Force Protection Announces Third Quarter Fiscal 2009 Results

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* Net income was $0.05 per share after the $19.3 million pre-tax charge for the
one-time write-down of the Cheetah inventory related to the M-ATV competition
and associated costs
* Adjusted net income1 was $16.1 million and adjusted net income per share1 was
$0.23

LADSON, S.C.--(Business Wire)--
Force Protection, Inc. (NASDAQ: FRPT), a leading survivability solutions
provider, today reported financial results for the third quarter of 2009. The
Company`s net income for the third quarter 2009 was $3.2 million, or $0.05 per
share, which includes a one-time pre-tax charge of $19.3 million, or $12.9
million after-tax, $0.19 per share, compared to net income of $19.9 million, or
$0.29 per share, for the third quarter of 2008. All per share amounts are
expressed on a diluted basis.

In the third quarter of 2009, the Company reported net sales of $316.2 million
versus $343.3 million in the third quarter of 2008. Net sales in the third
quarter of 2008 included $106.9 million of pass-through sales by General
Dynamics Land Systems in connection with vehicle deliveries under the Company`s
MRAP Competitive Contract. There were no vehicle pass-through sales by General
Dynamics in the third quarter of 2009. The Company noted that excluding
pass-through vehicle sales, the third quarter of 2009 marked a record quarterly
revenue performance for the Company. This performance was driven by record
shipments of Buffalo vehicles in the quarter, shipments of Wolfhound vehicles
and strength in the Company`s Total Life Cycle Support business, which includes
supplying and installing Independent Suspension System ("ISS") modernization and
ForceArmor kits.

Excluding the one-time write-down for the Cheetah inventory related to the M-ATV
competition and associated charges, the Company`s adjusted net income1 for the
third quarter 2009 was $16.1 million, and adjusted net income per share1 was
$0.23. Adjusted net income1 and adjusted net income per share1 reflect the
exclusion of the one-time charge related to the Company`s previous decision to
build 50 Cheetah vehicles in anticipation of a contract award. On June 30, 2009,
US Army Tank-Automotive and Armaments Command awarded the M-ATV contract to
another defense contractor. Although the Cheetah vehicles were not selected in
the M-ATV competition, the Company is actively pursuing other opportunities for
this vehicle with potential customers. Based on its current market analysis, the
Company reduced the net realizable value of its Cheetah-related inventory by
$18.2 million during the third quarter of 2009 to reflect its estimate of the
current market value of this inventory. The Company also recorded $1.1 million
of other costs related to the Cheetah during the third quarter of 2009. A
reconciliation of adjusted net income1 and adjusted net income per share1 to net
income and net income per share is included at the end of this press release.

Michael Moody, Chairman and Chief Executive Officer of Force Protection, Inc.,
said, "We were pleased to see strong, continuing demand for our Total Life Cycle
Support business and to have made significant deliveries of both the Buffalo and
Wolfhound vehicles during the third quarter. We will continue to adjust our
infrastructure to execute against anticipated vehicle orders and significant
long-term demand for service, support and upgrade work to our fleet of vehicles.
We will also continue to push forward on the development of new products,
including both upgrades to our existing platforms and through new vehicle
development."

Mr. Moody continued, "We are also very pleased to have submitted our Ocelot
vehicle for the United Kingdom`s Life Protected Patrol Vehicle (LPPV)
competition. This new platform, which was developed in partnership with Ricardo
UK Ltd, offers excellent survivability and a wide range of mission capabilities
at a curb weight of approximately 12,000 lbs. We believe that there is an
opportunity, in addition to the current competition, to market a tactical
wheeled vehicle of this weight class and capability range."

For the first nine months of 2009, the Company reported net income of $11.0
million, or $0.16 per share, on sales of $688.0 million. During the comparable
period in fiscal 2008, net income was $35.2 million, or $0.51 per share, on
sales of $1,087.3 million.

Excluding the one-time write-down for the Cheetah inventory related to the M-ATV
competition and associated charges, the Company`s adjusted net income1 for the
first nine months of 2009 was $23.9 million, and adjusted net income per share1
was $0.35 cents.

The $399.3 million decrease in sales during the first nine months of fiscal 2009
is largely attributable to lower vehicle sales, including the $446.6 million of
vehicles sold by General Dynamics Land Systems in the first nine months of 2008
on a pass through basis, which had minimal associated gross margins. For the
first nine months of 2009, spare parts and logistics sales increased $339.6
million compared to the first nine months of 2008. The change in net income per
share is primarily attributed to the impact on income of lower vehicle sales and
the costs and charges associated with the M-ATV competition.

The Company`s cash and marketable securities balance rose to $121.9 million as
of September 30, 2009 from $111.0 million as of December 31, 2008. Operating
activity provided (used) net cash of $21.9 million in the first nine months of
2009 compared with ($1.3) million in the first nine months of 2008. Inventories
as of September 30, 2009 increased to $113.8 million from $88.5 million as of
December 31, 2008. Inventories increased as a result of higher finished goods
comprised primarily of Wolfhound vehicles, ISS kits and increased inventory to
support the growth in the Company`s Total Life Cycle Support business. Accounts
receivable increased $50.1 million, or 36%, as of September 30, 2009 compared to
December 31, 2008.

Mr. Moody concluded, "We have a solid base of business from which to build, a
clean balance sheet with no debt, and an expertise in survivability technology
which positions us to compete for new business and support our fleet around the
globe. As the transformation of Force Protection continues, with careful control
of our cost structure and continued focus on our stated strategy of pursuing a
broader range of products and customers, we will be able to demonstrate the
capability to create significant value for our shareholders and our customers."

Conference Call Information

The Company will hold a conference call to discuss these results, including the
non-GAAP financial measures, on Monday, November 9, 2009 at 4:30 p.m. Eastern
Time and will include comments from Michael Moody, Chairman and Chief Executive
Officer, Charles Mathis, Chief Financial Officer and Randy Hutcherson, Executive
Vice President, Programs, Global Sales and Business Development. While the
question-and-answer session of the call will be limited to institutional
analysts and investors, retail brokers and individual investors are invited to
listen to a live webcast. The webcast can be accessed via the home page of the
Company`s website at www.forceprotection.net. Please visit the website at least
15 minutes prior to the call to register for the webcast and download any
necessary software. The replay of the call will be available on the Company`s
website for approximately one year.

About Force Protection, Inc.

Force Protection, Inc. is a leading American designer, developer and
manufacturer of survivability solutions, predominantly blast- and
ballistic-protected wheeled vehicles currently deployed by the U.S. military and
its allies to support armed forces and security personnel in conflict zones. The
Company`s specialty vehicles, the Cougar, the Buffalo and the Cheetah, are
designed specifically for reconnaissance and urban operations and to protect
their occupants from landmines, hostile fire, and improvised explosive devices
(IEDs, commonly referred to as roadside bombs). The Company also is the
developer and manufacturer of ForceArmor, an armor package providing superior
protection against explosively formed projectiles (EFPs), now available for a
wide range of tactical-wheeled vehicles. The Company is one of the original
developers and primary providers of vehicles for the U.S. military`s Mine
Resistant Ambush Protected, or MRAP, vehicle program. For more information on
Force Protection and its vehicles, visit www.forceprotection.net.

Safe Harbor Statement

This press release contains forward looking statements that are not historical
facts, including statements about our beliefs and expectations. These statements
are based on beliefs and assumptions of Force Protection`s management, and on
information currently available to management. These forward looking statements
include, among other things: the growth and demand for Force Protection`s
products and services, including the Total Life Cycle Support business,
including the Independent Suspension System modernization and ForceArmor kits;
the anticipated long-term demand for service, support and upgrade work to the
Company`s fleet of vehicles; the opportunities with potential customers for the
Company`s Cheetah vehicles; the opportunities to market the Ocelot vehicle and
the capabilities of the Ocelot; the rate at which the Company will be able to
produce its vehicles and products; the Company`s ability to develop new
technologies and products, and the effectiveness of these technologies and
products; the Company`s execution of its business strategy and strategic
transformation, including its opportunities to grow the business; and the
Company`s expected financial and operating results, including its revenues and
cash flow, for future periods. Forward-looking statements speak only as of the
date they are made, and the Company undertakes no obligation to update any of
them publicly in light of new information or future events. A number of
important factors could cause actual results to differ materially from those
contained in any forward-looking statements. Examples of these factors include,
but are not limited to, ability to effectively manage the risks in the Company`s
business; the ability to develop new technologies and products and the
acceptance of these technologies and products; the ability to obtain new orders
for its vehicles and products; the Company`s ability to identify and remedy its
internal control weaknesses and deficiencies, and other risk factors and
cautionary statements listed in the Company`s periodic reports filed with the
Securities and Exchange Commission, including the risks set forth in the
Company`s Annual Report on Form 10-K for the year ended December 31, 2008, as
updated in the Quarterly Report on Form 10-Q for the period ended September 30,
2009.

1 Use of Non-GAAP Financial Measures

Certain disclosures in this press release include "non-GAAP financial measures."
A non-GAAP financial measure is defined as a numerical measure of a company`s
financial performance, financial position or cash flows that excludes or
includes amounts so as to be different from the most directly comparable measure
calculated and presented in accordance with U.S. generally accepted accounting
principles (GAAP) in the Condensed Consolidated Balance Sheets and Condensed
Consolidated Statements of Operations. The Company defines "adjusted net income"
and "adjusted income per share" as net income and net income per share as
reported under GAAP less the one-time charge in the third quarter 2009 for the
write-down of Cheetah inventory related to the M-ATV competition and associated
charges related to the Company`s decision to build 50 Cheetah vehicles in
anticipation of an award the Company did not receive. By excluding the one-time
Cheetah inventory related to the M-ATV competition and associated charges,
management can compare the Company`s ongoing operations to prior periods and to
the ongoing operations of other companies in its industry who may have
materially different unusual charges. Management believes that excluding these
items is useful to investors because it is more representative of the on-going
business of the Company and are the financial indicators used by management to
evaluate the Company`s financial results. These amounts are not measures of
financial performance under GAAP. They should be considered supplemental to and
not a substitute for financial performance in accordance with GAAP. These
non-GAAP measures should not be considered measures of the Company`s liquidity.
In addition, these non-GAAP measures are not based on any comprehensive set of
accounting rules or principles. The Company`s definition of "adjusted net
income" and/or "adjusted net income per share" may differ from similar measures
used by other companies and may differ from period to period. Subject to the
review and approval of the Company`s audit committee, management may make other
adjustments for expenses and gains that it does not consider reflective of core
operating performance in a particular period and may modify "adjusted net
income" and/or "adjusted net income per share" by excluding these expenses and
gains. This information should not be construed as an alternative to the
reported results, which have been determined in accordance with GAAP. A
reconciliation of "adjusted net income" and "adjusted net income per share" with
net income and net income per share are included in the accompanying financial
data.

Force Protection, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)

As of September 30, As of December 31,
2009 2008
(In Thousands)
Assets
Current assets:
Cash and cash equivalents $ 111,949 $ 111,001
Marketable securities 9,996 -
Accounts receivable, net 188,575 138,449
Inventories 113,847 88,502
Advances to subcontractor 5,192 -
Deferred income tax assets 16,378 15,572
Prepaid income taxes 4,572 -
Other current assets 4,217 2,417
Total current assets 454,726 355,941
Property and equipment, net 60,059 61,429
Investment in joint venture 2,048 -
Intangible assets, net 302 654
Total assets $ 517,135 $ 418,024

Liabilities and Shareholders` Equity
Current liabilities:
Accounts payable $ 138,750 $ 47,115
Due to United States government 33,760 39,015
Advance payments on contracts 36,927 29,504
Other current liabilities 14,119 20,783
Total current liabilities 223,556 136,417
Deferred income tax liabilities 1,899 3,141
Other long-term liabilities - 139
225,455 139,697
Commitments and contingencies

Shareholders` equity:
Common stock 70 68
Additional paid-in capital 259,102 256,939
Accumulated other comprehensive income 152 -
Retained earnings 32,356 21,320
Total shareholders` equity 291,680 278,327
Total liabilities and shareholders` equity $ 517,135 $ 418,024

Force Protection, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)

For the three months ended For the nine months ended
September 30, September 30,
2009 2008 2009 2008
(In Thousands, Except Per Share Data) (In Thousands, Except Per Share Data)
Net sales $ 316,164 $ 343,309 $ 688,014 $ 1,087,273
Cost of sales 289,628 279,532 598,863 947,814
Gross profit 26,536 63,777 89,151 139,459
General and administrative expenses 19,196 27,817 60,219 73,967
Research and development expenses 4,239 4,306 13,736 10,205
Operating income 3,101 31,654 15,196 55,287
Other income, net 252 440 57 1,411
Interest expense, net (46 ) (2 ) (79 ) (225 )
Income before income tax expense 3,307 32,092 15,174 56,473
Income tax expense (88 ) (12,185 ) (4,138 ) (21,262 )
Net income $ 3,219 $ 19,907 $ 11,036 $ 35,211
Earnings per common share:
Basic $ 0.05 $ 0.29 $ 0.16 $ 0.52
Diluted $ 0.05 $ 0.29 $ 0.16 $ 0.51
Weighted average common shares outstanding:
Basic 68,436 68,318 68,423 68,309
Diluted 68,863 68,381 68,930 68,372

Force Protection, Inc. and Subsidiaries
Reconciliation of Net Income to Adjusted Net Income and
Net Income Per Share to Adjusted Net Income Per Share
(In Thousands, Except Per Share Data)
(Unaudited)

For the three months ended For the nine months ended
September 30, 2009 September 30, 2009
Reported Basis (GAAP) M-ATV write-down and associated costs Comparable Basis (Adjusted) Reported Basis (GAAP) M-ATV write-down and associated costs Comparable Basis (Adjusted)

Net sales $ 316,164 $ - $ 316,164 $ 688,014 $ - $ 688,014
Cost of sales 289,628 19,264 270,364 598,863 19,264 579,599
Gross profit 26,536 (19,264 ) 45,800 89,151 (19,264 ) 108,415
Gross profit percentage 8.4 % 14.5 % 13.0 % 15.8 %
General and administrative expenses 19,196 - 19,196 60,219 - 60,219
Research and development expenses 4,239 - 4,239 13,736 - 13,736
Operating income 3,101 (19,264 ) 22,365 15,196 (19,264 ) 34,460
Other income, net 252 - 252 57 - 57
Interest expense, net (46 ) - (46 ) (79 ) - (79 )
Income before income tax expense 3,307 (19,264 ) 22,571 15,174 (19,264 ) 34,438
Income tax expense (88 ) 6,357 (6,445 ) (4,138 ) 6,357 (10,495 )
Net income $ 3,219 $ (12,907 ) $ 16,126 $ 11,036 $ (12,907 ) $ 23,943
Earnings per common share:
Basic $ 0.05 $ (0.19 ) $ 0.24 $ 0.16 $ (0.19 ) $ 0.35
Diluted $ 0.05 $ (0.19 ) $ 0.23 $ 0.16 $ (0.19 ) $ 0.35
Weighted average common shares outstanding:
Basic 68,436 68,436 68,436 68,423 68,423 68,423
Diluted 68,863 68,863 68,863 68,930 68,930 68,930

Force Protection, Inc.
Tommy Pruitt, 843-574-3866
Senior Communications Director
or
Investor Relations:
ICR Inc.
James Palczynski, 203-682-8229
Principal and Director

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