Arotech Gets $36M Order For Training Program

ANN ARBOR — FAAC Inc., part of Arotech Corp.’s Training and Simulation Division, has received an engineering change order from the U.S. Army’s Program Executive Office for Simulation, Training, and Instrumentation (PEO STRI) valued at $36 million.

OIf the order, $20.4 million is funded, with an additional $15.6 million
in options.

The change order to FAAC’s Virtual Clearance Training Suite program reconfigures the previously contracted 28 training suites to match the U.S. Army’s current operational concept for Route Clearance companies and includes options for continued contractor logistical support of the fielded systems.

VCTS simulates the wide array of large and small technical devices,
purpose-built mine-protected security, detection, and clearing
vehicles to train the ever-evolving tactics and techniques used by the
U.S. Army to combat improvised explosive devices. The
reconfiguration effort will commence immediately and continue
through 2016.

“It is important to train as you fight; because you fight as you have
trained,” said Kurt Flosky, Arotech Training and Simulation’s executive vice president. “We are very pleased to receive this extension to our existing VCTS program. This change proposal will utilize the inherent flexibility of the solution to ensure that the fielded VCTSs simulate the actual configuration of today’s Route Clearance teams as their mission and equipment continues to evolve. The fielded systems to date have been well received by the units and we are pleased to be able to continue our support of the VCTS program and play a key role in maximizing its effectiveness.”

Arotech (Nasdaq: ARTX) also announced that it is updating its full-
year 2014 revenue and EBITDA expectations. The timing of recent
awards and planning of programs in hand has altered Arotech’s 2014
revenue guidance to be in the range of $105 million to $111 million
while increasing net backlog to $80.6 million (as of June 1, including
the funded portion of this order). Given improvement in margins as
well as the favorable product mix of orders in hand, Arotech expects
to improve its overall profitability levels. Arotech updates its
expectations for full year adjusted EBITDA to be in the range of $7.8
million to $8.3 million.

Arotech’s Training and Simulation Division develops, manufactures,
and markets advanced high-tech multimedia and interactive digital
solutions for engineering, use-of-force, and operator training
simulations for military, law enforcement, security, municipal and
private industry personnel. The division’s interactive operator
training systems feature vehicle simulator technology enabling training in situation awareness, risk analysis and decision-
making, emergency reaction and avoidance procedures,
conscientious equipment operation, and crew coordination. The
division’s use-of-force training products and services allow
organizations to train their personnel in safe, productive, and realistic
environments. The division provides consulting and developmental
support for engineering simulation solutions. The division also
supplies pilot decision-making support software for the F-15, F-16,
F-18, F-22, and F-35 aircraft, simulation models for the ACMI/TACTS
air combat training ranges, and Air-Refueling Boom Arm simulators.

Arotech’s Training and Simulation Division consists of FAAC Inc.
(, IES Interactive Training (, and
Realtime Technologies (

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