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BVRS CEO statement/Commenting on the quarter, Yoel Katzir, BVRS' chief executive officer stated, "We have maintained breakeven results, despite weakness in the global economy, which has affected some of our customers, and consequently, the quarter's results. BVR remains focused on maximizing revenue through successfully completing existing projects and lining up new ones, while streamlining costs to in order to improve our bottom line."

First quarter operating profit was $0.4 million, compared with an operating loss of $0.6 million for the same quarter last year. First quarter gross profit was $2.5 million compared with a gross profit of $1.3 million for the first quarter of the previous year.

The Company reported an order backlog of approximately $36.9 million at the end of the quarter.

"We continue our aggressive marketing push and development of new products," added Mr. Katzir. "Our relationships with Elisra and our myriad of global partners, enables BVR to globally market its leading comprehensive training and simulation solutions."

Early in the quarter the Company signed a memorandum of understanding with Smiths Aerospace, the leading transatlantic aerospace equipment company, to pursue an integrated Smiths Airborne Video Solid State Recorder (AVSR) with the BVRS' airborne embedded training suite.

BVRS also announced that its Armor Gunnery and Tactical Simulator, a multi-ship simulation facility, for multi level ground forces Distributed Mission Training, has been successfully completed.

The Company announced the completion of preliminary flight tests for its new In Flight Electronic Warfare Simulator (IFEWS) with the Israeli Air Force. The purpose of these flight tests was to evaluate the system's effectiveness in enhancing flight training of pilots in a virtual electronic warfare environment.

In other recent operating developments, BVR has signed a Marketing Alliance Agreement for a joint program to market a bundled aviation security solution for the commercial airline industry, with VeriTouch Ltd., a global leader in the delivery of advanced biometric security systems. The new solution, which introduces a unique set of pre-flight and in-flight security modules for the protection of passengers, pilots, and crewmembers, will be based on VeriTouch's Constellation SCS(TM) (Secure Cabin System) and BVR's Emergency Situation Recognition and Awareness (ESRA) system.

"BVR, like many other Israeli companies, faces not only global economic weakness, but additional challenges in the international marketplace driven by the current political situation in the Middle East," concluded Mr. Katzir. "With our strategy in place, however, we believe that BVR is prepared to meet these challenges."

BVR


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