UPDATE 2-Force Protection restructures management

(Recasts; adds management restructuring, analyst's comments, share movement)

By Biswarup Gooptu

BANGALORE, March 3 (Reuters) - Defence contractor Force Protection Inc (FRPT.O) said two senior executives, including its finance chief, resigned, days after the company announced it would restate third-quarter results on finding significant accounting errors.

Shares of the company, a maker of blast-resistant armored trucks, closed down 13 percent at $3.58, after falling as much as 18 percent in intra-day trade on Nasdaq.

The company said Chief Financial Officer Michael Durski and Chief Operating Officer Raymond Pollard have left the company.

Francis Scheuerell, a managing director of Huron Consulting Group, will replace Durski on an interim basis, while Pollard's position will not be filled, it added. Michael Moody, its interim chief executive, was named the new CEO.

On Friday, Force Protection said errors were made while recording accounts payable related to inventory purchased from a sub-contractor as a result of a contract termination, due to which it would restate its third-quarter results and delay its annual report.

The company also doubts that it could fix the problem before the current quarter comes to an end.

Stephens Inc senior research analyst Timothy Quillin said Force Protection has a number of ongoing issues relating to a lack of strong financial controls.

"The company has not been controlling its costs very well. I think there is going to be a charge in the results, which is once again indicative of weak financial controls," he said. Earlier on Monday, Force Protection also said it expected strong 2007 sales of $875 million from a recent defence contract. The company had revenue of $196 million a year ago.

It, however, does not expect 2007 net income to be "significantly different" from 2006. Force Protection reported net income of $16.6 million in 2006.

Analysts currently expect sales of $647.4 million, according to Reuters Estimates. (Editing by Anil D'Silva)