Arotech Corporation Reports 45% Increase in Revenues for the First Quarter, 2005; Company reconfirms 2005 guidance for at least 25% revenue growth and triple adjusted EBITDA compared to 2004.AUBURN Auburn (ô`bərn). 1 City (1990 pop. 33,830), Lee co., E Ala.; inc. 1839. The city's economy centers around Auburn Univ.; there is some manufacturing. 2 City (1990 pop. 24,309), seat of Androscoggin co. , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- Arotech Corporation (NasdaqNM: ARTX), a provider of quality defense and security products for the military, law enforcement and security markets, today reported results for the quarter ending March 31, 2005. Revenues for the first quarter, 2005, reached $10.4 million, an increase of 45% over the corresponding period in 2004. For the quarter, Arotech recorded negative adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $356,000, compared to negative adjusted EBITDA of $681,000 for the corresponding period in 2004. Arotech's EBITDA was attributable to a seasonally weaker first quarter, as previously guided by the Company. Arotech believes that information concerning EBITDA enhances overall understanding of its current financial performance. Arotech computes EBIDTA EBIDTA Earnings Before Interest Depreciation Taxes and Amortization , which is a non-GAAP financial measure, as reflected in the table below. Net loss for the quarter before a deemed dividend to certain shareholders was $2.5 million, or ($0.03) per share, compared to a net loss of $2.5 million, or ($0.04) per share, in the corresponding period last year. Net loss is primarily due to non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. associated with acquisitions and financings. "During the quarter, we made solid progress towards achieving our 2005 goals," said 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, 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. of Arotech Corporation. "Our product divisions each recorded significant revenue increases over the year ago quarter and continued to focus on enhancing their portfolios for future growth. The quarter was highlighted by the award of a new $24 million IDIQ IDIQ Indefinite Delivery, Indefinite Quantity (contracting/procurement) zinc-air battery 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. contract from the U.S. Army," added Ehrlich. "Our backlog remains strong and we continue to maintain our outlook for substantial growth from existing operations in 2005, while remaining focused on prospective strategic acquisitions that will significantly contribute to our operating results," concluded Ehrlich. Backlog The Company's backlog stood at $21.7 million at the end of the quarter. Guidance For the full year, 2005, Arotech reiterates its guidance for at least 25% revenue growth compared to the previous year. Adjusted EBITDA from existing operations is projected to triple, primarily reflected in a stronger second half of 2005, compared to 2004. For the second quarter 2005, revenues are expected to increase by over 30% compared to the second quarter of 2004. The Company expects adjusted EBITDA to be break even or above for the quarter. Conference Call Arotech Corporation will hold a conference call to discuss its first quarter 2005 results, today, Wednesday May 11, 2005, at 10:00 a.m. ET. Those wishing to take part in the conference call should call 1-866-550-6338 (US) or +1-850-521-5100 (international) a few minutes before the 10:00 a.m. ET start time. In addition, a replay option will be available from Wednesday, May 11, 2005 at 2:00 p.m. ET until Tuesday, May 17, 2005 at 11:00 p.m. ET. The replay telephone number is 1-888-203-1112 (US); +1-719-457-0820 (international). The replay passcode is: 4276913. Results for the First Quarter Revenues for the quarter ended March 31, 2005 increased to $10.4 million as compared with $7.2 million for the corresponding period of 2004. This increase is attributed to an increase in sales across all three divisions. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). profitability. Arotech computes adjusted EBITDA, which is a non-GAAP financial measure, as reflected in the table below. Net loss before a deemed dividend to certain shareholders for the quarter ended March 31, 2005 was $2.5 million or ($0.03) per share as compared with a net loss of $2.5 million or ($0.04) per share for the corresponding quarter of 2004. Net loss attributable to shareholders of common stock (after a deemed dividend to certain shareholders) for the quarter ended March 31, 2005 was $2.5 million or ($0.03) per share as compared with net loss per share of $3.7 million or ($0.06) per share for the corresponding period of 2004. Cash Position at Quarter End Cash-on-hand and cash equivalents, restricted collateral deposits and other restricted cash, and available-for-sale marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has at March 31, 2005, stood at $2.7 million in cash, $7.0 million in restricted collateral securities COLLATERAL SECURITY, contracts. A separate obligation attached to another contract, to guaranty its performance. By this term is also meant the transfer of property or of other contracts to insure the performance of a principal engagement. and cash deposits due within one year (reserved for payment in connection with the earnout contracted in Arotech's acquisition of FAAC FAAC Freeware Advanced Audio Coder FAAC Ford Amateur Astronomy Club FAAC Family Allergy and Asthma Care FAAC Functional Area Agreement Coordinator (USAF) FAAC Fatal Accident Assessment Committee ), $4.0 million in long-term restricted securities and deposits, and $136,000 in available-for-sale marketable securities, as compared with $6.7 million in cash, $7.0 million in restricted collateral securities and restricted held to maturity securities due within a year, $4.0 million in long-term restricted deposits, and $136,000 in available-for-sale marketable securities at December 31, 2004. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. at the end of the quarter was approximately $63 million. About Arotech Corporation is a leading provider of quality defense and security products 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, including multimedia interactive simulators/trainers, lightweight armoring armoring (ärˑ·m  ·ring),n and advanced zinc-air and lithium batteries Lithium batteries are primary batteries that have lithium metal or lithium compounds as an anode. Depending on the design and chemical compounds used lithium cells can produce voltages from 1.5V to about 3V, twice the voltage of an ordinary zinc-carbon battery or alkaline cell. and chargers. Arotech operates through three major business divisions: Armor, Simulation and Security and Battery and Power Systems. Arotech is incorporated in Delaware, with corporate offices in Auburn, Alabama Auburn is a city in Lee County, Alabama. It is the largest city in eastern Alabama with a 2006 population of 51,906 (according to the U.S. Census estimates).[1] , and research, development and production subsidiaries in Alabama, Colorado, Michigan, California 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, in whole or in part, of contracts or of purchase orders; 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. , as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , 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 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.
AROTECH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three months
ended March 31,
------------------------
2005 2004
------------ -----------
Revenues $10,387,445 $7,182,254
Cost of revenues 6,371,874 4,557,220
------------ -----------
Gross profit 4,015,571 2,625,034
Research and development 414,678 463,506
Selling and marketing expenses 1,158,820 1,021,084
General and administrative expenses 3,356,412 2,088,136
Amortization of intangible assets and
impairment loss 823,088 496,013
------------ -----------
Total operating costs and expenses 5,752,998 4,068,739
------------ -----------
Operating loss (1,737,427) (1,443,705)
Financial expenses, net (468,855) (1,078,545)
------------ -----------
Loss before minorities interests in earnings
of subsidiaries and tax expenses (2,206,282) (2,522,250)
Income taxes (217,264) 4,907
Minorities interests in earnings of
subsidiaries (32,954) (546)
------------ -----------
Loss from continuing operations (2,456,500) (2,517,889)
Deemed dividend to certain stockholders - (1,163,000)
------------ -----------
Net loss attributable to common stockholders (2,456,500) (3,680,889)
============ ===========
Basic and diluted net loss per share from
continuing operations ($0.03) ($0.04)
============ ===========
Combined basic and diluted net loss per share ($0.03) ($0.06)
============ ===========
Weighted average number of shares outstanding 80,102,089 59,406,466
============ ===========
Reconciliation of Non-GAAP Financial Measure To supplement Arotech's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP, Arotech uses a non-GAAP measure, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as adjusted to eliminate certain non-cash charges (Adjusted EBITDA). This non-GAAP measure is provided to enhance overall understanding of Arotech's current financial performance and its progress towards cash-flow break even and toward GAAP profitability. Reconciliation of Adjusted EBITDA to the nearest GAAP measure follows:
ADJUSTED EBITDA
----------------------------------------------------------------------
Three months
ended March 31,
-------------------------
2005 2004
------------ ------------
Net loss from continuing operations (GAAP
measure) ($2,456,500) ($2,517,889)
Add back:
Interest expense (income), net (after
deduction of minority interest) $468,977 $1,080,713
Taxes (after deduction of minority interest) $201,027 ($4,907)
Depreciation of fixed assets $298,110 $236,408
Amortization of intangible assets and
capitalized research and development
expenses $853,796 $505,176
------------ ------------
EBITDA (non-GAAP measure) ($634,590) ($700,499)
------------ ------------
Add back certain non-cash charges:
Expenses attributed on issuance of shares to
consultants and as a donation $58,560 $15,280
Expenses attributed on issuance of warrants
and options to employees, directors and
consultants $87,139 $4,500
Expenses attributed on issuance of shares to
employees $134,100 -
Write down of promissory note ($1,425) -
------------ ------------
ADJUSTED EBITDA (non-GAAP measure) ($356,216) ($680,719)
============ ============
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion