Force Protection to Restate Interim Consolidated Financial Statements for First and Second Quarters
Publisher: Force Protection, Inc.
Date: 08/28/2008
--Company Intends to File Form 10-K for Fiscal Year 2007 with SEC on or before September 15, 2008--
Ladson, SC (August 28, 2008) -- Force Protection, Inc. (NASDAQ:FRPT) today announced that, as a result of the ongoing review of the Company’s September 30, 2007 interim and 2007 full year consolidated financial statements, it has concluded that it is necessary to restate its previously reported financial statements for the three month period ended March 31, 2007 and the three and six month periods ended June 30, 2007 and that such financial statements should no longer be relied upon. The Company will file a Form 8-K with the Securities and Exchange Commission with regard to this restatement decision. On March 3, 2008, the Company previously announced that its previously reported interim financial statements for the three and nine months ended September 30, 2007 would be restated and should no longer be relied on.
The Company reached the conclusion to restate based upon the recommendation of management and the concurrence of the Audit Committee of the Company’s Board of Directors. Management discovered accounting errors during its 2007 interim period and year-end review, including errors associated with recognizing the value of revenue, certain accrued liabilities, inventory and deferred taxes in the proper quarterly periods. The Company discussed the matters related to the restatement with Grant Thornton LLP, the Company’s current independent registered public accounting firm. Therefore, the Company’s previously issued consolidated financial statements of the Company for the first and second quarters of 2007 filed on Quarterly Reports on Form 10-Q on May 15, 2007 and August 9, 2007, as well as the third quarter of 2007 filed on Form 10-Q on November 13, 2007, should not be relied upon until the restated financial statements are filed with the Securities and Exchange Commission and the restatement information disclosed therein is fully considered.
The Company intends to file an Annual Report on Form 10-K for the year ended December 31, 2007 with the Securities and Exchange Commission on or before September 15, 2008. The Company anticipates that its consolidated statement of operations included in its Annual Report on Form 10-K for the year ended December 31, 2007 will report net sales of approximately $890 million, representing an increase of over $694 million from net sales of $196 million for the year ended December 31, 2006. The increase in net sales was primarily due to contracts awarded under the United States military’s Mine Resistant Ambush Protected (“MRAP”) vehicle program. Although revenues increased in 2007, the Company expects that 2007 net income will be significantly lower than the $16.6 million of net income that the Company reported for the year ended December 31, 2006.
The Company continues to evaluate the impact of the matters described above on its internal controls over financial reporting and the Company’s disclosure controls and procedures. Management noted it had previously identified and described material weaknesses in its internal control over financial reporting in its Quarterly Report on Form 10-Q filed on November 13, 2007. As a result of these previously identified material weaknesses and other deficiencies identified during the review of financial statements for the year ended December 31, 2007, management has concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2007. Additionally, management does not believe that the material weaknesses identified as of December 31, 2007 will be remediated by September 30, 2008 and anticipates that material weaknesses will be identified in its Quarterly Report on Form 10-Q for the first, second and third quarters of 2008.
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