Arotech Corporation (NASDAQ: ARTX), a provider of quality defense
and security products for the military, law enforcement and
security markets, today reported results for the quarter ended
March 31, 2012.
First Quarter Results Revenues from
continuing operations for the first quarter of 2012 were $16.1
million, compared to $12.4 million for the corresponding period in
2011, an increase of 29%.
Gross profit from continuing operations for the first quarter of
2012 was $4.3 million, or 27% of revenues, compared to $3.6
million, or 29% of revenues, for the corresponding period in
2011.
The Company reported an operating loss from continuing
operations for the first quarter of 2012 of $(889,000), compared to
an operating loss from continuing operations of $(947,000) for the
corresponding period in 2011.
The Company's net loss from continuing operations for the first
quarter of 2012 was $(1.1 million), or $(0.08) per share, compared
to a net loss from continuing operations of $(959,000), or $(0.07)
per share, for the corresponding period in 2011.
The Company's net loss from all operations, including
discontinued operations, for the first quarter of 2012 was $(1.1
million), or $(0.07) per share, compared to a net loss from all
operations, including discontinued operations, of $(2.6 million),
or $(0.19) per share, for the corresponding period in 2011.
"We are generally pleased with first quarter revenue growth and
continue to see long term opportunities favorable despite the
current strained economic environment," stated Robert Ehrlich,
Chairman and CEO Arotech Corporation. "We were disappointed that
our pursuit of a battery and power systems acquisition was
unsuccessful, but organic growth continues to be strong and we
expect 2012 revenues to increase in the range of 10-15%. We remain
committed to our markets and growth prospects and expect to see
another record year in 2012 revenues," added Ehrlich.
Backlog Backlog of orders totaled
approximately $77.3 million as of March 31, 2012, as compared to
$95.5 million at March 31, 2011.
Cash Position at Quarter End As of March
31, 2012, the Company had $1.7 million in cash and $98,000 in
restricted collateral deposits, as compared to December 31, 2011,
when the Company had $2.3 million in cash and $1.7 million in
restricted collateral deposits.
The Company also had $4.9 million in unused bank lines of credit
with its main bank as of March 31, 2012, under a $10.0 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. There was $1.6 million of available
credit on this line as of March 31, 2012, based on the borrowing
base calculations.
Effective April 30, 2012, the Company and FAAC entered into an
agreement with a different primary bank that has provided the
Company with a replacement $10.0 million credit facility under its
FAAC subsidiary, which is secured by the Company's assets and the
assets of the Company's other domestic subsidiaries and guaranteed
by the Company and its other domestic subsidiaries, at a rate of
LIBOR plus 375 basis points. This credit facility expires May
2013.
The Company had trade receivables of $7.5 million as of March
31, 2012, compared to $11.9 million as of December 31, 2011. The
Company had a current ratio (current assets/current liabilities) in
continuing operations of 1.62 as of March 31, 2012 and 1.55 as of
December 31, 2011.
Conference Call The Company will host a
conference call tomorrow, Tuesday, May 15, 2012 at 10:00 a.m. EDT.
Those wishing to access the conference call should dial
1-877-407-0778 (U.S.) or 1-201-689-8565 (international) a few
minutes before the 10:00 a.m. EDT start time. A replay of the
conference call will be available starting Tuesday, May 15, 2012 at
12:30 p.m. EDT until Tuesday, May 29, 2012 at 11:59 p.m. The replay
telephone number is 1-877-660-6853 (U.S) and 1-201-612-7415
(international). The ID pass code for both the call and the replay
is 394167 and the account number is 286.
About Arotech Corporation Arotech
Corporation is a leading provider of quality defense and security
products for the military, law enforcement and homeland security
markets, including multimedia interactive simulators/trainers and
advanced zinc-air and lithium batteries and chargers. Arotech
operates through two major business divisions: Training and
Simulation, and Battery 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.
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; and other risk factors detailed in Arotech's most recent
Annual Report on Form 10-K for the fiscal year ended December 31,
2011 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 websites above does not
constitute incorporation of any of the information thereon into
this press release.
TABLES TO FOLLOW
AROTECH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended March 31,
----------------------------
2012 2011
------------- -------------
Revenues $ 16,107,708 $ 12,440,471
------------- -------------
Cost of revenues, exclusive of amortization of
intangibles 11,819,066 8,888,261
Research and development expenses 591,153 407,997
Selling and marketing expenses 1,284,894 1,180,332
General and administrative expenses 3,000,606 2,434,161
Amortization of intangible assets and
capitalized software 301,371 476,306
------------- -------------
Total operating costs and expenses 16,997,090 13,387,057
------------- -------------
Operating loss (889,382) (946,586)
------------- -------------
Other income 192 19,073
Financial income (expense), net (36,836) 109,166
------------- -------------
Total other income (expense) (36,644) 128,239
------------- -------------
Loss from continuing operations before income
tax expense (926,026) (818,347)
------------- -------------
Income tax expense 197,577 140,624
------------- -------------
Loss from continuing operations (1,123,603) (958,971)
Income (loss) from discontinued operations,
net of income tax 64,160 (1,684,174)
------------- -------------
Net loss (1,059,443) (2,643,145)
------------- -------------
Other comprehensive income, net of income tax
Foreign currency translation adjustment 167,075 135,908
------------- -------------
Comprehensive loss $ (892,368) $ (2,507,237)
============= =============
Basic and diluted net loss per share -
continuing operations $ (0.08) $ (0.07)
Basic and diluted net income (loss) per share
- discontinued operations $ 0.01 $ (0.12)
Basic and diluted net loss per share $ (0.07) $ (0.19)
============= =============
Weighted average number of shares used in
computing basic and diluted net income (loss)
per share 14,654,803 13,689,149
============= =============
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, 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 GAAP
profitability. Reconciliation of EBITDA to the nearest GAAP measure
follows:
Three months ended March 31,
----------------------------
2012 2011
------------- -------------
Net Loss Continuing (GAAP measure) $ (1,123,603) $ (958,971)
Add back:
Financial (income) expense - including
interest 36,836 (109,166)
Income tax expenses (benefit) 197,577 140,624
Depreciation and amortization expense 574,377 744,823
Other adjustments* 795,434 22,584
------------- -------------
Total adjusted EBITDA $ 480,621 $ (160,106)
============= =============
* Includes stock compensation expense, adjustments to allowances, one-time
transaction expenses and other non-cash expenses.
CONTACT: Victor Allgeier TTC Group (646) 290-6400 Email
Contact
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