Force Protection Inc. transforming its core mission

The CEO of the fastest-growing defense contractor in the world said Force Protection’s future lies in creating “products of choice” focusing on survivability solutions that extend beyond the battlefield into areas such as sports medicine, automotive design and medical research.

Speaking at the Charleston Regional Business Journal’s third Power Breakfast of 2009, President and CEO Michael Moody said the Ladson-based maker of mine-resistant vehicles is transforming itself from a company that put all of its efforts into getting trucks out the door into a company that’s finding its niche in a competitive market.

The company’s meteoric rise between 2005 and 2007 presented it with some challenges that had little to do with protecting troops and everything to do with running a business, Moody said.

The company had hundreds of millions of dollars in Defense Department contracts, was employing more than 2,000 workers and was in jeopardy of being delisted by Nasdaq because it couldn’t file its Securities and Exchange Commission reports on time. The company’s stock fluctuated from more than $30 a share to a little more than $1 a share over five years. Today, it’s trading at $8.11 after seeing a recent steady gain.

“It was turbo-charged growth. It was really clear this could not continue,” Moody said. “The market was also saying this ride wasn’t going to continue.”

Moody was brought in during 2008 as the company’s CEO after serving as an adviser and board member. He said someone needed to recognize that the large, multimillion-dollar vehicle manufacturing contracts wouldn’t last forever and that Force Protection needed a viable sustainable business model.

Today, the company is focusing on new product development, such as its ForceArmor, which Moody described as a “sandwich” of physics and chemistry that’s as hard as steel and much lighter. Force Protection has sold more than $40 million worth of the armor that can be used to retrofit vehicles to survive an attack.

Instead of allowing other entities, such as SPAWAR, to finish integrating its vehicles with components, Force Protection is going to start delivering finished vehicles ready for deployment.

He also said the 10- to 20-year service life of an MRAP means service, maintenance and parts will be needed for decades. The $700,000 to $1 million cost of each vehicle can represent just 20% of the total cost over its lifetime.

“This is a great opportunity for Force Protection,” he said.

The company is partnering with the Medical University of South Carolina on traumatic brain injury research that will be used not only to improve the design of Force Protection’s vehicles but also to help football players withstand shocking blows on the playing field and aid the automotive industry in making safer cars.

Moody said that by distinguishing Force Protection from its competitors as a company dedicated to “survivability issues” rather than as a truck manufacturer, the company has opened up avenues for new products and technology.

“There are companies that have serial truck manufacturing capability. They can send thousands of trucks down the line,” Moody said. “We needed to get back to that basic core.”

He said everyone expects to survive an attack if they’re inside one of Force Protection’s vehicles, but an attack can take a truck out of service and leave soldiers unprotected. Force Protection’s vehicles can usually be made roadworthy in a day or two. That’s a critical sustainability point that not all of the company’s competitors can demonstrate.