posted
For me, the best thing about Q3 is we leave the quarter with another profit (albeit small), we now have the ability to produce considerably more vehicles (expansion of production lines from 1 to 3) and a backlog of approximately $400m on trailing twelve month revenue of around $150m. That, my friends, is called significant progress. Some specific highlights:
Gross Margin - I like that we are now consistently above 18% and pushing 19%. Would love to see them get to 20%
G&A - I LOVED that they lowered G&A while at the same time growing the business (backlog, production expansion, pipeline of business opportunities). Q3 G&A of 6.78m vs Q2 G&A of 7.48m. This leads me to believe they are cost conscience and it's likely that G&A will stay under control going forward. A sign of excellent management controls.
Cash vs Debt - I like that they are now debt free with sufficient cash to continue to grow the business (almost $27m) Backlog - some $400m of backlog - not including the ILAV add on or the MRAP RFP
ILS - liked that it stayed over $10m. I wondered whether the 1.8m Q1 to 12m Q2 was an anomaly but it appears that ILS of $10m + will be the norm going forward and will likely trend higher as vehicle production trends higher Deferred Revenue - i see that there is $7.1m of deferred revenue on the books. While I would have loved to see that hit the books in Q3, it's there for Q4 so another positive for the future. My biggest disappointment was the deal about inspections being delayed. This tells me that better coordination is needed between the company and the inspector(s) and hopefully is something that's been addressed going forward.
So, net-net, the investment thesis for FRPT remains as strong as ever and the future has never looked better for this young company.
Don't worry Chartwalker, you'll have a merry Xmas... remember, slow and steady wins the race.
-------------------- Stick with Repo's plan in '07 - FRPT/DKAM! Posts: 6379 | From: PA | Registered: Dec 2004
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"Slow and steady wins the race" Right on the head Repo, that get rich overnight stuff is great,...
--- "IF" you like spending EVERY waking minute FEEDING off every lead and stock board you can find so you can tell when their going to TANK,... (gasp) -if you call that fun.. [sarcasism! ] Then their great! ~
-or, even riding a good "pump and dump" is fun, just use the indicators to watch as the tide changes and jump out, -but not during the holiday's, it takes too much time keeping up to the rumor mill...
After that CSHD stock, (that still may come through, -ahem) I'd like to kick back into a slower ride for the holidays... -sure you know what I mean ~
FRPT seems as good as any. Looks like a half azz support at about $8. But looking at a chart I see a pattern of a day or two pullback following "one day" runs, I see this starting on the run up starting on 9/5, then even coming down starting about 10/2 that pattern started again. I'm thinking we have some flippers trading this, so if the pattern continues (which is a crap shoot,.. -but it's a shot) then tomorrow should be a good day,
-unless those ENORMOUS gains that were expected by Repo in the 10Q effect things. (PUTZ!) lol ~
As always, time will tell ~
Now to check on PYPR... -that one will be my last rocket ride this year I bet, and if that one doesn't drop below .006 (closed at .0065) then we're going for another run boys! Stop loss .0055
posted
Here's the list of existing and reasonably likely future contracts for FRPT as of 11/14/06, incorporating the Q3 results info.
Note: Line items within a product are approximately ordered based on confidence, i.e. awarded contracts first, soon to be awarded next, followed by likely or possible. Backlogs are as of October 1. References to the previous messages provide further details and justification. If you have time, you may want to spend some time reading the background messages as well. The RB message numbers refer to messages on Raging Bull's FRPT board and IV for messages on Investorvillage’s FRPT board.
Cougar (Non-ILAV) 1) 100 JERRV to be delivered between Nov 06 and Nov 07. Part of the $125Million delivery order on $214 Mill contract awarded Nov 06. http://www.forceprotectioninc.com/news/news_article.html?id=133 2) 85 Mastiff PPV for the British. $65Mill awarded, believe deliveries started in Oct. http://www.forceprotection.net/news/news_article.html?id=117 3) 15 JERRV to be delivered in 3Q-4Q06, $9.3Mill awarded. 4 remain in backlog. http://www.forceprotection.net/news/news_article.html?id=95 http://www.forceprotection.net/news/news_article.html?id=106 4) Delivery award for 16 more JERRV as the May 06 contract was for up to 79. $10Mill. This appears to have already been quietly awarded as FRPT are including the 16 in the backlog on this contract. 5) 1 HEV remaining to be delivered. $400K. awarded. This one keeps getting pushed out. 6) An additional 100 JERRV to be delivered between Nov 06 and Nov 07. JERRV balance on the $214 Mill contract awarded Nov 06. Per SEC filings and press release, FRPT expects to be awarded and is already treating it as if it has been awarded. 7) The 2600 class II vehicles of the MRAP RFI have been specifically described as similar to JERRV's. RFQ response due in December 06, with award to follow some time after that. Funded by $228 Million line item in 2007 budget and likely other funds. Considering the JERRV has already been well tested in the field, and the desire is to commit funds before end of year, (IV4625) the initial delivery order could be large. 2600 vehicles is approximately $1.3-1.5 Billion over the 2 year life of the contract. MRAP details are at http://www.fbo.gov/spg/DON/USMC/M67854/M67854MRAP/listing.html and http://www.fbo.gov/spg/DON/USMC/M67854/M6785407R5000/listing.html My MRAP competitive analysis is at IV 8189 4000 vehicle reference in news article link below is MRAP. http://www.wilmingtonstar.com/apps/pbcs.dll/article?AID=/20061112/APN/611122014 8) Ambulance Variant of Cougar recently announced. I expect contract will be included in the MRAP class II award. http://www.forceprotection.net/news/news_article.html?id=126 9) The Army has an MMPV draft solicitation out for a 260 Vehicle contract with award projected in April 07. The vehicle is very similar to the JERRV and the MRAP class II vehicle, so they are discussing merging this vehicle in with the MRAP program. Approximate value $125Million. Likely to need two MMPV’s for each Buffalo awarded to form a GSTAMID’s convoy. http://contracting.tacom.army.mil/majorsys/mmpv/mmpv.htm 10) The Army is now forecasting needs for up to 21,000 vehicles as an interim until JLTV developed. Cougars called out as specific example. IV8316 This would be many Billion $. 11) Follow on order of more Mastiff for the British. Contract specifies details for 4 more, but press articles refer to the total order being for about 100, which would be 15. Approximate value $10 Million. Also, the initial order for 85 could be considered a test quantity with much larger orders possible next year as they prove themselves.
Cougar ILAV 1) Total IDIQ ILAV contract shared with BAE is for up to 1050 vehicles for up to $445 Million delivered by May 2008. DoD can initiate delivery orders up to that number fairly easily. Indication is that they will be issued as equiping the Iraqis with ILAV’s is one of the keys to the US handing over control. Partership terms with BAE are: 50/50 production split with BAE. Royalty paid by BAE to FRPT for units BAE builds. 100% of the training and support contract to FRPT. After 1050, contract with BAE is complete, so FRPT can provide 100% of future ILAV’s or renegotiate. 2) Initial delivery order of 378 units awarded. 2 of FRPT's 189 have been delivered. http://www.forceprotection.net/news/news_article.html?id=103 3) Follow on delivery order for additonal 20 units awarded. None delivered yet. http://www.forceprotection.net/news/news_article.html?id=128 4) Proposed sale of 600 ILAV’s announced to Congress. 30 day wait started, depending on how they count the days, may be completed. RB89091. Approximate value of $240 Million shared with BAE. Not awarded yet, TBD. http://www.dsca.mil/PressReleases/36-b/2006/Iraq_06-69.pdf
Buffalos 1) 44 Buffalos to be delivered by Dec 07. Part of the $125Million delivery order on $214 Million contract awarded Nov. 06. http://www.forceprotectioninc.com/news/news_article.html?id=133 2) Contracts for a total of 41 Buffalos were awarded in 06 prior to the Nov contract. Approximate contract value $30-40Million. Remaining backlog is 33 units. http://www.forceprotection.net/news/news_article.html?id=78 http://www.forceprotection.net/news/news_article.html?id=79 http://www.forceprotection.net/news/news_article.html?id=131 3) Rental fees and toy license fees from appearance in the Transformers movie to come out in mid 07. Message RB75575 4) Delivery award for additional 36 Buffalos from Nov 06 contract to be completed by Aug 08. Portion of $214Million Contract. Per SEC filings and press release, FRPT expects to be awarded and is already treating it as if it has been awarded. 5) Sole Source award for up to 64 Buffalos from MRAP RFI. Date TBD (IV5568). 6) Should get a large portion of $200Mill for additional Buffalos (specific line item for mine clearance convoys in 2006 Supplemental). 7) Army procurement plans are to buy another 250 Buffalos between 2007 and 2009. Approximately $220Million. The Buffalo was officially made part of the FCS program for mine clearance and FRPT is the sole source. Message RB76355. These will show up under the GSTAMIDs line item in the budget. 8) British may start buying Buffalos as they gain experience with Cougars. Reference in one of the news articles. 9) The Buffalo is also used in the humanitarian mission of demining old battlefields so that they are safe for civilians. Once capacity allows, there is the possibility of additional Buffalo purchases for this use. Note: For Buffalo items 5,6,7 it is difficult to tell how much of this demand is satisfied with items 1 and 4.
Cheetah (formerly MUV-R and MRUV) 1) The 1500 Class I vehicles in 1200 vehicle MRAP RFI look a lot like the Cheetah spec. Funded by $299 Million for Mine Resistant Utility Vehicles line item in 2007 defense budget and likely other items. RFQ response due in December 06, with initial award for test units to follow some time after that. Then larger award once testing is satisfactory. See Cougar description for MRAP links. 2) Will probably be included in Army's request for 21,000 interim vehicles before JLTV. IV8316 3) Strong position to compete for the JLTV as it moves forward. JLTV is a many billion dollar, many year contract, that will take some time to roll out. 4) British may also buy Cheetahs as we believe they have also evaluated them.
ILS/PSI (Field Support, Spares, Training, Maintenance, Repairs, Professional Services ) 1) Buffalo ILS Contracts. $5Million for Buffalo spares. Awarded, $800K remaining. http://www.forceprotection.net/news/news_article.html?id=80 2) ILAV ILS Contract: $25Million over the next two years, message 76773 Included in 378 unit award. 3) RFI for 5-year PSI support for 288 Buffalos and Cougars. Response was due August 14. IV4617. FRPT will win this one. Award date TBD. http://www.fbo.gov/spg/DON/USMC/M67854/M67854RFICIED/SynopsisR.html 4) Additional ILS and PSI as number of vehicles in the field keeps going up. We will have over 1000 vehicles in the field within 12 months. 5) Catalyst reports claim a high return on ILS/PSI, similar to how your auto dealer gets a high return on their service department. Repairs to the vehicle after an IED hit adds significantly to our revenue on an ongoing basis. See latest Catalyst reports on FRPT. http://catalystresearch.biz/ResearchFRPT.html 6) ILS/PSI revenue is somewhat based on total vehicles in the field. In other words, the revene from ILS/PSI would continue to grow every quarter, even if our vehicle shipments were to hit a steady state because the total number of vehicles in the field keeps going up.
Patent Licensing 1) Licensing Revenues from patent on blast protection for wheeled and tracked vehicles. In private negotiations. FRPT Press release, on investor news page June 15. "The significance of this undertaking cannot be overstated, and we intend to fully exploit this opportunity," said Force Protection CEO Gordon McGilton. "Since the technology can be applied not only to our vehicles, but to virtually any wheeled or tracked vehicle, the potential size of the opportunity may actually exceed that of our vehicle market."
Brief comments:
Can FRPT deliver the units for this many contracts? According to Spartan call, Spartan is now delivering over 5 Cougar chassis/day. IV6398. According to 3Q results, three Cougar lines are now running. A Cougar line should be able to produce at least 20/month. According to this article, http://www.wilmingtonstar.com/apps/pbcs.dll/article?AID=/20061112/APN/611122014 FRPT is setting up relationships with high volume manufacturing subcontractors to handle the MRAP and Army volumes.
This all confirms plans are in place and being executed to win the very high volume contracts. As we said months ago, the deal was get the production capacity in place and the orders will follow.
-------------------- Stick with Repo's plan in '07 - FRPT/DKAM! Posts: 6379 | From: PA | Registered: Dec 2004
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quote:Originally posted by Jo4321: Thanks, Repo, for putting that all in one place. The future looks bright (as usual) for FRPT.
Should be some good buying opportunities this morning.
Jo
Another thing to keep watching is the institutional ownership... it keeps going up DAILY. I think its at 14% now. If this hits the NASDAQ, probably will be near 70%. Shorts will get screwed.
-------------------- Stick with Repo's plan in '07 - FRPT/DKAM! Posts: 6379 | From: PA | Registered: Dec 2004
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Big money accumulating.. probably close in the $8.50's... but TODAY starts the biggest run ever to EOY and 4th quarter numbers... they now have tripe capacity setup with a backlog.
The NASDAQ listing is the icing.
-------------------- Stick with Repo's plan in '07 - FRPT/DKAM! Posts: 6379 | From: PA | Registered: Dec 2004
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posted
Repoman already in on this, added more on the big dip down to the 6.90's. Been playing this goldmine since around may.
Posts: 79 | Registered: Apr 2006
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posted
Thanks Jo, been around for awhile...just dont post much. Still learning so I keep my mouth shut most of the time.
Posts: 79 | Registered: Apr 2006
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"But looking at a chart I see a pattern of a day or two pullback following "one day" runs, I see this starting on the run up starting on 9/5, then even coming down starting about 10/2 that pattern started again. I'm thinking we have some flippers trading this, so if the pattern continues (which is a crap shoot,.. -but it's a shot) then tomorrow should be a good day,"
Looking to the Future Through the Windshield, Not the Rearview Mirror!
FRPT announced their third quarter operating results late on the afternoon of November 14th. Everyone knows the bad news (At this time of night, that phrase makes me think I might be sounding too much like the radio personality, Paul Harvey, for comfort.), ten vehicles were not inspected in time to be accepted by the US Government. Therefore, the revenue recognition approach that the Company uses did not allow for those associated revenues to be included in the quarter’s results. Hence, FRPT reported $42.16 million of total revenues for the period.
On the other hand, even with the lower level of quarter revenues, the Company’s operating results—particularly gross margin and bottom line figures—were impressive. FRPT reported a $0.01 in profit. Remember, this was on the basis of a much lower revenue number and the significant costs of starting a second Cougar manufacturing line and other quantum increases in the production process. I think that it is important to note that if the 10 vehicles did get inspected, that would have added another $6.5 million to $8 million in incremental revenue. A back-of-the envelope calculation suggests that the firm should have made an additional 2¢. Or, produced an operating profit figure that would have equaled what FRPT delivered in the second quarter. We now just have something to look forward to in the final quarter of the year.
It is very significant that the quarter’s operating costs--particularly the G&A costs—were as restrained as they were. Think about what is happening. The company ought to be 4-times the size is was in 2005, yet operating costs while adding manufacturing and fabrication lines are nearly stable. It portends very well for 2007. As to our model, we have updated the fourth quarter to better reflect the improved flow of business and strong operating margins: we are now using $0.10 for Q4. For next year, we have boosted out revenue number to reflect the start-up and operation of three Cougar lines, a ramp in production for Buffalos, and the beginning of “seeding” models of the Cheetah. Given that combination of product increases, we are now using $598 million in sales.
Also based on the production ramp, we are modestly adjusting upward our estimated margins while continuing to restrain G&A in our model for next year. I know I’m going to be aggressive, but never have I witnessed in my 30 professional years in the market an operation that added production capacity and increased revenues like I have witnessed with FRPT. More spectacularly, this has been done with incredible Op Ex restraint. On that basis, we are now using $0.90 in fullytaxed EPS for 2007. Valuation for the shares can be approached from two perspectives: essentially 15-times $1.00, or using a higher multiple given the service and repair component of the trucks and the technology, on a lower risk-adjusted earnings figure. The target today is the mid –teens.
-------------------- Stick with Repo's plan in '07 - FRPT/DKAM! Posts: 6379 | From: PA | Registered: Dec 2004
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posted
Not a great close as I expected, but this is now the BIG accumulation phase to the end of the year. This will be like when we marched from $2 - $4 and no one noticed.
And we are off the SHO list.
-------------------- Stick with Repo's plan in '07 - FRPT/DKAM! Posts: 6379 | From: PA | Registered: Dec 2004
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posted
BOOOOOOOOOOOYAH JIM!!!!!!!!!! Remember, GD is also going after the Hummer contracts..... oh man, I've got a (sexually explicit comment)
Force Protection, Inc. Announces Partnering Agreement with General Dynamics Thursday November 16, 8:30 am ET
LADSON, S.C.--(BUSINESS WIRE)--Force Protection, Inc. (OTCBB:FRPT - News) today announced it has reached an agreement with General Dynamics Land Systems to partner in the production of its Cougar medium mine-protected vehicle. The agreement, which took effect 11/11, marks the first vendor arrangement between the companies.
Force Protection will be prime contractor under the agreement, with General Dynamics as subcontractor, using available production capacity at the Joint Systems Manufacturing Center in Lima, Ohio to perform structure fabrication of the vehicle.
Force Protection's Cougar vehicle has been deployed since 2004 in the global war on terror. It was first used by the 1st Marine Expeditionary Force in Falujah, and is now used by all branches of U.S. armed forces due to its unmatched safety record in the field. To date, not a single fatality has occurred in a Force Protection vehicle.
"Warfare has changed, and the equipment needed by our troops to stay protected in the face of emerging threats must change with it," said Force Protection CEO Gordon McGilton. "The blast protection technology incorporated in the Cougar is the best available in the world today. Force Protection is delighted to partner with an organization of the caliber, depth and experience of General Dynamics to ensure the production capacity necessary to get this vehicle to the field in the numbers needed."
General Dynamics Land Systems, a business unit of General Dynamics Corporation (NYSE:GD - News), designs, manufactures and supports land and amphibious combat systems for the U.S. Army, U.S. Marine Corps, and allied nations. General Dynamics, headquartered in Falls Church, Virginia, employs approximately 81,100 people worldwide and expects 2006 revenue of approximately $24 billion. The company is a market leader in mission-critical information systems and technologies; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and business aviation.
Force Protection has delivered more than 300 blast- and ballistic-protected vehicles to the U.S. government since 2003.
-------------------- Stick with Repo's plan in '07 - FRPT/DKAM! Posts: 6379 | From: PA | Registered: Dec 2004
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posted
FRPT now has establshed relationships with 2 competitors for the Hummer replacement contracts (BAE, GD), rumored to have another relationship coming (Lockheed & Armor Holdings), and has itself in the competition! That's 4 ways to win a piece of that big pie with the Cheetah!
Here... remember this?
General Dynamics Selected to Provide Family of Joint Light Tactical Vehicles Conceptual Design and Mockup
STERLING HEIGHTS, Mich., Aug. 30 /PRNewswire/ -- The Office of Naval Research has selected General Dynamics Land Systems, a business unit of General Dynamics (NYSE: GD - News), to perform a "Best Technical Approach" trade study and to build a mock-up for use in defining a common set of requirements for the Joint Light Tactical Vehicle (JLTV) Program. JLTV is expected to provide the U.S. Army and Marine Corps with a family of more survivable vehicles and greater payload than the
The JLTV family of vehicles will comprise five "Mission Role" variants: the Combat Tactical Variant, the Command and Control Variant, the Utility Variant, the Light Infantry Squad Carrier Variant and the Reconnaissance Variant. The vehicle family will also include compatible trailers.
The JLTV design will include a basic armor protection package as well as provisions to accommodate an additional add-on armor kit. The JLTV will be network enabled, provide power for all on-board electronic components with the engine on and during extended silent watch, and export power to outside systems. Satisfying these design issues, meeting transportability and mobility requirements, and making this an affordable family of vehicles will require the use of innovative technologies and design strategies.
Work will be performed by existing General Dynamics employees located in the Muskegon Technical Center at Muskegon, Mich., and at Sterling Heights, Mich. Work is expected to be completed during the first quarter of 2007.
-------------------- Stick with Repo's plan in '07 - FRPT/DKAM! Posts: 6379 | From: PA | Registered: Dec 2004
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Also, rumor is the relationship between BAE and FRPT soured because BAE introduced the RG-33, a possible replacement for the Buffalo (won't happen but...)
But NOW, GD could be a buyer of FRPT down the road... $$$$$$$$$$$$$$$$$$$
-------------------- Stick with Repo's plan in '07 - FRPT/DKAM! Posts: 6379 | From: PA | Registered: Dec 2004
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