FRPT

[TerryG]

I worry.  The stochastics look like we have hit a bottom. This is the fourth day of testing 20 and the bollinger bands have narrowed in the last two. But today's close is lower than the open.

About the signs of weakness, the good news is that we may be at the bottom of a bear trap. Because the NASDAQ is still trending upward. Lets hope the market lifts FRPT with it. The bad news may be the bears are still trying to sink FRPT. I will feel better when we make it out of bear territory.

The good news that may be coming. Money for 2,650 vehicles to be contracted before October. And FRPT and the Cheetah moving into position with two production facilities just for the Cheetah, which FRPT will benefit 100% since Cheetah is not a part of FRPT/GD aka Force Dynamics.

It looks like FRPT will be able to push off any Cougar/Buffalo production off to Force Dynamics though. And Force Dynamics can handle the ILAV aka Cougar production from the BAE/FRPT partnership also. The ILAV contract had options for over 3,000 more vehicles as they deliver the first 800 now.

[TerryG]

Tested the 200 MA and rebounded. The bad news the "no reason" sale afterhours dipped to 17.68.

Well if this stays above the 200 MA, I am contrarian as this keeps testing low end trends.

And my reason is: Summer is?

http://defense.iwpnewsstand.com/defensenewsstand_spclsubj.asp?s=ied

Pentagon Plans Orders for 1,480 Additional MRAP Vehicles This Summer

DefenseAlert - 7/18/2007

July 18, 2007 -- The Defense Department's $1.1 billion reprogramming proposal for the Mine Resistant Ambush Protected vehicle program would provide funds for an additional 1,480 vehicles during fiscal year 2007, bringing the total number of vehicles on order to 6,415, according to senior Pentagon officials.

[TerryG]

One more ouch then a maybe?

Navistar Wins $413.9 Million Marine Corps Truck Award (Update1)

By Edmond Lococo and Mike Ramsey

July 20 (Bloomberg) -- Navistar International Corp. won a $413.9 million award from the U.S. Marine Corps to build blast- resistant trucks as the Pentagon speeds delivery of the vehicles to protect troops in Iraq and Afghanistan.

Navistar's International Military and Government unit in Warrenville, Illinois, will build 755 of the trucks by February 2008 as part of the Mine-Resistant, Ambush-Protected vehicle, or MRAP, program, the U.S. Defense Department said in a statement today. Navistar is the world's fourth largest truckmaker.

The award is Navistar's third manufacturing contract for the vehicles, following $631.5 million in awards this year. The $1.04 billion total gives it the largest share of among the seven companies awarded production contracts. Navistar's shares have more than doubled this year, fueled by ``MRAP enthusiasm,'' said JB Groh, an analyst with D.A. Davidson & Co.

``The timing is pretty convenient based on the downturn in commercial trucks because of new emissions standards,'' said Groh, who is based in Lake Oswego, Oregon. He rates the shares ``underperform'' and doesn't own any. ``It's sort of perfect timing.''

Shares of Navistar fell 65 cents to $70 at 3:59 p.m. New York time in over-the-counter trading before the award was announced at 5 p.m.

Since January, the Marine Corps has awarded more than $2.6 billion, giving Navistar about 40 percent of the total. The Defense Department said this week it plans to spend more than $5 billion this year on the trucks, which have a raised chassis and a blast-deflecting V-shaped hull that make them four times safer than flat-bottomed trucks.

3,765 Trucks

As of the end of June, 3,765 trucks had been ordered, and current plans call for having a total of 6,415 vehicles delivered by March 2008, John Young, head of the Pentagon's MRAP task force, said at a July 18 press conference.

Prior to today's award, the largest recipient of orders for the trucks was Force Protection Inc. of Ladson, South Carolina. Force has received orders valued at more than $770 million, or about 30 percent of the total after the Navistar award.

DaimlerChrysler Corp. is the world's largest truckmaker, followed by Volvo AB and Paccar Inc.

To contact the reporter on this story: Edmond Lococo in Boston at [email protected] ; Mike Ramsey in Southfield, Michigan, at mramsey6bloomberg.net

Last Updated: July 20, 2007 18:41 EDT

[TerryG]

There is still hope for FRPT, there are still 725 of 1480 vehicles near term to be contracted. With another 1170 on top of that before October.

[la-onda]

from 60% profit to small loss,what a shame from my side 
but I am still holding and I am still convinced that FRPT will be the dominant player on the MRAP market.

nice article:

Firm guards niche in armored vehicles
By Roxana Tiron
July 24, 2007
As the Pentagon and Congress urgently try to provide as many mine-resistant vehicles as possible to troops in Iraq, one company is warning lawmakers that the military may end up buying vehicles that don't all offer a consistent level of protection.

Additionally, it warns, the Pentagon could face an expensive logistical nightmare.

Force Protection Inc., of Ladson, S.C., quickly shot to fame with its V-shaped-hull vehicles, which can withstand blasts from the improvised explosive devices that are so common in Iraq. But the field is now getting crowded with other companies offering similar vehicles — and Force Protection is trying to assert its ascendancy.

The firm is pressing its case with lawmakers and Pentagon officials that "all V-shaped vehicles are not created equal," said Michael Aldrich, the company's vice president of marketing and government relations.

Company officials want to convince the Pentagon and lawmakers that Force Protection could license its original designs to other manufacturers rather than compete with a slew of vehicles that may not offer the same level of protection.

Indeed, based on the success of Force Protection's Cougar and Buffalo vehicles in Iraq, the Pentagon has significantly stepped up its acquisition of the uniquely designed vehicles, which deflect and stifle shockwaves from explosions through a V-shaped undercarriage. 

The Pentagon created a Mine-Resistant Ambush Protected (MRAP) vehicle task force as a top priority under Defense Secretary Robert Gates, and a whole host of defense contractors are expected to build up to 5,761 MRAP vehicles by February 2008. Force Protection will supply more than 30 percent of that order.

The Pentagon could buy as many as 17,000 of the V-shaped-hull vehicles in the coming years to replace Humvees.

But Force Protection, which is partnered with General Dynamics Corp.'s Land Systems business arm, is no longer the only company producing the vehicles. Six other contractors are also vying for MRAP orders after sending prototypes to military testers: Navistar International Corp.'s International Military and Government LLC; a General Dynamics Canadian unit; BAE Systems Plc.; Oshkosh Truck Corp.; Protected Vehicles Inc.; and Armor Holdings Inc.

Force Protection has already licensed its technical data package to General Dynamics as part of a joint venture, Force Dynamics, and Armor Holdings, which is manufacturing both Force Protection vehicles and its own competing design.

"We think they [the Pentagon] jump-started getting more protection to soldiers, but now it is time to focus on one design and we're hopeful it's going to be our design," said Aldrich.

"Our concern is that everything is being lumped together under one program called MRAP, but they are all different vehicles which are inefficiently managed," he added.

Aldrich also claimed that not all vehicles might perform as well as Force Protection's against blasts. "They have been tested against a common set of standards and that is why they are being fielded," he said. "But they have not been exposed to the real field."

He explained that Force Protection vehicles can survive blasts well due to their geometry and a specialty-grade steel that bends rather than welds. The vehicles also stand three feet off the ground and are very heavy to better withstand blasts.

If the Pentagon deploys different kinds of vehicles, however, sustaining them on the battlefield could become cumbersome, given the different parts needed. According to Pentagon numbers, 72 percent of the total life-cycle cost for the MRAPs goes toward maintaining and sustaining the vehicles, while the rest is for the actual purchase. On a $4 billion MRAP purchase, the life cycle cost would be as much as $10 billion.

The cost of one MRAP vehicle ranges between $1 million and $1.2 million. The vehicles are heavy and have a high fuel consumption of 5-10 miles per gallon, depending on their size. MRAPs come in three categories, ranging from a lighter utility vehicle to a large mine-protected clearance vehicle.

"It's much too heavy, it doesn't perform well off the road, and it's a logistical nightmare in terms of [the] fuel support it needs," said retired Gen. Jack Keane. "We are talking about tanks on wheels here."

"The life-cycle costs and logistics infrastructure is going to be very expensive," Sen. Lindsey Graham (R-S.C.) told The Hill.  "But we can absorb the cost easier than it is for a family to absorb another loss of life."

Together with Sen. Joseph Biden (D-Del.), Graham filed an amendment to the currently shelved defense authorization bill to provide up to $24 billion to buy additional MRAP vehicles.
Biden, a presidential contender, on Monday met with executives from Force Protection and Protected Vehicles Inc, also a South Carolina company.
But Graham said that the consequences of having more than one source for building the vehicles could be beneficial.

"You'll have different minds looking at ways to make this better," Graham said. "More companies will ensure that innovation is alive because they will be competing for a share of the market."

For example, Navistar won a $414 million contract for 755 MRAPs on Friday, following another contract in May for 1,200 of the ambush-protected vehicles. The company said it works to develop vehicles according to the rigorous Pentagon specifications.

Rep. John Murtha (D-Pa.), chairman of the House Appropriations defense subcommittee, acknowledged that the maintenance of these vehicles is going to be "substantial." Last week, Congress approved a Pentagon reprogramming request of $1.2 billion to buy more MRAPs.

The lawmaker has also expressed concern that there won't be enough spare parts available for all the vehicles. Murtha and other lawmakers are criticizing the Pentagon for not moving fast enough with its MRAP acquisition even though requests have been coming from Iraq since 2004.
"They are coming to us with a program request that they should have asked for two years ago," Murtha said in an interview.
"This is the most screwed-up Defense Department I have ever seen," said Murtha, who acknowledged that Gates has started to make a difference.

link:
http://thehill.com/business--lobby/firm-guards-niche-in-armored-vehicles-2007-07-24.html

bad chart (back on April levels):

[TerryG]

I think there is a fire for FRPT and the Cheetah. FRPT has quoted a second facility just for the Cheetah delivering vehicles in Q4. And has purchased a third facility also primarily for the Cheetah.

Navistar has captured 1,955 Cat I vehicles and there are 1,825 vehicles left in the 2007 budget to be contracted for. If FRPT captures the remaining for Cheetah?

If this turns into a two way split? Because the Army wanted to keep the number of different vehicles to a minimum to simplify fielding and maintaining the vehicles.

It looks like the second and third FRPT facility, both for Cheetah, was to directly compete for Cat I because the Cheetah comes in at the price point of the competition.

So unless BAE, OSH/PVI, or General Dynamics emerges from the pack, that straight away for the remaining 1,825 vehicles could be for the Cheetah.

[la-onda]

fyi:
FRPT: Short Interest UP 65.5% to 14.9M in Jul 2007
Tuesday , July 24, 2007 16:18ET

According to new short interest data from NASDAQ, short interest for Force Protection, Inc (NasdaqSC: FRPT) INCREASED 65.5% to 14,881,117 shares for the month ended mid-July, 2007.

SYMBOL         JUNE            JULY          CHANGE       %CHANGE       DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
FRPT           8,994,004      14,881,117      +5,887,113       +65.46%           6

Based on FRPT's 20-day average daily share volume of 2,698,170, it would require approximately 6 day(s) of buying to cover this short interest.


oversold inmho
cheers
Oliver

[TraderStar]

I've had puts on this one since around $20 .. cashed them all in today, any suggestions what to look for to go long again?  First close over 200 ma with volume?

[TerryG]

Just got a rumor. Those 13 million shares issued for the 152 million expansion are no longer restricted and being shorted? See attachment.

The 200 MA sounds like a fair price to start. But any contract announcement I think this still has legs. Otherwise the Q2 report due in the second week of August.

[TerryG]

I am down to one position in case of a contract announcement. There is still 1.2 billion realigned last week for 2007. I do not know if FRPT is maxed out or working up its proposal for the remaining funds. Until then I am looking for the bottom of the stock dilution being priced in. This is more than a dip.

[ravenquork]

Some News:

White House to request additional funding for bomb resistant vehicles

Associated Press - July 31, 2007 3:13 PM ET

WASHINGTON (AP) - The White House is set to ask Congress for more money for bomb-resistant vehicles -- about $5.3 billion.

Deputy Secretary of Defense Gordon England says the vehicles have special V-shaped undercarriages that can deflect roadside bomb blasts and better protect troops.

The request will be added to the Pentagon's more-than $141 billion budget request for military operations in Iraq and Afghanistan for the budget year.

England tells the House Budget Committee that other costs, especially President Bush's ongoing strategy of increased troop levels in Baghdad and Anbar province, will require additional funding. But England couldn't yet say exactly how much additional funding will be needed.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

      

[la-onda]

fyi:
MRAP: Another One Bites the Dust?
05-Aug-2007 16:18

Textron Land Systems' M1117 Guardian Armored Security Vehicle has already been disqualified from the USA's MRAP competition, though purchases for American military police continue. Now Oshkosh Truck's Category 1 partnership with Protected Vehicles, Inc. to produce the Alpha may have joined the casualty list, in the wake of testing at Aberdeen. The Alpha vehicle was a partnership with PVI and Battelle, whose ShieldAll™ ceramic armoring has reportedly survived recent testing against EFP land mines. The 13-ton Alpha was one of the 6+ person CAT I patrol vehicle's heavier entries, but it had been an early winner in the MRAP field thanks to a 100 "low risk" rapid-fielding order on Feb 14/07 before testing had commenced. A July 12/07 DefenseLink announcement listed a revised contract completion time frame of July 2007 for this order.

Bloomberg's July 27/07 article "Oshkosh Mine-Resistant Truck Rejected By Pentagon" excerpts a June 29/07 letter from the Marine Corps to Oshkosh Truck official Moss Ruedinger – and has significant implications for both Oshkosh and PVI going forward...

The USMC's letter allegedly said that explosives testing of the Alpha had "caused concern regarding overall vehicle survivability,'' and unspecified "automotive'' and "human factors'' also "preclude safe vehicle operation.'' These issues were, said the letter "borne out'' by a limited troop evaluation and the military "is convinced that remediation of this issue would require significant redesign.... The result would be an unacceptable delay to future production orders.''
(In plain English: rejected)

Oshkosh also has yet to see any orders for its Bushmaster vehicles, a CAT-II vehicle partnership with Thales Australia. Bushmaster vehicles make up Australia's mine-protected vehicle patrol fleet, and they have served successfully in Iraq and Afghanistan for several years with the Australians – and now the Dutch as well. Surprisingly, the Bushmaster received no "low risk" orders in the MRAP program's early stages, nor any following orders despite rumors of a 1,500 vehicle MRAP purchase and the recent placement of additional production orders by Australia.

To date, therefore, Oshkosh has largely been relegated to the sidelines. Meanwhile, competitor Navistar's MaxxPro has rocketed to the top of the MRAP competition thanks to a highly producible design created in conjunction with Israeli firm Plasan Sasa.

On July 27/07, Oshkosh announced a partnership with Ceradyne and I3 to produce The Bull using Oshkosh truck chassis. Their solution has significant applications for the logistics vehicles that travel the roads to supply combat units, but infantry carrier versions have also been designed and may qualify for the new MRAP-II solicitation. Its upgraded protection requirements are believed to include protection against EFP land mines, which makes it a solid 'Plan B' in light of emerging circumstances.


Oshkosh's smaller partner Protected Vehicles, Inc. will be hit harder if news concerning the Alpha is true. Force Protection's Cougar vehicles had a 2-year ramp up period thanks to slow orders and slowly-dawning awareness. PVI, on the other hand, is introducing its offerings at the height of awareness and competition. That's a less forgiving environment, where there's little tolerance or time for modifications, and significant production capacity is required to play. A July 30/07 interview by PVI CEO Garth Barrett with Jane's Defence Weekly indicates that he never expected the massive push now under way by the US military to acquire thousands of mine-resistant vehicles. Nevertheless, that is where the situation now stands.

Neither the Marines, Oshkosh, or PVI would comment on the Alpha situation when questioned by Bloomberg, or by DID; if true, however, the firm may begin to find itself in a Catch-22 situation. In order to become a serious contender and reap substantial MRAP orders, PVI needs significant expansion of its production capacity. In order to finance that investment, of course, PVI needs contracts and orders – or reliable expectation of same. A failure with the Alpha throws that reliability into serious question, and will complicate attempts at private financing.

The firm isn't out of the competition yet, however. they've just unveiled a JLTV-type competitor in The Protector, and PVI is still producing its initial Feb 14/07 order for 60 of its Golan CAT-II squad/specialty vehicles. Golan was developed in conjunction with Israeli firm RAFAEL and that country's ManTak tank program office and offers a number of advanced features. These include the same explosive reactive armor that protects US Bradley armored vehicles against threats including anti-tank rockets and EFP land mines, and is designed into the vehicle in such a way that the vehicle's appearance doesn't change whether it's protected by reactive armor or not. This makes the Golan another potential competitor in the upcoming MRAP-II program, and even one additional order for a couple hundred vehicles before MRAP-I closes would make a big difference to the firm's ability to ramp up future production.

So, too, would a major strategic production partner for its Golan vehicle. The best features in the world won't win a production race, which is what the MRAP competition has unquestionably become.

&

BAE Delivering a Cougar Variant for Iraq's $445.4M ILAV Contract
05-Aug-2007 16:14

The global trend toward mine-resistant vehicles has become unmistakable. The 101st Airborne's RG-31s and Australian Bushmasters were the first examples in Iraq, followed by the M1117 ASVs for military police and Cougar and Buffalo vehicles among US Marines et. al. Britain has the 'Mastiff' Cougar variant. And the Iraqis? While up-armored Hummers are a big upgrade over the Ford commercial pickups some units were using, they knew that they, too, needed a mine-resistant vehicle that could perform patrols in urban areas and along their country's roads.
Their choice featured a familiar vehicle base – but an unfamiliar partnership. While the design is based on Force Protection Inc's v-hulled Cougar that has earned such praise from US Marine Corps and Army Explosive Ordnance Disposal teams in Iraq, the prime contractor is competitor BAE Systems. The original contract and associated work began at the end of May 2006, and its total value could reach $445.4 million and 1,050 vehicles if all options are exercised. The first ILAVs were delivered to Iraq 90 days after contract award, i.e. by the end of August 2006.

So why use Cougar variant, instead of existing BAE products... and is the Iraqi vehicle getting the RG-33L's robotic arm?

After all, BAE's vast array of products include the M2/M3 Bradley, the M113 APC family, the highly-regarded v-hulled RG-31 Nyala 4×4s that are also in battlefield use by American and Canadian troops, and larger v-hulled Casspir personnel carriers that have a long history of effective use in mined war zones.

DID spoke with a BAE executive, whose simple response was that they looked at the Iraqis' stated requirements, looked at what was available on the market, decided that this option would be the best offering (the RG-33 hadn't yet been introduced), and put the consortium together.

This has not stopped BAE from making competitive moves of its own toward the Cougar/Buffalo's market niche, however, just as Force Protection is making moves toward the smaller mine-resistant vehicle niche of BAE OMC's RG-31/32 offerings. See below for further details.

BAE Systems Land and Armaments is the prime contractor for the ILAV, with subcontractors Force Protection Inc. in Ladson, SC, and Spartan Chassis, Inc. in Charlotte, MI. This consortium will also have the happy result of expanding the manufacturing capacity for Cougar-type vehicles; BAE Systems personnel told DID that work would be going on at Spartan Chassis in Michigan and BAE's manufacturing plants in Anniston, AL and York, PA, as well as Force Protection's South Carolina facilities; note, for instance, the work split in the original May 31, 2006 order.

All contracts are issued by the U.S. Army Tank-Automotive and Armaments Command in Warren, MI.


links:
http://www.defenseindustrydaily.com/mrap-another-one-bites-the-dust-03574
&
http://www.defenseindustrydaily.com/bae-delivering-a-cougar-variant-for-iraqs-4454m-ilav-contract-02338

cheers
Oliver

[TerryG]

Aside from the MRAP II RFP ( Request For Proposal ) that came out which looks promising for FRPT is that BAE does not appear to do a thing with its ILAV agreement with FRPT.

BAE was the prime contractor on the1,050 vehicle production initial part of the proposal. But the proposal had a maximum of over 4,000 vehicles or 3,000 more ILAVs. If BAE is not interested in producing its half of the vehicles BAE has an escape clause that lets FRPT produce all the vehicles. Enter substitute Cougars for ILAVs. I mention this because the last ILAV contract FRPT received did not mention BAE doing any of the work.

I am reading the MRAP II RFP right now.

https://www.neco.navy.mil/static/840-v5static_sh.cfm?header_key=63728529&CFID=3006585&CFTOKEN=75127359

Looking for a close above the 200 MA looks fair. TheStreet.com has been advertising a high teens entry point before they would be interested. Lets hope more interested parties show up.

[TerryG]

Continuation breaking the downtrend or sideways.

[TerryG]

Jumped the gun. I thought this was two weeks ago. If all the paper work is done the signature loop should be weeks. Reset the weeks counter.

Congress OKs MRAP Reprogramming; Additional Production Orders Expected
Aug. 7, 2007 -- Congress has officially blessed the Pentagon's July 17 request to shift $1.16 billion between accounts to procure additional Mine Resistant Ambush Protected vehicles, setting the stage for additional production orders of as many as 725 blast-proof trucks.
Story length: 345 words.

http://defense.iwpnewsstand.com/newsstand_latest.asp