Force Protection says 2007 earnings will be lower than 2006

Force Protection Inc. has expanded its re-evaluation of its past financial reports and now believes that when it eventually reports its earnings for 2007, the figure will be "significantly lower" than the profit it reported in 2006. In addition, the company said its accounting problems have not yet been solved.

The Ladson-based maker of armored military vehicles said late Thursday it has determined that it must restate its previous financial statements for the first and second quarters of 2007 and that the reports it previously issued for those periods "should not be relied upon."

In a written remarks, the company said those statements contained accounting errors, "including errors associated with recognizing the value of revenue, certain accrued liabilities, inventory and deferred taxes in the proper quarterly periods."

Force Protection faces delisting of its shares from the Nasdaq Stock Market unless it meets a Sept. 15 deadline to file its delayed financial report for the full 2007 fiscal year. The company said it intends to file that report "on or before" that date, and that it will include a figure of about $890 million in net sales, well above the $196 million it reported in 2006.

However, "the company expects that 2007 net income will be significantly lower than the $16.6 million" it reported in 2006.

Force Protection first disclosed in March that its internal accounting controls were "ineffective."

This week the company said that "management does not believe that the material weaknesses" in its accounting "will be remediated by Sept. 30" and that when it files its financial reports for the first three quarters of this year, they also will contain "material weaknesses."

Force Protection's shares were trading at about $4 at midmorning Friday, down about 5.6 percent from Thursday's close.

Read more in tomorrow's editions of The Post and Courier.