3SOF

Right now it is vulnerable to budget timing. They have enough budgeted for the next four months and amstocks may be right about one more contract to pad the production backlog until Fiscal 2008 in October, then the DoD has been good at sending the contracts right after.

amstocks82 has one other good observation. It has been four months, where is the competition and where are their vehicles? We have seen nothing but FRPT/GD displaying their production plan. Is the competition going to show? Is the competition going to deliver?

This is what the DoD was thinking three weeks ago. Are they bargaining or negotiating for something different? Is that why production went from 400 to 800? Where is that 2008 budget? Which may show something this month as MRAP is still a number one priority.


inside defense.com
16 may 07

Army Eyes $10 Billion in Procurement Cuts to Fund Larger MRAP Fleet 
By Jason Sherman 

......The size of the bill ultimately depends on how many MRAP vehicles the Army decides to procure each year -- and those purchases may be limited by industry's ability to deliver the new fleet. An internal Pentagon industrial assessment pegs the maximum MRAP procurement rate at 977 a month by the end of this year.


inside defense.com   

16 may 07


Army Eyes $10 Billion in Procurement Cuts to Fund Larger MRAP Fleet 


By Jason Sherman 

The Army is looking to slash as much as $10 billion from its procurement accounts to pay for a larger fleet of Mine Resistant Ambush Protected vehicles, setting off a round of budget drills that could throw its modernization goals into chaos and trigger a wave of program terminations and delays, according to Defense Department officials.

In a bid to find between $8 billion and $10 billion for a down payment on as many as 15,000 additional MRAP vehicles requested by commanders in Iraq, the Army is considering options for financing a sizable portion of the new armored fleet program within its base budget, according to sources familiar with closely held spending deliberations.

"Everything else we had planned is now second priority," said a Pentagon official.

This hunt for new resources is sure to compound Army budget challenges and could test the viability of high-priority projects, such as an effort by Gen. George Casey, the Army chief of staff, to accelerate the service's end strength increase -- an undertaking widely expected to produce a bill requiring billions of additional dollars.

"They are going to break the Army further to fund MRAP," said an industry official familiar with internal budget drills.

Until now, the quick-moving MRAP program was focused on procuring 7,774 vehicles -- 2,500 of which were for the Army -- largely through supplemental appropriations. Because MRAP is not a program of record and was regarded as a requirement unique to needs in Iraq, it was funded outside the service's base budget.

On May 2, however, Defense Secretary Robert Gates designated MRAP the Pentagon's highest priority acquisition program. Gates, in a memo to Pentagon leaders, also implicitly expressed concern that the Army was not buying enough of the vehicles.

"The earlier plan was 2,500 and that's not enough. I can't tell you the exact number at this point, but it's going to grow considerably," Pete Geren, the acting Army secretary, told reporters May 10.

That same day, Army leaders advanced a proposal for increasing its MRAP requirement from 2,500 to more than 8,000 vehicles.  However, officials familiar with the situation say the service faced stiff political pressure to increase its requirement further.

Army leaders are now looking at options for funding the bulk of the more than 17,700 MRAP vehicles that commanders in Iraq, as first reported by InsideDefense.com, have requested inside the service's base budget, a move expected to siphon resources from other programs and delay funding for others. 

"I don't know how the Army does that," the industry official said.

The MRAP budget drills are expected to affect the Army's fiscal year 2009 budget proposal, which is under construction, as well as the FY-08 supplemental spending request and the base budget proposal now before Congress. It may also affect the FY-07 budget, which is being executed.

The size of the bill ultimately depends on how many MRAP vehicles the Army decides to procure each year -- and those purchases may be limited by industry's ability to deliver the new fleet. An internal Pentagon industrial assessment pegs the maximum MRAP procurement rate at 977 a month by the end of this year.

In the hunt for funds to pay for MRAP, Army leaders are expected to fight to protect its top modernization priority, the Future Combat System, from cuts, Pentagon officials said.

Should the Army find funds to buy the entire 17,700 MRAPs now under consideration, the total MRAP program size would more than triple and drive the total price tag to more than $24 billion.

This is why I am saying this month.

..........Defense industry officials are closely eyeing which vehicle the Army, which will be the largest MRAP buyer, will select. The stakes for that contract award - which could come as soon as this month - are high. Army Secretary Pete Geren, in a memo last month, said "the Army's intent is to minimize the variants of MRAP vehicles it acquires, thereby reducing sustainment and training costs.".......

Entire article.
insidedefense.com

07 june 07


Army Leaders Due in Iraq to Add Up MRAP Needs; Program Could Grow Even Larger


By Jason Sherman

Army leaders are heading to Iraq and Kuwait on a mission to determine exactly how many Mine Resistant Ambush Protected vehicles the service needs, an assessment that could propel the total size of the MRAP program well beyond 23,000 vehicles and the price tag north of $23 billion, according to defense sources.

Adm. Edmund Giambastiani, the vice chairman of the Joint Chiefs of Staff and the Pentagon's top requirements officer, said in an interview with InsideDefense.com that he expects the results of the Army's analysis to be considered by the Joint Requirements Oversight Council - which he chairs – "in the next month."

A high-level team from the Department of the Army, according to a source familiar with the plan, is scheduled "within the week" to head to Baghdad and meet with top brass at Multi-National Corps Iraq, who earlier this year asked the Pentagon for 17,700 MRAP vehicles, enough to replace every armored humvee used by Army personnel in Iraq.

The Army's deputy chief of staff for operations and plans office plans to review that requirement as well as the attendant plans for employing the new vehicles. The size of the requirement is expected - with possible minor revisions - to be endorsed, according to Pentagon officials. "On top of that number, as any prudent Army planners would do, we will account for anticipated losses, for having an operational reserve fleet, both forward as well as in the rear in depots," said the source familiar with the trip's goal. "And we've got to account for training both in home station as well as in the institutional Army."

Defense industry officials are closely eyeing which vehicle the Army, which will be the largest MRAP buyer, will select. The stakes for that contract award - which could come as soon as this month - are high. Army Secretary Pete Geren, in a memo last month, said "the Army's intent is to minimize the variants of MRAP vehicles it acquires, thereby reducing sustainment and training costs."

Commandant of Marine Corps visits FPI (taken from Yahoo board)

http://www.usmc.mil/marinelink/mcn2000.nsf/0/0D74FE36F9C331BF852572F90072DF60?opendocument

CHARLESTON, S.C. (June 14, 2007) -- The commandant of the Marine Corps met with assembly-line workers June 9 to observe production of the new troop-carrying trucks designed to withstand Long War punishment.

The production plant, owned by Force Protection Industries, has delivered hundreds of mine-resistant, ambush-protected vehicles to American troops in the Middle East.

About 1,000 plant employees are outfitting Marines fighting in Iraq and Afghanistan with dozens of MRAP vehicles each month.

"I wanted to look them in the eye, personally thank them and let them know that plenty of Marines are counting on them," said Gen. James T. Conway, proclaiming the company was truly mobilized and focused on saving American lives.

The Marine Corps currently drives two models: the 9-foot-tall "Cougar," and the hefty "Buffalo," weighing more than 22 short tons. The cost per troop-carrying truck ranges from $480,000 to $790,000.

"These vehicles are going to save lives." said Conway. "A Marine riding in a mine-resistant, ambush-protected vehicle is less likely to be killed or injured when engaged by an enemy employing the same type of improvised explosive device that would rip through the undercarriage of an up-armored humvee."

The difference between humvees and MRAP vehicles is a V-shaped hull that deflects an explosion instead of absorbing the impact.

Conway also test-drove a "Cheetah" prototype designed for reconnaissance and urban operations and able to sustain highway speeds up to 75 mph.

"If it proves itself through further testing, the Cheetah will offer the same survivability rates as its predecessors," said Conway. "But it's also designed to be relevant beyond Iraq."

Force Protection Industries plans to have 1,000 MRAP vehicles delivered to the Marine Corps by March 2008.

"Everyone at the company enjoys and takes great pride in their work," said Carrie Reavenell, a welder and fitter. "Other people send care packages; we send care trucks."

A rumor that something is coming down the pipeline.

http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=FRPT:US&sid=aZmnLinGMC6M

General Dynamics, Force Protection May Win Award Soon (Update1)

By Edmond Lococo

June 14 (Bloomberg) -- General Dynamics Corp., the largest maker of armored vehicles for the U.S. military, said its joint venture with Force Protection Inc. may win an additional award for blast-proof trucks ``very soon.''

The venture will deliver about 85 vehicles this month under existing contracts for 1,125 of the trucks, Dave Heebner, president of General Dynamics's land systems division, said at its investor conference today. He didn't comment on the potential size or value of the next award.

The U.S. Marine Corps is leading the military effort to buy the Mine Resistant Ambush Protected vehicles, or MRAPs, and may spend $8.4 billion over two years for as many as 7,700. Demand from all services could rise to as many as 23,000 vehicles as the Pentagon rushes them to troops in Iraq, Heebner said.

``The requirement for these vehicles is well understood now because of threats in theater,'' Heebner said. ``It's a battle tested and proven vehicle.''

The joint venture is increasing production capacity to meet customer requirements, he said, without giving details. General Dynamics said this week it will invest $2.6 million and add 270 workers at facilities in Alabama, which will eventually have capacity to produce 80 trucks a month. General Dynamics also works on the vehicles in Lima, Ohio.

The joint venture has so far been able to exceed its production commitments to the U.S. military, Heebner said, without giving details.

Biggest Issue

The biggest issue for increasing the venture's production is long lead times with suppliers of parts including steel, axles and tires, he said. From time of contract, it takes about six months to begin vehicle delivery, due to order times for parts, he said.

``Getting a commitment from the customer is the key first step in the process,'' Heebner said. ``As soon as the customer makes that commitment, then for us it's generally six months from contract to out-the-door.''

Shares of Falls Church, Virginia-based General Dynamics fell 15 cents to $80.04 at 4:20 p.m. in New York Stock Exchange composite trading. They have gained 7.7 percent so far this year. Force Protection, based in Ladson, South Carolina, added 29 cents, or 1.2 percent, to $25.54 in Nasdaq Stock Market trading.

And waiting.

http://www.bloggingstocks.com/2007/06/18/force-protection-mission-configurable-armored-vehicles/

Force Protection: Mission configurable armored vehicles

Posted Jun 18th 2007 3:45PM by Larry Schutts
Filed under: Rumors, Technical Analysis

Put simply, modern warfare and security operations require high quality blast- and mine-protected vehicles. One of the best known producers of such vehicles is headquartered in Ladson, South Carolina.

Force Protection (NASDAQ: FRPT) is engaged in the manufacture of ballistic and blast protected vehicles. The company's products are used to protect personnel during transport, removal of unexploded ordnance, route clearance, humanitarian de-mining, and other missions that require protection from landmines and hostile fire. Customers include the U.S. Department of Defense, the Iraqi Army and the British military.

Investors were pleased last week, when the stock gained ground on takeover rumors and on word it would be added to the Russell 3000 Index (June 22). There was also speculation that the firm was preparing to ramp up work activities, when vehicle production sub-contractor General Dynamics (GD) committed to spending $2.6 million on two Alabama facilities connected to its contract. The stock popped through 50-day and 30-day moving average resistance on the news and subsequently began defining a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with three "strong buys" and one "buy." Analysts expect a 128% growth rate through the next year. The FRPT Sales Growth rate (187.79%), EPS Growth rate (209.10%), Return on Assets (12.66%), Return on Investment (19.13%) and Return on Equity (20.46%) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 52% of the outstanding shares. Over the past 52 weeks, the stock has traded between $4.50 and $31.16. A stop-loss of $23.25 looks good here. Note that the firm will conduct its 2007 Annual Shareholders' Meeting on June 21st (10 am ET).

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

Afterhours and Congratualations amstocks82 you are on target.

Elsewhere, Force Protection Inc. shares rose $1.21, or 4.7 percent, to $27 in aftermarket trading, on news that the company was awarded a $221.7 million deal from the U.S. Navy for 396 Mine Resistant Ambush Protected, or MRAP, vehicles.

In regular trading earlier, Force Protection shares declined $1.27, or 4.7 percent, to $25.79.

http://www.chron.com/disp/story.mpl/ap/fn/4903704.html

June 19, 2007, 6:18PM

Aftermarket Movers: Clarcor Climbs

© 2007 The Associated Press

NEW YORK — Shares of Clarcor Inc. rose in aftermarket electronic trading Tuesday, after the maker of industrial and automotive filters said its fiscal second-quarter profit jumped on sales growth.

The company reported income of 41 cents per share for the quarter ended June 2, compared with the 37 cents per share anticipated by analysts polled by Thomson Financial.
Results were also helped by easy comparisons from a year-ago quarter weighed down by a one-time charge.

The results, along with a fiscal 2007 outlook above Wall Street predictions, sent Clarcor shares up $1.60, or 4.7 percent, to $35.90 in aftermarket trading, after they rose 52 cents to $34.30 in the regular session.

Aftermarket indicators suggested a mixed opening for the major indexes on Tuesday.
Also on the rising side, IHS Inc. shares gained $3.22, or 7.2 percent, to $47.80. During the regular session, they added 50 cents to $44.58.

IHS, which supplies technical information to the energy, engineering, automotive and other industries, raised its full-year revenue forecast above Wall Street's expectations after posting strong second-quarter results.

IHS also reported its second-quarter profit rose sharply on strong sales, which topped analyst expectations.

Elsewhere, Force Protection Inc. shares rose $1.21, or 4.7 percent, to $27 in aftermarket trading, on news that the company was awarded a $221.7 million deal from the U.S. Navy for 396 Mine Resistant Ambush Protected, or MRAP, vehicles.

In regular trading earlier, Force Protection shares declined $1.27, or 4.7 percent, to $25.79.

On the losing side, shares of FSI International Inc., which makes equipment for microelectronics fabrication, declined after the company said its fiscal third-quarter loss more than doubled.

Results widely missed Wall Street expectations, sending shares down 37 cents, or 9.3 percent, to $3.60 in after-hours trading. In regular trading earlier, shares lost 4 cents to $3.97.
FSI said it expects a fourth-quarter loss, and forecast sales below Wall Street expectations.
Also declining were shares of Darden Restaurants Inc., which operates the Olive Garden and Red Lobster restaurant chains.

Darden swung to a fiscal fourth-quarter loss hurt by losses from discontinued operations related to the closing of certain restaurants. Sales edged higher, but still came in below Wall Street expectations.

The stock fell $2.30, or 4.9 percent, to $44.55 in aftermarket trading, after losing 23 cents to $46.85 in the regular session.

Two places. See you tomorrow.

See: http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=FRPT:US&sid=acno0ZXOVQsg

Force Protection Wins $221.7 Million for Blast-Resistant Trucks

By Edmond Lococo

June 19 (Bloomberg) -- Force Protection Inc., the first company to deliver blast-resistant trucks to U.S. troops in combat, won a $221.7 million order to build more of the vehicles as the Pentagon speeds delivery to forces in Iraq.

Force Protection will make 455 of the trucks under the latest award, the Defense Department said in a statement today. Work on the vehicles will be completed by December 2008.

Force Protection's trucks have been used by U.S. troops in Iraq and Afghanistan in limited quantities since 2003, and their safety record prompted the U.S. Marine Corps to begin a wider procurement effort in January. The Marines are leading purchases of the vehicles for the military and may spend as much as $8.4 billion for 7,700 trucks over the next two years.

The raised chassis and V-shaped hull of the vehicles makes them four times safer than traditional flat-bottomed trucks, according to the Marine Corps. Homemade bombs are the leading cause of U.S. deaths in Iraq, accounting for 61 percent of the 2,793 fatalities in Iraq as of May 19, according to Pentagon data.

The Marine Corps formally began the Mine Resistant Ambush Protected vehicle, or MRAP, program in January when it awarded prototype development contracts to nine truck makers. Since then, six of those companies have received production awards. The Marines ordered trucks valued at more than $1.3 billion between Jan. 26 and May 31.

Today's award adds to two earlier orders to Ladson, South Carolina-based Force Protection for its Cougar trucks, a contract on Feb. 14 for $67.4 million to build 125 trucks and one on April 23 for $481.4 million to make 1,000.

Joint Venture

Force Protection shares production of the Cougar with General Dynamics Corp., the largest maker of armored vehicles for the U.S. military. The two companies established their joint venture, called Force Dynamics, in November.

Falls Church, Virginia-based General Dynamics is also building a second truck, the RG-31, for the MRAP program.

The other companies with production contracts for MRAP vehicles include London-based BAE Systems Plc; Oshkosh Truck Corp. of Oshkosh, Wisconsin; Navistar International Corp.'s International Military and Government LLC unit in Warrenville, Illinois; and closely held Protected Vehicles Inc. in North Charleston, South Carolina.

Shares of Force Protection fell $1.27, or 4.7 percent, to $25.79 at 4:30 p.m. in Nasdaq Stock Market trading.

To contact the reporter on this story: Edmond Lococo in Boston at [email protected] .

I was watching a congressional hearing where a committee was questioning the secretary of the army. he was asked about modernizing the army's equipment.
for what it is worth, three things stood out:
(as paraphrased by me)
1.  Q Will the MRAP program be useful after the Iraq conflict?
        A  Yes, Any future conflicts will likely be similar to Irag in that hey would involve urban warfare.

2. Q How is the MRAP program progressing?
        A-1 we are moving as fast as possible.
        A-2 We are looking in particular at the capacity for the ability for customization, in particular, a vehicle capable of carrying add-on armor. The vehicle chassis needs to be capable of carrying the extra weight.   

Though the testing is complete they are still looking at designs. That means they are negotiating with vendors about upgrades and options. And that they have decided on a key design feature.

That would explain the delay in contracts after testing. The manufacturers are trying to correct their bid to the proposal. And the DoD may have narrowed the field.

And it would explain the drop in FRPT. What and when is the competition going to show up with, and how much of a compromise it will be to FRPT?

The positive note for FRPT is that the Marines are still buying every vehicle they can produce. And when the 2008 budget comes through DoD will be able to decide how much of 200, 300, 400, and 800 vehicles per month they will contract for and buy from FRPT.

Its target maximum production and probably FRPT's peak target price.

Our Cheetah as a dark horse is looking like it has legs. With its primary manufacturing facilities to be announced, and those other vendors still working on their vehicles and proposals and the DoD still waiting , though qualification testing is complete.

Those 4,506 vehicles still to be contracted this year and the 4 billion dollars in the 2008 budget for MRAP looks like a feast is coming, just who will be invited.

http://www.forbes.com/home/markets/2007/06/22/force-protection-capacity-markets-equity-cx_er_0621markets12.html

Competitors beware, Force Protection is prepared to win the lion's share of government contracts for armored vehicles. Within the next two weeks, the company is expected to announce the opening of new factories that will substantially boost its capacity.

According to a person familiar with the situation, the company's new factories, which will open later this year, will focus on the Cheetahs, a new line of armored vehicles that are lighter and more mobile than Force Protection 's popular Cougar line. Because of its size, the Cheetah is an attractive replacement candidate for the Humvee. The army has already indicated that a top priority is replacing the entire Humvee fleet— 17,700 vehicles— in Iraq with armored vehicles that can stand up better to mines, improvised explosive devices and rocket-propelled grenades.

Once the factories are up and running, they should be able to churn out 200 vehicles a month.

Remember the May 18th General Conway interview:

Q I just wanted to follow up on the MRAP. There's some downsides. It's -- as far as I understand -- a slower vehicle than the humvee, it's a bigger vehicle, it's not a vehicle particularly suited for off road. I mean are we spending all this money, all this procurement effort, on a vehicle that has a very specific use that may be well-suited to the current battle, but by the time we actually have these vehicles built, we will have gotten something that won't be as useful in the next battle?

GEN. CONWAY: I don't know that any of those things you said are accurate. Now, you got three different sizes of MRAPS, and yeah, the largest size is larger than the humvee, okay? But the one that we're most interested in comes as a replacement to the humvee. If you checked our buy, we've got a couple thousand and more that are going to be replacements for the humvee. And it certainly has to have an off-road capability. It will do anything that the humvee will do.

The General is definitely aware of the Cheetah.  When he said "it" and not "they", he had in mind only one vehicle - and that's the Cheetah!

http://www.forbes.com/home/markets/2007/06/22/force-protection-capacity-markets-equity-cx_er_0621markets12.html

Market Scan

Force Protection Goes On The Offensive

Evelyn M. Rusli, 06.22.07, 12:40 PM ET

Competitors beware, Force Protection is prepared to win the lion's share of government contracts for armored vehicles. Within the next two weeks, the company is expected to announce the opening of new factories that will substantially boost its capacity.

According to a person familiar with the situation, the company's new factories, which will open later this year, will focus on the Cheetahs, a new line of armored vehicles that are lighter and more mobile than Force Protection 's popular Cougar line. Because of its size, the Cheetah is an attractive replacement candidate for the Humvee. The army has already indicated that a top priority is replacing the entire Humvee fleet— 17,700 vehicles— in Iraq with armored vehicles that can stand up better to mines, improvised explosive devices and rocket-propelled grenades.

Once the factories are up and running, they should be able to churn out 200 vehicles a month. That ramp-up will more than double Force Protection's current in-house capacity levels. For comparison, in 2006, Force Protection made 300 vehicles for the entire year.

Under the government's Mine Resistant Ambush Protected vehicle program, the Army is expected to award contracts to produce 23,000 armored vehicles, about 7,700 of which will be awarded this year. For a company that is competing with a handful of manufacturers to bag the most contracts, capacity level is crucial. Force Protection's vehicles have had stellar performance on the field but the government has repeatedly told manufacturers that the bulk of the orders will go to companies that can deliver quantity as well as quality.

Force Protection currently has a 55% share of the orders, but its stock has rocked wildly in recent months as competitors nip at its heels. Shares of Force Protection fell 3.0%, or 70 cents, to $23.05 in afternoon trading on Friday.

Many analysts expect Force Protection to retain a large share of the market but other armored vehicle players, such as BAE Systems and Oshkosh Truck, should also win major contracts. There is also the threat of unexpected dark horses, such as Navistar. Last month, the government awarded a $623 million contract to Navistar, which was widely considered an unlikely competitor. (See: "Competition Saps Force Protection." )

Force Protection remains optimistic that it will be able to ramp up production to meet the military's needs. It has a major partnership with General Dynamics and subcontract deals with Armor Holdings and Spartan Motors' chassis unit to manufacture vehicles.

Under a joint venture with General Dynamics, Force Protection will be able to deliver 12,100 vehicles between July 2007 and December 2008, Michael Aldrich, Force Protection's vice president for sales, told Forbes.com earlier this month. "We have reason to be wildly optimistic that we will receive more orders," he said. "We have passed the test, we have more than quadrupled production and we are ahead on all the contracts we are on right now."

The market hasn't figured this one out yet.......
Excellent long term prospects.

Until the real MRAP contracts get awarded. As was noted previously, this is an award under the previous contract. While buying shares is the safer bet, check out the July 25 and 30 calls. Decent bets in the short term.

90% of DOD budget now for MRAP vehicles.
Mine Resistant Ambush Protected vehicles are the military's first choice for replacing the HumVee death-traps...
Marines and Army buy everything they can build, and they can't sell to Canada and others, even with strong demand, until U.S. gets all they need... 

I recently read an artice which said the Marines had ordered more than the Army, but the pressure was on the Army to get the upgraded vehicles in action. I expect some big orders soon and a resulting appreciation in the stock price.... 

Volume: 7,648,843
Avg Vol (3m): 596,374

HEADLINES: Force Protection Inc. Gets Contract
Thursday , June 21, 2007 05:17ET

Jun 21, 2007 (M2 PRESSWIRE via COMTEX) -- InvestorIM has been created as a tool for the average investor. The idea is simple, a website where the world can communicate. Do you have a stock related question, then why not ask 50,000 individual members? Are you a shareholder of Force Protection Inc. (NASDAQ:FRPT)? Join the many members engaged in this stock right now. Come see for yourself at www.investorim.com for your complimentary subscription.

Force Protection Inc. said Wednesday June 20, 2007 it received a $221 million contract from the Marine Corps to produce 455 vehicles for its mine-resistant ambush protected program.

Force Protection, which makes mine- and blast-protected vehicles, will supply 395 Category I Cougar 4X4 and 60 Category II Cougar 6X6 vehicles.

Production is targeted for completion by the end of next year. The pact is the fourth order Force Protection has received under the program.

Questions or comments about this story should be directed to AP Financial News at 212-621-7190

I will hold FRPT long and strong

let me quote amstocks82 again:

Order Predictions for FRPT

My belief is that FRPT and the Force Dynamics (FD) joint venture is in very good shape for additional orders for several reasons:

1) My belief is that all companies that have passed testing have gotten orders. So far, the Cougar and Navistar MaxxPro have gotten follow on orders and therefore passed testing. The MaxxPro still may not pass the second and third round of testing and so far there are no MaxxPros delivered to the military for shipment to Iraq. That is all in the future.

2) Several companies requested either a delay to deliver their vehicles past the delivery deadline or time to fix problems with their vehicles that were discovered in testing. Rumors from BAE and the industry have been that BAE failed testing and received time to fix their vehicle. It was expected that BAE would have been able to make changes and for their vehicle to pass testing. However, BAE is not commenting on this and has not recently stated that their vehicle was able to pass. Conclusion – no reason to believe BAE's RG-33 has passed testing as of yet.

3) The Cougar ramp-up consists of several companies which are producing Cougars or part of Cougars. GD, Force Protection, Armored Holdings, Ultra, Spartan and possibly other partners are churning out Cougars or doing major parts of the work. The Cougar ramp-up began months ago and this puts the Cougar ramp-up ahead of other competitors.

The current status is that there are two vehicles that passed the first round of testing. That is the Cougar and the MaxxPro.

The other vehicles might at some point in the future pass after making changes. Until the other manufacturers are able to make changes and pass testing, they are in no position to order parts to make vehicles to begin their ramp-up.

GDLS claimed it takes about six months to order the steel to make the vehicles. The MaxxPro may require less time as they don't need the type of armor steel that most vendors need. The MaxxPro uses add on armor placed over a regular steel frame.

If the other manufacturers are not able to order their parts and steel yet, it will be extremely difficult for them to have any meaningful ramp-up. This means is that the military has few options other than the Cougar for many of the additional Category II orders.

If Force Protection is to make 12,100 vehicles between July 2007 and December 2008, then they need to get more orders soon to begin ordering the vehicles.

The above reasoning is why I believe there are the "rumors" of large orders in the works for Force Protection. I don't think there are any leaks about orders from the military procurement people.

Based on conversations I have had with various people in the Army, all of those I talked to are very excited about the Cheetah. Army officials in the few comments about the Cheetah also expressed considerable excitement about it. It is a relatively inexpensive vehicle that is fast, maneuverable, and can survive in a 360 degree battlefield. When Force Protection begins making large numbers of these vehicles, I believe the military will purchase everyone that they can make.

The current backlog attributable to Force Protection if the already announced Buffalo order is added to backlog is approximately $800 million. This does not include any orders for Cheetahs or account for all the vehicles Force Protection can build in 2007. My estimate is that Force Protection will have revenue for 2007 in excess of 1 billion dollars. This would be a 5X increase in orders over 2006.

amstocks82 again (thanx buddy!):

Mine Resistant Ambush Protected (MRAP) Disaster at BAE

In June 2006, it was announced that BAE won the contract to build the Iraqi Light Armored Vehicle (ILAV) for the Iraqi army and police. BAE would be building a "Cougar" vehicle designed by Force Protection, Inc. Force Protection and BAE would split the contract each manufacturing half the vehicles but Force Protection would get 100% of the maintenance and parts for the contract and would retain all rights to the Cougar design.

Reportedly, the relationship between BAE and Force Protection began to deteriorate. There are various rumors why this might be but none have been confirmed. It is rumored that BAE tried to purchase Force Protection in 2006 but by the time the BAE bid was completed and arrived at Force Protection, the offer was ridiculously low. Force Protection's stock price had been increasing rapidly and the BAE bid didn't take that into account.

Another possible source of problems is that BAE provided a low bid on the manufacture of the ILAV. Force Protection with their greater experience manufacturing Cougars was able to make a slim profit on the ILAV and a much larger profit on the maintenance and spare parts. BAE is rumored to have lost money on the deal.

The RG33 might be another possible source of anger between BAE and Force Protection. A few months after the relationship between BAE and Force Protection was begun, BAE introduced the RG33 which looks remarkably like the Force Protection Cougar -- so much alike that BAE was rumored to be considering using Spartan Motors Inc., for the Chassis work. Spartan does much of the Chassis work for Force Protection.

It can't be confirmed whether or not BAE reverse engineered the Cougar and provided their own version of the vehicle or if the vehicle simply by chance looked much like the Cougar. But the problem for BAE is that the Cougar and Buffalo use technology that Force Protection owns or has exclusive foreign manufacturing licenses from South Africa for. Therefore BAE can't use part of the designs.

BAE submitted their RG33 prototypes to the US military for phase 1 testing with the likely expectation that they would pass with flying colors. The problem is that the vehicles were submitted months ago and all vehicles that passed testing have received follow on contracts. BAE has not gotten such a contract.

Unconfirmed rumors were that the RG33 failed testing at the US military testing range at Aberdeen. Several vendors requested time to make changes to their vehicles and fix problems. It is believed that BAE is one of the vendors making that request. After BAE made changes to pass survivability and ballistic testing which are rumored in the main to consist of adding additional armor, it is rumored that the additional armor allowed them to pass survivability and ballistic tests but caused other problems with the vehicle again causing it to fail testing.

BAE has a long history and will likely be able to get the RG33 right in the end, but in the mean time, the US military is rethinking their options. The US military gave BAE the second largest pre-testing order for the RG33. The US military gave initial contracts to the vendors that seemed to have the best chance of passing testing and winning a contract so that they could begin ramping up. Since the RG33 got the second largest order, the US military was counting on purchasing those vehicles but BAE has not delivered a prototype that can pass testing.

The problem for BAE is that the RG31 is a South African Design which they modified mainly by updating the automotive components. BAE didn't design the armor. Therefore, they don't have any experts in designing this type of armor and are hampered by not being able to use some of the design features of the Cougar and Buffalo that Force Protection owns the technology for or has exclusive licenses from South Africa for.

For BAE, getting the RG33 to pass testing is critical. Even though they have no experts, it is likely that they will by "brute force" get a vehicle to pass testing even if they have to add a large amount of additional armor and a larger motor to do it. But this will create other problems for BAE. Adding armor and a larger motor is going to add to the expense of manufacturing this vehicle. The additional weight and associated fuel consumption will make it less attractive to the US military. Since BAE already submitted the bid for the price of the RG33, will BAE once more end up with a money losing contract if they even get one?

Dilemma for the US Military

The US military believed that they could offer contracts to build MRAP vehicles to industry and that industry would provide them with several suitable products. At that point, the military would provide contracts to several of them and production would ramp-up and they would get the vehicles that they need.

Up to now, based on follow on contracts, only two vehicles passed testing -- the Cougar and the Navistar MaxxPro. (The assumption is that there has been sufficient time to award contracts for all vehicles that initially passed testing.)

Navistar does not have any recent experience making armored vehicles and therefore tried another approach. They used a garbage truck chassis which has been in operation for many years and mounted a simple "V" hulled steel crew and passenger capsule on the chassis. Then to make this capsule ballistic and blast resistant, they place advanced composite armor panels on the steel capsule. In addition, the steel capsule is mounted higher in the air than competing designs. This design will be difficult to repair and there is a danger that the capsule will be blasted off the chassis. In addition, the unarmored drive components will make the vehicle very vulnerable to being disabled and unable to move. Therefore, the Navistar MaxxPro is not a vehicle that the military will purchase unless there are political reasons to purchase it or they have no choice because it is better than a Humvee.

The competition for MRAP has not yet worked out as the military will have hoped. Currently they don't have many vendors with a suitable vehicle. This may make it difficult for the military to ignore a recent offer that Force Protection made – they would build 12,100 MRAP vehicles between July 2007 and December 2008. However, to do this, they need additional orders to put the vehicle ramp-up in high gear.

With other vendors unable to provide suitable vehicles, this offer may be one that can't be ignored. Especially since Force Protection vehicles the Cougar and Buffalo have survived more than 2000 IED and mine blasts with only one incident where there were fatalities. The Cougar and Buffalo have great records of being highly reliable and very repairable after a mine or IED blast. This makes the vehicle the unmatched gold standard in Iraq and Afghanistan.

The Cheetah – New Directions in Armored Vehicles

The South African Connection

During the long wars and insurgencies in South Africa, new types of vehicles were developed that could protect soldiers and police against mines, IEDs and small arms fire. The most famous of those vehicles is the Casspir vehicle which has been in use for over 20 years.

Leading up to the development of the Casspir and other mine protected vehicles, there were several major innovations. The first was the "V-shaped monocoque" hull. The term "monocoque" in this case refers to a vehicle where the armored shell of the vehicle provides the strength instead of a frame. The second major innovation was in the design of the drive train. The drive train is attached on the outside of the hull instead of through openings in that hull through which the explosive force of mines and IEDs might enter.

The third major innovation is not visible from the outside of the vehicle but added greatly to their toughness. It was the design of the actual steel armor. The armor needed to be both inexpensive and very tough. This was accomplished mainly through the creation of proprietary steel formulas, fabrication methods, and manufacturing techniques.

Current US Armor Designs

Most US armor was designed for use in wars against countries that had large capable military forces. The main focus of the armor was to survive against artillery and direct fire from other armored vehicles.  It was not specifically designed to survive against mines and IEDs. However, the overall toughness of the US heavy armored vehicles gives them a great deal of protection. Other typical US equipment such as the Stryker light armored vehicle was designed for the same types of wars that other US armor was designed for except the Stryker is a lighter and faster version of those vehicles with less overall protection.

Vehicles like the Humvee were meant to ferry soldiers and equipment behind the front lines and was not meant for a combat role. Therefore, when terrorists and insurgents in Iraq and Afghanistan began using mines and IEDs in larger numbers, the Humvee and other un-armored vehicles were vulnerable to these attacks. Armor was added to the Humvee to improve its protection. Unfortunately, the Humvee was not designed to carry armor and the vehicle body is not shaped such that blasts are easily deflected from it. Therefore, the additional armor to the Humvee is only marginally effective.

New Designs, the Cougar and Buffalo

Most vehicles purchased by the military in the last 40 years were designed to exact specifications. Often, the design process took many years and cost billions of dollars. The results of these design processes are vehicles that fit the current perceived threat and vehicles that usually don't use any common parts and are extremely expensive.

The Cougar and Buffalo are a different "breed" of armored vehicle altogether. The designs were not funded by the US Government but were mainly funded by private investors. Many of the private investors invested specifically because they believed the US military needed vehicles like the Cougar and Buffalo for Iraq and Afghanistan.

The design team at Force Protection, Inc (previously Technical Solutions Group) licensed the best technology from South Africa. They also hired the worlds leading expert on anti-mine and anti-IED technology to lead the design team.

The initial design of the Cougar and Buffalo vehicles were based off of the licensed South African technology. However, the Force Protection design team changed the design to use the most reliable American automotive components available. They also added improvements and technology upgrades making the Cougar and Buffalo superior to the South African vehicles.

The end result is a vehicle that is much tougher and more reliable than the original South African vehicles. This toughness allowed the Cougar and Buffalo to survive over 2000 mine and IED explosions with only one incident involving fatalities. In the one instance with fatalities, the terrorists specially targeted a Buffalo vehicle with an advanced Explosively Formed Projectile (EFP). My belief is that the terrorists received technical assistance from Iran to build that device.

Beyond South African Technology – Enter the Cheetah

The Cheetah is the next step or evolution in anti-mine and anti-IED defense. The Cheetah up-close has a futuristic space-age look with the flowing lines and angles that allow the force of an explosion to pass around the vehicle. The Cheetah does not rely on the South African technology and Force Protection will not have to pay a license fee to South Africa for this vehicle. However, it is able to survive very large IED and Mine blasts similar to a Cougar.

The Cheetah does not use the "V" shaped hull design and instead uses a thick flat wedge shaped bottom designed to allow the explosion to propagate along the ground passing under and around the vehicle.

One of the complaints about the Humvee is that after adding all the extra armor, it is prone to break downs, has terrible fuel efficiency and often convoys of vehicles must stop to refuel it -- sometimes in the worst possible areas. The Cheetah has better fuel efficiency than the Humvee, has a 500 mile range, and because of its extreme toughness, can be used safely for patrols without escorts of other "fighting" vehicles.

The Cheetah has impressive off-road ability and is a suitable vehicle for patrolling in areas where there are no roads. It is small and agile enough to patrol in city areas where the streets are narrow.

The Cheetah was designed to survive current mine and IED threats. However, if the battlefield gets even more deadly, it was designed specifically such that available add-on armor can be added to further enhance the vehicles survivability. Unlike the Humvee, the additional armor will not make it top-heavy and subject to rollovers. The suspension is designed to handle a large amount of additional armor if needed.

The Cheetah is everything the Humvee should have been. It is capable of surviving and keeping soldiers alive in combat. A remote fired machine gun or other weapons can be easily mounted on the roof and firing ports are available for soldiers to fire from inside the vehicle in case of ambush. It is relatively inexpensive so that the US military can afford to purchase many of them. It has the most efficient diesel motor commercially available for a vehicle of its weight. The Cheetah is a vehicle that can provide the much needed tactical mobility to our soldiers that is currently missing in Iraq and Afghanistan. 

Those who see the Cheetah for the first time may think it is well named. It has a slim sleek look, it is able to climb steep slopes and for an armored vehicle, it is very fast. In truth, it is the "Cheetah" of the armored world.

Force Protection has been hiring workers to manufacture the Cheetah for several months and indicated that they are building new manufacturing areas for it. Force Protection's management has indicated confidence that they will be able to sell Cheetahs to the government when the new factories are up and running. Since there is really no competitive vehicle to the Cheetah, and a replacement to the Humvee is desperately needed in Iraq and Afghanistan, it is likely that they will sell thousands of them and would be a crime if they don't.

This is interesting the JROC which has oversight of the MRAP program in DoD, ranking above the Navy and Marines has given Navistar's 1200 vehicles, that the Marines contracted for,  to the Army.

It basically forces the Army to accept this compromise of only field tested prototypes and new unproven production lines. Though International is big with lots of resources new production lines of new products is always a time consuming task. Because being the first time for everything it takes a lot more than anyone thinks.

But it gives International an inside track to the Army MRAP selection process.