LADSON, S.C., Aug. 9 /PRNewswire-FirstCall/ -- Force Protection , today announced results for its second quarter and six months ended June 30, 2007.
Net sales for the second quarter of 2007 rose 140% to $134.7 million, compared to net sales of $56.1 million for the second quarter of 2006. Net sales for the six month period ended June 30, 2007 were $234.9 million, compared to $90.9 million for the first six months of 2006, a 158% increase. The primary reason for the increase in sales was due to the improving production capability leading to increased deliveries and sales of its Cougar and Buffalo vehicles.
For the second quarter gross profit was $32.8 million, or 24.3% of net sales, compared to a gross profit of $10.2 million, or 18.1% of net sales for the second quarter of 2006. As a percentage of net sales gross margin increased 6.2% over second quarter 2006. Gross profit for the first six months of 2007 was $55.3 million, or 23.5% of net sales, compared to a gross profit of $16.8 million, or 18.5% of net sales for the first six months of 2006. As a percentage of net sales gross margin increased 5.0% for the first six months of 2007, compared to the same period last year. The gross profit increase for the second quarter and six month period was primarily due to improved material and labor costs and the Company's increased ability to leverage fixed costs as it continues to expand its production capability.
Research and development (R&D) expenses increased 416% to $3.3 million, compared to $641,215 for second quarter 2006. For the first six months of 2007, R&D rose 524% to $8.1 million, compared to $1.3 million for the first six months of 2006 primarily due to continued development of the Cheetah vehicle. The company previously announced the acquisition of an additional facility for the manufacture of current and future products including the Cheetah and expects the production capacity to be approximately 2,000 Cheetah vehicles in 2008 as previously stated.
Expansion efforts continue and are on track to provide increased capacity at our facilities in Ladson, SC, Roxboro, NC and the various facilities within our enterprise which will enable us to meet previously stated production capacity within our operations.
The Company recorded an operating profit of $13.9 million for the quarter, compared to an operating profit of $1.8 million for the second quarter of 2006. Operating profit was $16.5 million for the first half of 2007, compared to an operating profit of $1.8 million for the first half of 2006.
Income after taxes for the second quarter was $9.6 million, compared to income after taxes of $973,024 for the same quarter last year, a 889% increase. For the six month period ended June 30, 2007, the Company reported income after taxes of $12.1 million, compared to income after taxes of $205,575 for the first six months of 2006.
Net income for the quarter rose 2,170% to $9.6 million, or $0.14 per diluted share, compared to net income of $424,047 or $0.01 per diluted share for the same period last year. Net income for the six month period was $12.1 million, or $0.18 per diluted share, compared to net loss of $(989,267) or $(0.03) per diluted share for the same period last year. The Company incurred a $1.7 million charge for the late registration of the private placement during the second quarter 2007, or $0.025 per diluted share. Excluding this charge, EPS would have been $0.17 per share. As earlier announced, the S-3 filing was declared effective on July 26, 2007.
Gordon McGilton, Chief Executive Officer of Force Protection commented, "We are most pleased with our results for the second quarter having realized significant increases in net sales, net income and gross profit. At the same time, we produced 229 vehicles in the second quarter compared to 285 vehicles in all of 2006."
"We were also pleased to have signed several additional contracts during the quarter in connection with our joint venture with General Dynamics. During the quarter, we announced that we had been awarded contracts totaling $711 million to produce 1,455 vehicles for the U.S Marine Corps' Mine Resistant Ambush Protected (MRAP) vehicle program.
As previously announced, we received our first Canadian contract for approximately $8.9 million to produce five Buffalo and five Cougar mine- protected vehicles for the Canadian Expeditionary Force Command (CEFCOM). We recently delivered the first of these vehicles to the Canadian forces."
Subsequent Events
On July 20, 2007, we entered into an Agreement with Wachovia Bank for a revolving credit facility of $50,000,000. We entered into this agreement to assure continued flow of cash while administrative contractual payment issues are worked out with government payment offices on recently established MRAP programs.
On August 1st, 2007, the Company announced a contract for approximately $5.3 million for continued work under the Iraqi Light Armored Vehicle (ILAV) program for new ILAV vehicles and equipment to include 22 new vehicles and more than 40 articulating interrogating arms.
Mr. McGilton concluded, "The progress that we have made to date in 2007 positions us for a successful year. As noted, we are continuing to see strong demand for our vehicles. We are also realizing the benefits of improved materials and labor costs and a reduction in our fixed costs. Most importantly we remain committed to our mission to make vehicles that protect and save lives by making sure that those vehicles are available to our troops in a timely manner."
For further information, interested parties are encouraged to review Force Protection's latest 10-Q filing with the SEC, which can be accessed via the Internet at http://www.forceprotection.net/investors/sec.html.
About Force Protection Inc.
Force Protection, Inc., first to answer the call to duty for the urgent need to bring lifesaving mine-resistant ambush protected vehicles to U.S. troops in combat and an American company whose vehicles, Cougar and Buffalo, have a proven track record where it matters most; in the battlefield, manufactures ballistic- and mine-protected vehicles through its wholly-owned subsidiary. These specialty vehicles protect against landmines, hostile fire, and Improvised Explosive Devices (IEDs, commonly referred to as roadside bombs). Force Protection's mine and ballistic protection technologies are among the most advanced in the world. The vehicles are manufactured outside Charleston, S.C. For more information on Force Protection and its vehicles, visit http://www.forceprotection.net/.
This press release contains forward-looking statements that involve risks and uncertainties. The Company generally uses words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in the Company's Form 10-K and other reports filed with the Securities and Exchange Commission. Although management believes the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and the Company's future results, levels of activity, performance or achievements may not meet these expectations. The Company does not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in expectations, except as required by law.
