Arotech Corporation Reports Record Revenues and First Quarterly Profit in Its History; Revenues for Quarter up 75% over 2002; Nine Month Revenues More Than Triple.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 3, 2003 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 the Company's first-ever quarterly net profit in its third quarter and first nine months 2003 results. Revenues for the quarter ended September 30, 2003 increased to $5.7 million as compared with $3.3 million for the corresponding period of 2002, an increase of 75%. The respective increases are largely attributed to sales in the Defense and Security Products Division (IES and MDT MDT abbr. Mountain Daylight Time MDT (in the US and Canada) Mountain Daylight Time MDT n abbr (US) (= mountain daylight time) → ) and sales of military batteries in the Battery Division. Gross profit for the quarter ended September 30, 2003 increased to $2.5 million as compared with $1.6 million for the corresponding period of 2002, an increase of 54%, with a gross margin of 43%. The respective increases are largely attributed to sales in the Defense and Security Products Division (IES and MDT) and sales of military batteries in the Battery Division. 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.
Divisions of a business that have been sold or written off and that no longer are maintained by the business. , for the quarter ended September 30, 2003 increased to $491,000 as compared with a loss (LBITDA) of $(466,000) for the corresponding period of 2002. 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 profit (loss) for the quarter ended September 30, 2003 increased to $75,000 as compared with a net loss of $(9.6) million for the corresponding quarter of 2002. 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 profit (loss) per share for the quarter ended September 30, 2003 was $0.00 as compared with a loss of $(0.29) for the corresponding period of 2002. Revenues for the nine months ended September 30, 2003 increased to $13.2 million as compared with $4.3 million for the corresponding period of 2002, an increase of 211%. The respective increases are largely attributed to sales in the Defense and Security Products Division (IES and MDT, which were not owned by the Company in much of the corresponding period in 2002) and sales of military batteries in the Battery Division. Gross profit for the nine months ended September 30, 2003 increased to $4.9 million as compared with $1.8 million for the corresponding period of 2002, an increase of 166%. The respective increases are largely attributed to sales in the Defense and Security Products Division (IES and MDT) and sales of military batteries in the Battery Division. Loss Before Interest, Taxes, Depreciation and Amortization (LBITDA), excluding discontinued operations, for the nine months ended September 30, 2003 decreased to $1.3 million as compared with $2.3 million for the corresponding period of 2002. Arotech believes that information concerning LBITDA enhances overall understanding of its current financial performance and its progress towards cash-flow break even and toward GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). profitability. Arotech computes LBIDTA, which is a non-GAAP financial measure, as reflected in the table below. Net loss for the nine months ended September 30, 2003 decreased to $3.8 million as compared with $15.6 million for the corresponding quarter of 2002. Combined basic and diluted net loss per share for the nine months ended September 30, 2003 narrowed to $0.10 as compared with $0.49 for the corresponding period of 2002. Cash-on-hand and cash equivalents and certificate of deposit due within one year stood at the end of the quarter at approximately $2.7 million with 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 $3.2 million. 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. stood at the end of the quarter at approximately $11.4 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 Ehr·lich , Paul 1854-1915. German bacteriologist who conducted pioneering research in chemotherapy and developed the chemical Salvarsan as a treatment of syphilis. commented, "When we launched our 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. program around this time last year, our goal was to be cash flow positive from operations during this half. We exceeded our expectations, and achieved a net profit for the first time in our company's history," continued Ehrlich. "We are now looking forward to continuing to generate operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. during 2004," concluded Ehrlich. Conference Call Arotech Corporation will hold it second quarter 2003 conference call on Tuesday, November 4, 2003 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . Those wishing to take part in the conference call should call 1-800-967-7134 (US) or +1-719-457-2625 (international) a few minutes before the 10:00 a.m. EST start time. In addition, an instant replay will be available Tuesday, November 4, 2003 at 1:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. until Wednesday, November 5, 2003 at 8:00 p.m. EST. The replay telephone number is 1-888-203-1112 (US); +1-719-457-0820 (international). The confirmation number is 686108. About Arotech Corporation Arotech's corporate mission is to provide quality defense and security products for the military, law enforcement and homeland security markets, including advanced zinc-air batteries, multimedia interactive simulators/trainers and lightweight armoring. Arotech Corporation (www.arotech.com) operates two business divisions: Electric Fuel Batteries - developing and manufacturing zinc-air batteries for military and homeland security applications and developing electric vehicle batteries for zero emission Zero emission refers to an engine, motor, or other energy source, that emits no waste products that pollutes the environment or disrupts the climate. Zero emission engines public transportation; and Arotech Defense - consisting of IES Interactive, which provides advanced high-tech 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 , MDT Armor, which provides vehicle armoring for the military, industrial and private sectors, and Arocon Security, which provides homeland security consulting and other services. Arotech is incorporated in Delaware Delaware, state, United States Delaware (dĕl`əwâr, –wər), one of the Middle Atlantic states of the United States, the country's second smallest state (after Rhode Island). 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, in whole or in part, of contracts or 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 outcome of the claims made by the I.E.S. Group; 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, 2002 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)
Nine months ended Three months ended
September 30, September 30,
--------------------------- ---------------------------
2003 2002 2003 2002
------------- ------------- ------------- -------------
Revenues $ 13,232,486 $ 4,258,310 $ 5,705,898 $ 3,262,711
Cost of
revenues 8,365,212 2,428,844 3,252,323 1,668,941
------------- ------------- ------------- -------------
Gross profit 4,867,274 1,829,466 2,453,575 1,593,770
Research and
development 762,629 379,785 252,085 161,138
Selling and
marketing
expenses 2,395,190 712,502 757,614 552,863
General and
administrative
expenses 3,579,371 3,347,955 1,105,864 1,378,485
Amortization of
intangible
assets 727,127 251,721 103,584 251,721
------------- ------------- ------------- -------------
7,464,317 4,691,963 2,219,147 2,344,207
------------- ------------- ------------- -------------
Operating
profit (loss) (2,597,043) (2,862,497) 234,428 (750,437)
Financial
income
(expenses),
net (1,084,582) 140,017 (100,761) 23,297
------------- ------------- ------------- -------------
Net profit
(loss) before
taxes (3,681,625) (2,722,480) 133,667 (727,140)
Tax expenses (308,137) (105,466) (31,089) (104,832)
------------- ------------- ------------- -------------
Net profit
(loss) before
minority
interest in
profit of a
subsidiary (3,989,762) (2,827,946) 102,578 (831,972)
Loss (Profit)
to minority 134,813 (91,150) (25,485) (91,150)
------------- ------------- ------------- -------------
Net profit
(loss) from
continuing
operations $ (3,854,949) $ (2,919,096) $ 77,093 $ (923,122)
Net profit
(loss) from
discontinued
operations 80,883 (12,694,639) (2,285) (8,716,422)
------------- ------------- ------------- -------------
Net profit
(loss) for the
period $ (3,774,066) $(15,613,735) $ 74,808 $ (9,639,544)
============= ============= ============= =============
Basic net
earnings
(loss) per
share from
continuing
operations $ (0.10) $ (0.09) $ 0.00 $ (0.03)
============= ============= ============= =============
Diluted net
earnings
(loss) per
share from
continuing
operations $ (0.10) $ (0.09) $ 0.00 $ (0.03)
============= ============= ============= =============
Basic and
diluted net
earnings
(loss) per
share from
discontinued
operations $ 0.00 $ (0.40) $ (0.00) $ (0.26)
============= ============= ============= =============
Combined basic
net earnings
(loss) per
share $ (0.10) $ (0.49) $ 0.00 $ (0.29)
============= ============= ============= =============
Combined
diluted net
earnings
(loss) per
share $ (0.10) $ (0.49) $ 0.00 $ (0.29)
============= ============= ============= =============
Weighted average
number of
shares used in
computing basic
net loss per
share 37,276,260 31,545,914 40,371,940 33,441,137
============= ============= ============= =============
Weighted average
number of
shares used in
computing
diluted net
loss per share 44,474,334 31,545,914 47,076,792 33,441,137
============= ============= ============= =============
----------------------------------------------------------------------
Reconciliation of Non-GAAP Financial Measure
To supplement Arotech's consolidated financial statements
presented in accordance with GAAP, Arotech uses a non-GAAP measure,
Earnings (Loss) Before Interest, Taxes, Depreciation and Amortization
(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 EBITDA to the nearest GAAP measure follows:
EBITDA
----------------------------------------------------------------------
Nine months ended Three months ended
September 30, September 30,
--------------------------- ---------------------------
2003 2002 2003 2002
------------- ------------- ------------- -------------
Net profit
(loss) from
continuing
operations
(GAAP
measure) $ (3,854,949) $ (2,919,096) $ 77,093 $ (923,122)
Add back:
Interest expense
(income), net
(after
deduction of
minority
interest) 1,077,276 (135,764) 100,732 (19,044)
Taxes (after
deduction of
minority
interest) 166,175 54,194 23,480 53,718
Depreciation of
fixed assets 529,155 445,270 180,754 170,270
Amortization of
intangible
assets 732,364 251,721 108,821 251,721
------------- ------------- ------------- -------------
EBITDA (LBITDA)
(non-GAAP
measure) $ (1,349,979) $ (2,303,675) $ 490,880 $ (466,457)
============= ============= ============= =============
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion