Arotech Completes Acquisition of Armour of America

Second quarter results will be announced later today

August 10, 2004 - Arotech Corporation (NasdaqNM: ARTX) reported today that it had completed its previously-announced acquisition of 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. The transaction closed today.

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. Aro-tech’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.

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. Ar-thur Schreiber will continue as President, and John Neimens as General Manager.

“AoA, with Arthur Schreiber and John Neimens, will significantly enhance our Armor group,” said Robert S. Ehrlich, Arotech Chairman and CEO. “With AoA we are on track to be cash flow positive this year,” concluded Ehrlich.

The Company also announced that it will release its second quarter results today, Tues-day, August 10, after the close of the financial markets. A conference call to discuss the results will take place Wednesday, August 11, 2004 at 11:00 a.m. EDT. Those wishing to take part in the conference call should call 1-888-695-0608 (US) or +1-719-457-2659 (international) a few minutes before the 11:00 a.m. EDT start time. In addition, an instant replay will be available Wednesday, August 11, 2004 at 1:00 p.m. EDT until Friday, August 13, 2004 at 8:00 p.m. EDT. The replay telephone number is 1-888-203-1112 (US); +1-719-457-0820 (international). The confirmation number is 138511.

About Armour of America

AoA manufacturers aviation armor both for helicopters and for fixed wing aircraft, ma-rine armor, personnel armor, armoring kits for military vehicles, fragmentation blankest and a unique ballistic/flotation vest (ArmourFloat) that is U.S. Coast Guard-certified.

AoA provides armor for both rotary and fixed wing aircraft. Customers include, among others, the air forces of Australia, Canada, the United States (Navair), Norway, Sweden and Bra-zil. For the Marine market, AoA manufacturers gun mounts for Naval Ships and Patrol Boats. 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. In the military vehicle market, AoA provides soft armor for fragmentation blankets and hard armor for military Humvees, for 2½ ton and 5 ton trucks, and for armored personnel carriers.

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 armoring.

The Battery and Power Systems Division includes Electric Fuel Battery Corporation and Epsilor Electronic Industries Ltd. The Simulation, Training and Consulting Division includes IES Interactive Training, FAAC Incorporated and Arocon Security Consulting. The Armoring Division includes MDT Armor Corp., MDT Protective Industries Ltd. and Armour of America, Incorporated.

Arotech is incorporated in Delaware, with corporate offices in New York, and research, development and production subsidiaries in Alabama, Colorado, Michigan, California 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. 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 obliga-tion to update the information in this release. Reference to the Company’s website above does not constitute in-corporation of any of the information thereon into this press release.