LADSON, S.C., Nov. 14 /PRNewswire-FirstCall/ -- Force Protection, Inc. (NASDAQ:FRPT) today announced results for its third quarter and nine months ended September 30, 2007.
The Company reported net sales for the third quarter of $206.3 million, a 389% increase, compared with net sales of $42.2 million for the third quarter of 2006. Net sales for the first nine months of 2007 rose 232% to $441.2 million, compared with net sales of $133.0 million for the first nine months of 2006. The sales increase for both periods was a result of increased deliveries of Force Protection's Cougar and Buffalo vehicles. This includes increased production of vehicles by our joint venture partner General Dynamics Land Systems (GDLS), whose sales of Cougar vehicles under the mine resistant ambush protected (MRAP) program are included in our net sales.
The Company's third quarter 2007 results included approximately $33.3 million of net sales attributed to vehicles produced by GDLS under the December 15, 2006 joint venture requiring the company to award fifty percent (50%) of the MRAP Cougar vehicle production work to GDLS. Pursuant to the joint venture and a subcontract issued in support thereof, GDLS charges the Company an amount per vehicle that is equal to the revenue the company receives from the Government, which increased the Company's cost of sales for the third quarter of 2007 by a corresponding $33.3 million. Including the revenues as cost of vehicles manufactured by GDLS results in a decreased gross margin percentage, but has no impact on our absolute dollars of gross margin. Until such time as the MRAP contract is novated to the joint venture, vehicles produced by GDLS will be reported by the Company in sales and cost of sales.
Net earnings available to common shareholders for the third quarter of 2007 increased to $11.4 million, or $0.16 per diluted share, compared with net income of $239,943 or $0.0 per diluted share for the third quarter of last year. Net earnings available to common shareholders for the nine month period of 2007 was $23.5 million, or $0.34 per diluted share, compared with a net loss of $(749,324), or $(0.02) per diluted share for the same period last year.
Gross profit for the third quarter of 2007 was $40.6 million, or 19.7% of net sales, compared with a gross profit of $7.9 million, or 18.8% of net sales for the third quarter of 2006. For the first nine months of 2007, the Company reported gross profit of $95.9 million, or 21.7% of net sales, compared with a gross profit of $24.7 million, or 18.6% for the prior year period. The gross profit increase for the third quarter and nine months was primarily due to improved material and labor costs and the Company's increased ability to leverage fixed costs as it continues to expand production.
The Company recorded an operating profit of $18.1 million for the third quarter 2007, compared with an operating profit of $657,372 for last year's third quarter. Operating profit was $34.6 million for the nine month period ended September 30, 2007, compared with $2.4 million for the first nine months of 2006.
Cash flow for the first nine months of 2007 decreased by $84.0 million, compared with an increase of $25.5 million for the same nine month period in 2006. The 2007 decrease is primarily due to increased working capital and approximately $44 million in capital expenditures to support higher production volumes.
Gordon McGilton, Chief Executive Officer commented, "We are most pleased with the results for our third quarter and nine month periods, where we once again posted strong improvement in net sales, net income and gross profit. During the quarter we, together with our partners, produced 374 vehicles, compared with 58 vehicles for the same quarter last year." "During the quarter we received a follow-on order totaling approximately $69 million from the U.S. Marine Corps for an additional 125 Cougar Category I and II vehicles for the MRAP program. The vehicles due under this order, twenty-five Category I, plus 100 Category II MRAPs are planned to be delivered by the end of 2007. Approximately 50% of the work under this order will be performed by GDLS." Further, Mr. McGilton noted, "The Company continues to focus time and resources on managing the complexities of exponential growth which the Company has experienced. We are continuing to balance this successful growth with the maturation of our Business Operating System." Subsequent Events On November 8, the Company announced that it had received a contract from the U.S. Army's Tank Automotive and Armaments Command (TACOM) for the production of an additional 29 Buffalo mine-protected vehicles. The approximate total value of the contract is $22.3 million. Force Protection has delivered more than 140 Buffalo vehicles to date in support of route clearance missions in Iraq and Afghanistan.
On November 5, the Company announced that it had received a contract from the U.S. Marine Corps, valued at approximately $83.6 million, for the purchase of service in support of operation of the MRAP Vehicles University, which is an MRAP training program at Red River Army Depot, integrated logistics support, and field service representative support. A portion of the work under this program will be performed by our partner GDLS.
On October 22, 2007 the Company announced that it had received a $376 million dollar contract to produce an additional 800 vehicles for the U.S. Marine Corps' Mine Resistant Ambush Protected (MRAP) vehicle program. Approximately 50% of the work performed under this contract will be performed by our partner GDLS. Vehicle deliveries are scheduled for completion by April 2008. Force Protection has received contracts for more than 2,700 MRAP vehicles thus far in the program with approximately 50% of the work to be performed by GDLS.
On October 8, 2007, the Company announced that it has received a purchase order from BAE Systems for an additional 45 Iraq Light Armored Vehicles (ILAV). In addition to Iraq, approximately 18 of these vehicles are bound for Yemen. The order is worth an estimated $3.5 million and will be completed by February 2008.
About Force Protection, Inc.
Force Protection, Inc., was the first to respond to the urgent need to bring lifesaving mine-resistant ambush protected vehicles to U.S. troops in combat. Force Protection is the leading American manufacturer of ballistic and mine protected vehicles. The Company's Cougar and Buffalo vehicles lines each have a proven track record where it matters most - in the battlefield. 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. For more information on Force Protection and its vehicles, visit http://www.forceprotection.net/.
On November 13, 2007, we filed our Form 10-Q for the quarter ended September 30, 2007, with the Securities and Exchange Commission. Part II, Item 1A of the Form 10-Q describes Risk Factors that should be considered carefully, including uncertainty about receipt of future orders, on which our operations depend, critical audit reports by the Defense Contract Audit Agency, an arm of the Department of Defense, and a report by the Inspector General of the Department of Defense relating to the award of sole source contracts to us and criticizing our performance. You can obtain a copy of the Form 10Q and any of our other filings, at no cost, by accessing the SEC's website at http://www.sec.gov/ or by writing to or telephoning us at: Force Protection, Inc. 9801 Highway 78 Ladson, South Carolina 29456 or 843.574.3900.
This press release contains forward-looking statements that involve risks and uncertainties, including statements relating to expected production under awarded contracts and the number of vehicles we will manufacture. The Company generally uses words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward- looking statements. You should not place undue reliance on these forward- looking statements. Actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in the Company's Form 10-K and Form 10-Q for the quarter ended September 30, 2007 and other reports filed with the Securities and Exchange Commission. Although management believes the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and the Company's future results, levels of activity, performance or achievements may not meet these expectations. The Company does not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in expectations, except as required by law. DATASOURCE: Force Protection, Inc.
CONTACT: Tommy Pruitt of Force Protection, Communications Director, +1-843-574-3866; Investor Relations, Julie Tu, +1-843-574-3900, or General Information, Marilynn Meek, +1-212-827-3773, both of the Financial Relations Board Web site: http://www.forceprotection.net/
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