Business Wire - May 21, 2004 16:06 CHARLESTON, S.C., May 21, 2004 (BUSINESS WIRE) -- Force Protection, Inc. (OTCBB:FRCP) announced the filing of its 10Q Quarterly Report this week. The company reported that sales for the three month period ended March 31, 2004 increased by $1,546,504, or 16 times sales for the comparable period in 2003. Sales during the first quarter of 2004 included the shipment of one Buffalo, which was the last of the 10 units ordered by the U.S. Army in 2003, and associated spares. Net Loss for the three month period was $1,196,436, which is $587,230 less than the loss of $1,783,669 incurred during the same period in 2003. Results reflect reduced expenses attributable to the discontinued boat manufacturing operations and increased expenditures for Research & Development, fund raising, and sales presentations. Excluding these expenses, the net loss would have been $331,742.
Force Protection, Inc.'s CEO Michael Watts said, "The first quarter was important to the Company for several reasons. First, we developed a new vehicle and demonstrated it to several potential customers and received strong positive feedback. Second, we strengthened our balance sheet and laid the groundwork for expansion."
The Company is now well into the second quarter, which will be very important to the Company. "We have recently received two significant orders," continued Watts, "one for Buffalos and one for Cougars. These orders are to meet Urgent Operational Requirements and carry a high Defense Priority. These contracts call for us to deliver all of the current releases by the end of 2004. We therefore anticipate that these shipments will generate revenue of approximately $20 million, virtually all of which will hit the books in the third and fourth quarters of 2004."
"We have now begun to gear up in earnest. We have purchased additional capital equipment and fabricated additional production tooling. Our average headcount in the first quarter was about 35. Headcount is now 52 and will reach 110 by the beginning of July. As a result, our production capacity has been increased more than sevenfold. In the past, we have produced about two vehicles per month. By the beginning of July we will have increased our capacity to sixteen (16) vehicles per month - a total of 180 vehicles per year. This capacity can be extended a bit further on short notice to 225 vehicles per year - by putting on a third shift. In addition, we have begun to investigate expansion into additional nearby space to allow us to increase our capacity to 425 - 525 vehicles per year."
"I think a sea change has occurred," stated Watts. "We are no longer in a missionary marketing phase. We have been discovered. Our highly-protected vehicles are starting to be in demand and the full range of their mission capabilities is beginning to be explored. The sentiment I'm taking away from meetings with customers has changed from "show me this really works" to something more along the lines of "we would order more if you could make enough of them fast enough."
The Company has adopted a "lean flexible cell" approach to manufacturing which is highly scalable and highly flexible. Each cell set can be tasked to produce any of the Company's vehicle types. Among other advantages, this allows a variable product mix to be produced simultaneously. The lead time to expand capacity, and the risk involved in doing so, is dramatically reduced using this approach since expansion does not involve redesigning the plant, or the logistics, or the material flow. "We simply replicate existing cells," said Watts. "This is going to be an exciting and important year for us."
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