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Force Protection Q1 Revenues Decline by the MRAP Downturn

Force Protection Inc. reported yesterday income growth in the first quarter of 2009 despite a substantial drop in vehicle sales. Net sales of $184.7 million in Q1 2009, a sharp drop against $403 million in Q1 2008 reflected the demise of MRAP acquisition by the US Marine Corps, and limited penetration of the company's failure to penetrate the U.S. Army inventory, despite its cooperation with General Dynamics Land Systems, one of the Army's largest combat vehicle suppliers. Force protection reported a net income of $7.4 million in the first quarter and cash balance at $119.8 million.

Commenting about his company's performance CEO Michael Moody said: “The first quarter of 2009 was a quarter without a significant number of MRAP vehicle sales, and we are reasonably satisfied with improvements in the gross margins and operating results we were able to generate.” While failing to win substantial domestic orders for new vehicle in 2009, Force protection won significant orders, primarily from the U.K.

Under its ongoing Force Dynamics JV with GDLS, the companies are competing for the next procurement phase of the MRAP program, known as M-ATV. Five of the company Cheetah vehicles are currently undergoing U.S. Army evaluations, anticipating orders for 2000 – 1000 vehicles. The company could also gain follow-on orders for Cougar modifications and support, as the vehicles in service are being upgraded with independent suspensions, preparing for more exhaustive service in Afghanistan. The U.S. Marines are committed to maintain the vehicles in service for many years, Marine Commandant General James T. Conway said recently.