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Canadian Commercial Corp., General Dynamics Land Systems Canada, Ottawa, Ontario, Canada, is being awarded $338,734,800 for firm-fixed-priced delivery order # 0003 under previously awarded contract (M67854-07-D-5028) to purchase 600 Category (CAT) II Mine Resistant Ambush Protected (MRAP) variation vehicles. MRAP vehicles are armored vehicles with a blast resistant underbody designed to protect the crew from mine blasts, fragmentary and direct fire weapons. Work will be performed in Lansing, Michigan, and work is expected to completed March 2008. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured. The Marine Corps Systems Command, Quantico, Va., is the contracting activity.
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posted
Well, we knew THIS was coming. ---------------------------------------------
Force Protection's Friend Becomes a Foe
By Melissa Davis Senior Writer 8/8/2007 11:09 AM EDT
OKLAHOMA CITY -- Force Protection's (FRPT - Cramer's Take - Stockpickr - Rating) chief ally, General Dynamics (GD - Cramer's Take - Stockpickr - Rating), is starting to look more like a formidable foe. Up to now, Force Protection and General Dynamics have worked together as a team to snag big contracts for Mine-Resistant Ambush-Protected vehicles. This week, however, General Dynamics landed a $339 million order for 600 MRAP vehicles on its own.
Moreover, that order calls for heavy-duty Category II vehicles -- a class of MRAP vehicles previously dominated by Force Protection's celebrated Cougar.
Force Protection's stock plummeted 12% to $16 on Wednesday due to the stunning setback. The shares have lost nearly half of their value this summer as competitive pressures have mounted.
"The award is clearly a negative for FRPT, which now faces another Category II competitor ahead of large MRAP orders in 2008," Thomas Weisel Partners analyst David Gremmels admitted on Wednesday. "As a result of this new reality, we are lowering our Cougar market-share assumption for MRAP from 40% to 33% for 2007-2008."
Gremmels lowered that same target less than a month ago, when Armor Holdings, a rival now owned by BAE Systems, snagged a surprising MRAP win. Until then, Gremmels had projected that Force Protection's Cougar would represent at least half of all vehicles ordered under the multibillion-dollar MRAP program.
Force Protection's Friend Becomes a Foe Page 2
"Force Protection's Cougar vehicle dominates the Category II MRAP vehicle market, being the only contractor awarded volume production since testing wrapped up at Aberdeen," Gremmels wrote at the time. "Although our model has lost some of its conservatism by the addition of an unexpected contender to the production competition, we continue to believe it is achievable." While now backing away from that call, Gremmels continues to maintain his overweight rating on Force Protection's shares. He views the stock as especially attractive following the latest selloff.
Still, even Gremmels admits that the rules of the MRAP competition -- which once seemed to favor Force Protection -- have clearly changed.
"We believe the MRAP acquisition strategy has evolved as the Department of Defense struggles under intense political pressure to get as many vehicles fielded as soon as possible," wrote Gremmels, whose firm makes a market in Force Protection's securities. "This has resulted in the original intent of having industry focus on two or three of the best designs transforming into a free-for-all, with orders seemingly going to all players that passed testing at Aberdeen and can make a case for production capacity."
As a relatively young company with a spotted production record, Force Protection could further lose its competitive edge. Indeed, rival Navistar (NAVZ.PK - Cramer's Take - Stockpickr) -- an established player with a long history of mass producing commercial vehicles -- has already overtaken Force Protection as this year's biggest MRAP winner so far.
Navistar's stock, up 2.4% to $61.40 on Wednesday and hovering in the upper end of its 52-week range, has handily outperformed Force Protection's in a reflection of the changing landscape.
-------------------- "Great Day for Up!"....Dr. Seuss Posts: 3387 | Registered: Mar 2006
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posted
My forecast...Slaughtered today, up 4-6% tomorrow. Of course I could be wrong but that's how this stock seems to behave and this sell off, like all the others, is overdone.
Posts: 205 | Registered: Mar 2006
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posted
You got me all wrong. I was being sarcastic. I was going to put a "haha" in there but there's been nothing to laugh about lately.
-------------------- Good judgment comes from experience. Unfortunately, experience usually comes from bad judgment. Posts: 205 | Registered: Mar 2006
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posted
Yeah, I still haven't sold anything, although I should have. I've only bought when it comes down. I feel confident that this stock has a good long term yet, either through contracts or a buyout by a larger company to gain FRPT's capacity. Void of any big news, I honestly don't think FRPT will go towards the $30's again until first of the year. If earnings are tonight, I think it's good the stock is down. It seems 90% of the time when a stock has a run up before earnings, it crashes after due to unreasonable expectations. When it's down before earnings, people expect the worst and thus nearly anything will be good news. Just my $.02.
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posted
Well, 4% after hours. See, there's my 4-6%. You just had to be patient. haha.
-------------------- Good judgment comes from experience. Unfortunately, experience usually comes from bad judgment. Posts: 205 | Registered: Mar 2006
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I'm breathing a sigh of relief, now. I chose not to lighten my load, so I hope that decision doesn't come back to bite me. After hours isn't always a true indicator of what will happen in regular session.
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Force Protection Reports Record Second Quarter and Six Month 2007 Financial Results Thursday August 9, 5:51 pm ET
LADSON, S.C., Aug. 9 /PRNewswire-FirstCall/ -- Force Protection (Nasdaq: FRPT - News), today announced results for its second quarter and six months ended June 30, 2007.
ADVERTISEMENT Net sales for the second quarter of 2007 rose 140% to $134.7 million, compared to net sales of $56.1 million for the second quarter of 2006. Net sales for the six month period ended June 30, 2007 were $234.9 million, compared to $90.9 million for the first six months of 2006, a 158% increase. The primary reason for the increase in sales was due to the improving production capability leading to increased deliveries and sales of its Cougar and Buffalo vehicles.
For the second quarter gross profit was $32.8 million, or 24.3% of net sales, compared to a gross profit of $10.2 million, or 18.1% of net sales for the second quarter of 2006. As a percentage of net sales gross margin increased 6.2% over second quarter 2006. Gross profit for the first six months of 2007 was $55.3 million, or 23.5% of net sales, compared to a gross profit of $16.8 million, or 18.5% of net sales for the first six months of 2006. As a percentage of net sales gross margin increased 5.0% for the first six months of 2007, compared to the same period last year. The gross profit increase for the second quarter and six month period was primarily due to improved material and labor costs and the Company's increased ability to leverage fixed costs as it continues to expand its production capability.
Research and development (R&D) expenses increased 416% to $3.3 million, compared to $641,215 for second quarter 2006. For the first six months of 2007, R&D rose 524% to $8.1 million, compared to $1.3 million for the first six months of 2006 primarily due to continued development of the Cheetah vehicle. The company previously announced the acquisition of an additional facility for the manufacture of current and future products including the Cheetah and expects the production capacity to be approximately 2,000 Cheetah vehicles in 2008 as previously stated.
Expansion efforts continue and are on track to provide increased capacity at our facilities in Ladson, SC, Roxboro, NC and the various facilities within our enterprise which will enable us to meet previously stated production capacity within our operations.
The Company recorded an operating profit of $13.9 million for the quarter, compared to an operating profit of $1.8 million for the second quarter of 2006. Operating profit was $16.5 million for the first half of 2007, compared to an operating profit of $1.8 million for the first half of 2006.
Income after taxes for the second quarter was $9.6 million, compared to income after taxes of $973,024 for the same quarter last year, a 889% increase. For the six month period ended June 30, 2007, the Company reported income after taxes of $12.1 million, compared to income after taxes of $205,575 for the first six months of 2006.
Net income for the quarter rose 2,170% to $9.6 million, or $0.14 per diluted share, compared to net income of $424,047 or $0.01 per diluted share for the same period last year. Net income for the six month period was $12.1 million, or $0.18 per diluted share, compared to net loss of $(989,267) or $(0.03) per diluted share for the same period last year. The Company incurred a $1.7 million charge for the late registration of the private placement during the second quarter 2007, or $0.025 per diluted share. Excluding this charge, EPS would have been $0.17 per share. As earlier announced, the S-3 filing was declared effective on July 26, 2007.
Gordon McGilton, Chief Executive Officer of Force Protection commented, "We are most pleased with our results for the second quarter having realized significant increases in net sales, net income and gross profit. At the same time, we produced 229 vehicles in the second quarter compared to 285 vehicles in all of 2006."
"We were also pleased to have signed several additional contracts during the quarter in connection with our joint venture with General Dynamics. During the quarter, we announced that we had been awarded contracts totaling $711 million to produce 1,455 vehicles for the U.S Marine Corps' Mine Resistant Ambush Protected (MRAP) vehicle program.
As previously announced, we received our first Canadian contract for approximately $8.9 million to produce five Buffalo and five Cougar mine- protected vehicles for the Canadian Expeditionary Force Command (CEFCOM). We recently delivered the first of these vehicles to the Canadian forces."
Subsequent Events
On July 20, 2007, we entered into an Agreement with Wachovia Bank for a revolving credit facility of $50,000,000. We entered into this agreement to assure continued flow of cash while administrative contractual payment issues are worked out with government payment offices on recently established MRAP programs.
On August 1st, 2007, the Company announced a contract for approximately $5.3 million for continued work under the Iraqi Light Armored Vehicle (ILAV) program for new ILAV vehicles and equipment to include 22 new vehicles and more than 40 articulating interrogating arms.
Mr. McGilton concluded, "The progress that we have made to date in 2007 positions us for a successful year. As noted, we are continuing to see strong demand for our vehicles. We are also realizing the benefits of improved materials and labor costs and a reduction in our fixed costs. Most importantly we remain committed to our mission to make vehicles that protect and save lives by making sure that those vehicles are available to our troops in a timely manner."
For further information, interested parties are encouraged to review Force Protection's latest 10-Q filing with the SEC, which can be accessed via the Internet at http://www.forceprotection.net/investors/sec.html.
About Force Protection Inc.
Force Protection, Inc., first to answer the call to duty for the urgent need to bring lifesaving mine-resistant ambush protected vehicles to U.S. troops in combat and an American company whose vehicles, Cougar and Buffalo, have a proven track record where it matters most; in the battlefield, manufactures ballistic- and mine-protected vehicles through its wholly-owned subsidiary. These specialty vehicles protect against landmines, hostile fire, and Improvised Explosive Devices (IEDs, commonly referred to as roadside bombs). Force Protection's mine and ballistic protection technologies are among the most advanced in the world. The vehicles are manufactured outside Charleston, S.C. For more information on Force Protection and its vehicles, visit www.forceprotection.net.
posted
FRPT $ 14.38 Force Protection Inc. -0.77 Shares Short 14,881,100 Days to Cover (Short Ratio) 4.9 Short % of Float 24.28 % Shares Short - Prior 8,994,000 Short % Increase / Decrease 65.46 % Squeeze Ranking 184 % from 52-Wk HIGH ( 31.16 ) -116.69 % % from 52-Wk LOW ( 5.07 ) 64.74 % % from 200-Day MA ( 20.85 ) -44.99 %
% from 50-Day MA ( 20.49 ) -42.49 % Price % Change (52-Wk) 154.60 % Trading Volume - Today 4,188,654 Trading Volume - Average 3,057,400 Trading Volume Vs. Avg. 137.00 % Total Shares - Float 61,290,000 Total Shares - Outstanding 68,010,335 % Held by Insiders 14.00 % % Held by Institutions 51.60 % Market Cap 977,988,617 EPS 0.44 PE Ratio 34.40 Sector: Consumer Goods Industry: Trucks & Other Vehicles SI Record Date 2007-Jul Information Provided Without Warranty
posted
Force Protection Inc Force Protection's Shares Climb After Earnings Top Estimates
By Edmond Lococo
Aug. 10 (Bloomberg) -- Shares of Force Protection Inc., the largest builder of blast-resistant vehicles for the U.S. Marine Corps, rose as much as 6.4 percent after the company reported second-quarter profit that topped analysts' estimates.
Force Protection's stock gained 32 cents, or 2.2 percent, to $14.70 at 9:49 a.m. in Nasdaq Stock Market composite trading. Ladson, South Carolina-based Force said yesterday second-quarter net income surged almost 23-fold to $9.63 million, or 14 cents a share, from $424,047, or 1 cent, a year earlier.
Demand for the company's Cougar and Buffalo vehicles for U.S. troops in Iraq and Afghanistan lifted per-share profit past the estimate of 12 cents a share, the average of three analysts surveyed by Bloomberg. Force was the first company to deliver blast-resistant trucks for combat use in 2003. It is now one of seven companies building them and the largest as measured by deliveries.
``This quarter confirms our commitment to increasing capacity for the best-protected vehicles for our troops,'' Michael Aldrich, Force Protection's vice president for government relations, said in an interview. ``We are not only getting better at deliveries. We're becoming more profitable in the process.''
Force shipped a total of 229 Cougar and Buffalo trucks in the second quarter, up from 64 a year earlier. The results were released after markets closed yesterday.
Sales more than doubled to $134.7 million. Revenue fell short of the average estimate of $144.3 million from the Bloomberg survey.
Sales missed estimates partly because some June vehicle deliveries were late and shipped in July, David Gremmels, a New York-based analyst with Thomas Weisel Partners, wrote in a note to clients.
``Long-term outlook remains strong,'' wrote Gremmels, who rates the shares ``overweight'' and doesn't own any. ``Stronger- than-expected margin performance and ability to quickly make up the handful of deliveries that slipped out of 2Q increases our confidence that the company can execute on its aggressive planned production ramp while improving operating performance.''
To contact the reporter on this story: Edmond Lococo in Boston at elococo*bloomberg.net .
posted
Up nicely after hours on small contract news.
AP Force Protection Gets $69.8M Navy Deal Friday August 10, 5:49 pm ET Force Protection Gets $69.8 Million Navy Deal for 125 Armored Vehicles
WASHINGTON (AP) -- Force Protection Industries Inc. on Friday won yet another armored protected vehicle contract from the Navy worth up to $69.8 million, the Pentagon said on Friday. The latest contract could help boost the armored vehicle maker's sales for the upcoming quarter even higher. On Thursday, the Ladson, S.C.-based company reported net income for the second quarter soared to $9.6 million, or 14 cents per share, from $424,047, or a penny per share, in the prior-year period. Revenue more than doubled to $134.7 million, from $56.1 million, boosted by increased vehicle orders by the Pentagon.
ADVERTISEMENT
Analysts, on average, were expecting earnings of 13 cents per share on revenue of $145 million.
Force Protection will build and deliver 125 Mine Resistant Ambush Protected, or MRAP, vehicles. The company is expected to deliver these vehicles by December 2007.
The MRAPs are designed with a V-shaped hull to repel explosives and roadside bombs.
The company is teaming up with Falls Church, Va.-based General Dynamics Corp under a joint venture called "Force Dynamics" to increase production capacity.
To date, the Pentagon has ordered 6,415 MRAP vehicles for soldiers in Iraq and Afghanistan-- just short of its current target of 7,774 vehicles.
Shares of Force Protection added 18 cents to $15.73 in after-hours trading, after shares rose $1.17, or 8.1 percent, to $15.55.
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4:33PM Force Protection sues competitor over trade secrets - DJ (FRPT) 16.26 -0.63 : DJ reports Force Protection, which makes mine-resistant vehicles for the military, has filed a lawsuit claiming a nearby competitor stole trade secrets. The lawsuit filed Tuesday names Protected Vehicles and its founder, Garth Barrett, a former Force Protection president who resigned two years ago and started the new business about 10 miles away. The suit, which also names two other Protected Vehicles executives, claims while at Force Protection, Barrett made a copy of his computer hard drive "containing trade secrets and confidential information belonging to Force Protection."
posted
Great Barrons article: -------------------------------------------------------------
Armored-Vehicle Maker Ready to Roll By ALEXANDER EULE
FOR INVESTORS SEEKING TO SHIELD THEIR investment portfolio in a battered market, Force Protection and its line of mine-resistant vehicles may offer a safe way forward.
Force Protection, based in Ladson, S.C., has made a name for itself in the last five years by building a new class of mine-resistant military vehicles that offer U.S. soldiers vastly improved protection against roadside bombs, which now account for a majority of American fatalities in Iraq.
Since delivering the first mine-resistant ambush-protected (MRAP) vehicles to Iraq in 2003, Force Protection has sparked a burgeoning program that the Department of Defense now calls its "highest acquisition priority."
Despite the military's push for as many vehicles as it can get, Force Protection stock looks attractive thanks to investors who have nervously sold off shares as competitors sought a piece of its lucrative market.
Force Protection has the only battle-tested vehicles in Iraq and Afghanistan, with new entrants just beginning to deliver MRAP trucks under the Pentagon's program.
"Force Protection defined the market in the United States," Thomas Weisel Partners analyst David Gremmels says of MRAPs.
If the military has its way, the U.S. government will spend over $10 billion on MRAPs between this year and next. And industry observers say 2008 spending alone could ultimately approach $8 billion to $12 billion, as the armed services look to order as many as 23,000 mine-resistant vehicles.
MRAPs have already become the Pentagon's third-largest acquisition program, behind only missile defense and the so-called joint strike fighter.
Lawrence Korb, a senior fellow at the Center for American Progress and an assistant secretary of defense from 1981 to 1985, calls the program's rapid growth "unprecedented."
"Usually it takes a decade for something like this to happen," he says, noting that the missile-defense program emerged in 1983 and the joint strike fighter in 1993.
MRAPs enjoy nonpartisan support from Congressmen clamoring to get behind a program free of offensive weaponry and singularly focused on saving U.S. lives.
At a Glance Force Protection
Stock Price: $16.26 52-Wk High: $31.16 52-Wk Low: $5.75 Market Cap: $1.11 billion Est. 2008 EPS: $1.44 2008 P/E: 11.3 Est. Long-Term EPS Growth*: 30% Est. ('08/'07) EPS Growth: 118% Revenue (trailing 12 months): $340 million Dividend Yield: None Chief Executive: Gordon McGilton Headquarters: Ladson, S.C.
* Based on analyst estimates looking ahead three to five years. Sources: Force Protection Website, Thomson Financial/Baseline."There is no member of Congress who opposes increased funding for this program," says SunTrust Robinson Humphrey analyst Chris Donaghey, "even if they're opposed to our presence in Iraq."
As of Aug. 10, the U.S. government had ordered 1,963 vehicles from Force Protection, or 31% of its total MRAP procurement, according to Congressional Research Service. Still, after expecting the company to dominate MRAP sales, Wall Street has had to adjust its expectations with companies like Navistar International and Armor Holdings (now a subsidiary of BEA Systems) winning awards.
As a result, Force Protection shares are down 48% from a May high, and the stock now trades at an undemanding 11.3 times analysts' earnings estimates for fiscal 2008.
Michael Alpert, managing director and portfolio manager of the J. & W. Seligman Small Company Growth Team, says the selloff has presented a buying opportunity.
Alpert calls investors' lack of faith "shortsighted" and says "huge funding" still exists for MRAP-related programs.
Force Protection also got negative publicity from a recent Pentagon inspector general report that showed the company had missed delivery on promised vehicles back in 2003 and 2004.
"We had the founder's advantage but we also had the founder's injuries or pain," Force Protection Chief Executive Officer Gordon McGilton tells Barron's Online. Among early challenges, he cites ramping up capacity and teaching the government about the new class of vehicles and their potential.
McGilton says the company has now been "completely retooled." After producing 11 vehicles in all of 2003, Force Protection built 114 in July and says it will be at 300 per month by the first quarter of 2008.
The company's 17-ton Cougar model sells for approximately $400,000 while the 23-ton Buffalo is around $800,000.
A third, lighter-but-faster vehicle called the Cheetah is in production and the company says it anticipates making 2,000 of them in 2008. The Cheetah will go for about $300,000, according to Michael Aldrich, Force Protection's vice president for marketing and government relations.
Increased production capacity and the 8-ton Cheetah, which holds the promise of eventually replacing the Pentagon's 52,000 combat-configured Humvees, are helping to drive growth predictions. According to Thomson Financial, analysts project a long-term growth rate of 30% with earnings per share expected to be 66 cents in 2007 and $1.44 in 2008, up from 39 cents last year.
"The market has yet to really even give the company credit for the Cheetah vehicle," SunTrust's Donaghey says. Gremmels at Thomas Weisel, meanwhile, has assumed a conservative 800 Cheetah deliveries in his 2008 model.
Donaghey has a price target of $36, while Gremmels recently established a $22 target.
With competitors' vehicles coming due, McGilton says he's anxious to see whether they can meet their quotas but adds "we're very comfortable with the promises we've made."
Seligman's Alpert points out there's likely to still be volatility with the stock as the market reacts to Defense Department awards. And the possibilities of losing such awards or an expedited withdrawal from Iraq are risks for Force Protection.
On Wednesday, the Pentagon indicated its MRAP shipments to Iraq would be slower than expected, but the delays involve postproduction work and transportation logistics that shouldn't directly impact orders.
McGilton expresses little doubt there will be a long-term market for the company's product. "The government will continue to take all the vehicles that we can build," he says.
"The army trains as though there's a war all the time," McGilton says, looking beyond Iraq. "And they will use the equipment that they need to go to war for that training."
J. & W. Seligman & Co. owned 153,000 shares as of June 30, 2007, according to Michael Alpert, managing director and portfolio manager of the J. & W. Seligman Small Company Growth Team.
Thomas Weisel Partners makes a market in the security and may sell the security to or buy them from customers on a principal basis.
SunTrust Robinson Humphrey makes a market in the security and has received or is entitled to receive compensation for investment banking services within the last 12 months.
Zippy
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And then click on the article "Armored Vehicle Maker on a Roll"
It is currently the 8th most popular article. Using the link, even if you don't subscribe, should move it up. Then perhaps the story will make the paper edition.
jo
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Several mainstream media reports have picked up on a story published by the military publication Stars and Stripes indicating the MRAP industrial base will fall short of production targets in August and the U.S. military has lowered the number of vehicles it expects to send to Iraq by the end of the year.
We believe FRPT is tracking ahead of plan for August deliveries and thus believe other players such as Navistar are behind. As this visibility develops, we believe it could serve as a catalyst for FRPT.
posted
New US armored trucks are symbolic targets-general Fri Aug 24, 2007 3:38PM EDT By Andrew Gray
ABERDEEN, Md., Aug 24 (Reuters) - New armored vehicles that give extra protection to U.S. troops in Iraq are becoming symbolic targets for insurgents, the top military officer in charge of acquiring the vehicles said on Friday.
The Pentagon says the Mine Resistant Ambush Protected (MRAP) vehicles, which have V-shaped hulls to disperse the impact of bomb blasts, will save the lives of many U.S. troops and is rushing them to Iraq.
But Marine Corps Brig. Gen. Michael Brogan suggested the hype surrounding the vehicles was putting them at greater risk, pushing insurgents to see them as a challenge to be defeated.
"As we field these things, because of what all you are doing and how much you are touting the fact that they protect our troops ... these are becoming symbolic targets," he told reporters at an MRAP demonstration organized by the U.S. military.
"That in and of itself is not a good thing," he said.
The boxy, truck-like MRAPs, which come in various sizes and were originally developed in South Africa, give much greater protection than the Humvee vehicles used by many U.S. troops in Iraq against bombs planted on or beside roads.
The Pentagon says 6,415 MRAPs have been ordered and more than 225 have been fielded.
Brogan did not give examples of incidents in which he believed an MRAP had been targeted because of its status. He said he was reluctant to give many details of the program for fear that they could be useful to insurgents.
"Imagine if I'm a football coach and I've developed a play that's going to score every time I run it," he said.
"I sure don't want to hand it on in writing to the opposing defense," Brogan said at at the U.S. Army's Aberdeen Proving Ground test site in Maryland.
The Pentagon said on Wednesday U.S. troops in Iraq would receive at least 1,000 fewer MRAPs this year than previously announced due to shipping constraints.
It said defense contractors were expected to produce 3,900 MRAPs this year but only 1,500 would make it to the war zone -- down from a previous shipment target of 2,500 to 3,000.
Brogan said the military and its contractors were working as hard as possible to get MRAPs to Iraq.
"We're going to get them there as quickly as we can," said Brogan, the head of Marine Corps Systems Command, which is in charge of procuring the vehicles for the military.
Defense Secretary Robert Gates has made MRAPs the Pentagon's top procurement priority. In June, he said scores of Americans would die for every month of delay in getting MRAPs into the field.
The U.S. death toll in Iraq since the 2003 invasion has reached 3,725. Of those, 1,593 troops were killed by an improvised explosive device, or IED, according to Web site icasualties.org, which tracks coalition deaths in Iraq.
MRAP contractors include:
-- Navistar International Corp.'s (NAVZ.PK: Quote, Profile, Research) International Military and Government LLC.
-- Force Protection Inc. (FRPT.O: Quote, Profile, Research), which is partnered with General Dynamics Corp.'s (GD.N: Quote, Profile, Research) Land Systems business arm.
-- a General Dynamics Canadian unit.
-- BAE Systems Plc (BA.L: Quote, Profile, Research).
Military Struggles to Meet MRAP Demand Friday August 24, 5:23 pm ET By Donna Borak, AP Business Writer
Good article with an encouraging quote by Mike Aldrich, "Force Protection is not experiencing production delays and expects to stay on schedule the rest of the year."
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posted
Force Protection Seeks Legal Protection By Rich Smith August 27, 2007
Some say you shouldn't kick a man when he's down. Others assert that when he's down is, in fact, the safest time to kick him.
Judging from a lawsuit just filed against rival Protected Vehicles, it seems that armored vehicle maker Force Protection (Nasdaq: FRPT) sides with the latter camp. Last Tuesday, Force Protection marched into U.S. District Court in Charleston, S.C., and slapped Garth Barrett with a lawsuit alleging everything from unfair competition to copyright infringement to tortious interference with contractual relations. Barrett is the company's former founder, former president, chief technology officer, facility security officer, and, presumably, head janitor and senior administrative assistant at one time or another. Also sued were Barrett's new company, Protected Vehicles, which Barrett set up just days after leaving the employ of Force Protection -- and which stands as perhaps the tiniest participant to actually have won a contract in the MRAP game dominated by larger companies such as Navistar, BAE, and General Dynamics (NYSE: GD).
Now, I could go into a lot of detail about the merits of this case, but I'll leave that to others. Suffice it to say that Barrett's conduct in allegedly (always allegedly) downloading a lot of confidential information about Force Protection's products and their technical specifications, before leaving his office for the last time, stinks to high heaven. Also, let me add that I don't envy Force Protection's lawyers the task of proving that one of the company's founders had to steal information in order to set up a rival firm.
More interesting to me is the timing of the lawsuit. The fact that Force Protection filed it almost precisely two years to the day after Barrett left the firm suggests to me that there was a statute of limitations restriction on at least one of the complaints lodged against Barrett and his new company. But even if there wasn't, the timing alone justifies a remark about how clever Force Protection is being here.
You see, after winning an initial production order from the U.S. Marine Corps to produce 60 Category II MRAPs, Protected Vehicles has failed to secure any additional orders. To the contrary, the "Alpha" vehicle it was producing in cooperation with Oshkosh (NYSE: OSK) raised concerns with the USMC as to its "overall vehicle survivability" -- concerns that soon had Oshkosh running to Ceradyne (Nasdaq: CRDN) and its BULL for comfort. And without orders to fulfill, Protected Vehicles laid off roughly half its 500 employees earlier this month. Workers it had apparently hired through a temp agency. Workers who, apparently, included 67 inmates from the local county jail, who were doing welding work for Protected Vehicles.
Hmm. So things are so bad at Protected Vehicles that it can't afford to pay jailhouse wages? I'm betting this company wasn't thrilled to learn it will now have to ante up for costly litigation. In fact, I'm betting that within a matter of months, if not weeks, Force Protection will have one fewer solvent competitor to worry about -- whether or not it wins its lawsuit.
posted
PR!!! Force Protection, Inc. Ahead of MRAP Vehicle Production Schedule
Force Protection, Inc. Ahead of MRAP Vehicle Production Schedule Last update: 8/29/2007 4:15:01 PM
LADSON, S.C., Aug 29, 2007 (BUSINESS WIRE) -- Leading armored vehicle manufacturer Force Protection, Inc. (FRPT) today announced that it is ahead of its Mine Resistant Ambush Protected (MRAP) production schedule for the month of August. The company has produced more than 50 Cougar vehicles to support the U.S. Department of Defense MRAP program. The Category II Cougar 6x6 vehicle commitment for August has already been shipped.
"We have not yet closed August and are well ahead of our production objectives," said Force Protection COO Raymond Pollard. "This is indicative of the efficiencies of our proven manufacturing processes that are producing a proven solution which has effectively countered more than 3,000 mine detonations and IED attacks in the past four years." The Pentagon has awarded Force Protection contracts for more than 1,900 Cougar and Buffalo vehicles to support its Category I, II, and III MRAP program requirements.
"This is also reflective of the fact that our efforts to mobilize industry resources through our partnering agreements are having their intended effects," added Pollard. "We will continue to do everything necessary to meet the needs of our customers and the men and women who depend on these vehicles."
Force Protection's Cougar and Buffalo vehicle series have been deployed in Iraq and Afghanistan since 2003. They have become the gold standard for troop safety, and their proven performance has formed the basis for the MRAP vehicle program. In addition to its own production capacity, Force Protection has created a joint venture with General Dynamics Land Systems to increase both capacity and deliveries under its MRAP program awards.
About Force Protection Inc. yada yada yada
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Force Protection and MUSC to Establish Center for Brain Research Thursday August 30, 9:00 am ET
LADSON, S.C.--(BUSINESS WIRE)--Force Protection (Nasdaq:FRPT - News), and the Medical University of South Carolina (MUSC), announced today that they have entered into a memorandum of understanding to establish the Force Protection Center for Brain Research at MUSC. The aim of the partnership is to foster vital research that will lead to improving the quality of life of our young men and women in uniform and also benefit others who may suffer brain trauma including Traumatic Brain Injury (TBI).
Objectives of the partnership include securing funding for research equipment and appropriating space, faculty and employees for the center and related research activities.
"We are extremely pleased to enter into this agreement with MUSC. This effort builds on our commitment to the men and women who serve our country now and in the future. We owe them our best effort to improve their quality of life and seek methods to prevent brain trauma so that they may enjoy the freedoms that they help to preserve," stated Force Protection CEO Gordon McGilton.
"We, at the Medical University, feel privileged to be able to partner with Force Protection to help protect the health and safety of the men and women serving our country. By combining the medical research expertise of the University, with the engineering expertise of our corporate partners, we can assure that all of the relevant knowledge is brought together to produce the safest possible vehicles," said MUSC President Ray Greenberg.
About Force Protection
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-------------------- "Great Day for Up!"....Dr. Seuss Posts: 3387 | Registered: Mar 2006
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Troop-Truck Supplier Confronts Own Battles Force Protection Sees Shares Slump As Dominance Falls By AUGUST COLE and KAREN RICHARDSON August 31, 2007
Rising casualties from roadside bombs in Iraq have made blast-resistant trucks Washington's top weapons priority, but increased competition could send Force Protection Inc. -- the leading supplier of "mine-resistant ambush protected" vehicles, or MRAPs -- into retreat even before production fully ramps up.
Force Protection was the first major beneficiary of one of the Pentagon's biggest spending sprees of the Iraq war. Now, even as talk of pulling out of Iraq grows louder, the military has been recruiting other, bigger contractors to help with production. General Dynamics Corp., Britain's BAE Systems PLC, Oshkosh Truck Corp. and Navistar International Corp. are some of the other players threatening Force Protection's dominant market position.
The big companies are diversified builders of everything from ships and Gulfstream jets to dump trucks, while tiny Force Protection largely owes its existence to building MRAPs for the U.S. military's campaign in Iraq. More than its rivals, Force Protection's volatile shares waver on the news of MRAP awards going to other contractors.
Demand for these heavy-duty vehicles to protect American forces has driven a handful of military contractors' stock prices skyward, but heightened competition and share-price volatility should make investors cautious about betting on Force Protection. At $17.14 on the Nasdaq Stock Market yesterday, the shares are 45% below their 52-week high of $31.16 in May, giving the company a market value of $1.1 billion. The stock fell as low as $13.96 earlier this month.
Since November, the Defense Department has awarded almost $4 billion in MRAP contracts to about a dozen vendors. While Force Protection, in a joint venture with General Dynamics, has won about $1.1 billion with its main MRAP -- called the Cougar -- Navistar isn't far behind with $1.05 billion, according to Thomas Weisel Partners LLC research. BAE Systems has about $809 million, and General Dynamics alone has about $350 million. The Cougar's market share has fallen from 100% since November to 20% in one size category and to about 50% in another, according to Thomas Weisel. Per-vehicle costs run from $500,000 for the Cougar to $850,000 for a 23-ton Buffalo.
"People overbought the stock thinking it would get 80% of MRAP orders," says Michael Alpert, a portfolio manager who manages about $900 million at J&W Seligman & Co. and holds about $4.9 million in Force Protection shares. Like many investors who bought Force Protection shares just under a year ago, he thought the company's leading position was safe because the military favored its battle-tested, V-hulled MRAPs. "Nobody thought the military would want so many vendors," he says, adding that he remains a Force Protection investor.
The shares rallied recently on expectations that Congress will approve a bill soon for $147 billion, allotted to military operations in Iraq and Afghanistan, including $5.3 billion for MRAPs. That is on top of the $5.6 billion already approved for those vehicles. Mr. Alpert says he bought the shares at about $15 and sold some when the price rose to about $28. He bought more when the price was about $18 or $19.
The stock is trading at about 27 times estimated earnings in the next 12 months, according to Thomson Financial, a far higher valuation than General Dynamics' 16 times earnings and the 10 to 12 times for other military contractors.
Although the company's second-quarter sales and earnings rose sharply on a year-over-year basis -- up 140% and nearly 10 times, respectively -- there are signs that growth is slowing. Second-quarter sales rose 34.4% from the first quarter, when they were up 59% from the fourth quarter of 2006.
Still, some analysts and investors point out that Force Protection's sales have been growing much faster than the 12% to 20% rate among most of its peers, justifying the higher multiple. Consensus analyst estimates project Force Protection's earnings will rise 69% this year and 118% in 2008, according to Thomson Financial.
Analysts point out that Force Protection is starting from a low base and will continue to grow quickly, even if it has a smaller piece of the MRAP pie, in the event of a significant drawdown of troops in Iraq or a big cut in the military budget in 2008. "The size of the pie is so large that they don't need to have 50%," Seligman's Mr. Alpert says.
Even if American troops do begin to withdraw from Iraq, the U.S. government still will want vehicles that can save lives in battle anywhere in the world, the company says.
"We don't think it will have any significant impact on our business simply because we're in the business of protecting and saving lives," says Mike Aldrich, Force Protection's vice president of marketing and government relations.
The company realizes the need to branch out into other products besides the original MRAP. "What a drawdown might do is give us some time and resources to address some of the various markets we haven't spent a lot of time on," Mr. Aldrich says. Some investors are staking their hopes on its smaller, lighter Cheetah vehicle, which they hope can succeed the Humvee as the more maneuverable joint-light tactical vehicle, or JLTV.
-------------------- "Great Day for Up!"....Dr. Seuss Posts: 3387 | Registered: Mar 2006
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