Arotech Corporation Announces Stock Buy-Back Program

Company will buy back up to $1,000,000 of its common stock

February 19, 2009 - Arotech Corporation (NasdaqGM: ARTX), a provider of quality defense and security products for the military, law enforcement and security markets, announced today that its Board of Directors has approved a share repurchase program of up to $1,000,000 of its common stock over the next twelve months. Arotech expects to fund its repurchase program with existing cash and cash equivalents on hand.

“Our board and management have considered the current market price of our stock and have decided to introduce a share repurchase program of our common stock,” stated Robert S. Ehrlich, Chairman CEO and Chairman of Arotech. “We do not believe that this use of cash will hinder our ability to continue to make payments on our 10% Senior Convertible Notes in cash rather than stock, as we did in respect of the first installment payment on our Notes that was paid last week, and we strongly believe that at the current price, the purchase of our own stock is an appropriate and opportunistic use of our cash and will further enhance long-term shareholder value,” concluded Ehrlich.

The timing and amount of any repurchases will be determined by Arotech management based on its evaluation of market conditions, regulatory considerations and other factors. Arotech will not begin implementation of the program until after it releases its financial results for the year ended December 31, 2008, expected in the latter half of March. Purchases may be made from time to time in the open market or in privately negotiated transactions. Any open market stock repurchase activities will be conducted in compliance with the safe harbor provisions of Rule 10b-18 of the Securities Exchange Act of 1934, as amended. Repurchases of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when Arotech may otherwise be prohibited from doing so under insider trading laws. Arotech is not obligated to repurchase shares, and purchases will be subject to availability, regulatory constraints and general economic conditions. This program may be suspended or discontinued at any time, and there can be no assurance that any such purchases will be made.

About Arotech Corporation
Arotech Corporation is a leading provider of quality defense and security products for the military, law enforcement and homeland security markets. Arotech provides multimedia interactive simulators/trainers, lightweight armoring and advanced zinc-air and lithium batteries and chargers. Arotech operates through three major business divisions: Armor, Training and Simulation, and Batteries 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, including the effect of any share repurchases by Arotech. 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; dilution resulting from issuances of Arotech’s common stock upon conversion or payment of its outstanding convertible debt, which would be increasingly dilutive if and to the extent that the market price of Arotech’s stock decreases; and other risk factors detailed in Arotech’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as amended, 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.