Force Protection Continues to Transform its Business

Wed Sep 30, 2009 1:30pm EDT
 
[-] Text [+]
Announces Cost Reduction Program

-- Company Expects to Eliminate at Least $40 Million of Annualized Expenses --
LADSON, S.C.--(Business Wire)--
Force Protection, Inc. (NASDAQ: FRPT), a leading designer, developer and
manufacturer of survivability solutions and provider of total life cycle support
for those products, today announced that it had determined, based upon its
changing mix of business and related infrastructure requirements, to initiate a
significant program of operational realignment and overhead reductions. 

The Company expects to substantially complete this program in the first half of
2010, and to create an annualized run rate for cost savings of at least $40
million. The initiative is designed to align the company`s cost structure to
current and planned vehicle production and to improve operational efficiencies
in the area of Total Life Cycle Support. 

Included in the Company`s cost reduction program is a net reduction of
approximately 10% of its current workforce of 1200 employees and contractors.
Reductions in manufacturing and engineering headcount are expected to be
partially offset by an increase in capability in the Company`s Kuwait facility
and increases in sustainment and supply-chain management. The Company noted that
it anticipates a third-quarter severance-related charge of approximately $2
million. As part of its capability expansion, the Company is streamlining its
spares logistics functions in order to better service its customer, reduce lead
times, and leverage existing resources. Included in this streamlining are
proposed freight management changes that will yield significant cost savings and
improved customer response times. The Company also noted that it is pursuing
significant savings opportunities in general corporate functions such as
finance, consulting, legal and human resources, facilities management, travel,
insurance, and other costs. 

Michael Moody, Chief Executive Officer of Force Protection, commented, "As the
level and mix of our business activities change, we will, as I have stated
before, align our business and cost structure accordingly. Over the last several
quarters, our vehicle deliveries have decreased while non-vehicle deliveries of
spares, modernization, field services and training have increased. Our Total
Lifecycle Support operations have grown exceptionally over the past year and we
have increased our capability in that area as well as transferred a number of
our employees to our Kuwait facilities. We will continue to build vehicles,
develop new vehicles and retain vehicle manufacturing capacity as is necessary
to fulfill the ongoing demand for our Buffalo route-clearance vehicles,
additional Cougar-based vehicles and new products." 

Mr. Moody continued, "The cost reduction initiatives we are announcing today are
necessary to ensure our ongoing financial strength as we transform the company
from a high volume truck manufacturer to a highly skilled, advanced
survivability solutions provider of innovative products and solutions around the
world." 

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,the Cheetah and the
Ocelot, 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 Language

This press release contains forward looking statements that are not historical
facts, including statements about its 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 ability of Force Protection to implement the
Cost Reduction Program and realize the anticipated cost savings, increasing
growth and demand for the Company`s Total Life Cycle services, increasing
capability and opportunities for the Kuwait facility growth and demand for Force
Protection`s vehicles, including the Buffalo vehicle and related deliveries of
the Buffalo vehicle; the rate at which the Company will be able to produce these
vehicles; its expected work completion dates for the vehicles and the Company`s
ability to meet current and future contract requirements; 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, the 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 and
complete 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 June
30, 2009. 





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

Copyright Business Wire 2009

 

Featured Broker sponsored link

Editor's Choice

A selection of our best photos from the past 24 hours.  Slideshow 

Most Popular on Reuters

  • Articles
  • Video