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States markets, today reported fourth quarter and year end 2002 results. Revenues for the year ended December 31, 2002 increased to $6.4 million as compared with $2.1 million, excluding discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , for 2001. Gross profit for the year ended December 31, 2002 increased to $2.0 million as compared with $101,000 for 2001. The respective increases in revenues and gross profit are largely attributed to the two acquisitions completed early in the third quarter of 2002, i.e., IES Interactive Training and MDT MDT abbr. Mountain Daylight Time MDT (in the US and Canada) Mountain Daylight Time MDT n abbr (US) (= mountain daylight time) → Protective Industries. Revenues derived from the newly designated BA-8180 military battery are not expected to be realized until the first quarter of 2003 due to the terms of the defense contract. Loss Before Income Taxes, Depreciation and Amortization (LBITDA), excluding discontinued operations, for the year ended December 31, 2002 increased to $17.1 million as compared with $16.6 million for 2001. This increase largely stems from the increased research and development resulting from the ramping up of the military battery technology at the request of the US military branches that currently have orders for the Company's products and increased sales and marketing expenses attributed to international marketing efforts in respect of the use-of-force division. Combined basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net loss per share, including discontinued operations, for the year ended December 31, 2002 decreased to $0.57 as compared with $0.71 for 2001. Revenues for the quarter ended December 31, 2002 increased to $2.1 million as compared with $556,790, excluding discontinued operations, in the similar period of 2001. Gross profit for the quarter ended December 31, 2002 increased to $156,000 as compared with a gross loss of $61,000 in the similar period of 2001. The respective increases are largely attributed to sales in the Company's new vehicle armoring division, which were not included in 2001 revenues. Loss Before Income Taxes, Depreciation and Amortization (LBITDA), excluding discontinued operations, for the quarter ended December 31, 2002 increased to $1.7 million as compared with $1.3 million for the corresponding quarter 2001. This increase largely stems from the increased research and development and sales and marketing expenses attributed to international marketing efforts in respect of the use-of-force division. Combined basic and diluted net loss per share, including discontinued operations, for the quarter ended December 31, 2002 narrowed to $0.08 as compared with $0.18 for the corresponding quarter in 2001. Cash-on-hand and cash equivalents, including proceeds of a sale of debentures, stood at the beginning of 2003 at approximately $5 million with backlog of orders in excess of $8 million. Arotech Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Robert S Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. . Ehrlich commented, "2002 was a year of significant events as we successfully repositioned the Company to a defense and homeland security holding company. This transformation did not come easily. In turning the Company around, we had to go through a significant staff reduction, change senior management and take a one-time $7.1 million write-off of inventory and fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → related to discontinued operations. "For 2003, Arotech is looking forward to tripling revenues and achieving cash flow breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations as we head to profitability. When the market recovers, we believe that our stock price should reflect the major turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. underway. We appreciate the support of our shareholders and associates, and look forward to continued improvement in 2003." Conference Call Arotech Corporation will hold its quarterly and year-end 2002 conference call on Thursday, February 27, 2003 at 10:00 AM EST EST electroshock therapy. EST abbr. electroshock therapy . To take part in the conference call, please call 1-888-857-6929 (US) or +1-719-457-2600 (International) a few minutes before the 10:00 AM EST start time. For your convenience, an instant reply will be available Thursday February 27, 2003 at 1:00 PM EST until Saturday, March 1, 2003 at 8:00 PM EST. The replay telephone number is 1-888-203-1112 (US); +1-719-457-0820 (International). The confirmation number is 741032. About Arotech Corporation Arotech Corporation operates in three business subsidiaries: Electric Fuel Batteries - developing and manufacturing zinc-air batteries for military and homeland security applications; IES Interactive - multimedia training systems for law enforcement and paramilitary organizations Noun 1. paramilitary organization - a group of civilians organized in a military fashion (especially to operate in place of or to assist regular army troops) paramilitary, paramilitary force, paramilitary organisation, paramilitary unit ; and MDT Armor - vehicle armoring for the military, industrial and private sectors. Electric Fuel Batteries also continues developing Zinc-Air batteries for public transportation, which could help reduce the nation's dependence on foreign oil while eliminating tailpipe tail·pipe n. The pipe through which exhaust gases from an engine are discharged. Also called exhaust pipe. tailpipe Noun a pipe from which exhaust gases are discharged, esp. emissions. Arotech is incorporated in Delaware under the name "Electric Fuel Corporation" and has corporate and sales offices in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Denver with research, development and production subsidiaries in Alabama, Colorado and Israel. Except for the historical information herein, the matters discussed in this news release include forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. 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 significantly. These risks and uncertainties include, but are not limited to, risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc : product and technology development; the uncertainty of the market for Arotech's products; changing economic conditions; delay, cancellation or non-renewal of purchase orders; significant future capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. ; the Company's ability to quickly and smoothly execute the change in leadership as a result of its former CEO's resignation; and other risk factors detailed in Arotech's most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2001, Arotech's most recent Quarterly Report on Form 10-Q Form 10-Q See 10-Q. , and other filings (under the name Electric Fuel Corporation) 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 there·on adv. 1. On or upon this, that, or it. 2. Archaic Following that immediately; thereupon. Adv. 1. thereon - on that; "text and commentary thereon" on it, on that into this press release. ELECTRIC FUEL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Twelve months Three months
ended December 31, ended December 31,
-------------------------------------------------------
2002 2001 2002 2001
-------------------------------------------------------
Revenues $6,406,739 $2,093,632 $2,148,430 $556,790
Cost of
revenues 4,421,748 1,992,636 1,992,905 617,686
-------------------------------------------------------
Gross profit
(loss) 1,984,991 100,996 155,525 (60,896)
-------------------------------------------------------
Research and
development
expenses, net 685,919 455,845 306,134 101,710
Sales and
marketing
expenses 1,309,669 105,977 597,166 49,352
General and
administrative
expenses 4,023,103 3,827,544 674,911 1,266,532
Amortization of
intangible
assets and in-
process
research and
development 649,543 - 397,821 -
-------------------------------------------------------
6,668,234 4,389,366 1,976,032 1,417,594
-------------------------------------------------------
Operating loss (4,683,243) (4,288,370) (1,820,507) (1,478,490)
Financial
income
(expenses),
net 100,451 262,581 (39,566) (136,619)
-------------------------------------------------------
Net loss before
taxes (4,582,792) (4,025,789) (1,860,073) (1,615,109)
Taxes on income - - 105,229 -
-------------------------------------------------------
Net loss before
minority
interest in
profit of
subsidiary (4,582,792) (4,025,789) (1,754,844) (1,615,109)
Minority
interest in
profit of
subsidiary (355,360) - (264,210) -
-------------------------------------------------------
Net loss from
continuing
operations $(4,938,152) $(4,025,789) $(2,019,054) $(1,615,109)
Loss from
discontinued
operation (13,566,206) (13,260,999) (871,567) (3,245,329)
-------------------------------------------------------
Net loss for
the period $(18,504,358) $(17,286,788) $(2,890,621) $(4,860,438)
=======================================================
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Basic and
diluted net
loss per share
for continuing
operations $(0.15) $(0.17) $(0.06) $(0.06)
=======================================================
Basic and
diluted net
loss per share
for
discontinued
operation $(0.42) $(0.55) $(0.03) $(0.12)
=======================================================
Combined basic
and diluted
net loss per
share $(0.57) $(0.71) $(0.08) $(0.18)
=======================================================
Weighted
average number
of shares of
common stock
used in
computation of
basic and
diluted net
loss per share 32,381,592 24,200,184 34,758,048 26,648,319
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