FRPT

[snowcat]

I think the government is willing to give up a little fuel economy to save some soldiers from IEDs.  I am not aware what the range of these monster trucks are, but I am betting they are less than a tank.

It is the IEDs which are taking so many lives in Iraq.  Protecting the soldiers is the first priority.

I have kids.  Sure I can shuttle them around in the Mini which gets 30mpg, but I am willing to sacrifice some economy for the security of the Tahoe.

And it is not only the heft of these vehicles, but the v shaped hull which deflects blasts.   That is what makes this a superior vehicle and it looks like this is the current leader for the job.  Teaming with AH and GD puts them in the best position.

[TerryG]

"Cheetah orders - could be a vehicle included in the MRAP but not positive that will be the case or if there will be opportunities outside of the MRAP.  I calculate the Humvee replacement market (JLTV) to be a long term opportunity of about $45b.  I'd expect FRPT to team with someone to pursue"

That is not my point. I am all for their use in Iraq and Afghanistan. I was objecting to the speculation that FRPT would be in the running for the Humvee replacement or JLTV. None of FRPT's products were ever intended for the $45b JLTV program. And FRPT has made no statement of even working on one.

JLTV is a much bigger picture of replacing all Humvees making Humvees obsolete. Like the Humvee replaced the Jeep. Which has nothing to do with FRPT, Iraq, or Afghanistan.

[la-onda]

@ Forbes:

Pentagon
Military Truck Maker Gets A Boost
Matthew Swibel, 01.10.07, 10:15 AM ET

WASHINGTON, D.C. -

Force Protection Industries, maker of ballistic- and mine-protected vehicles used by the U.S. military, plans to list on the Nasdaq Stock Market on Jan. 18, giving it better credibility from its current place trading in the pink sheets, and better chances of raising capital to fuel continued sales growth.

The company delivered more than 50 vehicles in December 2006 alone, a 300% increase from December 2005. Not a single serviceman has been killed riding in its 23-ton Buffalo vehicle or its 17-ton Cougar vehicle.
Whatever the criticism of President George W. Bush's plan for a troop build-up in Iraq by some Democrats, such as Sen. Russell Feingold of Wisconsin and Sen. Harry Reid of Nevada, Force Protection sees plenty of opportunity in the military's procurement plans for Iraq-style warfare. Last month, it announced a joint venture with General Dynamics to compete for the Mine Resistant Ambush Protected vehicle program managed by the U.S. Marine Corps. The service plans to spend at least $2 billion for 4,100 vehicles.
Once the contract is awarded, production could begin as early as April or May--as much as three months ahead of schedule. "The intent is to try and get a fairly large number of these fairly quickly," Delores Etter, the Navy's chief acquisition official, told Defense Daily, a military journal. "These are what the commanders would like to be using in Iraq right now."
Trucks are also due for major boosts in the Pentagon's recent $100 billion supplemental funding breakdown, with $1.2 billion partitioned for the service's Family of Heavy Tactical Vehicles and $1.67 billion for the Family of Medium Tactical Vehicles. Another $1 billion is set aside for Humvees, while $500 million will be requested for the Mine-Resistant Armor-Protected Vehicle.

Over-the-counter shares of Force Protection inched 1.75% higher yesterday to $17.90, up from less than a buck a year ago.

&

IMPROVED ARMORED VEHICLES SENT TO IRAQ

IMPROVED ARMORED VEHICLES SENT TO IRAQ – British troops at a Basra air base in Iraq have received the first batch of Cougar blast-protected vehicles. The British government ordered 108 of the vehicles in August in a move partly aimed at reducing casualties among troops patrolling in lightly armored Snatch Land Rovers.

At the time the order was announced, the Ministry of Defense (MoD) committed to delivering the first vehicles by the end of the year. They just scraped in on that promise, with the vehicles arriving December 30.

About half of the Cougars - - known as the Mastiff in British Army service - - are destined for Afghanistan, where roadside bombs and attacks from other ordnance are becoming a great threat.

The British vehicles carry several modifications, including additional armor, electronic countermeasures equipment and a Bowman tactical communications system.

The Cougar was order by the British government as an urgent operational requirement at a time of mounting public and military criticism over the rising number of casualties from improvised explosive devices (IEDs) in Iraq.

In addition to the U.S.-built vehicle from Force Protection, the British also increased orders for Pinzgauer-built Vector armored vehicles and upgraded FV430 troop carriers to meet field commanders' requests for improved capabilities in the fight against terrorists in both hot spots. (Source: Defense News)

[TerryG]

When does this become not a penny stock?

[la-onda]

Suntrust Report:
Very interesting snippet from Suntrust report

Spare Parts, Services, and Upgrade Kits

In 2006, FPRT projected it would generate $42 million in revenue through its Integrated Logistics Support (ILS) business which is responsible for order fulfillment on spare parts, contract services and maintenance and training, and the deployment of field service representatives. As FRPT production rates increase, the ILS business should see strong growth since it is somewhat tied to the cumulative number of vehicles in use. Going forward, we forecast the ILS business will grow from $42 million in 2006 to $77 million in 2007 to more than $200 million in 2008. Our estimates do not include the potential impact of upgrade kits.As mentioned, the sophistication of the explosives used in IEDs continues to increase with more and more IEDs making use of shaped charges that are extremely effective at penetrating armor (shaped charges are used in anti-tank missiles, for example). As such, we see a strong opportunity for FRPT to use its expertise in blast mitigation technologies to develop and sell armor upgrade kits for its vehicles to more effectively counter the increasing sophistication of IEDs. Although we do not yet know what pricing could be for these kits, we note that the military has invested hundreds of millions of dollars for armor kits for Humvees, FMTVs, and heavy tactical trucks. We would not be surprised to see these kits generate $50 million to $100 million in revenue over the next two years.

Price target: 31 $ 

[Terliso]

Too much run for this stock, FRPT is the best run i've ever seen in the OTCBB exchange

---- from 0.70 cents a year ago to today's high at 21.89, the stock is now gaining..

3,000%    3,000%

[Terliso]

[size=08pt]Force Protection Rolls On

Force Protection (FRPT - commentary - Cramer's Take) knows how to treat its allies. Just look at the favor the maker of blast-resistant military trucks did for some of its investors last month.

Last month, the South Carolina-based defense contractor quietly inked a joint venture with heavyweight military supplier General Dynamics (GD - commentary - Cramer's Take - Rating).

But just before announcing that key deal to the public, the company raised $153 million by selling stock at the sharply discounted price of $11.75 a share in a private placement.

Those 13 million shares, representing roughly one-quarter of the total outstanding, have already delivered phenomenal returns. At recent prices, private placement buyers are up more than 80% over four weeks.

But they aren't the only investors who have become avid fans of Force Protection. The company's stock has risen 30-fold over the last year as fans catch on to the promise of its heavy-duty gear amid the war in Iraq. The stock could soon get even more popular: Force Protection is due to move its listing to the Nasdaq from the over-the-counter bulletin board next week.

Some observers clearly believe the company has big things ahead of it.

"Within the next month, we expect to see the largest contract yet for [mine-resistant, ambush-protected] vehicles to be awarded by the U.S. Marine Corps," SunTrust analyst Chris Donaghey wrote. In starting coverage Friday with a buy rating and $31 price target, he said he believes the company can generate $1 billion in annual revenue under the deal.

But Massachusetts investment strategist Peter Cohan has his doubts. Last month, Cohan notes, Force Protection announced problems with its past financial statements. Normally, he says, the Nasdaq sends out delisting notices -- not listing approvals -- when companies face restatements.

Cohan questions the timing behind Force Protection's recent private placement as well. Quite simply, he wonders why Force Protection sold its last round of stock so cheaply when -- based on the obvious value of the General Dynamics deal -- it could have waited a bit and sold less stock at higher prices instead.

Both Force Protection and its underwriter indicated that the company needed swift financing to meet surging demand for its products.

But "the company left a huge amount of money on the table," insists Cohan, who has no position in the stock. "Why did they do that? To me, it seems unfair to the public shareholders." The stock was trading at around $14 when the private placement went through.

Shares were rising $1.42 Friday to $21.40.
Perfect Story

C.E. Unterberg Towbin handled that private placement.

James McIlree, an analyst at the firm, calls Force Protection his favorite company. He has a buy recommendation and a $25 price target on the company's stock.

With the General Dynamics deal and the fresh capital in place, McIlree feels, Force Protection is equipped to meet escalating demand for its products. Indeed, he says, the company has now positioned itself to "win a very, very large contract that is pending" at this time.

Force Protection has distinguished itself by claiming that no soldiers have died while riding in its blast-resistant vehicles. The company has seen its revenue -- and its stock price -- soar as a result.

So far, Donaghey estimates, Force Protection has delivered about 350 vehicles to the U.S. military. But that number could explode, he predicts, as the government follows through with plans to order thousands of MRAP vehicles going forward.

Donaghey believes that Force Protection's revenue, which more than quadrupled to $42.2 million in the third quarter, could rocket past $1 billion next year if that happens.

"It's not hard to sell that concept to investors," Cohan says. "Maybe the stock is going up so much just because of the story."

But Cohan recalls a similar situation that brought some pain to investors in the end. He highlights Taser International (TASR - commentary - Cramer's Take - Rating) as an example.

After trading below $5 for years, Cohan says, Taser's stock suddenly took off as investors grew increasingly excited about the company's product. Taser makes electric stun guns that allow police offers to stop suspects without killing them.

Banking on huge demand for the guns, Cohan says, investors pushed Taser's stock above $30 a share a couple of years ago. However, he says, the story soon soured amid rising safety concerns over the weapons, and the stock lost most of that ground. The shares fetch around $8 now.

Force Protection Rolls On
Page 4

Cohan worries that Force Protection could turn into another Taser down the road.
History Lesson

To be sure, Force Protection carries plenty of risks.

Perhaps most notably, the company is relying on an increasingly unpopular war for much of its business. Growing crowds within Congress want to do more than shield troops in vehicles like those made by Force Protection. They want to bring those troops home instead, which would diminish the need for such vehicles.

Still, Force Protection has enjoyed quite a run in the meantime.

Force Protection started out as one of three shell companies, carrying the name Boulder Capital Opportunities, a decade ago. One of its sister companies would go on to become Stan Lee Media, an online venture involving the maker of Spiderman.

Stan Lee Media suffered a spectacular crash during the Internet bust, widely blamed on colorful co-founder Peter Paul. Paul, an ex-con who previously made millions tricking the Cuban government, allegedly orchestrated a stock-manipulation scheme that triggered the company's demise. He fled the country, winding up in a Brazilian dungeon, before returning home to face his accusers.

Paul pleaded guilty to securities violations in 2005, The Miami Herald reported, and could face up to 10 years when he is sentenced.

Still, to this day, Paul holds the Clintons responsible for the company's demise instead. Paul orchestrated a huge fund-raiser for Hillary Clinton during her first Senate campaign. In return, the media has reported, Paul expected the former president to join Stan Lee Media's board -- and raise the profile of the company -- but claims the Clintons sent securities fraud investigators after him instead.

Paul responded with a high-profile lawsuit against the Clintons. However, The New York Sun reported last year that a judge has since dropped Hillary Clinton from that case.

Force Protection's own history sounds rather mild in comparison. The company previously operated as Sonic Jet Performance, a boatmaker that hit rough waters in its early years. Frank Kavanaugh, a fund manager and current Force Protection chairman, reportedly stepped in at that time to protect his investment.

Kavanaugh has since pocketed millions by selling loads of Force Protection stock in recent months.

"Former management lied to him," says Marc Robins of Catalyst Financial Resources, hired by Force Protection to handle "investor awareness" for the company. "He took control, sold the assets, bought the truck company and ran it for five years. ... I would not be too concerned about what the company did before March 2005 -- when it became a real company."

But Cohan, for one, would have paid little attention to the company even then.

"I've never bought a company on the bulletin board; I don't track them," he says. "But for a company to go from the bulletin board to being a real company -- with a real stock -- seems very rare. I get the feeling that very few companies have managed to do what this company has apparently done.

"It's an interesting transformation, to say the least." [/size]

[la-onda]

 Force Protection Rolls On

By Melissa Davis
Senior Writer
1/12/2007 10:50 AM EST
Click here for more stories by Melissa Davis


Force Protection (FRPT - commentary - Cramer's Take) knows how to treat its allies. Just look at the favor the maker of blast-resistant military trucks did for some of its investors last month.

Last month, the South Carolina-based defense contractor quietly inked a joint venture with heavyweight military supplier General Dynamics (GD - commentary - Cramer's Take - Rating).

But just before announcing that key deal to the public, the company raised $153 million by selling stock at the sharply discounted price of $11.75 a share in a private placement.

Those 13 million shares, representing roughly one-quarter of the total outstanding, have already delivered phenomenal returns. At recent prices, private placement buyers are up more than 80% over four weeks.

But they aren't the only investors who have become avid fans of Force Protection. The company's stock has risen 30-fold over the last year as fans catch on to the promise of its heavy-duty gear amid the war in Iraq. The stock could soon get even more popular: Force Protection is due to move its listing to the Nasdaq from the over the counter bulletin board next week.

Some observers clearly believe the company has big things ahead of it.

"Within the next month, we expect to see the largest contract yet for [mine-resistant, ambush-protected] vehicles to be awarded by the U.S. Marine Corps," SunTrust analyst Chris Donaghey wrote. In starting coverage Friday with a buy rating and $31 price target, he said he believes the company can generate $1 billion in annual revenue under the deal.

[la-onda]

 Friday, January 12, 2007

New Troops Will Lack Safer Humvees
The thousands of troops that President Bush is expected to order to Iraq will join the fight largely without the protection of the latest armored vehicles that withstand bomb blasts far better than the Humvees in wide use, military officers said. Vehicles such as the Cougar and the M1117 Armored Security Vehicle have proven ability to save lives, but production started late and relatively small numbers are in use in Iraq, mostly because of money shortages, industry officials said. More than 1,000 American troops have been killed by roadside bombs since the war began in March 2003. At present there are fewer than 1,000 of the new armored trucks in Iraq. At $500,000 to $700,000 each, they cost more than twice as much as a standard Humvee, but already they are proving their worth.

"They are expensive, but they are going to save lives," said Gen. James T. Conway, commandant of the Marine Corps, during a recent trip to Iraq, where he reviewed the service's effort to get more of the vehicles.

Most American troops patrol in the 20,000 Humvees the Pentagon has sent to Iraq. Most of those vehicles have been layered with added armor plating as the Pentagon has struggled over the past three years to counter the increasingly powerful and sophisticated roadside bombs, or improvised explosive devices, planted by insurgents.

Two recent incidents illustrate the problem with the M1114 Humvee: The weight of added armor can make it unwieldy. And even with the extra armor, its flat bottom absorbs the full impact from bombs buried in the road, often buckling or breaking the chassis in half.

On Dec. 30, Army Sgt. John Michael Sullivan, 22, of Hixon, Tenn., was killed when his Humvee was struck by an IED in the Sadr City neighborhood of Baghdad. Four days earlier, Army Spc. Joseph A. Strong, 21, of Lebanon, Ind., and Spc. Douglas L. Tinsley, 21, of Chester, S.C., died when their Humvee rolled into a canal during a patrol in Baghdad.

The problem with the M1114s is, they are overloaded and flat-bottomed," said Major Gen. Richard C. Zilmer, the senior Marine commander in Iraq.
Today, the Marines are moving quickly to buy and deploy combat vehicles with a key design improvement over the Humvee: They are built with a V-shaped hull that deflects a blast up and outward, leaving passengers shaken, but alive.

Under a $125 million contract, the Marines are buying 100 Cougar and 44 Buffalo armored trucks, known collectively as MRAP, for Mine Resistant Ambush Protected vehicles, made by Force Protection Inc., a small company in Ladson, S.C. The firm is producing 40 vehicles a month, said its vice president, Mike Aldrich, a retired Army officer educated at West Point.

Aldrich said the design grew out of a joint Army and Marine Corps request "designed to literally stop the bleeding from up-armored Humvees in some of the most dangerous areas in Iraq and Afghanistan."

The military services said last month that they need 4,060 of the MRAP vehicles, with 2,500 for the Army, 538 for the Navy and 1,022 for the Marines. The delivery schedule is uncertain. Meanwhile, a permanent replacement for the Humvee, incorporating the latest design and armor improvements, is years away, Pentagon officials said, and mired in technical and cost disputes.

Separately, the Army is buying the 15-ton M1117 armored vehicle for its military police. The V-hull vehicles were in production in the late 1990s but were canceled by the Army as unnecessary. In June 2004, the service decided that it needed them after all. The Army has said it needs 2,600.

Today, Textron Inc. is producing 48 per month at its New Orleans plant under a contract for 1,250 vehicles.

"That's all they had the money for," said Clay Moise, vice president for business development for Textron's Marine and Land division.

But a lack of money only partly explains why, four years into the war, there is a shortage of vehicles that can effectively survive an IED.

"The key reason it is taking so long is pretty simple: At each step along the way for the past four years, the key policymakers have assumed we were just months away from beginning to withdraw" from Iraq, said Loren B. Thompson, a national security analyst at the Lexington Institute, a nonpartisan think tank in Arlington, Va. "As a result, they never made long-term plans for occupying the country effectively."

... [t]he IED threat to Humvees is reflected in the Marines' hard-won experience in Anbar province.

"If you are hit by an IED, your chance of survival is four or five times greater in an MRAP than in a M1114," said a Marine commander, referring to the standard Humvee.

About half of the Marines' combat vehicles in Anbar are Humvees, and these are associated with 60% of the combat deaths and 65% of the wounded Marines, officers said. By comparison, attacks on V-hull armored vehicles have resulted in 2.1% of Marine combat deaths and 3.5% of the service's wounded.

A report released yesterday by the Government Accountability Office, the investigative arm of Congress, said the IED problem came about in large measure because there were not enough U.S. troops in Iraq after the 2003 invasion to secure Saddam Hussein's ammunition caches.

In the weeks after the invasion, vast amounts of anti-personnel and anti-tank mines, artillery shells and other explosives were stolen from unguarded Iraqi arsenals.

"IEDs made from looted explosives have caused about half of all U.S. combat fatalities and casualties in Iraq and have killed hundreds of Iraqis," the GAO said."

link:
http://www.drudge.com/news/89105/new-troops-lack-safer-humvees

[la-onda]

U.S. Marine Corps Buys Additional Force Protection Vehicles
BusinessWire - January 16, 2007 8:56 AM ET

Because of increased capacity to rapidly produce its life-saving vehicles, Force Protection, Inc. (OTCBB:FRPT) said today it was able to respond to the U.S. Marine Corps' urgent operational need for 15 of the company's Cougar Joint Explosive Ordnance Disposal Rapid Response Vehicles (JERRV). The contract for the vehicles, spare parts, and sustainment services is worth an approximate $9.4 million. All 15 vehicles will be delivered in January.

"We are pleased to be able to respond to this urgent need so quickly," said Force Protection Vice President for Program Management Damon Walsh. "Due to our ramp up efforts that include expanding production lines and improving manufacturing efficiencies, these vehicles are being produced and readied for presentation to the government in the same month the order was received.

"This is indicative of our increased capacity to produce these unmatched blast- and ballistic-protected vehicles with the required speed to support our soldiers in Iraq," he said. "Based on the strategic manufacturing partnerships we have formed recently, that capacity will only continue to expand."

Force Protection's Buffalo and Cougar vehicles have logged more than 1.6 million hours of combat operations in Iraq and Afghanistan since 2003. Known for the unmatched level of troop safety they provide, the Buffalo and Cougar are deployed by all branches of U.S. armed forces.

[TerryG]

Are we ahead of, or behind the curve?

http://www.forceprotection.net/news/news_article.html?id=146

As the article states they are presently at 50 units per month.

http://www.stockta.com/cgi-bin/fund.pl?symb=FRPT&page=news&mode=stock

With General Dynamics' plants in Ohio and elsewhere, Force Protection said it expects to be churning out 200 vehicles a month by the middle of 2007, and up to 300 a month in 2008.

With capacity at its Ladson plant nearly maxed out, the company is looking for a new facility to manufacture its Cheetahs.

[la-onda]

pullback as expected 

please check attachted suntrust report

[Johnnyjumpedup]

 Could see a tremendous move up if the big boys and M/M go diving in after the bell rings. I am sure we will see it close up tomorrow. JMHO

[TerryG]

Back in the clutches of the FIBs. The big boys apparently could not explain the gap up above that.

Personally I think they are waiting to see how FRPT's management execution will turn into performance. Meaning Q4-2006 Report due out next month, or another contract announcement.

[ScottishTrader]

FRPT had a heavy selloff on its debut on the NASDAQ, but it looks to me like it found solid support at $18.  I would like to see it stay above the ascnding trendline on a closing basis.  They are anticipating hearing about the MRAP contract by the end of the month.  That is what I believe will kick off the next big leg up, if they get a significant proportion of it.

Brief TV segment about FRPT on marketwatch:
http://www.marketwatch.com/tvradio/playerFull.asp?media=0&band=0&guid=%7B26ADF37E-2A98-43CA-8CFD-A0686375CC7C%7D&siteid=yhoo