AROTECH
250 West 57th Street, Suite 310, New York, NY 10107 Corporate News
Tel: (212) 258-3222o Fax: (212) 258-3281
WWW.AROTECH.COM
FOR IMMEDIATE RELEASE
AROTECH TO ACQUIRE ARMOUR OF AMERICA FOR $22 MILLION
AoA, with $16 million in sales and $6.7 million in pre-tax net profit,
manufactures Humvee armor kits, aircraft and marine armor, and armored vests
NEW YORK, NY, JULY 15, 2004 - Arotech Corporation (NasdaqNM: ARTX)
announced today that it has contracted to acquire California-based Armour of
America Incorporated, an innovative leader in ballistic armoring. AoA's latest
twelve-month revenues reached $16.0 million, with a pre-tax net profit of $6.7
million. Arotech will purchase all of AoA's outstanding capital stock for $22
million, with additional possible earn-outs if AoA is awarded certain material
contracts. The transaction is financed with cash obtained from warrant exercises
and the sale of common stock to institutional investors, off of Arotech's
remaining shelf registration (see separate release).
The Company expects AoA to add an exciting new dimension to its Armoring
division, currently comprised of MDT Armor in Alabama and MDT Protective
Industries in Israel. Arotech's Armor group has seen significant growth in
vehicle armoring this year. The acquisition of AoA will add personal, aviation
and marine armoring activities, making the group a major player in an expanding
global market.
During the twelve months ended June 30, 2004, AoA had revenues of $16
million and net profit of $6.7 million (unaudited). In 2003 AoA's revenues
reached $7.6 million, with a net profit (pre-tax) of $3.3 million. The US Army,
Navy and Coast guard, as well as other foreign military agencies, form the core
of AoA's military customers.
AoA, founded in 1972, manufacturers aviation armor both for helicopters
and for fixed wing aircraft, marine armor, personnel armor, armoring kits for
military vehicles, fragmentation blankest and a unique ballistic/flotation vest
(ArmourFloat) that is U.S. Coast Guard-certified.
o AoA provides armor for both rotary and fixed wing aircraft. For example,
the C-130 armor kits include protection for the flight deck, crew seats,
galley, radome, liquid oxygen bottle, and paratroop doors. Customers
include, among others, the air forces of Australia, Canada, the United
States (Navair), Norway, Sweden and Brazil.
o For the Marine market, AoA manufacturers gun mounts for Naval Ships and
Patrol Boats.
o AoA offers a wide variety of soft and hard armored vests to protect
personnel in any type of high-risk special purpose application, such as in
the military and the law enforcement markets. The ballistic armor combines
handgun, submachine gun, and rifle protection with load-bearing pockets.
o In the military vehicle market, AoA provides soft armor for fragmentation
blankets and hard armor for military Humvees, for 2 1/2 ton and 5 ton
trucks, and for armored personnel carriers.
AoA's management, which has overseen the company's outstanding growth,
will stay with the company and continue to run the business - as a wholly-owned
subsidiary of Arotech - after the acquisition. Arthur Jacobs will continue as
President, and John Neimens as General Manager. The closing of the acquisition
is subject to customary conditions to closing, and is expected to close in
August 2004.
"Armour of America is a classic fit as a part of Arotech, a dynamic and
fast-growing defense and security company," said Arthur Schreiber, President of
AoA. "Arotech is well on the way to becoming a recognized force in this field,
and we at AoA are proud to be able to be a part of it".
"We are now focusing on our growing Armoring group," said Robert S.
Ehrlich, Arotech Chairman and CEO. "This acquisition will significantly expand
Arotech's array of armoring for a variety of military and law enforcement
applications, will increase revenue and strongly contribute to making us EBITDA
profitable."
CONFERENCE CALL
There will be a special conference call on Monday, July 19, 2004 at 10:00
a.m. EDT to discuss the AoA acquisition and its impact on Arotech. Those wishing
to take part in the conference call should call 1-800-2890493 (US) or
+1-913-981-5510 (international) a few minutes before the 10:00 a.m. EDT start
time. In addition, an instant replay will be available Monday, July 19, 2004 at
1:00 p.m. EDT until Tuesday, July 20, 2004 at 11:59 p.m. EDT. The replay
telephone number is 1-888-203-1112 (US); +1-719-457-0820 (international). The
confirmation number is 512138.
ABOUT AROTECH CORPORATION
Arotech Corporation provides quality defense and security products for the
military, law enforcement and homeland security markets, including advanced
zinc-air and lithium batteries and chargers, multimedia interactive
simulators/trainers and lightweight vehicle armoring.
The Battery and Power Systems Division includes Electric Fuel Battery
Corporation and Epsilor Electronic Industries. The Simulation, Training and
Consulting Division includes IES Interactive Training and FAAC Incorporated. The
Armored Vehicle Division includes MDT Armor Corp and MDT Protective Industries
Ltd.
Arotech is incorporated in Delaware, with corporate offices in New York,
and research, development and production subsidiaries in Alabama, Colorado,
Michigan and Israel.
COMPANY CONTACT:
Jonathan Whartman, Senior VP, Communications
1-866-325-6963, whartman@arotech.com
NY Office 1-212-258-3222
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. 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: 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, 2003 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 into this press release.
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