Force Protection Continues to Transform its Business.Announces Cost Reduction Program -- Company Expects to Eliminate at Least $40 Million of Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. Expenses -- LADSON, S.C. -- Force Protection, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : FRPT FRPT Force Protection, Inc. (stock symbol) ), a leading designer, developer and manufacturer of survivability sur·viv·a·ble adj. 1. Capable of surviving: survivable organisms in a hostile environment. 2. That can be survived: a survivable, but very serious, illness. solutions and provider of total life cycle support for those products, today announced that it had determined, based upon its changing mix of business and related infrastructure requirements, to initiate a significant program of operational realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. and overhead reductions. The Company expects to substantially complete this program in the first half of 2010, and to create an annualized run rate for cost savings of at least $40 million. The initiative is designed to align the company's cost structure to current and planned vehicle production and to improve operational efficiencies in the area of Total Life Cycle Support. Included in the Company's cost reduction program is a net reduction of approximately 10% of its current workforce of 1200 employees and contractors. Reductions in manufacturing and engineering headcount are expected to be partially offset by an increase in capability in the Company's Kuwait facility and increases in sustainment and supply-chain management. The Company noted that it anticipates a third-quarter severance-related charge of approximately $2 million. As part of its capability expansion, the Company is streamlining its spares logistics functions in order to better service its customer, reduce lead times, and leverage existing resources. Included in this streamlining are proposed freight management changes that will yield significant cost savings and improved customer response times. The Company also noted that it is pursuing significant savings opportunities in general corporate functions such as finance, consulting, legal and human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. , facilities management The management of a user's computer installation by an outside organization. All operations including systems, programming and the datacenter can be performed by the facilities management organization on the user's premises. , travel, insurance, and other costs. Michael Moody, Chief Executive Officer of Force Protection, commented, "As the level and mix of our business activities change, we will, as I have stated before, align our business and cost structure accordingly. Over the last several quarters, our vehicle deliveries have decreased while non-vehicle deliveries of spares, modernization, field services and training have increased. Our Total Lifecycle Support operations have grown exceptionally over the past year and we have increased our capability in that area as well as transferred a number of our employees to our Kuwait facilities. We will continue to build vehicles, develop new vehicles and retain vehicle manufacturing capacity as is necessary to fulfill the ongoing demand for our Buffalo route-clearance vehicles, additional Cougar-based vehicles and new products." Mr. Moody continued, "The cost reduction initiatives we are announcing today are necessary to ensure our ongoing financial strength as we transform the company from a high volume truck manufacturer to a highly skilled, advanced survivability solutions provider of innovative products and solutions around the world." About Force Protection, Inc. Force Protection, Inc. is a leading American designer, developer and manufacturer of survivability solutions, predominantly blast- and ballistic-protected wheeled vehicles currently deployed by the U.S. military and its allies to support armed forces and security personnel in conflict zones. The Company's specialty vehicles, the Cougar cougar: see puma. cougar or puma or mountain lion or panther Species (Puma concolor) of large, graceful cat that lives in a wide variety of habitats in the Americas, from southern Alaska to Patagonia. , the Buffalo,the Cheetah and the Ocelot ocelot (äs`əlŏt', ō`sə–), medium-sized cat, Felis pardalis, of Central and South America. It is occasionally found as far N as Texas. The ocelot has a yellow-brown coat with black spots, rings, and stripes. , are designed specifically for reconnaissance and urban operations and to protect their occupants from landmines, hostile fire In insurance law, a combustion that cannot be controlled, that escapes from where it was initially set and confined, or one that was not intended to exist. A hostile fire differs from a friendly fire, which burns in a place where it was intended to burn, such as one confined , and improvised explosive devices Noun 1. improvised explosive device - an explosive device that is improvised I.E.D., IED explosive device - device that bursts with sudden violence from internal energy (IEDs, commonly referred to as roadside bombs). The Company also is the developer and manufacturer of ForceArmor[TM], an armor package providing superior protection against explosively formed projectiles (EFPs), now available for a wide range of tactical-wheeled vehicles. The Company is one of the original developers and primary providers of vehicles for the U.S. military's Mine Resistant Ambush Protected, or MRAP MRAP Mine Resistant Ambush Protected (military vehicle) MRAP Mouvement contre le Racisme et Pour l'Amitié entre les Peuples (French antiracism movement) MRAP Melanocortin-2 Receptor Accessory Protein , vehicle program. For more information on Force Protection and its vehicles, visit www.forceprotection.net. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Language This press release contains forward looking statements that are not historical facts, including statements about its beliefs and expectations. These statements are based on beliefs and assumptions of Force Protection's management, and on information currently available to management. These forward looking statements include, among other things: the ability of Force Protection to implement the Cost Reduction Program and realize the anticipated cost savings, increasing growth and demand for the Company's Total Life Cycle services, increasing capability and opportunities for the Kuwait facility growth and demand for Force Protection's vehicles, including the Buffalo vehicle and related deliveries of the Buffalo vehicle; the rate at which the Company will be able to produce these vehicles; its expected work completion dates for the vehicles and the Company's ability to meet current and future contract requirements; and the Company's expected financial and operating results, including its revenues and cash flow, for future periods. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. speak only as of the date they are made, and the Company undertakes no obligation to update any of them publicly in light of new information or future events. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Examples of these factors include, but are not limited to, the ability to effectively manage the risks in the Company's business; the ability to develop new technologies and products and the acceptance of these technologies and products; the ability to obtain and complete new orders for its vehicles and products; the Company's ability to identify and remedy its internal control weaknesses and deficiencies; and other risk factors and cautionary statements listed in the Company's periodic reports filed with the Securities and Exchange Commission, including the risks set forth in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2008, as updated in the Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended June 30, 2009. |
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