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TWST: Could we start with a brief historical sketch and quick overview of BVR Systems (Nasdaq:BVRS)?

Mr. Katzir: BVR Systems is one of Israel’s leading technology firms dedicated to the development, manufacturing and marketing of highly sophisticated and diversified simulation and training systems. Our expertise embraces air, naval and ground simulation as well as on-board training and debriefing systems, which is ACMI (Aircraft Combat Maneuver Instrumentation), HCMI, NCMI and battlefield simulation plus the new product line of embedded simulation. The company was founded in 1987 by two IDF active fighter pilots for the purpose of maximizing the use of technology to provide cost effective solutions to the defense market. In 1999 the Elisra Group which is a world leader in electronic warfare systems acquired about 45% of BVR Systems and today has control of BVR’s Board of Directors.

TWST: When you look out over the next 12 to 24 months, what targets and milestones will you be aiming for and what will make that time frame a success?

Mr. Katzir: Looking ahead, we are completely focused on continuing our aggressive marketing, strengthening our US presence and enlarging our order backlog, which is the most important thing. We will also continue to pursue new opportunities of strategic alliances with major players in the defense industry. At the same time BVR must maintain its technology leadership, its unique human resources and dynamic and flexible attitude toward the customer.

TWST: Can you provide insight into some of the trends and developments -- political and economic -- that potentially will impact your markets?

Mr. Katzir: Yes of course. This is very important issue. Like many Israeli companies we face not only a global economical weakness and loss of purchasing power but additional challenges driven by the current political situation in the Middle East. However, with our strength in place we believe that BVR is prepared to meet this challenge.

TWST: Could you describer the competitive landscape and the particular strengths that differentiate BVR?

Mr. Katzir: The simulation market is highly competitive; this is a fact. Defense budgets have dwindled since September 11th, and often the challenge is not just our competition but supplying customers’ requirements with a limited budget. BVR has found a niche in the market for specific simulators where we offer a cost /price, a short time-table advantage. In other instances, it is a technology advantage. The background of BVR’s products is based on operational experience and it is this experience that is the key to our success. Much of our technology in the past has been way ahead of its time. It has taken the market time to value some of our projects and technology. For example, the networking of simulators is something BVR developed about 14 years ago. Furthermore BVR’s dynamic, highly experienced, professional, dedicated workforce sets us apart from competition. We better understand the needs of our customers. The fact that BVR is a small, flexible, young, sharp company, makes it a company that stands apart from the bigger and slower moving companies. Our size and operational experience enable us to enter niches where product customization at low cost and quick answers to the specific simulation and training problems is required.