(Marketwire - May 16, 2011) - 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, 2011.

Revenues for the first quarter of 2011 were $13.3 million, compared to $21.2 million for the corresponding period in 2010, a decrease of 37%.

Gross profit for the first quarter of 2011 was $2.8 million, or 21% of revenues, compared to $5.8 million, or 28% of revenues, for the corresponding period in 2010.

The Company reported an operating loss for the first quarter of 2011 of $(2.6) million, compared to an operating profit of $473,000 for the corresponding period in 2010.

The Company's basic net loss for the first quarter of 2011 was $(2.6) million, or $(0.19) per share, compared to a net profit of $92,000, or $0.01 per share, for the corresponding period in 2010.

"As we noted in our recent press release regarding our $63.4 million contract award for the design, development, production, and delivery of 28 VCTS simulators, our revenues slipped this quarter primarily due to delays in shipments of orders in our Armor Division to the Israeli Army," noted Arotech's Chairman and CEO Robert S. Ehrlich. However, since these armor orders are anticipated to be shipped later this year, we continue to expect our full year's revenues to be similar to or better than those of 2010," continued Ehrlich. "The VCTS win is an enormous vote of confidence in our Simulation Division, and will undoubtedly have a significant impact on our future results. While we have not had sufficient time to thoroughly and completely analyze the implications of this new order, we do feel it appropriate at this time to issue some preliminary guidance with respect to our 2011 and 2012 results, and we are doing so in this press release," concluded Ehrlich.

Backlog of orders (not including the VCTS order) totaled approximately $43.1 million as of March 31, 2011, as compared to $42.5 million at March 31, 2010. As of the date of this release, backlog stood at $106.5 million.

As of March 31, 2011, the Company had $2.3 million in cash and $2.3 million in restricted cash, and $391,000 in available for sale securities as compared to December 31, 2010, when the Company had $6.3 million in cash and $1.8 million in restricted cash, and $399,000 in available for sale securities.

The Company had $1.9 million in short-term bank debt and $2.0 million in long-term debt outstanding at the end of the first quarter 2011 compared to $2.5 million in bank debt and $2.4 million in long-term debt outstanding at the end of 2010. The Company also had $6.6 million available in unused bank lines of credit at the Company's primary bank in the U.S. at quarter end.

The Company had trade receivables of $8.5 million as of March 31, 2011, compared to $13.8 million as of December 31, 2010. The Company had a current ratio (current assets/current liabilities) of 1.75 as of March 31, 2011 and 1.74 as of December 31, 2010.

For the full year 2011, Arotech anticipates that revenues could range from $79 million to $82 million, with EBITDA reaching or exceeding last year's $2.9 million, excluding certain development costs in Arotech's Battery and Simulation Divisions, which Arotech believes will begin to pay off in 2012 and beyond.

For 2012, Arotech anticipates that revenues could increase significantly and could range from $85 million to $95 million, with a significant increase in EBITDA, which could range from $3.75 million to $5.0 million, including the possibility of reaching GAAP profitability.